INFINITY METALS LIMITED — Interim / Quarterly Report 2019

Mar 10, 2019

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HALF YEAR REPORT FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2018

Infinity Lithium Corporation Limited and controlled entities ABN 52 147 413 956

Half Year Financial Report

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CONTENTS

CONTENTS	CONTENTS
Corporate Directory .................................................................................................................... 1
Directors' Report ......................................................................................................................... 2
1.	Directors ....................................................................................................................................... 2
2.	Principal Activities ........................................................................................................................ 2
3.	Result Of Operation ...................................................................................................................... 2
4.	Review Of Operations ................................................................................................................... 2
5.	Significant Changes In The State Of Affairs .................................................................................. 3
6.	Dividends ...................................................................................................................................... 3
7.	Events Subsequent To Reporting Date ......................................................................................... 3
8.	Auditor’s Declaration .................................................................................................................... 3
Auditor’s Independence Declaration .......................................................................................... 5
Independent Auditors’ Review Report ........................................................................................ 6
Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income ...... 8
Condensed Consolidated Statement Of Financial Position ......................................................... 9
Condensed Consolidated Statement Of Cash Flows ................................................................. 10
Condensed Consolidated Statement Of Changes In Equity ...................................................... 11
Condensed Notes To The Financial Statements ........................................................................ 13
1.	Statement Of Significant Accounting Policies............................................................................ 13
2.	Operating Segments................................................................................................................... 15
3.	Exploration Expenditure............................................................................................................. 17
4.	Interests In Joint Operations...................................................................................................... 17
5.	Issued Capital.............................................................................................................................. 18
6.	Reserves...................................................................................................................................... 19
7.	Fair Value Measurement............................................................................................................ 19
8.	Commitments............................................................................................................................. 20
9.	Contingent Liabilities.................................................................................................................. 20
10.	Dividends.................................................................................................................................... 20
11.	Key Management Personnel...................................................................................................... 21
12.	Events Subsequent To Reporting Date....................................................................................... 21
Director’s Declaration......................................................................................................22

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 annual report for the year ended 30 June 2018 and any public announcements made by Infinity Lithium Corporation Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

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Half Year Financial Report

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CORPORATE DIRECTORY

NON-EXECUTIVE CHAIRMAN

Kevin Tomlinson

CEO and MANAGING DIRECTOR Ryan Parkin

EXECUTIVE DIRECTOR

Adrian Byass Vincent Ledoux-Pedailles

COMPANY SECRETARY Robert Orr

PRINCIPAL & REGISTERED OFFICE

Level 1, 329 Hay Street SUBIACO WA 6008 Telephone: (08) 6461 6350

AUDITORS

PKF Perth Level 5, 35 Havelock Street WEST PERTH WA 6005

SHARE REGISTER

Advanced Share Registry Services 2/150 Stirling Highway NEDLANDS WA 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

SECURITIES EXCHANGE LISTINGS

Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: INF

BANKERS

National Australia Bank 1232 Hay Street WEST PERTH WA 6872

WEBSITE

www.infinitylithium.com

1

Half Year Financial Report

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DIRECTORS' REPORT

The Directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter as the 'Consolidated Entity') consisting of Infinity Lithium Corporation Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the entities it controlled at the end of the half-year ended 31 December 2018.

1. DIRECTORS

The names of Directors who held office during or since the end of the half-year:-

Mr Kevin Tomlinson Non-Executive Chairman Mr Ryan Parkin CEO and Managing Director (appointed 4 August 2018) Mr Adrian Byass Executive Director Mr Vincent Ledoux-Pedailles Executive Director (appointed 16 January 2019) Mr Humphrey Hale Non-Executive Director (resigned 4 August 2018) Dr Eric Lilford Non-Executive Director (resigned 4 August 2018)

Directors have held office for the entire period and to the date of this report unless otherwise stated.

2. PRINCIPAL ACTIVITIES

During the half-year the principal activities of the Consolidated Entity consisted of exploration and evaluation of the Consolidated Entity’s ground holdings.

