and Controlled Entities
(ACN 119 670 370)
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2019
COMPANY DIRECTORY
Directors
Trevor Benson
Allan Mulligan
Michael Elliott
Andrew Cunningham
Company Secretary
Ian Hobson
ASX Code: WKT
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Australia
Securities Exchange Listing
ASX code: WKT
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges’ Terrace
Perth, WA 6000
Australia
Registered Office and Principal Place of Business
Bankers:
National Australia Bank
Perth West Business Banking Centre
1238 Hay Street
West Perth, WA 6005
Australia
Level 3
681 Murray Street
West Perth, WA 6005
Australia
Telephone: +61 8 6298 7500
Facsimile: +61 8 6298 7501
Website : www.wkt.com.au
Email: admin@wkt.com.au
Share Register
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000, Australia
GPO Box 2975
Melbourne VIC 3001, Australia
Phone: 1300 850 505 (within Australia)
+61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500
Email: www.investorcentre.com/contact
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TABLE OF CONTENTS
1.
DIRECTORS’ REPORT 2
2.
AUDITOR’S INDEPENDENCE DECLARATION
17
4.
FINANCIAL STATEMENTS 18
5.
DIRECTORS' DECLARATION 48
6.
INDEPENDENT AUDITOR’S REPORT
49
7.
ADDITIONAL SHAREHOLDER INFORMATION
53
1
DIRECTORS’ REPORT
Your Directors submit the annual financial report of the consolidated entity (or the “Group”) consisting of Walkabout
Resources Ltd (“the Company”) and the entities it controlled during the period for the financial year ended 30 June 2019. In
order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
Directors
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Name and independence status
Experience, qualifications and special responsibilities and other
directorships
Mr Trevor Benson
Appointed Chairman 13 September 2016.
Chairman
Executive Director
Mr Allan Mulligan
Executive Director
Appointed Executive Chairman 22 February 2017
Trevor has extensive experience as an investment banker and has served on a
number of ASX listed company boards as both Chairman and Director. He has
specialised in cross border transactions within the natural resources sector across
China, Africa and SE Asia, and has been an adviser to Chinese State-Owned
Enterprises (SOE’s). His specialist activities include corporate funding solutions
and off-take agreement negotiations within the natural resources domain.
Trevor holds a Bachelor of Science Degree from the University of Western
Australia.
Other directorships of listed companies in the last 3 years: None
Appointed Managing Director 7 August 2012
Resigned as Managing Director, retained as Executive Director 22 February 2017.
Allan is a mining engineer with over thirty years of mine management and
production experience.
Allan has specialised in technical assessment and production economics,
feasibilities, project design and costing of underground mines and prospects. He
has worked extensively in exploration, mine development and operations across
Africa and Australia. Allan is a Member of the Australian Institute of Mining and
Metallurgy, a qualified Mining Engineer and the holder of a Mine Managers
Certificate of Competency (Metalliferous) from South Africa.
Allan was a founding Director of Walkabout Resources Pty Ltd. He has previously
been on the board of several Western Australian explorers.
Other directorships of listed companies in the last 3 years: None
Mr Andrew Cunningham
Appointed 13 November 2015
Technical Director
Non-Executive Director
Andrew has a BSc Hons in Geology from the University of Stellenbosch in South
Africa and is a member of the Australian Institute of Geosciences.
Andrew has extensive cross discipline technical and management experience in
the minerals industry predominantly in Africa and Australia and has worked in a
range of commodities and geological styles including uranium, iron ore, graphite,
diamonds, gold and base metals.
During the last 15 years, Andrew has managed all facets of exploration and
development projects in Africa from project generation to the completion of
feasibility studies. He has held senior geology and exploration positions with major
international mining companies as well as various ASX and TSX listed companies.
He has been working with Walkabout Resources since 2013 and brings a wide
range of exploration, resource development, mine geology and management
experience to the company.
Other directorships of listed companies in the last 3 years: None
2
DIRECTORS’ REPORT
Mr Michael Elliott
Appointed 20 December 2018
Non-Executive Director
Mike Elliott holds a Bachelor of Commerce from the University of New South
Wales. He was the Global Mining & Metals Sector Leader at Ernst and Young (EY)
for over 10 years and has over 34 years’ experience working with mining and
metals clients around the world. He was a Partner at EY from 1995-2015 and was
a member of the Oceania governing body of EY for 5 years.
Mike advised and briefed the CEOs, CFOs and Directors of some of the largest
global mining and metals companies. He has advised mining and metals clients
from all over the world, from countries that include Australia, New Zealand, South
Africa, China, USA, Japan, Canada, Russia, Chile, Peru, Brazil, Papua New
Guinea, Zimbabwe, Gabon and Colombia.
As a key advisor to a number of mining companies, Mike has participated in many
of the large transactions, IPOs and privatizations that have transformed the
industry.
Mike is a Member of Australian Institute of Company Directors (MAICD), a Fellow
of the Institute of Chartered Accountants (FCA) and a member of Financial
Services Institute of Australasia.
Other directorships of listed companies in the last 3 years: None
Mr Thomas Murrell
Appointed 1 May 2015
Investor Relations Director
Resigned 15 March 2019
Independent Non-Executive
Director
Company Secretary
Mr Ian Hobson
Company Secretary
Tom is recognised as an authority on investor relations and has been the
Managing Director of his own company 8M Media and Communications for the
past eighteen years. He has provided counsel to an elite group of companies listed
on the Australian Stock Exchange ranging from Top 500 companies through to
start – up biotechnology, medical and mineral exploration companies. He has
been a director of Investor Central, a Singapore based financial news service
since 2002.
A graduate of three Australian Universities, Tom gained his MBA from the
University of WA and is the immediate past President of the Business School’s
Graduate Management Association representing UWA MBA alumni.
Other directorships of listed companies in the last 3 years: None
Appointed 14 December 2017
Ian is a fellow chartered accountant and chartered company secretary with over
32 years’ experience in the profession. Ian acts as company secretary and CFO
for a number of ASX listed companies and is experienced in exploration
companies.
Interests in the shares and options of the company and related bodies corporate
The following relevant interests in shares of the Company or a related body corporate were held by the directors at the
date of this report.
Director
T Benson
A Mulligan
T Murrell (holding as at
resignation date 15
March 2019)
A Cunningham
M Elliott
Ordinary shares
Options (listed) Options (unlisted)
2,886,811
6,074,656
107,509
100,000
-
4,000,000
3,354,379
110,691
-
1,203,183
37,005
3,000,000
12,300,000
-
-
3
DIRECTORS’ REPORT
Options of the Company were granted to Directors of the Company during the financial year as part of their remuneration
package as was approved by shareholders at the Annual General Meeting on 15 November 2018.
During the year, performance rights granted over unissued shares to the Directors of the Company and the entities it
controlled as part of their remuneration was as follows: NIL
As at the date of this report unissued shares or interests of the Company under performance rights are: NIL
As at the date of this report unissued shares or interests of the Company under options are:
Series
Date options granted
Number of shares
under option
Exercise price of
option
Expiry date of option
1
2
3
24 January 2018
20 February 2018
11 December 2018
24,783,666
15,500,000
7,000,000
$0.15
$0.15
$0.20
31 December 2019
31 December 2019
11 December 2021
The series 1 options were issued as free attaching options to subscribers to the Placement completed on 7 December
2017 and subscribers to the Rights Issue competed on 17 January 2018. The series 2 options were issued to Patersons
Securities Ltd as part of the underwriting fees. Series 3 options were issued as director incentives and were approved by
shareholders on 15 November 2018 at the Annual General Meeting.
Principal Activities
The principal activities of the consolidated entity during the financial year were the exploration and development of
resources and energy assets located in Tanzania, Namibia, Scotland and Northern Ireland, with the Botswana projects on
hold.
Operating Results
The net loss after tax of the consolidated entity amounted to $2,737,501 (2018: loss of $1,965,876).
Financial Position
The net assets of the Group were $18,324,904 at 30 June 2019 (2018: $15,323,369).
Dividends Paid or Recommended
There were no dividends paid or recommended throughout the period.
4
DIRECTORS’ REPORT
Review of Operations
Walkabout is actively engaged in developing the fully permitted, 100% owned high-grade Lindi Jumbo Graphite Project
in South East Tanzania and has embarked on an international debt and equity fund raising exercise to secure the capital
required to construct the Project.
The Company’s objective of maximising the debt component of the project fund-raising has resulted in a detailed due-
diligence and project review process to provide higher levels of legal, technical, commercial and jurisdiction certainty and
confidence to debt funding parties.
The Company continues to expect that first production will be achievable between 9 and 12 months after access is
provided to full project funding.
In addition, the Company has also acquired an earn-in share of a highly prospective suite of base metal and gold
tenements in Scotland to complement the prospective properties in Northern Ireland and has proceeded to commence
negotiation of Land Access Agreements.
Lindi Jumbo Graphite Project - Tanzania
During the year under review, the Company achieved a number of project development milestones;
• Mining Licence – The first Mining Licence under the Tanzanian Mining Act 2010 (Amended 2017) was awarded to
Lindi Jumbo Limited, the Company’s 100% held subsidiary in Tanzania.
• Resource Upgrade – The Company commenced with Resource Upgrade drilling to improve confidence and expand
the high-grade zones of the Resource. (See ASX announcement 26/09/2018)
• Mineral Resource – The JORC 2012 Measured, Indicated and Inferred Resource tonnage at Lindi Jumbo was
increased by 41%. (See ASX announcement 19/12/2018)
• Relocation Assistance Program (RAP) – The RAP was approved by the Government of Tanzania and the Company
commenced with the stage implementation of compensation and access Agreements.
• Ore Reserve – The updated Ore Reserve delivered a 17.9% Total Graphitic Carbon grade for the life of mine, the
highest in Africa. (See ASX announcement 28/02/2019)
• Updated DFS – The Definitive Feasibility Study was updated with the new Ore Reserve, new graphite prices and an
adjusted product ratio split and the results continued to indicate a highly robust and profitable mine design. (See ASX
announcement 07/03/2019)
• Binding Offtake Agreements – The Company announced two Binding Offtake Agreement term sheets with Chinese
end-user companies and a graphite Marketing Agreement with international minerals trading house, Wogen Pacific.
(See ASX announcements 02/04/2019, 09/04/2019 and 11/04/2019)
• Early Start Activities – The Company embarked on an Early-Start construction on site and in China to prepare
earthworks sites and commence with manufacturing and fabrication of long lead equipment items.
•
Funding Mandate – The Company executed a loan-funding mandate with an International Investment Bank and
proceed to commence deep due diligence activities in Australia, China and Tanzania.
