Announcement PDF LITHIUM CONSOLIDATED MINERAL EXPLORATION LIMITED ACN 612 008 358 CONSOLIDATED FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Contents Cautionary Statements ........................................................................................................................................................ 3 Corporate Information ......................................................................................................................................................... 4 Directors’ Report .................................................................................................................................................................... 5 Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Half-Year Ended 31 December 2017 ................................................................................................................................................................... 10 Consolidated Statement of Financial Position as at 31 December 2017 ................................................................. 11 Consolidated Statement of Changes in Equity for the Half-Year Ended 31 December 2017 .............................. 12 Consolidated Statement of Cash Flows for the Half-Year Ended 31 December 2017........................................... 13 Notes to the Financial Statements for the Half -Year Ended 31 December 2017 .................................................. 14 Directors’ Declaration ......................................................................................................................................................... 24 Independent Auditor’s Review Report ............................................................................................................................ 25 2|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 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. Lithium Consolidated Mineral Exploration Ltd 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 Botswana Exploration Results has been reviewed and approved by Jerry Aiken, who is a Registered Member of the Society for Mining, Metallurgy and Exploration (SME). Jerry Aiken is a geologic consultant to the Company, and has extensive experience relevant to the styles of mineralisation and type of deposit under consideration. Mr Aiken is a Competent Person (CP) as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC). Jerry Aiken consents to the inclusion in the release of the concepts and geologic principles expressed in this press release, based on his review in the form and context in which it appears. The information in this report that relates to the Yilgarn Lithium Project (in Western Australia) Exploration Results 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. 3|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Corporate Information Directors and Company Secretary Mr Shanthar Pathmanathan (Managing Director) Mr Brian Moller (Non-executive Chairman) Mr Vincent Mascolo (Non-executive Director) Mr Duncan Cornish (Company Secretary and CFO) Head Office and Registered Office Lithium Consolidated Mineral Exploration Limited Level 10, 110 Mary Street Brisbane QLD 4000 Tel: +61 7 3221 7770 Fax: +61 7 3221 7773 www.lithiumconsolidated.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 15, 324 Queen Street Brisbane QLD 4000 Tel: 1300 554 474 www.linkmarketservices.com.au Stock Exchange Listing Australian Securities Exchange Ltd ASX Code: LI3 Australian Business Number 32 612 008 358 4|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Directors’ Report The directors submit their report on the consolidated entity (“Group”) consisting of Lithium Consolidated Mineral Exploration Limited (“Company”) and the entities it controlled at the end of, and during, the half-year ended 31 December 2017. Directors The following persons were Directors of the Company during or since the end of the financial period: Mr Vincent Mascolo (appointed 19 May 2016) Mr Shanthar Pathmanathan (appointed 13 October 2016) Mr Brian Moller (appointed 13 October 2016) Mr Jim McKerlie (appointed 2 November 2016 and resigned 17 November 2017) Review of Operations The Group’s operating loss for the financial period, after applicable income tax was $740,712. Exploration and evaluation expenditure capitalised during the period totalled $614,115. At 31 December 2017, the Group’s net assets totalled $6,728,942 which included cash assets of $2,515,637. The movement in net assets largely resulted from the following factors:  Operating losses of $740,712;  Cash outflows from operating activities were $469,576.  