2020
Annual Report
DIRECTORS
Gary Johnson (Non-Executive Chair)
Julian (Joe) Walsh (Managing Director)
Mark Rodda (Non-Executive Director)
Cynthia Thomas (Non-Executive Director)
JOINT COMPANY SECRETARIES
Alex Neuling
Shontel Norgate
REGISTERED OFFICE
23 Belmont Avenue
Belmont, WA, Australia, 6104
Telephone: (08) 9363 7800
Facsimile: (08) 9363 7801
Email: info@lepidico.com
PRINCIPAL PLACE OF BUSINESS
23 Belmont Avenue
Belmont, WA, Australia, 6104
PO Box 330 Belmont WA 6984
Website: www.lepidico.com
COUNTRY OF INCORPORATION
Australia
AUDITORS
Moore Australia Audit (WA)
Level 15, Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone: (08) 9225 5355
Facsimile: (08) 9225 6181
SHARE REGISTRY
Automic Pty Ltd
Level 2, 267 St Georges Terrace
PERTH WA 6000
GPO Box 5193 Sydney NSW 2001
Telephone: 1300 288 664
Email: hello@automicgroup.com.au
HOME EXCHANGE
Australian Securities Exchange Limited
Central Park
152 - 158 St Georges Terrace
PERTH WA 6000
ASX CODE: LPD, LPDOB, LPDOC
CORPORATE DIRECTORY
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2020 LEPIDICO ANNUAL REPORT
CONTENTS
HIGHLIGHTS 2
CHAIR’S AND MANAGING DIRECTOR’S LETTER 4
LITHIUM INDUSTRY AND MARKET 6
PROJECT DEVELOPMENT 8
TECHNOLOGY DEVELOPMENT 10
STRATEGIC RESOURCE DEVELOPMENT 14
BOARD OF DIRECTORS & MANAGEMENT 18
SUSTAINABILITY 19
CORPORATE GOVERNANCE STATEMENT 26
FINANCIAL REPORT 37
SUPPLEMENTARY (ASX) INFORMATION 96
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2020 LEPIDICO ANNUAL REPORT
HIGHLIGHTS
SUSTAINABILITY
STRATEGIC
RESOURCE
DEVELOPMENT
• 2020 was incident free: Lepidico has a zero-harm
health, safety and environment track-record since
records began in September 2016.
• P1P exhibits excellent sustainability criteria within
the lithium industry including low CO intensity,
modest water usage and a small operational
footprint amongst other attributes.
as advantages in the form of environmental
reclamation of the existing mine sites.
• Karibib mine and concentrator redevelopments
designated as a Category B Project in terms of the
Equator Principles and IFC Performance Standards
on Social and Environmental Sustainability.
• Inaugural Ore Reserve of 6.7 million tonnes
grading 0.46% LiO, 0.23% rubidium and
320ppm caesium is believed to be the world’s
only Code compliant estimate for the strategic
alkali metals caesium and rubidium.
• Project supported by a Mineral Resource
inventory of 11.2 million tonnes grading 0.43%
LiO which includes 8.9 million tonnes in
Measured and Indicated categories grading
0.43% LiO, 0.23% Rb, 302ppm Cs and 2.08% K.
• Mineral Resource estimates being undertaken in
at Rubicon and Helikon 1.
• Near mine and regional exploration targets
being generated for lithium, caesium and gold,
which the large property package is highly
prospective for.
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2020 LEPIDICO ANNUAL REPORT
PROJECT
DEVELOPMENT
TECHNOLOGY
DEVELOPMENT
integrated Phase 1 Project completed within just 10
months of acquiring the Karibib assets in Namibia.
• DFS reveals attractive Project economics and
fundamentals: 31% Internal Rate of Return; NPV
8%
US$221 million (A$340 million) ungeared, based
on a 14 year production life.
• P1P average output of 4,900tpa lithium hydroxide
at a competitive C1 Cost of US$1,656/t LCE and
an AISC of US$3,221/t after credits from other
products.
• Payback after just over 3 years of operation on
pre-production capital of US$139 million (includes
13.6% contingency), giving a competitive capital
intensity of US$17,400/t LCE on by-product basis,
equivalent to US$27,900/t LCE before credits from
other products.
• Propietary LOH-Max
process batch trials
successfully produced nominal battery grade
lithium hydroxide monohydrate grading
>56.5% LiOH.
• LOH-Max
conventional conversion of spodumene in that
it does not result in the production of sodium
sulphate and can materially reduce process
complexity and thereby capital cost.
• Patent protection received for the L-Max®
technology in Australia, Europe, Japan and the
United States. Provisional patent applications
advancing for LOH-Max
and production of
caesium and rubidium chemicals.