2018 Resource Upgrade
A drilling and trenching program was conducted over the northern Inferred Mineral Resource area as well as a new
mineralised zone directly to the south of the Gilberts Arc Graphite Deposit. The upgrade and extension program included
17 drillholes for 1,354m and 7 trenches for 654m.
The global Mineral Resource increased by 41.3% to 41.8 million tonnes at 10.8% TGC containing 4.5 million tonnes of
graphite (Table 1). Fifty one percent (51%) of the mineral resource that will form part of the initial mining and economic
studies is now classified as Measured (6.5 Mt @ 12.1% TGC) and Indicated (8.4 Mt @ 10.5% TGC) containing 1.67
million tonnes of graphite.
The global mineral resource now includes a new Inferred Resource area which lies directly to the south of the current
planned open-pit area and is made up of 6 distinct mineralised domains. This area will not form part of the upcoming
mining studies, amended DFS and Reserve upgrade as further work within the area will only be done post-production.
5
DIRECTORS’ REPORT
Table 1: Resource category breakdown of the Gilbert Arc.
Resource Category
Tonnes
(millions)
TGC %
Contained Graphite
(tonnes)
Measured
(Including High Grade)
Indicated
(Including High Grade)
Inferred
(Including High Grade)
Grand Total
High Grade Domains
6.5
1.7
8.4
1.5
26.9
1.8
41.8
5.0
12.1
23.4
10.5
21.2
10.5
22.7
10.8
22.5
781,800
393,200
887,300
325,300
2,837,600
411,900
4,506,811
1,127,800
Note: Appropriate rounding applied.
2019 Ore Reserve Update
The Resources considered for mining are based on the JORC 2012 Mineral Resource Estimate (see ASX announcement
of 19 December 2018). The Ore Reserve is based only on the Measured and Indicated Mineral Resources in the current
mining schedule which is summarised in Table 2.
Thus, the Inferred Resource zone to the south of the mining pit is not currently included in the mine design reserves and
remains available for further consideration or potential expansion opportunities. The Ore Reserve estimate was prepared
and signed off by and independent consultancy, Bara International of Johannesburg, South Africa.
Table 2: Lindi Jumbo Project Ore Reserve.
Ore Reserves
Category
Tonnes (million)
TGC %
Contained Graphite (tonnes)
Proven Ore Reserves
Probable Ore Reserves
Total Ore Reserves
2.54
2.97
5.51
19.3
16.7
17.9
489,000
498,000
987,000
2019 Updated Definitive Feasibility Study
The main areas of adjustment for the 2019 study update was the application of the updated Mineral Resource (ASX
Announcement 19 December 2018) to the mining plan and a revision of Capital expenditure following detailed scope of work
contract agreements with contract partners.
The mining depletion was completely remodelled following the upgrade of the previous Inferred Resource to the north of
the pit into an Indicated Resource category. As a result of the increased LoM grade to 17,9% Total Graphitic Carbon, the
average annual mill feed requirement has reduced from a average of 280,000 tonnes per year to an average of 230,000
tonnes per year.
Pre-Production direct capital costs were further reduced by 6.4% to US$27.8M from US$29.7M in 2017. An upfront
saving of some US$2.5m was achieved through vendor funding of a large portion of the camp infrastructure costs.
Capital costs have been determined through a combination of fixed tender pricing, firm quotations and data-base
references based on similar operations. The costs presented have a base date of December 2018 and are presented in
United States Dollars (US$). The costs presented are definitive costs and include the US$2.1m provision for the
Relocation Assistance Programme (RAP), (ASX Announcement 31 January 2019).
Furthermore, updated estimates for product pricing was applied to the financial modelling.
6
DIRECTORS’ REPORT
Table 3: Project financial indicators as per the Updated Definitive Feasibility Study of 2019.
Financial Metric
(100% ownership basis)
Life of Mine Modelled
Operating Costs (Life of Mine)
Operating Costs (ex-transport)
Operating Costs FOB Mtwara
Pre-production Capital Costs
Life of Mine Revenue
Unit
Years
US$m
US$/t
con
US$/t
con
US$m
US$m
Average Annual Free Cashflow
US$m
EBITDA Life of Mine
Pre Tax NPV10
Pre Tax IRR
Post Tax NPV10
Post Tax IRR
Operating Margin
Payback Period
US$m
US$m
%
US$m
%
%
Years
2017 DFS
Update
2019 DFS
Update
% Change
20
24
20% Increase
267.5
334.1
25% Increase
289
349
29.7
1,188
28.0
886
302
108
180
88
77
<2
282
347
2.4 % Decrease
0.6 % Decrease
27.8
6.4% Decrease
1,445
21.6% Increase
2.9% Increase
21% Increase
10.7% Increase
31.5% Increase
9.4% Increase
23.9% Increase
28.8
1,070
335
142
197
119
77
<2
Executed Key Binding Offtake and Marketing Agreements
1.
Inner Mongolia Qianxin Graphite Co. Ltd (IMQG)
a. Binding on both parties subject to standard conditions,
b. Sale of up to 50% of planned production for 3 years,
c. Pricing framework to be linked to China spot, determined up to 1-month prior delivery.
2. Qingdao Rising Dawn
a. Binding on both parties subject to standard conditions,
b. Sale of up to 25% of planned production for 3 years,
c. Pricing framework to be linked to China spot, determined within 3 months of first delivery.
3. Wogen Pacific Ltd
a. Wogen will actively market Lindi Jumbo’s concentrate globally and will initially
purchase between 10,000 tpa and 30,000 tpa for a 5-year term,
b. An advance payment facility of 80% of consignment value is available,
c. Wogen will continuously develop graphite markets for Lindi Jumbo branded products.
Resettlement Action Plan (RAP)
The first two of three stages of the RAP was successfully settled under supervision of local authorities and stakeholder
groups with the final tranche completed after the year end. An estimated US$2.05m including costs was allocated to this
program and community feedback has been strongly in favour of the Company’s transparent approach and management
of the process.
Early Start Site and Manufacturing Works
The Company also commenced with an integrated international project “early-start” to commence procurement,
manufacturing and site-works for the Lindi Jumbo Graphite Project in south eastern Tanzania.
The objective of the Early-Start Program advanced the project construction process along its critical path while project
funding was being negotiated and finalised. The primary benefits are a notional reduction of the project construction
timeline due to the long lead item period of manufacture of equipment in China.
On-Site Earthworks
Preparation of the process plant earthworks platform, the Tailings Storage Facility (TSF) footprint, explosive magazine,
topsoil storage area and selected road accesses was completed under a “Side-Agreement” with the earthwork’s contractor.
7
DIRECTORS’ REPORT
These works have also prepared the local community for enhanced construction activity and allowed the project team to
engage in a “slow-start” for the purposes of improving quality, management, measurement, safety, environmental and
project systems while potentially shortening the timeframe needed for earthworks once funding is in place. Senior
executives from the Mining Commission, responsible for administering and regulating mining projects in Tanzania, visited
the site and were pleased with progress and observed operating standards.
Figure 1: Topsoil removal for storage at Lindi Jumbo Graphite Project processing facility site.
Procurement and Manufacture in China
In China, technical drawings for equipment manufacture were finalised and steel plating and associated fittings were
ordered along with long lead motors and bearing units. Manufacture on the factory floor in Yantai commenced and
Walkabout quality engineers and metallurgists have commenced periodic and programmed inspections.
Figure 2: Lindi Jumbo Directors inspecting early-start equipment at the Jinpeng workshop in Yantai, China.
Funding Activities
The Company has engaged an International Investment Bank (The Bank) to advise on procuring the debt-based portion
of the development funding requirement. Intense independent scrutiny of the legal, commercial and technical elements of
the Project through due diligence by the Bank’s representative experts has been commenced.
The Company benefits from The Bank’s experience of funding greenfield mining projects and structuring emerging market
transactions especially when considering the regulatory and logistical aspects of lending to a project in Tanzania.
The Company anticipates launching a Loan Note Offering when final Due Diligence reports are received from the
independent legal and technical experts.
8
DIRECTORS’ REPORT
UK Joint Ventures
The Company executed a Farm In Agreement over three highly prospective exploration licences in south west Scotland.
The target mineralisation include historic lead-zinc mines and gold and copper targets (see ASX announcement 01 October
3019).
Regional and target specific reconnaissance exploration continued while longer term access agreements and the
Company’s exploration programmes within the license areas were discussed with the Forestry and Land Scotland
Department. Suitable heritage and community and social risk screening studies have been carried out to engage
community perceptions. The land Access Agreements are critical to commencing successful exploration programmes.
Namibian Eureka Lithium Project
The softening of lithium prices has led the Company to defer activity on this project in order to focus management attention
on funding and construction of the Lindi Jumbo Project.
Corporate
During the year, the Company embarked on an underwritten Share Purchase Plan (SPP) to raise A$3m for general working
capital. The SPP raised A$1.5m and a further placement to sophisticated shareholders raised A$3.1m in order to
commence the early start works program.
The Competent Persons Statements are provided on page 54.
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the Company occurred during the year:
On 9 November 2018 the Company issued 33,333,423 fully paid ordinary shares to raise $3,000,000 at the price of $0.09
per share pursuant to a share purchase plan.
On 9 May 2019 the Company completed a placement of 11,528,434 fully paid ordinary shares to raise $2,651,540 at the
price of $0.23 per share from the Company’s 15% placement capacity.
The Company commenced with an integrated international project “early-start” to commence procurement,
manufacturing and site-works for the Lindi Jumbo Graphite Project in south eastern Tanzania.
The objective of the Early-Start Program advances the project construction process along its critical path while project
funding is being negotiated and finalised. The primary benefits include a notional reduction of the project construction
timeline due to the period of manufacture of equipment in China.
Significant Events After Balance Date
The resettlement action plan payments approximating US$1 million were made in July 2019. Otherwise, no matters or
circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the
operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in
future financial years.
Likely Developments and Expected Results
Further information has not been presented in this report as disclosure of information regarding likely developments in the
operations of the consolidated entity in future financial years and the expected results of those operations is likely to result
in unreasonable prejudice to the consolidated entity.
Environmental legislation
The consolidated entity is subject to environmental legislation in Tanzania for the development and construction works of
the Lindi Jumbo Graphite Project. The group does not consider the requirements to be material given the limited work
performed on site to date.
9
DIRECTORS’ REPORT
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors 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 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.
REMUNERATION REPORT (Audited)
This report, which forms part of the Directors’ Report, outlines the remuneration arrangements in place for the Key
Management Personnel (“KMP”) of the Company for the financial year ended 30 June 2019. The information provided in
this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company and its controlled
entities, directly or indirectly, including any Director (whether Executive or otherwise) of the parent company.
