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GENMIN LIMITED Interim / Quarterly Report 2021

Sep 2, 2021

64979_rns_2021-09-02_3d9f2dbe-07e8-4805-ab4e-299b71ad47c1.pdf

Interim / Quarterly Report

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ABN 81 141 425 292

Interim Financial Report

for the half-year ended 30 June 2021

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DIRECTORS

Mr Michael Arnett, Non-Executive Chairman Mr Giuseppe Ariti, Managing Director & CEO Mr Brian van Rooyen, Non-Executive Director Mr Salvatore Pietro Amico, Non-Executive Director Mr John Hodder, Non-Executive Director

COMPANY SECRETARY

Mrs Lucy Rowe

AUDITORS

Hall Chadwick WA Audit Pty Ltd 283 Rokeby Road Subiaco, WA 6008 T: +61 8 9426 0666

SOLICITORS

Herbert Smith Freehills QV1 Building, 250 St Georges Terrace Perth WA 6000 T: +61 8 9211 7777

BANKERS

National Australia Bank 100 St Georges Terrace Perth, WA 6000

REGISTERED OFFICE AND BUSINESS ADDRESS

Suite 7, Outram Centre 1297 Hay Street West Perth WA 6005 T: +61 8 9200 5812

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 11, 172 St George’s Terrace Perth WA 6000

STOCK EXCHANGE LISTING

The Company’s shares are listed and quoted on the Australian Securities Exchange (ASX). ASX Code: GEN

WEBSITE: www.genmingroup.com

General Information

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2020.

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Table of Contents

Directors’ Report ....................................................................................................................................... 4
Auditors Independence Declaration .......................................................................................................... 6
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income ....................... 7
Condensed Consolidated Statement of Financial Position ........................................................................ 8
Condensed Consolidated Statement of Changes in Equity ....................................................................... 9
Condensed Consolidated Statement of Cash Flows ............................................................................... 10
Notes to the Consolidated Financial Statements ..................................................................................... 11
1.
Basis of Preparation ....................................................................................................................... 11
2.
Going Concern ............................................................................................................................... 12
3.
Income ........................................................................................................................................... 12
4.
Director and Employee Expenses .................................................................................................. 13
5.
Financial Cost ................................................................................................................................ 13
6.
Cash and Cash Equivalent ............................................................................................................. 13
7.
Exploration Expenditure ................................................................................................................. 14
8.
Convertible Notes ........................................................................................................................... 14
9.
Issued Capital ................................................................................................................................ 15
10.
Performance Rights ....................................................................................................................... 15
11.
Options ........................................................................................................................................... 19
12.
Operating Segments ...................................................................................................................... 21
13.
Contingencies ................................................................................................................................ 21
14.
Financial Instruments ..................................................................................................................... 22
15.
Subsequent Events ........................................................................................................................ 22
Directors’ Declaration .............................................................................................................................. 23
Independent Auditor’s Review Report ..................................................................................................... 24

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Directors’ Report

The Directors of Genmin Limited ( Genmin or Company) and its controlled entities ( Group ), present their Report together with the Interim Financial Report of the Consolidated Entity, for the half-year period ended 30 June 2021 and the Independent Auditor’s Report thereon.

Directors

The names of the Directors of the Company in office up to the date of this report are:

Mr Michael Arnett Non-Executive Chairman Appointed: 10 March 2021 Mr Giuseppe Ariti Managing Director & CEO Mr John Hodder Non-Executive Director Re-elected: 27 May 2021 Mr Salvatore Pietro Amico Non-Executive Director Mr Brian van Rooyen Non-Executive Director Appointed: 10 March 2021

Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated.

Results of Operations

The Group recorded a loss after tax for the half-year ended 30 June 2021 of US$709,455 (2020: US$1,269,471).

Review of Operations

On 10 March 2021, the Company was successfully admitted to the official list of the Australian Securities Exchange ( ASX ), following an initial public offering ( IPO ) and capital raising, made pursuant to its Prospectus dated 9 February 2021 ( Prospectus ). Genmin issued approximately 88.2 million new shares at AU$0.34 per share, to raise AU$30 million (US$23.1 million) (before costs) and an additional 12.2 million new shares, to extinguish a US$3.2 million Convertible Note (including Interest and The Establishment Fee).

