☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
N/A (Translation of Registrant’s name into English) | | | AUSTRALIA (Jurisdiction of incorporation or organization) |
Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered or to be registered |
American Depository Shares each representing 100 Ordinary Shares, no par value(1) | | | PLL | | | The Nasdaq Capital Market |
(1) | Evidenced by American Depositary Receipts |
Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | | Emerging growth company ☒ |
U.S. GAAP ☐ | | | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | | | Other ☐ |
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• | “Piedmont” refers to Piedmont Lithium Limited, unless otherwise indicated; |
• | “the Company,” “we,” “us,” or “our” refers to Piedmont and its consolidated subsidiaries, through which it conducts its business, unless otherwise indicated; |
• | “shares” or “ordinary shares” refer to our ordinary shares; |
• | “ADS” refers to our American depositary shares; and |
• | “ASX” refers to the Australian Securities Exchange. |
• | risks related to our operations being further disrupted, and our financial results being adversely affected by the novel coronavirus pandemic; |
• | risks related to our limited operating history in the lithium industry; |
• | risks related to our status as an exploration stage company; |
• | risks related to our ability to identify lithium mineralization and achieve commercial lithium mining at the Project; |
• | risks related to mining, exploration and mine construction, if warranted, on our properties; |
• | risks related to our ability to achieve and maintain profitability and to develop positive cash flow from our mining activities; |
• | risks related to investment risk and operational costs associated with our exploration activities; |
• | risks related to our ability to access capital and the financial markets; |
• | risks related to compliance with government regulations; |
• | risks related to our ability to acquire necessary mining licenses, permits or access rights; |
• | risks related to environmental liabilities and reclamation costs; |
• | risks related to volatility in lithium prices or demand for lithium; |
• | risks related to our stock price and trading volume volatility; |
• | risks relating to the development of an active trading market for our ADSs; |
• | risks related to ADS holders not having certain shareholder rights; |
• | risks related to ADS holders not receiving certain distributions; and |
• | risks related to our status as a foreign private issuer and emerging growth company. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
OFFER STATISTICS AND EXPECTED TIMETABLE |
KEY INFORMATION |
Selected Financial Data |
| | Fiscal 2016 | | | Fiscal 2017 | | | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Consolidated Operating Data | | | | | | | | | | | |||||
Exploration and evaluation expenses | | | $(39,903) | | | $(1,132,846) | | | $(6,021,506) | | | $(7,107,146) | | | $(3,563,437) |
Corporate and administrative expenses | | | (281,797) | | | (444,388) | | | (1,160,608) | | | (1,711,475) | | | (1,514,519) |
Business development expenses | | | (139,107) | | | (233,538) | | | (1,207,907) | | | (928,097) | | | (941,399) |
Share based payments | | | 72,471 | | | (861,973) | | | (1,172,164) | | | (438,375) | | | (470,939) |
Foreign stock exchange listing expenses | | | — | | | — | | | (580,922) | | | — | | | — |
Finance income | | | 39,002 | | | 33,936 | | | 132,752 | | | 128,377 | | | 215,549 |
Finance costs | | | — | | | — | | | — | | | — | | | (157,271) |
Other income/(expenses) | | | 69,701 | | | (619) | | | 52,538 | | | 234,090 | | | 760,917 |
Loss for the year | | | (279,633) | | | (2,639,428) | | | (9,957,817) | | | (9,822,626) | | | (5,671,099) |
Loss per basic and diluted ordinary share (US$ per ordinary share) | | | (0.00) | | | (0.01) | | | (0.02) | | | (0.02) | | | (0.01) |
Weighted average number of ordinary shares outstanding (basic and diluted) | | | 397,808,129 | | | 409,976,775 | | | 520,222,133 | | | 621,391,730 | | | 828,356,668 |
| | As of June 30, | |||||||||||||
| | Unaudited 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | |
Consolidated Statement of Financial Position | | | | | | | | | | | |||||
Cash and cash equivalents | | | $1,380,358 | | | $3,536,318 | | | $7,238,489 | | | $4,432,150 | | | $18,857,088 |
Trade and other receivables | | | 10,276 | | | 33,977 | | | 72,110 | | | 59,679 | | | 27,412 |
Exploration and evaluation assets | | | 38,709 | | | 177,800 | | | 742,017 | | | 2,265,121 | | | 7,720,957 |
Property, plant and equipment | | | 959 | | | 3,895 | | | 3,982 | | | 26,195 | | | 774,440 |
Other current assets | | | — | | | — | | | — | | | — | | | 128,271 |
Other non-current assets | | | — | | | — | | | — | | | — | | | 150,781 |
Total assets | | | 1,430,302 | | | 3,751,990 | | | 8,056,598 | | | 6,783,145 | | | 27,658,949 |
Trade and other payables | | | (47,117) | | | (483,427) | | | (1,989,084) | | | (2,144,071) | | | (1,007,507) |
Other current liabilities | | | — | | | — | | | — | | | — | | | (705,536) |
Other non-current liabilities | | | — | | | — | | | — | | | — | | | (1,910,413) |
Total liabilities | | | (47,117) | | | (483,427) | | | (1,989,084) | | | (2,144,071) | | | (3,623,456) |
Contributed equity | | | 24,908,762 | | | 28,512,793 | | | 40,483,348 | | | 48,853,707 | | | 74,877,325 |
Total equity | | | 1,383,185 | | | 3,268,563 | | | 6,067,514 | | | 4,639,074 | | | 24,035,493 |
Capitalization and Indebtedness |
Reasons for the Offer and Use of Proceeds |
Risk Factors |
• | the discovery of unusual or unexpected geological formations; |
• | accidental fires, floods, earthquakes or other natural disasters; |
• | unplanned power outages and water shortages; |
• | controlling water and other similar mining hazards; |
• | operating labor disruptions and labor disputes; |
• | the ability to obtain suitable or adequate machinery, equipment, or labor; |
• | our liability for pollution or other hazards; and |
• | other known and unknown risks involved in the conduct of exploration and operation of mines. |
• | a significant, prolonged decrease in the market price of lithium; |
• | difficulty in marketing and/or selling lithium; |
• | significantly higher than expected capital costs to construct our mine; |
• | significantly higher than expected extraction costs; |
• | significantly lower than expected lithium extraction; |
• | significant delays, reductions or stoppages of lithium extraction activities; and |
• | the introduction of significantly more stringent regulatory laws and regulations. |
• | adverse economic conditions; |
• | adverse general capital market conditions; |
• | poor performance and health of the lithium or mining industries in general; |
• | bankruptcy or financial distress of unrelated lithium companies or marketers; |
• | significant decrease in the demand for lithium; or |
• | adverse regulatory actions that affect our exploration and construction plans or the use of lithium generally. |
• | our ability to obtain leases or options on properties; |
• | our ability to identify and acquire new exploratory prospects; |
• | our ability to develop existing prospects; |
• | our ability to continue to retain and attract skilled personnel; |
• | our ability to maintain or enter into new relationships with project partners and independent contractors; |
• | the results of our exploration programs; |
• | the market price for lithium; |
• | our access to capital; and |
• | our ability to enter into agreements for the sale of lithium. |
• | actual or expected fluctuations in our prospects or operating results; |
• | changes in the demand for, or market price of, lithium; |
• | additions to or departures of our key personnel; |
• | fluctuations of exchange rates between the U.S. dollar and the Australian dollar; |
• | changes or proposed changes in laws and regulations; |
• | changes in trading volume of ADSs on Nasdaq and of our ordinary shares on the ASX; |
• | sales or perceived potential sales of the ADSs or ordinary shares by us, our directors, senior management or our shareholders in the future; |
• | announcement or expectation of additional financing efforts; and |
• | conditions in the U.S. or Australian financial markets or changes in general economic conditions. |
• | it did not have jurisdiction; |
• | it was not an appropriate forum for such proceedings; |
• | applying Australian conflict of laws rule, U.S. law (including U.S. securities laws) did not apply to the relationship between holders of our ordinary shares or ADSs and us or our directors and officers; or |
• | the U.S. securities laws were of a public or penal nature and should not be enforced by the Australian court. |
• | effect service of process within the United States upon certain directors and executive officers or on us; |
• | enforce in U.S. courts judgments obtained against any of our directors and executive officers or us in the U.S. courts in any action, including actions under the civil liability provisions of U.S. securities laws; |
• | enforce in U.S. courts judgments obtained against any of our directors and senior management or us in courts of jurisdictions outside the United States in any action, including actions under the civil liability provisions of U.S. securities laws; or |
• | bring an action in an Australian court to enforce liabilities against any of our directors and executive officers or us based upon U.S. securities laws. |
• | Nasdaq’s requirement that a majority of our board of directors be “independent” as defined by Nasdaq rules. The ASX Corporate Governance Principles and Recommendations contain non-binding recommendations that all ASX-listed companies should strive to achieve, including a majority of the board being comprised of independent directors. Due to Australian law and generally accepted business practices in Australia regarding director independence, we have departed from this recommendation and differ from independence requirements under Nasdaq. |
• | Nasdaq’s requirement that our independent directors meet regularly in executive sessions. The ASX Listing Rules and the Corporations Act do not require the independent directors of an Australian company to have such executive sessions and, accordingly, we have claimed this exemption. |
• | Nasdaq’s requirement that an issuer provide for a quorum as specified in its bylaws for any meeting of the holders of ordinary shares, which quorum may not be less than 33 1/3% of the outstanding shares of an issuer’s voting ordinary shares. In compliance with Australian law, our Constitution provides that two shareholders present shall constitute a quorum for a general meeting. |
• | Nasdaq’s requirement that we establish a compensation committee and that all members of such committee be “independent” as defined in the Nasdaq rules. Nasdaq rules would require that compensation to be determined, or recommended to the board of directors for determination, either by a compensation committee comprised of independent directors or by a majority of the independent directors on our board of directors. Instead, compensation of our directors and officers will be determined by our board of directors. The ASX Listing Rules and Australian law do not require an Australian company to establish a compensation committee, known in Australia as a remuneration committee, which is comprised solely of non-executive directors if the company is not included in the S&P/ASX300 Index at the beginning of its fiscal year. We were not included on the S&P/ASX300 Index at the beginning of our last fiscal year and, hence, are not required under ASX Listing Rules to have a remuneration committee. The ASX Corporate Governance Principles and Recommendations contain a non-binding recommendation that all ASX-listed companies should have a remuneration committee comprised of at least three members, a majority of whom (including the chair) are independent. While these recommendations contain guidelines for assessing independence, ASX-listed entities are able to adopt their own definitions of an independent director for this purpose and is different from the definition in the Nasdaq rules. |
• | Nasdaq’s requirement that we establish a nominating committee and that all members of such committee be “independent” as defined in the Nasdaq rules. Nasdaq rules would require that nominations to be determined, or recommended to the board of directors for determination, either by a nominating committee comprised of independent directors or by a majority of the independent directors on our board of directors. Instead, nominations for persons for election as our directors are determined by our board of directors. The ASX Listing Rules and Australian law do not require an Australian company to establish a nominating committee. |
• | Nasdaq’s requirement that issuers obtain shareholder approval prior to the issuance of securities in connection with certain acquisitions, changes of control or private placements of securities, or the establishment or amendment of certain stock option, purchase or other compensation plans. Applicable Australian law and rules differ from Nasdaq requirements, with the ASX Listing Rules providing |
• | Nasdaq’s requirement that we maintain a code of conduct in compliance with Nasdaq rules. Applicable Australian law does not require us to maintain a code of conduct. |
• | the last day of the fiscal year during which we have total annual gross revenues of US$1,070,000,000 (as such amount is indexed for inflation every five years by the United States Securities and Exchange Commission (the “SEC”)) or more; |
• | the last day of our fiscal year following the fifth anniversary of the completion of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act; |
• | the date on which we have, during the previous three-year period, issued more than US$1,070,000,000 in non-convertible debt; or |
• | the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 of the Exchange Act, which would occur if the market value of our ordinary shares and ADSs that are held by non-affiliates exceeds US$700,000,000 as of the last day of our most recently completed second fiscal quarter. |
INFORMATION ON THE COMPANY |
History and Development of the Company |
• | we completed a pre-feasibility study (“PFS”) for our proposed lithium hydroxide chemical plant (“Chemical Plant”) in Kings Mountain, North Carolina, USA. The PFS highlights a business model where a Piedmont built and owned Chemical Plant would convert spodumene concentrate purchased on the global market to battery-grade lithium hydroxide; |
• | we completed an updated scoping study (“Scoping Study”) for our integrated mine-to-hydroxide project. The mine-to-hydroxide project comprises a mine and concentrator producing spodumene concentrate which will be transported to our Chemical Plant and converted into battery-grade lithium hydroxide. The updated scoping study includes the results of the Chemical Plant PFS; |
• | we completed additional metallurgical testwork to produce 120 kilograms of spodumene concentrate from core samples collected from the Project. Concentrate qualities and recoveries were consistent with earlier testwork programs, with a grade above 6.0% Li2O, iron oxide below 1.0%, and low impurities; |
• | we completed a bench-scale lithium hydroxide testwork program at SGS Canada, Inc. in Lakefield, Ontario which demonstrated conversion of spodumene concentrate to battery-quality lithium hydroxide; |
• | we completed our Phase 4 drill program, which comprised 113 holes for a total of 18,393 meters. The Phase 4 drill program was successful in expanding the Project’s mine life from 13 to 25 years; |
• | we completed soil and rock chip sampling at our Project in North Carolina, United States, which led to the discovery of five new spodumene-bearing pegmatites in areas that have not previously been explored; |
• | we completed federal permitting required to develop the proposed mine and concentrator at the Project, following receipt of a Clean Water Act Section 404 Standard Individual Permit from the US Army Corps of Engineers (“USACE”); |
• | we completed Mineral Resource estimates and bench-scale metallurgical testwork for by-product quartz, feldspar and mica as by-products of spodumene concentrate from the Project. The Mineral Resource estimates were prepared by independent consultants, CSA Global Pty Ltd; |