The Directors and key management personnel of the Group during the year were:
Mr T Benson
Mr A Mulligan
Mr T Murrell
Mr A Cunningham
Mr M Elliott
Executive Chairman
Executive Director
Non-executive Director (resigned 15 March 2019)
Non-executive Director
Non-executive Director (appointed 20 December 2018)
Remuneration policy
The remuneration policy of Walkabout has been designed to align Director and Executive objectives with shareholder and
business objectives by providing a fixed remuneration component and potentially, at the Boards discretion, long term
incentives based on key performance areas affecting the consolidated entity’s financial results. The Board of Walkabout
believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and
Directors to run and manage the consolidated entity, as well as create goal congruence between Directors, Executives
and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of
the consolidated entity is as follows: the remuneration policy, setting the terms and conditions for the Executive Directors
and other senior executives, was developed by the Board of Directors, and approved by resolution of the Board. All
Executives receive a base salary including superannuation with the possibility of options and performance incentives.
The Board of Directors review executive packages annually by reference to the consolidated entity’s performance,
executive performance and comparable information from industry sectors and other listed companies in similar industries.
The performance of Executives is assessed annually with each executive and is based predominantly on operational and
exploration activities and shareholders’ value. The Board may, however, exercise its discretion in relation to approving
incentives, bonuses and options, and can award these if they can be reasonably justified. The policy is designed to attract
and retain the highest calibre of Executives and reward them for performance that results in long term growth in shareholder
value.
Directors and Executives receive a superannuation guarantee contribution required by the Government, which is currently
9.5%, and do not receive any other retirement benefits.
All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed.
10
DIRECTORS’ REPORT
The Board policy is to remunerate Non-executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Company has established a Remuneration Committee during the year. The Remuneration
Committee is responsible for determining and reviewing compensation arrangements for directors and executive team.
The Board of Directors, following a recommendation from the remuneration Committee, determines payments to the Non-
executive Directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. Any changes to the maximum aggregate amount of fees that can
be paid to Non-executive Directors is subject to approval by shareholders at an Annual General Meeting. The latest
determination was at a General Meeting prior to the Company’s listing on ASX, held on 5 August 2006 when shareholders
approved an aggregate remuneration of $200,000 per year. Fees for Non-executive Directors are not linked to
performance of the consolidated entity. Non-executive directors Tom Murrell and Andrew Cunningham were paid a non-
executive director fee of $25,000 p.a. each plus a consulting fee at an hourly rate.
Performance-based remuneration
Performance based remuneration was granted to Directors by shareholders at the Company’s Annual General Meeting
dated 15 November 2018. Details of this remuneration are disclosed above in the paragraph entitled “Interests in the
shares and options of the company and related bodies corporate”.
Company performance, shareholder wealth and Director and executive remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and Executives.
There have been two methods applied in achieving this aim, the first being a fixed market competitive salary, and the
second being the potential issue of options to Directors and Executives to encourage the alignment of personal and
shareholder interests.
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive
remuneration is separate and distinct.
Key Management Personnel Remuneration Policy
The remuneration structure for KMP is to be based on a number of factors, including length of service, particular experience
of the individual concerned, and overall performance of the Company. The contracts for service between the Company
and KMP are on a continuing basis, the terms of which are not expected to change in the immediate future.
Employment Contracts
Executive
Director
Contract
Commencement
Contract
Termination
Remuneration
Notice period
T Benson
22 February 2017
No fixed term
$250,000
3 months
A Mulligan
7 August 2012
7 August 2015
$250,000
3 months
Termination
entitlement
3 months’ pay in
lieu of notice
3 months’ pay in
lieu of notice
Mr Mulligan’s contract has been extended on a 12 month basis and is currently under review.
In addition, each Executive Director is entitled to the statutory 9.5% superannuation guarantee.
11
DIRECTORS’ REPORT
Table 1 details the nature and amount of remuneration for each Director of Walkabout Resources Ltd. There are no Executives who aren’t Directors.
30 June 2019
Short-term Benefits
Post-
employment
Benefits
Share-based Payment
Total
Performance
Related
Salary and
fees
$
Bonuses
Non-cash
benefit
Other
Superannuation
Equity
Options
$
$
$
$
$
Trevor Benson
Allan Mulligan
Thomas Murrell
249,996
12,500
249,996
25,000
43,300
-
Andrew Cunningham
262,393
15,000
Michael Elliott
9,645
-
815,330
52,500
-
-
-
-
-
-
-
-
-
-
-
-
24,937
25,000
-
-
1,012
50,949
$
-
172,147
-
129,111
-
$
287,433
472,143
43,300
406,504
10,657
%
4%
42%
Nil
35%
Nil
301,258
1,220,037
-
-
-
-
-
-
Not included above were amounts related to the reversal of amounts previously expensed in relation to tranche 1 of the performance rights. The amounts for each KMP were $27,845 for each of Allan Mulligan, Thomas
Murrell and Andrew Cunningham and $55,690 for Trevor Benson.
Bonuses were paid to directors following receipt of the Lindi Jumbo mining license based on the board’s assessment of individual input.
30 June 2018
Short-term Benefits
Post-
employment
Benefits
Share-based Payment
Total
Performance
Related
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
Salary and
fees
$
249,996
249,996
63,284
233,062
796,338
Bonuses
Non-cash
benefit
Other
Superannuation
Equity*
Options
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
23,750
23,750
-
-
$
145,690
72,845
72,845
72,845
47,500
364,225
$
-
-
-
-
-
•
The equity issued to directors were tranche 1 & 3 of performance rights approved by shareholders at the 2018 AGM.
$
419,436
346,591
136,129
305,907
1,208,063
%
34.7%
21.0%
53.5%
23.8%
Share-based payments granted in current and prior period
Options were issued as compensation during the year to Directors and Executives following shareholder approval at the Annual General Meeting on 15 November 2018. Refer to note 11(b) of the
financial report.
11
DIRECTORS’ REPORT
Performance rights were issued as compensation during the previous year by Directors and Executives are described in previous paragraphs. Series 1 and series 2 lapsed. Series 3 vested on 17
July 2018.
Shareholdings of Key Management Personnel
Ordinary Shares
30 June 2019
Directors
Balance at beginning
of period
Number
Conversion of
performance rights
Number
Acquired
Number
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell1
Andrew Cunningham
Michael Elliott2
1,720,144
5,407,988
2,521,045
592,071
-
1,000,000
500,000
500,000
500,000
-
166,667
166,668
333,334
111,112
-
-
-
(3,354,379)
-
12,300,000
2,886,811
6,074,656
-
1,203,183
12,300,000
1,655,801
-
592,071
10,300,000
30 June 2018
Directors
Balance at beginning
of period
Number
Conversion of
performance rights
Number
Effect of consolidation
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
1,032,376
4,750,256
1,562,819
444,053
-
-
-
-
-
-
-
-
687,768
657,732
958,226
148,018
1,720,144
5,407,988
2,521,045
592,071
-
1,544,689
688,271
592,071
All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than
those the Group would have adopted if dealing at arm’s length.
Net change – other represents the balance on appointment / resignation.
1Resigned 15 March 2019
2Appointed 20 December 2018
12
DIRECTORS’ REPORT
Option holdings of Key Management Personnel
30 June 2019
Directors
Balance at beginning
of period
Number
Granted as
remuneration
Number
Expired
Number
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell1
Andrew Cunningham
Michael Elliott2
107,509
100,000
110,691
37,005
-
-
4,000,000*
-
3,000,000*
-
-
-
-
-
-
-
-
(110,691)
-
-
107,509
4,100,000
-
3,037,005
-
-
50,000
-
37,005
-
30 June 2018
Directors
Balance at beginning
of period
Number
Granted as
remuneration
Number
Expired
Number
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
1Resigned 15 March 2019
2Appointed 20 December 2018
-
271,740
1,138,652
54,538
-
-
-
-
-
(271,740)
(1,138,652)
(54,538)
107,509
100,000
110,691
37,005
107,509
100,000
110,691
37,005
-
100,000
43,017
37,005
*7,000,000 options were granted to directors following shareholder approval at the AGM on 15 November 2018. The fair value of $0.043 per option at grant date are determined using a Black
Scholes pricing method that takes into account the exercise price, the term of the option, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option. The inputs to the model used for valuation of the unlisted options is set out in note 11(b) to the financial report.
13
DIRECTORS’ REPORT
Performance right holdings of Key Management Personnel
30 June 2019
Series
Balance at
beginning of period
Granted as
remuneration
Value per
performance right
granted during the
year
Lapsed
Vested
Balance at end of
period
Balance held
nominally
Directors
Number
Number
Number
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell1
Andrew Cunningham
Michael Elliott2
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
869,565
1,304,348
1,000,000
434,783
869,565
500,000
`434,783
869,565
500,000
434,783
869,565
500,000
-
-
-
The fair value of the Series 1 rights which lapsed during the year was $0.09 per right.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
-
-
-
(869,565)
(1,304,348)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
-
-
-
-
-
(1,000,000)
-
-
(500,000)
-
-
(500,000)
-
-
(500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
DIRECTORS’ REPORT
30 June 2018
Series
Directors
Balance at
beginning of period
Number
Granted as
remuneration
Number
Value per performance right
granted during the year
Lapsed
Balance at end of period
Balance held nominally
Number
Number
Number
Allan Mulligan
Trevor Benson
Thomas Murrell
-
-
-
-
-
-
-
-
-
-
-
-
The total fair value of performance rights granted during the year is noted in the Directors’ Report under the section titled “Interests in the shares and options of the Company and related bodies Corporate”. The fair value of
the rights which lapsed during the year was $0.09 per right.
-
(869,565)
(1,304,348)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
869,565
1,304,348
-
434,783
869,565
-
434,783
869,565
-
434,783
869,565
869,565
1,304,348
1,000,000
434,783
869,565
500,000
434,783
869,565
500,000
434,783
869,565
500,000
869,565
1,304,348
1,000,000
434,783
869,565
500,000
434,783
869,565
500,000
434,783
869,565
500,000
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
Andrew Cunningham
1Resigned 15 March 2019
2Appointed 20 December 2018
Other transactions with Key Management Personnel
For amounts owing to key management personnel refer to Note 17 to the financial report for details.
End of Remuneration Report
15
DIRECTORS’ REPORT
Directors’ meetings
The number of meetings of directors held during the year and the number of meetings attended by each Director were as
follows:
Number
of meetings
held
Number
eligible to
attend
Number
attended
Trevor Benson
Alan Mulligan
Thomas Murrell
Andrew Cunningham
Michael Elliott
12
12
12
12
12
12
12
8
12
6
12
12
8
12
6
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
Auditor’s independence
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company
with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on
page 17 and forms part of this Directors’ Report for the year ended 30 June 2019.