• Proprietary process for production of caesium
and rubidium chemicals from lithium mica
minerals provides technological advantages
for the production of these strategic metals.
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2020 LEPIDICO ANNUAL REPORT
CO
CHAIR’S AND
MANAGING DIRECTOR’S LETTER
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2020 LEPIDICO ANNUAL REPORT
Gary Johnson, Chair and
Joe Walsh Managing Director
We remain committed to developing a sustainable
business that makes quality products for the needs
industry best practice protocols in the areas of
health, safety, the environment, human resources,
sustainability, and stakeholder engagement.
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2020 LEPIDICO ANNUAL REPORT
Review
Technology
LITHIUM INDUSTRY AND MARKET
Source: BMI, ASX
Prices (September 2016 - June 2020)
$25,000
$20,000
$15,000
$10,000
$5,000
$0
$0.08
$0.07
$0.06
$0.05
$0.04
$0.03
$0.02
$0.01
$0.00
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2020 LEPIDICO ANNUAL REPORT
Demand
Supply
Outlook
Lepidico is positioning its
Phase 1 Project to be an early
mover for this next lithium
demand cycle that is expected
to lead to the return of a
healthy incentive price for
quality lithium chemicals
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2020 LEPIDICO ANNUAL REPORT
Denitive Feasibility Study
2
Mines & Concentrator, Namibia
PROJECT DEVELOPMENT
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2020 LEPIDICO ANNUAL REPORT
Logistics
Key Phase 1 Project DFS results:
• NPV
8%
: US$221 million (A$340 million)
• IRR: 31% ungeared
• AISC (LCE): US$3,221/t
• Capital Intensity (LCE): US$17,400/t
• LiOH HO Production: 4,900tpa
• By-products: Caesium, Rubidium, SOP,
Amorphous Silica
• LCE eq Production: 7,000tpa
• Project life: 14 years
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2020 LEPIDICO ANNUAL REPORT
Chemical Conversion Plant, Abu Dhabi
TECHNOLOGY DEVELOPMENT
Lepidico’s proprietary
process technologies provide
a competitive advantage in
the production of critical and
strategic metals from lithium
mica minerals
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2020 LEPIDICO ANNUAL REPORT
L-Max® and LOH-Max® technologies:
• Six years of development including mini plant
and pilot plant manufacture of products
• Demonstrated chemistry through piloting and
product development
• Multiple products maximise revenue potential
and result in minimal waste streams
• Low temperature and atmospheric pressure
leach with no roasting stage required,
allowing for relatively low energy intensity
and greenhouse gas emissions
• Conventional processing equipment and non-
exotic materials of construction
• Relatively short equipment and construction
lead time
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2020 LEPIDICO ANNUAL REPORT
BUSINESS DEVELOPMENT
Transitioning to Development
& Operations
ESIAs
Otake
TECHNOLOGY DEVELOPMENT
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2020 LEPIDICO ANNUAL REPORT
Finance
Engineering & Design
Implementation Milestones
•
•
•
•
•
•
•
•
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2020 LEPIDICO ANNUAL REPORT
STRATEGIC RESOURCE
DEVELOPMENT
Karibib Project
Mineral Resources
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2020 LEPIDICO ANNUAL REPORT
Ore Reserves
Other Exploration
Karibib Ore Reserves are
understood to be the only
publicly quoted code
compliant estimates globally
of strategic metals caesium
and rubidium
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2020 LEPIDICO ANNUAL REPORT
STRATEGIC RESOURCE
DEVELOPMENT
Deposit
Resource
Category
Tonnes
(M)
(%)
Rb
(%)
Cs
(ppm)
Ta
(ppm)
K
(%)
Pit Mt
%
Rb
%
Cs
ppm
Ta
ppm
K
%
Rubicon Pit
Helikon 1 Pit
Total Project
Karibib Mineral Resource estimate
Karibib Ore Reserve estimate
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2020 LEPIDICO ANNUAL REPORT
Competent Persons' Statements
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2020 LEPIDICO ANNUAL REPORT
BOARD OF DIRECTORS
Mr Gary Johnson
Chair (Non-executive)
Mr Julian “Joe” Walsh
Managing Director (Executive)
Ms Cynthia Thomas
Non-Executive Director
Mr Mark Rodda
Non-Executive Director
MANAGEMENT TEAM
JOINT COMPANY SECRETARY
Mr Alex Neuling
CHIEF FINANCIAL OFFICER &
JOINT COMPANY SECRETARY
Ms Shontel Norgate
GENERAL MANAGER – GEOLOGY
Mr Tom Dukovcic
GENERAL MANAGER –
BUSINESS DEVELOPMENT
Mr Peter Walker
BOARD OF DIRECTORS
AND MANAGEMENT
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2020 LEPIDICO ANNUAL REPORT
Corporate Governance
SUSTAINABILITY
Level 2020
2
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2020 LEPIDICO ANNUAL REPORT
Sustainability Policy and Risk
Sustainable Development
•
closure plans developed that employ industry
best practice and will rectify mining and
processing legacy issues, designed to return
the site to agricultural land use
• Symbiotic co-existence with local farmers and
communities
• Enhancement of local community
infrastructure through roads and water supply
• Community support programs developed
and focussed on critical resources, health and
education, diversity and sustainable micro
business development
•
the economy with an estimated eight fold
• Renewable energy supply is favoured with the
local electrical utility objective to have 80%
of power generated from renewable sources
within 5 years
• No tailings storage facility is required as co-
