LEGEND MINING LIMITED — Interim / Quarterly Report 2020

Aug 25, 2020

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HALF YEAR REPORT

30 JUNE 2020

ASX : LEG

ACN: 060 966 145

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Examining Diamond Drill Core from Mawson, Rockford Project, Fraser Range
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CONTENTS

COMPANY DIRECTORY

Directors

Michael William Atkins (Non-Executive Chairman) Mark William Wilson (Managing Director) Oliver Charles Kiddie (Executive Director)

	Page
Company Directory	1
Directors’ Report	2
Consolidated Statement of Comprehensive Income 4
Consolidated Statement of Financial Position	5
Consolidated Statement of Cash Flows	6
Consolidated Statement of Changes in Equity	7
Notes to the Financial Statements	8
Directors’ Declaration	14
Auditor’s Independence Declaration	15
Auditor’s Review Report	16

Company Secretary

Anthony Michael Walsh

Registered Office

Level 1 8 Kings Park Road WEST PERTH, WA 6005

Telephone: (08) 9212 0600 Facsimile: (08) 9212 0611

Bankers

Australian and New Zealand Banking Group Ltd 1275 Hay Street WEST PERTH, WA 6005

Auditors

Ernst & Young 11 Mounts Bay Road PERTH, WA 6000

Home Exchange

Australian Securities Exchange Ltd Level 40, Central Park 152-158 St George’s Terrace PERTH WA 6000

Web

www.legendmining.com.au

Email

legend@legendmining.com.au

ASX Code

Share Registry

Advanced Share Registry Services 110 Stirling Highway NEDLANDS, WA 6009

Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

LEG – ordinary shares

Lawyers

DLA Piper Level 31, Central Park 152-158 St George’s Terrace PERTH WA 6000

Legend Mining Limited Half Year Report 2020

1

DIRECTORS’ REPORT

The Directors submit their report for the half-year ended 30 June 2020.

DIRECTORS

The names and details of the Company’s directors during the financial period and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

• Michael Atkins (Chairman, Non-Executive Director)

• Mark Wilson (Managing Director)

• Derek Waterfield (Executive Director – Technical) – resigned 10 August 2020

• Oliver Kiddie (Executive Director) – appointed 10 August 2020

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities during the period of the entities within the consolidated entity were exploration for nickel and copper deposits in Australia.

RESULTS OF OPERATIONS

The loss of the consolidated entity for the half-year after tax was $170,249 (2019: $316,550 loss).

REVIEW OF OPERATIONS

Legend continued with exploration activities on the Rockford Project tenements in the Fraser Range District of Western Australia, which includes ongoing testing and development of innovative geophysical exploration techniques which the Company expects to claim in its R&D Tax Incentive application, and comprised:

• Diamond drilling and DHTEM testing at Mawson

• Infill aircore drilling at Mawson

• RC drilling at Mason

• Regional MLTEM & FLTEM surveys (Worsley, Crean, Hurley, Magnus and Octagonal)

• Mawson FLTEM and LEF-FLTEM

In June 2020 the Company completed a $20 million placement to fund its Rockford project exploration activities and issued 142,857,143 ordinary shares @ 14 cents each.

The Company has been proactively managing the potential impact of COVID-19 and has developed systems and policies to ensure the health and safety of our employees and contractors and limiting the risk to our operations. These systems and policies have been developed in line with the formal guidance of State and Federal health authorities and with the assistance of our contractors.

To ensure the health and wellbeing of our employees and contractors, the Company has implemented a range of measures to minimise the risk of infection and rate of transmission of COVID-19. These measures include employees and contractors completing a COVID-19 Exposure Questionnaire, increased hygiene practices, restrictions on non-essential travel, establishing strong infection control systems and protocols across the business and facilitating remote working arrangements, where practicable. The Company will continue to monitor the formal requirements and guidance of State and Federal health authorities and act accordingly.

Other than set out above, COVID-19 has not impacted the Company’s normal exploration activities on its Rockford Project in the Fraser Range District of Western Australia and has not had material impact on the cost of this exploration activity.

Legend Mining Limited Half Year Report 2020

2

EVENTS AFTER THE BALANCE SHEET DATE

On 10 August 2020 Mr Oliver Kiddie was appointed as Executive Director of the Company. Following Mr Kiddie’s appointment, Mr Derek Waterfield stood down from the Board and was appointed as General Manager Exploration, remaining focused on the Company’s Rockford Project in the Fraser Range. No other matters or circumstances have arisen since the end of the half-year to the date of this report which have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity.

AUDITOR’S INDEPENDENCE

The Auditor’s Independence Declaration under S307C of the Corporations Act 2001 has been received from Ernst & Young, the Company’s auditor, and is available for review on page 15.