Non-audit Services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined
in Note 4 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services
have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services
undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
Signed in accordance with a resolution of the Board of Directors.
Trevor Benson
Executive Chairman
24 September 2019
16
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Walkabout 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)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
24 September 2019
D I Buckley
Partner
17
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Note
Consolidated
Income
Foreign exchange gain
Depreciation and amortisation expense
Occupancy costs
Legal and compliance fees
Administration expenses
Consulting fees
Professional fees
Other expenses
Exploration costs expensed or written off
Share based payments
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
2
2
2
2
3
2019
$
2018
$
44,464
35,236
23,923
68,439
(3,703)
(201,318)
(394,225)
(874,276)
(440,779)
(132,908)
(377,933)
(146,213)
(234,533)
(6,924)
(280,889)
(326,544)
(621,194)
(227,617)
(149,171)
(147,596)
(192,542)
(276,450)
(2,737,501)
(2,125,252)
-
159,376
(2,737,501)
(1,965,876)
Exchange differences on translation of foreign operations
3,751
148,920
Other comprehensive income/ (loss) for the year, net
of tax
(2,733,750)
148,920
Total comprehensive loss for the year
(2,733,750)
(1,816,956)
Earnings Per Share
Basic loss per share (cents per share)
5
Diluted loss per share (cents per share)
(0.95)
(0.95)
(0.94)
(0.94)
The accompanying notes form part of these financial statements.
18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Note
Consolidated
2019
$
2018
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Deferred exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
6
7
7
8
9
10
11
12
4,719,663
6,412,501
99,528
82,714
4,819,191
6,495,215
5,000
2,520,560
12,514,419
15,039,979
5,000
8,939
9,563,843
9,577,782
19,859,170
16,072,997
1,427,472
106,794
1,534,266
1,534,266
665,536
84,092
749,628
749,628
18,324,904
15,323,369
71,260,507
65,462,255
814,977
874,193
(53,750,580)
(51,013,079)
18,324,904
15,323,369
The accompanying notes form part of these financial statements.
19
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2019
Consolidated
Note Share Capital
Accumulated
Losses
Foreign Currency
Translation
Reserve
Share based
Payment
Reserve
Option
Reserve
Total
$
$
$
$
$
$
Balance as at 1 July 2018
65,462,255
(51,013,079)
(93,203)
364,225 603,171 15,323,369
Net loss for the year
Exchange differences arising
on translation of foreign
operations
Total comprehensive loss
for the year
Share based payment -
consultants
Conversion of director
Performance Rights
Share based payment
reversal
Issue of director options
-
-
-
72,500
225,000
-
-
Shares issued during the year
Transaction costs
5,738,725
(237,973)
(2,737,501)
-
-
3,751
(2,737,501)
3,751
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(225,000)
(2,737,501)
3,751
(2,733,750)
72,500
-
-
-
-
-
(139,225)
(139,225)
301,258
301,258
-
-
-
-
5,738,725
(237,973)
Balance as at 30 June 2019
71,260,507
(53,750,580)
(89,452)
- 904,429 18,324,904
Balance as at 1 July 2017
53,582,608
(49,047,203)
(242,123)
87,775
Net loss for the year
Exchange differences arising
on translation of foreign
operations
Total comprehensive loss
for the year
Share based payment
Share based payment
reversal
-
-
-
-
-
Shares issued during the year
13,175,857
Transaction costs
(1,296,210)
(1,965,876)
-
-
148,920
(1,965,876)
148,920
-
-
-
-
-
-
-
-
-
-
-
364,225
(87,775)
-
-
-
-
-
-
4,381,057
(1,965,876)
148,920
(1,816,956)
364,225
(87,775)
-
- 13,175,857
603,171
-
(693,039)
Balance as at 30 June 2018
65,462,255
(51,013,079)
(93,203)
967,396
- 15,323,369
The accompanying notes form part of these financial statements.
20
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Research & development incentive received
Interest received
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation expenditure
Payments for property, plant & equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Funds received in advance
Issue costs
Net cash provided by financing activities
Net (decrease) / increase in cash held
Cash at beginning of financial year
Effect of foreign currency on cash balances
Cash at end of financial year
Note
Consolidated
2019
$
2018
$
(2,331,224)
(1,670,659)
-
44,464
159,376
35,236
14
(2,286,760)
(1,476,047)
(2,693,382)
(4,756,345)
(2,515,324)
(8,722)
(5,208,706)
(4,765,067)
5,738,726
13,175,857
301,875
(237,973)
-
(791,501)
5,802,628
12,384,356
(1,692,838)
6,412,501
-
6,143,242
269,259
-
4,719,663
6,412,501
6
6
The accompanying notes form part of these financial statements.
21
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
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 Walkabout Resources Ltd and its
subsidiaries. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity.
The financial statements have been prepared on a historical cost basis. Cost is based on the fair values of the
consideration given in exchange for assets.
The financial statements are presented in Australian dollars.
The Company is a listed public company, incorporated in Australia and operating in Australia, Botswana, Tanzania,
Malawi, Northern Ireland, Scotland and Namibia. The entity’s principal activities are mineral exploration.
(b)
Adoption of new and revised standards
Standards and Interpretations on issue not yet adopted
AASB 16 Leases
AASB 16 replaces AASB 117 Leases. AASB 16 removes the classification of leases as either operating leases or
finance leases for the lessee – effectively treating all leases as finance leases. Most leases will be capitalised on the
statement of financial position by recognising a ‘right-of-use’ asset and a lease liability for the present value obligation.
This will result on an increase on the recognised assets and liabilities in the statement of financial position as well as
change in expense recognition, with interest and depreciation replacing operating lease expense.
Lessor accounting remains similar to current practice, i.e. lessors continue to classify leases as finance and operating
leases.
AASB 16 is effective from annual reporting periods beginning on or after 1 July 2019, with early adoption permitted
for entities that also adopt AASB 15.
(c)
(d)
Statement of Compliance
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).
Basis of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Walkabout Resources
Ltd (‘the Company or parent entity’) as at 30 June 2019 and the results of all subsidiaries for the year then ended.
Walkabout Resources Ltd and its subsidiaries are referred to in this financial report as the Group or the consolidated
entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Control exists where the company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing when the Group controls another entity.
22
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(d)
Basis of Consolidation - continued
Business combinations have been accounted for using the acquisition method of accounting.
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s
interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in the statement of comprehensive income and within equity in the consolidated
statement of financial position. Losses are attributed to the non-controlling interests even if that results in a deficit
balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised within equity attributable to owners of Walkabout Resources Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled
entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of
that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean
that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
(e)
Critical accounting judgements and key sources of estimation uncertainty
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.
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.
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Fair value is determined by an external valuer using a Black and
Scholes model, using the assumptions detailed in Note 19. From time to time the Company makes share-based
payments to other parties, other than employees, for goods or services. Where the fair value of the goods and services
cannot be reliably estimated, the Company measures their fair value by reference to the fair value of the equity
instruments granted.
23
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(f)
(g)
(h)
Going Concern
For the year ended 30 June 2019, the Group recorded a net loss of $2,737,501 (2018: $1,965,876) and a net cash
outflows of $1,692,838 (2018: inflow $6,143,242). At 30 June 2019, the Group had cash available of $4,719,663 and
exploration, lease and the Lindi Jumbo Graphite Project construction commitments for the next 12 months of
$2,989,256.
Notwithstanding the above, the financial report has been prepared on the basis of accounting principles applicable to
a going concern, which assumes the commercial realisation of the future potential of the Company’s and Group’s
assets and the discharge of their liabilities in the normal course of business. The Board considers that the Company
is a going concern. Additional funding will be required to progress their exploration and evaluation assets and fund
construction commitments of the Lindi Jumbo graphite Project in the near future. The Directors are confident that
sufficient funding can be raised. During the year, the Group successfully raised $5,500,753 after costs. It is also noted
that there are a significant number of options on issue with an exercise price of $0.15 which are ‘in the money’ and
are likely to be exercised.
The Company has been actively pursuing funding for the Lindi Jumbo mine development and working capital.
Having carefully assessed the uncertainties relating to the likelihood of securing additional funding, the Group’s ability
to effectively manage their expenditures and cash flows from operations and the opportunity to farm out participating
interests in existing tenements, the Directors believe that the Group will continue to operate as a going concern for
the foreseeable future. Therefore, the Directors consider it appropriate to prepare the financial report on a going
concern basis.
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 Walkabout Resources Ltd.
Foreign Currency Translation
Both the functional and presentation currency of Walkabout Resources Ltd and its Australian subsidiaries is Australian
dollars. Each entity in the Group 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 balance date.
All exchange differences in the consolidated financial report are taken to the statement of comprehensive income.
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 the foreign operations in Botswana, Tanzania, Malawi, Namibia and Northern Ireland is
Pula, Schillings, Kwacha, Namibian Dollars and Sterling respectively.
As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of
Walkabout Resources Ltd at the rate of exchange ruling at the balance 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
(i)
Income Recognition
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
24
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(j)
(k)
Leases
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed.
Income Tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
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 balance date.
Deferred income tax is provided on all temporary differences at the balance 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:
• 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 is associated with investments 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.
The carrying amount of deferred income tax assets is reviewed at each balance 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 balance 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 balance 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.
25
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(k)
Income tax - continued
Tax consolidation legislation
The Company and its 100% owned Australian resident subsidiaries 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.
The Company recognises 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 Group. Any difference between the amounts receivable
or payable under the funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated Group.
(l)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST and VAT except:
• when the GST and VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST and VAT 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 and VAT included.
(m)
The net amount of GST and VAT 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 and VAT 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 and VAT recoverable from, or payable to,
the taxation authority.
Impairment of assets
The Group assesses at each balance 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 Group 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 balance 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.
26
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(n)
(o)
(p)
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.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
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 impairment.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written
off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the
Group will not be able to collect all amounts due according to the original contractual terms. Factors considered by
the Group in making this determination include known significant financial difficulties of the debtor, review of financial
information and significant delinquency in making contractual payments to the Group. The impairment allowance is
set equal to the difference between the carrying amount of the receivable and the present value of estimated future
cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not
applied in determining the allowance.
The amount of the impairment loss is recognised in the Statement of Comprehensive Income within other expenses.
When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against other expenses in the statement of comprehensive income.
AASB 9 Financial Instruments – Impact of adoption
AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of
financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and
hedge accounting.