tails with mine waste will be employed, which
• Fossil fuel consumption will be low due to
the requirement for only a small scale mining
and when right-sized equipment becomes
available
• The Karibib Project is fully permitted with
an existing Environmental Compliance
Karibib Project, Namibia
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2020 LEPIDICO ANNUAL REPORT
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2020 LEPIDICO ANNUAL REPORT
ESIA Karibib Operations
SUSTAINABILITY
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2020 LEPIDICO ANNUAL REPORT
ESIA Abu Dhabi Operations
Residue Re-use Opportunities
• Chemical plant development is within an
established purpose built industrial zone that
minimises overall project impacts including
close to port facilities
•
grid power to be supplemented by solar as and
when planned new supply comes on-stream
• Design incorporating heat recovery equipment
to reduce gas consumption
• Low emissions with net carbon intensity and
solid waste recycling into the building industry
in Abu Dhabi
• LOH-Max® eliminates the energy intensive
production of potentially problematic sodium
sulphate, which can’t be easily disposed of due
to its high solubility
•
• Through the UAE and Abu Dhabi Vision 2030,
there is Government support for new projects
and technologies in the economic diversity
initiative that reduces reliance on the oil and
gas industries and general commodity imports
• Project permitting is underway for completion
in the December 2020 quarter
Lepidolite Chemical Conversion
Plant, Abu Dhabi
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2020 LEPIDICO ANNUAL REPORT
SUSTAINABILITY
Carbon Emissions: Current & Future
Water Intensity
Land Use Intensity
Ore Concentrator Waste Minimisation
Social, Community & Stakeholder
Consultation
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Shareholder engagement
Intellectual Property
Goal Outcome Comments
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2020 LEPIDICO ANNUAL REPORT
CORPORATE GOVERNANCE STATEMENT
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
ASX Recommendation 1.1: A listed entity should have and disclose a board charter setting out:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management..
ASX Recommendation 1.2: A listed entity should
(a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for
election as a director; and
(b) provide security holders with all material information in its possession relevant to a decision on whether or not
to elect or re-elect a director.
ASX Recommendation 1.3: A listed entity should have a written agreement with each director and senior executive
setting out the terms of their appointment.
ASX Recommendation 1.4: The company secretary of a listed company should be accountable directly to the Board,
through the chair, on all matters to do with the proper functioning of the Board.
ASX Recommendation 1.5: A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the
composition of its board, senior executives and workforce generally; and
(c) disclose in relation to each reporting period:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives; and
(3) either:
(A) the respective proportions of men and women on the board, in senior executive positions and across
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2020 LEPIDICO ANNUAL REPORT
If the entity was in the S&P / ASX 300 Index at the commencement of the reporting period, the measurable objective
for achieving gender diversity in the composition of its board should be to have not less than 30% of its directors of
Objective Results
Capital for Representation
Level 2020
2
ASX Recommendation 1.6: A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the board, its committees and
individual directors; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with
that process during or in respect of that period.
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2020 LEPIDICO ANNUAL REPORT
ASX Recommendation 1.7: A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting
period; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that
process during or in respect of that period.
PRINCIPLE 2: STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE
ASX Recommendation 2.1: The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) chaired by an independent director;
and disclose:
(3) the charter of the committee;
(5) the members of the committee; and
as at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board
succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience,
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2020 LEPIDICO ANNUAL REPORT
ASX Recommendation 2.2: A listed entity should have and disclose a Board skills matrix setting out the mix of skills that
the Board currently has or is looking to achieve in its membership.
Area Board Skill and Experience
ASX Recommendation 2.3: A listed entity should disclose:
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2020 LEPIDICO ANNUAL REPORT
(a) the names of the directors considered by the board to be independent directors;
that it does not compromise the independence of the director, the nature of the interest, position or relationship in
question and an explanation of why the board is of that opinion; and
(c) provide details in relation to the length of service of each Director.
