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RESOURCE BASE LIMITED. Interim / Quarterly Report 2021
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Interim / Quarterly Report
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Resource Base Limited
ABN 57 113 385 425
Interim Report - 31 December 2020
Resource Base Limited Corporate directory 31 December 2020
| Shannon Green (Executive Chairman)John Lewis (Executive Director)Jamie Myers (Non-Executive Director) |
|---|
| Shannon Coates |
| Suite 5, 62 Ord StreetWest Perth WA 6005 |
| Suite 5, 62 Ord StreetWest Perth WA 6005 |
| Link Market ServicesLevel 4 Central Park152 St George TerracePerth WA 6000 |
| Elderton Pty LtdLevel 2, 267 St Georges Tce,Perth WA 6000 |
Resource Base Limited Directors' report 31 December 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Resource Base Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled during, the half-year ended 31 December 2020.
Directors
The following persons were directors of Resource Base Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:
Shannon Green Jamie Myers Michael Kennedy (resigned 26 October 2020) John Lewis (appointed 26 October 2020)
Principal activities
During the financial half-year the principal continuing activities of the consolidated entity consisted of assessment of exploration and commercial opportunities to leverage off Resource Base's existing assets.
Review of operations
The loss for the period after providing for income tax amounted to $1,030,445 (31 December 2019: $481,953).
The shares in the company continued to be suspended from trading on the ASX between 1 July 2020 and 19 November 2020 when the Company was officially delisted from the ASX.
The potential to utilise the idled Broula King processing site subsidiary Broula King Joint Venture Pty Ltd were sold to Sunshine Reclamation Pty Ltd on 18 December 2020.
In addition to focusing on realising the Broula King site, discussions have been held with parties in respect of prospects located elsewhere around Australia. In particular, approaches have been received in respect of mineral exploration opportunities, and especially copper and gold bearing prospects. This reflects the continued high A$ gold price, and the general high level of corporate activity throughout the gold sector. The company continues to investigate all opportunities with a view to completing a transaction early in 2021.
Significant changes in the state of affairs
As noted above the Company was officially delisted from the ASX on 19 November 2020 and the Company sold its investment in Broula King Joint Venture Pty Ltd effective on 18 December 2020.
There were no other significant changes in the state of affairs of the consolidated entity during the financial half-year.
Subsequent Events
On 16 February 2021, the Company announced it had entered into a Binding Term Sheet (Term Sheet) with ASX listed Navarre Minerals Limited (ACN 113 385 425) (NML or the Vendor) pursuant to which the Company has agreed to acquire from the Vendor Exploration Licence 4590 (the Tenement or the Black Range Project) and all applicable mining information and the benefit of any applicable access, heritage and native title agreements relating to the Tenement area (together, the Sale Assets).
The Black Range Project, located 260km west of Melbourne in Victoria and approximately 60km north-west of Stavely zinc. During FY2020, NML announced the completion of a 1,496m diamond drilling program across 3 holes at the Eclipse
The Term Sheet conditions among others normally associated with an agreement of this type included
- a. Resource Base completing a consolidation of capital at a ratio of one (1) new security for every eight (8) securities (unless another ratio is otherwise mutually agreed by both parties) (Consolidation);
- b. Resource Base completing a capital raising of not less than such a securities to be admitted to trading on the Official List of the ASX following settlement of the Acquisition (Capital Raising);
The Company has entered into agreement with all the creditors whose debts are recorded as Borrowings in the accounts. Whereby these debts have bene compromised and converted to share prior to the Consolidation referred to above. These agreements are conditional upon the Company completing the acquisition of the Black Range project raising sufficient capital and being requoted on the ASX.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs 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 4.
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
___________________________
Shannon Green Director
10 March 2021
Auditor's Independence Declaration
To those charged with the governance of Resource Base Limited
As auditor for the review of Resource Base Limited for the half-year ended 31 December 2020, I declare that, to the best of my knowledge and belief, there have been:
- i) no contraventions of the independence requirements of the Corporations Act 2001 in relation to the review; and
- ii) no contraventions of any applicable code of professional conduct in relation to the review.