Cash outflows on exploration and evaluation assets were $475,191. During the period, the Company’s principal activity was lithium exploration. Tonopah Lithium Project, Nevada, USA The Company owns a 100% interest in LCME Holdings Inc., which has an 80% ownership interest in the Tonopah Lithium Project (“TLP”) in Nevada, USA. TLP is in the Clayton Valley, in West Central Nevada, in the United States of America. TLP consist of 439 placer claims over an area of 8,674 acres. Land Management LCME’s own evaluation of geologic potential and an independent opinion by SRK lead to a decision to relinquish the northern part of TLP and the whole of the Teels project. A total of 1,587 claims were relinquished. A total of 439 placer claims in the southern part of TLP (“South TLP”) were retained and renewed. Exploration SRK completed a technical review of the Nevada projects and provided positive validation of the lithium brine resource potential at South TLP. SRK has recommended progressing with the early-stage exploration of South TLP. A gravity infill data survey was acquired over South TLP in August 2017. The newly acquired infill gravity data was merged with the existing gravity data and remodelled in August 2017. The next stage of exploration of South TLP would involve further geophysical surveys, including magnetotelluric resistivity and 2D seismic surveys to locate the best sites for drilling. 5|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Yilgarn Lithium Project, Western Australia, Australia The Company owns a 100% interest in West Resource Ventures Pty Ltd, which has a direct ownership interest in the Yilgarn Lithium Project (“YLP”) located in the Yilgarn Province of Western Australia. YLP is a hard-rock lithium project located in the Yilgarn Province of Western Australia. YLP consists of 16 Exploration Licenses, including 8 granted Exploration Licenses and 8 pending Exploration License Applications, covering 747 km2. The YLP Exploration Licenses are located over extensions of known lithium-fertile belts, within covered areas of Archean Yilgarn Craton which have potential for hard-rock spodumene bearing pegmatite mineralisation. Land Management 6 new Exploration License applications were made during the half-year ending 31 December 2017, to expand our position over concealed pegmatite targets, which extend outside of our existing granted licenses. The new applications include E 63/1862 (“Ten Mile South”), E 15/01616 (“Wanoc”), E 28/2732 (“Junction North”), E 63/1877 (“Dundas North”), E 69/3540 (“Esmond Northeast”) and E28/2743 (“Salmon”). Exploration A Phase 1 Drilling Program at YLP was completed in December 2017. 94 air-core holes were drilled for a total of 3,958m at 6 of our licenses. The Ten Mile, Snomys, Cool, Bedonia, Dundas, and Nawoc licenses were drilled as planned. The 22 planned holes at the Junction license were not drilled due to delays from stormy weather conditions. The air-core drilling was a first pass exploration program designed to identify the lithium potential of the area by drilling through the barren cover rocks and sampling the underlying older, weathered Archean basement for Li-bearing pegmatites or indications of Li-bearing pegmatites in the area. As a result of this approach, all of the pegmatites intersected were strongly weathered and no spodumene was observed. The drilling parameters were as follows:  east-west drill traverses, with 200m spaced holes, over zones interpreted to be prospective for spodumene bearing lithium-cesium-tantalum pegmatites;  holes drilled to blade refusal;  a number of holes were extended into the basement using a hammer drill;  the air-core sample piles were logged at 1m intervals; and  the analytical samples were collected in 1m single samples and composites up to 5m, based on logged geology, and forwarded to ALS Global for multi-element analysis, including lithium and other associated elements. Pegmatites were intersected in:  3 holes at the Dundas license (E63/1826);  1 hole at the Bedonia license (E 63/1814); and  1 hole at the Cool license (E 28/2651). 3 holes intersected pegmatites at the Dundas License. On the northern drill line, the drill hole WRVAC004 intersected a 4m pegmatite and the adjacent drill hole WRVAC005, 200m to the east, intersected a 6m pegmatite and 3m pegmatite for a combined 11m pegmatite intersection. On the southern line, 1.6km to the south, WRVAC010 had a 5m pegmatite intersection from 18m. 6|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Figure 1: Dundas license pegmatite intersections Drill traverse line Hole ID Total Depth Intersection Thickness North WRVAC004 33m 23m-27m 4m North WRVAC005 24m 2m-8m 6m 10m-13m 3m 18m-23m 5m North South Same hole as above WRVAC010 30m A 2m pegmatite was intersected from 88m in WRVAC023 at the Bedonia License. Drill hole WRVAC019 intersected a 3m quartz vein from 79m within sulphide bearing strongly silicified, fuchsite altered felsic volcanics which will be analyzed for gold. A thin pegmatite vein was intersected in drill hole WRVAC039 between 35m and 36m within a chlorite schist at the Cool License. A detailed, 50m line spaced, airborne