Director Independent Date of Appointment Length of Service
1
No
No
ASX Recommendation 2.4: The majority of the Board of a listed entity should be independent Directors.
ASX Recommendation 2.5: The Chair of a listed entity should be an independent Director and, in particular, should not be
the same person as the CEO of the entity.
ASX Recommendation 2.6: A listed entity should have a program for inducting new Directors and for periodically
reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and
PRINCIPLE 3: INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
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2020 LEPIDICO ANNUAL REPORT
ASX Recommendation 3.1: A listed entity should articulate and disclose its values.
ASX Recommendation 3.2: A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that code.
ASX Recommendation 3.3: A listed entity should:
(a) have and disclose a Whistleblower Policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
ASX Recommendation 3.4: A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
ASX Recommendation 4.1: The Board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of which are independent
directors; and
(2) is chaired by an independent director, who is not the chair of the board;
and disclose:
(3) the charter of the committee,
(5) In relation to each reporting period, the number of times the committee met throughout the period and the
individual attendances of the members at those meetings; or
(b) If it does not have an audit committee, disclose that fact and the processes it employs that independently verify and
safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement partner.
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2020 LEPIDICO ANNUAL REPORT
ASX Recommendation 4.3: A listed entity should disclose its process to verify the integrity of any periodic corporate
report it releases to the market that is not audited or reviewed by the external auditor.
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
ASX Recommendation 5.1: A listed entity should have and disclose a written policy for complying with its continuous
disclosure obligations under listing rule 3.1.
ASX Recommendation 5.2: A listed entity should ensure that its board receives copies of all material market
announcements promptly after they have been made.
ASX Recommendation 5.3: A listed entity that gives a new and substantive investor or analyst presentation should
release a copy of the presentation materials on the ASX Market Announcements Platform ahead of that presentation.
PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS
ASX Recommendation 6.1: A listed entity should provide information about itself and its governance to investors via its
website.
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2020 LEPIDICO ANNUAL REPORT
ASX Recommendation 6.2: A listed entity should design and implement an investor relations program to facilitate
ASX Recommendation 6.3: A listed entity should disclose how it facilitates and encourages participation at meetings of
security holders.
ASX Recommendation 6.4: A listed entity should ensure that all substantive resolutions at a meeting of security holders
are decided by a poll rather than by a show of hands.
ASX Recommendation 6.5: A listed entity should give security holders the option to receive communications from, and
send communications to, the entity and its security registry electronically.
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2020 LEPIDICO ANNUAL REPORT
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
ASX Recommendation 7.1: The Board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
and disclose:
(3) the charter of the committee,
(4) the members of the committee and
(5) as at each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it
employs for overseeing the entity’s risk management framework.
ASX Recommendation 7.2: The Board or a committee of the Board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and
that the entity is operating with due regard to the risk appetite set by the board; and
(b) disclose, in relation to each reporting period, whether such a review was undertaken.
ASX Recommendation 7.3: A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually
ASX Recommendation 7.4: A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and if it does how it manages or intends to manage those risks.
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2020 LEPIDICO ANNUAL REPORT
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
ASX Recommendation 8.1: The Board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
and disclose:
(3) the charter of the committee,
(4) the members of the committee and
(5) as at each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level
and composition of remuneration for directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
ASX Recommendation 8.2: A listed entity should separately disclose its policies and practices regarding the remuneration
of non-executive Directors and the remuneration of executive Directors and other senior executives.
ASX Recommendation 8.3: A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b) disclose the policy or a summary of that policy.
