Announcement PDF IMPACT MINERALS LIMITED (and Controlled Entities) ABN 52 119 062 261 HALF-YEAR FINANCIAL REPORT 31 December 2018 CONTENTS DIRECTORS’ REPORT ........................................................................................................................................................... 2 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................. 6 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 .................................................................................................. 7 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018 ............................... 8 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 ............................................................................................................................................................. 9 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 ........................................................................................................................................................... 10 NOTES TO the CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 ........................................................................................................................................................... 11 DIRECTORS’ DECLARATION............................................................................................................................................ 18 INDEPENDENT AUDITOR’S REVIEW REPORT ........................................................................................................... 19 HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 1 of 20 DIRECTORS’ REPORT Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2018. 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 Eamon Hannon – 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 Work during the six months focussed on the Blackridge and Commonwealth projects. Blackridge Gold Project (IPT 100% and option for 95%) Impact’s Blackridge conglomerate-hosted gold project is located about 30 km north of Clermont in Central Queensland. The project covers 91 km2 and comprises one 100% owned Exploration Permit (E28806), one Exploration Permit (E26066) and four Mining Lease applications (ML100158, 59, 60 and 61) for which Impact has an option to buy 95% from Rock Solid Holdings Pty Limited. During the half year Impact purchased a fully granted Mining Lease (ML2386) from a local prospector for a cash payment of $30,000 and replacement of environmental bonds of approximately $7,000. This Mining Lease lies in the centre of the Blackridge project area. The purchase of a granted Mining Lease will allow very large bulk samples to be taken if warranted to help define a resource. Approximately 8.5 tonnes of samples were collected covering the likely range of ore processing properties. The majority of samples were successfully wet processed. In addition, a review of previous gold production demonstrated high grade gold mined over an area of at least one square kilometre extending from surface down dip to depths of up to 80 metres. Distribution of old shafts and mapping by the Queensland Geological Survey indicates the presence of linear high-grade “runs”. Bulk sample results have identified significant potential for new high grade runs and possible large volumes of lower grade gold above the main target unconformity. Together, all of this data demonstrates the large scale potential of the gold bearing units at Blackridge. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 2 of 20 DIRECTORS’ REPORT Commonwealth Gold-Silver-Base Metal Project, N.S.W. (IPT 100%) The Commonwealth Project comprises three 100% owned exploration licences that cover about 315 km 2 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. During the half year assays from four diamond drill holes at Main Shaft confirmed significant extensions to near the surface, high grade massive sulphide unit both along trend and at depth. Hole 084 returned: 5.7 metres at 3.8 g/t gold, 347 g/t silver, 10.8% zinc and 3.7% lead from 52.1 metres down hole; including 0.7 metres at 15.6 g/t gold, 245 g/t silver, 8.6% zinc and 1.9% lead; and 0.5 metres at 4.9 g/t gold, 917 g/t silver, 10.2% zinc and 4.6% lead from 56.9 metres. Hole 082 returned: 4 metres at 3.3 g/t gold 129 g/t silver, 7% zinc and 1.9% lead from 96.4 metres down hole; including 2.1 metres at 5.1 g/t gold, 239 g/t silver, 12.8% zinc and 3.5% lead. Hole 083 returned: 2.6 metres at 7.9 g/t gold, 164 g/t silver, 5.3% zinc and 3.1% lead from 96.9 metres down hole. Hole 085 returned: 1.7 metres at 1.8 g/t gold 72 g/t silver 1.5% zinc 0.5% lead from 49.3 metres down hole in a historically poorly drilled area within 30 metres of surface. In addition Hole 083 intersected a narrow high grade massive sulphide unit about 30 metres below the Main Shaft unit which confirms the discovery of a second massive sulphide unit that is at least 100 metres by 150 metres in dimension and is untested at depth. The second massive sulphide unit returned: 1 metre at 3.1 g/t gold, 57 g/t silver, 9.4% zinc and 4.3% lead from 143 metres down hole; including 0.3 metres at 0.8 g/t gold, 150 g/t silver, 30.2% zinc