Announcement PDF LITHIUM CONSOLIDATED LTD (formerly known as Lithium Consolidated Mineral Exploration Ltd) ACN 612 008 358 CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019 LITHIUM CONSOLIDATED LTD ACN 612 008 358 Phone: +61 7 3212 6299 Fax: +61 7 3212 6250 Address: Level 6, 10 Market Street, Brisbane Q 4000 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Contents Cautionary Statements 2 Corporate Information 3 Letter from the Chairman 4 Review of Operations 5 Directors’ Report 14 Auditor’s Independence Declaration 28 Shareholder Information 29 Interests in Tenements 32 Corporate Governance Statement 33 Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 30 June 2019 40 Consolidated Statement of Financial Position as at 30 June 2019 41 Consolidated Statement of Changes In Equity for the Year Ended 30 June 2019 42 Consolidated Statement of Cash Flows for the Year Ended 30 June 2019 43 Notes To The Consolidated Financial Statements for the Year Ended 30 June 2019 44 Director’s Declaration 70 Independent Auditor’s Report 71 Page 1 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Cautionary Statements Forward-looking statements This document may contain certain forward-looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the company’s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement. The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled. LCME undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this document (subject to securities exchange disclosure requirements). The information in this document does not take into account the objectives, financial situation or particular needs of any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice. Competent Person Statement The information in this report that relates to the geological descriptions of the Company’s Zimbabwe Projects is based on information reviewed and compiled by Michael Cronwright, a Competent Person who is a fellow of The Geological Society of South Africa and Pr. Sci. Nat. (Geological Sciences) registered with the South African Council for Natural Professions. Mr Cronwright is a Principal Consultant with The MSA Group (Pty) Ltd, a South African based consultancy. Mr Cronwright has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Cronwright consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Information in this report that related to Exploration Results for the Company’s Yilgarn Lithium Project (in Western Australia) is based on and fairly represents information and supporting documentation prepared by Mr Adrian Black. Mr. Black is a director of Newexco Services Pty Ltd, an independent geological consultancy contracted by LCME. Mr Black is a member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results. Specifically, Mr. Black consents to the inclusion in this report of the matters based on his information in the form and context in which they appear. Page 2 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 Corporate Information Directors and Company Secretary Mr Brian Moller (Non-Executive Chairman) Mr Shanthar Pathmanathan (Executive Director) Mr Vincent Mascolo (Non-executive Director) Mr Duncan Cornish (Company Secretary) Head Office and Registered Office Lithium Consolidated Ltd Level 6, 10 Market Street Brisbane QLD 4000 Tel: +61 7 3212 6299 Fax: +61 7 3212 6250 www.li3limited.com Auditors BDO Audit Pty Ltd Level 10, 12 Creek Street Brisbane QLD 4000 Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au Share Registry Link Market Services Limited Level 21, 10 Eagle Street Brisbane QLD 4000 Tel: 1300 554 474 www.linkmarketservices.com.au Stock Exchange Listing Australian Securities Exchange Ltd ASX Code: LI3 Australian Company Number 612 008 358 Solicitor HopgoodGanim Lawyers Level 8, Waterfront Place 1 Eagle Street Brisbane QLD 4000 Tel: +61 7 3024 0000 Fax: +61 7 3024 0300 www.hopgoodganim.com.au Banker Commonwealth Bank of Australia 180 Ann Street Brisbane QLD 4000 Page 3 ANNUAL REPORT 2019 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Letter from the Chairman Dear Shareholder The past year has been a challenging time for exploration and mining companies in the Lithium sector. Against this background, Lithium Consolidated Ltd (Li3 or the Company) has focused much of its activities in the past year on its Western Australian, Mozambique and Zimbabwe portfolio of assets. In Western Australia, the Company has undertaken an initial drilling program at the Yilgarn Lithium Project which has confirmed the presence of concealed LCT pegmatites in at least 3 Licenses and now has secured 16 Exploration Licenses in the Yilgarn Province of Western Australia, Australia. In Mozambique, the Company has now secured 5 granted exploration