Announcement PDF IMPACT MINERALS LIMITED (and Controlled Entities) ABN 52 119 062 261 HALF-YEAR FINANCIAL REPORT 31 December 2020 CONTENTS DIRECTORS’ REPORT ........................................................................................................................................................... 2 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................. 6 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 .......................................... 7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 ............................................................................................................................................................. 8 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 ............................................................................................................................................. 9 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 ........................................................................................................................................................... 10 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 ........................................................................................................................................... 11 DIRECTORS’ DECLARATION............................................................................................................................................ 16 INDEPENDENT AUDITOR’S REVIEW REPORT ........................................................................................................... 17 HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 1 of 18 DIRECTORS’ REPORT Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2020. DIRECTORS The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated. • • • • Peter Unsworth – Non-Executive Director Michael Jones – Managing Director Paul Ingram – Non-Executive Director Markus Elsasser – Non-Executive Director PRINCIPAL ACTIVITIES The principal activity of the Group during the financial year was exploration for deposits of nickel, gold, copper and platinum group elements. REVIEW OF OPERATIONS Commonwealth Gold-Silver-Zinc-Lead-Copper Project, NSW (IPT 100%) The Commonwealth Project comprises six 100% owned exploration licences that cover about 853 km2 of the highly prospective Lachlan Fold Belt about 100 km north of Orange in NSW. The belt is host to many major gold-silver-copper mines including the Cadia-Ridgeway deposits that contain at least 25 million ounces of gold and 5 million tonnes of copper. Earlier in 2020 Impact identified five new undrilled targets along trend from the recent Boda-Kaiser porphyry copper-gold discovery (Alkane Resources Limited ASX:ALK). Several campaigns of rock chip and soil geochemistry sampling together with a new airborne magnetic and radiometric survey commissioned by Impact, highlighted host rocks and alteration assemblages at three of the prospects that are similar to those at Cadia-Ridgeway, North Parkes and Boda. One of the prospects Apsley, was prioritised for a follow up soil geochemistry survey following the discovery of extensive fresh copper sulphides at surface. The survey defined a near-textbook example of the zones of metal assemblages expected around major alkalic porphyry copper gold complexes over an area of about four square kilometres. The assemblages included a classic example of a so-called “zinc doughnut” where an outer halo of zinc, lead and manganese surrounds a core of copper, gold and PGM’s. Such doughnuts are well understood in porphyry copper-gold exploration. An extensive Induced Polarisation ground survey was completed over the entire doughnut and whilst final interpretations are still pending, the results indicate priority drill targets are present in a number of places. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 2 of 18 DIRECTORS’ REPORT Broken Hill Project, NSW (IPT 100%) The Broken Hill Project comprises 727 km2 of exploration licences located southeast of Broken Hill, NSW and is prospective for: nickel-copper-cobalt-PGE mineralisation associated with ultramafic rocks; zinclead-silver mineralisation hosted by metasedimentary rocks and amphibolite (Broken Hill style); and pyrite-cobalt deposits similar to Thackaringa (72Mt at 852 ppm cobalt, 9.3% sulphur and 10% iron). During the six months Impact completed a major drill programme of 13,263 metres which delivered break-through drill results at every prospect tested, driven mainly by Impact’s discovery of a proprietary multi-element ratio that is a good predictor of PGM grade, a possible first in platinum exploration anywhere. At the Plat Central prospect, the ratio led directly to the discovery of high-grade nickel-copper-PGM mineralisation in