The adoption of AASB 9 Financial Instruments from 1 July 2018 resulted in changes in accounting policies. The
new accounting policies are set out in note below. In accordance with the transitional provisions in AASB 9(7.2.15)
and (7.2.26), comparative figures have not been restated.
(i) Classification and Measurement
On 1 July 2018 (the date of initial application of AASB 9), the Group’s management has assessed which business
models apply to the financial assets held by the group and has classified its financial instruments into the
appropriate AASB 9 categories. There were no changes to the classification and measurement of financial assets.
(ii) Impairment of financial assets
The Group has one type of financial asset that is subject to AASB 9’s new expected credit loss model, being trade
and other receivables.
The group was required to revise its impairment methodology under AASB. There was no material impact of the
change in impairment methodology on the group’s retained earnings and equity.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, there was no material
impairment loss identified.
AASB 9 Financial Instruments – Accounting policies applied from 1 July 2018
(i) Investments and other financial assets
Classification
From 1 July 2018, the group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments
in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
27
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its
debt instruments:
•
•
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and
losses. Impairment losses are presented as separate line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue
and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss
and recognised in other gains/(losses). Interest income from these financial assets is included in finance income
using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a
debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within
other gains/(losses) in the period in which it arises.
Impairment
From 1 July 2018, the group assesses on a forward-looking basis the expected credit loss associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there
has been a significant increase in credit risk.
For trade receivables the group applies the simplified approach permitted by AASB 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables. Management has determined that assessment of
expected credit loss associated with trade receivables is immaterial.
Fair Values
The fair values of Consolidated Entity’s financial assets and financial liabilities approximate their carrying values due to
short –term in nature. No financial assets or financial liabilities are readily traded on organised markets in standardised
form.
28
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(q)
Derecognition of financial assets and financial liabilities (Applicable to 30 June 2018 and 30 June 2019)
(i) Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised when:
(r)
•
•
•
the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in
full without material delay to a third party under a ‘pass-through’ arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either:
has transferred substantially all the risks and rewards of the asset, or
has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
(a)
(b)
When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the
extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum
amount of consideration received that the Group could be required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or
similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the
transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-
settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement
is limited to the lower of the fair value of the transferred asset and the option exercise price.
(ii) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de
recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying
amounts is recognised in profit or loss.
Impairment of financial assets (Applicable to 30 June 2018)
The Group assesses at each balance date whether a financial asset or group of financial assets is impaired.
(i) Financial assets carried at amortised cost
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the
financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The
carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the
loss is recognised in profit or loss.
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that
group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of
impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed.
Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of
the asset does not exceed its amortised cost at the reversal date.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not
carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and
must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at
the current market rate of return for a similar financial asset.
29
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(iii) Available-for-sale investments
If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference
between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss
previously recognised in profit or loss, is transferred from equity to the statement of comprehensive income. Reversals
of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of
impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value
can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.
(s)
Property, Plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is calculated on a diminishing value basis or units of production basis over the estimated useful
life of the assets at the following rates:
Plant and equipment – 20%
Computer equipment – 30%
Motor Vehicles – 33.3%
Furniture and Fittings – 22.2%
Mine properties – Amortised over units of production.
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 balance 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 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 the statement of comprehensive income in the cost of
sales 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.
Mine Properties
Mining assets, including mineral property interests and mine plant facilities, are initially recorded at cost. Costs
incurred to develop the property are capitalised as incurred until the mine is considered to have moved into the
production phase, after which they are measured at cost less accumulated depreciation and impairment. Costs
include expenditure that is directly attributable to the acquisition of and construction of the asset. Subsequent costs
are included in the asset’s carrying amount or recognised as a separate asset as appropriate only when it is probable
that future economic benefits associated with the item will flow to the group and the cost of the item can be measured
reliably.
Borrowing costs are capitalised to the extent that they are directly attributable to the acquisition and construction of
qualifying assets. Qualifying assets are assets that take a substantial time to get ready for their intended use. These
costs are capitalised until the asset moves into the production phase. Other borrowing costs are expensed.
Depreciation and amortisation of mineral property interests and mine plant facilities are computed principally by
the units of production method over the life of mine, based on estimated quantities of economically recoverable
proved and probable reserves, which can be recovered in future from known mineral deposits. Changes in
management’s estimates of economically recoverable reserves and resources impact depreciation and amortisation
on a prospective basis.
Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalised against
the mine’s cost.
30
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(s)
Property, plant and equipment - continued
(t)
(u)
(v)
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.
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group 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.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating
losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as separate assets but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a borrowing cost.
Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’
services up to the balance date, they are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid
or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expect future wage and salary levels, experience of employee departures, and period of
service. Expected future payments are discounted using market yields at the balance date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(w)
Share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions).
There are currently two plans in place to provide these benefits:
•
•
the incentive Performance Rights Plan, which provides benefits to Directors, Key Management and other eligible
participants; and
the Incentive Share Plan, which provides benefits to Directors, Key Management and other eligible participants
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.
Where appropriate, fair value is determined by using a Black-Scholes model, further details of which are given in Note
11(b). From time to time the Company makes share-based payments to other parties, other than employees, for
goods or services. Where the fair value of the goods and services cannot be reliably estimated, the Company
measures their fair value by reference to the fair value of the equity instruments granted.
31
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(w)
(x)
(y)
Share- based payments transactions - continued
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Walkabout Resources Ltd (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 balance date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the Group’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 statement of
comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as
at the beginning and end of that period. The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share (see Note 5).
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. Incremental costs directly attributable to the issue
of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the
purchase consideration.
Earnings per share
Basic earnings 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 are 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.
(z)
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) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation 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 balance 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.
The decision to capitalise or expense exploration and evaluation expenditure is made separately for each area of
interest.
32
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(z)
Exploration & evaluation - continued
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 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.
(aa)
Parent entity financial information
The financial information for the parent entity, Walkabout Resources Ltd, disclosed in Note 16 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 Walkabout 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 grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the
group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment
in subsidiary undertakings, with a corresponding credit to equity.
33
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: INCOME AND EXPENSES
Interest received
Expenses
Foreign exchange (gain) / losses
Depreciation
Exploration costs expensed
Exploration costs written off
Consolidated
2019
$
2018
$
44,464
35,236
(23,923)
3,703
87,886
58,327
68,439
6,924
-
192,542
NOTE 3: INCOME TAX EXPENSE
a. The components of income tax expense comprise:
The prima facie income tax expense on pre-tax accounting profit from
operations reconciles to the income tax expense in the financial statements
as follows:
Accounting profit before tax from continuing operations
(2,737,501)
(2,125,252)
Income tax expense / (benefit) calculated at 27.5% (2018: 27.5%)
Non-deductible expenses
Difference in tax rate of subsidiaries operating in other jurisdictions
Unused tax losses not recognised as deferred tax assets
Effect due to derecognition of losses on Takatokwane Project
Effect due to change in accounting policy in relation to exploration spend
(753,579)
210,889
(189)
(48,989)
-
-
(584,444)
198,423
6,342
1,464,424
(724,236)
731,059
Other deferred tax assets and tax liabilities not recognised
591,868
(1,091,568)
R & D tax incentive
Income tax expense/(benefit) reported in the consolidated statement of
comprehensive income
-
-
(159,376)
(159,376)
b. Unrecognised deferred tax balances
The following deferred tax assets and (liabilities) have not been brought to
account:
Deferred tax assets / (liabilities) comprise:
25
Losses available for offset against future taxable income – revenue
6,412,678
6,461,664
•
•
Losses available for offset against future taxable income – capital
• Depreciation timing differences
•
• Accrued expenses and liabilities
•
• Exploration expenditure capitalised
•
c. Income tax benefit not recognised direct in equity
• Share issue costs
Ggg
20,622
(1,998)
117,480
(2,125,232)
4,423,550
20,622
2,211
32,133
(2,451,824)
4,064,806
-
-
-
-
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax
assets have not been recognised in respect of these items because it is not probable that future taxable profit
will be available against which the Group can utilise the benefits thereof.
34
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE: 4: AUDITORS REMUNERATION
Remuneration of the auditor for:
Auditing or reviewing the financial report – HLB Mann Judd
Taxation compliance services – HLB Mann Judd
NOTE 5: EARNINGS PER SHARE
Basic and diluted earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Earnings
Earnings used in the calculation of basic and diluted earnings per share
Consolidated
2019
$
2018
$
53,035
20,780
73,815
32,000
7,400
39,400
(0.95)
(0.95)
(0.94)
(0.94)
Consolidated
2019
$
2018
$
Loss from continuing operations
(2,737,501)
(1,965,876)
Weighted average number of ordinary shares
Weighted average number of ordinary shares outstanding
during the year used in calculating basic EPS
288,568,565
209,223,375
Weighted average number of ordinary shares outstanding
during the year used in calculating diluted EPS
288,568,565
209,223,375
No.
No.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
4,719,663
6,412,501
Cash at bank earns interest at floating rates based on daily bank deposit rates
NOTE: 7: TRADE AND OTHER RECEIVABLES
CURRENT
Other debtors
NON-CURRENT
Security bonds
99,528
82,714
5,000
5,000
35
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 8: PROPERTY, PLANT AND EQUIPMENT
NON-CURRENT
Property, plant and equipment
At cost
Accumulated depreciation
Total property, plant and equipment
a. Movements in Carrying Amounts
Consolidated
2019
$
2018
$
2,631,000
(110,440)
2,520,560
115,676
(106,737)
8,939
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and
the end of the current financial year.
Plant & Equipment
Balance at the beginning of the year
Additions
Depreciation expense
Balance at end of the year
Mine Properties – work in progress
Balance at the beginning of the year
Additions
Amortisation expense
Balance at end of the year
NOTE 9: DEFERRED EXPLORATION EXPENDITURE
NON-CURRENT
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Balance at beginning of year
Purchase of tenements
Expenditure incurred
Foreign currency exchange variation
Expenditure written off (i)
Carrying amount at end of year
36
Consolidated
2019
$
2018
$
8,939
2,028
(3,703)
7,264
7,141
8,722
(6,924)
8,939
Consolidated
2019
$
2018
$
-
2,513,296
-
2,513,296
-
-
-
-
Consolidated
2019
$
2018
$
9,563,843
4,498,677
159,195
1,865,318
2,713,187
166,080
(87,886)
3,050,928
148,920
-
12,514,419
9,563,843
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 9: DEFFERRED EXPLORATION EXPENINDUTRE continued
(i)
During the 2019 financial year, exploration and evaluation expenditure totalling $87,886 was written off as a
result of tenement relinquishments and the Directors’ assessment of the value of some of the Groups’ projects
and as a result no further exploration is planned.