• | we concluded a definitive and exclusive marketing agreement for byproduct quartz, feldspar, and mica with Ion Carbon, a division of AMCI Group. The Company continues to advance offtake discussions for byproducts with quartz offtake discussions the most advanced; |
• | we entered into a memorandum of understanding with Primero Group for the delivery of Piedmont’s planned spodumene concentrator on an engineer, procure, and construct basis, with Primero Group to contract operate the spodumene concentrator for a period of up to six years following construction; |
• | we appointed Mr. Austin Devaney as Vice President – Sales & Marketing. Mr. Devaney spent most of the past decade in senior marketing roles with Albemarle Corporation, most recently as Vice President, Strategic Marketing and Customer Excellence; |
• | we completed a U.S. public offering of 2,065,000 of our American Depositary Shares (“ADSs”), each representing 100 of our ordinary shares, at an issue price of US$6.30 per ADS, to raise gross proceeds of US$12.9 million (~A$18.6 million) (“Public Offering”); |
• | we announced an Australian private placement to existing non-U.S. institutional and sophisticated shareholders and directors of 120,000,000 of our ordinary shares, at an issue price of A$0.09 per share (which equates to the same issue price of the Public Offering), to raise gross proceeds of A$10.8 million (~US$7.8 million) (“Private Placement”). We completed the Private Placement subsequent to the end of fiscal 2020; and |
• | we continued numerous preliminary off-take, financing and strategic conversations, including companies from the lithium, mining, chemicals, battery, automotive and private equity sectors. |
• | we announced that we had entered into a binding agreement with Tesla, Inc. (“Tesla”) for the supply of spodumene concentrate (“SC6”) from Piedmont's North Carolina deposit to Tesla. The agreement is for an initial five-year term on a fixed-price binding purchase commitment from the delivery of first product and may be extended by mutual agreement for a second five-year term. The Agreement covers |
• | we announced the results of a bench-scale lithium hydroxide testwork program at SGS Canada, Inc. in Lakefield, Ontario which demonstrated conversion of Piedmont ore to battery-quality lithium hydroxide; and |
• | we completed the Private Placement. |
• | Located in a historical major lithium mining district in the United States. The Project is located within the TSB and along trend to the Hallman Beam and Kings Mountain mines, historically providing much of the western world’s lithium between the 1950s and 1980s. The TSB extends over approximately 40 miles in length and reaches a maximum width of approximately one mile. |
• | Proximate to existing lithium processing facilities. Albemarle Corporation (“Albemarle”) and Livent Corporation (“Livent”) continue to maintain important lithium processing facilities near the Project site. Livent’s Bessemer City lithium processing facility is approximately six miles from the Project, while Albemarle’s Kings Mountain lithium processing facility is approximately 12 miles from the Project. |
• | Significant existing mining related infrastructure. We believe the Project is well situated in a historical lithium mining district, with access to road and rail infrastructure, a highly skilled labor force, low cost baseload grid power, research and development centers for lithium and battery storage and access to major high-tech population centers. |
• | First mover in restarting exploration in the Carolina Tin-Spodumene Belt. We believe we are in a strong position to leverage our position as a first mover in restarting exploration in the historic lithium producing region, with the aim of developing a strategic, U.S. domestic source of lithium to supply the increasing electric vehicle and battery storage markets. |
• | Lithium Mineral Resource Defined. During fiscal 2018, we announced an initial lithium Mineral Resource estimate for the Project, which was the first Mineral Resource estimate completed in over 30 years in the historic TSB. During fiscal 2019, we increased our total lithium Mineral Resources for the Project by 72%. |
• | Key Permits Received. During fiscal 2020, we completed the federal permitting required to develop our proposed mine and concentrator at the Project, following receipt of a Clean Water Act Section 404 Standard Individual Permit from the USACE. |
• | Metallurgical Testwork Progressing. During fiscal 2020, we completed bench-scale metallurgical testwork for the production of lithium hydroxide, which demonstrated the ability of our ore body to produce battery-grade lithium hydroxide. We also produced 120 kilograms of spodumene concentrate from core samples collected from the Project, with a grade above 6.0% Li2O, iron oxide below 1.0%, and low impurities. |
• | Technical Studies Progressing. During fiscal 2020, we completed a PFS for our proposed Chemical Plant in Kings Mountain, North Carolina, USA and an updated Scoping Study for our integrated mine-to-hydroxide project. |
• | Highly experienced management team with a long history of acquiring and developing mining properties. Our senior management team has significant experience in acquiring, developing and financing mines. They have previously held senior business development, financial, operations, and sales positions at both large, publicly traded mining companies as well as successful private mining operations. |
• | completing additional drilling programs on our properties to expand the current Mineral Resource estimate and increase the geological confidence of the Mineral Resource estimate; |
• | continuing to secure additional properties within the TSB to undertake additional exploration; |
• | undertaking further technical studies to assess the economic potential of the Project and defining a lithium reserve base, including further metallurgical studies and feasibility studies; |
• | undertaking discussions with potential lithium offtake parties for future sale of lithium products; |
• | completing required permitting and zoning activities required to commence mining and processing operations at the Project; |
• | completing required financing activities; |
• | completing construction of Piedmont’s lithium mining and processing activities; and |
• | beginning lithium mining and processing activities to supply electric vehicle and battery storage markets. |
• | the last day of the fiscal year during which we have total annual gross revenues of US$1,070,000,000 (as such amount is indexed for inflation every five years by the SEC) or more; |
• | the last day of our fiscal year following the fifth anniversary of the completion of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act; |
• | the date on which we have, during the previous three-year period, issued more than US$1,070,000,000 in non-convertible debt; or |
• | the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 of the Exchange Act, which would occur if the market value of our ordinary shares and ADSs that are held by non-affiliates exceeds US$700,000,000 as of the last day of our most recently-completed second fiscal quarter. |
Business Overview |
Drilling Program | | | No. Holes | | | Core Property Drilling (m) | | | Central Property Drilling (m) | | | Sunnyside Property Drilling (m) | | | Total Length Drilled (m) |
Historical | | | 19 | | | 2,544 | | | — | | | — | | | 2,544 |
Phase 1 | | | 12 | | | 1,667 | | | — | | | — | | | 1,667 |
Phase 2 | | | 93 | | | 12,263 | | | — | | | — | | | 12,263 |
Phase 3 | | | 134 | | | 21,363 | | | 500 | | | 911 | | | 22,774 |
Phase 4 | | | 113 | | | 14,218 | | | 4,175 | | | — | | | 18,393 |
Total | | | 371 | | | 52,055 | | | 4,675 | | | 911 | | | 57,641 |
• | we announced an initial Mineral Resource estimate for the Core property within the Project. The Mineral Resource estimate was prepared by independent consultants, CSA Global Pty Ltd and reported in accordance with the JORC Code (2012 Edition). |
• | we announced initial Mineral Resource estimates for by-products quartz, feldspar and mica for the Core property within Project. The Mineral Resource estimate was prepared by independent consultants, CSA Global Pty Ltd and reported in accordance with the JORC Code (2012 Edition); |
• | we announced an initial Mineral Resource estimate for the Central property within the Project. The Mineral Resource estimate was prepared by independent consultants, CSA Global Pty Ltd and reported in accordance with the JORC Code (2012 Edition); and |
• | we announced an updated Mineral Resource estimate the Core property within the Project. These Mineral Resource estimates were prepared by independent consultants, CSA Global Pty Ltd and reported in accordance with the JORC Code (2012 Edition). |
• | we conducted additional Phase 4 exploration drilling, but did not announce an updates to our Mineral Resource estimates. |
Average Composite Results of Six Locked Cycle Byproduct Tests | ||||||||||||||||||||||||||||||
| | Li2O | | | SiO2 | | | Al2O3 | | | K2O | | | Na2O | | | CaO | | | MgO | | | MnO | | | P2O5 | | | Fe2O3 | |
Quartz Concentrate | | | 0.02 | | | 99.0 | | | 0.32 | | | 0.04 | | | 0.11 | | | 0.01 | | | 0.01 | | | 0.01 | | | 0.01 | | | 0.01 |
Feldspar Concentrate | | | 0.12 | | | 68.0 | | | 19.35 | | | 2.45 | | | 9.30 | | | 0.17 | | | 0.04 | | | 0.01 | | | 0.15 | | | 0.05 |
Results of Piedmont Lithium Hydroxide Testwork | |||||||||||||||||||||||||||||||||
Product | | | LiOH | | | Na | | | K | | | Fe | | | Ca | | | Cu | | | Mg | | | Si | | | Cl | | | SO4 | | | CO2 |
Unit | | | (%) | | | ppm | | | ppm | | | ppm | | | ppm | | | ppm | | | ppm | | | ppm | | | ppm | | | ppm | | | (%) |
Value | | | >56.5 | | | <20 | | | <10 | | | <2 | | | <9 | | | <1 | | | <0.7 | | | <8 | | | <10 | | | <100 | | | 0.48 |
• | fluctuations in the market prices for lithium; |
• | fluctuating supplies of lithium; |
• | fluctuating demand for lithium; and |
• | mining activities of others. |
• | require notice to stakeholders of proposed and ongoing operations; |
• | require the installation of pollution control equipment; |
• | restrict the types, quantities and concentration of various substances that can be released into the environment in connection with mining or drilling activities; |
• | limit or prohibit mining or drilling activities on lands located within wetlands, areas inhabited by endangered species and other protected areas, or otherwise restrict or prohibit activities that could impact the environment, including water resources; |
• | impose substantial liabilities for pollution resulting from current or former operations on or for any preexisting environmental impacts at the Project site; and |
• | require preparation of an Environmental Assessment or an Environmental Impact Statement. |
• | National Environmental Protection Act (“NEPA”), which requires careful evaluation of the environmental impacts of mining operations that require federal approvals; |
• | Clean Air Act (“CAA”) and its amendments, which governs air emissions; |
• | Clean Water Act (“CWA”), which governs discharges to and excavations within the waters of the United States; |
• | Safe Drinking Water Act (“SDWA”), which governs the underground injection and disposal of wastewater; |
• | Resource Conservation and Recovery Act (“RCRA”), which governs the management of solid waste; |
• | Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), which imposes liability where hazardous substances have been released into the environment (commonly known as Superfund); and |
• | Federal Mine Safety and Health Act, which established the primary safety and health standards regarding working conditions of employees engaged in mining, related operations, and preparation and milling of the minerals extracted, as well as the Occupation Safety and Health Act, which regulates the protection of the health and safety of workers to the extent such protection is not already addressed by the Federal Mine Safety and Health Act. |
Organizational Structure |
Property, Plants and Equipment |
UNRESOLVED STAFF COMMENTS |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
• | completing additional drilling programs on our properties to expand the current Mineral Resource estimate and increase the geological confidence of the Mineral Resource estimate; |
• | continuing to secure additional properties within the TSB to undertake additional exploration; |
• | undertaking further technical studies to assess the economic potential of the Project and defining a lithium reserve base, including further metallurgical studies and feasibility studies; |
• | undertaking discussions with potential lithium offtake parties for future sale of lithium products; |
• | completing required permitting and zoning activities required to commence mining and processing operations at the Project; |
• | completing required financing activities; |
• | completing construction of Piedmont’s lithium mining and processing activities; and |
• | beginning lithium mining and processing activities to supply electric vehicle and battery storage markets. |
Operating Results |
| | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Consolidated Statements of Profit or Loss and Other Comprehensive Income | | | | | | | |||
Exploration and evaluation expenses | | | $(6,021,506) | | | $(7,107,146) | | | $(3,563,437) |
Corporate and administrative expenses | | | (1,160,608) | | | (1,711,475) | | | (1,514,519) |
Business development expenses | | | (1,207,907) | | | (928,097) | | | (941,399) |
Share based payments | | | (1,172,164) | | | (438,375) | | | (470,939) |
Foreign stock exchange listing expenses | | | (580,922) | | | — | | | — |
Finance income | | | 132,752 | | | 128,377 | | | 215,549 |
Finance costs | | | — | | | — | | | (157,271) |
Other income/(expenses) | | | 52,538 | | | 234,090 | | | 760,917 |
Loss for the year | | | (9,957,817) | | | (9,822,626) | | | (5,671,099) |
Other comprehensive income/(loss) | | | (249,205) | | | (366,083) | | | (499,399) |
Total comprehensive loss | | | (10,207,022) | | | (10,188,709) | | | (6,170,498) |
| | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Consolidated Statements of Cash Flows | | | | | | | |||
Net cash flow used in operating activities | | | $(7,581,996) | | | $(9,809,812) | | | $(6,975,428) |
Net cash flow used in investing activities | | | (602,180) | | | (1,552,511) | | | (3,417,255) |
Net cash flow from financing activities | | | 11,833,809 | | | 8,321,894 | | | 24,684,187 |
Increase/(decrease) in cash and cash equivalents | | | 3,649,633 | | | (3,040,429) | | | 14,291,504 |
| | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Finance income | | | $132,752 | | | $128,377 | | | $215,549 |
| | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Exploration and evaluation expenses | | | $(6,021,506) | | | $(7,107,146) | | | $(3,563,437) |
Corporate and administrative expenses | | | (1,160,608) | | | (1,711,475) | | | (1,514,519) |
Business development expenses | | | (1,207,907) | | | (928,097) | | | (941,399) |
Share based payments | | | (1,172,164) | | | (438,375) | | | (470,939) |
Foreign stock exchange listing expenses | | | (580,922) | | | — | | | — |
Finance costs | | | — | | | — | | | (157,271) |
• | exploration and evaluation expenses of $3.6 million and $7.1 million in fiscal 2020 and 2019, respectively. This decrease resulted principally from our reduced drilling activities on the Project following completion of our Phase 4 drilling program; |
• | corporate and administrative expenses of $1.5 million and $1.7 million in fiscal 2020 and 2019, respectively. This decrease resulted principally from reduced overheads to support our reduced drilling activities on the Project following completion of our Phase 4 drilling program, as described in further detail above; |
• | business development expenses of $0.9 million and $0.9 million in fiscal 2020 and 2019, respectively. The nature and level of business development activity remained largely consistent between both financial years; and |
• | share-based payment expenses of $0.5 million and $0.4 million in fiscal 2020 and 2019, respectively. The nature and level of share-based payment expenses remained largely consistent between both financial years. |