and 13.6% lead. Assays from two diamond drill holes at Commonwealth South confirmed significant extensions to near the surface resource both along trend and at depth: Hole 086 returned: 8 metres at 5.1 g/t gold, 20 g/t silver, 1.3% zinc and 0.5% lead from 94 metres down hole; including 5 metres at 7.7 g/t gold, 25 g/t silver 2.1% zinc and 0.7% lead; which includes 0.5 metres at 34.3 g/t gold, 40 g/t silver, 5.8% zinc and 2.3% lead from 97.6 metres. Hole 087 returned: 6 metres at 1.5 g/t gold, 22 g/t silver, 0.7% zinc and 0.2% lead from 96.8 metres down hole; including 0.35 metres at 8.9 g/t gold, 21 g/t silver, 3.5% zinc and 0.6% lead. These results extend the high grade veins for at least 40 metres down plunge to the south. A second lower zone of mineralisation has been intersected from about 115 metres down hole with increasing gold grades at depth which is open. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 3 of 20 DIRECTORS’ REPORT Hole 087 in this zone returned: 5 metres at 1.2 g/t gold within a 12 m thick zone of anomalous gold, silver, lead and zinc. All 8 diamond drill holes from the drill programme returned high grade mineralisation which is open along trend and at depth with further drilling required. Further confirmation was made of strong geological similarities to the Eskay Creek VMS mine in British Columbia (production of 3.3 million ounces of gold and 160 million ounces of silver) where recent renewed exploration around the dormant mine shows close spaced drilling (25 metres) is required to track the target high grade massive sulphide lenses down dip (TSX:V Skeena Resources Limited). Broken Hill Project (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. New rock chip samples taken during the half year confirmed high grade gold and copper along trend from the recent discovery of high grade IOCG style mineralisation by Silver City Minerals Ltd. The area is at the southern end of a 40 km long corridor of very high grade gold-PGE-bearing ultramafic alkaline rocks known to be parent magmas to IOCG-style deposits. Very high grade palladium and other precious metals were recorded which have been interpreted as part of a mantle plume event with potential for major deposits. Numerous prospects require follow up work. A proposed Joint Venture with Bluebird Battery Metals was terminated giving Impact the opportunity to review its plans for the project at a time of record prices for palladium. Clermont Gold Project, Queensland (IPT 100%) Impact holds 100% of EPM14116 near Clermont located in the southern part of the Drummond Basin in Central Queensland; a prolific epithermal gold-silver belt which hosts several world class gold deposits. A drill programme was completed during the half year and interpretation of results is in progress by respected consultant Dr Gregg Morrison. Mulga Tank Project (IPT 100%) Impact owns thirteen granted exploration licences and one application, located 200 km east of Kalgoorlie WA, that cover 694 km2 of the Minigwal greenstone belt in the southeast Yilgarn Craton. A reconnaissance drill programme was completed during the half year and results are under review. Pilbara Gold Project The sale of Impact’s Pilbara tenements to Pacton Gold was completed during the half year. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 4 of 20 DIRECTORS’ REPORT FINANCIAL PERFORMANCE AND FINANCIAL POSITION During the half-year the Group reported an operating loss after tax of $1,372,140 (half-year to 31 December 2017: loss of $678,199). As at 31 December 2018 the Group had net assets of $17,982,887 (30 June 2018: $19,522,107) including $1,935,700 of cash and cash equivalents (30 June 2018: $3,514,002). 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 2018. This report is signed in accordance with a resolution of the Board of Directors. Peter Unsworth Chairman Perth, 7 March 2019 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. 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 forwardlooking 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 2018 Page 5 of 20 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 2018, 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 7th day of March 2019 DOUG BELL CA Partner CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 CONSOLIDATED 31 Dec 2018 $ 31 Dec 2017 $ 64,208 21,161 1,099,031 - 1,163,239 21,161 Employee benefits expense (202,019) (222,264) Corporate and administration expenditure (276,097) (353,619) Depreciation and amortisation expense (12,665) (1,485) Occupancy (43,652) (20,436) (2,000,946) - - (101,556) (1,372,140) (678,199) - - (1,372,140) (678,199) (211,280) - 12 (156) (211,268) (156) Total comprehensive Profit/(Loss) for the period (1,583,408) (678,355) Total comprehensive Profit/(Loss) income attributable to the owners of Impact Minerals Limited (1,583,408) (678,355) Cents per share Cents per share (0.10) (0.07) Notes Interest and other income Gain on sale of tenements Impairment of exploration expenditure 2 6 Financing costs 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 5 Items that may be reclassified to profit or loss Exchange differences on translating foreign operations Other comprehensive income (net of