Funds raised by Genmin in the IPO are being applied to develop its 100% owned African iron ore assets located in Gabon, central West Africa. More specifically completion of a Preliminary Feasibility Study at the Baniaka Iron Ore Project ( Baniaka ) (feasibility stage), resource definition at the Bakoumba Iron Ore Project (advanced exploration stage), and regional exploration at the Minvoul/Bitam Iron Ore Project (early exploration stage), as well as working capital.

As part of, and following, the successful IPO and capital raising, the Company has made significant progress in its growth through enhancing Board independence, increasing the breadth and skill set of the executive leadership group and executing on the ground work activities, including:

  • appointment of Mr Michael Arnett and Mr Brian van Rooyen as independent, non-executive directors who also add legal and further enhance African, iron ore and steelmaking, and commercial skill sets to the Board;

  • expanding the breadth of the executive leadership group with the appointment of a Chief Financial Officer, General Manager – Technical Services, new Company Secretary, and at the end of the half-year, a Study Manager and Manager – Sales & Marketing;

  • recommencement of diamond drilling at Baniaka in late June 2021, which remains ongoing;

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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  • commencement of pilot scale metallurgical test work in South Africa on representative bulk oxide iron ore samples from within the mineral resource envelope at Baniaka;

  • completion of a detrital iron deposits mineral resource update improving the 63.1 million tonne mineral resource classification from 19% to 38% Indicated at Baniaka[1] ; and

  • commencement of small, support civil work programs including 31km of access road refurbishment and installation of bulk fuel storage at Baniaka.

Gabon generally experiences low levels of COVID-19 infections, with approximately 25,600 cases and 165 deaths recorded since the commencement of the pandemic, to 18 August 2021. Subject to normal visa restrictions, travel in and out of Gabon is permitted and the government has in place various protection protocols (PCR testing on arrival and exit, online government quarantine accommodation portal, mandatory wearing of masks, a vaccination program and vaccination incentives), to manage and stop transmission of the virus.

During the half-year, the Company has not experienced any significant impact on its operations through COVID-19, or as a result of the protective measures Gabon has in place. The Company has indirect exposure to the impact of COVID-19 on global logistics chains through its drilling contractors at Baniaka, specifically the procurement and transport of supplies and consumables in support of the drilling function.

On 2 August 2021, Genmin’s auditor Bentleys Audit & Corporate (WA) Pty Ltd (ABN 33 121 222 802) merged with, and changed its name to, Hall Chadwick WA Audit Pty Ltd (ABN 33 121 222 802) ( Hall Chadwick WA ). The Auditors Independence Declaration and the Independent Auditor’s Review Report is issued by Hall Chadwick WA, but for all intents and purposes the shareholder approved auditor remains the same.

Subsequent Events

No other matters or circumstances have arisen, which significantly affect or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 6 and forms part of this Directors’ Report.

Signed in accordance with a resolution of the Board of Directors.

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Michael Arnett

Non-Executive Chairman 3 September 2021

1 Refer ASX market announcement titled Baniaka DID Mineral Resource Update dated 21 July 2021 in which Mr Richard Gaze and Mr Mathieu Lacorde are Competent Persons. Further, the Company confirms that all material assumptions and technical parameters underpinning the mineral resource estimates in that ASX announcement continue to apply and have not materially changed, and that it is not aware of any new information or data that materially affects the mineral resource estimates.

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Auditors Independence Declaration

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Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Note Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
Continuing operations
Other income
3		 18,872
33,906
Total Other income 18,872
33,906
Accounting and audit fees (80,665)
(46,248)
Consultancy fees (68,365)
(45,990)
Travel and accommodation (5,741)
(13,260)
Corporate expenses (403,927)
(107,760)
Director and employee expenses
4		 686,166
(856,760)
Legal fees (279,869)
(47,208)
Occupancy expenses (10,181)
(7,211)
Depreciation expense (41,643)
(127,957)
Interest paid (61,593)
(26,584)
Reversal of provision of doubtful debt 25,191
-
FX gain/loss (469,323)
(10,737)
Financial cost
5		 303,386
(13,662)
Site Maintenance (161,581)
-
Loss on transfer of exploration licence
7		 (160,182)
-
Loss before income tax (709,455)
(1,269,471)
Income Tax Expense -
-
Loss after income tax for the half-year (709,455)
(1,269,471)
Loss attributable to:
Owners of Genmin Group Limited (705,393)
(1,266,285)
Non-controlling interests (4,062)
(3,186)
(709,455)
(1,269,471)
Basic Earnings per share (cent) (0.194)
(0.423)
Diluted Earnings per share (cent) (0.194)
(0.423)
Other comprehensive income / (loss)
Items that may be reclassified subsequently to profit or loss
ꞏ exchange differences on translatingcontrolled entities (630,505)
5,841
Other comprehensive income / (loss), net of income tax (630,505)
5,841
Total comprehensive loss for the half-year (1,339,960)
(1,263,630)
Total comprehensive loss for the half-year attributable to:
Owners of Genmin Group Limited (1,335,827)
(1,260,447)
Non-controlling interests (4,133)
(3,183)
(1,339,960)
(1,263,630)