SIGNED in accordance with a Resolution of the Directors on behalf of the Board

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________ M Wilson Managing Director

Dated this 26th day of August 2020

Legend Mining Limited Half Year Report 2020

3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 30 JUNE 2020

Notes Finance revenue 3(a) Other Income 3(b) Net (loss)/gain on revaluation of financial assets held for trading 3(b) Employee benefits expense 3(c) Financial expenses 3(d) Other expenses 3(d) Corporate expenses Net loss before income tax expense Income tax benefit Loss for the period attributable to Owners of Legend Mining Limited Other comprehensive income Total comprehensive loss for the period attributable to Owners of Legend Mining Limited LOSS PER SHARE (cents per share) Basic loss for the period attributable to ordinary equity holders of the parent 4 Diluted loss for the period attributable to ordinary equity holders of the parent 4	CONSOLIDATED 30 Jun 2020 $ 30 Jun 2019 $ 115,801 91,545 62,500 - (23,094) 19,655 (77,613) (143,835) (1,386) - (17,394) (1,276) (229,063) (282,639)
	(170,249) (316,550) - -
	(170,249) (316,550)
	- -
	(170,249) (316,550)
	(0.0061) (0.0155) (0.0061) (0.0155)

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2020

4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

Notes ASSETS Current Assets Cash and cash equivalents 6 Receivables 7 Other financial assets 8 Total Current Assets Non-current Assets Other financial assets 8 Property, plant and equipment 9 Right-of-use asset Deferred exploration assets 10 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 11 Provisions Lease liability Total Current Liabilities Non-current Liabilities Provisions Lease liability Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Equity attributable to equity holders of the parent Contributed equity 12 Share option premium reserve Accumulated losses TOTAL EQUITY	CONSOLIDATED As at 30 Jun 2020 $ As at 31 Dec 2019 $ 26,541,157 10,133,887 177,952 333,471 50,000 148,273
	26,769,109 10,615,631
	5,775 5,775 264,624 84,777 48,929 81,345 18,356,015 14,622,473
	18,675,343 14,794,370
	45,444,452 25,410,001
	909,898 230,464 155,456 195,148 31,322 67,234
	1,096,676 492,846
	113,675 108,258 13,704 13,704
	127,379 121,962
	1,224,055 614,808
	44,220,397 24,795,193
	92,074,637 72,479,184 23,615,178 23,615,178 (71,449,418) (71,299,169)
	44,220,397 24,795,193

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2020

5

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 30 JUNE 2020

CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received ATO Cashflow Boost Proceeds from Jindal Receivables Net cash flows from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for exploration and evaluation Proceeds from sale of assets Net cash flows (used in)/from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from capital raising Payment for capital raising costs Principal elements of lease payments Net cash flows from financing activities Net Increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at end of period	CONSOLIDATED 30 Jun 2020 $ 30 Jun 2019 $ (336,727) (590,015) 108,521 98,247 50,000 - 250,000 -
	71,794 (491,768) (208,322) (4,200) (3,174,102) (1,202,525) 75,179 -
	(3,307,245) (1,206,725) 20,400,000 - (721,367) - (35,912) -
	19,642,721 - 16,407,270 (1,698,493) 10,133,887 3,323,829
	26,541,157 1,625,336

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2020

6

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 30 JUNE 2020

Consolidated At 1 January 2020 Loss for the period Total comprehensive loss for the period Issued capital Capital raising costs At 30 June 2020 At 1 January 2019 Loss for the period Total comprehensive loss for the period At 30 June 2019	Issued Capital Share Option Premium Reserve Accumulated Losses Total Equity $ $ $ $ 72,479,184 23,615,178 (71,299,169) 24,795,193
	- - (170,249) (170,249)
	- - (170,249) (170,249)
	20,400,000 - - 20,400,000
	(804,547) - - (804,547)
	92,074,637 23,615,178 (71,469,418) 44,220,397
	60,711,242 23,268,278 (70,897,368) 13,082,152
	- - (316,550) (316,550)
	- - (316,550) (316,550)
	60,711,242 23,268,278 (71,213,918) 12,765,602

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2020

7

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 1: CORPORATE INFORMATION

The financial report of Legend Mining Limited (the Company) for the half-year ended 30 June 2020 was authorised for issue in accordance with a resolution of the Directors on 26 August 2020.

Legend Mining Limited is a company incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group are exploration for nickel and copper deposits in Australia.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the Annual Financial Report of Legend Mining Limited for the year ended 31 December 2019.

It is also recommended that the half-year financial report be considered together with any public announcements made by Legend Mining Limited and its controlled entities during the half-year ended 30 June 2020 in accordance with the continuance disclosure obligations arising under the Corporations Act 2001.

(a) Basis of preparation

The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. The half-year financial report has been prepared on a historical cost basis except for certain financial instruments, which have been measured at fair value.