magnetic survey for an estimated 1,350 line-km was acquired over the remote E 69/3455 (Edmond) license. Eucla Basin Project, South Australia, Australia The Company owns a 100% interest in West Resource Ventures Pty Ltd, which has a direct ownership interest in 5 Exploration License applications which cover a total of 5,680 km 2 of the Eucla Basin in South Australia. The license applications have been placed over a series of partially exposed salt-bearing playa lakes (salt lakes) and their concealed extensions in the Lake Maurice area of the Eucla Basin. The formal grant of these licenses is subject to completion of the native title process in South Australia. There was no material activity at the Eucla Basin Project in the half-year ending 31 December 2017. Botswana projects The Company owns an 80% ownership interest in South Resource Ventures Pty Ltd, which has a direct interest in the Botswana Lithium Project (“BLP”), which consists of 6 Prospecting Licenses and 2 Prospecting License Applications in the Sua and Ntwetwe Pans in the Makgadikgadi Depression in north eastern Botswana. Land Management The Department of Mines in Botswana (the “Department”) has cancelled portions of Prospecting Licenses 263/ 2016, 265/ 2016, 267/2016 and 268/2016, due to what the Department has advised is the Department’s mistake in issuing the same ground for the same mineral commodity to another company. The cancellations relate to 4 of the 6 Prospecting Licenses in Botswana. Exploration A limited drilling program on Prospecting Licences 264/2016 and 266/2016 situated over the Ntwetwe Pan, in the Makgadikgadi Depression, in northern Botswana was completed in January 2018. The drilling program was designed to test for the presence of lithium bearing brines. 5 holes were drilled for a total of 338m using a down-the-hole hammer air percussion rig. The drilling program was hindered by the early onset of the wet season which caused certain of the preferred drill sites to become inaccessible due to pan surfaces becoming too soft (for the drilling rig). The Prospecting Licenses on the Sua Pan were not drilled due to certain of the preferred drill sites being affected by the partial License cancellation or the early onset of the wet season. 7|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Highly saline groundwater was found in all the holes, with true brines (TDS >100,000 mg/l) in 3 holes. The SRV-BH/5 hole had the strongest air lift yields of up to 60 m3/hr, as measured at the drill site. A total of 34 water samples were submitted to X-Lab Earth Science (Pty) Ltd, in Johannesburg, South Africa. Assay results confirmed the presence of hypersaline brines with TDS values up to a maximum of 150,000 mg/l and conductivities up to 163,000 µS/cm. 4 samples recorded lithium values in excess of 1.0 mg/ L with the highest being 4.1 mg/L. Corporate Lithium Consolidated Mineral Exploration Ltd is an Australian incorporated company that was incorporated as a proprietary company limited by shares on 16 April 2016. It converted to a public company on 18 November 2016. On 8 November 2016 the Company lodged a prospectus with the Australian Securities and Investments Commission seeking a listing on the ASX and an Initial Public Offering (“IPO”) to raise between $8.0 million to $9.0 million. The Company issued first, second and third supplementary prospectuses dated 12 December, 2016, 12 January 2017 and 27 January 2017 respectively, before lodging a further ‘refresh’ prospectus on 3 February 2017 (“Supplementary Prospectuses”). The main outcome of these Supplementary Prospectuses was to change the proposed IPO raising from $5.0million to $8.0million and extend the IPO closing date to 6 March 2017. The Company successfully met all the conditions required to list on the ASX, listing on 27 March 2017, raising $5,321,299. The Group continues to review opportunities as they arise. Subsequent Events No other material events or circumstances have arisen since the balance date. Auditor’s Independence Declaration The auditor’s independence declaration under section 307C of the Corporations Act 2001 is included in this financial report. Signed in accordance with a resolution of the Board of Directors. Shanthar Pathmanathan Director 7 March 2018 Brisbane 8|Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Auditor’s Independence Declraation Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia DECLARATION OF INDEPENDENCE BY T J KENDALL TO THE DIRECTORS OF LITHIUM CONSOLIDATED MINERAL EXPLORATION LIMITED As lead auditor for the review of Lithium Consolidated Mineral Exploration Limited for the half-year ended 31 December 2017, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Lithium Consolidated Mineral Exploration Limited and the entities it controlled during the period. T J Kendall Director BDO Audit Pty Ltd Brisbane, 7 March 2018 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees. 