Eldectur Avdit Pty Utd.
Elderton Audit Pty Ltd
Sidrelac Hollens
Nicholas Hollens Managing Director
10 March 2021
T +61 8 6324 2900 ABN 51 609 542 458 E [email protected] Wwww.eldertongroup.com A Level 2, 267 St Georges Terrace, Perth WA 6000
Resource Base Limited Contents 31 December 2020
| Statement of profit or loss and other comprehensive income | 6 |
|---|---|
| Statement of financial position | 7 |
| Statement of changes in equity | 8 |
| Statement of cash flows | 9 |
| Notes to the financial statements | 10 |
| Directors' declaration | 14 |
| Independent auditor's review report to the members of Resource Base Limited | 15 |
Resource Base Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2020
| Consolidated | |||
|---|---|---|---|
| Note | Dec 2020$ | Dec 2019$ | |
| Revenue | - | 28,319 | |
| Interest revenue calculated using the effective interest method | 2,711 | 5,675 | |
| ExpensesAdministration expensesCorporate expensesCare and maintenance expensesOccupancyMovement in provision for rehabilitationOther expensesLoss on sale of SubsidiaryFinance costs | 4 | (43,562)(302,205)(118,802)(7,125)-(1,095)(331,228)(229,139) | (17,141)(237,308)(18,181)(8,993)(72,000)(8,138)-(154,186) |
| Loss before income tax expense | (1,030,445) | (481,953) | |
| Income tax expense | - | - | |
| Loss after income tax expense for the half-year attributable to the owners ofResource Base Limited | (1,030,445) | (481,953) | |
| Other comprehensive income for the half-year, net of tax | - | - | |
| Total comprehensive loss for the half-year attributable to the owners ofResource Base Limited | (1,030,445) | (481,953) | |
| Cents | Cents | ||
| Basic earnings per shareDiluted earnings per share | 1010 | (3.72)(3.72) | (1.75)(1.75) |
Resource Base Limited Statement of financial position As at 31 December 2020
| Consolidated | |||
|---|---|---|---|
| Note | Dec 2020$ | Jun 2020$ | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 39,065 | 24,265 | |
| Receivables | 3,519 | 71,780 | |
| Other | - | 3,204 | |
| 42,584 | 99,249 | ||
| Non-current assets classified as held for sale | 4 | - | 1,022,254 |
| Total current assets | 42,584 | 1,121,503 | |
| Non-current assets | |||
| Plant and equipment | - | 203 | |
| Total non-current assets | - | 203 | |
| Total assets | 42,584 | 1,121,706 | |
| Liabilities | |||
| Current liabilities | |||
| Payables | 5 | 354,576 | 598.241 |
| Borrowings | 6 | 3,607,691 | 2.630.115 |
| 3,962,267 | 3.228.356 | ||
| Liabilities directly associated with assets classified as held for sale | - | 572.000 | |
| Total current liabilities | 3,962,267 | 3,800,356 | |
| Non-current liabilities | |||
| Payables | 7 | - | 210,588 |
| Total non-current liabilities | - | 210,588 | |
| Total liabilities | 3,962,267 | 4,010,944 | |
| Net liabilities | (3,919,683) | (2,889,238) | |
| Equity | |||
| Issued capital | 14,602,953 | 14,602,953 | |
| ReservesAccumulated losses | 46,583(18,569,219) | 46,583(17,538,774) | |
| Total deficiency in equity | (3,919,683) | (2,889,238) |
Resource Base Limited Statement of changes in equity For the half-year ended 31 December 2020
| Issued | Reserves | Accumulated | Totaldeficiency in | |
|---|---|---|---|---|
| Consolidated | capital$ | $ | losses$ | equity$ |
| Balance at 1 July 2019 | 14,602,953 | 30,414 | (16,640,876) | (2,007,509) |
| Loss after income tax expense for the half-yearOther comprehensive income for the half-year, net of tax | -- | -- | (481,953)- | (481,953)- |
| Total comprehensive loss for the half-year | - | - | (481,953) | (481,953) |
| Balance at 31 December 2019 | 14,602,953 | 30,414 | (17,122,829) | (2,489,462) |
| Issued | Reserves | Accumulated | Total | |
| Consolidated | capital$ | $ | losses$ | deficiency inequity$ |
| Balance at 1 July 2020 | 14,602,953 | 46,583 | (17.538.774) | (2,889,238) |
| Loss after income tax expense for the half-yearOther comprehensive income for the half-year, net of tax | -- | -- | (1,030,445)- | (1,030,445)- |
| Total comprehensive loss for the half-year | - | - | (1,030,445) | (1,030,445) |
Resource Base Limited Statement of cash flows For the half-year ended 31 December 2020
| Consolidated | |
|---|---|
| Dec 2020$ | Dec 2019$ |
| - | 11,966 |
| (456,260) | (511,244) |
| (456,260) | (499,278) |
| 2,711 | 6,171 |