This statement should be read in conjunction with the notes to the financial statements.

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Condensed Consolidated Statement of Financial Position

Note As at
30 June 2021
As at
31 Dec 2020
US$
US$
Assets
Current
Cash and cash equivalents
6		 19,268,423
868,274
Trade and other receivables 332,843
77,498
Prepayments 103,004
84,024
Total current assets 19,704,270
1,029,796
Non-current
Property, plant and equipment 213,146
247,750
Exploration and evaluation assets
7		 24,888,080
24,910,867
Intangible assets 395,285
395,285
Capital work in progress 63,504
-
Right of use asset 41,180
79,314
Total non-current assets 25,601,195
25,633,216
Total assets 45,305,465
26,663,012
Liabilities
Current
Trade and other payables 648,672
815,522
Lease liabilities 46,342
73,536
Convertible note
8		 -
2,823,460
Embedded derivative -
583,789
Current liabilities 695,014
4,296,307
Non-Current
Lease liabilities -
8,945
Non-Current liabilities -
8,945
Total liabilities 695,014
4,305,252
Net assets 44,610,451
22,357,760
Equity
Share capital
9		 61,194,355
37,130,711
Reserves (1,399,465)
(298,038)
Accumulated losses (15,114,504)
(14,409,111)
Equity Attributable to Owners of the Company 44,680,386
22,423,562
Non-controllinginterest (69,935)
(65,802)
Total equity 44,610,451
22,357,760

This statement should be read in conjunction with the notes to the financial statements.

Genmin Limited Interim Financial Report For the half-year ended 30 June 2021

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Condensed Consolidated Statement of Changes in Equity

Share
capital
Foreign
currency
translation
reserve
Options
reserve
Performance
right reserve		 Acquisition of
NCI reserve
Accumulated
losses
Non-
Controlling
interest
Total
US$
US$
US$
US$		 US$
US$
US$
US$
Balance as at 1 January 2020 36,075,955
(2,410,697)
-
1,968,871		 (1,385,407)
(11,604,302)
(58,518)
22,585,902
Loss for the half-year -
-
-
-		 -
(1,266,285)
(3,186)
(1,269,471)
Other comprehensive income -
5,838
-
-		 -
-
3
5,841
Total comprehensive loss for the year -
5,838
-
-		 -
(1,266,285)
(3,183)
(1,263,630)
Transactions with owners in their capacity as owners:
- issue of ordinary shares 1,054,756
-
-
-		 -
-
-
1,054,756
- net movementperformance rights -
-
-
448,725		 -
-
-
448,725
Sub-total 1,054,756
-
-
448,725		 -
-
-
1,503,481
Balance as at 30 June 2020 37,130,711
(2,404,859)
-
2,417,596		 (1,385,407)
(12,870,587)
(61,701)
22,825,753
Balance as at 1 January 2021 37,130,711
(970,875)
-
2,058,244		 (1,385,407)
(14,409,111)
(65,802)
22,357,760
Loss for the half-year -
-
-
-		 -
(705,393)
(4,062)
(709,455)
Other comprehensive loss for the half-year -
(630,434)
-
-		 -
-
(71)
(630,505)
Total comprehensive loss for the half-year -
(630,434)
-
-		 -
(705,393)
(4,133)
(1,339,960)
Transactions with owners in their capacity as owners:
- issue of ordinary shares 26,377,534
-
-
-		 -
-
-
26,377,534
- cost of issue of ordinary shares (2,313,890) (2,313,890)
- issue of options -
-
903,952
-		 -
-
-
903,952
- net movementperformance rights -
-
-
(1,374,945)		 -
-
-
(1,374,945)
Sub-total 24,063,644
-
903,952
(1,374,945)		 -
-
-
23,592,651
Balance as at 30 June 2021 61,194,355
(1,601,309)
903,952
683,299		 (1,385,407)
(15,114,504)
(69,935)
44,610,451

This statement should be read in conjunction with the notes to the financial statements.