Ultimate recovery of exploration and evaluation expenditure carried forward is dependent upon the recoupment of costs
through successful development and commercial exploitation, or alternatively, by sale of the respective areas.
NOTE 10: TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Placement funds from related parties received in advance
(refer note 17)
Sundry payables and accrued expenses
Trade payables are non-interest bearing and are normally settled on 30 day terms.
NOTE 11: SHARE CAPITAL
Consolidated
2019
$
2018
$
753,894
462,677
300,000
373,578
1,427,472
-
202,859
665,536
Consolidated
2019
$
2018
$
a) Ordinary Shares
(i) Issued and paid-up capital 316,587,593
(2018: 268,416,321) fully paid ordinary shares
71,260,507
65,462,255
(ii) Movements in share capital
Opening balance
2019
2018
No. of Shares
$
No. of Shares
$
268,416,321 65,462,255
119,746,122 53,582,608
Issued on exercise of options
559,411
87,184
-
-
Issued for cash – share purchase plan
33,333,427
3,000,000
26,132,314
1,520,901
Issued for cash – entitlement issue
-
-
67,104,080
6,710,408
Issued in lieu of cash
250,000
72,500
-
-
Issued for cash – placements
11,528,434
2,651,540
55,433,805
4,944,548
Conversion of Director performance rights
2,500,000
225,000
-
-
Less costs of issues
Closing balance
316,587,593 71,498,480
268,416,321 66,758,465
-
(237,973)
-
(1,296,210)
316,587,593 71,260,507
268,416,321 65,462,255
(iii) Holders of ordinary shares have the right to receive dividends as declared and in the event of winding up the company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held and the
amount paid up.
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each holder in
person or by proxy has one vote on a show of hands.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
37
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11: SHARE CAPITAL - continued
b) Options
Movements in Options
Opening balance
Issued for nil consideration – issued to directors*
Issued for nil consideration – entitlement issue
Issued in lieu of cash*
Exercised
Issued for nil consideration – placements
Expired
Closing balance
Consolidated
2019
2018
No. of Options
No. of Options
40,664,321
7,000,000
-
-
(559,411)
-
-
47,104,910
27,550,019
-
16,776,311
15,500,000
-
8,388,010
(27,550,019)
40,664,321
Upon exercise, the options have the same rights as fully paid ordinary shares.
*Director options exercisable at $0.20 and expiring 11 December 2021
7,000,000 options were granted to directors following shareholder approval at the AGM on 15 November 2018,
The fair value of the options at grant date are determined using a Black Scholes pricing method that takes into
account the exercise price, the term of the option, the share price at grant date and expected volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The
following table lists the inputs to the model used for valuation of the unlisted options:
Item
Volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Expected dividend yield
Exercise price per terms and conditions
Underlying security price at grant date
Expiry date
Value per option
c) Performance Rights
Movements in performance rights
Opening balance
Issued to Directors
Conversion to ordinary shares
Expired
Closing balance
Inputs
95%
2.155%
3.07
Nil
$0.20
$0.095
11 December 2021
$0.0430
Consolidated
2019
2018
No. of Perf Rights
No. of Perf Rights
8,586,957
-
(2,500,000)
(6,086,957)
-
6,086,957
8,586,957
-
(6,086,957)
8,586,957
During the year $139,225 in previous recognised expense was reversed through profit or loss as Series 1 did not vest and
has expired. The performance rights had a fair value of $0.09.
38
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11: SHARE CAPITAL - continued
The vesting conditions were:
Series 1 performance rights shall vest upon an announcement to the ASX platform upon securing 80% of the initial funding
requirement for project development within 12 months of the shareholder approval to grant the rights.
Series 2 performance rights shall vest upon an announcement to the ASX platform of commencement of first commercial
production of graphite concentrate from the Lindi Jumbo Project within 18 months of the shareholder approval to grant the
rights.
Series 3 performance rights vested on issue being achieving a market capitalisation of $28 million and were converted to the
equivalent number of ordinary shares for nil consideration. No other rights have converted.
d) Capital Management
The Group manages its capital to ensure that entities in the Group 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 Group’s overall strategy remains unchanged from 2018.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings.
None of the Group’s 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,
dividends 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.
NOTE 12: RESERVES
Opening Balance 1 July
Translation of foreign operations
Issue of share-based payments
Issue of options
Conversion of performance rights
Expiry of non-market vesting condition
Closing Balance 30 June
Consolidated
2019
$
2018
$
874,193
3,751
-
301,258
(225,000)
(139,225)
814,977
(154,348)
148,920
364,225
603,171
-
(87,775)
874,193
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign subsidiary accounts.
Opening Balance 1 July
Translation of foreign operations
Closing Balance 30 June
(93,203)
3,751
(89,452)
(242,123)
148,920
(93,203)
Share Based Payments Reserve
The share based payments reserve records the value of equity benefits provided to employees and Directors as part of their
remuneration.
Opening Balance 1 July
Issue of share based payment
Conversion of performance rights
Expiry of non-market vesting condition
Closing Balance 30 June
364,225
-
(225,000)
(139,225)
-
87,775
364,225
-
(87,775)
364,225
39
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12: RESERVES continued
Option Reserve
The option reserve records the value of options issued to service providers as part of their remuneration.
Opening Balance 1 July
Issue of options to broker (share issue costs)
Issue of options to directors
Closing Balance 30 June
NOTE 13: SEGMENT REPORTING
603,171
-
301,258
904,429
-
603,171
-
603,171
Walkabout Resources Ltd operates predominantly in one industry and four geographical segments being the mining and
exploration industry in Australia, Tanzania, Namibia, Northern Ireland, Scotland and Botswana as a segment that is being
exited.
Segment Information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the board of
directors in assessing performance and determining the allocation of resources.
The Company is managed primarily on the basis of its graphite project in Tanzania, copper projects in Northern Ireland and
Scotland, other developing prospects in Tanzania and Namibia and its corporate activities, with the coal exploration in
Botswana being exited. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have
similar economic characteristics.
Types of reportable segments
Graphite
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania are
reported in this segment.
Coal
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Botswana and
Tanzania are reported in this segment.
Lithium
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania and
Namibia are reported in this segment.
Copper
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Northern
Ireland and Scotland are reported in this segment.
Corporate
Corporate, including treasury, corporate and regulatory expenses arising from operating an ASX listed entity. Segment assets,
including cash and cash equivalents, and investments in financial assets are reported in this segment.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual
financial statements of the Company.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic
value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and
physical location.
Unless indicated otherwise in the segment assets note, deferred tax assets and intangible assets have not been allocated to
operating segments.
40
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: SEGMENT REPORTING continued
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a whole and are not allocated.
Segment liabilities include trade and other payables.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:
•
•
•
•
•
net gains on disposal of equity investments;
income tax expense;
deferred tax assets and liabilities;
intangible assets; and
discontinuing operations.
(i) Segment performance
Continuing Operations
Corporate
Coal
Gold
Graphite
Copper
Lithium
Total
30 June 2019
Segment revenue
$
44,464
$
-
Segment result
(2,114,572)
(59,983)
Included with segment
results:
•
•
•
Depreciation
Interest revenue
(3,703)
44,464
-
-
Share-based
-
payment
(234,533)
Acquisition of non-
current assets
2,028
-
Segment assets
4,616,079
Segment liabilities
(948,546)
15,931
(1,654)
30 June 2018
Segment revenue
35,236
-
-
$
$
$
-
$
$
-
44,464
-
-
-
-
-
-
-
-
-
-
-
(378,246)
(166,120)
(18,580)
(2,737,501)
-
-
-
-
-
-
-
-
-
(3,703)
44,464
(234,533)
4,667,351
464,357
92,747
5,226,483
13,600,451
1,284,716
341,993
19,859,170
(494,055)
(89,084)
(927)
(1,534,266)
-
-
-
-
-
-
35,236
Segment result
(1,448,588)
(128,620)
(131,282)
(87,300)
(168,436)
(1,650)
(1,965,876)
Included with segment
results:
•
•
Depreciation
Interest revenue
Income tax
•
benefit
(6,924)
35,236
159,376
-
-
-
•
Share-based
-
payment
(276,450)
Acquisition of non-
current assets
1,798
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,924)
35,236
159,376
(276,450)
4,136,516
749,863
178,800
5,066,977
Segment assets
6,389,493
16,297
31,458
8,614,891
749,863
270,995
16,072,997
Segment liabilities
(538,330)
(122,882)
(31,458)
(6,940)
(50,018)
-
(749,628)
41
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14: CASH FLOW INFORMATION
Reconciliation of net cash flow from operating activities with loss after
Income Tax
Loss after income tax
(2,737,501)
(1,965,876)
Cash flows excluded from loss attributable to operating activities
Consolidated
2019
$
2018
$
Non-cash flows in loss
- Foreign exchange gain
- Exploration written off
- Depreciation
- Share based payments
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade payables and accruals
(23,923)
87,886
3,703
234,533
(21,480)
170,022
-
-
6,924
276,450
(7,985)
214,440
Net cash used in operating activities
2,286,760
(1,476,047)
NOTE 15: EVENTS AFTER THE BALANCE DATE
The final stages of the resettlement action plan payments were made in July 2019 approximating US$1 million. Otherwise,
no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly
affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity
in future financial years.
42
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Financial performance
2019
$
2018
$
4,608,815
15,039,979
19,648,794
948,546
948,546
6,371,619
9,486,145
15,857,764
534,395
534,395
71,260,508
814,977
65,462,255
963,311
(53,375,238)
(51,102,197)
18,700,247
15,323,369
Total comprehensive loss for the period
(2,273,041)
(1,816,956)
The parent entity has no contingent liabilities or commitments at balance date.
NOTE 17: RELATED PARTY TRANSACTIONS
Amounts owing to related parties at year end:
Other Related Parties
Thomas Murrell
Andrew Cunningham
Michael Elliott – placement funds received in advance
Consolidated
2019
$
-
23,350
300,000
2018
$
14,634
26,800
-
Transactions between related parties are on normal commercial terms which are no more favourable than those available to
other parties unless otherwise stated.
- Fees paid are for the provision of geological and marketing services to the Company.
The fees payable to Directors and options issued to Directors are disclosed in the Remuneration Report included in this
Financial Report. Key management personnel remuneration is disclosed in Note 23. There are no other related party
transactions that have occurred throughout the year.