3. RESULT OF OPERATION

The Directors of the Company advise the consolidated loss of the Consolidated Entity after providing for income tax for the half-year to 31 December 2018 is $1,543,235 (2017: $5,289,306).

4. REVIEW OF OPERATIONS

During the half year period ending 31 December 2018 the Company advanced its San Jose Lithium JV (Spain), including the announcement of the lithium hydroxide scoping study (ASX release 17 August 2018) which was delivered in Q4 2018 (ASX release 29 November 2018). The compelling economic metrics were based on open pit mining and on-site processing to produce battery grade lithium hydroxide.

Through the confirmation of our ability to produce battery-grade lithium hydroxide using the chosen process route the Company is now well placed to continue discussions with strategic and end-user parties regarding potential lithium hydroxide production. Infinity Lithium has positioned itself well with further delivery of well targeted and value accretive study work underway. This work will continue into 2019.

The Company successfully listed on the Frankfurt and Stuttgart Stock Exchanges (ASX release 24 October 2018) to broaden Infinity’s investor appeal and increase exposure to European investors.

The Company released a JORC Resource (ASX release 5 November 2018) at the 100% owned Banio potash project in Gabon. Whilst the potash asset is of proven high-quality the Company has chosen to focus its efforts and resources on advancing the San Jose lithium-tin deposit. The Company has decided to seek a joint venture partner or divestment of the potash asset.

2

Half Year Financial Report

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Competent Person Statement: The information in this report related to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr A Byass, B.Sc Hons (Geol), B.Econ, FSEG, MAIG an employee of Infinity Lithium Corporation Limited. Mr Byass has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 and 2012 Edition of the Australasian Code for Reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves. Mr Byass consents to the inclusion in the report of the matters based on this information in the form and context in which it appear.

Corporate Activities

On 4 August 2018 Humphrey Hale and Eric Lilford resigned from the Board of Directors.

On the same date Ryan Parkin was appointed to the Board of Directors in the position of Managing Director.

On 30 September 11,732,961 listed share options with an exercise price of $0.29 expired.

On 28 November 2018 the Company held its Annual General Meeting of Shareholders and subsequently announced that all resolutions put to the meeting were passed unanimously by a show of hands.

On 2 December 2018 3,400,000 unlisted share options with an exercise price of $0.35 expired.

On 19 December 2018 the Company announced the issue of 282,000 fully paid ordinary shares and 500,000 shares options to Vincent Ledoux-Pedailles an Executive Director of the Company. The shares have a value of $0.062 per share, and the share options have an exercise price of $0.12 and an expiry date of 14 December 2021.

5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no other significant changes in the state of affairs of the Consolidated Entity during the financial half-year.

6. DIVIDENDS

The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

7. EVENTS SUBSEQUENT TO REPORTING DATE

On 16 January 2019 Vincent Ledoux-Pedailles was appointed to the Board of Directors in the position of Executive Director.

No matter or circumstance has arisen subsequent to 31 December 2018 that has significantly affected, or may significantly affect, the state of affairs or operations of the reporting Consolidated Entity in future financial periods.

8. AUDITOR’S DECLARATION

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 5 for the half-year ended 31 December 2018.

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Half Year Financial Report

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This report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the Directors.

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Ryan Parkin Managing Director Dated this 11 March 2019

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PKF Perth

AUDITOR’S INDEPENDENCE DECLARATION

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TO THE DIRECTORS OF INFINITY LITHIUM CORPORATION LIMITED

In relation to our review of the financial report of Infinity Lithium Corporation Limited for the half year ended 31 December 2018, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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PKF PERTH