a Kambalda-style channel at the base of the target ultramafic unit, the first coherent zone of mineralisation found in over 40 years of exploration in the area. Final assays from this area are due shortly. At the Little Broken Hill Gabbro-Rockwell prospects, the first ever drill holes into the basal unit of an intrusion that has many similarities to the world class Jinchuan mine in China have returned thick intercepts of strongly anomalous PGM +/-copper and nickel mineralisation over a distance of at least 1,500 metres. The results suggest the basal unit may host a vast repository of these metals. In addition, the drill holes are at broad reconnaissance spacings and this is extremely encouraging for the discovery of a significant deposit given the remainder of the entire 6.5 kilometre extent of the Little Broken Hill Gabbro is untested. At Red Hill, a recently reported stand out drill intercept suggests that this prospect may be a feeder zone for the Little Broken Hill Gabbro and a prime target for massive sulphide mineralisation at depth has now been identified. Other Projects During the half year Impact also rationalised its project portfolio. In May the Company staked a new major project called Arkun in the SW Yilgarn Terrane, about 130 km east of Perth in the emerging new province for nickel-copper-PGM mineralisation following the Julimar discovery near Perth (Chalice Mining Limited ASX:CHN). During the period Impact added to the Arkun project with the recent purchase of the Beau project which covers an untested magnetic anomaly of similar dimension and magnitude to the Gonneville intrusion that hosts the mineralisation at Julimar. In October Impact also purchased an 80% interest in the Doonia gold project, located 75 km east of Kambalda. Here, a significant gold-in-soil anomaly 2.5 km long and up to 1 km wide is centred over numerous small prominent magnetic anomalies and which has shallow gold-in-regolith anomalies that have not been followed up at depth. This is a walk-up drill target with significant size potential. Impact also added two new 100% owned applications for Exploration Permits to its Blackridge gold project in central Queensland. Impact’s tenements now cover 150 km 2 or about 90% of the southern part of the larger Miclere-Blackridge gold field that produced over 300,000 ounces of gold. In addition Impact also purchased Silver City Minerals Limited’s (ASX:SCI) 20% interest in the silver-leadzinc rights to EL7390 at Broken Hill. Impact now owns 100% of all mineral rights to its entire tenement portfolio at Broken Hill and ends a long and complex history of joint ventures on the tenement inherited by Impact when it first purchased an interest in the project. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 3 of 18 DIRECTORS’ REPORT As well as adding to its portfolio, Impact also divested some of its non-core assets. The Clermont gold project in Queensland was sold to private company Australasian Gold Limited for $100,000 at a price of 10 cents per share. Australasian Gold has a suite of similar prospective gold assets in Queensland and will list on the ASX by Q2 2021 at a listing price of 20 cents per share. Impact has also recently agreed to the sale of two tenements in the company’s Lachlan Fold Belt portfolio, EL8632 and the northern part of E8505 (41 sub blocks) to Orange Minerals Pty Limited, an unrelated private company. Orange Minerals has acquired a number of other assets in the Lachlan Fold Belt with the aim of listing on the ASX in mid-2021. FINANCIAL PERFORMANCE AND FINANCIAL POSITION In July 2020, the Company raised $3,245,000 (before costs) via a placement of 216,333,333 new shares at an issue price of 1.5 cents each. During the half-year the Group reported an operating loss after tax of $1,321,493 (half-year to 31 December 2019: loss of $572,077). As at 31 December 2020 the Group had net assets of $15,233,202 (30 June 2020: $13,377,076) including $2,594,456 of cash and cash equivalents (30 June 2020: $2,431,426). The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the entity up to 31 December 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. AUDITOR’S DECLARATION Section 307C of the Corporations Act 2001 requires our auditors, Bentleys, to provide the directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 6 and forms part of this directors’ report for the halfyear ended 31 December 2020. This report is signed in accordance with a resolution of the Board of Directors. Peter Unsworth Chairman Perth, 5 March 2021 Competent Person’s Statement The review of exploration activities and results contained in this report is based on information compiled by Dr Mike Jones, a Member of the Australian Institute of Geoscientists. He is a director of the Company and works for Impact