Interim Financial Report for the half-year ended 30 June 2021

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Condensed Consolidated Statement of Cash Flows

Note Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
Cash flows from operating activities
Payments to suppliers and employees (2,231,543)
(950,856)
Interest received 4,306
818
Net cash used in operating activities (2,227,237)
(950,038)
Cash flows from investing activities
Purchase of property, plant and equipment (98,781)
(3,249)
Payments for exploration and evaluation (876,472)
(516,519)
Net cash used in investing activities (975,253)
(519,768)
Cash flows from financing activities
Proceeds from issue of shares 21,638,665
1,054,756
Proceeds for convertible notes -
1,000,000
Repayment of Principal on Leases (31,657)
(43,051)
Net cash provided by financing activities 21,607,008
2,011,705
Net change in cash and cash equivalents held 18,404,518
541,899
Cash and cash equivalents at beginning of financial year 868,274
217,953
Effects of exchange rate changes on cash (4,369)
73
Cash and cash equivalents at end of financial year
6		 19,268,423
759,925

This statement should be read in conjunction with the notes to the financial statements.

Interim Financial Report for the half-year ended 30 June 2021

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Notes to the Consolidated Financial Statements

1. Basis of Preparation

These condensed interim financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards including AASB 134 Interim Financial Reporting , Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

The financial statements comprise the consolidated condensed interim financial statements for the Group. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity.

The interim financial statements do not include full disclosures of the type normally included in the full financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report. It is recommended interim financial statements be read in conjunction with the full financial report for the year ended 31 December 2020 and any public announcements made by Genmin and its subsidiaries during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding half-year, except for the impact of the new Standards and Interpretations effective 1 January 2021 disclosed below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards ( IFRS ).

The interim financial statements have been prepared on a historical cost basis, except for selected noncurrent assets, financial assets and financial liabilities. Historical cost is based on the fair values of the consideration given in exchange for goods and services.

The Company is domiciled in Australia and all amounts are presented in United States dollars, unless otherwise noted.

For the purpose of preparing the interim financial statements, the half-year has been treated as a discrete reporting period.

Statement of compliance

The interim financial report was authorised for issue on 3 September 2021.

The interim financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards ( AIFRS ). Compliance with AIFRS ensures that the financial report, comprising the interim financial statements and notes thereto, complies with IFRS.

Significant accounting estimates and judgements

The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group’s last annual financial statements for the year ended 31 December 2020.

Interim Financial Report for the half-year ended 30 June 2021

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New and revised Standards and Interpretations

Standards and Interpretations

In the period ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting policies.

Standards and Interpretations in issue not yet adopted

The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the half-year ended 30 June 2021. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary to Group accounting policies.

2. Going Concern

The Interim Financial Report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group incurred a loss for the half-year of US$709,455 (2020: US$1,269,471), and had a net operating cash outflow of US$2,227,237 (30 June 2020: US$950,038).

The above is mitigated for the following reasons:

  • Genmin completed an IPO and raised US$23.1m (AU$30m) on 10 March 2021 and as at 30 June 2021, the Company had US$19.3m as cash and cash equivalent;

  • Management has prepared a cash flow forecast, which indicates that the Company has sufficient funds to meet all commitments and working capital requirements for the next 12 months from the date of signing this interim financial report; and

  • Given the Company’s history of raising capital to date and the expanded shareholder base following the IPO, the Directors are reasonably confident of the Company’s ability to raise additional funds as and when they are required.

3.