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SHANE CROSS PARTNER

11 MARCH 2019 WEST PERTH, WESTERN AUSTRALIA

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

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PKF Perth

INDEPENDENT AUDITORS’ REVIEW REPORT

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TO THE MEMBERS OF INFINITY LITHIUM CORPORATION LIMITED

Conclusion

We have reviewed the accompanying half-year financial report of Infinity Lithium Corporation Limited (the Company) and controlled entities (consolidated entity) which comprises the condensed consolidated statement of financial position as at 31 December 2018, the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at 31 December 2018, or during the half year.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Infinity Lithium Corporation Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2018 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our conclusion, we draw attention to Note 1 in the financial report which indicates that the consolidated entity incurred a net loss after tax of $1,543,235 and net operating cash outflows of $1,356,915 during the half-year ended 31 December 2018. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the company’s and consolidated entity’s ability to continue as a going concern and therefore, the company and consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. In accordance with the Corporations Act 2001, we have given the directors’ of the company a written Auditor’s Independence Declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

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PKF Perth

Auditor’s Responsibility

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Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2018 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporation Regulations 2001. As the auditor of Infinity Lithium Corporation Limited and the entities it controlled during the half year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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PKF PERTH

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SHANE CROSS PARTNER

11 MARCH 2019 WEST PERTH, WESTERN AUSTRALIA

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Half Year Financial Report

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the half year ended 31 December 2018

31-Dec 2018 $ Revenue Other revenue 31,151 Expenses Administrative expenses (84,617) Compliance and regulatory expenses (129,245) Consultancy expenses (97,677) Depreciation and amortisation expense (118) Directors fees (130,317) Employee benefits expense (21,945) Equity compensation payment (26,670) Impairment of exploration expenditure (989,061) Insurance expenses (9,987) Occupancy expenses (71,381) Travel expenses (10,289) Realised foreign exchange movements (3,079) Loss before income tax expense (1,543,235) Income tax expense - Loss for the period (1,543,235) Other comprehensive income Items that maybe reclassified subsequently to profit and loss Exchange differences arising on translation of foreign operations (2,481) Total comprehensive loss for the period (1,545,716) Loss attributable to: Owners of the Parent Entity (1,546,142) Non-controlling interests 2,907 (1,543,235) Other comprehensive income/(loss) attributable to: Owners of the Parent Entity 5,431 Non-controlling interests (7,912) 2,481 Total comprehensive loss attributable to: Owners of the Parent Entity (1,540,711) Non-controlling interests (5,005) (1,545,716) Earnings per share Basic and diluted loss per share (cents) calculated on loss for the period (0.81) The above condensed consolidated statement of profit or loss and other comprehensive be read in conjunction with the accompanying notes.	31-Dec 2017 $ 635 (96,828) (178,735) (112,432) (196) (208,172) (16,957) (162,629) (4,328,212) (11,189) (68,087) (59,182) (47,322)
	(5,289,306) -
	(5,289,306) 62,551
	(5,226,755)
	(5,282,583) (6,723)
	(5,289,306)
	71,126 (8,575)
	62,551
	(5,211,457) (15,298)
	(5,226,755)
	(3.51) income should

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Half Year Financial Report

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2018

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation expenditure 3 Plant and equipment Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 5 Reserves 6 Accumulated losses Equity attributable to owners of the Parent Entity Non-controlling interest TOTAL EQUITY	31-Dec 2018 $ 2,547,523 224,580 9,580 2,781,683 - 469 47,104 47,573 2,829,256 191,331 44,567 235,898 235,898 2,593,358 24,250,639 1,473,394 (22,829,318) 2,894,715 (301,357) 2,593,358	30-Jun 2018 $ 3,905,102 463,869 16,874
		4,385,845
		- 587 47,049
		47,636
		4,433,481 261,199 58,878
		320,077 320,077 4,113,404
		24,234,719 1,705,192 (21,530,155)
		4,409,756 (296,352)
		4,113,404

The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.

