ABN: 28 106 353 253
And Controlled Entities
CONSOLIDATED ANNUAL REPORT
For the Year Ended
30 June 2019
CONTENTS
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
1
2
22
23
24
25
26
27
58
59
Volt Resources Limited and Controlled Entities
SECURITIES EXCHANGE
ASX : VRC
CORPORATE DIRECTORY
DIRECTORS
Non-Executive Chairman
Asimwe Kabunga
Stephen Hunt
Non-Executive Director
Giacomo (Jack) Fazio Non-Executive Director
CHIEF EXECUTIVE OFFICER
Trevor Matthews
SECRETARY
Susan Hunter
REGISTERED OFFICE
Level 25, Suite 10
108 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9486 7788
BUSINESS OFFICES
Level 25, Suite 10
108 St Georges Terrace
Perth WA 6000
Volt Graphite Tanzania Plc
C/- Level 1, Golden Heights Building, Wing B
Plot No 1826/17 Chole Road
Msasani Peninisula, Masaki
PO Box 80003
Dar es Salaam, Tanzania
WEBSITE & EMAIL
www.voltresources.com
info@voltresources.com
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
AUDITORS
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Volt Resources Limited and Controlled Entities
1
DIRECTORS’ REPORT
Your Directors submit the financial report of Volt Resources Limited (the Company) and its
Controlled Entities (Consolidated Entity) for the year ended 30 June 2019.
DIRECTORS AND CEO
The names of Directors who held office during or since the end of the year:
Asimwe Kabunga
Stephen Hunt
Alwyn Vorster
Giacomo Fazio
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (resigned 1 July 2019)
Non-Executive Director (appointed 1 July 2019)
Trevor Matthews is the Chief Executive Officer.
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity during the financial year was graphite exploration
and evaluation activities in Tanzania.
RESULTS
The loss after tax for the year ended 30 June 2019 was $3,483,275 (2018: $3,079,019).
REVIEW OF OPERATIONS
Overview
Key operational highlights during the 2019 financial year included:
• Feasibility Study (FS) for the Stage 1 Bunyu Graphite Project completed – results
announced on 31 July 2018.
• Positive FS based on annual throughput rate of 400,000 tonnes of ore to produce on
average 23,700 tonnes per annum of graphite products over a 7 year project period:
Pre-tax NPV at 10% discount rate of US$18.6 million, after tax US$14.7 million;
Pre-tax IRR of 21%
Payback period of 4.4 years
Start-up Capital cost estimate of US$31.8 million
FOB operating costs averaging US$664 per tonne
Average annual EBITDA of US$13.1 million over 7 years, US$96.3 million in total.
Importantly, Volt has now received all key approvals for the Stage 1 and Stage 2
developments of the Bunyu Graphite Project as outlined below:
o The Environmental Impact Assessment (EIA) Certificate was granted to the
Company’s 100%-owned subsidiary Volt Graphite Tanzania (“VGT”) by the
National Environment Management Council of Tanzania in August 2018.
•
Volt Resources Limited and Controlled Entities
2
DIRECTORS’ REPORT Continued
o Volt formally received two Mining Licences (MLs) ML 591/2018 and ML 592/2018
on 22 October 2018, covering Bunyu’s respective Stage 1 and Stage 2
developments from the Mining Commission of the Ministry of Minerals of
Tanzania.
• Additional offtake agreements continued to advance with a binding offtake agreement
signed with Qingdao Tiangshengda Graphite Co. Ltd. (“Tianshengda”) in August 2018 for
9,000 tonnes per annum of Bunyu Graphite product.
• A co-operation agreement was signed with HAIDA Graphite (“HAIDA”) in late August 2018
to conduct testing on VGT’s graphite product samples for the future supply and purchase
of Bunyu graphite.
• A process to select an engineering firm for the role of Project Management Contractor
(PMC) commenced in late Q4 2018. A recognised engineering services firm has been
selected and contract negotiations with the selected firm are advancing.
Figure 1: Bunyu 1 view looking north to North Pit location on the rising ground in the foreground
Figure 2: In March 2019, the Company hosted a delegation from Japan and China who visited the Bunyu
Project to ascertain the potential for graphite product supply.
Volt Resources Limited and Controlled Entities
3
DIRECTORS’ REPORT Continued
Bunyu Stage 1 Development Funding Progress
As previously reported, Volt has partnered with Exotix Capital (“Exotix”) to undertake a US$40
million Tanzanian Note Issue. Funds raised will be deployed towards the Stage 1 development of
the Bunyu Graphite Project. Key developments during the 2019 financial year include:
• An updated Prospectus was lodged with the Tanzanian Capital Markets and Securities
Authority (“CMSA”) and the Dar Es Salaam Stock Exchange (“DSE”) on 17 August, 2018. A
further updated Prospectus was lodged with the CMSA on 28 September following
feedback and requests for additional information.
• VGT received approval from the Dar es Salaam Stock Exchange PLC on 13 December 2018
to list its Notes on the DSE, however correspondence received from the CMSA on 25
January 2019 set unrealistic commercial terms for the Note Issue to proceed.
• While discussions with the CMSA and DSE continue positively, Volt worked
simultaneously to progress alternative funding options including a Note Issue and Listing
on the Stock Exchange of Mauritius (“SEM”) which used principally the same Tanzanian
Note Prospectus, and advancing discussions with multiple North American institutional
investors.
• Subsequent to the reporting period, Volt’s proposed Bond Issue and listing on the SEM
was lodged for approval.
2019 Financial Year - Community Engagement Overview
Figure 3: The Lindi District Council’s Economic, Work & Environmental Committee visited the Bunyu 1 site
in September 2018 and were impressed with the planned developments. VGT initiated and sponsored
the development of a formal Village Land Use Plan (VLUP). The report was approved by the District
Council on 31 July 2018 and subsequently registered with the Land Use Commissioner.
Volt Resources Limited and Controlled Entities
4
DIRECTORS’ REPORT Continued
Figure 4: CEO Trevor Matthews and VGT management attended a mining exhibition in the parliament
grounds of Tanzania’s capital, Dodoma, on May 26 and 27 2019. Trevor welcomes the Speaker of the
Tanzanian National Assembly Hon. Job Ndugai to the Volt booth.
Figure 5: The exhibition provided an opportunity to present the Company’s Bunyu project and explain
graphite mining and processing, product markets and project development activities to the Speaker of
the House and members of parliament.
(L to R): Volt CEO Trevor Matthews, Community Relations Manager Peter Dodi, Corporate Affairs
Manager Godwin Nyelo and guest.
Volt Resources Limited and Controlled Entities
5
DIRECTORS’ REPORT Continued
Corporate Overview
•
In January 2019, the Company secured a short-term (6-month) funding facility of A$1.3
million, providing added funded flexibility whilst the Company advances its development
funding activities.
• Volt lodged its income tax return and supporting R&D Tax incentive claim for the 2018
financial year, whereby the Company received a 43.5% cash rebate on eligible R&D
expenditure. This resulted in an R&D cash refund from the Australian taxation office of
$641,173 in late December 2018, following which the Company repaid the $512,000 R&D
loan received from the R&D Loan funder Radium Capital earlier in the December quarter.
•
• Volt completed investor meetings in North America and an investor roadshow in East
Africa, with strong interest received from a number of investment funds and banks.
In June 2019, the Company secured US$1 million in working capital funding from Mr Lars
Bader via:
o
the placement of 20,845,714 shares at 2.1c per share raising US$300,000; and
o an 18-month loan facility for US$700,000 and 25,536,000 options with an exercise
price of $0.04 per share with an 18-month maturity.
• Subequent to the reporting period, Volt closed an oversubscribed Share Purchase Plan
(SPP) raising a total of $1,299,000;
o
In addition, a further $350,000 was raised via a top-up placement of new shares
to sophisticated and professional investors at the same issue price as the SPP
(Placement), taking the total amount raised to $1,649,000;
o Funds raised under the SPP and Placement have been used to repay the
outstanding loan notes due to Riverfort Global Capital and Yorkville Advisors due
14 September 2019 (refer ASX announcement Monday, 15 July 2019) and for
general working capital and corporate purposes.
Board and Management Changes
• On 9 July 2018, Matthew Bull resigned as Non-Executive Director of the Company.
• Post-period end on 1 July 2019, the Company appointed Mr Giacomo (Jack) Fazio as Non-
Executive Director, following the resignation of Mr Alwyn Vorster.
Volt Resources Limited and Controlled Entities
6
DIRECTORS’ REPORT Continued
DIRECTOR AND COMPANY SECRETARY INFORMATION
Directors
Mr Asimwe Kabunga – Non-Executive Chairman from 4 August 2017, appointed 5 April 2017.
Qualifications – BSc Mathematics and Physics
Other current directorships of Listed Public Companies – Lindian Resources Limited (Chairman);
Former directorships of Listed Public Companies in last three years - Strandline Resources Limited;
Interests in Shares and Options over Shares in the Company:
161,392,017 fully paid ordinary shares;
Mr Kabunga is a Tanzanian born Australian entrepreneur who has over 20 years technical and
commercial experience in Tanzania, the United States and Australia. Mr Kabunga has extensive
experience in the mining industry, logistics, land access, tenure negotiation and acquisition, as
well as a developer of technology businesses. Mr Kabunga has been instrumental in establishing
the Tanzania Community of Western Australia Inc, and served as its first President. Mr Kabunga
was also a founding member of Rafiki Surgical Missions and Safina Foundation, both NGOs
dedicated to helping children in Tanzania.
Mr Stephen Hunt – Non-Executive Director, appointed 15 December 2015.
Qualifications – Bachelor of Business (Maj. Marketing), AICD member
Other current directorship of Listed Public Companies – American Pacific Borate and Lithium
Limited
Former directorships of Listed Public Companies in last three years – Nil
Interests in Shares and Options over Shares in the Company:
13,937,026 fully paid ordinary shares;
Mr Hunt has more than 25 years of experience in the marketing of steel and mineral products
worldwide. His career includes 15 years at BHP Billiton Ltd, where he spent 5 years in the London
office marketing minerals to European and Middle Eastern customers. Stephen has built on his
extensive network and developed his own minerals trading company, which has a strong Chinese
focus. He brings along with him 15 years of cumulative board experience with ASX limited
companies and was a founding director of Magnis Resources Limited.
Mr Alwyn Vorster – Non-Executive Director, appointed 22 March 2016 and resigned 1 July 2019.
Qualifications – BSc Geology; MBA, MSc Mineral Economics
Other current directorship of Listed Public Companies: Managing Director of BCI Minerals Limited
Former directorships of Listed Public Companies in last three years: Iron Ore Holdings Limited –
Managing Director (2010-2014)
Interests in Shares and Options over Shares in the Company:
6,229,437 fully paid ordinary shares;
Mr Vorster is a mining professional with more than 25 years of experience working with numerous
large and smaller mining companies in technical and commercial roles covering the total supply
chain from geology, mining, rail and port, shipping, marketing and sales. He has held various CEO
Volt Resources Limited and Controlled Entities
7
DIRECTORS’ REPORT Continued
roles during his career, including with BCI Minerals Limited, API Management and with Iron Ore
Holdings Limited.
Mr Giacomo (Jack) Fazio – Non-Executive Director, appointed 1 July 2019.
Qualifications – Diploma in Geometry, Associate Diploma in Civil Engineering, Graduate Certificate
in Project Management
Other current directorships of Listed Public Companies – Nil
Former directorships of Listed Public Companies in last three years - Nil
Interests in Shares and Options over Shares in the Company:
Nil fully paid ordinary shares;
Mr Fazio is a highly experienced project, construction and contract/commercial management
professional having held senior project management roles with Primero Group Limited, Laing
O’Rourke and Forge Group Ltd. His experience ranges from feasibility studies through to
engineering, procurement, construction, and commissioning of diverse mining resources,
infrastructure, oil & gas and energy projects.
Company Secretary
Ms Susan Hunter – Company Secretary, appointed 1 August 2017.
Ms Hunter has over 25 years’ experience in the corporate finance industry and has extensive
experience in Company Secretarial and Non-Executive Director roles on ASX, AIM and TSX listed
companies. She is founder and Managing Director of consulting firm Hunter Corporate Pty Ltd,
which specialises in the provision of corporate governance and company secretarial advice to ASX,
AIM and TSX listed companies. She has previously held senior management roles at Ernst & Young,
PricewaterhouseCoopers and Bankwest, both in Perth and Sydney. Ms Hunter holds a Bachelor
of Commerce degree majoring in accounting and finance, is a Chartered Accountant, a Fellow of
the Financial Services Institute of Australasia, a Fellow of the Institute of Chartered Secretaries
and Administrators and a Graduate Member of the Australian Institute of Company Directors.