Income

Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
Interest received 13,173
818
Miscellaneous income 5,699
33,088
Total Other income 18,872
33,906

Interim Financial Report for the half-year ended 30 June 2021

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4. Director and Employee Expenses

Note Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
Salaries and wages 429,006
345,854
Superannuation contributions 40,756
32,856
Performance rights - lapsed (1,374,945)
448,725
Performance rights – cash settled 60,008
-
Recruitment costs 66,322
192
Director Fees 92,337
25,000
Other 350
4,133
Total Director and employee expenses (686,166)
856,760
Financial Cost
Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
Embedded derivative 333,594
-
Convertible note establishment fee (25,714)
(8,552)
Bank fees (4,494)
(5,110)
Total Financial costs 303,386
(13,662)

5. Financial Cost

6. Cash and Cash Equivalent

Cash and Cash Equivalent
As at
30 June 2021
As at
31 Dec 2020
US$
US$
United States Dollar (US$) 7,552
715,606
Australian Dollar (AU$) 19,232,462
73,395
Central African Franc(XAF) 28,409
79,273
Total Cash and cash equivalents 19,268,423
868,274

Interim Financial Report for the half-year ended 30 June 2021

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7. Exploration Expenditure

Exploration Expenditure
Half-Year ended
30 June 2021
Year ended
31 Dec 2020
US$
US$
Opening Balance 24,910,867
22,112,217
Exploration and evaluation expenditure 695,504
1,411,643
Impairment of exploration and evaluation expenditure -
(7,021)
Loss on transfer of exploration licence (160,182)
-
Foreign exchange translation effect (558,109)
1,394,028
Closing Balance 24,888,080
24,910,867

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.

8. Convertible Notes

Convertible Notes
Half-Year ended
30 June 2021
Year ended
31 Dec 2020
US$
US$
Proceeds from issue of Convertible notes 3,000,000
3,000,000
Embedded derivative (583,789)
(583,789)
Embedded derivative - unwound 583,789
333,594
Establishment fee (60,000)
(60,000)
Establishment fee unwound during the period 60,000
34,285
Interest expense 207,863
99,370
Conversion into shares (3,207,863)
-
Carrying value of liability as at 30 June 2021 -
2,823,460

On 1 May 2020, Genmin signed a Convertible Note Deed ( Deed ) with Tembo Capital Mining Fund LP ( Tembo ), which was approved by the Company’s shareholders at the 2020 Annual General Meeting. The key terms of the Deed were as follows:

  • Genmin to raise up to US$3m by issuing up to 30,000 unsecured convertible notes to Tembo at a face value of US$100 each, convertible into fully paid ordinary shares of Genmin ( Facility );

  • An establishment fee of 2% and interest rate of 10% per annum payable on the Facility;

  • The Facility had a Maturity Date of 30 June 2021, and the Repayment Amount was due and payable on 31 December 2021.

  • Subject to certain regulatory approvals, Tembo could have elected to convert the notes into shares at a conversion price, which was equal to the higher of:

  • 100% subtract the 15% discount rate then multiplied by the price per share payable on the basis of the fair market value that is determined by an independent expert; and

  • o the floor price, which is US$0.15 per share.

Tembo retrospectively received Foreign Investment Review Board ( FIRB ) approval of the Deed on 25 November 2020 and accordingly, Genmin recognised the embedded derivative. Prior to receiving FIRB approval, Genmin treated the Facility as an unsecured debt.

Interim Financial Report for the half-year ended 30 June 2021

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Contemporaneous with the IPO and capital raising, Tembo converted the Facility into ordinary shares pursuant to the Tembo Offer set out in the Prospectus.

9. Issued capital

9.1

Share capital

The share capital of Genmin consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital.

Date No. of shares
Value (US$)
Opening balance
01-Jan-20		 293,028,650
36,075,955
Issue of shares(Tembo/Ndovu Capital 1 BV)
15-Jan-20		 7,031,705
1,054,756
Closing balance
31-Dec-20		 300,060,355
37,130,711
Opening balance
01-Jan-21		 300,060,355
37,130,711
Issue of shares (IPO excl. Tembo C-Note)
10-Mar-21		 88,235,294
23,094,301
Cost of IPO
10-Mar-21		 -
(2,313,890)
Issue of Shares (Tembo Conversion C-Note)
10-Mar-21		 12,253,105
3,207,863
Issue of Shares (Chantilly Limited options)
16-Jun-21		 10,077
1,512
Issue of Shares (Volksvs Super Fund options)
16-Jun-21		 460,000
14,316
Issue of Shares(Shane Volk)
16-Jun-21		 1,940,000
59,542
Closing balance
30-Jun-21		 402,958,831
61,194,355

10. Performance Rights

Half-Year ended
30 June 2021
Half-Year ended
30 June 2020
US$
US$
At the beginning of the reporting period 2,058,244
1,968,871
Issued during the year -
464,014
Exercised during the year (155,035)
-
Lapsed during the year (133,532)
(41,616)
Probabilityadjustment (1,086,378)
26,327
At reporting date 683,299
2,417,596

On 27 May 2021, Genmin’s shareholders approved:

  • issuing 1,600,000 performance rights to Mr Michael Arnett;

  • issuing 1,200,000 performance rights to Mr Brian van Rooyen;

  • amending the terms of certain performance rights previously issued to Mr Salvatore Pietro Amico; and

the details are set out in the tables overleaf.