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Half Year Financial Report

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS for the half year ended 31 December 2018

CASH FLOWS FROM OPERATING ACTIVITIES Payments for administrative and corporate expenses Payments for exploration and evaluation expenses Payments for staff expenses Proceeds from VAT refund Interest received NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payment for investment in Tonsley Pty Ltd NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue shares Payment for costs of issue of shares NET CASH FROM FINANCING ACTIVITIES Net increase/(decrease) in cash and cash equivalents Effect of exchange rate changes on cash Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period	31-Dec-18 $ (434,994) (1,040,053) (180,308) 267,600 30,840 (1,356,915) - - - (500) (500) (1,357,415) (164) 3,905,102 2,547,523	31-Dec-17 $ (749,827) (3,028,932) (256,291) - 1,336
		(4,033,714)
		(500,000)
		(500,000)
		8,871,679 (159,768)
		8,711,911
		4,178,197 (41,174) 2,817,663
		6,954,686

The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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Half Year Financial Report

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the half year ended 31 December 2018

Balance at 1 July 2018 Loss for the period Other Comprehensive Income Exchange differences arising on translation of foreign operations Total comprehensive income for the period Transactions with owners, recorded directly in equity Issue of shares Issue of shares on exercise of options Share-based payments Costs of issuing shares Lapse of option on expiry Total transactions with owners Balance at 31 December 2018	Issued Capital $ 24,234,719 - - - - - 16,920 (1,000) - 15,920 24,250,639	Share Based Payment Reserve $ 1,532,225 - - - - 9,750 - (246,979) (237,229) 1,294,996	Foreign Currency Translation Reserve $ 172,967 - 5,431 5,431 - - - - - - 178,398	Accumulated Losses $ (21,530,155) (1,546,142) - (1,546,142) - - - - 246,979 246,979 (22,829,318)	Attributable to Owners of Parent $ 4,409,756 (1,546,142) 5,431 (1,540,711) - - 26,670 (1,000) - 25,670 2,894,715	Non- Controlling Interest $ (296,352) 2,907 (7,912) (5,005) - - - - - - (301,357)	Total $ 4,113,404
							(1,543,235) (2,481)
							(1,545,716)
							- - 26,670 (1,000) -
							25,670
							2,593,358

The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Half Year Financial Report

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the half year ended 31 December 2018 (continued)

Balance at 1 July 2017 Loss for the period Other Comprehensive Income Exchange differences arising on translation of foreign operations Total comprehensive income for the period Transactions with owners, recorded directly in equity Issue of shares Issue of shares on exercise of options Share-based payments Costs of issuing shares Derecognition of non-controlling interest in Tonsley Pty Ltd Total transactions with owners Balance at 31 December 2017	Issued Capital $ 16,130,624 - - - 8,416,679 556,806 19,000 (602,679) - 8,389,806 24,520,430	Share Based Payment Reserve $ 1,381,527 - - - - (101,806) 189,710 - - 87,904 1,469,431	Foreign Currency Translation Reserve $ 42,481 - 71,126 71,126 - - - - (831) (831) 112,776	Accumulated Losses $ (12,233,175) (5,282,583) - (5,282,583) - - - - (556,592) (556,592) 18,072,350	Attributable to Owners of Parent $ 5,321,457 (5,282,583) 71,126 (5,211,457) 8,416,679 455,000 208,710 (602,679) (557,423) 7,920,287 8,030,287	Non- Controlling Interest $ (333,763) (6,723) (8,575) (15,298) - - - - 57,423 57,423 (291,638)	Total $ 4,987,694
							(5,289,306) 62,551
							(5,226,755)
							8,416,679 455,000 208,710 (602,679) (500,000)
							7,977,710
							7,738,649

The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Half Year Financial Report

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CONDENSED NOTES TO THE FINANCIAL STATEMENTS for the half year ended 31 December 2018

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

Infinity Lithium Corporation Limited (the Company) is a public company, limited by shares, domiciled and incorporated in Australia and listed on the Australian Securities Exchange. The half-year consolidated financial report of the Company for the six months ended 31 December 2018, comprise the Company and its subsidiaries (the “Consolidated Entity” or “Group”).