43
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
Controlled Entities Consolidated
Parent Entity:
Walkabout Resources Ltd
Subsidiaries of Walkabout Resources Ltd:
Reveal Resources Pty Ltd
Walkabout Resources Australia Pty Ltd
Walkabout Resources (Pty) Ltd
Wizard Investments (Pty) Ltd
Triprop Energy (Pty) Ltd
Walkabout Resources Pty Ltd
Walkabout Resources Pty Ltd
Lindi Jumbo Ltd
Aardvark Minerals (Pty) Ltd
Shackleton Resources Ltd
Antrim Metals Ltd
JDH Exploration Pty Ltd
Country of
Incorporation
Australia
Australia
Australia
Botswana
Botswana
Botswana
Malawi
Tanzania
Tanzania
Namibia
Northern Ireland
UK
UK
Percentage Owned (%)*
2019
2018
100%
100%
100%
70%
40%1
100%
100%
100%
100%
100%
50%
75%2
100%
100%
100%
70%
40%1
100%
100%
100%
100%
100%
50%
-
* Percentage of voting power is in proportion to ownership
1 The Group has consolidated Triprop Energy (Pty) Ltd as the Directors’ consider the Group controls this company through
the terms of the farm-in agreement.
2 JDH Exploration Pty Ltd was acquired during the year and holds exploration permits in Scotland.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are therefore not disclosed in this note.
NOTE 18: FINANCIAL INSTRUMENTS
a.
Financial Risk Management
The consolidated entity’s financial instruments consist of deposits with banks, accounts receivable and payable, loans
to a controlled entity and a cash advance to a third party.
i.
Treasury Risk Management
The Company’s funds are held with an Australian “four pillar” bank with the majority residing in a high interest
low transaction fee account.
The Company’s overall risk management strategy seeks to assist the consolidated group in meeting its
financial targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board on a regular basis. These include the
formulation of credit risk policies and future cash flow requirements.
Financial Risks
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency
risk, liquidity risk and credit risk.
Foreign currency risk
The group is exposed to fluctuations in foreign currencies arising from the purchase of goods and services in
currencies other than the group’s measurement currency.
ii.
Iii
b. Foreign Currency Risk Sensitivity
At 30 June 2019, there would have been an immaterial change in post-tax loss for the year as a result of a 4%
change in the value of the Australian Dollar to the Botswana Pula and an 6% change in the value of the Australian
Dollar to the Tanzanian Schilling. The effect on equity would be the same.
44
Consolidated
2019
Consolidated
2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18: FINANCIAL INSTRUMENTS - Continued
c. Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
The following table details the Company’s and the Group’s expected maturity for its non-derivative financial liabilities.
These have been drawn up based on undiscounted contractual maturities of the financial assets including interest
that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different
period.
Less than 1
month
1 – 3
Months
3 months
– 1 year
1 – 5
years
5+ years
$
$
$
Non-interest bearing
1,049,833
270,845
106,794
1,049,833
270,845
106,794
Less than 1
month
1 – 3
Months
3 months –
1 year
1 – 5
years
5+ years
$
$
$
Non-interest bearing
544,158
121,378
84,092
544,158
121,378
84,092
d.
Credit risk
The main exposure to credit risk as at 30 June 2019 relates to three separate advances made to the Company’s wholly
owned subsidiaries, Walkabout Resources Pty Ltd ($18,690,622), Reveal Resources Pty Ltd ($448,105), Lindi Jumbo
Limited ($2,648,001) and Shackleton Resources Ltd ($1,374,649). These separate advances have been made for the
purpose of funding the day to day operations of the subsidiaries and their exploration activities. The loans are
unsecured. The risk associated with these advances is exploration risk. These advances will not be repaid if the
exploration does not provide an economic deposit. This risk is mitigated by providing the best opportunity to make an
economic discovery by utilising exploration professionals of the highest standard and by obtaining the necessary
funding.
e.
Interest Rate Risk
The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial
assets and financial liabilities are detailed in the liquidity risk section of this note. At balance date, the Group is not
materially exposed to interest rate risk.
f.
Fair Value
The carrying amount of the Group’s financial assets and liabilities approximate their carrying amount at balance date.
45
$
-
-
$
-
-
$
-
-
$
-
-
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19: SHARE-BASED PAYMENT PLANS
The following share-based payment arrangements were in place as at 30 June 2019:
Series
Date options
granted
Number of
shares
under option
Exercise
price of
option
Expiry date of option
Vesting date
Fair
value at
grant
date
$
1
11 December 2018
7,000,000
$0.20
11 December 2021
301,258
11 December 2018
On 15 November 2018, shareholders granted the directors 7,000,000 options with no vesting conditions. Further detail on the
valuation of the options are provided in note 11(b).
NOTE 20: CONTINGENT LIABILITES
The Directors are not aware of any contingent liabilities as at the date of this report.
NOTE 22: CAPITAL AND LEASING COMMITMENTS
a.
Property Lease Commitments
Payable — minimum lease payments
-
-
not later than 12 months
between 12 months and 5 years
b.
Capital Expenditure Commitments
Minimum expenditure commitments for mining tenements:
-
-
not later than 12 months
between 12 months and 5 years
NOTE 23: DIRECTORS AND EXECUTIVES DISCLOSURES
Details of Key Management Personnel
Directors
Trevor Benson
Executive Chairman
Allan Mulligan
Executive Director
Thomas Murrell
Non-Executive Director (Resigned 15 March 2019)
Andrew Cunningham
Non-Executive Director
Michael Elliott
Non-Executive Director
Consolidated
2019
$
2018
$
67,863
-
67,863
61,443
-
61,443
2,989,256
1,265,471
4,254,727
1,872,413
1,496,202
3,368,615
Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.
46
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
NOTE 23: DIRECTORS AND EXECUTIVES DISCLOSURE CONT.
The totals of remuneration paid to key management personnel of the Company and the Group during the year are as follows:
Short-term employment benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
Consolidated
2019
$
2018
$
867,830
50,949
-
301,258
1,220,037
796,338
47,500
-
364,225
1,208,063
47
1.
In the opinion of the directors of Walkabout Resources Ltd (the ‘Company’):
DIRECTORS’ DECLARATION
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and
of their performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements.
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.
c. the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
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.
Trevor Benson
Executive Chairman
Dated this 24th day of September 2019
48
INDEPENDENT AUDITOR’S REPORT
To the members of Walkabout Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Walkabout 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 confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
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. We have determined the matters described below to
be the key audit matters to be communicated in our report.
49
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of deferred exploration 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 cost model after
recognition.
the carrying amount of
Our audit focussed on the Group’s assessment
of
the capitalised
exploration and evaluation asset, as this is one
of the most significant assets of the Group.
Mine properties work in progress
Note 8 of the financial report
On 7 May 2019, the Company announced on
the ASX that it was commencing ‘Early-Start’
works for its Lindi Jumbo Graphite project in
Tanzania.
The carrying amount of mine properties work in
progress at balance date was $2,513,296 and is
being recognised in accordance with AASB 116
Property, Plant and Equipment.
Our audit focussed on the Group’s assessment
of the carrying amount of the capitalised asset
due the significance to readers of the financial
report. Previously all costs in relation to the
Lindi Jumbo Graphite Project were being
recognised in accordance with AASB 6
Exploration for and Evaluation of Mineral
Resources.
Going Concern
Note 1(f) of the financial report
Our procedures included but were not limited to
the following:
▪ We obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area of
interest;
▪ 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 2019 and discussed with
management the nature of planned ongoing
activities; and
▪ We examined the disclosures made in the
financial report.
Our procedures included but were not limited to
the following:
▪ We obtained an understanding of
management’s assessment to recognised
costs in accordance with AASB 116 Property,
Plant and Equipment;
▪ We considered the Directors’ assessment of
potential indicators of impairment;
▪ We substantiated a sample of costs incurred;
▪ With the commencement of construction, we
considered whether the carry forward Lindi
Jumbo Graphite Project Exploration and
Evaluation asset should be transferred to
development costs in accordance AASB 138
Intangible Assets: and
▪ We examined the disclosures made in the
financial report.
The Group recorded a net loss of $2,737,501
and had net cash outflows of $1,692,838. As at
30 June 2019 the Group had cash and cash
equivalents of $4,719,663 and exploration,
lease and the Lindi Jumbo Graphite Project
construction commitments for the next 12
months of $2,989,256.
Our procedures included but were not limited to
the following:
▪ We considered the appropriateness of the
going concern basis of accounting by
evaluating the underlying assumptions in cash
flow projections prepared by management;
including sensitivity analysis;
If the going concern basis of preparation of the
financial statements was inappropriate, the
carrying amount of certain assets and liabilities
may have significantly differed. In addition,
▪ We considered the progress of the ongoing
process for funding of the Lindi Jumbo
Graphite Project;
▪ We discussed with the Board plans in place to
mitigate the going concern risk;
50
Going Concern
Note 1(f) of the financial report
management and the auditor must consider
whether a material uncertainty exists that may
cast significant doubt on the Group’s ability to
continue as a going concern. Disclosure is
required in the financial report should the
significant doubt exist.
The going concern basis of accounting was a
key audit matter due to the significance to users
of the financial report and the significant
judgement involved with forecasting cash flows
▪ We have considered the timing of settlement
of trade and other payables and contractual
commitments existing at balance date;
▪ We have considered the likelihood that
options on issue will be exercised within the
relevant period;
▪ Our responsibilities in respect of the going
concern basis of accounting are included
below under Auditor’s responsibilities for the
audit of the financial report; 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 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.
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.
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.
51
-
-
- 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.
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 Walkabout 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
D I Buckley
Partner
52
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
The following additional information is provided as at 16 September 2019.
Distribution of Shareholders
Fully Paid Ordinary Shares
Listed Options
Category (size of holding)
Number of Holders Number of Shares Number of Holders Number of Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
450
486
371
1,073
446
2,826
147,404
1,431,916
2,883,569
40,425,998
271,963,936
316,852,823
84
104
56
150
77
471
32,771
303,892
397,943
5,233,661
33,815,399
39,783,666
The number of shareholdings held in less than marketable parcels is 574
The names of the substantial shareholders are:
Shareholder
Hong Kong Tiande Baorun Trade Co Limited
Number
Ordinary
23,043,656
%
7.27
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
- Each ordinary share is entitled to one vote
Options
- Options are not entitled to a vote
Performance Rights
- Performance rights are not entitled to a vote
Corporate Governance
The 2019 corporate governance statement is located on the Company’s website at www.wkt.com.au.