tax) Basic Profit/(Loss) per share 10 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 2018 Page 7 of 20 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018 CONSOLIDATED 31 Dec 2018 $ 30 Jun 2018 $ 1,935,700 3,514,002 32,436 668,167 - 170,763 1,968,136 4,352,932 5 717,756 - 79,358 9,629 6 15,442,851 15,441,823 209,171 183,926 Total Non-Current Assets 16,449,136 15,635,378 TOTAL ASSETS 18,417,272 19,988,310 Trade and other payables 219,613 255,325 Short-term provisions 214,772 210,878 Total Current Liabilities 434,385 466,203 TOTAL LIABILITIES 434,385 466,203 17,982,887 19,522,107 Notes Current Assets Cash and cash equivalents 4 Trade and other receivables Assets held for sale Total Current Assets Non-Current Assets Financial assets Property, plant and equipment Exploration expenditure Other non-current assets Current Liabilities NET ASSETS EQUITY Issued capital 44,900,024 44,900,024 Option reserve 7 484,486 1,418,620 Foreign currency translation reserve (504,808) (504,820) Financial asset reserve (211,280) - Transactions with non-controlling interest (1,161,069) (1,161,069) Accumulated losses (25,524,466) (25,130,648) TOTAL EQUITY 17,982,887 19,522,107 The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 8 of 20 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 Balance at 1 July 2017 Issued capital Option reserve Foreign currency translation reserve $ $ $ Financial asset $ Transactions with noncontrolling Accumulated interest losses reserve $ Total equity $ $ 1,297,282 (503,894) - - - - - - (678,199) (678,199) - (156) - - - (156) - - (156) - - (678,199) (678,355) Issue of shares 6,289,140 - - - - - 6,289,140 Share issue costs Profit for the period Other comprehensive income Total comprehensive income for the half-year (1,161,069) (24,317,852) 12,248,077 36,933,610 Transactions with owners in their capacity as owners (266,162) 12,000 - - - - (254,162) Fair value of options issued - 71,570 - - - - 71,570 Balance at 31 December 2017 42,956,588 1,380,852 (504,050) - (1,161,069) (24,996,051) 17,676,270 Balance at 1 July 2018 44,900,024 1,418,620 (504,820) - (1,161,069) (25,130,648) 19,522,107 Profit for the period - - - - - (1,372,140) (1,372,140) Other comprehensive income - - 12 (211,280) - - (211,268) Total comprehensive income for the half-year - - 12 (211,280) - (1,372,140) (1,583,408) Fair value of options issued - 44,188 - - - - 44,188 Fair value of options expired - (978,322) - - - 978,322 - 44,900,024 484,486 (504,808) (211,280) (1,161,069) (25,524,466) 17,982,887 Transactions with owners in their capacity as owners Balance at 31 December 2018 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 9 of 20 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 CONSOLIDATED 31 Dec 2018 $ 31 Dec 2017 $ (622,063) (597,365) 31,980 16,964 Research and development tax rebate received 644,894 - Net cash flows from/(used in) operating activities 54,811 (580,401) (82,394) (6,677) (1,916,696) (2,078,877) 340,758 - 25,219 - (1,633,113) (2,085,554) Proceeds from issue of shares - 6,289,140 Share issue costs - (254,162) Net cash flows from/(used in) financing activities - 6,034,978 Net increase/(decrease) in cash and cash equivalents (1,578,302) 3,369,023 Cash and cash equivalents at beginning of the period 3,514,002 1,917,206 1,935,700 5,286,229 Notes CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for exploration activities Cash proceeds from disposal of tenements 2 Proceeds from non-refundable deposit on Broken Hill JV Net cash flows from/(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 2018 Page 10 of 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 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 2018 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 2018, together with any public announcements made during the half-year. Except for Note 2(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 a 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 (the AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2018. New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include: • AASB 9 Financial Instruments and related amending Standards; • AASB 15 Revenue from Contracts with Customers and related amending Standards; and • AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions. AASB 9 Financial Instruments and related amending Standards In the current period, the Group has applied AASB 9 Financial Instruments (as amended) and the related consequential amendments to other Accounting Standards that are effective for an annual period that begins on or after 1 January 2018. The Group’s financial assets have been treated at fair value through other comprehensive income. No restatements to comparatives were required on adoption of the standard. Additionally, the Group adopted consequential amendments to AASB 7 Financial Instruments: Disclosures. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 11 of 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 AASB 15 Revenue from Contracts with Customers and related amending Standards In the current period, the Group has applied AASB 15 Revenue from Contracts with Customers (as amended) which is effective for an annual period that begins on or after 1 January 2018. There was no material impact on adoption of the standard. 