• | exploration and evaluation expenses of $7.1 million and $6.0 million in fiscal 2019 and 2018, respectively. This increase resulted principally from our increased exploration and appraisal activities on the Project, including the Phase 4 drilling program, additional metallurgical test work, and additional technical studies; |
• | corporate and administrative expenses of $1.7 million and $1.2 million in fiscal 2019 and 2018, respectively. This increase resulted principally from increased hiring and overheads to support our increased exploration and appraisal activities on the Project, as described in further detail above; |
• | business development expenses of $0.9 million and $1.2 million in fiscal 2019 and 2018, respectively. The nature and level of business development activity remained largely consistent between both financial years; |
• | share-based payment expenses of $0.4 million and $1.2 million in fiscal 2019 and 2018, respectively. This decrease resulted principally because no new key management personnel (“KMP”) were appointed during fiscal 2019, compared to six (6) new KMP being appointed in fiscal 2018 (Mr. Keith Phillips, Mr. Jorge Beristain, Mr. Jeffrey Armstrong, Mr. Patrick Brindle, Mr. David Buckley and Mr. Bruce Czachor) and the associated grant of incentive securities to secure the services of the new KMP during fiscal 2018; and |
• | foreign stock exchange initial listing expenses of $0.0 million and $0.6 million in fiscal 2019 and 2018, respectively, relating to our listing in the United States which occurred in May 2018, following which no further initial listing expenses were incurred. |
| | Fiscal 2018 | | | Fiscal 2019 | | | Fiscal 2020 | |
Consolidated Statement of Cash Flow data: | | | | | | | |||
Net cash flow used in operating activities | | | $(7,581,996) | | | $(9,809,812) | | | $(6,975,428) |
Net cash flow used in investing activities | | | (602,180) | | | (1,552,511) | | | (3,417,255) |
Net cash flow from financing activities | | | 11,833,809 | | | 8,321,894 | | | 24,684,187 |
Net change in cash and cash equivalents | | | 3,649,633 | | | (3,040,429) | | | 14,291,504 |
Net foreign exchange differences | | | 52,538 | | | 234,090 | | | 133,434 |
Cash and cash equivalents at beginning of the year | | | 3,536,318 | | | 7,238,489 | | | 4,432,150 |
Cash and cash equivalents at the end of the year | | | 7,238,489 | | | 4,432,150 | | | 18,857,088 |
Liquidity and Capital Resources |
Research and Development, Patents and Licenses |
Trend Information |
Off-Balance Sheet Arrangements |
Tabular Disclosure of Contractual Obligations |
| | Total | | | Less than 1 year | | | 1–5 years | | | Thereafter | |
Contractual obligations | | | | | | | | | ||||
Loans and borrowings | | | $2,771,412 | | | $777,424 | | | $1,993,988 | | | $— |
Lease liabilities | | | 307,134 | | | 156,621 | | | 150,513 | | | — |
| | 3,078,546 | | | 934,045 | | | 2,144,501 | | | — |
Safe Harbor |
• | risks related to our operations being further disrupted, and our financial results being adversely affected by the novel coronavirus pandemic; |
• | risks related to our limited operating history in the lithium industry; |
• | risks related to our status as an exploration stage company; |
• | risks related to our ability to identify lithium mineralization and achieve commercial lithium mining at the Project; |
• | risks related to mining, exploration and mine construction, if warranted, on our properties; |
• | risks related to our ability to achieve and maintain profitability and to develop positive cash flow from our mining activities; |
• | risks related to investment risk and operational costs associated with our exploration activities; |
• | risks related to our ability to access capital and the financial markets; |
• | risks related to compliance with government regulations; |
• | risks related to our ability to acquire necessary mining licenses, permits or access rights; |
• | risks related to environmental liabilities and reclamation costs; |
• | risks related to volatility in lithium prices or demand for lithium; |
• | risks related to our stock price and trading volume volatility; |
• | risks relating to the development of an active trading market for our ADSs; |
• | risks related to ADS holders not having certain shareholder rights; |
• | risks related to ADS holders not receiving certain distributions; and |
• | risks related to our status as a foreign private issuer and emerging growth company. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Directors and Senior Management |
| Name | | | Director or Officer since | | | Principal business activities and other principal directorships | | |||
| Ian Middlemas, Chairman | | | September 2009 | | | • | | | Currently Non-Executive Director and Chairman of ASX listed Constellation Resources Limited (since November 2017), Apollo Minerals Limited (since July 2016), Paringa Resources Limited (since October 2013), Berkeley Energia Limited (since April 2012), Prairie Mining Limited (since August 2011), Salt Lake Potash Limited (since January 2010), Equatorial Resources Limited (since November 2009), Sovereign Metals Limited (since July 2006), and Odyssey Energy Limited (since September 2005). | |
| • | | | Previously Non-Executive Director and Chairman of ASX listed Cradle Resources Limited (May 2016 to July 2019), Syntonic Limited (April 2010 to June 2017), and Papillon Resources Limited (May 2011 to October 2014). | | ||||||
| Keith Phillips, Managing Director, President and Chief Executive Officer | | | July 2017 | | | • | | | No other directorships in listed companies during fiscal 2016, 2017, 2018, 2019 or 2020. | |
| Anastasios Arima, Non-Executive Director | | | October 2016 | | | • | | | Previously Director of ASX listed Paringa Resources Limited (October 2013 to June 2017) and Prairie Mining Limited (September 2012 to September 2015). | |
| Jeffrey Armstrong, Non-Executive Director | | | August 2018 | | | • | | | CEO and Managing Partner of North Inlet Advisors, LLC. | |
| • | | | Previously a senior leader in what is now Wells Fargo’s Investment Bank, an investment banker for Citigroup (1994 to 1999), and for Morgan Stanley (1987 to 1994). | | ||||||
| Jorge Beristain, Non-Executive Director | | | May 2018 | | | • | | | Currently Chief Financial Officer of Central Steel & Wire Co., a wholly-owned subsidiary of Ryerson Corp. | |
| • | | | Previously Managing Director and Head of Deutsche Bank’s Americas Metals & Mining equity research. | | ||||||
| Levi Mochkin, Non-Executive Director | | | April 2006 | | | • | | | Currently Non-Executive Director of Odyssey Energy Limited (since August 2020). | |
| • | | | No other directorships in listed companies during fiscal 2016, 2017, 2018, 2019 or 2020. | |
| Name | | | Director or Officer since | | | Principal business activities and other principal directorships | | |||
| Gregory Swan, Company Secretary | | | October 2012 | | | • | | | Currently Chief Financial Officer and/or Company Secretary for several ASX-listed companies that operate in the resources sector, including Paringa Resources Limited (since November 2013) and Equatorial Resources Limited (since May 2010). | |
| • | | | Previously Chief Financial Officer and/or Company Secretary for several ASX-listed companies that operate in the resources sector, including Mantra Resources Limited and Papillon Resources Limited. | |
Compensation |
• | we are currently focused on identifying and acquiring suitable resource projects and undertaking exploration, appraisal and development activities; |
• | risks associated with small cap resource companies whilst exploring and developing projects; and |
• | other than profit which may be generated from asset sales, we do not expect to be undertaking profitable operations until sometime after the commencement of commercial production on any of its projects. |
(i) | Performance Rights |
(ii) | Incentive Options |
| | Short-term benefits | | | Post- employment benefits US$ | | | Termination benefits US$ | | | Share- based payments US$ | | | Total US$ | | | Performance related % | |||||||
| | Salary & fees US$ | | | Cash bonus US$ | | | Other US$ | | |||||||||||||||
Directors | | | | | | | | | | | | | | | | | ||||||||
Ian Middlemas | | | 24,169 | | | — | | | — | | | 2,296 | | | — | | | — | | | 26,465 | | | — |
Keith Phillips | | | 250,000 | | | 100,000 | | | 33,137 | | | 8,817 | | | — | | | 132,274 | | | 524,228 | | | 44% |
Anastasios Arima(1) | | | 146,667 | | | 29,167 | | | 10,294 | | | — | | | — | | | 23,497 | | | 209,625 | | | 25% |
Jeffrey Armstrong | | | 30,000 | | | — | | | — | | | — | | | — | | | 23,497 | | | 53,497 | | | 44% |
Jorge Beristain | | | 40,000 | | | — | | | — | | | — | | | — | | | 23,497 | | | 63,497 | | | 37% |
Levi Mochkin(2) | | | 123,067 | | | — | | | — | | | 3,072 | | | — | | | 23,497 | | | 149,636 | | | 16% |
Other KMP | | | | | | | | | | | | | | | | | ||||||||
Patrick Brindle | | | 210,000 | | | 50,000 | | | 29,409 | | | 8,400 | | | — | | | 146,295 | | | 444,104 | | | 44% |
Lamont Leatherman | | | 210,000 | | | — | | | — | | | — | | | — | | | 61,429 | | | 271,429 | | | 23% |
Austin Devaney(3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Gregory Swan(4) | | | — | | | — | | | — | | | — | | | — | | | 17,878 | | | 17,878 | | | 100% |
David Buckley(5) | | | 50,000 | | | — | | | 13,472 | | | 2,600 | | | 15,000 | | | — | | | 81,072 | | | — |
Bruce Czachor(5) | | | 50,000 | | | — | | | 14,782 | | | 2,600 | | | 15,000 | | | — | | | 82,382 | | | — |
| | 1,133,903 | | | 179,167 | | | 101,094 | | | 27,785 | | | 30,000 | | | 451,864 | | | 1,923,813 | | |
(1) | Effective from February 1, 2020, Mr. Arima receives director fees of US$30,000 per annum and consulting fees of US$70,000 per annum for additional services provided in respect of business development activities. |
(2) | Effective from February 1, 2020, Mr. Mochkin receives director fees of US$30,000 per annum and Ledger Holdings Pty Ltd, a company associated with Mr. Levi Mochkin, receives consulting fees of US$70,000 per annum for additional services provided in respect of business development activities. |
(3) | Mr. Devaney was appointed after year end, effective from July 1, 2020. |
(4) | Mr. Swan provides services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (“Apollo”). During the year, Apollo was paid or is payable A$180,000 for the provision of serviced office facilities and administrative, accounting and company secretarial services to us. |
(5) | Mr. Buckley and Mr. Czachor ceased to be KMP effective December 31, 2019. |
| | Equity Based Awards | ||||||||||
| | Number of securities underlying awards | | | Class of securities | | | Expiry date | | | Value of in-the- money awards (A$)(1) | |
Directors | | | | | | | | | ||||
Mr. Keith Phillips | | | 6,000,000 | | | Options | | | December 31, 2022 | | | — |
| | 750,000 | | | Rights | | | December 31, 2020 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2021 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2022 | | | 63,750 | |
Other KMP | | |||||||||||
Mr. Patrick Brindle | | | 6,000,000 | | | Options | | | December 31, 2022 | | | — |
| | 750,000 | | | Rights | | | December 31, 2020 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2021 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2022 | | | 63,750 | |
Mr. Lamont Leatherman | | | 6,000,000 | | | Options | | | December 31, 2022 | | | — |
| | 750,000 | | | Rights | | | December 31, 2020 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2021 | | | 63,750 | |
| | 750,000 | | | Rights | | | December 31, 2022 | | | 63,750 | |
Mr. Gregory Swan | | | 2,000,000 | | | Options | | | December 31, 2022 | | | — |
| | 250,000 | | | Rights | | | December 31, 2020 | | | 21,250 | |
| | 250,000 | | | Rights | | | December 31, 2021 | | | 21,250 | |
| | 250,000 | | | Rights | | | December 31, 2022 | | | 21,250 |
(1) | Value is calculated based on the difference between the applicable exercise price and the closing price of shares on the ASX on June 30, 2020 of A$0.085. |
Board Practices |
• | our Constitution specifies that there must be a minimum of three directors and a maximum of 10, and our Board of Directors may determine the number of directors within those limits; |
• | in the event of a conflict of interest or where a potential conflict of interest may arise, involved Directors are expected to, unless the remaining Directors resolve otherwise, withdraw from deliberations concerning the matter; |
• | the Chair of our Board of Directors should be an independent director who satisfies the criteria for independence recommended by the ASX Corporate Governance Principles and Recommendations; and |
• | our Board of Directors should, collectively, have the appropriate level of personal qualities, skills, experience, and time commitment to properly fulfill its responsibilities or have ready access to such skills where they are not available. |
Employees |
Share Ownership |
| | Ordinary Shares Beneficially Owned(1) | ||||
Shareholder | | | Number | | | Percent |
Officers and Directors | | | | | ||
Ian Middlemas(2) | | | 21,909,091 | | | 1.9% |
Keith Phillips(3) | | | 20,910,000 | | | 1.8% |
Anastasios Arima(4) | | | 3,406,494 | | | * |
Jeffrey Armstrong(5) | | | 1,750,000 | | | * |
Jorge Beristain(6) | | | 3,500,000 | | | * |
Levi Mochkin(7) | | | 53,000,000 | | | 4.6% |
Patrick Brindle(8) | | | 3,375,000 | | | * |
Lamont Leatherman | | | 3,558,168 | | | * |
Austin Devaney | | | — | | | * |
Gregory Swan(9) | | | 962,519 | | | * |
Officers and directors as a group (10 persons) | | | 112,371,272 | | | 9.7% |
(1) | Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, including options and performance rights that are currently exercisable or exercisable within 60 days of August 31, 2020. Ordinary shares subject to options and performance rights currently exercisable or exercisable within 60 days of August 31, 2020 are deemed to be outstanding for computing the percentage ownership of the person holding these options and/or performance rights and the percentage ownership of any group of which the holder is a member, but are not deemed outstanding for computing the percentage of any other person. |
(2) | 21,909,091 ordinary shares are held of record by Arredo Pty Ltd, an Australian corporation controlled by Mr. Middlemas. |
(3) | Mr. Phillips holds 810,000 ordinary shares in the form of ADSs. Includes options to purchase 18,000,000 ordinary shares (6,000,000 exercisable for A$0.12 each on or before January 10, 2021, 6,000,000 exercisable for A$0.16 each on or before July 10, 2021 and 6,000,000 exercisable for A$0.24 each on or before July 10, 2022). |
(4) | 2,906,494 ordinary shares are held of record by Moshos Family Investments Pty Ltd, an Australian corporation controlled by Mr. Arima. |
(5) | Includes options to purchase 500,000 ordinary shares (exercisable for A$0.35 each on or before December 31, 2020). |
(6) | Mr. Beristain holds 2,500,000 ordinary shares in the form of ADSs. Also includes options to purchase 500,000 ordinary shares (exercisable for A$0.35 each on or before December 31, 2020). |
(7) | 52,500,000 ordinary shares are held of record by Nasdaq Securities Australia Pty Limited, an Australian corporation owned by Mr. Levi Mochkin, his spouse, Ms. Lisa Mochkin, and his son, Mr. Menachem Mochkin, who holds a majority interest. |
(8) | Includes options to purchase 2,625,000 ordinary shares (1,125,000 exercisable at A$0.35 on or before December 31, 2020 and 1,500,000 exercisable for A$0.15 each on or before June 30, 2021). |
(9) | 700,000 ordinary shares are held of record by Verve Investments Pty Ltd, an Australian corporation controlled by Mr. Swan and 298,051 ordinary shares are held of record by Verve Capital Pty Ltd, an Australian corporation controlled by Mr. Swan. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Major Shareholders |
| | Ordinary Shares Beneficially Owned | ||||
Shareholder | | | Number | | | Percent |
The Bank of New York Mellon Corporation | | | 278,452,200 | | | 24.1% |
AustralianSuper Pty Ltd | | | 146,731,379 | | | 12.7% |
FIL Limited | | | 102,312,216 | | | 8.9% |
Related Party Transactions |
• | enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, us; |
• | associates, meaning unconsolidated enterprises in which we have a significant influence or which have significant influence over us; |
• | individuals owning, directly or indirectly, an interest in the voting power of us that gives them significant influence over our us, and close members of any such individual’s family; |