The half-year consolidated financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting as appropriate for for-profit orientated entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting .

The half-year consolidated financial report does not include full disclosures of the type normally included in an annual financial report. Accordingly, it is recommended that this interim financial report be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by Infinity Lithium Corporation Limited and its controlled entities during the interim reporting period in accordance with the continuous disclosure requirements arising under the Corporations Act 2001 .

These consolidated half-year financial statements were authorised for issue in accordance with a resolution of the directors on 11 March 2019.

Basis of Preparation

The half-year consolidated financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. The presentation and functional currency is Australian Dollars.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s annual financial report for the financial year ended 30 June 2018. Those accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

New, revised or amending Accounting Standards and Interpretations adopted

The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are relevant to their operations and mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated Entity and are consistent with those of the previous financial years and corresponding interim reporting period.

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

Impact of new standards and interpretations issued but not yet adopted

There are no new standards that have been issued since 30 June 2018 that have been applied by the Consolidated Entity. The 30 June 2018 annual report disclosed that the Consolidated Entity anticipated no new material impacts arising from initial application of those standards issued but not yet applied at that date, and this remains the assessment as at 31 December 2018.

Going Concern Basis

The financial statements have been prepared on the going concern basis which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. The Consolidated Entity incurred a net loss after tax of $1,543,235 for the period ended 31 December 2018 (31 December 2017: $5,289,306). As at 31 December 2018 the Consolidated Entity had net assets of $2,593,358 (30 June 2018: $4,113,404) and continues to incur expenditure on its exploration tenements drawing on its cash balances. As at 31 December 2018 the Consolidated Entity had $2,547,523 (30 June 2018: $3,905,102) in cash and cash equivalents.

The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest. Ultimate exploitation of the assets will depend on raising necessary funding in the future. Should the Consolidated Entity be unable to raise additional funds, there is a material uncertainty which may cast significant doubt over the Consolidated Entity ability to continue as a going concern. As at 31 December 2018 there has been no adjustment in the financial report relating to the recoverability and classification of the asset carrying amounts, or the amounts and classification of liabilities that might be necessary, should the Consolidated Entity be unable to raise capital as and when required, and the exploitation of the areas of interest not be successful, or the Consolidated Entity not continue as a going concern.

Significant accounting estimates, judgments and assumptions

The preparation of financial statements requires management to make judgments and estimates relating to the carrying amounts of certain assets and liabilities. Actual results may differ from the estimates made. Estimates and assumptions are reviewed on an ongoing basis.

The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next accounting period are:

(i) Share based payment transactions

The Consolidated Entity measures the cost of equity settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined by an external valuer using an appropriate valuation model.

(ii) Income tax expenses

Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement of financial position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised.

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

• (iii) Impairment of exploration and evaluation assets

The ultimate recoupment of the value of exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

Impairment tests are carried out on a regular basis to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

The key areas of judgement and estimation include:

• Recent exploration and evaluation results and resource estimates;

• Environmental issues that may impact on the underlying tenements;

• Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.

2. OPERATING SEGMENTS

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM') to make decisions about resources to be allocated to the segments and assess their performance.

Operating segments are identified by Management based on the mineral resource and exploration activities in Australia, Gabon and Spain. Discrete financial information about each project is reported to the CODM on a regular basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

The Group has three reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia, Gabon and Spain. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

(i)	Australia Gabon Spain $ $ $ Segment performance 31 Dec 2018 Revenue Unallocated items: Interest revenue - - - Total segment revenue Reconciliation of segment result to group net profit/(loss) before tax Exploration expenditure - (487,282) (501,779) Unallocated items: Amounts not included in segment result but reviewed by the Board: - Other expenses Net loss before tax	Total $ 31,151
		31,151 (989,061) (585,325)
		(1,543,235)