Unlisted securities :
There are 2 holders of unlisted options exercisable at 20 cents and expiring 11 December 2021 as follows:
Name
Allan Mulligan
Andrew Cunningham
Total
Holding
4,000,000
3,000,000
7,000,000
% Held
57%
43%
100%
53
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
20 Largest Shareholders – Ordinary Shares
Name
Number Held
% Held
1 HONG KONG TIANDE BAORUN TRADE CO LIMITED
2 MARCOLONGO NOMINEES PTY LTD
23,043,656
12,576,512
3 BNP PARIBAS NOMINEES PTY LTD
8,852,945
7.27
3.97
2.79
2.54
2.16
1.96
1.42
1.42
1.35
1.33
1.32
1.31
1.00
0.95
0.92
0.91
0.84
0.78
0.76
0.74
8,065,124
6,836,099
6,200,000
4,500,000
4,500,000
4,291,519
4,213,703
4,196,053
4,160,390
3,182,200
3,024,234
2,907,850
2,886,811
2,673,600
2,465,000
2,400,000
2,349,499
113,325,195
203,583,643
35.76
64.24
4 OODACHI PTY LTD
5
MR JOHN RICHARD TURNER + MRS CLARE FRANCES TURNER
6 PANTAI INVESTMENTS PTY LTD
7 GERROA SERVICES PTY LIMITED
8 P & M ZUVIC PTY LIMITED
9
IAN DAVID PENNY
10 MR ALLY MBARAK MOHAMED
11 MR ALLAN MULLIGAN
12 CITICORP NOMINEES PTY LIMITED
13 MRS ROBYN JOY CRASE
14 MR NAVEEN TEJPAL + MRS JYOTI TEJPAL
15 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
16 MR TREVOR BRUCE BENSON
17 MR ROBERT LINCOLN WESTLAKE
18 MR SHANNON EDWARD RUTTY
19 MR DAVID ALAN CLARKSON + MRS HEATHER JOY CLARKSON
20 BNP PARIBAS NOMS PTY LTD
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
54
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
20 Largest option holders — listed options expire 31/12/2019 exercisable at $0.15
Name
Number Held
% Held
1. MR ROBERT LINCOLN WESTLAKE
2. MARCOLONGO NOMINEES PTY LTD
3. MR TREVOR ALAN POWER
2,529,480
2,292,012
2,200,000
4. MR MATIU RUDOLPH + MRS JANELLE LESLEY RUDOLPH
1,507,561
6.36
5.76
5.53
3.79
3.64
3.62
3.54
2.70
2.64
2.26
2.20
2.13
1.97
1.75
1.50
1.46
1.45
1.31
1.30
1.26
1.26
1,450,000
1,440,229
1,410,000
1,072,517
1,050,000
900,000
874,161
847,933
782,610
697,764
596,815
580,056
575,673
520,000
515,288
500,000
500,000
22,842,099
16,941,567
57.42
42.58
5. MR ROGER GOES
6. HONG KONG TIANDE BAORUN TRADE CO LIMITED
7. MR STEPHEN JOHN HOGAN
8. MR CHRISTOPHER POHLNER
9. MR STEPHEN JOHN HOGAN + MS KAREN MAREE HOGAN
10. MR JUNYAN ZHOU
11. MR GRAHAM PAUL STRAUSS
12. OODACHI PTY LTD
13. MR ANDREW WILLIAM BUTLER
14. MR HAYDEN JOHN DAHM
15. ARAWHERO PTY LTD
16. MR ROBERT KEITH HOWARD
17. MR VIKRAM ASHWIN MODY
18. MR MARK ANTHONY MURTAGH
19. MR MICHAEL GORDON SHAW
20. MR DAVID PAUL INGLIS
20. MR LUKE STANNARD + MRS CHERIE SARAH ELIZABETH HALFPENNY-STANNARD
Totals: Top 21 holders of LISTED OPTIONS EXPIRE 31/12/2019 @$0.15 (Total)
Total Remaining Holders Balance
55
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
Tenement Schedule
Project /
Location
Tenement
Type
Tenement
Number
Interest Held
Comment
Application
Recommended
Application
Subject to ongoing
commitments
Antrim Metals JV
Antrim Metals JV
Earning 50% and then
75%
New licence
Earning 75%
Earning 75%
Earning 75%
Renewed
Earning 65%
Renewed
Earning 65%
Renewed
Lindi
Lindi
Lindi
Lindi
Kimoingan
Eureka
Eureka
NE Antrim
Glenariff
The Sheddings
Gortnamoyagy
Tyrone
Lisburn
Scotland
Scotland
Scotland
ML
PLA
PLA
PL
PL
EPL
EPL
MPL
MPL
MPL
MPL
MPL
Mines Royal
Option
Mines Royal
Option
Mines Royal
Option
Mines Royal
Option
Tanzania
579/2018
13376/2018
13352/2018
9993/2014
11119/2017
Namibia
6308
6309
100%
100%
70%
70%
100%
100%
100%
Northern Ireland and Scotland
LON01/14
LON02/14
LON03/14
LON05/14
KOZ01/16
SK01/18
St Johns Town of
Dalry
Newton Stewart
Rhins of Galaway
Botswana
50%
50%
100%
100%
0%
100%
0%
0%
0%
70%
40%
40%
Takatokwane
Takatokwane
Takatokwane
PL
PL
PL
35/2007
157/2009
160/2009
56
Lindi Jumbo Graphite Project 2012 JORC Mining Reserve – Annual Review as at 30 June 2019
2018 Resource Upgrade
A drilling and trenching program was conducted over the northern Inferred Mineral Resource area as well as a new
mineralised zone directly to the south of the Gilberts Arc Graphite Deposit. The upgrade and extension program included
17 drillholes for 1,354m and 7 trenches for 654m.
The global Mineral Resource increased by 41.3% to 41.8 million tonnes at 10.8% TGC containing 4.5 million tonnes of
graphite (Table 1). Fifty one percent (51%) of the mineral resource that will form part of the initial mining and economic
studies is now classified as Measured (6.5 Mt @ 12.1% TGC) and Indicated (8.4 Mt @ 10.5% TGC) containing 1.67 million
tonnes of graphite.
The global mineral resource now includes a new Inferred Resource area which lies directly to the south of the current planned
open-pit area and is made up of 6 distinct mineralised domains. This area will not form part of the upcoming mining studies,
amended DFS and Reserve upgrade as further work within the area will only be done post-production.
Table 1: Resource category breakdown of the Gilbert Arc.
Resource Category
Tonnes
(millions)
TGC %
Contained Graphite
(tonnes)
Measured
(Including High Grade)
Indicated
(Including High Grade)
Inferred
(Including High Grade)
Grand Total
High Grade Domains
6.5
1.7
8.4
1.5
26.9
1.8
41.8
5.0
12.1
23.4
10.5
21.2
10.5
22.7
10.8
22.5
Note: Appropriate rounding applied.
781,800
393,200
887,300
325,300
2,837,600
411,900
4,506,811
1,127,800
2019 Ore Reserve Update
The Resources considered for mining are based on the JORC 2012 Mineral Resource Estimate (see ASX announcement of
19 December 2018). The Ore Reserve is based only on the Measured and Indicated Mineral Resources in the current mining
schedule which is summarised in Table 2.
Thus, the Inferred Resource zone to the south of the mining pit is not currently included in the mine design reserves and
remains available for further consideration or potential expansion opportunities. The Ore Reserve estimate was prepared
and signed off by and independent consultancy, Bara International of Johannesburg, South Africa.
Table 2: Lindi Jumbo Project Ore Reserve.
Ore Reserves
Category
Tonnes (million)
TGC %
Contained Graphite (tonnes)
Proven Ore Reserves
Probable Ore Reserves
Total Ore Reserves
2.54
2.97
5.51
19.3
16.7
17.9
489,000
498,000
987,000
2019 Updated Definitive Feasibility Study
The main areas of adjustment for the 2019 study update was the application of the updated Mineral Resource (ASX
Announcement 19 December 2018) to the mining plan and a revision of Capital expenditure following detailed scope of work
contract agreements with contract partners.
The mining depletion was completely remodelled following the upgrade of the previous Inferred Resource to the north of the
pit into an Indicated Resource category. As a result of the increased LoM grade to 17,9% Total Graphitic Carbon, the average
annual mill feed requirement has reduced from a average of 280,000 tonnes per year to an average of 230,000 tonnes per
year.
57
Pre-Production direct capital costs were further reduced by 6.4% to US$27.8M from US$29.7M in 2017. An upfront saving
of some US$2.5m was achieved through vendor funding of a large portion of the camp infrastructure costs.
Capital costs have been determined through a combination of fixed tender pricing, firm quotations and data-base references
based on similar operations. The costs presented have a base date of December 2018 and are presented in United States
Dollars (US$). The costs presented are definitive costs and include the US$2.1m provision for the Relocation Assistance
Programme (RAP), (ASX Announcement 31 January 2019).
Furthermore, updated estimates for product pricing was applied to the financial modelling.
Walkabout conducts an annual review of its Mineral Resources and Ore Reserves. This process is managed by the Directors
and competent person. As of 30 June 2019, the Mineral Resources and Ore Reserves statement remains the same as that
stated above. The governance arrangements and internal controls in place with respect to its estimates of mineral resources
and ore reserves and the estimation process include oversight of the competent person by the managing director and review
by the board. No mining has commenced and no additional mining studies have been completed.
Competent Person’s Statement
The information in this report that relates to Exploration Results and Exploration Targets is based on and fairly represents information and
supporting documentation prepared by Mr Andrew Cunningham (Director of Walkabout Resources Limited). Mr Cunningham is a member of
the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and types of deposits under
consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves
Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Cunningham consents
to the inclusion in this report of the matters based on his information in the form and context in which they appear.
The information in this report that relates to Mineral Resources is based on and fairly represents information compiled by Mr Lauritz Barnes,
(Consultant with Trepanier Pty Ltd), Mr Aidan Platel (Consultant with Platel Consulting Pty Ltd), Mr Andrew Cunningham (Director of Walkabout
Resources Limited) and Ms Bianca Manzi (Bianca Manzi Consulting). Mr Barnes, Mr Platel, Mr Cunningham and Ms Manzi are members of
the Australian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and have sufficient experience of relevance to
the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as
defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Specifically, Ms Manzi is the Competent Person for the geological database. Mr Barnes is the Competent
Person for the resource estimation. Both Mr Platel and Mr Cunningham completed the site inspections. Mr Barnes, Mr Platel, Mr Cunningham
and Ms. Manzi consent to the inclusion in this report of the matters based on their information in the form and context in which they appear.
The information in this report that relates to Ore Reserves is based on and fairly represents information and supporting documentation
prepared by Mr Clive Wyndham Brown who is a Principal Consultant (Mining) at Bara International Ltd. Mr Brown is a Mining Engineer and a
Fellow of the South African Institute of Mining and Metallurgy and has sufficient experience of relevance to the styles of mineralisation and
types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the
Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr
Brown consents to the inclusion in this report of the matters based on his information in the form and context in which they appear.
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