• | key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of ours, including directors and senior management of us and close members of such individuals’ families; and |
• | enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence, including enterprises owned by directors or major shareholders of us and enterprises that have a member of key management in common with us. |
Interests of Experts and Counsel |
FINANCIAL INFORMATION |
Consolidated Statements and Other Financial Information |
Significant Changes |
THE OFFER AND LISTING |
Offer and Listing Details |
Plan of Distribution |
Markets |
Selling Shareholders |
Dilution |
Expenses of the Issue |
ADDITIONAL INFORMATION |
Share Capital Overview |
Number of Stock Options Outstanding | | | Number Exercisable | | | Exercise Price (A$) | | | Expiry Date |
6,000,000 | | | 6,000,000 | | | $0.10 | | | July 10, 2020 |
2,875,000 | | | 2,875,000 | | | $0.35 | | | December 31, 2020 |
6,000,000 | | | 6,000,000 | | | $0.12 | | | January 10, 2021 |
1,500,000 | | | 1,500,000 | | | $0.15 | | | June 30, 2021 |
6,000,000 | | | 6,000,000 | | | $0.16 | | | July 10, 2021 |
1,500,000 | | | — | | | $0.20 | | | June 30, 2022 |
6,000,000 | | | — | | | $0.24 | | | July 10, 2022 |
23,750,000 | | | — | | | $0.16 | | | December 31, 2022 |
• | 2,500,000 Performance Rights subject to the “Integrated Feasibility Study Milestone,” expiring December 31, 2021; and |
• | 2,500,000 Performance Rights subject to the “Construction Milestone,” expiring December 31, 2022. |
• | On August 6 and 7, 2020, we issued 120,000,000 ordinary shares as part of a private placement at A$0.09 per share to non-U.S. institutional and sophisticated shareholders and, following shareholder approval received on July 31, 2020, to certain directors of the Company. |
• | On June 11, 2020, we issued 2,065,000 ADSs (representing 206,500,000 ordinary shares) as part of a U.S. public offering at US$6.30 per ADS. |
• | On April 17, 2020, we issued 2,000,000 ordinary shares, following shareholder approval received on March 18, 2020, to certain directors of the Company as part of their remuneration arrangements and to incentivize their continued performance. |
• | On July 10, 2019, we issued 145,000,000 ordinary shares as part of a private placement at A$0.145 per share to institutional and professional investors. |
• | On December 7 and 13, 2018 and February 1, 2019, we issued 111,000,000 ordinary shares as part of a private placement at A$0.11 per share to institutional and sophisticated investors and, following shareholder approval received on January 31, 2019, to certain directors of the Company. |
• | On November 3, 2017, we issued 100,000,000 ordinary shares as part of a private placement at A$0.16 per share to institutional and professional investors. |
• | During fiscal 2020, we issued 11,439,854 ordinary shares following the exercise of options and conversion of performance rights. |
• | During fiscal 2019, we issued 350,000 ordinary shares following the exercise of options and conversion of performance rights. |
• | During fiscal 2018, we issued 5,000,000 ordinary shares following the exercise of options and conversion of performance rights. |
• | During fiscal 2020, we granted options and performance rights to directors, employees, and consultants covering an aggregate of 33,450,000 ordinary shares. |
• | During fiscal 2019, we granted options and performance rights to directors, employees, and consultants covering an aggregate of 4,950,000 ordinary shares. |
• | During fiscal 2018, we granted options and performance rights to directors, employees, and consultants covering an aggregate of 28,650,000 ordinary shares. |
Memorandum and Articles of Association |
• | Dividend Rights. Under our Constitution, subject to the rights of persons (if any) entitled to shares with special rights to dividends, the directors may declare a final dividend be paid out of profits to the members in accordance with the Australian Corporations Act and may authorize the payment or crediting by us to the members of such a dividend. No dividend carries interest as against us. Under the Australian Corporations Act, we must not pay a dividend unless: (a) our assets exceed our liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; (b) the payment of the dividend is fair and reasonable to our shareholders as a whole; and (c) the payment of the dividend does not materially prejudice our ability to pay our creditors. Unless any share is issued on terms providing to the contrary, all dividends are to be apportioned and paid proportionately to the amounts paid, or credited as paid on the relevant shares. |
• | Voting Rights. Holders of ordinary shares have one vote per person on a show of hands, or one vote for each ordinary share held on all matters submitted to a vote of shareholders conducted by way of a poll. Such voting rights may be affected by the grant of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future. |
• | Rights in the Event of Liquidation. Under our Constitution, in the event of our liquidation, after satisfaction of liabilities to creditors and other statutory obligations prescribed by the laws of Australia, and the passing of a special resolution giving effect to the following, our assets will be distributed to the holders of ordinary shares in proportion to the shares held by them respectively, irrespective of the amount paid-up or credited as paid up on the shares. This right may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights, such as the right in winding up to payment in cash of the amount then paid up on the share, and any arrears of dividend in respect of that share, in priority to any other class of shares. |
• | the acquisition of a substantial interest if the Australian corporation is valued in excess of the applicable monetary threshold (see below); |
• | any direct investment by a foreign government investor; and |
• | any acquisition of shares in an Australian land corporation. |
• | a natural person not ordinarily resident in Australia; |
• | a corporation in which a natural person not ordinarily resident in Australia, or a corporation incorporated outside of Australia, holds direct or indirect, actual or potential, voting power of 20.0% or more; |
• | a corporation in which two or more persons, each of whom is either a non-Australian resident or a non-Australian corporation, hold direct or indirect, actual or potential, voting power in aggregate of 40.0% or more; |
• | a trustee of a trust estate in which a non-Australian resident or non-Australian corporation holds 20.0% or more of the corpus or income of the trust estate; |
• | a trustee of a trust estate in which two or more persons, each of whom is either a non-Australian resident or a non-Australian corporation, hold in aggregate 40.0% or more of the corpus or income of the trust estate; or |
• | a foreign government investor, to ascertain if they may be required to notify the Australian Treasurer of their investment. |
• | the person’s spouse or de facto partner, lineal ancestors and descendants, and siblings; |
• | any partner of the person; |
• | any corporation of which the person is an officer, any officer of a corporation (where the person is a corporation), employers and employees, any employee of a natural person of whom the person is an employee; |
• | any corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the person or, where the person is a corporation, of the directors of the person; |
• | any corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the person is accustomed or under an obligation, whether formal or informal, to act; |
• | any corporation in which the person holds a substantial interest; |
• | where the person is a corporation-a person who holds a substantial interest in the corporation; |
• | the trustee of a trust estate in which the person holds a substantial interest; |
• | where the person is the trustee of a trust estate-a person who holds a substantial interest in the trust estate; or |
• | any person who is an associate of any other person who is an associate of the person. |
• | control of 20% or more of the actual or potential voting power or issued shares in a target by a single foreign person (together with associates); or |
• | control of 40% or more of the actual or potential voting power or issued shares in a target by multiple foreign persons (together with associates). |
• | preferential, special or veto voting rights; |
• | the ability to appoint directors or asset managers; |
• | contractual agreements including, but not restricted to, agreements for loans, provision of services and off take agreements; or |
• | building or maintaining a strategic or long-term relationship with a target entity. |
• | a body politic of a foreign country; |
• | entities in which governments, their agencies or related entities from a single foreign country have an aggregate interest (direct or indirect) of 20% or more; |
• | entities in which governments, their agencies or related entities from more than one foreign country have an aggregate interest (direct or indirect) of 40% or more; or |
• | entities that are otherwise controlled by foreign governments, their agencies or related entities, and any associates, or could be controlled by them including as part of a controlling group. |
Material Contracts |
Exchange Controls |
Taxation |
• | insurance companies; |
• | banks or other financial institutions; |
• | individual retirement and other tax-deferred accounts; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | individuals who are former U.S. citizens or former long-term U.S. residents; |
• | brokers, dealers or traders in securities, commodities or currencies; |
• | traders that elect to use a mark-to-market method of accounting; |
• | persons holding our ADSs or ordinary shares through a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) or S corporation; |
• | persons that received the ADSs as compensation for the performance of services; |
• | grantor trusts; |
• | tax-exempt entities; |
• | persons that hold ADSs or ordinary shares as a position in a straddle or as part of a hedging, constructive sale, conversion or other integrated transaction for U.S. federal income tax purposes; |
• | persons that have a functional currency other than the U.S. dollar; |
• | persons that own (directly, indirectly or constructively) 10% or more of our equity (by vote or value); or |
• | persons that are not U.S. holders (as defined below). |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust (i) the administration of which is subject to the primary supervision of a court in the United States and for which one or more U.S. persons have the authority to control all substantial decisions or (ii) that has an election in effect under applicable income tax regulations to be treated as a U.S. person for U.S. federal income tax purposes. |
• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares; |
• | the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we were classified as a PFIC in your holding period will be treated as ordinary income arising in the current taxable year (and would not be subject to the interest charge discussed below); and |
• | the amount allocated to each other taxable year during your holding period in which we were classified as a PFIC (i) will be subject to income tax at the highest rate in effect for that year and applicable to you and (ii) will be subject to an interest charge generally applicable to underpayments of tax with respect to the resulting tax attributable to each such year. |
Dividends and Paying Agents |
Statement by Experts |
Documents on Display |
Subsidiary Information |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
Debt Securities |
Warrants and Rights |
Other Securities |
American Depositary Shares |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures |
Management’s Report on Internal Control over Financial Reporting |
Attestation Report of the Registered Public Accounting Firm |
Changes in Internal Control over Financial Reporting |
AUDIT COMMITTEE FINANCIAL EXPERT |
CODE OF ETHICS |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Services Rendered | | | Fiscal 2019 | | | Fiscal 2020 |
Audit or review of financial reports | | | $81,108 | | | $94,024 |
Other assurance and agreed-upon procedures | | | — | | | 128,714 |
Tax | | | — | | | — |
Other | | | — | | | — |
Total | | | $81,108 | | | $222,738 |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
CORPORATE GOVERNANCE |
• | We rely on an exemption from the independence requirements for a majority of our board of directors. The ASX Corporate Governance Principles and Recommendations contain non-binding recommendations that all ASX-listed companies should strive to achieve, including a majority of the board being comprised of independent directors. Due to Australian law and generally accepted business practices in Australia regarding director independence, we have departed from this recommendation and differ to the independence requirements under the Nasdaq Capital Market. Accordingly, we claim this exemption. |
• | We rely on an exemption from the requirement that our independent directors meet regularly in executive sessions. The ASX Listing Rules and the Corporations Act do not require the independent directors of an Australian company to have such executive sessions and, accordingly, we claim this exemption. |
• | We rely on an exemption from the quorum requirements applicable to meetings of shareholders under the Nasdaq Capital Market. In compliance with Australian law, our Constitution provides that two shareholders present shall constitute a quorum for a general meeting. The Nasdaq Capital Market require that an issuer provide for a quorum as specified in its bylaws for any meeting of the holders of ordinary shares, which quorum may not be less than 33 1/3% of the outstanding shares of an issuer’s voting ordinary shares. Accordingly, because applicable Australian law and rules governing quorums at shareholder meetings differ from the Nasdaq Capital Market’s quorum requirements, we seek to claim this exemption. |
• | We rely on an exemption from the requirement that we establish compensation and nominating committees and that all members of such committees be independent as defined by Nasdaq. Nasdaq rules would require that nominations to be determined, or recommended to the board of directors for determination, either by a compensation committee comprised of independent directors or by a majority of the independent directors on our board of directors. Instead, compensation of our directors and officers will be determined by our board of directors. The ASX Listing Rules and Australian law do not require an Australian company to establish a compensation committee, known in Australia as a remuneration committee, or a nominating committee comprised solely of non-executive directors if the company is not included in the S&P/ASX300 Index at the beginning of its fiscal year. We were not included on the S&P/ASX300 Index at the beginning of our last fiscal year and, hence, are not required under ASX Listing Rules to have a remuneration committee or a nominating committee. The ASX Corporate Governance Principles and Recommendations contain a non-binding recommendation that all ASX-listed companies should have a remuneration committee and nominating committee comprised of at least three members, a majority of whom (including the chair) are “independent.” While these recommendations contain guidelines for assessing independence, ASX-listed entities are able to adopt their own definitions of an independent director for this purpose and is different from the definition in the Nasdaq rules. |
• | We rely on an exemption from the requirement prescribed by the Nasdaq Capital Market that issuers obtain shareholder approval prior to the issuance of securities in connection with certain acquisitions, changes of controls or private placements of securities, or the establishment or amendment of certain stock option, purchase or other compensation plans. Applicable Australian law and rules differ from Nasdaq requirements, with the ASX Listing Rules providing generally for prior shareholder approval in numerous circumstances, including (i) issuance of equity securities exceeding 15% (or an additional 10% capacity to issue equity securities for the proceeding 12-month period if shareholder approval by |