The half-year financial report is presented in Australian dollars and all values are expressed as whole dollars. For the purpose of preparing the half-year financial report, the half-year has been treated as a discreet reporting period.

(b) New Standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of new standards effective as of 1 January 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

(c) Estimates

The preparation of the half-year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Legend Mining Limited Half Year Report 2020

8

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 3: REVENUE AND EXPENSES Revenues and expenses from continuing operations (a) Finance Revenue Bank interest received and receivable Interest on Jindal receivable (refer note 7(a)) (b) Other Income ATO Cashflow boost Net gain/(loss) on sale of financial assets (c) Employee Benefits Expense Salaries, on-costs and other employee benefits (d) Other Expenses Depreciation - office Depreciation – office Financial expenses - office Other NOTE 4: EARNINGS/(LOSS) PER SHARE (a) Earnings used in the calculation of basic earnings/(loss)per share Net loss attributable to ordinary equity holders of Legend Mining Limited (b) Weighted average number of shares on issue during the financial period used in the calculation of basic earnings/(loss) per share Weighted average number of ordinary shares on issue used in the calculation of diluted earnings/(loss) per share		CONSOLIDATED 30 Jun 2020 $ 30 Jun 2019 $ 71,027 31,545 44,774 60,000 115,801 91,545 62,500 - (23,094) - 39,406 - 77,613 143,835 77,613 143,835 1,611 1,276 21,814 13,774 1,386 - (6,031) - 18,780 15,050 CONSOLIDATED 30 Jun 2020 $ 30 Jun 2019 $ (170,249) (316,550)
		2,787,530,333 2,044,350,801
		2,787,530,333 2,044,350,801

(c) Information on the classification of options

For the half year ended 30 June 2020, all options on issue were dilutive as the various exercise prices were all lower than the average market price of the Company’s shares during the year. This has resulted in the diluted earnings per share being different from the basic earnings per share. These options could potentially dilute basic earnings per share in the future. The number of dilutive potentially issuable ordinary shares at 30 June 2020 is 377,111,111 (30 June 2019: 238,000,000).

Legend Mining Limited Half Year Report 2020

9

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 5: SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports that are used by the chief operating decision maker (“CODM”) in order to allocate resources to the segment and to assess its performance. The CODM of the Group is the Board of Directors.

The Group has identified its operating segments based on the internal reports that are provided to the CODM on a regular basis. The Group has one reportable segment being exploration and evaluation activities in Australia.

NOTE 6: CASH AND CASH EQUIVALENTS Cash at bank and in hand Term deposits Total cash and cash equivalents NOTE 7: TRADE AND OTHER RECEIVABLES Current Jindal receivable (a) Other receivable (b) Jindal receivable Receivable from Jindal Mining and Exploration Limited (a) Provision for Jindal receivables	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $ 1,541,157 633,887 25,000,000 9,500,000
	26,541,157 10,133,887
	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $ 44,774 282,658 133,178 50,813 177,952 333,471 2,294,774 2,537,658 (2,250,000) (2,255,000)
	44,774 282,658

Terms and conditions relating to the above financial instruments:

• (a) On 4 January 2017, the Company announced that it had received a request from Jindal Steel and Power (Mauritius) Limited (“Jindal”) to consider a further deferral of the payment of the final amount of $3 million owing to Legend from the sale of the Cameroon Iron Ore project. At that time, Legend agreed to this request in principle, and expected to report to the ASX as soon as an agreement of new payment terms was reached.

On 6 May 2019, Legend and Jindal agreed to a payment schedule for the final amount of $3 million owing to Legend from the sale of the Cameroon Iron Ore project. Three payments of $250,000 were received between October 2019 and January 2020. Since January 2020 and following the disruption caused by the COVID-19 outbreak, no payments of interest and principal were received.

Subsequent to 30 June 2020 the Company has agreed to a further reschedule of payments due to the severity and ongoing disruption caused by COVID-19. This will see periodic repayments of $250,000 (plus interest) starting November 2020 and finishing in March 2022, with interest paid quarterly. The March 2020 and June 2020 quarters’ interest of $44,774 in aggregate was received from Jindal on 28 July 2020. The provision has not been adjusted in the absence of further evidence of recoverability.

• (b) Other receivables are interest accruals on Term Deposits.

Legend Mining Limited Half Year Report 2020

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 8: OTHER FINANCIAL ASSETS

Current Share in S2 Resources Limited - at fair value (c) Security Bond (a) Non-current Rental property bond (b)	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $ - 98,273 50,000 50,000
	50,000 148,273
	5,775 5,775

The equity investments are all classified as financial assets at fair value through profit and loss. The market value of all equity investments represent the fair value based on quoted prices on active markets (ASX) as at the reporting date without any deduction for transaction costs. These investments are classified as Level 1 financial instruments. There have been no transfers between levels of the fair value hierarchy used in measuring the fair value of these financial instruments, or changes in its classification as a result of a change in the purpose or use of these assets.