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2020 LEPIDICO ANNUAL REPORT
DIRECTORS’ REPORT 38
AUDITORS INDEPENDENCE DECLARATION 54
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
AND OTHER COMPREHENSIVE INCOME 55
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 56
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 57
CONSOLIDATED STATEMENT OF CASH FLOW 58
NOTES TO THE FINANCIAL STATEMENTS 59
DIRECTORS’ DECLARATION 90
INDEPENDENT AUDITOR’S REPORT 91
SUPPLEMENTARY (ASX) INFORMATION 96
FINANCIAL REPORT
TABLE OF CONTENTS
38
DIRECTORS’
REPORT
DIRECTORS
CURRENT DIRECTORS
Mr Gary Johnson - Chair (Non-executive)
None
None
None
2020 LEPIDICO ANNUAL REPORT
39
2020 LEPIDICO ANNUAL REPORT
Mr Mark Rodda - Non-Executive Director
None
Ms Cynthia Thomas – Non-Executive Director
None
COMPANY SECRETARIES
Mr Alex Neuling
Ms Shontel Norgate
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2020 LEPIDICO ANNUAL REPORT
MEETINGS OF DIRECTORS
Committee
Committee
Committee
2 2 2 2 0 0
0 0 0 0 2 2
2 2 0 0 0 0 0 0
2 2 2 2 2 2
0 0 0 0 0 0
2 2 2 2 2 2
INFORMATION ON DIRECTORS’ INTERESTS IN SECURITIES OF LEPIDICO
PRINCIPAL ACTIVITIES
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
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2020 LEPIDICO ANNUAL REPORT
DIVIDENDS PAID OR RECOMMENDED
SUMMARY REVIEW OF OPERATIONS
DEVELOPMENT
Integrated Phase 1 Project Feasibility Study
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2020 LEPIDICO ANNUAL REPORT
Alvarrões Lepidolite Mine (Gonçalo), Portugal
1
, Feasibility Study
Phase 2 L-Max® Plant Scoping Study
RESEARCH & DEVELOPMENT
Pilot Plant Product Development, Perth, Western Australia
Lithium carbonate
Lithium hydroxide Monohydrate (LiOH.HO)
®
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2020 LEPIDICO ANNUAL REPORT
Sulphate of potash (SOP)
Amorphous silica
µ
µ
µ
Caesium & Rubidium (Cs & Rb)
Caesium Rich Formate
Rubidium Rich Formate
2
2
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2020 LEPIDICO ANNUAL REPORT
Background
3
EXPLORATION
Karibib Project (80%)
2
2
CORPORATE
Desert Lion Energy Business Combination
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2020 LEPIDICO ANNUAL REPORT
Controlled Placement Facility of $7.5 million Secured
Capital Raising
Patents
L-Max
LOH-Max
Brines and other formates
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2020 LEPIDICO ANNUAL REPORT
S-Max
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
SUBSEQUENT EVENTS
LIKELY DEVELOPMENTS AND EXPECTED RESULTS ON OPERATIONS
INSURANCE AND INDEMNITY OF OFFICERS AND AUDITORS
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2020 LEPIDICO ANNUAL REPORT
OPTIONS
WARRANTS
AUDITOR’S INDEPENDENCE DECLARATION
Cth
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2020 LEPIDICO ANNUAL REPORT
REMUNERATION REPORT (AUDITED)
A. Principles Used To Determine The Nature And Amount Of Remuneration
Non-Executive Directors
Executive Director
Executives
2
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2020 LEPIDICO ANNUAL REPORT
Non-Executive Director Remuneration
Long Term Incentives (LTIs)
Retirement benets
Other benets
Fixed remuneration
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2020 LEPIDICO ANNUAL REPORT
Short-term incentives (STIs)
Long term incentives (LTIs)
Consequences of Performance on Shareholder Wealth
2016 2017 2018 2019 2020
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2020 LEPIDICO ANNUAL REPORT
B. Details Of Remuneration
Amounts of remuneration
Short-term Benets Post-employment benets
Share-
based
payments
Total
Equity
Options
Cash
Salary and
Fees (Paid)
Cash
Salary
and Fees
(Deferred)
Other
(STI)
Retirement
Benets
(Paid)
Retirement
Benets
(Deferred)
Vested
$$ $ $ $ $ $
Non-Executive Directors
2020
2020
2020
2020
Executive Directors
2
2020
Executives
2020
2020
2020
2020
Total Directors’ and
KMP remuneration
2020 1,419,904 128,764 - 33,366 5,169 483,000 2,070,203
2019 1,221,355 - 322,373 42,911 - 520,000 2,106,639
2
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2020 LEPIDICO ANNUAL REPORT
Loans to Key Management Personnel
Other Transactions with Key Management Personnel
2020 2019
$ $
C. Service Agreements
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2020 LEPIDICO ANNUAL REPORT
D. Share Based Compensation
Share Holdings
2020
Balance at
start of year Purchased
Exercised
Options Sold
Other Net
Change
Balance at
end of year
Non-Executive Directors
Executive Directors
Executives
2
2
Option Holdings
2020
Balance at
start of year
Granted
during the
year as
remuneration
Purchased
during
year
Exercised/
Expired during
year
Balance at
end of year
* Vested and
exercisable at
end of year
Non-Executive Directors
Executive Directors
Executives
2
2
Corporations Act 2001
Joe Walsh
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2020 LEPIDICO ANNUAL REPORT