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

(ii) (iii) 2017 (iv) (v)	Australia Gabon Spain $ $ $ Segment assets Reconciliation of segment assets to group assets Segment assets at 1 July 2018 - - - Segment asset increase for the period: Exploration expenditure - 487,282 501,779 Impairment of capitalised expenditure - (487,282) (501,779) Foreign exchange movements - - - Segment assets at 31 December 2018 - - - Unallocated assets: Other assets Total group assets Segment liabilities Reconciliation of segment liabilities to group liabilities Segment liabilities as at 1 July 2018 - - 95,059 Segment asset/(decrease) increase for the period: Trade and other payables - 4,508 (14,625) Segment liabilities at 31 December 2018 - 4,508 80,434 Unallocated liabilities: Other liabilities Total group liabilities Segment performance 31 Dec 2017 Revenue Unallocated items: Interest revenue Total segment revenue Reconciliation of segment result to group net profit/(loss) before tax Exploration expenditure - (4,280,379) (47,833) Unallocated items: Amounts not included in segment result but reviewed by the Board: - Other expenses Net loss before tax Segment assets Reconciliation of segment assets to group assets Segment assets at 1 July 2017 - 2,783,603 - Segment asset increase for the period: Exploration expenditure - 1,924,639 2,398,146 Exploration expenditure impairment - (4,280,679) (2,398,146) Foreign exchange movements - 100,455 - Segment assets at 30 June 2018 - - - Unallocated assets: Other assets Total group assets	Total $ - 989,061 (989,061) -
		- 2,829,256
		2,829,256
		95,059 (10,117)
		84,942 150,956
		235,898
		635
		635
		(4,328,212) (961,729)
		(5,289,306)
		2,783,603 4.322,785 (7,206,843) 100,455
	Segment assets at 1 July 2017 Segment asset increase for the period: Exploration expenditure Exploration expenditure impairment Foreign exchange movements Segment assets at 30 June 2018 Unallocated assets: Other assets Total group assets
		-
		4,433,481
		4,433,481

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

Australia Gabon Spain $ $ $ (vi) Segment liabilities Reconciliation of segment liabilities to group liabilities Segment liabilities as at 1 July 2017 - 286,980 411,726 Segment asset/(decrease) increase for the period: Trade and other payables - (286,980) (316,667) Segment liabilities at 30 June 2018 - - 95,059 Unallocated liabilities: Other liabilities Total group liabilities EXPLORATION EXPENDITURE 31 Dec 2018 $ Exploration expenditure capitalised - exploration and evaluation held at fair value - A reconciliation of the carrying amount of exploration and evaluation expenditure is set out below: Carrying amount at beginning of the period - Additional costs capitalised during period 989,061 Foreign exchange movements - Impairment on exploration expenditure (989,061) Carrying amount at end of the period -	Australia Gabon Spain $ $ $ (vi) Segment liabilities Reconciliation of segment liabilities to group liabilities Segment liabilities as at 1 July 2017 - 286,980 411,726 Segment asset/(decrease) increase for the period: Trade and other payables - (286,980) (316,667) Segment liabilities at 30 June 2018 - - 95,059 Unallocated liabilities: Other liabilities Total group liabilities EXPLORATION EXPENDITURE 31 Dec 2018 $ Exploration expenditure capitalised - exploration and evaluation held at fair value - A reconciliation of the carrying amount of exploration and evaluation expenditure is set out below: Carrying amount at beginning of the period - Additional costs capitalised during period 989,061 Foreign exchange movements - Impairment on exploration expenditure (989,061) Carrying amount at end of the period -	Total $ 698,706 (603,647) 95,059 225,018 320,077 30 June 2018 $ -
		2,783,603 4,322,785 100,455 (7,206,843)
		-

3. EXPLORATION EXPENDITURE

The value of the Consolidated Entity’s exploration expenditure is dependent upon:

• The continuance of the rights to tenure of the areas of interest;

• The results of future exploration; and

• The recoupment of costs through successful development and exploitation of the areas of interest or alternatively by their sale.