Minerals Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Dr Jones has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 4 of 18 DIRECTORS’ REPORT Forward Looking Statements This document may contain certain forward-looking statements. Forward-looking statements include but are not limited to statements concerning Impact Minerals Limited’s (Impact’s) current expectations, estimates and projections about the industry in which Impact operates, and beliefs and assumptions regarding Impact’s future performance. When used in this document, words such as “anticipate”, “could”, “plan”, “estimate”, “expects”, “seeks”, “intends”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although Impact believes that its expectations reflected in these forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Impact and no assurance can be given that actual results will be consistent with these forward-looking statements. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 5 of 18 To The Board of Directors Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 As lead audit Partner for the review of the financial statements of Impact Minerals Limited for the period ended 31 December 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:   the auditor independence requirements of the Corporations Act 2001 in relation to the review; and any applicable code of professional conduct in relation to the review. Yours faithfully BENTLEYS Chartered Accountants Dated at Perth this 5th day of March 2021 MARK DELAURENTIS CA Partner CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 CONSOLIDATED 31 Dec 2020 $ 31 Dec 2019 $ 32,952 115,407 - 287,189 32,952 402,596 Employee benefits expense (248,680) (588,693) Corporate and administration expenditure (394,289) (267,575) Depreciation and amortisation expense (20,609) (19,529) Occupancy (24,886) (45,814) (665,981) (53,062) (1,321,493) (572,077) - - (1,321,493) (572,077) - - Exchange differences on translating foreign operations - 16 Other comprehensive income (net of tax) - 16 Total comprehensive Profit/(Loss) for the period (1,321,493) (572,061) Total comprehensive Profit/(Loss) income attributable to the owners of Impact Minerals Limited (1,321,493) (572,061) Cents per share Cents per share (0.08) (0.04) Notes Interest and other income 3 Research and development tax rebate Impairment of exploration expenditure 6 Profit/(Loss) before income tax expense Income tax expense Net Profit/(Loss) for the period Other comprehensive income Items that will not be reclassified to profit or loss Change in the fair value of financial assets Items that may be reclassified to profit or loss Basic Profit/(Loss) per share 9 The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 7 of 18 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 CONSOLIDATED Notes 31 Dec 2020 $ 30 Jun 2020 $ 4 Current Assets Cash and cash equivalents 2,594,456 2,431,426 Trade and other receivables 47,588 72,433 Other current assets 27,000 35,234 345,000 - 3,014,044 2,539,093 Assets held for sale 5 Total Current Assets Non-Current Assets Property, plant and equipment 32,803 37,549 12,881,432 10,946,163 Other non-current assets 239,055 151,055 Total Non-Current Assets 13,153,290 11,134,767 TOTAL ASSETS 16,167,334 13,673,860 Trade and other payables 857,606 210,496 Short-term provisions 76,526 86,288 Total Current Liabilities 934,132 296,784 TOTAL LIABILITIES 934,132 296,784 15,233,202 13,377,076 Exploration expenditure 6 Current Liabilities NET ASSETS EQUITY Issued capital 7 50,024,784 46,931,843 Option reserve 7 871,596 1,005,268 (1,161,069) (1,161,069) Accumulated losses (34,502,109) (33,398,966) TOTAL EQUITY 15,233,202 13,377,076 Transactions with non-controlling interest The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 8 of 18 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 Balance at 1 July 2019 Issued capital Option reserve Foreign currency translation reserve $ $ $ Financial asset $ Transactions with noncontrolling Accumulated interest losses reserve $ Total equity $ $ (1,161,069) (31,445,495) 11,859,834 44,900,024 577,577 (504,747) (506,456) Profit for the period - - - - - (572,077) (572,077) Other comprehensive income - - 16 - - - 16 Total comprehensive income for the half-year - - 16 - - (572,077) (572,061) Fair value of options issued - 472,533 - - - - 472,533 Fair value of options expired - (226,150) - - - 226,150 - Balance at 31 December 2019 44,900,024 823,960 (504,731) (506,456) (1,161,069) (31,791,422) 11,760,306 Balance at 1 July 2020 46,931,843 1,005,268 - - (1,161,069) (33,398,966) 13,377,076 Profit for the period - - - - - (1,321,493) (1,321,493) Other comprehensive income - - - - - - - Total comprehensive income for the half-year - - - - - (1,321,493) (1,321,493) Shares issued 3,253,750 - - - - - Share