Interim Financial Report for the half-year ended 30 June 2021

15

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Name
Performance
Rights
Granted		 Vesting Conditions Vesting Conditions Vesting Conditions Vesting Conditions
Michael
Arnett
400,000
400,000
400,000
400,000		 The Company achieving a 30-day VWAP of at least AU$0.70 per Share
Completion of debt and equity financing for the Baniaka Iron Ore Project by
30 June 2023
Commencement of production at the Baniaka Iron Ore Project by 30 June
2024
Asset growth through the acquisition of key regional projects resulting in a
significant value uplift (as determined by an independent party)
Name
Performance
Rights
Granted		 Vesting Conditions
Brian
van Rooyen
300,000
300,000
300,000
300,000		 The Company achieving a 30-day VWAP of at least AU$0.70 per Share
Completion of a positive Bankable Feasibility Study for the Baniaka Iron ore
Project by 31 December 2022
Completion of debt and equity financing for the Baniaka Iron Ore Project by
30 June 2023
Commencement of production at the Baniaka Iron Ore Project by 30 June
2024
Name
Performance
Rights
Granted		 Vesting Conditions
Grant
Date		 Expiry
Date
Salvatore
Pietro Amico
360,000
360,000		 Grant of a mining permit and entering into
the Mining Convention for the Baniaka Iron
Ore Project by~~31 December 2022~~30
June 2023.
23 June 2020		 ~~22 June 2023~~
22 June 2024
Ore Project by

June 2023.
Assisting in achieving either: a project
financing outcome once the mining permit
is granted; or an exit at an amount in
excess of~~USD200 million~~USD300 million
for Shareholders before~~31 December~~
~~2021 ~~31 December 2023.
23 June 2020		 ~~22 June 2023~~
22 June 2024
is granted; or an exit at an
excess of ~~USD200 million~~
for Shareholders before
~~2021~~

Interim Financial Report for the half-year ended 30 June 2021

16

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10.1 Number of Performance Rights

For the half-year ended 30 June 2021

For the half-year ended 30 June 2021
Grant Date
Expiry Date
Average
Exercise
Price
Fair Value
at Grant
date
US$		 Performance
rights at the
start of the
half-year
Granted
during the
half-year		 Exercised
(not vested)
during the
half-year
Forfeited
during the
half-year
Lapsed
during the
half-year
Balance at
the half-
year end
Vested at
the end of
the half-
year
26/08/2018
25/08/2021
Nil
$0.28
4,800,000
-		 -
-
-
4,800,000
1,200,000
12/09/2018
11/09/2021
Nil
$0.30
500,000
-		 -
-
-
500,000
250,000
31/12/2019
31/12/2022
Nil
$0.63
1,035,000
-		 (265,000)
-
(385,000)
385,000
300,000
23/06/2020
22/06/2023
Nil
$0.62
1,200,000
-		 -
-
-
1,200,000
-
27/05/2021
26/05/2025
Nil
$0.15
-
700,000		 -
-
-
700,000
-
27/05/2021
26/05/2025
Nil
$0.22
-
2,100,000		 -
-
-
2,100,000
-
7,535,000
2,800,000		 (265,000)
-
(385,000)
9,685,000
1,750,000

For the year ended 31 December 2020

Grant Date
Expiry Date
Average
Exercise
Price
Fair Value
at Grant
date
US$		 Performance
rights at the
start of the
year
Granted during
the year
Exercised
(not
vested)
during the
year
Forfeited
during the
year
Lapsed
during the
year
Balance
at the
Year End
Vested at
the end of
the year
5/04/2018
5/04/2021
Nil
$0.28		 6,000,000
-
-
-
(1,200,000)
4,800,000
-
12/09/2018
11/09/2021
Nil
$0.30		 500,000
-
-
-
-
500,000
250,000
31/12/2019
31/12/2022
Nil
$0.63		 1,800,000
-
-
-
(765,000)
1,035,000
432,500
23/06/2020
22/06/2023
Nil
$0.62		 -
1,200,000
-
-
-
1,200,000
-
8,300,000
1,200,000
-
-
(1,965,000)
7,535,000
682,500