9 | Page LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Half-Year Ended 31 December 2017 Note Revenue 31 Dec 2017 31 Dec 2016 $ $ 27,241 - (598,012) (511,373) - (58,945) (18,973) (18,922) (150,968) (186,944) (740,712) (776,184) - - (740,712) (776,184) - - (740,712) (776,184) (740,656) (776,182) (56) (2) (740,712) (776,184) (740,656) (776,182) (56) (2) (740,712) (776,184) Loss per share attributable to owners of the parent company Cents Cents Basic and diluted earnings per share (0.82) (1.77) Corporate and administrative expenses 2 Tenement acquisition expenses Foreign exchange loss Share-based payments Loss before income tax expense Income tax expense Loss for the period 10 Other comprehensive income Other comprehensive income/(loss) for the period, net of tax Total comprehensive income/(loss) for the period Loss for the period attributable to: Owners of the parent company Non-controlling interests Total comprehensive income for the period attributable to: Owners of the parent company Non-controlling interests The accompanying notes form part of this financial statement. 10 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Consolidated Statement of Financial Position as at 31 December 2017 Note 31 Dec 2017 30 June 2017 $ $ Cash and cash equivalents 2,515,637 3,480,927 Trade and other receivables 474,223 552,592 Other current assets 825 3,667 Total Current Assets 2,990,685 4,037,186 4,065,755 3,451,640 Total Non-Current Assets 4,065,755 3,451,640 TOTAL ASSETS 7,056,440 7,488,826 CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation assets 3 CURRENT LIABILITIES Trade and other payables 4 327,498 104,403 Total Current Liabilities 327,498 104,403 TOTAL LIABILITIES 327,498 104,403 6,728,942 7,384,423 8,879,907 8,945,644 543,402 392,434 (2,694,305) (1,953,649) 6,729,004 7,384,429 (62) (6) 6,728,942 7,384,423 NET ASSETS EQUITY Issued capital Reserves Accumulated losses Equity attributable to owners of the parent company Non-controlling interests TOTAL EQUITY 9 The accompanying notes form part of this financial statement. 11 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Consolidated Statement of Changes in Equity for the Half-Year Ended 31 December 2017 Attributable to Owners of Parent Company Issued Capital Accumulated Losses Share-Based Payments Reserve Total Noncontrolling Interests Total Equity $ $ $ $ $ $ 930,001 (457,218) 141,510 614,293 (6,705) 607,588 Loss for the period - (776,182) - (776,182) (2) (776,184) Acquisition of non-controlling interests - (306,705) - (306,705) 6,705 (300,000) Total comprehensive income - (1,082,887) - (1,082,887) 6,703 (1,076,184) 1,344,063 - - 1,344,063 - 1,344,063 - - - - 2 2 Note Balance at 1 July 2016 Issue of shares 9 Issue of shares to non-controlling interests Share-based payments 10 52,500 - 134,444 186,944 - 186,944 Share issue costs 9 (26,500) - - (26,500) - (26,500) Balance at 31 December 2016 2,300,064 (1,540,105) 275,954 1,035,913 - 1,035,913 Balance at 1 July 2017 8,945,644 (1,953,649) 392,434 7,384,429 (6) 7,384,423 Loss for the period - (740,656) - (740,656) (56) (740,712) Total comprehensive income - (740,656) - (740,656) (56) (740,712) Issue of shares - - - - - - Share-based payments 10 - - 150,968 150,968 - 150,968 Share issue costs 9 (65,737) - - (65,737) - (65,737) 8,879,907 (2,694,305) 543,402 6,729,004 (62) 6,728,942 Balance at 31 December 2017 The accompanying notes form part of this financial statement. 12 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Consolidated Statement of Cash Flows for the Half-Year Ended 31 December 2017 31 December 2017 31 December 2016 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Other receipts 86,247 Interest received 19,363 (54,460) Payments to suppliers and employees (575,186) (456,757) Net cash used in operating activities (469,576) (511,217) Payments for exploration and evaluation assets (475,191) (386,750) Net cash used in investing activities (475,191) (386,750) - 1,017,562 Payments for (IPO) share issue costs (20,523) (198,502) Net cash provided by/(used in) financing activities (20,523) 819,060 Net increase/(decrease) in cash held (965,290) (78,907) Cash at Beginning of Period 3,480,927 262,518 Cash at End of Period 2,515,637 183,611 CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares The accompanying notes form part of this financial statement. 