AUDITORS INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS
OF LEPIDICO LIMITED
Corporations Act 2001
Neil Pace MOORE AUSTRALIA AUDIT (WA)
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2020 LEPIDICO ANNUAL REPORT
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
AND OTHER COMPREHENSIVE INCOME
as at 30 June 2020
Note
2020
$
2019
$
Continuing Operations
Loss from continuing operations after tax (10,118,237) (5,105,014)
Other comprehensive income
Items that may be reclassied subsequently to prot or loss
Total comprehensive loss for the year (9,816,667) (5,011,955)
Loss per share for the year attributable to the members of Lepidico Ltd
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2020 LEPIDICO ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2020
Note
2020
$
2019
$
ASSETS
CURRENT ASSETS
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS 59,189,215 38,589,652
EQUITY
TOTAL SHAREHOLDERS EQUITY 59,189,215 38,589,652
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2020 LEPIDICO ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the Year ended 30 June 2020
Attributable to the owners of the Company
Issued
Capital
Reserves Equity
component
of
convertible
note
Accumulated
LossesOptions Warrants
Foreign
Currency Total
Non
Controlling
Interest
Total
Equity
$ $ $ $ $ $ $ $ $
24,499,573
(5,105,014)
93,059
565,000
363,000
-
18,174,034
Balance at 30 June 2019 59,430,846 3,782,750 - 75,918 - (24,699,862) 38,589,652 - 38,589,652
25,508,526
(10,118,237)
301,570
511,000
75,000
-
4,321,704
Balance at 30 June 2020 80,081,594 4,915,097 415,135 377,488 990,000 (34,375,243) 52,404,071 6,785,144 59,189,215
58
2020 LEPIDICO ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOW
For the Year ended 30 June 2020
Note
2020
$
2019
$
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
4,792,713 13,660,308
59
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Basis of Preparation
Reporting Basis and Conventions
Accounting Policies
(a) Going Concern
60
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(b) Principles of Consolidation
(c) Business Combinations
(d) Goodwill
61
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(d) Goodwill (continued)
(e) Income Tax
(f) Property, Plant and Equipment
Depreciation
62
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(g) Exploration and Development Expenditure
(h) Fair Value of Assets and Liabilities
63
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(i) Financial Instruments
Initial recognition and measurement
Classicationandsubsequentmeasurement
Financial liabilities
Financial assets
64
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Equity instruments
Derecognition
Derecognition of nancial liabilities
Derecognition of nancial assets
65
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Impairment
Recognition of expected credit losses in nancial statements
66
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(j) Impairment of Assets
(k) Foreign Currency Transactions and Balances
Functional and presentation currency
Transaction and Balances
Group companies
(m) Provisions
(n) Cash and Cash Equivalents
67
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(o) Revenue
(p) Goods and Services Tax (GST)
(q) Critical Accounting Estimates and Judgements
Key Sources of Estimation Uncertainty
(i) RecoverabilityofExplorationandEvaluationExpenditure
(ii) RecoverabilityofIntangibleAsset(DevelopmentExpenditure)
(iii) Sharebasedpaymenttransactions
68
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
(r) Intangibles Assets – Intellectual Property Development Expenditure
•
•
•
•
•
•
(s) New and Amended Accounting Policies Adopted by the Group
AASB 16: Leases
(t) New Accounting Standards for Application in Future Periods
(u) Comparative Figures
69
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 2: Controlled Entities
Country of
Incorporation
Interest as at
30 June
(%)
Principal Activity
2020 2019
Parent Entity:
Subsidiaries of Lepidico Ltd:
0
0
0
0
0
70
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 3: Business Combination
(a) Summary of acquisition
(b) Purchase Consideration
$
Total Purchase Consideration 22,932,240
(c) Net assets acquired
$
Net assets acquired 22,932,240
71
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 3: Business Combination (continued)
(d) Non-controlling Interest
(e) Acquisition related expenses
Note 4: Revenue
2020
$
2019
$
Other Income 63,558 59,110
Total Revenue 63,558 59,110
Note 5: Administrative Expenses
2020
$
2019
$
Total Administrative Expenses 2,821,926 1,827,998
72
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 6: Income Tax Expense
2020
$
2019
$
(a)
(b)
(c)
73
2020 LEPIDICO ANNUAL REPORT
2020
$
2019
$
(d)
(e)
Note 7: Auditor’s Remuneration
2020
$
2019
$
Note 8: Earnings per Share
2020
$
2019
$
$ $
No. No.