Interim Financial Report for the half-year ended 30 June 2021

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10.2 Value of Performance Rights

For the half-year ended 30 June 2021

Grant Date
Expiry Date
Average
Exercise
Price
Fair Value
at Grant
date		 Performance
rights at the
start of the
half-year
Granted
during the
half-year
Exercised
(not vested)
during the
half-year
Forfeited
during the
half-year
Lapsed
during the
half-year
Probability
adjustment
Balance at
the Year
End
US$
US$		 US$
US$
US$
US$
US$
US$
US$
26/08/2018
25/08/2021
Nil
$0.28		 813,906
-
-
-
-
(452,443)
361,463
12/09/2018
11/09/2021
Nil
$0.30		 139,020
-
-
-
-
(63,715)
75,305
31/12/2019
31/12/2022
Nil
$0.63		 526,150
-
(155,035)
-
(133,532)
8,948
246,531
23/06/2020
22/06/2023
Nil
$0.62		 579,168
-
-
-
-
(579,168)
-
27/05/2021
26/05/2025
Nil
$0.15		 -
-
-
-
-
-
-
27/05/2021
26/05/2025
Nil
$0.22		 -
-
-
-
-
-
-
2,058,244
-
(155,035)
-
(133,532)
(1,086,378)
683,299

For the year ended 31 December 2020

Grant Date
Expiry Date
Average
Exercise
Price
Fair Value
at Grant
date		 Performance
rights at the
start of the
year
Granted
during the
year
Exercised
during the
year
Forfeited
during the
year
Lapsed
during the
year
Probability
adjustment
Balance at
the Year
End
US$
US$		 US$
US$
US$
US$
US$
US$
US$
26/08/2018
25/08/2021
Nil
$0.28
1,124,376
-
-
-
(272,027)
(38,443)
813,906
12/09/2018
11/09/2021
Nil
$0.30
94,783
-
-
-
-
44,237
139,020
31/12/2019
31/12/2022
Nil
$0.63
749,712
-
-
-
(320,503)
96,941
526,150
23/06/2020
22/06/2023
Nil
$0.62
-
464,014
-
-
-
115,154
579,168
1,968,871
464,014
-
-
(592,530)
217,889
2,058,244

Interim Financial Report for the half-year ended 30 June 2021

18

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11. Options

Options are issued and give the holder the right, but not the obligation, to subscribe for one fully paid ordinary share in the capital of the Company. These options are considered equity transactions and no value is placed on the early conversion or on the granting of additional options.

Half-year ended
30 June 2021
Number of options
Year ended
31 Dec 2020
Number of options
At the beginning of the reporting period 11,087,584
18,249,971
Issued during the year 5,000,000
-
Exercised during the year (2,410,077)
(7,031,705)
Lapsed duringtheyear (968,625)
(130,682)
At reporting date 12,708,882
11,087,584

Options on issue as at 1 January 2021

Options on issue as at 1 January 2021
Issue Date
Expiry Date
Exercise Price		 Number of
Options
Fair value
on Issue Date
1-Sep-12
14-Aug-22
AU$0.04
1-Nov-12
14-Aug-22
AU$0.04
7-Jun-17
6-Jun-22
AU$0.04
23-May-16
30-Apr-21
US$0.25
31-Jul-18
31-Jan-23
US$0.15
5-Aug-19
31-Jul-24
US$0.15
27-Aug-19
31-Jul-24
US$0.15
1-Oct-19
31-Jul-24
US$0.15
7,200,000
free attaching