4. INTERESTS IN JOINT VENTURE

The Company has a material interest in a joint venture held through a 50% (2017: 0%) interest in Tecnolgia Extremena Del Litio, S.L (“TEL”) which is a special purpose vehicle established for the purpose of holding the San Jose tenement in Spain about 200 km from the Company’s other Spanish project the Morille Project.

On 13 June 2016 the Company announced its joint venture agreement with Valoriza Mineria SLU (“Valoriza”), a wholly owned subsidiary of one of Spain’s largest companies Sacyr Vallehormoso, SA, to evaluate and potentially develop the advanced San Jose lithium-tin-tungsten deposit in Spain. The agreement enables the Company to acquire up to a 75% interest in TEL through a staged earn-in arrangement. Further information pertaining to the earn-in agreement is disclosed in note 8.

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

The net assets of the joint venture are not material at 31 December 2018 and this entity is funded by the Parent Entity.

5. ISSUED CAPITAL

190,171,104 (30 June 2018: 189,889,104) listed fully paid ordinary shares (a) 10,000,000 (30 June 2018: 10,000,000) milestone performance shares (class B) Less: capital raising costs A reconciliation of the carrying amount of the listed fully paid ordinary shares is set out below: At the beginning of reporting period Shares issued during the period/year At reporting date	31-Dec 2018 $ 26,248,073 50,000 (2,047,434) 24,250,639 No. 189,889,104 282,000 190,171,104	30-Jun 2018 $ 26,231,153 50,000 (2,046,434)
		24,234,719
		No. 137,992,092 51,897,012
		189,889,104

• a) On 19 December 2018 the Company announced the issue of 282,000 fully paid ordinary shares. The shares have a value of $0.062 per share with an aggregate valuation of $16,920.

Ordinary fully paid shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. The fully paid ordinary shares have no par value.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Milestone performance shares

The milestone performance shares were issued to the Vendors of Equatorial Pty Ltd as consideration for the acquisition of their company. This new form of Company security were issued as two different classes on 28 April 2016. The details of these classes is listed below:

A class milestone performance shares: These shares were placed in escrow until a first milestone condition was achieved (being an independently verified evidence of JORC mineral resource at the Mamana/Banio tenement over and above specified parameters within a two year period from acquisition), this condition was not satisfied and the shares expired on 18 March 2018.

B class milestone performance shares: These shares have been placed in escrow subject to the successful conversion of the A class milestone shares, and an independent expert producing a pre-feasibility study evidencing a viable project at the Mamana/Banio tenement within four years from acquisition. As with Class A milestone performance shares once escrow conditions are achieved the shares will be released from escrow and will have all the same participation rights as a normal fully paid ordinary share of the Company.

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

6. RESERVES

Share based payments reserve (a) Foreign exchange translation reserve (b) a) Share-based payment reserve Reserve at beginning of financial period/year Share options issued (i) Exercise of options Lapse of options (ii) Reserve at end of financial period/year	31-Dec 2018 $ 1,294,996 178,398 1,473,394 1,532,225 9,750 - (246,979) 1,294,996	30-Jun 2018 $ 1,532,225 172,967
		1,705,192
		1,381,527 549,990 (101,807) (297,485)
		1,532,225

• i) On 19 December 2018 the Company announced the issue of 500,000 shares options to Vincent Ledoux-Pedailles. The share options have an exercise price of $0.12 and an expiry date of 14 December 2021. The options were independently valued using Black-Scholes valuation methodology with the following assumptions being; risk free rate 1.96%, share price $0.061 and a volatility factor of 74%. This has resulted in a fair value of $0.0195 per share option.

ii) On 2 December 2018 3,400,000 unlisted share options with an exercise price of $0.35 expired.

The share options outstanding at reporting date had a weighted average exercise price of $0.249 and a weighted average remaining contractual life of 1.27 years.