issue costs (214,969) Exercise of options Transactions with owners in their capacity as owners Transactions with owners in their capacity as owners 3,253,750 (214,969) 54,160 (54,160) Fair value of options issued - 138,838 - - - - 138,838 Fair value of options expired - (218,350) - - - 218,350 - 50,024,784 871,596 - - (1,161,069) (34,502,109) 15,233,202 Balance at 31 December 2020 - The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 9 of 18 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 CONSOLIDATED 31 Dec 2020 $ 31 Dec 2019 $ (552,614) (373,132) Interest received 17,700 13,242 Government rebates 67,470 - (467,444) (359,890) (15,863) - (2,353,693) (523,632) (30,000) - (2,399,556) (523,632) Proceeds from issue of shares 3,245,000 - Share issue costs (214,970) - NET CASH FLOWS FROM FINANCING ACTIVITIES 3,030,030 - Net increase/(decrease) in cash and cash equivalents 163,030 (883,522) Cash and cash equivalents at beginning of the period 2,431,426 2,002,624 2,594,456 1,119,102 Notes CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for exploration activities Payments for the acquisition of tenements NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 4 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 10 of 18 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES a) Basis of Preparation These general purpose financial statements for the interim half-year reporting period ended 31 December 2020 have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. This interim report is intended to provide users with an update on the latest annual financial statements of Impact Minerals Limited and its controlled entities (the consolidated entity). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the consolidated entity. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the consolidated entity for the year ended 30 June 2020, together with any public announcements made during the half-year. Except for Note 1(b) the accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. The half-year financial statements have been prepared on the historical cost basis, except where stated. For the purpose of preparing the half-year financial statements, the half-year has been treated as a discrete reporting period. b) New accounting standards and interpretations The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an annual accounting period that begins on or after 1 July 2020. The adoption of the new and revised Standards and Interpretations have not had a material impact on this half-year financial report. c) Going Concern The interim financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Consolidated Group generated a loss for the period of $1,321,493 (2019: loss of $572,077) and net cash outflows from operating activities of $467,444 (2019: $359,890). As at 31 December 2020 the Consolidated Group had a cash balance of $2,594,456 (30 June 2020: $2,431,426). In July 2020, the Company raised $3,245,000 (before costs) via a placement of 216,333,333 new shares at an issue price of 1.5 cents each. The ability of the Consolidated Group to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflow in line with available funds. These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern. In the event the above matters HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 11 of 18 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 are not achieved, the Company will be required to raise funds for working capital from debt or equity sources. The directors have prepared a cash flow forecast which indicates that the Consolidated Group will have sufficient cash flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company’s history of raising capital to date, the directors are confident of the Company’s ability to raise additional funds as and when they are required. Should the Consolidated Group be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due. NOTE 2: SEGMENT REPORTING Management has determined that the Group has one material reportable segment, being mineral exploration in Australia. The Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Managing Director) in allocating resources and have concluded at this time that there are no separately identifiable segments. NOTE 3: INTEREST AND OTHER INCOME Interest income Gain on sale of tenements Other income 31 Dec 2020 $ 31 Dec 2019 $ 14,002 18,950 10,776 100,000 4,631 32,952 115,407 31 Dec 2020 $ 30 Jun 2020 $ 1,092,633 1,501,823 631,426 1,800,000 2,594,456 2,431,426 NOTE 4: CASH AND CASH EQUIVALENTS Cash at bank and on hand Short-term deposits HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 12 of 18 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 NOTE 5: ASSETS HELD FOR SALE Tenements held for sale 31 Dec 2020 $ 30 Jun 2020 $ 345,000 - 