licenses over 31,481 ha, providing a significant land position in the Alto Ligonha Pegmatite Province in northern Mozambique. The intention in the coming year is to focus on 9166L license which has been prioritized for immediate exploration based on a potentially very large interpreted pegmatite which appears to be 1,000m along strike with variable widths of up to 300m. In Zimbabwe Li3 has established a dominant land position in the Mutare Greenstone Belt in eastern Zimbabwe, holding 8 lithium exploration assets consisting of 59 granted licences covering an area of 1,800 ha and an additional 13 licences under application (an additional 1,003 ha). Li3 has completed initial grab sampling of the Nels Luck and Bepe pegmatites, with encouraging results of between 1.3% to 8.6% Li2O, confirming the presence of lithium minerals, including spodumene, at these pegmatites. The Odzi West asset has been prioritized for immediate exploration. Li3 was able to reach agreement with ASX listed Argosy Minerals Ltd, selling Li3's interest in the Nevada Tonapah claims on terms which affords Li3 exposure to any future upside in the Nevada claims, allowing it to focus on its hard rock Lithium assets in Western Australia, Mozambique and Zimbabwe. Proceeds from the Entitlement Offer (and Additional Placement) announced on 30 July 2019 Li3 will be applied to fund exploration programs over the next 6-12 months at the higher priority assets in Western Australia, Mozambique and Zimbabwe. We were delighted to supplement our technical team with the addition of Sally Bevington during the year. On behalf of the Board, I would like to thank you for your support of the Company and look forward to bringing you further news as our exploration efforts continue. Yours faithfully Brian Moller Chairman Page 4 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Exploration and development activities at the Group’s assets during the year are detailed below. Li3’s portfolio consists of: ▪ 100% of 8 lithium exploration assets in the Mutare Greenstone Belt in Zimbabwe; ▪ 100% of 6 license applications in the Alto Ligonha Pegmatite Province of northern Mozambique, 5 of which have been granted while 1 application is still pending; and ▪ 100% of Yilgarn Lithium Project (YLP) in Western Australia consisting of 16 Exploration Licenses, including 14 granted Exploration Licenses and 2 Exploration License Applications, covering 747 km2. Figure 1: Company Structure Lithium Consolidated Limited ACN 612 008 358 ASX CODE: Li3 100% 100% 100% Western Australia Mozambique Zimbabwe 16 Lithium exploration assets 6 Lithium exploration assets 8 Lithium exploration assets Note: Ownership in Western Australia Licenses subject to a 2.0% Royalty Li3 has hard rock lithium assets in the known lithium provinces of Western Australia, Mozambique and Zimbabwe. Li3 has implemented a multiple assets strategy to provide our shareholders with the greatest exposure to the global growth in demand for lithium. During FY 2019, Li3 has made substantial progress in securing the grant of, multiple, significant lithium exploration assets in Western Australia, Mozambique and Zimbabwe. Li3’s Yilgarn Lithium Project is in Western Australia, which is the largest and most active lithium province globally and with a dominant share of global hard rock lithium production. The YLP hard rock lithium targets are in extensions of known lithium pegmatite belts, in deeply weathered and shallowly covered areas of Archean Yilgarn Craton. The Phase 1 drilling at the Yilgarn Lithium Project has confirmed the presence of concealed LCT pegmatites in 3 of the Licenses. The African lithium provinces are characterised by at-or-near surface Lithium-Caesium-Tantalum (LCT) pegmatites, which are visible in outcrops and/or historical workings. Many of the pegmatites in Africa have been mined for columbo-tantalite, tin, and gemstones, but largely unexplored and under-explored for lithium. The current exploration maturity in Mozambique and Zimbabwe is similar to that which existed in the Pilbara and Yilgarn Craton pegmatites of Western Australia, approximately 10 years or so ago, before modern lithium-focused exploration. Li3’s high priority assets in each lithium province, includes: ▪ Dundas, Bedonia and Junction in Western Australia; ▪ 9166L in Mozambique; and ▪ Odzi West in Zimbabwe. Page 5 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations The Company’s strategy is to: ▪ develop a globally significant portfolio of hard rock lithium exploration assets and potential, future lithium mines; ▪ immediately undertake exploration at our higher priority assets in Western Australia, Mozambique, and Zimbabwe; and ▪ pursue acquisition opportunities. Western Australia