Volt Resources Limited and Controlled Entities
8
DIRECTORS’ REPORT Continued
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors (and committees
of directors) held during the year ended 30 June 2019, and the number of meetings attended by
each Director.
Director
Director
Asimwe Kabunga
Stephen Hunt
Alwyn Vorster
Directors’
Meetings
Audit & Risk Committee
Meetings#
Eligible to
Attend
8
8
8
Attended
8
8
7
External Advisor
Glyn O’Brien
Eligible to
Attend
*
2
2
2
Attended
*
2
2
2
* Mr Kabunga attended the Audit & Risk Committee meetings as a guest.
# As from the 22 August 2019 the Audit & Risk Committee function has reverted to the full board
of directors, rather than a sub-committee.
SHARE OPTIONS
At the date of this report the following options have been granted over unissued capital as part
of the funding package of US$1.0 million dated 23 June 2019.
Number
25,536,000
Exercise Price
$0.04
Expiry Date Status
23 December 2020 Unlisted
PERFORMANCE RIGHTS
During the 2019 financial year 35,000,000 performance rights have been issued and 34,500,000
performance rights have been cancelled or lapsed. A balance of 20,000,000 performance rights
remain outstanding at balance date and at the date of this report.
REMUNERATION REPORT
The “Remuneration Report” which forms part of the Director’s Report, outlines the remuneration
arrangements in place for the Key Management Personnel of Volt Resources Limited for the year
ended 30 June 2019 and is included from page 13.
Volt Resources Limited and Controlled Entities
9
DIRECTORS’ REPORT Continued
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the Consolidated Entity in future
financial periods other than the following:
• On 1 July 2019 the Company announced the appointment of Mr Giacomo Fazio as a Non-
Executive Director, and the resignation of Mr Alwyn Vorster as a Non-Executive Director
of the Company;
• On 15 July 2019, the Company has extended the maturity date for the loan facility with
Riverfort Global Capital and Yorkville Advisors by two months, from 14 July 2019 to 14
September 2019. The terms of the extension require an amount payable at execution of
US$375,000, comprising a loan repayment amount of US$335,106 which reduces the total
amount payable at maturity to US$664,894 from US$1.0 million and an extension fee of
US$39,894. There are nil interest charges for the loan extension period. In addition,
unlisted options to the value of $189,969 and with a 36 month maturity will be issued to
the lenders;
• The Company announced on 22 July 2019 that they will be undertaking a Share Purchase
Plan which will be underwritten by Patersons Securities Limited to $1.1 million. The new
shares will be issued at a 20% discount to the volume weighted average price traded on
the ASX during the 5 days immediately prior to the issue date. Funds raised will be used
to repay the outstanding loan notes due to Riverfort Global Capital and Yorkville Advisors
due 14 September 2019 and for general working capital and corporate purposes. In
addition, the Company has reached agreement with Riverfort and Yorkville whereby the
issue of unlisted options to the value of $189,970 under the Debt Facility Restructure will
be cancelled in exchange for the payment of US$31,193;
• On 21 August 2019 the Company announced that it raised $1.65 million; from the Share
Purchase Plan $1,299,000 and a top-up placement of $350,000 of which $100,000 is
subject to shareholder approval at the next general meeting of shareholders;
• On 23 August 2019 based on an issue price of $0.012 per share, 108,250,081 shares were
issued under the Share Purchase Plan and a further 20,833,335 shares in relation to
$250,000 of the top-up placement;
• On 10 September 2019 the Company announced that it had lodged a Prospectus for
approval and listing of its Mauritian Note Issue with the Stock Exchange of Mauritius. In
addition the Company confirmed it had fully repaid the amounts outstanding under the
loan notes (US$664,894) due to Riverfort Global Capital and Yorkville advisors out of the
proceeds from the Share Purchase Plan and Top-up placement.
Volt Resources Limited and Controlled Entities
10
DIRECTORS’ REPORT Continued
LIKELY DEVELOPMENTS
The Consolidated Entity intends to continue its exploration activities on its existing tenements,
assess the viability of existing tenements and to acquire further suitable tenements for
exploration and/or development as opportunities arise.
The Consolidated Entity is progressing options, including a planned Note issue on the Dar es
Salaam Stock Exchange, to raise development funding, intially for the Stage 1 Bunyu Graphite
Project to allow directors to make a Final Investment Decision (FID) based on the Stage 1
Feasibility Study completed in July 2018.
Subsequent to development funding and resulting positive FID for Stage 1, the Company would
then be in a position to commence resettlement of affected landowners, upgrade of access roads
and water supply, preparation of the plant site and commencement of construction works.
ENVIRONMENTAL REGULATION
The Consolidated Entity has a policy of exceeding or at least complying with its environmental
obligations. During the financial year, the Consolidated Entity did not materially breach any
particular or significant regulation in respect to environmental management in any of the
jurisdictions in which it operates.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the group to the date of this
report.
DIVIDENDS
No dividends have been declared, provided for or paid in respect of the financial year ended 30
June 2019 (2018: None).
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the Directors and Officers of the Company for any
liabilities to another person (other than the Company or related body corporate) that may arise
from their position as Directors or Officers of the Company and its controlled entities, except
where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the
Directors and Officers of the Company and its controlled entities against any liability incurred in
the course of their duties to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
PROCEEDINGS ON BEHALF OF COMPANY
Volt Resources Limited and Controlled Entities
11
DIRECTORS’ REPORT Continued
No person has applied for leave of court to bring proceedings on behalf of the Consolidated Entity
or intervene in any proceeding to which the Consolidated Entity is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings. The Consolidated
Entity was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of the Consolidated Entity support, and adhere to, good corporate governance
practices. Refer to the Company’s Corporate Governance Statement at www.voltresources.com.
NON-AUDIT SERVICES
No fees for non-audit services were paid or payable to the external auditor of the Parent Entity
during the year ended 30 June 2019 (2018: nil).
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2019, which forms a part of
the directors’ report has been received and is included within this annual report at page 22.
Volt Resources Limited and Controlled Entities
12
DIRECTORS’ REPORT Continued
REMUNERATION REPORT: AUDITED
This remuneration report outlines the key management personnel remuneration arrangements
of the Consolidated Entity in accordance with the requirements of the Corporations Act 2001 and
its Regulations. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing and
controlling the major activities of the Consolidated Entity, directly or indirectly, including any
director (whether executive or otherwise) of the parent company, and includes the specified
executives. For the purposes of this report, the term 'executive' encompasses the chief executive,
senior executives and secretaries of the Parent and the Consolidated Entity.
Remuneration Committee
The Company is not of a sufficient size to justify the establishment of a remuneration committee
and so the Board of Directors of the Company fulfils this obligation and is responsible for
determining and reviewing remuneration arrangements for the directors and executives. The
Board of Directors assesses the appropriateness of the nature and amount of remuneration of
executives on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing director and executive team.
Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To
prosper, the Company must attract, motivate and retain highly skilled directors and executives.
To this end, the charter adopted by the remuneration committee aims to align rewards with
achievement of strategic objectives. The remuneration framework applied provides for a mixture
of fixed and variable pay and a blend of short and long term incentives as appropriate.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director
and executive remuneration is separate and distinct.
Non-Executive Directors
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at General Meeting and was capped at $360,000 in November 2018.
The Company’s policy is to remunerate non-executive directors at market rates (for comparable
companies) for time, commitment and responsibilities. Fees for non-executive directors are not
linked to the performance of the Company, however to align directors’ interests with
shareholders’ interests, directors are encouraged to hold shares in the Company, and subject to
approval by shareholders, are permitted to participate in the Employee Share Option Plan.
Retirement Benefits and Allowances
No retirement benefits or allowances are paid or payable to directors of the Company (other than
statutory or mandatory superannuation contributions, where applicable).
Volt Resources Limited and Controlled Entities
13
DIRECTORS’ REPORT Continued
Performance on shareholder wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board have
regarded the following indices in respect of the current and previous four financial years:
2019
(0.24)
(3,483)
2018
(0.27)
(3,079)
2017
(0.32)
(3,102)
EPS loss (cents)
Net profit / loss ($’000)
Exploration and Evaluation
expenditure ($’000)
24
Share price ($)
0.012
# The Group had previously focused on coal in Mozambique rather than graphite in Tanzania.
6,167
0.029
603
0.020
4,863
0.021
3,114
0.105
2016
(0.57)
(3,807)
2015#
(0.27)
(662)
Executives
Base Pay
Executives are offered a competitive level of base pay which comprises the fixed (unrisked)
component of their pay and rewards. Base pay for senior executives is reviewed annually to
ensure market competitiveness. There are no guaranteed base pay increases included in any
senior executives’ contracts.
Short Term Incentives
Payment of short term incentives is dependent on the achievement of key performance
milestones as determined by the Board of Directors. For the years ended 30 June 2018 and 2019,
these milestones required performance in relation to key strategic, non-financial measures linked
to drivers of performance in future reporting periods. No bonuses have been paid or are payable
in respect of the year to 30 June 2019. There have been no forfeitures of bonuses by key
management personnel during the current or prior periods and no cash bonuses remained
unvested at year-end.
Long Term Incentives - Share-Based Compensation
Both performance rights and share options have been issued to Directors and executives as part
of their remuneration. Share-based compensation instruments are not issued based on
performance criteria, however, they are issued with vesting conditions and exercise prices set
specifically to increase goal congruence between Directors, executives and shareholders.
Performance rights and options granted carry no dividend or voting rights. The Company
currently has no policy in place to limit an individual’s risk exposure in relation to the issue of
company securities as remuneration.
Service Agreements
In late November 2016, the Company entered into an agreement with Mr Trevor Matthews, in his
capacity as Chief-Executive Officer to commence from 1 January 2017 with a base package
inclusive of statutory superannuation and before incentives of $300,000 per annum, plus a
company provided car parking bay at its corporate office or payment in lieu.
Under an established Performance Rights Plan approved by shareholders, Mr Matthews was
issued 35,000,000 Performance Rights during the current year in the following tranches subject
to vesting conditions:
• Tranche A – 15,000,000 Performance Rights vest on the Company raising a minimum of
US$30 million for the development of the Bunyu Stage 1 Project by 31 March 2019.
Volt Resources Limited and Controlled Entities
14
DIRECTORS’ REPORT Continued
• Tranche B – 10,000,000 Performance Rights vest on the receipt of first sales revenue from
product produced from the Binyu Stage 1 Project evidenced by the receipt of cash
proceeds in a Volt Group Company’s bank account by 30 June 2020.
• Tranche C – 10,000,000 Performance Rights vest on the achieving a 20 business day VWAP
equal to or exceeding 15 cents per share for the Company within 3 years of grant date.
The condition for Tranche A was not achieved by 31 March 2019 resulting in the 15,000,000
performance rights lapsing.
Use of Remuneration Consultants
The Board is satisfied that the recommendations of remuneration consultants (if utilised) were
made free from undue influence from any member of Key Management Personnel. No
remuneration consultants were utilised during the 2019 financial year.
Remuneration of Directors and Key Management Personnel
Key
Management
Personnel
30 June 2019
Asimwe
Kabunga
Stephen
Hunt
Alwyn *
Vorster
Matthew
Bull **
Directors
Subtotal
Trevor
Matthews
Mark
Hoffmann
Management
Subtotal
KMP
TOTAL
Short Term Benefits
Cash
Salary
and Fees
$
Leave
and other
entitle’ts
$
133,071
52,560
52,560
1,000
239,191
-
-
-
-
-
270,000
2,923#
209,331
953
479,331
3,876
718,522
3,876
Consulting
$
-
-
-
-
-
-
-
-
-
Post-
Employment
Benefits
Super-
annuation
$
-
-
-
95
95
Share
Based
Payments
Perform-
ance
Rights
$
-
-
-
-
-
Total
Perform-
ance
Related
$
133,071
52,560
52,560
1,095
239,286
%
-%
-%
-%
-%
-%
30,000
591,582^
894,505
66.1%
19,886
-
230,170
-%
49,886
591,582
1,124,675
52.6%
49,981
591,582
1,363,961
43.4%
Volt Resources Limited and Controlled Entities
15
DIRECTORS’ REPORT Continued
Key
Management
Personnel
30 June 2018
Asimwe
Kabunga
Stephen
Hunt
Alwyn
Vorster
Matthew
Bull
Directors
Subtotal
Trevor
Matthews
Mark
Hoffmann
Jason ***
Livingstone
KMP
TOTAL
Short Term Benefits
Cash
Salary
and Fees
$
Leave
and other
entitle’ts
$
122,472
51,083
48,000
48,000
269,555
-
-
-
-
-
Consulting
$
26,909
30,000
-
-
Post-
Employment
Benefits
Super-
annuation
$
7,835
4,853
4,560
4,560
Share
Based
Payments
Perform-
ance
Rights
$
-
-
-
-
-
Total
Perform-
ance
Related
$
157,216
85,936
52,560
52,560
348,272
%
-%
-%
-%
-%
-%
56,909
21,808
270,000
30,667#
-
30,000
108,261
438,928
24.7%
85,688
3,176
140,000
8,141
139,431
(6,139)
-
11,836
-
-
237,005
144,948
-%
-%
764,674
27,524
196,909
71,785
108,261
1,169,153
9.3%
* Resigned on 1 July 2019
** Resigned on 9 July 2018
*** Resigned on 7 March 2018
# Includes provision of car parking at $6,522 (2018: $6,521).
^ Of the $591,582 in performance rights expensed for the year, $496,740 in rights were either
cancelled or lapsed prior to 30 June 2019 for $nil value, leaving a balance of $94,842 current at
year’s end.