Note 9: Cash and Cash Equivalents
2020
$
2019
$
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 6: Income Tax Expense (continued)
74
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 10: Trade and Other Receivables
2020
$
2019
$
Current
Total Current Trade and Other Receivables 1,766,863 1,148,086
Non-Current
Total Non-Current Trade and Other Receivables 72,829 71,729
Total Trade and Other Receivables 1,839,692 1,219,815
Note 11: Property, Plant and Equipment
Buildings &
Infrastructure
Furniture,
Fittings &
Equipment
Motor
Vehicles
Assets under
Construction Total
$ $ $ $ $
Cost
Balance at 30 June 2019 - 70,015 - - 70,015
Balance at 30 June 2020 1,741,511 266,067 215,359 2,392,807 4,615,744
Accumulated Depreciation
Balance at 1 July 2018 - 78,552 - - 78,552
Balance at 30 June 2019 - 50,330 - - 50,330
Balance as at 30 June 2020 130,510 124,843 63,954 2,392,807 2,712,114
Net Book Value
At 30 June 2020 1,611,001 141,224 151,405 - 1,903,630
75
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 12: Exploration and Evaluation Expenditure
2020
$
2019
$
2020
$
2019
$
Reconciliation of movements during the year:
Balance at the end of the year 42,725,634 1,928,203
Note 13: Intangible assets
2020
$
2019
$
2020
$
2019
$
Reconciliation of movements during the year:
Balance at the end of the year 23,870,434 22,925,130
76
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 14: Trade and Other Payables
2020
$
2019
$
Current
Total Current Trade and Other Payables 564,671 1,077,812
Note 15: Provisions
2020
$
2019
$
Current
2020
$
2019
$
Reconciliation of movements during the year:
Balance at the end of the year 107,652 85,677
Note 16: Convertible Note
$
Total fair value of Convertible Note on acquisition 6,394,960
77
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 16: Convertible Note (continued)
$
Carrying amount of the liability component 5,215,104
Note 17: Deferred Revenue
Note 18: Contributed Equity
a) Share capital
2020 2019
Number $ Number $
78
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 18: Contributed Equity (continued)
a) Share capital (continued)
Movements in ordinary share capital
Description Date
Number of
shares Issue Price $
b) Share options
Number Exercise Price Grant Expiry
79
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 18: Contributed Equity (continued)
b) Share options (continued)
Movements in Options
Weighted
Average Exercise
Price
Number $
c) Warrants
Number Exercise Price Recognised Expiry
Movements in Warrants
Number Weighted Average
Exercise Price
80
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 18: Contributed Equity (continued)
d) Share Based Payments
(i) Desert Lion Business Combination
(ii) Bacchus Capital Advisors
(iii) Related Party Options
Unlisted Options
Option life
(iv) Controlled Placement Agreement
81
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 19: Reserves
2020
$
2019
$
Total Reserves 5,707,720 3,858,668
a) Option Reserve
2020
$
2019
$
Closing Balance 4,915,097 3,782,750
b) Warrant Reserve
2020
$
2019
$
Closing Balance 415,135 -
c) Foreign Currency Translation Reserve
2020
$
2019
$
Closing Balance 377,488 75,918
Note 20: Contingent Liabilities and Contingent Assets
82
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 21: Segment reporting
Reportable Segments
Mineral
Exploration Technology
Corporate &
Unallocated items Total
$ $ $ $
(i) Segment performance
Year ended 30 June 2020
Year ended 30 June 2019
(ii) Segment assets
Geographical Information
Australia Canada Africa UAE Europe Total
$ $ $ $ $ $
(i) Segment
performance for
the year ended:
30 June 2020
30 June 2019
ii) Segment assets
30 June 2019
83
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 22: Commitments
Operating lease commitments
2020 2019
$ $
Exploration lease commitments
30 June
2020
30 June
2019
$ $
Note 23: Cash Flow Information
2020 2019
$ $
Reconciliation of Cash Flow from Operations
with Loss after Income Tax
84
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 24: Related Party Transactions
Key Management Personnel Remuneration
2020 2019
$ $
2,070,203 2,106,639
Payments to director-related parties
2020 2019
$ $
Note 25: Financial Risk Management
85
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 25: Financial Risk Management (continued)
(a) Credit Risk
Note
2020
$
2019
$
Financial assets
6,632,405 14,808,394