• | We rely on an exemption from the requirement that issuers must in compliance with Nasdaq rules maintain charters for a nomination committee and compensation committee. In addition, we rely on an exemption from the requirement that issuers must maintain a code of conduct in compliance with the Nasdaq rules. Applicable Australian law does not require the Company to maintain any charters for their committees nor does such law require the Company maintain a code of conduct. |
MINE SAFETY DISCLOSURE |
FINANCIAL STATEMENTS |
FINANCIAL STATEMENTS |
EXHIBITS |
Exhibit Number | | | Description |
| | Certificate of the Registration of a Company of Penfold Printers Limited, dated September 27, 1983 (incorporated by reference to Exhibit 1.1 to the Company’s Registration Statement on Form 20-F, filed on March 16, 2018). | |
| | Certificate of Registration on Change of Name of Piedmont Lithium Limited, dated August 18, 2017 (incorporated by reference to Exhibit 1.2 to the Company’s Registration Statement on Form 20-F, filed on March 16, 2018). | |
| | Constitution of WCP Resources Limited, dated November 27, 2009 (incorporated by reference to Exhibit 1.3 to the Company’s Registration Statement on Form 20-F, filed on March 16, 2018). | |
| | Form of Amended and Restated Deposit Agreement among Piedmont Lithium Limited, The Bank of New York Mellon, and Owners and Holders of American Depositary Shares (incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form 20-F, filed on March 16, 2018). | |
| | Description of Share Capital | |
| | Subsidiaries of Piedmont Lithium Limited | |
| | Section 302 Certification of Chief Executive Officer | |
| | Section 302 Certification of Chief Financial Officer | |
| | Section 906 Certification of Chief Executive Officer | |
| | Section 906 Certification of Chief Financial Officer | |
| | Consent of Deloitte Touche Tohmatsu | |
100.1 | | | XBRL |
101.1 | | | XBRL |
| | PIEDMONT LITHIUM LIMITED | ||||
| | | | |||
| | By: | | | /s/ Keith D. Phillips | |
| | | | Keith D. Phillips | ||
| | | | Chief Executive Officer | ||
Date: October 13, 2020 | | | | |
| | PAGE | |
| | ||
FINANCIAL STATEMENTS | | | |
| | ||
| | ||
| | ||
| | ||
| |
| | Notes | | | 2020 | | | 2019 | | | 2018 | |
| | | | US$ | | | US$ | | | US$ | ||
Continuing operations | | | | | | | | | ||||
Exploration and evaluation expenses | | | | | (3,563,437) | | | (7,107,146) | | | (6,021,506) | |
Corporate and administrative expenses | | | | | (1,514,519) | | | (1,711,475) | | | (1,160,608) | |
Business development expenses | | | | | (941,399) | | | (928,097) | | | (1,207,907) | |
Share based payments | | | 17 | | | (470,939) | | | (438,375) | | | (1,172,164) |
Foreign stock exchange listing expenses | | | | | — | | | — | | | (580,922) | |
Finance income | | | 2 | | | 215,549 | | | 128,377 | | | 132,752 |
Finance costs | | | 2 | | | (157,271) | | | — | | | — |
Other income and expenses | | | 2 | | | 760,917 | | | 234,090 | | | 52,538 |
Loss before income tax | | | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) | |
Income tax expense | | | 3 | | | — | | | — | | | — |
Loss for the year | | | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) | |
Loss attributable to members of Piedmont Lithium Limited | | | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) | |
| | | | | | | | |||||
Other comprehensive income | | | | | | | | | ||||
Items that may be reclassified subsequently to profit or loss: | | | | | | | | | ||||
Exchange differences arising on translation of foreign operations | | | | | (499,399) | | | (366,083) | | | (249,205) | |
Other comprehensive loss for the year, net of tax | | | | | (499,399) | | | (366,083) | | | (249,205) | |
Total comprehensive loss for the year | | | | | (6,170,498) | | | (10,188,709) | | | (10,207,022) | |
Total comprehensive loss attributable to members of Piedmont Lithium Limited | | | | | (6,170,498) | | | (10,188,709) | | | (10,207,022) | |
| | | | | | | | |||||
Basic loss per share (US$ per share) | | | 15 | | | (0.01) | | | (0.02) | | | (0.02) |
Diluted loss per share (US$ per share) | | | 15 | | | (0.01) | | | (0.02) | | | (0.02) |
| | Notes | | | 2020 | | | 2019 | |
| | | | US$ | | | US$ | ||
ASSETS | | | | | | | |||
Current Assets | | | | | | | |||
Cash and cash equivalents | | | 5 | | | 18,857,088 | | | 4,432,150 |
Trade and other receivables | | | | | 27,412 | | | 59,679 | |
Other assets | | | 6 | | | 128,271 | | | — |
Total Current Assets | | | | | 19,012,771 | | | 4,491,829 | |
| | | | | | ||||
Non-Current Assets | | | | | | | |||
Exploration and evaluation assets | | | 7 | | | 7,720,957 | | | 2,265,121 |
Property, plant and equipment | | | 8 | | | 774,440 | | | 26,195 |
Other assets | | | 6 | | | 150,781 | | | — |
Total Non-Current Assets | | | | | 8,646,178 | | | 2,291,316 | |
TOTAL ASSETS | | | | | 27,658,949 | | | 6,783,145 | |
| | | | | | ||||
LIABILITIES | | | | | | | |||
Current Liabilities | | | | | | | |||
Trade and other payables | | | 9 | | | 1,007,507 | | | 2,144,071 |
Other liabilities | | | 10 | | | 705,536 | | | — |
Total Current Liabilities | | | | | 1,713,043 | | | 2,144,071 | |
| | | | | | ||||
Non-Current Liabilities | | | | | | | |||
Other liabilities | | | 10 | | | 1,910,413 | | | — |
Total Non-Current Liabilities | | | | | 1,910,413 | | | — | |
TOTAL LIABILITIES | | | | | 3,623,456 | | | 2,144,071 | |
| | | | | | ||||
NET ASSETS | | | | | 24,035,493 | | | 4,639,074 | |
| | | | | | ||||
EQUITY | | | | | | | |||
Contributed equity | | | 12 | | | 74,877,325 | | | 48,853,707 |
Reserves | | | 13 | | | 515,110 | | | 1,990,135 |
Accumulated losses | | | 14 | | | (51,356,942) | | | (46,204,768) |
TOTAL EQUITY | | | | | 24,035,493 | | | 4,639,074 |
| | Contributed Equity | | | Share Based Payments Reserve | | | Foreign Currency Translation Reserve | | | Accumulated Losses | | | Total Equity | |
| | US$ | | | US$ | | | US$ | | | US$ | | | US$ | |
Balance at July 1, 2019 | | | 48,853,707 | | | 2,287,301 | | | (297,166) | | | (46,204,768) | | | 4,639,074 |
Effect of adoption of IFRS 16 (Note 1(b)) | | | — | | | — | | | — | | | (13,009) | | | (13,009) |
Balance at July 1, 2019 (restated) | | | 48,853,707 | | | 2,287,301 | | | (297,166) | | | (46,217,777) | | | 4,626,065 |
Net loss for the year | | | — | | | — | | | — | | | (5,671,099) | | | (5,671,099) |
Exchange differences arising on translation of foreign operations | | | — | | | — | | | (499,399) | | | — | | | (499,399) |
Total comprehensive loss for the year | | | — | | | — | | | (499,399) | | | (5,671,099) | | | (6,170,498) |
Issue of shares | | | 27,435,257 | | | — | | | — | | | — | | | 27,435,257 |
Share issue costs | | | (2,326,270) | | | — | | | — | | | — | | | (2,326,270) |
Conversion of performance rights | | | 114,072 | | | (114,072) | | | — | | | — | | | — |
Exercise of incentive options | | | 706,570 | | | (706,570) | | | — | | | — | | | — |
Expiry of incentive options | | | — | | | (531,934) | | | — | | | 531,934 | | | — |
Issue of shares to non-executive directors | | | 93,989 | | | (93,989) | | | — | | | — | | | — |
Share based payments | | | — | | | 470,939 | | | — | | | — | | | 470,939 |
Balance at June 30, 2020 | | | 74,877,325 | | | 1,311,675 | | | (796,565) | | | (51,356,942) | | | 24,035,493 |
| | | | | | | | | | ||||||
Balance at July 1, 2018 | | | 40,483,348 | | | 1,897,391 | | | 68,917 | | | (36,382,142) | | | 6,067,514 |
Net loss for the year | | | — | | | — | | | — | | | (9,822,626) | | | (9,822,626) |
Exchange differences arising on translation of foreign operations | | | — | | | — | | | (366,083) | | | — | | | (366,083) |
Total comprehensive loss for the year | | | — | | | — | | | (366,083) | | | (9,822,626) | | | (10,188,709) |
Issue of shares | | | 8,831,759 | | | — | | | — | | | — | | | 8,831,759 |
Share issue costs | | | (509,865) | | | — | | | — | | | — | | | (509,865) |
Conversion of performance rights | | | 48,465 | | | (48,465) | | | — | | | — | | | — |
Share based payments | | | — | | | 438,375 | | | — | | | — | | | 438,375 |
Balance at June 30, 2019 | | | 48,853,707 | | | 2,287,301 | | | (297,166) | | | (46,204,768) | | | 4,639,074 |
| | | | | | | | | | ||||||
Balance at July 1, 2017 | | | 28,512,793 | | | 861,973 | | | 318,122 | | | (26,424,325) | | | 3,268,563 |
Net loss for the year | | | — | | | — | | | — | | | (9,957,817) | | | (9,957,817) |
Exchange differences arising on translation of foreign operations | | | — | | | — | | | (249,205) | | | — | | | (249,205) |
Total comprehensive loss for the year | | | — | | | — | | | (249,205) | | | (9,957,817) | | | (10,207,022) |
Issue of shares | | | 12,304,000 | | | — | | | — | | | — | | | 12,304,000 |
Share issue costs | | | (657,716) | | | — | | | — | | | — | | | (657,716) |
Exercise of options | | | 324,271 | | | (136,746) | | | — | | | — | | | 187,525 |
Share based payments | | | — | | | 1,172,164 | | | — | | | — | | | 1,172,164 |
Balance at June 30, 2018 | | | 40,483,348 | | | 1,897,391 | | | 68,917 | | | (36,382,142) | | | 6,067,514 |
| | Notes | | | 2020 | | | 2019 | | | 2018 | |
| | | | US$ | | | US$ | | | US$ | ||
Operating activities | | | | | | | | | ||||
Payments to suppliers and employees | | | | | (7,177,345) | | | (9,937,002) | | | (7,713,845) | |
Grant income | | | | | 138,100 | | | — | | | — | |
Interest paid | | | | | (157,271) | | | — | | | — | |
Interest received | | | | | 221,088 | | | 127,190 | | | 131,849 | |
Net cash flows used in operating activities | | | 5 | | | (6,975,428) | | | (9,809,812) | | | (7,581,996) |
| | | | | | | | |||||
Investing activities | | | | | | | | | ||||
Purchase of exploration and evaluation assets | | | 7 | | | (2,747,784) | | | (1,523,104) | | | (564,217) |
Purchase of property, plant and equipment | | | 8 | | | (669,471) | | | (14,407) | | | (1,346) |
Payment of deposits | | | | | — | | | (15,000) | | | (36,617) | |
Net cash flows used in investing activities | | | | | (3,417,255) | | | (1,552,511) | | | (602,180) | |
| | | | | | | | |||||
Financing activities | | | | | | | | | ||||
Proceeds from issue of shares | | | 12(a) | | | 27,435,257 | | | 8,831,759 | | | 12,491,525 |
Share issue costs | | | 12(a) | | | (2,326,270) | | | (509,865) | | | (657,716) |
Repayment of borrowings | | | 10(a) | | | (352,303) | | | — | | | — |
Proceeds from principal portion of sub-lease receivables | | | | | 35,795 | | | — | | | — | |
Costs of entering sub-lease | | | | | (25,060) | | | — | | | — | |
Payment of principal portion of lease liabilities | | | | | (83,232) | | | — | | | — | |
Net cash flows from financing activities | | | | | 24,684,187 | | | 8,321,894 | | | 11,833,809 | |
| | | | | | | | |||||
Net increase/(decrease) in cash and cash equivalents | | | | | 14,291,504 | | | (3,040,429) | | | 3,649,633 | |
Net foreign exchange differences | | | | | 133,434 | | | 234,090 | | | 52,538 | |
Cash and cash equivalents at beginning of year | | | | | 4,432,150 | | | 7,238,489 | | | 3,536,318 | |
Cash and cash equivalents at the end of the year | | | 5 | | | 18,857,088 | | | 4,432,150 | | | 7,238,489 |
1. | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES |
(a) | Basis of preparation |
(b) | New standards, interpretations and amendments |
• | IFRS 16 Leases |
• | Interpretation 23 Uncertainty over Income Tax Treatments |
• | Annual Improvements to IFRS Standards 2015–2017 Cycle |
• | Fixed payments, less any lease incentives receivables |
• | Variable lease payment that are based on an index or a rate |
• | Amounts expected to be payable by the lessee under residual value guarantees |
• | The exercised price of a purchase option if the lessee is reasonably certain to exercise that option, and |
• | Payments of penalties for terminating the lease, if the term reflects the lessee exercising that option. |
• | did not recognise right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application; |
• | did not recognise right-of-use assets and liabilities for leases of low value assets (e.g. IT equipment); |
• | excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application; and |
• | used hindsight when determining the lease term. |
| | As previously reported | | | IFRS 16 adjustment | | | As adjusted at July 1, 2019 | |
| | US$ | | | US$ | | | US$ | |
Right-of-use assets | | | — | | | 222,116 | | | 222,116 |
Other liabilities | | | — | | | (235,125) | | | (235,125) |
Accumulated losses | | | (46,204,768) | | | (13,009) | | | (46,217,777) |
| | US$ | |
Operating lease commitments as at June 30, 2019 | | | 134,884 |
Discounted operating lease commitments as at July 1, 2019 | | | 116,873 |
Less: Commitments relating to short-term leases and leases of low-value assets | | | (25,627) |
Add: Lease payments not included in operating lease commitments as at June 30, 2019 | | | 143,879 |
Lease liabilities as at July 1, 2019 | | | 235,125 |
(c) | Issued standards and interpretations not early adopted |
Standard/Interpretation | | | Application Date of Standard | | | Application Date for the Group |
Definition of a Business (Amendments to IFRS 3) | | | January 1, 2020 | | | July 1, 2020 |
Definition of Material (Amendments to IAS 1 and IAS 8) | | | January 1, 2020 | | | July 1, 2020 |
Amendments to References to the Conceptual Framework in IFRS Standards | | | January 1, 2020 | | | July 1, 2020 |
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) | | | January 1, 2020 | | | July 1, 2020 |
(d) | Change in functional currency |
(e) | Principles of Consolidation |
(f) | Foreign Currencies |
(i) | Functional and presentation currency |
(ii) | Transactions and balances |
(iii) | Group companies |
• | assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; |
• | income and expenses are translated at average exchange rates for the period; and |
• | retained earnings are translated at the exchange rates prevailing at the date of the transaction. |
(g) | Cash and Cash Equivalents |
(h) | Trade and Other Receivables |
(i) | Property, Plant and Equipment |
(i) | Cost and valuation |
(ii) | Depreciation |
| | 2020 | | | 2019 | | | 2018 | |
Major depreciation periods are: | | | | | | | |||
Plant and equipment: | | | 5 years | | | 5 years | | | 5 years |
(j) | Exploration and Development Expenditure |
(i) | the rights to tenure of the area of interest are current; and |
(ii) | at least one of the following conditions is also met: |
• | 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; and |
• | exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. |
(k) | Trade and other payables |
(l) | Provisions |
(m) | Finance income |
(n) | Government grant income |
(o) | Income Tax |
(p) | Employee Entitlements |
(q) | Earnings per Share |
(r) | Goods and Services Tax |
(s) | Use and Revision of Accounting Estimates, Judgements and Assumptions |
• | Change in functional currency (Note 1(d)); |
• | Recognition of tax losses (Note 3); |
• | Impairment of exploration and evaluation expenditures (Note 7); and |
• | Share-based payments (Note 17). |
(t) | Operating Segments |
• | Nature of the products and services, |
• | Nature of the production processes, |
• | Type or class of customer for the products and services, |
• | Methods used to distribute the products or provide the services, and if applicable, |
• | Nature of the regulatory environment. |
(u) | Impairment of Assets |
(v) | Fair Value Estimation |
(w) | Issued and Unissued Capital |
(x) | Dividends |
(y) | Share-Based Payments |
2. | INCOME AND EXPENSES |
| | Note | | | 2020 | | | 2019 | | | 2018 | |
| | | | US$ | | | US$ | | | US$ | ||
Finance income | | | | | | | | | ||||
Interest income | | | | | 215,549 | | | 128,377 | | | 132,752 | |
| | | | 215,549 | | | 128,377 | | | 132,752 | ||
| | | | | | | | |||||
Finance costs | | | | | | | | | ||||
Interest on loans and borrowings | | | | | (107,568) | | | — | | | — | |
Interest on lease liabilities | | | | | (49,703) | | | — | | | — | |
| | | | (157,271) | | | — | | | — | ||
| | | | | | | | |||||
Other income/(expenses) | | | | | | | | | ||||
Net foreign exchange gain | | | | | 632,832 | | | 234,090 | | | 52,538 | |
Grant income(1) | | | | | 138,100 | | | — | | | — | |
Gain on derecognition of right-of-use assets | | | | | 15,588 | | | — | | | — | |
Other | | | | | (25,603) | | | — | | | — | |
| | | | 760,917 | | | 234,090 | | | 52,538 | ||
| | | | | | | | |||||
Depreciation | | | | | | | | | ||||
Depreciation of property, plant and equipment | | | | | (84,512) | | | (8,812) | | | (1,259) | |
| | | | (84,512) | | | (8,812) | | | (1,259) | ||