Volt Resources Limited and Controlled Entities
16
DIRECTORS’ REPORT Continued
Share Based Compensation
Options
There were no options granted, exercised or lapsed during the financial year, in relation to key
management personnel’s remuneration.
Performance Rights
35,000,000 performance rights have been issued to Trevor Matthews during the 2019 financial
year with milestones as set out above. Based upon a valuation of the performance rights at the
grant date an amount of $409,842 has been included in remuneration of the recipient based on
the value attributable to the milestones over the determined vesting period during the 2019
financial year. 15,000,000 Tranche A performance rights representing $315,000 of the above
amount lapsed on 31 March 2019 for $nil value, as the hurdle conditions were not achieved.
A total of 15,000,000 performance rights previously held by the CEO, were cancelled by mutual
agreement for nil consideration during September 2018. This cancellation has been accounted for
by the acceleration of vesting and the remaining vesting expense relating to these cancelled
performance rights of $181,740 has been included in the share based payments expense in the
current period.
The fair value of the performance rights granted during the financial year is estimated as at the
date of grant using the black scholes model (except Tranche C) and trinomial option model
(Tranche C) taking into account the following inputs:
Details
Share price barrier
Expected volatility
Risk free interest rate
Expected life
Exercise price
Grant date share price
Fair value per right
Black Scholes Option Model
Tranche A
Performance RIghts
expiring
31-Mar-2019
n/a
80%
2.02%
0.44 years
nil
$0.021
$0.021
Tranche B
Performance
RIghts expiring
30-Jun-2020
n/a
80%
2.025%
1.69 years
nil
$0.021
$0.021
Trinomial Option
Model
Tranche C3
Performance
RIghts expiring
22-Oct-2021
$0.15
70%
2.09%
3 years
nil
$0.021
$0.004
Volt Resources Limited and Controlled Entities
17
DIRECTORS’ REPORT Continued
Directors and Key Management Personnel Equity Holdings
Shares
Key
Management
Personnel
Balance at
Beginning
of Year
Issued as
Remuneration
Exercise of
Options /
Conversion of
Perf. Rights
Net Other
Change*
Balance at
End of Year
2019
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull**
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
160,142,017
12,687,026
4,088,885
6,229,437
72,920
300,000
TOTAL
183,520,285
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
145,645,118
9,258,454
4,088,885
3,515,151
-
-
-
TOTAL
162,507,608
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 160,142,017
-
12,687,026
(4,088,885)
-
-
6,229,437
53,015
125,935
-
300,000
(4,035,870) 179,484,415
13,202,613
1,294,286 160,142,017
2,000,000
1,428,572
12,687,026
-
-
4,088,885
2,000,000
714,286
6,229,437
-
72,920
72,920
300,000
-
-
-
300,000
-
17,502,613
3,510,064 183,520,285
*On-market purchases / (sales) and share placements/purchase plans.
**Balance on date of resignation, 9 July 2018.
Volt Resources Limited and Controlled Entities
18
DIRECTORS’ REPORT Continued
Options
Key
Management
Personnel
Balance at
Beginning
of Year
Granted as
Remuneration
Exercise/lapsing
of Options
Net Other
Change*
Balance at
End of
Year
Vested at Year End
Exercisable Vested
During
Year
2019
TOTAL
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull**
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
-
-
11,397,613
2,000,000
5,461,412
2,000,000
-
300,000
-
TOTAL
21,159,025
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Nil
(13,202,613)
1,805,000
(2,000,000)
(5,461,412)
(2,000,000)
-
(300,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(22,964,025)
1,805,000
Nil
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*On-market purchases / (sales).
** These options lapsed unexercised. All other options were exercised.
All share options issued to key management personnel were made in accordance with the
provisions of the employee share option plan. During the financial year, no options were exercised
by key management personnel (2018: 17,502,613). No employee share option were granted as
remuneration during the 2019 and 2018 financial years. Performance rights have been the
preferred method of remuneration in recent years.
Volt Resources Limited and Controlled Entities
19
DIRECTORS’ REPORT Continued
Performance Rights
Key
Management
Personnel
Balance at
Beginning
of Year
Granted as
Remuneration
Vested and
converted into
ordinary shares
2019
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
TOTAL
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
TOTAL
-
2,500,000
-
2,000,000
-
-
-
-
15,000,000
35,000,000
-
-
19,500,000
35,000,000
-
5,000,000
-
4,000,000
-
-
-
-
-
-
17,000,000
-
-
9,000,000
-
17,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Lapsed as
hurdle not
achieved /
cancelled
-
(2,500,000)
-
(2,000,000)
Balance at
End of Year
-
-
-
-
(30,000,000)
20,000,000
-
-
(34,500,000)
20,000,000
-
-
(2,500,000)
2,500,000
-
-
(2,000,000)
2,000,000
(2,000,000)
15,000,000
-
-
-
(6,500,000)
-
19,500,000
Volt Resources Limited and Controlled Entities
20
DIRECTORS’ REPORT Continued
Other Transactions with Key Management Personnel of the Consolidated Entity
Entities associated with Mr Stephen Hunt and Mr Asimwe Kabunga both provided unsecured
short term loans of $50,000 each. The loans have a 10% interest rate per annum payable at
maturity and a maturity date of 15 July 2019 or earlier at the Company’s discretion. These loans
were repaid in full on 1 July 2019.
During the 2019 financial year, there were no other transactions with Key Management
Personnel.
End of Remuneration Report
Signed in accordance with a resolution of directors.
___________________
Asimwe Kabunga
Non-Executive Chairman
24 September 2019
Volt Resources Limited and Controlled Entities
21
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Volt Resources Limited for the
year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been
no contraventions of:
(a)
(b)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
24 September 2019
B McVeigh
Partner
Volt Resources Limited and Controlled Entities
22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Corporate compliance fees
Corporate management costs
Foreign exchange gain (loss)
Marketing and investor relations costs
Occupancy expenses
Share based payments
Interest expenses
Other expenses
Loss before income tax benefit
Income tax benefit
Note
2
2, 15
2
3
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended
30 June 2018
$
4,071
(591,066)
(1,840,920)
38,222
(202,064)
(156,427)
(591,582)
(177,096)
(607,586)
22,220
(477,413)
(1,655,069)
(56,111)
(246,059)
(161,037)
(108,261)
(140,142)
(805,774)
(4,124,448)
641,173
(3,627,646)
548,627
Net loss for the year from continuing operations
(3,483,275)
(3,079,019)
Net loss for the year
(3,483,275)
(3,079,019)
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of foreign operations
(61,075)
489,194
Total comprehensive loss for the year
(3,544,350)
(2,589,825)
Loss attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(3,493,873)
10,598
(3,483,275)
(3,076,272)
(2,747)
(3,079,019)
(3,554,948)
10,598
(3,544,350)
(2,587,078)
(2,747)
(2,589,825)
Basic and diluted loss per share from continuing operations
(cents)
4
(0.24)
(0.27)
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets
Plant and equipment
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Borrowings
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Accumulated losses
Parent entity interest
Non-controlling interests
Total Equity
Note
Consolidated
30 June
2019
$
Consolidated
30 June
2018
$
5
6
6
7
8
9
10
11
12
1,171,421
41,748
40,413
2,192,277
214,820
47,330
1,253,582
2,454,427
3,900
30,000
45,676
22,394,753
2,400
30,000
100,480
21,786,559
22,474,329
21,919,439
23,727,911
24,373,866
347,354
62,260
1,523,709
614,647
58,867
399,844
1,933,323
1,073,358
12
1,004,648
1,004,648
-
-
2,937,971
1,073,358
20,789,940
23,300,508
13
14
64,415,434
20,102
(43,435,138)
21,000,398
(210,458)
63,973,234
163,204
(40,614,874)
23,521,564
(221,056)
20,789,940
23,300,508
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated
Entity
Issued
Capital
Reserves
Accumulated
Losses
Parent Entity
Interest
$
$
$
$
Non-
Controlling
Interest
$
Total
$
Balance at 1 July
2018
Loss for the year
Other
comprehensive
income
Total
comprehensive
loss for the year
Shares issued
during the year
Issue
expenses
Equity
exercised/expired
Share based
payments
Balance at 30
June 2019
Balance at 1 July
2017
Loss for the year
Other
comprehensive
income
Total
comprehensive
loss for the year
Shares issued
during the year
Issue
expenses
Equity
exercised/expired
Share based
payments
Balance at 30
June 2018
63,973,234
163,204
(40,614,874)
23,521,564
(221,056)
23,300,508
-
-
-
-
(3,554,948)
(3,554,948)
10,598
(3,544,350)
(61,075)
61,075
-
-
-
(61,075)
(3,493,873)
(3,554,948)
10,958
(3,544,350)
434,747
7,453
-
-
-
-
-
-
(673,609)
673,609
434,747
7,453
-
591,582
-
591,582
-
-
-
-
434,747
7,453
-
591,582
64,415,434
20,102
(43,435,138)
21,000,398
(210,458)
20,789,940
53,342,884
4,173,650
(40,946,202)
16,570,332
(218,309)
16,352,023
-
-
-
-
(3,076,272)
(3,076,272)
(2,747)
(3,079,019)
489,194
-
489,194
-
489,194
489,194
(3,076,272)
(2,587,078)
(2,747)
(2,589,825)
9,999,597
(585,547)
-
-
-
-
9,999,597
(585,547)
1,216,300
(4,623,900)
3,407,600
-
-
124,260
-
124,260
-
-
-
-
9,999,597
(585,547)
-
124,260
63,973,234
163,204
(40,614,874)
23,521,564
(221,056)
23,300,508
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
25
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Cash flows from operating activities
Payments to suppliers and employees
Research and development tax credit received
Interest paid
Interest received
Note
Consolidated
Year Ended
30 June 2019
$
Inflows/
(Outflows)
Consolidated
Year Ended
30 June 2018
$
Inflows/
(Outflows)
(3,831,464)
641,173
(19,210)
5,320
(3,459,723)
548,627
(120,475)
20,477
Net cash used in operating activities
5
(3,204,181)
(3,011,094)
Cash flows from investing activities
Payments for plant and equipment
Payments for exploration and evaluation
expenditure
Proceeds from disposal of plant and equipment
Refund of rental bond
-
(20,278)
-
609
59,088
(4,678,786)
-
-
Net cash provided by / (used in) investing activities
59,697
(4,699,064)
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Payment of share issue costs
Costs of loan financing
429,825
2,435,218
(491,625)
39,812
(289,602)
9,802,688
1,304,301
(914,301)
(392,461)
-
Net cash provided by financing activities
2,123,628
9,800,227
Net (decrease) / increase in cash held
(1,020,856)
2,090,069
Cash and cash equivalents at beginning of the
financial year
Effects of exchange rates on cash and cash
equivalents
2,192,277
102,208
-
-
Cash and cash equivalents at year end
5
1,171,421
2,192,277
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
1.
Statement of significant accounting policies
Basis of preparation
a)
These financial statements are general purpose financial statements, which have been prepared
in accordance with the requirements of the Corporations Act 2001, Accounting Standards and
Interpretations and comply with other requirements of the law. The accounting policies detailed
below have been consistently applied to all of the years presented unless otherwise stated. The
financial statements are for the Consolidated Entity consisting of Volt Resources Limited and its
subsidiaries. The financial statements have also been prepared on a historical cost basis. Cost
is based on the fair values of the consideration given in exchange for assets. The Company is a
listed public company, incorporated in Australia. The entity’s principal activities are graphite
exploration activities in Tanzania.