| - | 24,526 |
| - | (5,438) |
| - | 25,628 |
| 289,173 | - |
| (164,376) | (448,391) |
| 100,000 | - |
| - | |
| (1,000) | |
| 165,010 | (1,000) |
| 14,166 | 250,000 |
| 14,166 | 250,000 |
| (199,391) | |
| 234,881 | |
| 35,490 | |
| 65,010-14,80024,26539,065 |
Note 1. General information
The financial statements cover Resource Base Limited as a consolidated entity consisting of Resource Base Limited and the entities it controlled during, the half-year. The financial statements are presented in Australian dollars, which is Resource Base Limited's functional and presentation currency.
Resource Base Limited is an unlisted public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:
Suite 5, 62 Ord Street West Perth WA 6005
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on TBC 2021.
Note 2. Significant accounting policies
These general-purpose financial statements for the interim half-year reporting period ended 31 December 2020 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.
These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2020 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Australian Accounting Standards (AASs) and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The consolidated financial report has been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
For the six months ended 31 December 2020, the consolidated entity incurred a loss of $1,030,445 and had negative cash flows from operations $453,549.
As at 31 December 2020 the Company had a working capital deficiency of $3,919,683 and net asset deficiency of $3,919,683.
These events and condition indicate that a material uncertainty exists which may cast significant doubt as to whether the consolidated entity will continue as a going concern.
The Board and management of the Company continue to evaluate new business opportunities that have potential to grow and diversify sources of production and increase shareholder wealth.
application of the going concern basis of accounting is appropriate due to the following factors:
Note 2. Significant accounting policies (continued)
- The company has received letters of comfort from its major shareholder, Asipac Group Pty Ltd and other Loan Creditors , indicating they will provide financial support sufficient for the Company to meet its financial commitments. Subsequent to the period end, the Company has negotiated to convert the loan amounts to equity as referred to in Note 9.;
- The Board has been active in seeking out new partners and opportunities to restructure the Company. The Company has in February 2021 entered into an agreement to acquire the Black Range Project and subsequently requote the company on the ASX where it will be in a position to seek further capital injections from the equity markets if necessary;
- The Board is of the opinion that the company will be able to access equity capital markets for any additional working capital requirements; and
- The ability of the consolidated entity to scale back certain activities, if required.
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessarily incurred should the consolidated entity not continue as a going concern.
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into one operating segment, being the assessment of exploration and commercial opportunities to leverage off Resource Base's existing assets in Australia. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
Note 4. Sale of Broula king Joint Venture Pty Ltd
On 18 August 2020, the Company entered into a Binding Term Sheet with Sunshine Reclamation Pty Ltd (Sunshine) regarding the sale of the 100% owned subsidiary Broula King Joint Venture Pty Ltd.
On 18 October Sunshine Reclamation Pty Ltd executed the option to acquire BKJV. Subject to this date the NSW government regulator indicated to the Company that BKJV was in breach of its environment obligations regard the BKJV site and that significant penalties were being considered. Further the regulators indicated and internal works by the Company confirmed that there was likely to be a significant increase in the Environmental Bond required over the BKJV ML 1617. This had a significant effect on the value of BKJV. As a result, the Company and Sunshine renegotiated the terms of the sale of BKJV.