(b) Liquidity Risk
30 June 2020
Note
Carrying
amount
Contractual
cash
outows
Within 1
year 1-2 years 2-5 years
Total 12,408,919 5,893,136 5,893,136 - -
86
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 25: Financial Risk Management (continued)
(b) Liquidity Risk (continued)
30 June 2019
Note
Carrying
amount
Contractual
cash
outows Within 1 year
$ $ $
Assets pledged as security
(c) Market Risk
(i) Interest Rate Risk
2020 2019
% $ % $
Financial assets
2020
$
2019
$
Change in Loss
Change in Equity
87
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 25: Financial Risk Management (continued)
(c) Market Risk (continued)
(ii) Currency Risk
30 June 2020
NAD CAD USD GBP EUR
$ $ $ £ €
Note
Net currency exposure (957,283) (4,202,639) (4,548,627) 39,286 -
30 June 2019
NAD CAD USD GBP EUR
$ $ $ £ €
Note
Net currency exposure - (390,703) 9,963 - 7,792
88
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 25: Financial Risk Management (continued)
(c) Market Risk (continued)
ii) Currency Risk (continued)
Average rate Reporting date spot rate
2020 2019 2020 2019
Sensitivity Analysis
2020
$
2019
$
NAD
CAD
USD
(iii) Commodity Price Risk
(iv) Capital Management
89
2020 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2020
Note 26: Parent Entity Financial Information
2020
$
2019
$
Assets
60,057,622 50,364,845
Liabilities
325,310 507,622
Shareholders’ Equity
59,732,312 49,857,223
Result of the parent entity
Total comprehensive loss for the year (8,840,284) (2,852,020)
(b) Contractual commitments for the acquisition of property, plant and equipment
(c) Guarantees and contingent liabilities
Note 27: Events Subsequent to Reporting Date
Industrial License Awarded for Abu Dhabi Free Zone
90
2020 LEPIDICO ANNUAL REPORT
DIRECTORS’ DECLARATION
Joe Walsh
91
2020 LEPIDICO ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LTD
REPORT ON THE AUDIT
OF THE FINANCIAL REPORT
Opinion
Corporations Act 2001
Corporations Regulations 2001
Basis for Opinion
92
2020 LEPIDICO ANNUAL REPORT
Key Audit Matters
Carrying value of Exploration & Evaluation Expenditure and Intangible Assets
•
•
•
•
•
•
•
•
93
2020 LEPIDICO ANNUAL REPORT
Key Audit Matters (continued)
Acquisition of Desert Lion Energy Inc
•
•
•
•
•
Related Party Transactions & Share Based Payments to Key Management Personnel
•
•
•
•
•
•
•
•
•
94
2020 LEPIDICO ANNUAL REPORT
Key Audit Matters (continued)
Group’s ability to continue as a Going Concern
•
•
•
•
Other Information
Responsibilities of the Directors for the Financial Report
Auditor’s Responsibilities for the Audit of the Financial Report
95
2020 LEPIDICO ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LIMITED (CONTINUED)
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
Responsibilities
Neil Pace
PARTNER
MOORE AUSTRALIA AUDIT (WA)
96
2020 LEPIDICO ANNUAL REPORT
SUPPLEMENTARY (ASX) INFORMATION
FULLY PAID ORDINARY SHARES (ASX:LPD)
Top 20 Holders of Fully Paid Ordinary Shares
Shareholder Number %
2
20
Total 2,004,052,807 38.66%
Substantial Shareholders
Shareholder Number of Shares %
Distribution of Shares
Number Held Holders
Total Number of Shareholders 7,968
97
2020 LEPIDICO ANNUAL REPORT
LISTED OPTIONS EXPIRING 5 JUNE 2022 AT $0.05 (ASX : LPDOB)
Top 20 Holders of Listed Options
Shareholder Number %
2
20
Total 75,824,668 39.75%
Distribution of Listed Options
Number Held Holders
Total Number of Option Holders 1,767
98
2020 LEPIDICO ANNUAL REPORT
LISTED OPTIONS EXPIRING 18 MAY 2022 AT $0.02 (ASX : LPDOC)
Top 20 Holders of Listed Options
Shareholder Number %
2
20
Total 140,876,129 51.04%
Distribution of Listed Options
Number Held Holders
Total Number of Option Holders 985
99
2020 LEPIDICO ANNUAL REPORT
UNLISTED OPTIONS
Unlisted Option holdings as at 2 October 2020
A B C D E F G H I J K
2
2
Total number of holders 4 1 3 6 1 2 5 5 4 8 10
100
2020 LEPIDICO ANNUAL REPORT
UNLISTED WARRANTS
Unlisted Warrant holdings as at 2 October 2020
Number Held A B
Total number of holders 11
19
VOTING RIGHTS
UNMARKETABLE PARCELS
Minimum Parcel Size Holders Shares
Minimum $500.00 parcel at $0.08 per share
RESTRICTED AND ESCROWED SECURITIES
ON-MARKET BUY-BACK
TENEMENT INFORMATION
NAMIBIAN OPERATIONS, Karibib Project
Karibib Project Tenement Schedule
Tenement ID Registered Holder Lepidico Interest Expiry Date Area
ML 204
EPL 5439
EPL 5555
EPL 5718
www.lepidico.com
2020 LEPIDICO ANNUAL REPORT