• a) Security Bond - bank deposit held as security for credit cards. At 30 June 2020, this deposit is held on term deposit for 5 months and 28 days with an interest rate of 0.90% per annum maturing on 21 December 2020.

• b) Rental Property Bond – this bond relates to a rental property in Kalgoorlie WA. No interest is received on this bond.

• c) S2 Resources Limited Shares sold during the period.

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

Cost Accumulated depreciation Net carrying amount Movement Opening net carrying amount Additions Depreciation expense - Admin Depreciation expense - Exploration Closing net carrying amount	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $ 523,851 315,329 (259,227) (230,552)
	264,624 84,777
	6 Months Ended 30 Jun 2020 $ 6 Months Ended 30 Jun 2019 $ 84,777 109,099 208,522 7,500 (1,611) (15,050) (27,064) -
	264,624 101,549

Legend Mining Limited Half Year Report 2020

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 10: DEFERRED EXPLORATION ASSETS

Deferred exploration costs (a) Deferred exploration and evaluation assets At 1 January, at cost Expenditure incurred during the period Reimbursement of exploration expenditure - R&D Rebate At 30 June, at cost (i)	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $
	18,356,015 14,622,473
	6 Months Ended 30 Jun 2020 $ 6 Months Ended 30 Jun 2019 $ 14,622,473 10,012,564 3,733,542 1,231,158 - -
	18,356,015 11,243,722

Note:

(i) The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

NOTE 11: TRADE AND OTHER PAYABLES Current – unsecured Trade payables (i) Other payables and accruals (ii)	30 Jun 2020 $ 31 Dec 2019 $ 590,947 230,465 318,951 67,234
	909,898 297,699

Terms and conditions relating to the above financial instruments

(i) Trade payables are non-interest bearing and normally settled on 30 day terms.

(ii) Other payables are non-interest bearing and normally settled as they fall due.

NOTE 12: CONTRIBUTED EQUITY

Ordinary shares Issued and fully paid Issue costs Movement in ordinary shares on issue At 1 January 2020 Conversion of Options – Musgrave Minerals (May 2020) Share Placement – Creasy, IGO and Euroz Securities(June 2020) Costs of Placement At 30 June 2020	CONSOLIDATED AND COMPANY 30 Jun 2020 $ 31 Dec 2019 $ 96,185,375 75,785,375 (4,110,738) (3,306,191)
	92,074,637 72,479,184
	30 June 2020 30 June 2020 No. of Shares $ 2,372,128,578 72,479,184 10,000,000 400,000 142,857,143 20,000,000 - (804,547)
	2,524,985,721 90,074,637

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Legend Mining Limited Half Year Report 2020

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2020

NOTE 13: SHARE-BASED PAYMENTS

During the 2020 half-year there were no share-based payment transactions.

NOTE 14: COMMITMENTS

(a) Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay approximately $2,207,500 (2019: $1,357,500) in the following twelve months in respect of tenement lease rentals and to meet minimum expenditure requirements of the Department of Mines, Industry Regulation and Safety. These obligations are expected to be fulfilled in the normal course of operations and have not been provided for in the financial report.

NOTE 15: CONTINGENT LIABILITIES

There are no contingent liabilities at the reporting date.

NOTE 16: EVENTS AFTER THE BALANCE SHEET DATE

No matters or circumstances have arisen since the end of the half-year to the date of this report which have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity.

NOTE 17: DIVIDENDS PAID AND PROPOSED

No dividends were paid or proposed this financial period.

NOTE 18: FAIR VALUES

The carrying amounts of the Group’s financial assets and financial liabilities at 30 June 2020 and 31 December 2019 are reasonable approximations of their fair values at those dates.

Management assessed that cash and cash equivalents, trade and other receivables, and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

There have been no transfers between Level 1 and Level 2 during the period.

The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value of the quoted equity instruments is based on price quotations at the reporting date.

Legend Mining Limited Half Year Report 2020

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DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Legend Mining Limited, I state that:

In the opinion of the Directors:

• a) the financial statements and notes, of the consolidated entity, are in accordance with the Corporations Act 2001, including;

• i. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and its performance for the period ended on that date; and

• ii. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

• b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board.

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Mark Wilson Managing Director

Dated this 26th day of August 2020

Legend Mining Limited Half Year Report 2020

14

AUDITOR’S INDEPENDENCE DECLARATION

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Legend Mining Limited Half Year Report 2020

AUDITOR’S REVIEW REPORT

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Legend Mining Limited Half Year Report 2020

AUDITOR’S REVIEW REPORT

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Legend Mining Limited Half Year Report 2020