| | | | | | | | |||||
Employee benefits expense (including KMP) | | | | | | | | | ||||
Wages, salaries and fees | | | | | (1,554,496) | | | (1,897,280) | | | (1,649,294) | |
Defined contribution plans | | | | | (34,099) | | | (51,432) | | | (18,876) | |
Other employee benefits | | | | | (130,430) | | | (159,030) | | | (66,735) | |
Share based payments | | | 17 | | | (470,939) | | | (438,375) | | | (1,172,164) |
| | | | (2,189,964) | | | (2,546,117) | | | (2,907,069) |
(1) | During the 2020 year, the Group received US$138,100 (2019: nil) (2018: nil) in government grants under the Paycheck Protection Program, a business loan program established by the 2020 US Federal government Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses continue paying their workers. The Paycheck Protection Program provides businesses with funds to pay payroll costs in the form of loans that will be fully forgiven when used for eligible payroll costs. |
3. | INCOME TAX |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Recognised in profit or loss | | | | | | | |||
Current income tax: | | | | | | | |||
Current income tax benefit in respect of the current year | | | — | | | — | | | — |
Deferred income tax: | | | | | | | |||
Origination and reversal of temporary differences | | | — | | | — | | | — |
Income tax expense reported in profit or loss | | | — | | | — | | | — |
| | | | | |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Reconciliation between tax expense and accounting loss before income tax | | | | | | | |||
Accounting loss before income tax | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) |
At the Australian income tax rate of 30% (2019: 30%) (2018: 27.5%) | | | (1,701,330) | | | (2,946,788) | | | (2,738,400) |
Expenditure not allowable for income tax purposes | | | 280,176 | | | 435,641 | | | 612,788 |
Income not assessable for income tax purposes | | | (189,850) | | | (70,227) | | | (14,448) |
Effect of different income tax rate in the United States | | | 366,471 | | | 1,774,721 | | | (551,859) |
Effect of change in income tax rate in Australia | | | — | | | (233,013) | | | — |
Exchange differences on translation of foreign operations | | | 125,391 | | | 142,627 | | | 105,045 |
Adjustments in respect of deferred income tax of previous years | | | (214,545) | | | (159,852) | | | (56,213) |
Effect of deferred tax assets not brought to account | | | 1,333,687 | | | 1,056,891 | | | 2,643,087 |
Income tax expense reported in profit or loss | | | — | | | — | | | — |
| | | | | | ||||
Deferred Tax Assets and Liabilities | | | | | | | |||
Deferred Tax Liabilities: | | | | | | | |||
Accrued interest | | | 875 | | | 3,856 | | | 3,292 |
Deferred tax assets used to offset deferred tax liabilities | | | (875) | | | (3,856) | | | (3,292) |
| | — | | | — | | | — | |
Deferred Tax Assets: | | | | | | | |||
Accrued expenditures | | | 27,487 | | | 35,587 | | | 25,160 |
Exploration and evaluation expenditure(1) | | | 3,213,971 | | | 2,649,626 | | | — |
Tax losses available to offset against future taxable income | | | 4,676,715 | | | 3,902,255 | | | 5,504,853 |
Deferred tax assets used to offset deferred tax liabilities | | | (875) | | | (3,856) | | | (3,292) |
Deferred tax assets not brought to account(2) | | | (7,917,298) | | | (6,583,612) | | | (5,526,721) |
| | — | | | — | | | — |
(1) | For U.S. income tax purposes, exploration costs are generally capitalised and then amortized for tax purposes unless an election is made to deduct the exploration costs as incurred. On finalisation of its U.S. tax return, the Group did not make such an election for the year ended June 30, 2019 or 2018, and consequently exploration costs have been treated as capitalised for tax purposes, with deductions available in future periods. This election has no impact on the total deferred tax assets available to the Group at either June 30, 2020 or June 30, 2019. |
(2) | The benefit of deferred tax assets not brought to account will only be brought to account if: (a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; (b) the conditions for deductibility imposed by tax legislation continue to be complied with; and (c) no changes in tax legislation adversely affect the Group in realising the benefit. |
4. | DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES |
5. | CASH AND CASH EQUIVALENTS |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Cash at bank and on hand | | | 14,307,088 | | | 2,224,380 | | | 2,714,776 |
Short term deposits | | | 4,550,000 | | | 2,207,770 | | | 4,523,713 |
| | 18,857,088 | | | 4,432,150 | | | 7,238,489 | |
| | | | | |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Reconciliation of loss before income tax to net cash flows from operations | | | | | | | |||
Loss for the year | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) |
Adjustment for non-cash income and expense items | | | | | | | |||
Depreciation | | | 84,512 | | | 8,812 | | | 1,259 |
Share-based payments expense | | | 470,939 | | | 438,375 | | | 1,172,164 |
Net foreign exchange gain | | | (632,832) | | | (234,090) | | | (52,538) |
Gain on derecognition of right-of-use assets | | | (15,588) | | | — | | | — |
Other | | | 17,258 | | | — | | | — |
Change in assets and liabilities | | | | | | | |||
(Increase)/decrease in trade and other receivables | | | (92,054) | | | 10,814 | | | (1,516) |
(Decrease)/Increase in trade and other payables | | | (1,136,564) | | | 154,987 | | | 1,505,657 |
Exchange differences arising on translation of foreign operations | | | — | | | (366,084) | | | (249,205) |
Net cash outflow from operating activities | | | (6,975,428) | | | (9,809,812) | | | (7,581,996) |
6. | OTHER ASSETS |
| | 2020 | | | 2019 | |
| | US$ | | | US$ | |
Current | | | | | ||
Sub-lease receivables(1) | | | 102,684 | | | — |
Prepayments | | | 25,587 | | | |
Total current other assets | | | 128,271 | | | — |
| | | | |||
Non-current | | | | | ||
Sub-lease receivables(1) | | | 120,875 | | | — |
Lease security deposit | | | 29,906 | | | |
Total non-current other assets | | | 150,781 | | | — |
| | | | |||
Total other assets | | | 279,052 | | | — |
(1) | During the period, the Group entered into an agreement to sub-lease one of its offices in the United States and, accordingly, has recognised a sub-lease receivable at June 30, 2020. Refer to Note 11 for further information on leases. |
7. | EXPLORATION AND EVALUATION ASSETS |
| | Piedmont Lithium Project(1) | |
| | US$ | |
2020 | | | |
Carrying amount at July 1, 2019 | | | 2,265,121 |
Additions(2) | | | 5,455,836 |
Carrying amount at June 30, 2020(3) | | | 7,720,957 |
| | ||
2019 | | | |
Carrying amount at July 1, 2018 | | | 742,017 |
Additions(2) | | | 1,523,104 |
Carrying amount at June 30, 2019(3) | | | 2,265,121 |
(1) | At June 30, 2020, the Piedmont Lithium Project comprised approximately 2,126 acres (June 30, 2019: approximately 2,207 acres) of surface property and associated mineral rights in North Carolina, United States, of which approximately 391 acres are owned, approximately 79 acres are subject to lease-to-own agreements, and approximately 1,656 acres are subject to exclusive option agreements, which upon exercise, allows the Group to purchase or, in some cases long-term lease, the surface property and associated mineral rights. For those properties under option, no liability has been recorded for the consideration payable to landowners if the Group chooses to exercise its option (refer to Note 20 for further details of contingent liabilities). |
(2) | During the year ended June 30, 2020, the Group made land acquisition payments and land option payments totalling US$5,455,836 (2019: US$1,523,104) to landowners which have been treated as acquisition costs and capitalised as ‘exploration and evaluation assets’. The acquisitions during the 2020 year were settled through a combination of cash payments of US$2,747,784 (2019: US$1,523,104) and vendor financed loans and borrowings of US$2,708,052 (2019: nil). Refer to Note 10(a) for further information on loans and borrowings. |
(3) | The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest. |
8. | PROPERTY, PLANT AND EQUIPMENT |
| | Freehold land | | | Plant and equipment | | | Right-of-use assets | | | Total | |
| | US$ | | | US$ | | | US$ | | | US$ | |
2020 | | | | | | | | | ||||
Carrying amount at July 1, 2019 | | | — | | | 26,195 | | | — | | | 26,195 |
Effect of adoption of IFRS 16 (refer Note 1(b)) | | | — | | | — | | | 222,116 | | | 222,116 |
Carrying amount at July 1, 2019 (adjusted) | | | — | | | 26,195 | | | 222,116 | | | 248,311 |
Additions | | | 688,829 | | | 15,642 | | | 116,400 | | | 820,871 |
De-recognition of right-of-use assets(1) | | | — | | | — | | | (210,230) | | | (210,230) |
Depreciation | | | — | | | (13,249) | | | (71,263) | | | (84,512) |
Carrying amount at June 30, 2020 | | | 688,829 | | | 28,588 | | | 57,023 | | | 774,440 |
- at cost | | | 688,829 | | | 52,068 | | | 89,608 | | | 830,505 |
- accumulated depreciation | | | — | | | (23,480) | | | (32,585) | | | (56,065) |
| | | | | | | | |||||
2019 | | | | | | | | | ||||
Carrying amount at July 1, 2018 | | | — | | | 3,982 | | | — | | | 3,982 |
Additions | | | — | | | 31,025 | | | — | | | 31,025 |
Depreciation | | | — | | | (8,812) | | | — | | | (8,812) |
Carrying amount at June 30, 2019 | | | — | | | 26,195 | | | — | | | 26,195 |
- at cost | | | — | | | 36,426 | | | — | | | 36,426 |
- accumulated depreciation | | | — | | | (10,231) | | | — | | | (10,231) |
(1) | During the period, the Group entered into an agreement to sublease one of its offices in the United States. The Group has assessed that as a result of entering into the sublease, the Group no longer retains the significant risks and rewards associated with the use of the office space and as such has de-recognised the right-of-use asset recorded in relation to this lease, and recognised a corresponding lease receivable at June 30, 2020, which is classified as ‘other assets’ in the consolidated statement of financial position. The Group has not adjusted the corresponding lease liability recognised under the office lease as it is still responsible for the lease payments to the lessor. Refer to Note 11 for further information on leases. |
9. | TRADE AND OTHER PAYABLES |
| | 2020 | | | 2019 | |
| | US$ | | | US$ | |
Current | | | | | ||
Trade creditors | | | 644,857 | | | 1,434,439 |
Accrued expenses | | | 362,650 | | | 709,632 |
Total trade and other payables | | | 1,007,507 | | | 2,144,071 |
10. | OTHER LIABILITIES |
| | 2020 | | | 2019 | |
| | US$ | | | US$ | |
Current | | | | | ||
Loans and borrowings(1) | | | 577,576 | | | — |
Lease liabilities | | | 127,960 | | | — |
Total current other liabilities | | | 705,536 | | | — |
| | | | |||
Non-current | | | | | ||
Loans and borrowings(1) | | | 1,740,042 | | | — |
Lease liabilities | | | 140,465 | | | — |
Sub-lease security deposit | | | 29,906 | | | |
Total non-current other liabilities | | | 1,910,413 | | | — |
Total other liabilities | | | 2,615,949 | | | — |
(1) | At June 30, 2020, the Group had loans and borrowings relating to surface properties that form part of ‘exploration and evaluation assets’ which have been fully or partly financed by the seller of the surface properties. The loans and borrowings are repayable in monthly instalments, based on an implied interest rate of 10%, and secured by the respective surface property. |
(a) | Reconciliation of loans and borrowings |
| | Balance at July 1, 2019 | | | Amount Financed | | | Modifications | | | Cash Repayments | | | Balance at June 30, 2020 | |
| | US$ | | | US$ | | | US$ | | | US$ | | | US$ | |
Loans and borrowings | | | — | | | 2,708,052 | | | (38,131) | | | (352,303) | | | 2,317,618 |
Lease liabilities | | | — | | | 351,657 | | | — | | | (83,232) | | | 268,425 |
Total | | | — | | | 3,059,709 | | | (38,131) | | | (435,535) | | | 2,586,043 |
11. | LEASES |
| | 2020 – Leases under IFRS 16 | |
| | US$ | |
Depreciation of right-of-use assets | | | (71,263) |
Gain on derecognition of right-of-use assets | | | 15,588 |
Interest expense on lease liabilities | | | (49,703) |
Interest income on sub-lease receivables | | | 4,079 |
Expense relating to short-term leases and leases of low-value assets | | | (32,673) |
Net amount recognised in profit or loss | | | (133,972) |
| | ||
2019 – Operating Leases under IAS 17 | | | |
Lease expense | | | (92,189) |
Net amount recognised in profit or loss | | | (92,189) |
| | Year 1 US$ | | | Year 2 US$ | | | Year 3 US$ | | | Total contractual cash flows US$ | | | Carrying amount US$ | |
Sub-lease receivables | | | 121,035 | | | 113,925 | | | — | | | 234,960 | | | 223,559 |
| | 121,035 | | | 113,925 | | | — | | | 234,960 | | | 223,559 | |
Lease liabilities | | | (156,621) | | | (150,513) | | | — | | | (307,134) | | | (268,425) |
| | (156,621) | | | (150,513) | | | — | | | (307,134) | | | (268,425) |
12. | CONTRIBUTED EQUITY |
| | Note | | | 2020 | | | 2019 | |
| | | | US$ | | | US$ | ||
Issued capital | | | | | | | |||
1,035,320,206 fully paid ordinary shares (2019: 670,380,352) (2018: 559,030,352) | | | 12(a) | | | 74,877,325 | | | 48,853,707 |
(a) | Movements in issued capital |
Details | | | Number of Ordinary Shares | | | Issue Price | | | US$ |
2020 | | | | | | | |||
Opening balance at July 1, 2019 | | | 670,380,352 | | | | | 48,853,707 | |
Issue of shares – share placement (July 2019) | | | 145,000,000 | | | A$0.145 | | | 14,557,710 |
Issue of shares – U.S public offering (June 2020) | | | 206,500,000 | | | A$0.09 | | | 12,877,547 |
Issue of shares – exercise of incentive options | | | 8,939,854 | | | — | | | 706,570 |
Issue of shares – non-executive directors | | | 2,000,000 | | | — | | | 93,989 |
Issue of shares – conversion of performance rights | | | 2,500,000 | | | — | | | 114,072 |
Share issue costs | | | — | | | — | | | (2,326,270) |
Closing balance at June 30, 2020 | | | 1,035,320,206 | | | | | 74,877,325 |
Details | | | Number of Ordinary Shares | | | Issue Price | | | US$ |
| | | | | | ||||
2019 | | | | | | | |||
Opening balance at July 1, 2018 | | | 559,030,352 | | | | | 40,483,348 | |
Issue of shares – share placement | | | 111,000,000 | | | A$0.11 | | | 8,831,759 |
Issue of shares – conversion of rights | | | 350,000 | | | — | | | 48,465 |
Share issue costs | | | — | | | — | | | (509,865) |
Closing balance at June 30, 2019 | | | 670,380,352 | | | | | 48,853,707 |
(b) | Rights attaching to ordinary shares |
(i) | Shares — The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control of the directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any special class of shares. |
(ii) | Meetings of Members — Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is 2 shareholders. The Company holds annual general meetings in accordance with the Corporations Act 2001 and the Listing Rules. |
(iii) | Voting — Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only despite the number of members the person represents. On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share. |
(iv) | Changes to the Constitution — The Company’s Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days’ written notice specifying the intention to propose the resolution as a special resolution must be given. |
(v) | Listing Rules — Provided the Company remains admitted to the Official List, then despite anything in its Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company’s Constitution will be deemed to comply with the Listing Rules as amended from time to time. |
13. | RESERVES |
| | Note | | | 2020 | | | 2019 | | | 2018 | |
| | | | US$ | | | US$ | | | US$ | ||
Share-based payments reserve | | | 13(b) | | | 1,311,675 | | | 2,287,301 | | | 1,897,391 |
Foreign currency translation reserve | | | 13(e) | | | (796,565) | | | (297,166) | | | 68,917 |
| | | | 515,110 | | | 1,990,135 | | | 1,966,308 |
(a) | Nature and purpose of reserves |
(i) | Share-based payments reserve |
(ii) | Foreign currency translation reserve |
(b) | Movements in share-based payments reserve |
Details | | | Number of Incentive Options | | | Number of Performance Rights | | | Number of Shares | | | US$ |
2020 | | | | | | | | | ||||
Opening balance at July 1, 2019 | | | 84,650,000 | | | 50,000 | | | — | | | 2,287,301 |
Grant of incentive securities(1) | | | 25,950,000 | | | 7,500,000 | | | 2,000,000 | | | — |
Exercise of incentive options | | | (31,500,000) | | | — | | | — | | | (706,570) |
Conversion of performance rights | | | — | | | (2,500,000) | | | — | | | (114,072) |