1,000,000
free attaching

124,403
free attaching

968,625
free attaching

1,254,479
free attaching

250,000
free attaching

280,000
free attaching

10,077
free attaching
12,087,584
  • Options exercised during the half year ended 30 June 2021
Issue Date
Expiry Date
Exercise
Price
Exercise
Date		 Number of
Options
Fair value
on Issue Date
Share price
on
Exercise Date
1-Sep-12
14-Aug-22
AU$0.04
24-Mar-21
1-Sep-12
14-Aug-22
AU$0.04
16-Apr-21
1-Oct-19
31-Jul-24
US$0.15
1-May-21		 1,940,000
free attaching
AU$0.275
460,000
free attaching
AU$0.270
10,077
free attaching
AU$0.295
2,410,077
  • Options lapsed during the half year ended 30 June 2021
Options lapsed during the half-year ended 30 June 2021
Issue Date
Expiry Date
Exercise Price		 Number of
Options
Fair value
on Issue Date
23-May-16
30-Apr-21
US$0.25
968,625
free attaching
968,625

Interim Financial Report for the half-year ended 30 June 2021

19

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- Options granted during the half year ended 30 June 2021

In accordance with the IPO Offer Management Agreement dated 9 February 2021, Genmin issued a total of 5,000,000 unlisted Advisor options to the Joint Lead Managers ( JLM Options ). The JLM Options have been valued using a Black Scholes pricing model with the following inputs:

Issue Date / Valuation Date: 8 March 2021
Share price: AU$0.340
Exercise price: AU$0.442
Maturity: 5 years
Risk-free rate: 0.78%
Dividend yield: 0%
Expected volatility: 100%

As a result, the fair value of the JLM Options on the Issue Date was AU$0.2401 per option.

Options on issue as at 30 June 2021

Options on issue as at 30 June 2021
Issue Date
Expiry Date
Exercise Price		 Number of
Options
Fair value
on Issue Date
1-Sep-12
14-Aug-22
AU$0.04
1-Nov-12
14-Aug-22
AU$0.04
7-Jun-17
6-Jun-22
AU$0.04
31-Jul-18
31-Jan-23
US$0.15
5-Aug-19
31-Jul-24
US$0.15
27-Aug-19
31-Jul-24
US$0.15
8-Mar-21
7-Mar-26
AU$0.442		 4,800,000
free attaching
1,000,000
free attaching
124,403
free attaching
1,254,479
free attaching
250,000
free attaching
280,000
free attaching
5,000,000
AU$0.2401
11,708,882

Interim Financial Report for the half-year ended 30 June 2021

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12. Operating Segments

For management purposes, Genmin is organised into business units based on its geographical location and the nature of activities. Genmin has two business units and they are:

  • Gabon Exploration; and

  • Corporate.

The following tables present revenue and profit information and certain asset and liability information regarding business segments.

Corporate Gabon
Exploration		 Total
US$ US$ US$
30 June 2021
Segment Revenue 18,872
-
18,872
Segment loss before income tax expense (130,731) (578,724) (709,455)
30 June 2021
Segment Assets 19,882,949
25,422,516
45,305,465
Segment Liabilities 298,234
396,780
695,014
Corporate Gabon
Exploration		 Total
US$ US$ US$
30 June 2020
Segment Revenue 33,906 - 33,906
Segment loss before income tax expense (1,101,867) (167,604) (1,269,471)
31 December 2020
Segment Assets 1,449,373 25,213,639 26,663,012
Segment Liabilities 3,920,513 384,739 4,305,252

13. Contingencies

There has been no change in contingent liabilities since the last annual reporting date (31 December 2020: $nil).

Interim Financial Report for the half-year ended 30 June 2021

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14. Financial Instruments

The Group has a number of financial instruments which are not measured at fair value in the statement of financial position.

The Directors consider that the carrying amounts of current receivables, current payables and current borrowings are considered to be a reasonable approximation of their fair values.

15. Subsequent Events

No other matters or circumstances have arisen which significantly affect or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Interim Financial Report for the half-year ended 30 June 2021

22

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Directors’ Declaration

The Directors of the Group declare that:

  1. The consolidated financial statements and notes are in accordance with the Corporations Act 2001 :

  2. a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the half-year ended on that date; and

  3. b) complying with Accounting Standard AASB 134: Interim Financial Reporting , Corporate Regulations 2001 and other mandatory professional reporting requirements.

  4. In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

On behalf of the Board

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Michael Arnett Non-Executive Chairman 3 September 2021

Interim Financial Report for the half-year ended 30 June 2021

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Independent Auditor’s Review Report

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Interim Financial Report for the half-year ended 30 June 2021

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Interim Financial Report for the half-year ended 30 June 2021

25

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