Going Concern
b)
The financial report has been prepared on a going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the normal course of business.
At 30 June 2019 the Consolidated Entity had cash of $1,171,421 and net assets of $20,789,940,
primarily represented by deferred exploration expenditure of $22,394,753 on its Graphite
prospecting tenements in Tanzania. During the year, net cash outflows from operating activities
totalled $3,204,181 primarily in relation to corporate compliance, management, marketing and
investor relations costs of the listed parent entity.
The Directors are of the opinion that the Consolidated Entity is a going concern due to the
following factors:
(i)
(ii)
The Consolidated Entity is in the process of obtaining regulatory approval in Tanzania to
issue a Prospectus or Information Memorandum to raise debt funding through the issue
of listed Notes on the Dar es Salaam Stock Exchange for the equivalent of US$30 to US$40
million. Simultaneously the Consolidated Entity is progressing alternative funding options
including a Note issue and listing on the Stock Exchange of Mauritius. Assuming a
successful Note issue, all expenditures relating to the Bunyu Graphite project and
Tanzanian activities will be met out of these funds in Tanzania. The corporate costs to be
incurred in Australia are expected to approximate A$2.5 million per annum;
The Company has the ability to raise additional working capital in the shorter term from:
a capital raising;
issue of convertible loan notes; and
(iii)
The Company has the ability to sell assets, or an interest in assets.
Whilst the Directors are confident that the above initiatives will generate sufficient funds to
enable the Consolidated Entity to continue as a going concern for at least the period of 12 months
from the date of signing this financial report, should these initiatives be unsuccessful, there exists
a material uncertainty that may cast significant doubt on the ability of the Consolidated Entity to-
continue as a going concern and, therefore, whether it will be able to realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report.
Volt Resources Limited and Controlled Entities
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
1.
Statement of significant accounting policies (Continued)
Adoption of new and revised standards
c)
In the year ended 30 June 2019, the Directors have reviewed all of the new and revised Standards
and Interpretations issued by the AASB that are relevant to the Consolidated Entity and effective
for the current annual reporting periods beginning on or after 1 July 2018. As a result of this
review, the Directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Consolidated Entity and therefore no material change is
necessary to the Consolidated Entity’s accounting policies.
The new Standards effective and adopted are documented below:
AASB 9 Financial Instruments
The Consolidated Entity has adopted AASB 9 from 1 July 2018. The standard introduced new
classification and measurement models for financial assets. A financial asset shall be measured at
amortised cost if it is held within a business model whose objective is to hold assets in order to
collect contractual cash flows which arise on specified dates and that are solely principal and
interest. A debt investment shall be measured at fair value through other comprehensive income
if it is held within a business model whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that are solely principal and interest as well
as selling the asset on the basis of its fair value. All other financial assets are classified and
measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading
or contingent consideration recognised in a business combination) in other comprehensive
income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as
measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting
mismatch. For financial liabilities designated at fair value through profit or loss, the standard
requires the portion of the change in fair value that relates to the entity's own credit risk to be
presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting
requirements are intended to more closely align the accounting treatment with the risk
management activities of the entity. New impairment requirements use an 'expected credit loss'
('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method
unless the credit risk on a financial instrument has increased significantly since initial recognition
in which case the lifetime ECL method is adopted. For receivables, a simplified approach to
measuring expected credit losses using a lifetime expected loss allowance is available.
Volt Resources Limited and Controlled Entities
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
1.
Statement of significant accounting policies (Continued)
AASB 15 Revenue from Contracts with Customers
The Consolidated Entity has adopted AASB 15 from 1 July 2018. The standard provides a single
comprehensive model for revenue recognition. The core principle of the standard is that an entity
shall recognise revenue to depict the transfer of promised goods or services to customers at an
amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. The standard introduced a new contract-based revenue recognition
model with a measurement approach that is based on an allocation of the transaction price. This
is described further in the accounting policies below. Credit risk is presented separately as an
expense rather than adjusted against revenue. Contracts with customers are presented in an
entity's statement of financial position as a contract liability, a contract asset, or a receivable,
depending on the relationship between the entity's performance and the customer's payment.
Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be
capitalised as an asset and amortised over the contract period.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all of the new and revised Standards and Interpretations in issue
not yet adopted that are relevant to the Consolidated Entity and effective for the half-year
reporting periods beginning on or after 1 January 2019. As a result of this review, the Directors
have determined that there is no material impact of the new and revised Standards and
Interpretations in issue not yet adopted on the Consolidated Entity and therefore no material
change is necessary to the Consolidated Entity’s accounting policies.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted.
Statement of compliance
d)
The financial report was authorised for issue on 24 September 2019. The financial report
complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the
financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (IFRS).
Volt Resources Limited and Controlled Entities
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
1.
Statement of significant accounting policies (Continued)
Basis of consolidation
e)
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its involvement in with the investee;
and
• has the ability within its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements listed above. Consolidation
of a subsidiary begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or
loss from the date the Company gains control until the date when the Company ceases to control
the subsidiary. Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests. Total comprehensive income
of subsidiaries is attributed to the owners of the Company and to the non-controlling interests
even if this results in the controlling interest having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Consolidated Entity’s accounting policies. All intragroup assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members
are eliminated in full on consolidation.
Critical accounting judgements and key sources of estimation uncertainty
f)
The application of accounting policies requires the use of judgements, estimates and
assumptions about carrying values of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions are recognised in the period in which the estimate is revised if it affects only that
period, or in the period of the revision and future periods if the revision affects both current and
future periods.
Share-based payment transactions:
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
using either the Black and Scholes or Trinomial Options formula taking into account the terms and
conditions upon which the instruments were granted.
Exploration and evaluation expenditure:
The application of the Group’s accounting policy for exploration and evaluation expenditure
requires judgment in determining whether it is likely that future economic benefits are likely
either from future exploitation or sale or where activities have not reached a stage which permits
a reasonable assessment of the existence of reserves.
The determination of a Joint Ore Reserves Committee (JORC) resource is itself an estimation
process that requires varying degrees of uncertainty depending on sub-classification and these
estimates directly impact the point of deferral of exploration and evaluation expenditure.
Volt Resources Limited and Controlled Entities
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
1.
Statement of significant accounting policies (Continued)
The deferral policy requires management to make certain estimates and assumptions about
future events or circumstances, in particular whether an economically viable extraction operation
can be established. Estimates and assumptions made may change if new information becomes
available.
2.
Revenue and expenses
Revenue
Interest income (i)
Expenses
Share based payments:
Performance rights
Other Expenses:
Corporate advisors and brokers, including
business development
Depreciation
Travel and accomodation
Other
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended
30 June 2018
$
4,071
4,071
22,220
22,220
591,582
108,261
591,582
108,261
113,939
50,728
118,470
324,449
282,326
63,682
256,438
203,328
607,586
805,774
Accounting policy: revenue recognition
Revenue is recognised at an amount that reflects the consideration to which the consolidated
entity is expected to be entitled in exchange for transferring goods or services to a customer.
For each contract with a customer, the consolidated entity: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction
price which takes into account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Volt Resources Limited and Controlled Entities
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
2. Revenue and expenses (continued)
(i) Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
3.
Income tax
The prima facie income tax benefit on pre-tax accounting loss
reconciles to the income tax benefit in the financial
statements as follows:
Accounting loss before income tax
Income tax benefit calculated at 30% (2018: 30%)
Share based payments
Non-deductible expenses
Capital raising costs deductible
Income tax losses not brought to account
Profit and loss proportion of research and development tax
credit
Consolidated
Year Ended 30
June 2019
$
Consolidated
Year Ended
30 June 2018
$
(4,124,448)
1,237,334
(177,475)
(795,288)
34,376
(298,947)
(3,627,646)
997,603
(29,772)
(637,229)
22,902
(353,504)
641,173
548,627
Income tax benefit from continuing operations
641,173
548,627
The tax rates used in the above reconciliation are the corporate tax rates of Australia 30% and
Tanzania 30% (2018: Australia 30%, Tanzania 30%). The 27.5% tax rate on taxable profits for small
businesses does not apply to Australian corporate entities under Australian tax law if greater than
80% passive income is expected. The Consolidated Entity has tax losses arising in Australia of
$19,251,419 (2018: $18,134,930) that are available indefinitely for offset against future taxable
profits of the companies in which the losses arose. The availability of these losses is subject to
the satisfaction of either the same business or continuity of ownership tests. Tax losses arising in
Tanzania to 30 June 2018 totalled A$1.2 million equivalent. The Tanzania tax losses for the year
ended 30 June 2019 are yet to be determined. Deferred tax assets have not been recognised in
respect of these items because it is not sufficiently probable that future taxable profit will be
available against which the Consolidated Entity can utilise the benefits thereof.
Accounting policy: income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the
reporting date. Deferred income tax is provided on all temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary
differences except:
Volt Resources Limited and Controlled Entities
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
3.
Income tax (continued)
• when the deferred income tax liability arises from the initial recognition of goodwill or
of an asset or liability in a transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss;
or
• when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and the carry-forward
of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
• when the deductible temporary difference
in
subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset
is only recognised to the extent that it is probable that the temporary difference will
reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
is associated with
investments
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred
income tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities and the
deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Tax consolidation legislation
Volt Resources Limited and its 100% owned Australian resident subsidiary have implemented
the tax consolidation legislation. Current and deferred tax amounts are accounted for in each
individual entity as if each entity continued to act as a taxpayer on its own. Volt Resources
Limited recognises both its own current and deferred tax amounts and those current tax
liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused
tax losses which it has assumed from its controlled entities within the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts payable or receivable from or payable to other entities in the
Consolidated Entity. Any difference between the amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated group.
Volt Resources Limited and Controlled Entities
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
3.
Income tax (continued)
Accounting policy: other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position. Cash flows are included in
the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation authority.
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended
30 June 2018
$
4.
Loss per share
Loss after tax from continuing operations
(3,483,275)
(3,079,019)
Weighted average number of ordinary shares
1,455,635,268 1,123,682,862
Consolidated
Year Ended
30 June 2019
No.
Consolidated
Year Ended
30 June 2018
No.
Consolidated
Year Ended
30 June 2019
Cents per
Share
Consolidated
Year Ended
30 June 2018
Cents per
Share
Basic / diluted loss per share – continuing operations
(0.24)
(0.27)
As the Consolidated Entity is loss making in both 2019 and 2018, no potential ordinary shares are
considered to be dilutive as they would act to decrease the loss per share. The options on issue
(Note 13) represent potential ordinary shares but are not dilutive and accordingly have been
excluded from the weighted average number of ordinary shares and potential ordinary shares
used in the calculation of diluted loss per share.
Volt Resources Limited and Controlled Entities
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
4.
Loss per share (continued)
Accounting policy: earnings/loss per share
Basic earnings/loss per share is calculated as net profit or loss attributable to members of the
parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference
share dividends, divided by the weighted average number of ordinary shares, adjusted for any
bonus element. Diluted earnings per share is calculated as net profit or loss attributable to
members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares; divided by the weighted average
number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
5.
Cash and cash equivalents
Cash at bank and on hand
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
1,171,421
2,192,277
1,171,421
2,192,277
Reconciliation of loss for the year to net cash outflows from operating activities:
Loss for the year
Depreciation
Foreign exchange (gain)/loss
Share based payments
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Year ended
30 June 2019
$
(3,483,275)
50,728
(38,222)
591,582
112,485
6,917
(447,789)
3,393
Year ended
30 June 2018
$
(3,079,019)
63,682
(56,111)
108,261
(66,419)
4,985
(23,658)
37,185
Net cash used in operating activities
(3,204,181)
(3,011,094)
Volt Resources Limited and Controlled Entities
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
5.
Cash and cash equivalents (continued)
Accounting policy: cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Cash at bank earns interest at floating rates based on daily
bank deposit rates.
6.
Trade and other receivables
Current:
GST receivable net
Sundry receivables
Rental bonds
Non-Current:
Rental bond
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
15,562
26,186
-
131,319
24,413
59,088
41,748
214,820
3,900
3,900
2,400
2,400
Accounting policy: trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method, less any allowance for
expected credit losses. Trade receivables are generally due for settlement within periods
ranging from 15 days to 30 days.
The consolidated entiy has applied the simplified approach to measuring expected credit losses,
which uses a lifetime expected loss allowance. To measure the expected credit losses, trade
receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit
losses.
Volt Resources Limited and Controlled Entities
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
7.