Transfer to issued capital upon issue of shares to non-executive directors | | | — | | | — | | | (2,000,000) | | | (93,989) |
Expiry of incentive options | | | (25,475,000) | | | — | | | — | | | (531,934) |
Lapse of performance rights | | | — | | | (50,000) | | | — | | | — |
Share-based payment expense | | | — | | | — | | | — | | | 470,939 |
Closing balance at June 30, 2020 | | | 53,625,000 | | | 5,000,000 | | | — | | | 1,311,675 |
| | | | | | | | |||||
2019 | | | | | | | | | ||||
Opening balance at July 1, 2018 | | | 79,700,000 | | | 1,500,000 | | | — | | | 1,897,391 |
Grant of incentive securities(1) | | | 4,950,000 | | | — | | | — | | | — |
Conversion of performance rights | | | — | | | (350,000) | | | — | | | (48,465) |
Lapse of performance rights | | | — | | | (1,100,000) | | | — | | | — |
Share-based payment expense | | | — | | | — | | | — | | | 438,375 |
Closing balance at June 30, 2019 | | | 84,650,000 | | | 50,000 | | | — | | | 2,287,301 |
| | | | | | | | |||||
2018 | | | | | | | | | ||||
Opening balance at July 1, 2017 | | | 56,450,000 | | | 2,200,000 | | | — | | | 861,973 |
Grant of incentive securities(1) | | | 28,250,000 | | | 400,000 | | | — | | | — |
Exercise of incentive options | | | (5,000,000) | | | — | | | — | | | (136,746) |
Expiry of performance rights | | | — | | | (1,100,000) | | | — | | | — |
Share-based payment expense | | | — | | | — | | | — | | | 1,172,164 |
Closing balance at June 30, 2018 | | | 79,700,000 | | | 1,500,000 | | | — | | | 1,897,391 |
(1) | For details on the valuation of Incentive Options and Performance Rights, including models and assumptions used, refer to Note 17 of the financial statements. |
(c) | Terms and conditions of Incentive Options |
• | Each Incentive Option entitles the holder to the right to subscribe for one Share upon the exercise of each Incentive Option; |
• | The Incentive Options granted as share based payments at the end of the financial year have the following exercise prices and expiry dates: |
○ | 6,000,000 Incentive Options exercisable at A$0.10 each expiring on July 10, 2020; |
○ | 6,000,000 Incentive Options exercisable at A$0.12 each expiring on January 10, 2021; |
○ | 6,000,000 Incentive Options exercisable at A$0.16 each expiring on July 10, 2021; |
○ | 6,000,000 Incentive Options exercisable at A$0.24 each expiring on July 10, 2022; |
○ | 2,875,000 Incentive Options exercisable at A$0.35 each expiring on December 31, 2020; |
○ | 1,500,000 Incentive Options exercisable at A$0.15 each expiring on June 30, 2021; |
○ | 1,500,000 Incentive Options exercisable at A$0.20 each expiring on June 30, 2022; and |
○ | 23,750,000 Incentive Options exercisable at A$0.16 each expiring on December 31, 2022; |
• | The Incentive Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being satisfied (if applicable); |
• | Shares issued on exercise of the Incentive Options rank equally with the then Shares of the Company; |
• | Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Incentive Options; |
• | If there is any reconstruction of the issued share capital of the Company, the rights of the Incentive Option holders may be varied to comply with the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction; and |
• | No application for quotation of the Incentive Options will be made by the Company. |
(d) | Terms and conditions of Performance Rights |
• | Each Performance Right automatically converts into one Share upon vesting of the Performance Right; |
• | Each Performance Right is subject to performance conditions (as determined by the Board from time to time) which must be satisfied in order for the Performance Right to vest; |
• | The Performance Rights outstanding at the end of the financial year have the following performance conditions and expiry dates: |
○ | 2,500,000 Performance Rights subject to the ‘Integrated Feasibility Study Milestone’, expiring December 31, 2021; and |
○ | 2,500,000 Performance Rights subject to the ‘Construction Milestone’, expiring December 31, 2022. |
• | Shares issued on conversion of the Performance Rights rank equally with the then Shares of the Company; |
• | Application will be made by the Company to ASX for official quotation of the Shares issued upon conversion of the Performance Rights; |
• | If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right holders may be varied to comply with the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction; |
• | No application for quotation of the Performance Rights will be made by the Company; and |
• | Without approval of the Board, Performance Rights may not be transferred, assigned or novated, except, upon death, a participant’s legal personal representative may elect to be registered as the new holder of such Performance Rights and exercise any rights in respect of them. |
(e) | Movements in foreign currency translation reserve |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Balance at July 1 | | | (297,166) | | | 68,917 | | | 318,122 |
Exchange differences arising on translation of foreign operations | | | (499,399) | | | (366,083) | | | (249,205) |
Balance at June 30 | | | (796,565) | | | (297,166) | | | 68,917 |
14. | ACCUMULATED LOSSES |
| | Note | | | 2020 | | | 2019 | |
| | | | US$ | | | US$ | ||
Balance at July 1 | | | | | (46,204,768) | | | (36,382,142) | |
Effect of adoption of IFRS 16 | | | 1(b) | | | (13,009) | | | — |
Expiration of incentive options | | | | | 531,934 | | | — | |
Net loss for the year | | | | | (5,671,099) | | | (9,822,626) | |
Balance at June 30 | | | | | (51,356,942) | | | (46,204,768) |
15. | EARNINGS PER SHARE |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Basic loss per share | | | (0.01) | | | (0.02) | | | (0.02) |
Diluted loss per share | | | (0.01) | | | (0.02) | | | (0.02) |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
The following reflects the income and share data used in the calculations of basic earnings per share: | | | | | | | |||
Net loss | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) |
Earnings used in calculating basic and dilutive earnings per share | | | (5,671,099) | | | (9,822,626) | | | (9,957,817) |
| | Number of Ordinary Shares 2020 | | | Number of Ordinary Shares 2019 | | | Number of Ordinary Shares 2018 | |
Weighted average number of Ordinary Shares used in calculating basic and dilutive earnings per share | | | 828,356,668 | | | 621,391,730 | | | 520,222,133 |
(a) | Non-Dilutive Securities |
(b) | Conversions, Calls, Subscriptions or Issues after June 30, 2020 |
16. | RELATED PARTIES |
(a) | Subsidiaries |
| | Country of Incorporation | | | Equity Interest | |||||||
| | 2020 % | | | 2019 % | | | 2018 % | ||||
Piedmont Lithium, Inc. | | | United States | | | 100 | | | 100 | | | 100 |
Gaston Land Company, LLC | | | United States | | | 100 | | | 100 | | | 100 |
(b) | Ultimate Parent |
(c) | Transactions with Key Management Personnel |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Short-term employee benefits | | | 1,414,164 | | | 1,673,245 | | | 1,153,314 |
Post-employment benefits | | | 27,785 | | | 30,544 | | | 18,876 |
Termination benefits | | | 30,000 | | | — | | | — |
Share-based payments | | | 451,864 | | | 420,529 | | | 957,147 |
Total compensation | | | 1,923,813 | | | 2,124,318 | | | 2,129,337 |
(d) | Other transactions with Related Parties |
17. | SHARE-BASED PAYMENTS |
(a) | Recognised share-based payment expense |
| | 2020 | | | 2019 | | | 2018 | |
| | US$ | | | US$ | | | US$ | |
Expense arising from equity-settled share-based payment transactions | | | (470,939) | | | (438,375) | | | (1,172,164) |
(b) | Summary of Options and Performance Rights granted as share-based payments |
| | 2020 Number | | | 2020 WAEP | | | 2019 Number | | | 2019 WAEP | | | 2018 Number | | | 2018 WAEP | |
Outstanding at beginning of year | | | 84,700,000 | | | A$0.14 | | | 81,200,000 | | | A$0.13 | | | 58,650,000 | | | A$0.10 |
Options granted during the year | | | 25,950,000 | | | A$0.16 | | | 4,950,000 | | | A$0.22 | | | 28,650,000 | | | A$0.17 |
Options exercised during the year | | | (31,500,000) | | | A$0.08 | | | — | | | — | | | (5,000,000) | | | A$0.05 |
Options expired during the year | | | (25,475,000) | | | A$0.17 | | | — | | | — | | | — | | | — |
Rights granted during the year | | | 7,500,000 | | | — | | | — | | | — | | | — | | | — |
Rights lapsed during the year | | | (50,000) | | | — | | | (1,100,000) | | | — | | | (1,100,000) | | | — |
Rights converted during the year | | | (2,500,000) | | | — | | | (350,000) | | | — | | | — | | | — |
Outstanding at end of year | | | 58,625,000 | | | A$0.15 | | | 84,700,000 | | | A$0.14 | | | 81,200,000 | | | A$0.13 |
Series | | | Security Type | | | Number | | | Grant Date | | | Expiry Date | | | Exercise Price A$ | | | Fair Value A$ |
2018 | | | | | | | | | | | | | ||||||
Series 1 | | | Options | | | 6,000,000 | | | 10-Jul-17 | | | 10-Jul-20 | | | $0.10 | | | $0.0480 |
Series 2 | | | Options | | | 6,000,000 | | | 10-Jul-17 | | | 10-Jan-21 | | | $0.12 | | | $0.0470 |
Series 3 | | | Options | | | 6,000,000 | | | 10-Jul-17 | | | 10-Jul-21 | | | $0.16 | | | $0.0460 |
Series 4 | | | Options | | | 6,000,000 | | | 10-Jul-17 | | | 10-Jul-22 | | | $0.24 | | | $0.0450 |
Series 5 | | | Options | | | 150,000 | | | 13-Oct-17 | | | 30-Jun-20 | | | $0.15 | | | $0.1030 |
Series 6 | | | Options | | | 150,000 | | | 13-Oct-17 | | | 30-Jun-20 | | | $0.20 | | | $0.0910 |
Series 7 | | | Options | | | 150,000 | | | 13-Oct-17 | | | 30-Jun-20 | | | $0.25 | | | $0.0810 |
Series 8 | | | Options | | | 1,050,000 | | | 1-Jan-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0910 |
Series 9 | | | Options | | | 1,050,000 | | | 1-Jan-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0850 |
Series 10 | | | Rights | | | 150,000 | | | 1-Jan-18 | | | 31-Dec-18 | | | $Nil | | | $0.1900 |
Series 11 | | | Rights | | | 150,000 | | | 1-Jan-18 | | | 31-Dec-19 | | | $Nil | | | $0.1900 |
Series 12 | | | Options | | | 100,000 | | | 26-Feb-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0680 |
Series 13 | | | Options | | | 100,000 | | | 26-Feb-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0630 |
Series 14 | | | Options | | | 100,000 | | | 12-Mar-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0600 |
Series 15 | | | Options | | | 100,000 | | | 12-Mar-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0560 |
Series 16 | | | Options | | | 500,000 | | | 7-May-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0550 |
Series 17 | | | Options | | | 500,000 | | | 7-May-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0510 |
Series 18 | | | Rights | | | 50,000 | | | 29-May-18 | | | 31-Dec-18 | | | $Nil | | | $0.1790 |
Series 19 | | | Rights | | | 50,000 | | | 29-May-18 | | | 31-Dec-19 | | | $Nil | | | $0.1790 |
Series 20 | | | Options | | | 150,000 | | | 15-Jun-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0810 |
Series 21 | | | Options | | | 150,000 | | | 15-Jun-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0750 |
2019 | | | | | | | | | | | | | ||||||
Series 1 | | | Options | | | 375,000 | | | 13-Jul-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0630 |
Series 2 | | | Options | | | 375,000 | | | 13-Jul-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0590 |
Series 3 | | | Options | | | 500,000 | | | 1-Aug-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0640 |
Series 4 | | | Options | | | 500,000 | | | 1-Aug-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0580 |
Series 5 | | | Options | | | 1,500,000 | | | 7-May-19 | | | 30-Jun-21 | | | $0.15 | | | $0.0680 |
Series 6 | | | Options | | | 1,500,000 | | | 7-May-19 | | | 30-Jun-22 | | | $0.20 | | | $0.0680 |
Series 7 | | | Options | | | 100,000 | | | 1-Oct-18 | | | 30-Jun-20 | | | $0.25 | | | $0.0260 |
Series 8 | | | Options | | | 100,000 | | | 1-Oct-18 | | | 31-Dec-20 | | | $0.35 | | | $0.0240 |
Series | | | Security Type | | | Number | | | Grant Date | | | Expiry Date | | | Exercise Price A$ | | | Fair Value A$ |
2020 | | | | | | | | | | | | | ||||||
Series 1 | | | Options | | | 1,000,000 | | | 17-Dec-19 | | | 30-Jun-20 | | | $0.15 | | | $0.0110 |
Series 2 | | | Options | | | 1,200,000 | | | 17-Dec-19 | | | 30-Jun-20 | | | $0.20 | | | $0.0050 |
Series 3 | | | Options | | | 12,000,000 | | | 18-Mar-20 | | | 31-Dec-22 | | | $0.16 | | | $0.0160 |
Series 4 | | | Options | | | 8,500,000 | | | 19-Mar-20 | | | 31-Dec-22 | | | $0.16 | | | $0.0130 |
Series 5 | | | Options | | | 250,000 | | | 20-Mar-20 | | | 31-Dec-22 | | | $0.16 | | | $0.0160 |
Series 6 | | | Options | | | 1,500,000 | | | 27-Mar-20 | | | 31-Dec-22 | | | $0.16 | | | $0.0180 |
Series 7 | | | Options | | | 1,500,000 | | | 17-Apr-20 | | | 31-Dec-22 | | | $0.16 | | | $0.0190 |
Series 8 | | | Rights | | | 1,500,000 | | | 18-Mar-20 | | | 31-Dec-20 | | | — | | | $0.0700 |
Series 9 | | | Rights | | | 1,000,000 | | | 19-Mar-20 | | | 31-Dec-20 | | | — | | | $0.0630 |
Series 10 | | | Rights | | | 1,500,000 | | | 18-Mar-20 | | | 31-Dec-21 | | | — | | | $0.0700 |
Series 11 | | | Rights | | | 1,000,000 | | | 19-Mar-20 | | | 31-Dec-21 | | | — | | | $0.0630 |
Series 12 | | | Rights | | | 1,500,000 | | | 18-Mar-20 | | | 31-Dec-22 | | | — | | | $0.0700 |
Series 13 | | | Rights | | | 1,000,000 | | | 19-Mar-20 | | | 31-Dec-22 | | | — | | | $0.0630 |
(c) | Weighted Average Remaining Contractual Life |
(d) | Range of Exercise Prices |
(e) | Weighted Average Share Price of Exercised Options |
(f) | Weighted Average Fair Value |
(g) | Option and Right Pricing Models |
| | 2020 | | | 2019 | | | 2018 | ||||||||||
| | Incentive Options | | | Performance Rights | | | Incentive Options | | | Performance Rights | | | Incentive Options | | | Performance Rights | |
Fair value at grant date (weighted average) | | | A$0.015 | | | — | | | A$0.064 | | | — | | | A$0.051 | | | A$0.187 |
Share price at grant date (weighted average) | | | A$0.07 | | | — | | | A$0.16 | | | — | | | A$0.104 | | | A$0.187 |
Exercise price (weighted average) | | | A$0.16 | | | — | | | A$0.22 | | | — | | | A$0.175 | | | — |
Expected life of options/rights (weighted average)1 | | | 2.59 years | | | — | | | 2.01 years | | | — | | | 3.69 years | | | 1.40 years |
Risk-free interest rate (weighted average) | | | 0.44% | | | — | | | 1.59% | | | — | | | 2.11% | | | — |
Expected volatility2 | | | 70% | | | — | | | 78% | | | — | | | 85.00% | | | — |
Expected dividend yield3 | | | — | | | — | | | — | | | — | | | — | | | — |
(1) | The expected life is based on the expiry date of the options or rights. |
(2) | The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. |
(3) | The dividend yield reflects the assumption that the current dividend payout will remain unchanged. |
18. | SEGMENT INFORMATION |
(a) | Reconciliation of non-current assets by geographical location |
| | 2020 | | | 2019 | |
| | US$ | | | US$ | |
United States of America | | | 8,646,178 | | | 2,291,316 |
| | 8,646,178 | | | 2,291,316 |
19. | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES |
(a) | Overview |
(b) | Credit Risk |
| | Note | | | 2020 | | | 2019 | |
| | | | US$ | | | US$ | ||
Cash and cash equivalents | | | 5 | | | 18,857,088 | | | 4,432,150 |
Trade and other receivables | | | | | 27,412 | | | 59,679 | |
Other assets | | | | | 279,052 | | | — | |
| | | | 19,163,552 | | | 4,491,829 |
(c) | Liquidity Risk |
| | ≤1 year | | | 1-5 years | | | ≥5 years | | | Total contractual cash flows | | | Carrying amount | |
| | US$ | | | US$ | | | US$ | | | US$ | | | US$ | |
Group − 2020 | | | | | | | | | | | |||||
Financial assets | | | | | | | | | | | |||||
Sub-lease receivables | | | 121,035 | | | 113,925 | | | — | | | 234,960 | | | 223,559 |
| | 121,035 | | | 113,925 | | | — | | | 234,960 | | | 223,559 | |
| | | | | | | | | | ||||||
Financial liabilities | | | | | | | | | | | |||||
Trade and other payables | | | 1,007,507 | | | — | | | — | | | 1,007,507 | | | 1,007,507 |
Loans and borrowings | | | 777,424 | | | 1,993,988 | | | — | | | 2,771,412 | | | 2,317,618 |
Lease liabilities | | | 156,621 | | | 150,513 | | | — | | | 307,134 | | | 268,425 |
| | 1,941,552 | | | 2,144,501 | | | — | | | 4,086,053 | | | 3,593,550 |
| | ≤1 year | | | 1-5 years | | | ≥5 years | | | Total contractual cash flows | | | Carrying amount | |
| | US$ | | | US$ | | | US$ | | | US$ | | | US$ | |
2019 | | | | | | | | | | | |||||
Financial assets | | | | | | | | | | | |||||
Sub-lease receivables | | | — | | | — | | | — | | | — | | | — |
| | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | ||||||