The Yilgarn Lithium Project (YLP) is a hard-rock lithium project located in the Yilgarn Province of Western Australia, Australia comprising 16 Exploration Licenses, including 14 granted Exploration Licenses and two (2) pending Exploration License Applications, covering 747 km2. The YLP licences are in: ▪ extensions of known lithium-fertile belts, and what are believed to be new previously unrecognised belts, both which are close to “fertile” granites considered to be the sources of the LCT pegmatites in the region; ▪ deeply weathered and shallowly covered areas of Archean Yilgarn Craton which have the potential to host hard rock spodumene (lithium mineral) bearing pegmatite mineralisation, similar to that found at Greenbushes, Mt Marion and Mt Holland; and ▪ geologically favourable zones displaying high prospectivity for LCT pegmatites, over areas with potential to host shallow, concealed LCT pegmatites that were overlooked in the early tantalum boom of the 1960s and the current Yilgarn lithium exploration and mine development activity. Figure 2: Regional Location of YLP Licences Page 6 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Exploration Activity There were no exploration activities at YLP during FY2019. A Phase 1 exploratory drilling program, consisting of shallow aircore drilling was completed at YLP, in FY2018 (see ASX Announcement dated 6 April 2018). The results indicate the presence of Lithium-Caesium-Tantalum (LCT) pegmatites, in deeply weathered rocks and under cover within three (3) of the Licenses. Anomalous levels of Li and associated LCT pegmatite pathfinder elements (i.e. Cs, Nb, Rb, Sn, Ta) were intersected in holes in the E63/1826 (Dundas), E63/1814 (Bedonia) and E63/1813 (Ten Mile) licenses. Elevated levels of LCT pegmatite pathfinder elements were also intersected in several holes at Snomys. Land Management YLP consists of 16 Exploration Licenses, including 14 granted Exploration Licenses and two (2) pending Exploration License Applications, covering 747 km2. During FY 2019, four (4) exploration licenses were granted, including E28/2732, E28/2743, E63/1877 and E69/3540. Mozambique The Company has established a significant land position in the Alto Ligonha Pegmatite Province in northern Mozambique through the ownership of five (5) exploration licenses over an area of 31,481ha. Li3 is the first ASX-listed company to enter Mozambique for hard-rock lithium in an area where pegmatites were historically exploited for their beryl, rare-earth minerals and gemstones making the country the second largest beryl producer in the world during the 1960’s. The Alto Ligonha Pegmatite Province (ALPP) encompasses most pegmatites within Mozambique. Outcropping pegmatites are interpreted in our five (5) licenses and have potential for extensions at shallow depths, which may be confirmed through modern lithium-focussed exploration. The Mozambique assets include: ▪ 9166L: extensive artisanal workings were identified from the satellite imagery. The spectral response from the satellite imagery indicates the potential for a large pegmatite body to be present underneath the extensive workings. ▪ 9167L: At least nine (9) tracts of artisanal workings have been identified within this license which is located within the southwestern part of the ALPP pegmatite field. Pegmatites within this area have been described as containing gem beryl (aquamarine), columbite-tantalite, tourmaline and rareearth minerals. The Murrule-Nigule pegmatite has been recorded within the licence area. ▪ 9168L: This License is located within the highly prospective Alto Ligonha Pegmatite field and contains four (4) tracts of artisanal workings, three (3) of which are located on recorded pegmatites comprising the Ingela pegmatite cluster, which is recorded as containing beryl and tantalite-columbite series minerals. No lithium minerals have been reported historically from these pegmatites. ▪ 9188L: This asset is located in the northern part of the ALPP pegmatite field with three (3) mapped pegmatites within the license boundaries, Guilherme, Malapa and Muetia. Numerous scattered tracts of artisanal workings have been identified from the satellite imagery, around these pegmatites, which have been interpreted as clusters of pegmatite bodies. ▪ 9190L: This license is located in the Alto Ligonha Pegmatite field and contains the recorded Piteia and Nahia-Iaia pegmatites. Piteia reportedly contains beryl and lithium minerals while beryl and columbite-tantalite minerals are contained within the Nahia-Iaia pegmatite. Numerous artisanal workings are present over both pegmatites. Page 7 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Figure 3: Location plan of the Mozambique assets over