345,000 - In November 2020, the Company announced that it had reached an agreement for the sale of its Clermont epithermal gold project (EPM14116) in central Queensland to Australasian Gold Limited, an unrelated company with a suite of similar prospective gold assets in Queensland. The terms of the sale are $100,000 in shares in Australasian Gold at a price of 10 cents per share. Australasian Gold plan to list on the ASX in early 2021 at a listing price of 20 cents per share. As at 31 December 2020 the licence subject to the Agreement was held at its sale price and the Company recognised an impairment on the tenement of $757,594. In February 2021, the Company announced that it had reached an agreement for the sale of tenement EL8632 and the northern part of block El8505 in the Company’s Lachlan Fold Belt portfolio to Orange Minerals Pty Ltd an unrelated company. The consideration is (a) a non-refundable deposit of $15,000; (b) at Impact’s election either $134,000 in shares in a new listed company or $50,000 in shares in the new listed company and cash of $180,000 in cash; and (c) a 1% Net Smelter Royalty. As at 31 December 2020 the licences subject to this agreement were held at their sale price. NOTE 6: EXPLORATION EXPENDITURE Capitalised cost at the beginning of the period Exploration expenditure incurred during the period Sale of Clermont project (refer Note 5) Sale of Lachlan Fold Belt tenements (refer Note 5) Impairment expense for the period 31 Dec 2020 $ 30 Jun 2020 $ 10,946,163 2,946,250 (100,000) (245,000) (665,981) 9,777,828 1,281,481 (113,146) 12,881,432 10,946,163 Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 13 of 18 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 NOTE 7: ISSUED CAPITAL Ordinary shares fully paid 31 Dec 2020 $ 30 Jun 2020 $ 50,024,784 46,931,843 a) Movements in ordinary shares on issue HALF-YEAR ENDED 31 DEC 2020 No. $ At the beginning of the period - Placement YEAR ENDED 30 JUN 2020 No. $ 1,559,494,630 46,931,843 1,321,679,789 44,900,024 - - 233,389,496 2,100,505 (b) - - 4,425,345 35,000 (c) 216,333,333 3,245,000 - - - Share issue (d) 353,829 8,750 - - 2,708,434 54,160 - - - (214,969) - (103,686) 1,778,890,226 50,024,784 1,559,494,630 46,931,843 (a) - Share issue - Placement - Option conversion (e) - Transaction costs At the end of the period (a) In February 2020, the Company raised $2,100,505 (before costs) via a placement of 233,389,496 new shares at an issue price of 0.9 cents each. (b) In May 2020, the Company issued 4,425,345 new shares as part consideration for geological consulting services in relation to the identification of, and application for, five tenements in the Yilgarn Craton in Western Australia. (c) In July 2020, the Company raised $3,245,000 (before costs) via a placement of 216,333,333 new shares at an issue price of 1.5 cents each. (d) In November 2020, the Company issued 353,829 new shares as part consideration for geological consulting services in relation to the identification of, and application for, a tenement in the Mt. Belches Basin in Western Australia. (e) During the half-year the Company issued 2,708,434 new shares for nil consideration on the cashless exercise of 8,000,000 employee options. b) Movements in options on issue HALF-YEAR ENDED 31 DEC 2020 No. $ At the beginning of the reporting period YEAR ENDED 30 JUN 2020 No. $ 176,500,000 1,005,268 590,910,556 577,577 - 138,838 101,000,000 665,841 Options exercised (8,000,000) (54,160) - - Options expired (15,500,000) (218,350) (515,410,556) (238,150) At the end of the reporting period 153,000,000 871,596 176,500,000 1,005,268 Fair value of options issued (a) (a) No options were issued during the reporting period. The fair value of options is determined at grant date and is expensed over the vesting period for those options. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2020 Page 14 of 18 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020 NOTE 8: CONTINGENCIES There has been no change in contingent liabilities or assets since the annual reporting date. NOTE 9: EARNINGS PER SHARE Half-year ended 31 Dec 2020 Cents Half-year ended 31 Dec 2019 Cents (0.08) (0.04) Basic profit/(loss) per share The following reflects the income and share data used in the calculations of basic profit/(loss) per share: Half-year ended 31 Dec 2020 $ Half-year ended 31 Dec 2019 $ (1,321,493) (572,077) Half-year ended 31 Dec 2020 Number Half-year ended 31 Dec 2019 Number 1,744,310,795 1,321,679,789 Profit / (Loss) used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating basic loss per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The issue of potential ordinary shares is antidilutive when their conversion to ordinary shares would increase earnings per share or decrease loss per share from continuin