Other financial assets
Term deposit
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
30,000
30,000
30,000
30,000
Accounting policy: financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. Such assets are subsequently measured at either amortised cost or fair value depending
on their classification. Classification is determined based on both the business model within
which such assets are held and the contractual cash flow characteristics of the financial asset
unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset,
its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such
financial assets will be either: (i) held for trading, where they are acquired for the purpose of
selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value movements are recognised in profit
or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments
which the consolidated entity intends to hold for the foreseeable future and has irrevocably
elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets
which are either measured at amortised cost or fair value through other comprehensive income.
The measurement of the loss allowance depends upon the consolidated entity's assessment at
the end of each reporting period as to whether the financial instrument's credit risk has
increased significantly since
initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Volt Resources Limited and Controlled Entities
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
7.
Other financial assets (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition,
a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's
lifetime expected credit losses that is attributable to a default event that is possible within the
next 12 months. Where a financial asset has become credit impaired or where it is determined
that credit risk has increased significantly, the loss allowance is based on the asset's lifetime
expected credit losses. The amount of expected credit loss recognised is measured on the basis
of the probability weighted present value of anticipated cash shortfalls over the life of the
instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss
allowance is recognised within other comprehensive income. In all other cases, the loss allowance
is recognised in profit or loss.
8.
Plant and equipment
Cost
Accumulated depreciation
Written down value
Reconciliation:
Opening written down value
Additions
Depreciation
Disposals
Foreign currency translation
Closing written down value
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
148,617
(102,940)
168,120
(67,640)
45,676
100,480
100,480
-
(50,728)
(4,075)
-
123,854
20,279
(63,682)
-
20,029
45,677
100,480
Accounting policy: property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful
life of the assets as follows:
• Plant and equipment – over 3 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date,
with recoverable amount being estimated when events or changes in circumstances indicate
that the carrying value may be impaired. The recoverable amount of plant and equipment is the
higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
Volt Resources Limited and Controlled Entities
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For
an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in
use can be estimated to be close to its fair value. An impairment exists when the carrying value
of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or
cash-generating unit is then written down to its recoverable amount. For plant and equipment,
impairment losses are recognised in profit or loss for the year as a separate line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further
future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
9.
Deferred exploration and evaluation expenditure
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
Balance at beginning of year
21,786,559
16,581,589
Expenditure during the year
Foreign currency translation
602,879
5,315
4,863,440
341,530
Balance at end of year
22,394,753
21,786,559
Accounting policy: exploration and evaluation
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where
the following conditions are satisfied:
(i)
(ii) at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
(a) the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting
date reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights
to explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortised of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest. Exploration and evaluation assets are assessed for impairment when facts and
Volt Resources Limited and Controlled Entities
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
9.
Deferred exploration and evaluation expenditure (continued)
circumstances suggest that the carrying amount of an exploration and evaluation asset may
exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset
(for the cash generating unit(s) to which it has been allocated being no larger than the relevant
area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years. Where a decision has been
made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development. Capitalised exploration and evaluation expenditure represents the accumulated
cost of acquisition and subsequent cost of exploration and evaluation of the properties.
Ultimate recoupment of these costs is dependent on the successful development and
commercial exploitation, or alternatively, sale, of the respective areas of interest.
Accounting policy: impairment of assets
The Consolidated Entity assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when annual impairment testing for an
asset is required, the Consolidated Entity makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset's value in
use cannot be estimated to be close to its fair value. In such cases the asset is tested for
impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating
unit is considered impaired and is written down to its recoverable amount. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried
at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An
assessment is also made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated.
A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. After such a reversal the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.
Volt Resources Limited and Controlled Entities
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
10.
Trade and other payables
Trade creditors and accruals
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
347,354
614,647
347,354
614,647
Accounting policy: trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods
and services provided to the Consolidated Entity prior to the end of the financial year that are
unpaid and arise when the Consolidated Entity becomes obliged to make future payments in
respect of the purchase of these goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months. Trade payables are non-interest
bearing and are normally settled on 30-day terms.
11.
Provisions
Employee entitlements
12.
Borrowings
Current
Convertible loans (a)
R&D loans (b)
Directors’ loans (c)
Short-term loan (d)
Non-current
18-month US$ loan (e)
Total Borrowings
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
62,260
58,867
62,260
58,867
-
-
100,948
1,422,761
399,844
-
-
-
1,523,709
399,844
1,004,648
-
2,528,357
399,844
Volt Resources Limited and Controlled Entities
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
Movement in borrowings:
Balance at beginning of year
Proceeds from convertible loans
Repayment of convertible loans
Repayment of convertible loan through share issue
Interest accrued on convertible loans
Interest paid that was previously accrued
Proceeds of R&D loans
Repayment of R&D loans
Proceeds of directors’ loans
Interest accrued on directors’ loans
Proceeds of short-term loan
Face value premium on short term loan
Repayments of short-term loan
Foreign exchange revaluation of short term loan
Proceeds from 18-month US$ loan
Establishment fee payable at maturity
Deferred establishment fee
Accrued interest on 18-month US$ loan
Foreign exchange revaluation of 18-month US$ loan
Year ended
30 June 2019
$
Year ended
30 June 2018
$
399,844
-
(390,000)
-
-
(9,844)
512,000
(512,000)
100,000
948
1,339,286
160,714
(102,110)
24,871
1,006,130
503,065
(497,623)
3,274
(10,198)
-
875,000
(475,000)
(10,000)
9,844
-
439,301
(439,301)
-
-
-
-
-
-
-
-
-
-
-
Balance at end of year
2,528,357
399,844
(a) These funds have been raised from various lenders through a convertible loan facility for 12
months, with an interest rate of 10% per annum which accrues daily. The interest is payable
quarterly in arrears in cash or Company shares. The lender can convert the facility into Company
shares at any time prior to maturity at a conversion price of $0.05 per share. The prior year
balance was fully repaid during the period to October 2018.
(b) The Company entered into a secured loan agreement in October 2018 for $512,000 with an
annual interest rate of 14% per annum. This is secured against the Company’s present and
future right, title and interest in its eligible research and development expenditure to which it
will become entitled as a tax refund under the applicable tax legislation. The loan was settled
on 21 December 2018.
(c) On the 27 May 2019 Volt Director’s Mr Hunt and Mr Kabunga provided unsecured loans of
$50,000 each on commercial terms or better at 10.0% per annum repayable by 15 July 2019 or
earlier at the Company’s election. These were repaid in full on 1 July 2019.
(d) The Company entered into a secured funding agreement on 14 January 2019 to provide a short-
term loan for six months with a face value equivalent to A$1.5 million (US$1.0 million) and
principal repayments totalling approximately A$0.1 million during the April to June 2019
quarter, the loan is denominated in US$ and the proceeds totalled the equivalent of
A$1,339,286. Subsequent to year’s end the loan maturity was extended from 14 July 2019 to
14 September 2019, refer subsequent events Note 23.
Volt Resources Limited and Controlled Entities
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
(e) On the 24 June 2019 as part of US$1.0 million in funding from a European based high net worth
investor, Volt received US$700,000 in unsecured loan funds with the full amount due at
maturity in 18-months. The total amount payable at maturity includes a deferred establishment
fee of US$350,000 and interest payable at 20.0% per annum semi-annually.
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
13.
Issued capital
Ordinary shares fully paid of no par value
64,415,434
63,973,234
64,415,434
63,973,234
Consolidated Year Ended
30 June 2019
Number
Consolidated Year Ended
30 June 2018
$
Number
$
Movement in
ordinary shares on
issue:
Balance at beginning
of year
In lieu of services
Performance rights
converted at $nil per
right
Share purchase plan
Share placements
Options exercised at
$0.02 per share
Shares issued in lieu
of interest
Convertible loan
converted into shares
Transfer from share
based payment
reserve on exercise of
options
Issue expenses
Balance at end of
year
1,455,379,711
63,973,234
976,784,189
53,342,884
-
-
-
-
-
-
20,845,714
-
98,450
-
-
-
-
-
429,824
-
111,379,981
130,504,148
-
2,338,980
2,914,500
-
236,314,931
4,726,299
4,923
196,462
9,818
-
-
7,453
200,000
10,000
-
-
1,216,300
(585,547)
1,476,323,875
64,415,434 1,455,379,711
63,973,234
Volt Resources Limited and Controlled Entities
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
13.
Issued capital (continued)
Share options:
Grant Date Details
Expiry Date
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
21-June-18 Unlisted options
25-June-19 Unlisted options
30-Apr-19
30-Apr-19
30-Apr-19
30-Apr-19
30-Apr-19
23-Dec-20
Exercise
Price
Balance at
30-Jun-18
$0.06
$0.08
$0.10
$0.12
$0.06
$0.04
4,200,000
4,200,000
4,200,000
4,200,000
8,000,000
-
24,800,000
Granted
During the
Year
-
-
-
-
-
25,536,000
25,536,000
Exercised
During
the Year
-
-
-
-
-
-
-
Expired
During the
Year
(4,200,000)
(4,200,000)
(4,200,000)
(4,200,000)
(4,200,000)
-
(24,800,000)
Cancelled
During
the Year
-
-
-
-
-
-
-
Balance at
30-Jun-19
-
-
-
-
-
25,536,000
25,536,000
The options granted during the year were free attaching to the June 2019 placement.
Performance rights:
Issue Date Details
Granted
During the
Year
Various Unlisted performance rights 19,500,000 35,000,000
19,500,000 35,000,000
Balance at
30 June
2018
Expired
during the
Year
(34,500,000)
(34,500,000)
Converted
During the
Year
-
-
Balance at
30 June
2019
20,000,000
20,000,000
The Company announced on 22 October 2018 the granting of 35,000,000 performance rights to the CEO,
under the Performance Rights Plan approved by shareholders at the 2015 AGM. These performance rights
are subject to the achievement of certain milestones. A total of 15,000,000 performance rights previously
held by the CEO, were cancelled by mutual agreement for nil consideration during September 2018. This
cancellation has been accounted for by the acceleration of vesting and the remaining vesting expense
relating to these cancelled performance rights of $181,740 has been included in the share based payments
expense in the current period.
Volt Resources Limited and Controlled Entities
44
Share
based
payment
expense
315,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
13.
Issued capital (continued)
The remaining 4,500,000 performance rights carried forward were held by two non-executive directors.
These rights were granted in the FY2017 year and required commencement of mining, and processing of
first ore recovered from the Bunyu Graphite project by 31 March 2019 to vest. This vesting hurdle was not
achieved in the timeframe and therefore these rights have lapsed. The vesting condition milestones, fair
value and share based payments expense for the 35 million performance rights are detailed in the table
below:
Milestone
Expiry
Date
Number of
Options
Tranche Fair Value
(per right)
Total Fair
Value
Estimated
% to vest
Raise USD30m for
the development
of the Bunyu
Stage 1 project
Receipt of the
first sales revenue
from product
produced from
the Bunyu Stage 1
project
Achieving a VRC
20-day VWAP of
15 cents per share
Total
31
March
2019
30 June
2020
Within 3
years of
grant
15,000,000
A
$0.021
$315,000
100%
10,000,000
B
$0.021
$210,000
100%
$85,657
10,000,000
C
$0.004
$40,000
100%
$9,185
35,000,000
$409,842
Tranche A and Tranche B performance rights do not contain market based vesting conditions and have been
valued using a Black Scholes option pricing model as the appropriate valuation model. Tranche C rights do
contain market based vesting conditions and have been valued using an up and in single barrier share option
pricing model with a Parisian barrier adjustment. The model takes into consideration that the Tranche C
Rights will vest at any time during the performance period, given that the VWAP exceeds the determined
barrier over the specified number of days. The model incorporates a trinomial option pricing model.
Accounting policy: issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Volt Resources Limited and Controlled Entities
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
14.
Reserves
Share based payments reserve:
Balance at beginning of year
Share based payments
Transfer to share capital on exercise of options
Transfer to accumulated losses on expiry of options and
lapse of performance rights
Balance at end of year
Foreign currency translation reserve:
Balance at beginning of year
Currency translation differences
Balance at end of year
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended 30 June
2018
$
176,869
591,582
-
4,676,507
124,262
(1,216,300)
(673,609)
(3,407,600)
94,842
176,869
(13,665)
(61,075)
(74,740)
(502,857)
489,192
(13,665)
Total reserves
20,102
163,204
Accounting policy: foreign currency translation
Both the functional and presentation currency of Volt Resources Limited and its Australian subsidiaries is
Australian dollars. Each entity in the Consolidated Entity determines its own functional currency and items
included in the financial statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the reporting date. All exchange differences
in the consolidated financial report are taken to profit or loss. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the
initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss. The functional currency of
foreign operations through Dugal Resources Lda and Xiluva Mozambi Lda, is Mozambique New Metical
(MZN) The functional currency of foreign operations through Volt Graphite Tanzania Limited is Tanzanian
Shillings (TZS) and US Dollars (USD).