Google imagery Note: Additional Licenses under application for new areas of interest are not shown on this map. High Priority Asset: 9166L The 9166 L License has been prioritized for immediate exploration based on extensive artisanal workings over a potentially large pegmatite, which has been interpreted based on detailed spectral analysis of satellite imagery over this area. The interpreted pegmatite is potentially over 1,000m along strike with variable widths of up to 300m being observed. Note that the observed widths do not represent the true width of the pegmatite. Page 8 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Figure 4: Interpreted pegmatite and associated workings within license 9166L shown over ESRI satellite imagery Infrastructure Northern Mozambique has well-developed infrastructure for mining. The Mozambique Licenses are in close proximity to the Mocuba – Nampula main road, a sealed, all weather road. The recently upgraded Nacala railway corridor connects Nampula to the natural deep-water port of Nacala, which is the principal port for the export of coal from mining operations at Moatize. Exploration Activities There were no exploration activities at the Mozambique Assets in FY2019. However, there has been considerable historical mining and exploration activities at the pegmatites in the ALPP. Mining of the pegmatites in northern Mozambique commenced in 1926 and continued for several decades with the country becoming the world’s second largest producer of beryl, and contributing significantly to lithium, niobium and tantalum production in the 1960’s. Li3 will commence exploration activities in Mozambique in the first quarter of FY2020, focussing initially on the 9166L License. Page 9 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Field mapping and rock chip sampling of the outcrops and historical workings will also be conducted over the other four license areas. A Phase 1 drilling program would then be implemented based on the results of the geochemical sampling program at the most prospective Licenses. Land Management During FY2019, Li3 was granted five (5) lithium exploration licenses in the Alto Ligonha Pegmatite Province of central-northern Mozambique, covering an area of 31,481ha (314.8km2). Zimbabwe Li3 has established a dominant land position in the Mutare Greenstone Belt in eastern Zimbabwe, through eight (8) lithium exploration assets consisting of a total of 72 Licenses over an area of 2,803ha, where 59 have been granted (1,800ha) and the remainder are pending grant. Li3 is one of the first ASX-listed companies to enter Zimbabwe for hard-rock lithium despite Zimbabwe being a known lithium province and ranked as the fifth largest lithium producer globally, based on production from a single mine, the Bikita mine. The Mutare Greenstone Belt is believed to be highly prospective for pegmatite hosted lithium deposits based on historical information and recent image analysis, in which flat-lying pegmatites with potential for open-pit mining were interpreted. The Zimbabwe assets include: ▪ Odzi West: The pegmatites in this asset were historically mined for beryl and tantalite, and petalite and spodumene have been documented as being present. 22 licenses cover this area at the south-western end of the Mutare Greenstone Belt in which at least seven (7) clusters of artisanal workings can be observed from the satellite imagery. ▪ Nels Luck: Eight (8) licenses cover outcropping and sub-outcropping pegmatites. The main pegmatite contains a discontinuous quartz core bordered by zones of cleavelandite with tantalite, lepidolite and zinnwaldite float. Spodumene has been identified in the area from grab samples collected. There are a number of artisanal workings in the project area. ▪ Bepe: Spodumene and petalite bearing pegmatites in the Bepe area were historically mined for tantalite, beryl and other pegmatite minerals. 15 licenses cover portions of these historic workings as well as interpreted extensions of the mined pegmatites. ▪ Chisuma: Six (6) licenses cover the interpreted pegmatites which have been partially exposed through artisanal workings throughout the project area. ▪ Day Dawn: Four (4) licenses cover scattered artisanal workings which appear to be focussed on interpreted pegmatite exposures. ▪ Grey Lady: The six (6) licenses cover a historic beryllium mine with reported lithium mica, lepidolite and zinnwaldite observed in the associated pegmatites. ▪ Magoda: Eight (8) licenses cover historic workings along the identified trend in this asset. ▪ Tals 5: A single license covers a cluster of shallow pits in which beryl was historically mined from the exposed pegmatite which is potentially of the Complex LCT type. Page 