13 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 Notes to the Financial Statements for the Half -Year Ended 31 December 2017 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation These general purpose financial statements for the interim half-year reporting period ended 31 December 2017 have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standard AASB 134 "Interim Financial Reporting". The historical cost basis has been used. This interim financial report does not include all notes of the type normally included in the Annual Financial Report. Accordingly, this report is to be read in conjunction with the Annual Report of Lithium Consolidated Mineral Exploration Limited (the "Company") and its controlled entities (together the “Group”) as at 30 June 2017, together with public announcements made by the Company during the interim period in accordance with its continuous disclosure obligations. The accounting policies and methods of computation adopted are consistent with those of the previous financial period as disclosed in the 30 June 2017 Annual Report. There has been no new or revised Australian Accounting Standards issued by the AASB that materially affected the Company in the current period. The fair values of financial assets and financial liabilities approximate their carrying values due to their shortterm nature. Share Capital Costs Costs incurred in issuing own equity instruments are to be accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. The costs incurred by the Company for the intended issue of equity instruments have been capitalised and recorded as prepayments in the Statement of Financial Position until such time as the equity is raised and they can be accounted for as a deduction from equity. Going Concern The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business. For the half-year ended 31 December 2017 the Group generated a consolidated loss of $740,712 and incurred operating cash outflows of $469,576. As at 31 December 2017 the Group has cash and cash equivalents of $2,515,637 and net assets of $6,728,942. 14 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 NOTE 2: RESULTS FOR THE PERIOD 31 Dec 2017 31 Dec 2016 $ $ The following (corporate and administration) expense items are relevant in explaining the financial performance for the interim period: ASX, ASIC, share registry expenses 49,629 2,948 Audit and external accounting fees 18,654 11,436 Business development and investor relations 17,527 87,593 Consulting fees 55,000 118,391 - 345 Salaries, wages and superannuation 95,000 - Directors and senior management fees 155,170 117,500 7,625 - Insurance 40,350 72,737 Legal fees 77,283 75,765 Travel expenses 18,058 70,093 Depreciation Employee benefits expense comprises: Provision for leave entitlement NOTE 3: EXPLORATION AND EVALUATION ASSETS 31 Dec 2017 30 June 2017 $ $ 4,065,755 3,451,640 3,451,640 353,788 - 2,500,000 614,115 597,852 4,065,755 3,451,640 4,065,755 3,451,640 Exploration and evaluation expenditure carried forward in respect of the areas of interest are: Exploration and evaluation expenditure Movement in exploration and evaluation assets: Opening balance – at cost Option fee paid to acquire tenements Capitalised exploration expenditure Total exploration and evaluation expenditure Carrying amount at the end of period Recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial exploitation of projects, or alternatively through the sale of the areas of interest. 15 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 NOTE 4: TRADE AND OTHER PAYABLES 31 Dec 2017 30 June 2017 $ $ Current: Trade payables and accrued expenses 316,536 101,066 Short term employee benefits 10,962 3,337 Total payables (unsecured) 327,498 104,403 NOTE 5: COMMITMENTS (a) Exploration Commitments The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group. The following commitments exist at balance date but have not been brought to account. If the relevant option to acquire a mineral tenement is relinquished the expenditure commitment also ceases. The Group has the option to negotiate new terms or relinquish the tenements and also to meet expenditure requirements by joint venture or farm-in arrangements. 31 Dec 2017 30 June 2017 $ $ Not later than 1 year 172,000 172,000 Later than 1 year but not later than 5 years 860,000 688,000 Later than 5 years - - Total commitment 1,032,000 860,000 (b) Operating Lease Commitments The Group has no operating leases. (c) Capital Commitments The Group has no capital commitments. NOTE 6: CONTINGENT LIABILITIES There were no contingent liabilities at the end of the reporting period. NOTE 7: EVENTS SUBSEQUENT TO REPORTING DATE There were no events subsequent to reporting date that required disclosure in this financial report. 16 | P a g e LITHIUM CONSOLIDATED MINERAL EXPLORATION LTD – ACN 612 008 358 INTERIM FINANCIAL REPORT 2018 NOTE 8: OPERATING SEGMENTS Segment Information Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on the basis of geographical locations as these locations have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are similar with respect to any external regulatory requirements. Basis of accounting for purposes of reporting by operating segments (a) Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. (b) Segment assets Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In most instances, segment assets are clearly identifiable on