Financial liabilities | | | | | | | | | | | |||||
Trade and other payables | | | 2,144,071 | | | — | | | — | | | 2,144,071 | | | 2,144,071 |
| | 2,144,071 | | | — | | | — | | | 2,144,071 | | | 2,144,071 |
(d) | Interest Rate Risk |
| | Note | | | 2020 | | | 2019 | |
| | | | US$ | | | US$ | ||
Interest-bearing financial instruments | | | | | | | |||
Cash at bank and on hand | | | 5 | | | 14,307,088 | | | 2,224,380 |
Short term deposits | | | 5 | | | 4,550,000 | | | 2,207,770 |
| | | | 18,857,088 | | | 4,432,150 |
| | Profit or loss | | | Equity | |||||||
| | +1% | | | -1% | | | +1% | | | -1% | |
| | US$ | | | US$ | | | US$ | | | US$ | |
2020 | | | | | | | | | ||||
Cash and cash equivalents | | | 188,571 | | | (29,013) | | | 188,571 | | | (29,013) |
2019 | | | | | | | | | ||||
Cash and cash equivalents | | | 44,322 | | | (44,322) | | | 44,322 | | | (44,322) |
(e) | Foreign Currency Risk |
A$ denominated financial assets and liabilities | | | 2020 A$ exposure (US$ Equivalent) | | | 2019 A$ exposure (US$ Equivalent) |
Financial assets | | | | | ||
Cash and cash equivalents | | | 955,630 | | | 1,028,454 |
Trade and other receivables | | | 24,322 | | | 24,679 |
Financial liabilities | | | | | ||
Trade and other payables | | | (677,952) | | | (260,171) |
Net exposure | | | 302,000 | | | 792,962 |
| | Profit or loss | | | Other Comprehensive Income | |||||||
| | 10% Increase | | | 10% Decrease | | | 10% Increase | | | 10% Decrease | |
| | US$ | | | US$ | | | US$ | | | US$ | |
2020 | | | | | | | | | ||||
Group | | | 30,201 | | | (30,201) | | | 30,201 | | | (30,201) |
2019 | | | | | | | | | ||||
Group | | | 79,296 | | | (79,296) | | | 79,296 | | | (79,296) |
(f) | Commodity Price Risk |
(g) | Capital Management |
(h) | Fair Value |
20. | CONTINGENT ASSETS AND LIABILITIES |
21. | EVENTS SUBSEQUENT TO BALANCE DATE |
(a) | On September 28, 2020, the Company announced that it has entered into a binding agreement with Tesla, Inc. (“Tesla”) for the supply of spodumene concentrate (“SC6”) from Piedmont’s North Carolina deposit to Tesla for an initial five-year term on a fixed-price binding purchase commitment from the delivery of first product. The agreement can be extended by mutual agreement for a second five-year term; |
(b) | On August 10, 2020, the Company announced that it had completed its previously announced private placement to existing non-U.S. institutional and sophisticated shareholders and directors for 120,000,000 of its fully paid ordinary shares, at an issue price of A$0.09 per share (which equates to the same issue price of the Public Offering), to raise gross proceeds of A$10.8 million (~US$7.8 million) (“Private Placement”); |
(c) | On July 23, 2020 the Company announced the results of a bench-scale lithium hydroxide testwork program at SGS Canada, Inc. in Lakefield, Ontario which demonstrated conversion of Piedmont ore to battery-quality lithium hydroxide; and |
(d) | The outbreak of the 2019 novel strain of coronavirus causing a contagious respiratory disease known as COVID-19, and the subsequent quarantine measures imposed by the Australian, United States and other governments, and related travel and trade restrictions have caused disruption to businesses and resulted in significant global economic impacts. As at June 30, 2020 these impacts have not had a significant effect on the Group’s financial results or operations. However, as the impact of COVID-19 continues to evolve, including changes in government policy and business reactions thereto, if our staff are unable to work or travel due to illness or government restrictions, we may be forced to reduce or suspend our exploration and development activities. In addition, as the COVID-19 pandemic and mitigation measures have also negatively impacted global economic conditions, this, in turn, could adversely affect our business in the future. Due to the continually evolving nature of COVID-19 the Directors cannot reasonably estimate the effects that the COVID-19 pandemic could have on the Group in future periods, and believes that any disturbance may be temporary. However, there is uncertainty about the length and potential impact of any resultant disturbance. As a result, we are unable to estimate the potential impact on the company’s future operations as at the date of these financial statements. |
• | the operations, in financial years subsequent to June 30, 2020, of the Consolidated Entity; |
• | the results of those operations, in financial years subsequent to June 30, 2020, of the Consolidated Entity; or |
• | the state of affairs, in financial years subsequent to June 30, 2020, of the Consolidated Entity |
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Dividend Rights. Under our Constitution, subject to the rights of persons (if any) entitled to shares with special rights to dividends, the directors may declare a final dividend be paid out of
profits to the members in accordance with the Australian Corporations Act and may authorize the payment or crediting by us to the members of such a dividend. No dividend carries interest as against us. Under the Australian Corporations Act,
we must not pay a dividend unless: (a) our assets exceed our liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; (b) the payment of the dividend is fair and reasonable to our
shareholders as a whole; and (c) the payment of the dividend does not materially prejudice our ability to pay our creditors. Unless any share is issued on terms providing to the contrary, all dividends are to be apportioned and paid
proportionately to the amounts paid, or credited as paid on the relevant shares.
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Voting Rights. Holders of ordinary shares have one vote per person on a show of hands, or one vote for each ordinary share held on all matters submitted to a vote of shareholders conducted by way of
a poll. Such voting rights may be affected by the grant of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future.
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Rights in the Event of Liquidation. Under our Constitution, in the event of our liquidation, after satisfaction of liabilities to creditors and other statutory obligations prescribed by the laws of
Australia, and the passing of a special resolution giving effect to the following, our assets will be distributed to the holders of ordinary shares in proportion to the shares held by them respectively, irrespective of the amount paid-up or
credited as paid up on the shares. This right may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights, such as the right in winding up to payment in cash of the
amount then paid up on the share, and any arrears of dividend in respect of that share, in priority to any other class of shares.
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the acquisition of a substantial interest if the Australian corporation is valued in excess of the applicable monetary threshold (see below);
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any direct investment by a foreign government investor; and
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any acquisition of shares in an Australian land corporation.
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a natural person not ordinarily resident in Australia;
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a corporation in which a natural person not ordinarily resident in Australia, or a corporation incorporated outside of Australia, holds direct or indirect, actual or potential, voting power of 20.0% or more;
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a corporation in which two or more persons, each of whom is either a non-Australian resident or a non-Australian corporation, hold direct or indirect, actual or potential, voting power in aggregate of 40.0% or more;
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a trustee of a trust estate in which a non-Australian resident or non-Australian corporation holds 20.0% or more of the corpus or income of the trust estate;
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a trustee of a trust estate in which two or more persons, each of whom is either a non-Australian resident or a non-Australian corporation, hold in aggregate 40.0% or more of the corpus or income of the trust estate; or
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a foreign government investor, to ascertain if they may be required to notify the Australian Treasurer of their investment.
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the person’s spouse or de facto partner, lineal ancestors and descendants, and siblings;
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any partner of the person;
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any corporation of which the person is an officer, any officer of a corporation (where the person is a corporation), employers and employees, any employee of a natural person of whom the person is an employee;
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any corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the person or, where the person is a corporation, of the directors of
the person;
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any corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the person is accustomed or under an obligation, whether formal or informal, to act;
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any corporation in which the person holds a substantial interest;
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where the person is a corporation-a person who holds a substantial interest in the corporation;
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the trustee of a trust estate in which the person holds a substantial interest;
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where the person is the trustee of a trust estate-a person who holds a substantial interest in the trust estate; or
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any person who is an associate of any other person who is an associate of the person.
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control of 20% or more of the actual or potential voting power or issued shares in a target by a single foreign person (together with associates); or
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control of 40% or more of the actual or potential voting power or issued shares in a target by multiple foreign persons (together with associates).
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preferential, special or veto voting rights;
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the ability to appoint directors or asset managers;
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contractual agreements including, but not restricted to, agreements for loans, provision of services and off take agreements; or
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building or maintaining a strategic or long-term relationship with a target entity.
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a body politic of a foreign country;
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entities in which governments, their agencies or related entities from a single foreign country have an aggregate interest (direct or indirect) of 20% or more;
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entities in which governments, their agencies or related entities from more than one foreign country have an aggregate interest (direct or indirect) of 40% or more; or
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entities that are otherwise controlled by foreign governments, their agencies or related entities, and any associates, or could be controlled by them including as part of a controlling group.
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Persons depositing or withdrawing ordinary shares or ADS holders must pay the depositary:
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For:
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US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
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Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
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Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
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US$0.05 (or less) per ADS
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Any cash distribution to ADS holders
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A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
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Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
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US$0.05 (or less) per ADS per calendar year
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Depositary services
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Registration or transfer fees
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Registration of transfers of shares on our share register to or from the name of the depositary or its nominee or the custodian or its nominee when you deposit or withdraw shares
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Expenses of the depositary
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Cable and facsimile transmissions (when expressly provided in the deposit agreement)
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Converting foreign currency to U.S. dollars
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Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes
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As necessary
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Any charges incurred by the depositary, custodian or their agents for servicing the deposited securities
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As necessary
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Name
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Jurisdiction of Organization
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Ownership Percentage
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Piedmont Lithium, Inc.
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North Carolina
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100%
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Gaston Land Company, LLC
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North Carolina
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100%
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1. |
I have reviewed this annual report on Form 20-F of Piedmont Lithium Limited;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for,
the periods presented in this report;
|
4. |
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
|
5. |
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or
persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report
financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date:
|
October 13, 2020
|
|
By:
|
/s/ Keith D. Phillips
|
|
Name:
|
Keith D. Phillips
|
|
Title:
|
Chief Executive Officer
(principal executive officer) |
|
1. |
I have reviewed this annual report on Form 20-F of Piedmont Lithium Limited;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for,
the periods presented in this report;
|
4. |
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
|
5. |
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or
persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report
financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date:
|
October 13, 2020
|
|
By:
|
/s/ Gregory Swan
|
|
Name:
|
Gregory Swan
|
|
Title:
|
Chief Financial Officer
(principal financial officer) |
|
1. |
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act, as amended; and
|
2. |
the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of Piedmont Lithium Limited.
|
Date:
|
October 13, 2020
|
|
By:
|
/s/ Keith D. Phillips
|
|
Name:
|
Keith D. Phillips
|
|
Title:
|
Chief Executive Officer
(principal executive officer)
|
1. |
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act, as amended; and
|
2. |
the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of Piedmont Lithium Limited.
|
Date:
|
October 13, 2020
|
|
By:
|
/s/ Gregory Swan
|
|
Name:
|
Gregory Swan
|
|
Title:
|
Chief Financial Officer
(principal financial officer)
|
/s/ Deloitte Touche Tohmatsu
|
|
DELOITTE TOUCHE TOHMATSU
Perth, Australia |
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