10 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Figure 5: Location plan of the Zimbabwe assets over Google imagery High Priority Asset: Odzi West The Odzi West asset has been prioritized for immediate exploration in Zimbabwe based on historical observations of spodumene at surface and the increased potential for flat-lying pegmatites for future open-pit mining. At least seven (7) clusters of artisanal workings have been interpreted from satellite imagery with spodumene having been recorded historically in the beryl and tantalite workings. The Odzi West area is particularly significant due to the increased potential for flat-lying, near surface sheet-like configuration of the interpreted pegmatites, for future open-pit mining. Page 11 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations Figure 6: Interpreted pegmatite and pegmatite workings within the larger pegmatite play within the Odzi West license area (shown over Google imagery) Infrastructure The Zimbabwe Projects are 300km from the port of Beira in Mozambique and approximately 60km from the Mutare Railhead on the border between Zimbabwe and Mozambique, which is connected to the port of Beira in Mozambique by the operating Mutare-Beira railway line. Exploration Activities during FY2019 Li3 completed the following exploration activities: ▪ compilation of all available historical information as well as spectral analysis of ESRI portal satellite imagery; ▪ field reconnaissance of all of the Zimbabwe assets, which confirmed the presence of LCT pegmatites in four (4) of the assets; and ▪ initial grab sampling of the Nels Luck and Bepe pegmatites, with encouraging results of between 1.3% to 8.6% Li2O, confirming the presence of lithium minerals, including spodumene, at these pegmatites. Page 12 LITHIUM CONSOLIDATED LTD - ACN 612 008 358 ANNUAL REPORT 2019 Review of Operations The Odzi West asset has been prioritized for immediate work during the upcoming FY2020 exploration program in Zimbabwe. Land Management Li3 has eight (8) lithium exploration assets consisting of a total of 70 Licenses over an area of 2,803 ha, where 59 have been granted (1,800 ha) and the remainder are pending grant. There are an additional two (2) Licenses, under application, covering an area of 155ha, in the Mutoko District in eastern Zimbabwe. During FY 2019, Li3 was granted 30 Prospecting Licenses to consolidate our position over key lithium pegmatite targets. Nevada The Company has sold its 80% interest in the Tonopah Lithium Project in the Clayton Valley, in West Central Nevada, in the United States of America, to ASX listed Argosy Minerals Ltd. Page 13 LITHIUM CONSOLIDATED LTD- ACN 612 008 358 ANNUAL REPORT 2019 Directors’ Report The directors submit their report on the consolidated entity (“Group”) consisting of Lithium Consolidated Ltd and the entities it controlled at the end of, and during, the financial period ended 30 June 2019. Directors The following persons were directors of Lithium Consolidated Ltd during the financial period and up to the date of this report, unless otherwise stated: Mr Brian Moller Mr Shanthar Pathmanathan Mr Vincent Mascolo Information on Directors The board has a strong combination of technical, managerial and capital markets experience. Expertise and experience includes operating and mineral exploration. The names and qualifications of the current directors are summarised as follows: Brian Moller – Non-Executive Chairman Mr Moller specialises in capital markets, mergers and acquisitions and corporate restructuring, and has acted in numerous transactions and capital raisings in the industrial, resources and energy sectors. He has been a partner at the legal firm, HopgoodGanim for 30 years and leads the Corporate Advisory and Governance practice. Mr Moller acts for many publicly listed companies in Australia and regularly advises boards of directors on corporate governance and related issues. Mr Moller is a solicitor of the Supreme Court of Queensland and Solicitor and Barrister of the Supreme Court of Western Australia. Mr Moller is a Non-Executive Director of ASX listed DGR Global Ltd, Platina Resources Ltd, Dark Horse Resources Ltd (formerly Navaho Gold Limited) and chairman of ASX listed AusTin Limited and the dual TSX and AIM-listed SolGold plc. During the past three years, Mr Moller has also served as a director of the following listed companies: ▪ DGR Global Ltd* ▪ Aus Tin Mining Limited* ▪ Dark Horse Resources Limited* ▪ Aguia Resources Limited (resigned 14 June 2019) ▪ Platina Resources Ltd* ▪ Solgold PLC*^ *denotes current directorship ^denotes listed on the Toronto Stock Exchange and the London Stock Exchange Mr Moller is a member of the Audit & Risk Management