Volt Resources Limited and Controlled Entities
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
14.
Reserves (continued)
As at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation
currency of Volt Resources Limited at the rate of exchange ruling at the reporting date and their statements
of comprehensive income are translated at the weighted average exchange rate for the year. The
exchange differences arising on the translation are taken directly to a separate component of equity, being
recognised in the foreign currency translation reserve. On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit
or loss.
15.
Share based payments
The following share based payments were made during the financial year:
Details
Security Type
Issue / Grant
Date
Number Issued /
Granted
Fair Value
Vested Expense
In lieu of interest
Fully paid ordinary shares
In lieu of interest
Fully paid ordinary shares
Trevor Matthews
Performance rights
2-Aug-18
11-Oct-18
22-Oct-18
Total
70,677
27,773
35,000,000
35,098,450
$3,534
$1,389
$565,000
$569,923
$3,534
$1,389
$409,842
$414,765
The fair value of the equity settled performance rights granted during the financial year is
estimated as at the date of grant using the Black Scholes model (except Tranche C Performance
Rights) and Trinomial Option model (Tranche C Performance Rights) taking into account the terms
and conditions upon which the options were granted:
Details
Share price barrier
Expected volatility
Risk free interest rate
Expected life
Exercise price
Grant date share price
Fair value per
right/option
Black Scholes Option Model
Tranche A
Performance RIghts
expiring
18-May-2020
n/a
80%
Tranche B
Performance
RIghts expiring
31-Mar-2018
n/a
80%
Trinomial Option
Model
Tranche C3
Performance
RIghts expiring
18-May-2020
$0.15
70%
2.02%
0.44 years
nil
$0.021
2.02%
1.69 years
nil
$0.021
$0.021
$0.021
2.09%
3 years
nil
$0.021
$0.004
Volt Resources Limited and Controlled Entities
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
15.
Share based payments (continued)
Accounting policy: share-based payment transactions
(i) Equity settled transactions:
The Consolidated Entity provides benefits to employees (including senior executives) of the
Consolidated Entity in the form of share-based payments, whereby employees render services
in exchange for shares or rights over shares (equity-settled transactions). The cost of these
equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an
external valuer using a Black-Scholes model. In valuing equity-settled transactions, no account
is taken of any performance conditions, other than conditions linked to the price of the shares
of Volt Resources Limited (market conditions) if applicable. The cost of equity-settled
transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects
(i) the extent to which the vesting period has expired; and
(ii) the Consolidated Entity’s best estimate of the number of equity instruments that will
ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the
effect of these conditions is included in the determination of fair value at grant date. The
consolidated statement of profit or loss and other comprehensive income charge or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end
of that period. No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is only conditional upon a market condition. If the terms of an equity-
settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to the employee, as
measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding
options is reflected as additional share dilution in the computation of earnings/loss per share
(see Note 4).
Volt Resources Limited and Controlled Entities
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
16.
Financial instruments
Capital risk management
The Consolidated Entity manages its capital to ensure that entities in the Consolidated Entity will
be able to continue as a going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The Consolidated Entity’s overall strategy remains
unchanged from 2018. The capital structure of the Consolidated Entity consists of debt, cash and
cash equivalents and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings. None of the entities are subject to externally imposed capital
requirements. Operating cash flows are used to maintain and expand operations, as well as to
make routine expenditures such as tax, and general administrative outgoings. Gearing levels are
reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital
and the risks associated with each class of capital.
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Borrowings
Consolidated
30 June 2019
$
Consolidated
30 June 2018
$
1,171,421
45,648
30,000
2,192,277
217,220
30,000
1,247,069
2,439,497
347,354
2,528,357
614,647
399,844
2,875,711
1,014,491
Financial risk management objectives
The Consolidated Entity is exposed to market risk (including currency risk, fair value interest rate
risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Consolidated
Entity seeks to minimise the effect of these risks, by using derivative financial instruments to
hedge these risk exposures where appropriate. The use of financial derivatives is governed by the
Consolidated Entity’s policies approved by the board of directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-
derivative financial instruments, and the investment of excess liquidity. Compliance with policies
and exposure limits is reviewed by management on a continuous basis. The Consolidated Entity
does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.
Volt Resources Limited and Controlled Entities
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
16.
Financial instruments (continued)
Market risk
The Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign
currency exchange rates, commodity prices and exchange rates. There has been no change to the
Consolidated Entity’s exposure to market risks or the manner in which it manages and measures
the risk from the previous period.
Foreign currency risk management
The Consolidated Entity undertakes certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed
within approved policy parameters. No forward contracts or other hedging instruments have
been used during the current or prior year as the Consolidated Entity’s foreign exchange exposure
is not considered to be sufficiently material to justify such activities. The carrying amounts of the
Consolidated Entity’s foreign currency denominated monetary assets and monetary liabilities at
the balance date expressed in Australian dollars are as follows:
US dollars
Tanzanian shillings
Assets
Liabilities
2019
1,012,701
691
2018
1,306
3,767
2019
2,348,088
-
2018
80,911
-
Foreign currency sensitivity analysis
The Consolidated Entity is exposed to US Dollar (USD) and Tanzanian shillings (TZS) currency
fluctuations. The following table details the Consolidated Entity’s sensitivity to a 10% increase
and decrease in the Australian dollar against the relevant foreign currencies. 10% is the sensitivity
rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items and
adjusts their translation at the period end for a 10% change in foreign currency rates. A positive
number indicates a weakening against the respective currency. For a strengthening of the
Australian Dollar against the respective currency there would be an equal and opposite impact on
the result and other equity and the balances below would be negative.
Result for the year
Result for the year
USD Impact
2019
$
(133,539)
2018
$
(7,961)
TZS Impact
2019
TZS
69
2018
TZS
377
Volt Resources Limited and Controlled Entities
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
16.
Financial instruments (continued)
Interest rate risk
As at and during the year ended on reporting date the Consolidated Entity had no significant
interest-bearing assets or liabilities, other than liquid funds on deposit and various loans. As such,
the Consolidated Entity’s income and operating cash flows (other than interest income from funds
on deposit and interest expense on the loans) are substantially independent of changes in market
interest rates. The Consolidated Entity’s exposure to interest rate risk for each class of financial
assets and liabilities is set out below:
Financial Asset
Cash and cash equivalents
Total
Financial Liabilities
Borrowings
Total
Interest Rate Consolidated
2019
$
1,171,421
1,171,421
Floating
Consolidated
2018
$
2,192,277
2,192,277
Interest Rate Consolidated
2019
$
2,528,357
2,528,357
Fixed
Consolidated
2018
$
399,844
399,844
Consolidated Entity and Parent Company sensitivity
The sensitivity analyses below have been determined based on the exposure to interest rates
at the balance date and the stipulated change taking place at the beginning of the financial
year and held constant through the reporting period. At balance date, if interest rates had
been 80 basis points higher or lower and all other variables were held constant, the
Consolidated Entity’s net result would increase or decrease by $9,371 (2017: $17,538). This
is mainly attributable to the Consolidated Entity’s exposure to interest rates on its variable
rate cash holdings.
Credit risk
The Consolidated Entity seeks to trade only with recognised, trustworthy third parties and it
is the Group’s policy to perform credit verification procedures in relation to any customers
wishing to trade on credit terms with the Consolidated Entity. The Consolidated Entity has no
significant concentrations of credit risk.
Liquidity risk
Prudent liquidity management involves the maintenance of sufficient cash, marketable
securities, committed credit facilities and access to capital markets. It is the policy of the
Board to ensure that the Consolidated Entity is able to meet its financial obligations and
maintain the flexibility to pursue attractive investment opportunities through keeping
committed credit lines available where possible, ensuring the Consolidated Entity has
sufficient working capital and preserving the 15% share issue limit available to the Company
under the ASX Listing Rules.
Volt Resources Limited and Controlled Entities
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
16.
Financial instruments (continued)
Net fair value
The carrying amount of financial assets and liabilities recorded in the financial statements
approximate their fair value as at 30 June 2019.
Accounting policy: Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs
are included as part of the initial measurement, except for financial assets at fair value through
profit or loss. Such assets are subsequently measured at either amortised cost or fair value
depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the
financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have
been transferred and the consolidated entity has transferred substantially all the risks and
rewards of ownership. When there is no reasonable expectation of recovering part or all of a
financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such
financial assets will be either: (i) held for trading, where they are acquired for the purpose of
selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value movements are recognised in
profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments
which the consolidated entity intends to hold for the foreseeable future and has irrevocably
elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial
assets which are either measured at amortised cost or fair value through other comprehensive
income. The measurement of the loss allowance depends upon the consolidated entity's
assessment at the end of each reporting period as to whether the financial instrument's credit
risk has increased significantly since initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial
recognition, a 12-month expected credit loss allowance is estimated. This represents a portion
of the asset's lifetime expected credit losses that is attributable to a default event that is
possible within the next 12 months. Where a financial asset has become credit impaired or
where it is determined that credit risk has increased significantly, the loss allowance is based
on the asset's lifetime expected credit losses. The amount of expected credit loss recognised
Volt Resources Limited and Controlled Entities
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
16.
Financial instruments (continued)
is measured on the basis of the probability weighted present value of anticipated cash
shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss
allowance is recognised within other comprehensive income. In all other cases, the loss
allowance is recognised in profit or loss.
17.
Commitments and contingencies
In order to maintain and preserve the rights of tenure to granted exploration tenements, the
Consolidated Entity is required to meet certain minimum levels of exploration expenditure.
As at the reporting date, these future minimum expenditure commitments together with
operating lease commitments for office premises are as follows:
Within one year - exploration
Within one year – office lease
One to five years - exploration
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended
30 June 2018
$
148,027
1,950
349,157
150,319
32,334
362,136
499,134
544,789
There are no contingent liabilities as at the date of this report, other than for the Resettlement
Action Plan totalling US$3.5 million where commencement of resettlements and any
commitments are contingent on the consolidated entity making a Financial Investment
Decision (FID) to develop the Bunyu Graphite project which is contingent on an appropriate
level of development funding being sourced.
On production and sale of graphite products from the Bunyu Graphite project, the previous
owners are entitled to a 3% net smelter royalty on the sale of dried concentrate. At the
Company’s election, at any stage in the future the Company may pay US$2.0 million to reduce
the royalty rate to 1.5%.
Changes to the legal framework governing the natural resources sector in Tanzania were
passed by the Tanzanian Parliament in early July 2017 and the Company advised the ASX of
the impact of the new legislation on 7 July 2017. One impact was the Tanzanian Government
would have a 16% non-dilutable free carried interest in Volt’s Tanzanian subsidiary which
increases from a current interest of nil. The 16% interest is to apply to mining operations under
Volt Resources Limited and Controlled Entities
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
17.
Commitments and contingencies (continued)
a mining licence or a special mining licence. The Company is not aware of any further guidance
or application of this change to date. The Consolidated entity currently retains a 100% interest
in Volt’s Tanzanian subsidiary which holds the Bunyu Graphite Project.
18.
Financial reporting by segments
AASB 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker
in order to allocate resources to the segment and to assess its performance.
The function of the chief operating decision maker is performed by the Board collectively.
Information reported to the Board for the purposes of resource allocation and assessment of
performance is focused broadly on the Group’s diversified activities across different sectors.
The Group’s reportable segments under AASB 8 are predominantly within the one segment
being Mineral Exploration – Tanzania.
Accounting policy: segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified
as the Board of Directors of Volt Resources Limited.
19.
Subsidiaries
Subsidiary
Principal Activity
Volt Graphite Tanzania Plc
Mozambi Graphite Pty Ltd
Mozambi Resource
Investments Pty Ltd
Dugal Pty Ltd
Dugal Resources Lda
Mozambi Ventures Lda
Xiluva Mozambi Lda
Graphite exploration
Holding Company
Dormant
Dormant
Dormant
Dormant
Dormant
Country of
Incorporation
Tanzania
Australia
Australia
Australia
Mozambique
Mozambique
Mozambique
Equity Interest
2019
2018
100%
100%
100%
100%
70%
80%
80%
100%
100%
100%
100%
70%
80%
80%
The Company’s intention is to wind up or liquidate the three Mozambique subsidiaries and
Dugal Pty Ltd.
Volt Resources Limited and Controlled Entities
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
20.