All options on issue are for ordinary shares in the Company, which confer a right of one ordinary share for every option held.

b)	Foreign exchange translation reserve Reserve at beginning of financial period/year Exchange differences arising on translating the foreign operations Exchange difference arising from non-controlling interest in Tonsley Pty Ltd Reserve at end of financial period/year	172,967 5,431 - 178,398	42,481 131,317 (831)
			172,967

7. FAIR VALUE MEASUREMENT

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

8. COMMITMENTS

In order to maintain current rights of tenure to exploration tenements the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State Governments and overseas government bodies. These obligations can be reduced by selective relinquishment of exploration tenure or renegotiation.

Capital expenditure commitments contracted for exploration and evaluation expenditure payable for each of the Company’s tenements is discussed below:

MORILLE PROJECT

The Consolidated Entity does not have any material financial commitments and has met its minimum exploration expenditure in order to maintain rights of tenure of its Morille Project.

The Consolidated Entity is obliged to make an advance royalty payment of Euro 50,000 per annum should production not commence on Morille by January 2016, the obligation is being renegotiated.

SAN JOSE PROJECT

On 13 June 2016 the Company announced its joint venture agreement with Valoriza Mineria SLU (“Valoriza”), a wholly owned subsidiary of one of Spain’s largest companies Sacyr Vallehormoso, SA, to evaluate and potentially develop the advanced San Jose lithium-tin-tungsten deposit in Spain. The agreement enables the Company to acquire up to a 75% interest in the San Jose Deposit through a staged earn-in arrangement with consideration for the acquisition being the funding of joint venture expenditure on the project of up to €4 million during the earn-in period.

On 11 October 2017 the Company announced that Valoriza had confirmed that the Company had satisfied the requirements of Stage 1 of the earn-in agreement (50% interest) including the €1.5 million funding of joint venture expenditure and would accordingly transfer a 50% interest in the San Jose lithium-tin project in Spain to the Company. The 50% interest was transferred to the Group on 31 May 2018. The Company has elected to earn a further 25% by continuing to expend funds in accordance with Stage 2 of the interest earn in agreement. Subject to the JV agreement to date the Company progresses towards the Stage 2 target joint venture spend being €2.5 million (the Company needs to complete the expenditure within 2 years of completing stage 1, but has an option to extend). Following the final interest transfer (being the further 25%) the Company and Valoriza can then continue on a pro-rata funded joint venture to develop the project.

BANIO PROJECT

In order to maintain current rights of tenure to the Banio potash project the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the Gabonese government. The Company currently have no financial commitment to expend on this project. The Company has decided to seek a joint venture partner or divestment of the potash asset.

9. CONTINGENT LIABILITIES

There has been no change to contingent liabilities since the last annual reporting date.

10. DIVIDENDS

No dividends have been declared or paid during the half-year ended 31 December 2018.

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Half Year Financial Report

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NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS for the half year ended 31 December 2018 (cont)

11. KEY MANAGEMENT PERSONNEL

Remuneration arrangements of key management personnel are disclosed in the annual financial report.

12. EVENTS SUBSEQUENT TO REPORTING DATE

On 16 January 2019 Vincent Ledoux-Pedailles was appointed to the Board of Directors in the position of Executive Director.

No matter or circumstance has arisen subsequent to 31 December 2018 that has significantly affected, or may significantly affect, the state of affairs or operations of the reporting Consolidated Entity in future financial periods.

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Half Year Financial Report

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DIRECTOR’S DECLARATION

The Directors of the Company declare that:-

1. The financial statements and notes, as set out on pages 8 to 21 are in accordance with the Corporations Act 2001, including:

2. (a) complying with Accounting Standard AASB 134: Interim Financial Reporting, and Corporations Regulations 2001; and

3. (b) giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2018 and of its performance for the half-year ended on that date.

4. In the Directors’ opinion there are reasonable grounds to believe that the Company 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 directors made pursuant to s.303(5) of the Corporations Act 2001 .

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____ Ryan Parkin Managing Director

Dated this day 11 March 2019

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