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 $1,372,140 (2017: loss of $678,199) and net cash inflows from operating activities of $54,811 (2017: outflows of $580,401). As at 31 December 2018 the consolidated group had a cash balance of $1,935,700 (30 June 2018: $3,514,002). 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 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: GAIN ON SALE OF TENEMENTS In September 2018 the Company completed the sale of its wholly owned subsidiary Drummond East Pty Ltd, the holder of its seven Pilbara licences, to Pacton Gold Inc. (Pacton). Under the terms of the Sale Agreement the Company was paid a total of CAD$325,000 ($AUD 340,758) in cash and 2,125,000 common shares in Pacton. Pacton must also pay a CAD$500,000 Bonus to the Company upon publishing a measured, indicated or inferred gold resource of more than 250,000 ounces on the licences. The Company retains a 2% NSR royalty on the licences with Pacton retaining the right to buy back 1% of the royalty for CAD$500,000 at any time. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 12 of 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 NOTE 3: 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 4: CASH AND CASH EQUIVALENTS 31 Dec 2018 $ 30 Jun 2018 $ Cash at bank and on hand Short-term deposits 635,700 1,300,000 514,002 3,000,000 Cost carried forward 1,935,700 3,514,002 31 Dec 2018 $ 30 Jun 2018 $ Opening balance Additions Change in fair value 929,036 (211,280) - Closing balance 717,756 - NOTE 5: INVESTMENTS IN FINANCIAL ASSETS Investments in financial assets represents the shares held in Pacton Gold Inc. (refer Note 2). The fair value of these financial assets has been determined by reference to published price quotations in an active market, with movement in fair value recognised in other comprehensive income. NOTE 6: EXPLORATION EXPENDITURE 31 Dec 2018 $ 30 Jun 2018 $ Capitalised cost at the beginning of the period Exploration expenditure incurred during the period Transfers to assets held for sale Impairment expense for the period 15,441,823 2,001,974 (2,000,946) 12,585,274 3,255,665 (170,763) (228,353) Cost carried forward 15,442,851 15,441,823 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. As a result, the Group wrote down the carrying value of its exploration expenditure by $2,000,946 during the period following the relinquishment of a number of tenements (2017:$Nil). HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 13 of 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 NOTE 7: ISSUED CAPITAL Ordinary shares fully paid 31 Dec 2018 $ 30 Jun 2018 $ 44,900,024 44,900,024 a) Movements in ordinary shares on issue HALF-YEAR ENDED 31 DEC 2018 No. $ At the beginning of the period YEAR ENDED 30 JUN 2018 No. $ 1,321,679,789 44,900,024 848,436,136 36,933,610 Shortfall issue (a) - - 162,634,949 2,927,429 Placement (b) - - 124,960,556 2,499,211 Placement (c) - - 37,500,000 862,500 - - 148,148,148 2,000,000 - - - (322,726) 1,321,679,789 44,900,024 1,321,679,789 44,900,024 Shares issued during the period: Convertible notes (d) Transaction costs At the end of the period (a) In September 2017, the Company raised $2,927,429 (before costs) via a Shortfall Offer to the May 2017 Share Purchase Plan. The issue was under the same terms as the Share Purchase Plan with the issue of 162,634,949 new shares at an issue price of 1.8 cents each together with three free attaching listed options exercisable at $0.04 on or before 15 June 2020 for every two new shares subscribed for (243,952,410 Listed Options). (b) In November 2017, the Company raised $2,499,211 (before costs) via a placement. The Company issued 124,960,556 new shares at an issue price of 2 cents each together with one free attaching listed option exercisable at $0.04 on or before 15 June 2020 for every share subscribed for (124,960,556 Listed Options). (c) In December 2017, the Company raised $862,500 (before costs) via a placement. The Company issued 37,500,000 new shares at an issue price of 2.3 cents each together with one free attaching listed option exercisable at $0.04 on or before 15 June 2020 for every share subscribed for (37,500,000 Listed Options). (d) In February 2018 Squadron Resources Pty Ltd (Squadron) elected to convert the $2,000,000 of Convertible Notes (Notes) that it held in the Company into shares. Pursuant to the terms of the Notes, Squadron converted the Notes into the Company’s shares at a conversion price of 1.35 cents. Accordingly 148,148,148 shares were issued to Squadron on conversion of the Notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2018 Page 14 of 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 NOTE 7: ISSUED CAPITAL (Continued) b) Movements in options on issue HALF-YEAR ENDED 31 DEC 2018 No. $ At the beginning of the reporting period YEAR ENDED 30 JUN 2018 No. $ 629,339,128 1,418,620 218,926,162 1,297,282 Listed options issued pursuant to shortfall (a) - - 243,952,410 - Listed options issued pursuant to placement (b) - - 124,960,556 - Listed options issued pursuant to placement (c) - - 37,500,000 - Listed options issued to lead manager (d) - -