Committee. Shanthar Pathmanathan - Chief Executive Officer and Executive Director Mr Pathmanathan has 16 years corporate finance experience. He was most recently with Deutsche Bank's investment banking division and prior to that has held corporate finance and principal investment roles with Macquarie Group's investment banking division in Australia and New York. He has a Bachelor of Laws from the University of Western Australia. During the past three years, Mr Pathmanathan has not served as a director of any other listed company. Page 14 LITHIUM CONSOLIDATED LTD- ACN 612 008 358 ANNUAL REPORT 2019 Directors’ Report Vince Mascolo - Non-Executive Director Mr Mascolo is a qualified mining engineer with extensive experience in gold and coal mining, quarrying and civilworks. He has been a director of various public and private companies over the past 27 years and is currently Chief Executive Officer and Managing Director of AIM listed IronRidge Resources Ltd. During the past three years, Mr Mascolo has also served as a director of the following listed companies: ▪ DGR Global Ltd* ▪ Ironridge Resources Limited*^ *denotes current directorship ^denotes listed on the Alternative Investment Market of the London Stock Exchange Mr Mascolo is chairman of the Audit & Risk Management Committee. Company Secretary Mr Cornish is a Chartered Accountant with significant experience as public company CFO and Secretary, focused on junior resource companies, as well as financial, administration and governance. Mr Cornish is an accomplished and highly efficient corporate administrator and manager. He has more than 20 years’ experience in the accountancy profession both in England and Australia, mainly with the accountancy firms Ernst & Young and PricewaterhouseCoopers. He has extensive experience in all aspects of company financial reporting, corporate regulatory and governance areas, business acquisition and disposal due diligence, capital raising, company listings and company secretarial responsibilities, and serves as company secretary and chief financial officer of several Australian and Canadian public companies. Mr. Cornish holds a Bachelor of Business (Accounting) and is a member of the Australian Institute of Chartered Accountants. Interests in Securities As at the date of this report, the interests of each director in shares and options issued by the Company are shown in the table below: Unlisted Options Directors Shares ($0.15 @ 31-Dec21) Unlisted Options ($0.05 @ 30-Sep20) Unlisted Performance Rights B. Moller 2,162,500 - 132,500 - S. Pathmanathan 3,295,938 2,000,000 659,188 5,000,000 V. Mascolo 1,050,000 - - - Principal Activities The principal activity of the Group during the period was lithium exploration. Corporate Lithium Consolidated Ltd was incorporated as an Australian proprietary company limited by shares on 22 April 2016 (originally named Lithium Consolidated Mineral Exploration Pty Ltd). It converted to a public company on 18 November 2016. The Company completed a successful Initial Public Offering (raising $5,321,299) and was admitted to the ASX on 27 March 2017. Page 15 LITHIUM CONSOLIDATED LTD- ACN 612 008 358 ANNUAL REPORT 2019 Directors’ Report The Company changed its name from Lithium Consolidated Mineral Exploration Ltd to Lithium Consolidated Ltd on 28 November 2018. Dividends Paid or Recommended There were no dividends paid or recommended during the financial year. Review of Operations Information on the operations of the Group during the financial year and up to the date of this report is set out separately in the Annual Report under Review of Operations. Operating Results The Group’s operating loss for the financial year was $5,272,868 (2018: $1,707,228). Exploration and evaluation expenditure before the impairment during the year totalled $301,997 (2018: $809,856). The increased loss was caused principally by: • General corporate and administrative expenses ($416,907); • Employee benefits expense ($460,770); • Business Development ($111,236); • Exploration assets impairment ($3,775,024); • Exploration expenses ($230,366); • Legal expenses ($66,552); and • Share-based payments ($242,779). Review of Financial Condition Capital Structure As at 30 June 2018 the Company had 90,499,122 ordinary shares, 7,177,000 performance rights and 6,154,000 options on issue. During the year ended 30 June 2019, the following shares were issued: • 173,000 shares were issued for nil consideration on 5 December 2018 to consultants of the Company for services rendered; and • 150,000 shares were issued for nil consideration upon exercise of performance rights on 5 December 2018. During the year ended 30 June 2019, the following performance rights and options were issued: • 346