Auditor’s remuneration
Amounts received or due and receivable by HLB Mann Judd
for an audit or review of the financial report
Amounts received by auditors in Tanzania for the audit of
Volt Graphite Tanzania Ltd (2018: 2 years included)
Consolidated
Year Ended
30 June 2019
$
Consolidated
Year Ended
30 June 2018
$
39,927
41,000
6,410
16,041
46,337
57,041
21.
Key management personnel remuneration
Total remuneration paid to key management personnel during the year:
Short term benefits
Post-employment benefits
Share based payments
722,398
49,981
591,582
989,107
71,785
108,261
1,363,961
1,169,153
Parent
30 June 2019
$
Parent
30 June 2018
$
22.
Parent entity information
The following details information related to the parent entity, Volt Resources Limited, as at 30
June 2019. The information presented here has been prepared using consistent accounting
policies as presented in Note 1.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
1,219,906
22,880,951
24,100,857
2,454,427
22,170,665
24,625,092
(391,436)
(2,528,357)
(2,919,793)
(1,028,187)
-
(1,028,187)
21,181,064
23,596,905
Volt Resources Limited and Controlled Entities
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
Parent entity information (continued)
22.
Issued Capital
Reserves
Accumulated losses
Total equity
Financial performance
Parent
30 June 2019
$
Parent
30 June 2018
$
64,415,434
94,482
(43,328,852)
21,181,064
63,973,234
176,869
(40,553,198)
23,596,905
Year ended
Year ended
30 June 2019 30 June 2018
$
$
Loss for the year
Total comprehensive loss for the year
(2,775,654)
(2,775,654)
(2,293,468)
(2,293,468)
Commitments
Within one year
One to five years
1,950
-
32,334
-
1,950
32,334
Accounting policy: parent entity financial information
The financial information for the parent entity, Volt Resources Limited, disclosed in this note has
been prepared on the same basis as the consolidated financial statements, except as set out
below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the
financial statements of Volt Resources Limited. Dividends received from associates are
recognised in the parent entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
(ii) Share-based payments
The Consolidated Entity measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are granted. The
fair value is determined using a Black-Scholes model.
Volt Resources Limited and Controlled Entities
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2019
23.
Events subsequent to year end
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the reporting entity in future
financial periods other than the following:
• On 1 July 2019 the Company announced the appointment of Mr Giacomo Fazio as a Non-
Executive Director, and the resignation of Mr Alwyn Vorster as a Non-Executive Director
of the Company;
• On 15 July 2019, the Company has extended the maturity date for the loan facility with
Riverfort Global Capital and Yorkville Advisors by two months, from 14 July 2019 to 14
September 2019. The terms of the extension require an amount payable at execution of
US$375,000, comprising a loan repayment amount of US$335,106 which reduces the total
amount payable at maturity to US$664,894 from US$1.0 million and an extension fee of
US$39,894. There are nil interest charges for the loan extension period. In addition,
unlisted options to the value of $189,969 and with a 36 month maturity will be issued to
the lenders;
• The Company announced on 22 July 2019 that they will be undertaking a Share Purchase
Plan which will be underwritten by Patersons Securities Limited to $1.1 million. The new
shares will be issued at a 20% discount to the volume weighted average price traded on
the ASX during the 5 days immediately prior to the issue date. Funds raised will be used
to repay the outstanding loan notes due to Riverfort Global Capital and Yorkville Advisors
due 14 September 2019 and for general working capital and corporate purposes. In
addition, the Company has reached agreement with Riverfort and Yorkville whereby the
issue of unlisted options to the value of $189,970 under the Debt Facility Restructure will
be cancelled in exchange for the payment of US$31,193;
• On 21 August 2019 the Company announced that it raised $1.65 million; from the Share
Purchase Plan $1,299,000 and a top-up placement of $350,000 of which $100,000 is
subject to shareholder approval at the next general meeting of shareholders;
• On 23 August 2019 based on an issue price of $0.012 per share, 108,250,081 shares were
issued under the Share Purchase Plan and a further 20,833,335 shares in relation to
$250,000 of the top-up placement;
• On 10 September 2019 the Company announced that it had lodged a Prospectus for
approval and listing of its Mauritian Note Issue with the Stock Exchange of Mauritius. In
addition the Company confirmed it had fully repaid the amounts outstanding under the
loan notes (US$664,894) due to Riverfort Global Capital and Yorkville advisors out of the
proceeds from the Share Purchase Plan and Top-up placement.
Volt Resources Limited and Controlled Entities
57
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Volt Resources Limited (the ‘Company’):
a. the accompanying financial statements and notes and the additional disclosures
are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the Consolidated Entity’s financial position
as at 30 June 2019 and of its performance for the year then ended; and
ii. complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations regulations 2001; and
b. there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
2. The financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
3. This declaration has been made after receiving the declarations required to be made to the
directors in accordance with Section 295A of the Corporations Act 2001 for the financial year
ended 30 June 2019.
This declaration is signed in accordance with a resolution of the Board of Directors.
___________________________
Asimwe Kabunga
Non-Executive Chairman
24 September 2019
Volt Resources Limited and Controlled Entities
58
INDEPENDENT AUDITOR’S REPORT
To the members of Volt Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Volt Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2019, 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:
a) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
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.
Volt Resources Limited and Controlled Entities
59
Key Audit Matter
How our audit addressed the key audit
matter
Carrying amount of exploration and evaluation
expenditure
Note 9 of the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group capitalises
all exploration and evaluation expenditure, including
acquisition costs and subsequently applies
the
capitalisation model after recognition.
Our audit focused on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation asset, as this is one of the most significant
assets of the Group. We planned our work to address
the audit risk that the capitalised expenditure might no
longer meets the recognition criteria of the standard. In
addition, we considered it necessary to assess
whether facts and circumstances existed to suggest
that the carrying amount of an exploration and
evaluation asset may exceed its recoverable amount.
Our procedures included but were not
limited to the following:
▪ We obtained an understanding of the
associated with
key
management’s review of the carrying
values of each area of interest;
processes
▪ We
considered
the Directors’
assessment of potential indicators of
impairment;
▪ We obtained evidence that the Group
has current rights to tenure of its areas
of interest;
▪ We examined the exploration budget
for the year ending 30 June 2020 and
discussed with management
the
nature of planned ongoing activities;
▪ We enquired with management,
reviewed ASX announcements and
reviewed minutes
of Directors’
meetings to ensure that the Group had
not resolved to discontinue exploration
and evaluation at any of its areas of
interest; and
▪ We examined the disclosures made in
the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s consolidated annual report for the year ended 30 June 2019,
but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Volt Resources Limited and Controlled Entities
60
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or 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 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.
- 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.
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.
Volt Resources Limited and Controlled Entities
61
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of Volt Resources Limited for the year ended 30 June
2019 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
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
24 September 2019
B McVeigh
Partner
Volt Resources Limited and Controlled Entities
62
ASX ADDITIONAL INFORMATION
The following additional information is required by the Australian Securities Exchange. The
information is current as at 27 September 2019.
(a) Distribution schedule and number of holders of equity securities as at 27 September
2019
Issued Securities
1 –
1,000
1,001 –
5,000
5,001 –
10,000
10,001
–
100,000
100,001
– and
over
Total
Fully Paid Ordinary Shares
255
194
163
1,345
1,438
3,395
Options exercisable at $0.04
on or before 23 December
2020
Performance Rights
-
-
-
-
-
-
-
-
1
1
1
1
The number of holders holding less than a marketable parcel of fully paid ordinary shares as
at 27 September 2019 is 1,416.
(b) 20 Largest holders of quoted equity securities as at 27 September 2019
The names of the twenty largest holders of fully paid ordinary shares (ASX code: VRC) as at 27
September 2019 are:
Rank Name
Shares
% of Total
Shares
Kabunga Holdings Pty Ltd
161,392,017
10.05
1
2
3
4
5
6
7
8
9
10
HSBC Custody Nominees (Australia) Limited
Bosswhat Pty Ltd
23,465,205
Daroc Pty Limited
BNP Paribas Nominees Pty Ltd
Mr Leslie Thomas King & Mrs Heather King
Gerard C Toscan Management Pty Limited
22,150,000
19,465,164
18,900,000
14,526,750
11 Mr Peter Raymond Notman + Mrs Elaine Notman
13,374,720
12
Mr Richard Him Sim Vom
13
Endjua Pty Ltd
12,258,657
11,023,427
2.93
1.84
1.70
1.65
1.46
1.38
1.21
1.18
0.90
0.83
0.76
0.69
63 ASX ADDITIONAL INFORMATION (CONTINUED)
Rank Name
14 Minerals And Metals Marketing Pty Ltd
15 Mr Robert Adrian Jones
16 Ms Leticia Kokutengeneza Kabunga
17
18
Mr Stephen Mark Young & Mrs Lilibeth Villamin Young
Mr Paul John Anstee & Mr Rodney Michael Smith
19 Mr Kevin Brady
20
Haj Corporate & Financial Services Pty Ltd
Shares
% of Total
Shares
10,722,740
10,400,000
10,286,380
10,157,272
10,130,000
10,000,000
8,950,000
0.67
0.65
0.64
0.63
0.63
0.62
0.56
TOTAL
497,497,718
30.99
Stock Exchange Listing – Listing has been granted for 1,605,407,291 fully paid ordinary shares
of the Company on issue on the Australian Securities Exchange.
The unquoted securities on issue as at 27 September 2019 are detailed below in part (d).
(c)
Substantial shareholders
Substantial shareholders in Volt Resources Limited and the number of equity securities over
which the substantial shareholder has a relevant interest as disclosed in substantial holding
notices provided to the Company are listed below:
Name
Shares
% of Total
Shares
Kabunga Holdings Pty Ltd
161,392,017
10.05%
64 ASX ADDITIONAL INFORMATION (CONTINUED)
(d) Unquoted Securities
The number of unquoted securities on issue as at 27 September 2019 is as follows:
Unquoted Security
Options exercisable at $0.04 on
or before 23 December 2020.
Number on
Issue
25,536,000
Performance Rights.
20,000,000
(e) Holder Details of Unquoted Securities
Unquoted security holders that hold more than 20% of a given class of unquoted securities
as at 27 September 2019 other than the performance rights which were issued under an
employee incentive scheme are as follows:
Security
Name
Number of
Securities
Options exercisable at $0.04 on
or before 23 December 2020.
Lars Bader
25,536,000
(f) Restricted Securities as at 27 September 2019
The Company had no restricted securities as at 27 September 2019.
(g) Voting Rights
All fully paid ordinary shares carry one vote per ordinary share without restriction.
Unquoted options and performance rights have no voting rights.
(h) On-Market Buy-Back
The Company is not currently undertaking an on-market buy-back.
(i) Corporate Governance
The Board of Volt Resources Limited is committed to achieving and demonstrating the highest
standards of Corporate Governance. The Board is responsible to its Shareholders for the
performance of the Company and seeks to communicate extensively with Shareholders. The
Board believes that sound Corporate Governance practices will assist in the creation of
Shareholder wealth and provide accountability. In accordance with ASX Listing Rule 4.10.3,
the Company has elected to disclose its Corporate Governance policies and its compliance
with them on its website, rather than in the Annual Report. Accordingly, information about
the Company's Corporate Governance practices is set out on the Company's website at
http://voltresources.com/corporate-governance/
65 ASX ADDITIONAL INFORMATION (CONTINUED)
(k) Schedule of Mining Tenements
The schedule of interest in mining tenements both as at 30 June 2019 and as at 27 September
2019 is as follows:
All tenement within Tanzania are held by Volt Graphite Tanzania Ltd, a wholly owned
subsidiary of Volt Resources Ltd.
Project
Location
Tenement Number
Status
Current
Beneficial
Interest
Status
30 June
2019
Live
Live
Live
Live
ML 591/2018
ML 592/2018
Tanzania
Graphite
Tanzania – Masasi District
Tanzania – Masasi District
Tanzania - Nachingwea,
Ruangwa & Masasi Districts
Tanzania - Ruangwa &
Masasi Districts
Tanzania - Newala & Masasi
Districts
Tanzania - Newala, Ruangwa
& Masasi Districts
Tanzania - Ruangwa & Lindi
Districts
Tanzania - Masasi District
Tanzania – Masasi District
Tanzania – Masasi District
PL 10643/2015
Live
Renewal
PL 10644/2015
Live
Renewal
PL 10667/2015
Live
Renewal
PL 10668/2015
Live
Renewal
PL 10717/2015
PL 10788/2016
PL 13207/2018
PL 13208/2018
Live
Live
Renewal
Live
Application
Application
100%
100%
100%
100%
100%
100%
100%
100%
#
#
# Prospecting Licence Applications PL 13207/2018 and PL 13208/2018 are for 100% of the
remaining area covered by PL 10718/2015 which ceased on the granting of the two Mining
Licenses over a portion of the previously held prospecting license tenement area.
66 Mineral Resource and Ore Reserve Statements
Summary of results of the entity’s annual review of its Mineral Resources and Ore Reserves.
The Company carries out an annual review of its Mineral Resources and Ore Reserves as required by
the ASX Listing Rules. The review was carried out as at 30 June 2019. The estimates for Ore Reserves
and Mineral Resources were prepared and disclosed under the JORC Code 2012.
As of the 30 June 2019, the Company reviewed the Mineral Resource and Ore Reserve inventories and
found:
•
• Opportunities for the Company to convert lower classified Mineral Resources into higher
All Mineral Resource and Ore Reserve statements follow JORC 2012 guidelines.
classification, and
• Opportunities to convert appropriate Mineral Resources into Ore Reserves,
with follow up exploratory work including but not limited to infill drilling and further metallurgical test
work.
The Company is not aware of any new information or data that materially affects the information
included in the Annual Statement about Mineral Resources or Ore Reserves and confirms that all
material assumptions and technical parameters underpinning the estimates continue to apply and
have not materially changed as of 30 June 2019.
Mineral Resource and Ore Reserve Statements
All Mineral Resources and Ore Reserves announced by Volt Resources Ltd are within the Republic of
Tanzania.
Volt Resources the consolidated entity, is targeting Graphite mineralisation within the Republic of
Tanzania.
As of the 30 June 2019, the Graphite Mineral Resources for Volt Resources were:
Bunyu Project
Mt
TGC (%)
Measured
Namangale North (now Bunyu 1)
Total Measured
Indicated
Namangale North (now Bunyu 1)
Namangale South (now Bunyu 2 & 3)
Total Indicated
Inferred
20
20
122
33
155
5.3
5.3
5.2
4.3
5.0
Namangale North (now Bunyu 1)
Namangale South (now Bunyu 2 & 3)
Total Inferred
Total Resource
Note:
The Mineral Resource is inclusive of the Ore Reserves.
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
This Mineral Resource statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition).
Mineral Resources were based on cut-off grades of 2.5% TGC for Namangale North and 4% TGC for Namangale South.
264
23
286
461
5.0
3.6
4.9
4.9
67 As per clause 49 of the JORC 2012 Code, to detail the specifications of the minerals reported above:
Size
µm Label
500 Super Jumbo
Jumbo
300
180 Large
150 Medium
75 Small
-75 Fine
Namangale 1
(now Bunyu 1)
%
1
13
29
12
27
18
Namangale 2
(now Bunyu 2)
%
9
29
29
8
16
9
Namangale 3
(now Bunyu 3)
%
5
26
30
10
19
11
Note:
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
As of the 30 June 2019, the Graphite Ore Reserves for Volt Resources were:
Ore Reserve Classification
Ore (Mt)
TGC (%)
Proved
Contained
Graphite (Mt)
Namangale 1 North (now Bunyu 1)
Namangale 2 South (now Bunyu 2)
Namangale 3 South (now Bunyu 3)
Subtotal - Proved
19.3
-
-
19.3
4.32
-
-
4.32
0.8
-
-
0.8
Probable
Namangale 1 North (now Bunyu 1)
Namangale 2 South (now Bunyu 2)
Namangale 3 South (now Bunyu 3)
Subtotal - Probable
Total Ore Reserve
Note:
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
This Ore Reserve statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition).
Ore Reserves are based on the following processing cut-off that varied between deposits: 1.29% TGC for Namangale 1, 1.52% for
Namangale 2, and 1.76% for Namangale 3.
95.8
6.4
5.8
108.1
127.4
4.4
5.11
3.05
4.37
4.36
4.2
0.3
0.2
4.7
5.6
Material changes in Mineral Resources and Ore Reserve Holdings from the previous financial year
The material changes in the Graphite Mineral Resources from the 2018 financial year to the 2019
financial year:
There were no material changes to Mineral Resources or Ore Reserves during the year ended 30 June
2019. An updated subset of the Mineral Resources and Ore Reserves relating to the Stage 1 higher
grade portion of the Bunyu 1 deposit was announced on 31 July 2018 and is further detailed below,
there has been no material changes to this subset during the remainder of the year to 30 June 2019.
68 Governance Arrangements and Internal Controls with respect to Mineral Resource and Ore Reserve
Estimates
The Company ensures that all Mineral Resource and Ore Reserve calculations are subject to
appropriate levels of governance and internal controls.
Exploration Results are collected and managed by competent qualified geologists and metallurgists.
All data collection activities are conducted to industry standards based on a framework of quality
assurance and quality control protocols covering all aspects of sample collection, topographical and
geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample
management.
Mineral Resource and Ore Reserve estimates are prepared by qualified independent Competent
Persons. If there is a material change in the estimate of a Mineral Resource, the modifying factors for
the preparation of Ore Reserves, or reporting an inaugural Mineral Resource or Ore Reserve, the
estimate and supporting documentation in question are reviewed by a suitably qualified independent
Competent Person.
The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with
the JORC Code 2012 Edition.
The Ore Reserves and Mineral Resources Statement is based on and fairly represents information and
supporting documentation prepared by competent and qualified independent external professionals.
The Mineral Resources Statement has been approved by a Competent Person, Mr Mark Biggs of ROM
Resources Ltd, a member of the Australasian Institute.
The Ore Reserves Statement has been approved by Mr Andrew Law of Optiro Pty Ltd, a Competent
Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Law, Mr Biggs and
Mr Bull have consented to the inclusion of the Statement in the form and context in which it appears
in this Annual Statement or Report.
Competent Person’s Statements
The information above is extracted from the announcement dated 15 December 2016. The Company
confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement and, in the case of estimates of Mineral Resources and
Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in
the relevant market announcements continue to apply and have not materially changed.
On 31 July 2018, the Company announced an updated subset of the Mineral Resources and Ore
Reserves relating to the Stage 1 higher grade portion of the Bunyu 1 deposit. The subset is further
detailed in a separate section with separate competent person statements below.
The Company confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified from the original market announcement. Nevertheless,
for ease of access, please see the relevant Competent Person’s statements below:
The information in this report that relates to Exploration Targets and Exploration Results is based on
information compiled by Mr Matthew Bull, a Competent Person who is a member of the Australasian
Institute of Geoscientists. Mr Bull is a previous director of Volt Resources Ltd and held securities in the
Company. Mr Bull has sufficient experience that 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 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Bull consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by
Mr Mark Biggs, a Competent Person who is a member of the Australasian Institute of Mining and
Metallurgy. Mr Biggs is a Director of ROM Resources Pty Ltd. Mr Biggs has sufficient experience that
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 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Biggs consents to
69 the inclusion in the report of the matters based on his information in the form and context in which it
appears.
The information in this report that relates to Ore Reserves is based on information compiled Mr
Andrew Law, a Competent Person who is a Fellow and Chartered Professional of the Australasian
Institute of Mining and Metallurgy. Mr Law was previously a Director of Optiro. Mr Law has sufficient
experience that 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 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Law consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
--------------------------------------------------------------------------------------------------------------------------------------
In accord with the Stage 1 Feasibility Study for the Bunyu Graphite Project Tanzania dated 30 July
2018 – The Bunyu 1 (Stage 1): Mineral Resources & Ore Reserves tables below, relate to the Stage 1
higher grade portion of the Bunyu 1 deposit, not the entire Bunyu 1 deposit as detailed above.
The July 2018 resource model was developed for investigation of the Stage 1 pit designs. The global
Mineral Resource for Bunyu 1 reported with the 2016 Pre-feasibility Study results, on 15 December
2016 has not been re-estimated. The July 2018 model is restricted to above 240 mRL and includes
only the top two layers of mineralisation within the southern area and the top four layers of
mineralisation within the northern area. Geological
identified additional
mineralised layers that are not included in the July 2018 resource model: seven within the northern
area, eight within the south area and two within the eastern area.
The Mineral Resources have been reported for the July 2018 model at a 2.93% TGC cut-off grade and
are included in the Table below. This cut-off grade was determined from technical and economic
assessment of the mineralisation within the Stage 1 Feasibility Study (FS) pits by Orelogy Consulting
Pty Ltd. This resource tabulation is not a resource statement for the entire Bunyu 1 project and is
presented for validation of the July 2018 resource model which has been used as the basis of the July
2018 Stage 1 FS pit designs.
interpretation has
Bunyu 1 (Stage 1): Mineral Resources (restricted above the base of model surface and above 240
mRL) reported above a cut-off grade of 2.93% TGC
Classification
Measured
Indicated
Inferred
Mt
8.0
31.9
36.9
TGC (%)
5.8
5.6
5.1
Total
Note: this update does not cover the global Mineral Resources at Bunyu 1
76.8
5.4
The July 2018 mineral resource model was used to determine the Bunyu 1 Stage 1 FS Ore Reserve and
associated mine production schedule. The selected mining scenario, based on the outcomes of an
open pit optimisation, was for three pits to be developed over 7 years with a total of 2.8Mt of mill
feed being mined.
The scope of the Stage 1 FS was to develop a project plan for a relatively small component of the
Bunyu 1 deposit. The Bunyu Stage 1 FS Ore Reserve is considered a subset of the 2016 Namangale 1
Ore Reserve released by Volt Resources 15 December 2016 as part of the 2016 Namangale Pre-
Feasibility Study. It therefore does not replace or update this reserve and is for the purposes of
underpinning the Stage 1 FS. The overall Ore Reserve for Bunyu (previously Namangale) will be
updated as part of the Bunyu Stage 2 DFS which will be based on the whole of the Bunyu 1 deposit.
70 The specifications of the minerals reported above:
Size
µm Label
500 Super Jumbo
300
Jumbo
180 Large
150 Medium
-150 Small to Fine
Bunyu 1
(Stage 1)
%
1
11
27
15
46
Note:
Inconsistencies in totals are due to rounding.
Refer to announcement “Positive Stage 1 Feasibility Study Bunyu Graphite Project, Tanzania” dated 30 July 2018.
The Bunyu 1 (Stage 1): Ore Reserves (not the entire Bunyu 1 deposit)
Material
Ore
Location
North
Central
South
Starter
South
Main
TOTAL
Classification
Proved
Probable
Subtotal
Proved
Probable
Subtotal
Proved
Probable
Subtotal
Proved
Probable
Subtotal
Proved
Probable
Total
kt
833
60
892
472
343
815
399
399
709
709
1,305
1,511
2,815
TGC %
6.1%
5.1%
6.0%
6.2%
5.6%
5.9%
0.0%
6.8%
6.8%
0.0%
6.6%
6.6%
6.1%
6.4%
6.3%
Waste
kt
Total
kt
Strip
Ratio
109
1,001
0.12
593
1,408
0.73
916
1,315
2.30
649
1,358
0.91
2,267
5,082
0.81
The Bunyu Stage 1 FS Ore Reserve comprises 46% Proved and 54% Probable Ore Reserves. Both the
Stage 1 Ore Reserve and Mineral Resource underpinning it have been prepared by competent persons
in accordance with JORC requirements.
The Bunyu Stage 1 FS mining schedule was designed to generate a minimum 400,000tpa of plant feed
annually, for seven years, resulting in an average feed grade of 6.26% TGC.
Competent Person’s Statements
The information in the Stage 1 Feasibility Study for the Bunyu Graphite Project Tanzania dated 30 July
2018 that relates to Mineral Resources is based upon information compiled by Mrs Christine Standing
who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the
Australian Institute of Geoscientists. Mrs Standing is an employee of Optiro Pty Ltd and has sufficient
experience relevant to the style of mineralisation, the type of deposit under consideration and to the
activity undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian
71 Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mrs Standing
consents to the inclusion in this annual statement of a summary based upon her information in the
form and context in which it appears.
The information in the Stage 1 Feasibility Study for the Bunyu Graphite Project Tanzania dated 30 July
2018 that relates to Ore Reserves was compiled by Mr Ross Cheyne who is a Fellow of the Australasian
Institute of Mining and Metallurgy. Mr Cheyne is a Director of Orelogy Consulting Pty Ltd and has
sufficient experience relevant to the style of mineralisation, the type of deposit under consideration
and to the activity undertaken to qualify as a Competent Person as defined in the 2012 edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr
Cheyne consents to the inclusion in this annual statement of a summary based upon his information
in the form and context in which it appears.
72