On 18 December 2020, the Company transferred the one share it owned in BKJV to Sunshine for a total sale price in the amount of $100,000 which reflected a net loss on sale of BKJV in the amount of $331,228. The Company had in previous periods made provisions for the amount recoverable on sale of BKJV down to $450,254. The balance reflects costs incurred during the period by the Company to complete the sale.
As at 18 December 2020 the Company no longer had responsibility for any and all present or future environmental liabilities of BKJV.
Note 5. Current liabilities - payables
| Consolidated | |||
|---|---|---|---|
| Dec 2020$ | Jun 2020$ | ||
| Trade payables | 211,419 | 454,744 | |
| Payable to directors | 125,000 | 116,800 | |
| Other payables | 18,158 | 26,697 | |
| 354,577 | 598,241 |
Note 6. Current liabilities - borrowings
| Consolidated | |||
|---|---|---|---|
| Dec 2020$ | Jun 2020$ | ||
| Loans from directors/OfficersConvertible notes payable | (i)(ii) | 731,914152,834 | 731,914146,956 |
| Unsecured loan from major shareholder | (iii) | 2,722,943 | 2,483,159 |
| 3,607,691 | 3,362,029 |
(i) Loan from Directors/officers
The former Board members and officers of the Company have accrued significant costs which have been capitalised into loans with the company. The parties have agreed that the loans will not be payable until 24 October 2021.
(ii) Convertible Notes payable
The convertible note has an interest rate of 8%, has a conversion price of 4 cents and matures on 24 October 2021. The convertible note has a face value of $167,147 with an amount of $46,583 having been recognised in equity.
(iii) Unsecured loan from major shareholder
The facility from the major shareholder has an interest rate of 12%, per annum and matures on 24 October 2021. A total of $2,035,200 has been drawn down against the facility from the major shareholder with an additional amount of $687,743 having been accrued in relation to interest and facility fees over the life of the loan.
The Company has entered into Agreements with all the above parties to compromise these debts as part of the restructure of the Company initially announced on 16 February 2021.
Under the terms of the Deeds entered between the creditors and the Company the debts will be converted to equity and then the shares will be the subject of a 1 for 8 Consolidation. The transaction is conditional on the settlement of the Acquisition of the Black Range Project, raising of between $4,500,000 and $5,500,000 and the Company being requoted on the ASX.
Note 7. Non-current liabilities Payables provisions
| Consolidated | |||
|---|---|---|---|
| Dec 2020$ | Jun 2020$ | ||
| Payables | - | 210,588 |
Note 8. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial half-year.
Note 9. Events after the reporting period
On 16 February 2021, the Company announced it had entered into a Binding Term Sheet (Term Sheet) with ASX listed Navarre Minerals Limited (ACN 113 385 425) (NML or the Vendor) pursuant to which the Company has agreed to acquire from the Vendor Exploration Licence 4590 (the Tenement or the Black Range Project) and all applicable mining information and the benefit of any applicable access, heritage and native title agreements relating to the Tenement area (together, the Sale Assets).
The Black Range Project, located 260km west of Melbourne in Victoria and approximately 60km north-west of Stavely e for copper, gold and zinc. During FY2020, NML announced the completion of a 1,496m diamond drilling program across 3 holes at the Eclipse
The Term Sheet conditions among others normally associated with an agreement of this type included
- c. Resource Base completing a consolidation of capital at a ratio of one (1) new security for every eight (8) securities (unless another ratio is otherwise mutually agreed by both parties) (Consolidation);
- d. Resource Base completing a capital raising of not less than such a securities to be admitted to trading on the Official List of the ASX following settlement of the Acquisition (Capital Raising);
The Company has entered into agreement with all the creditors whose debts are recorded as Borrowings in the accounts. Whereby these debts have been compromised and converted to share prior to the Consolidation referred to above. These agreements are conditional upon the Company completing the acquisition of the Black Range project raising sufficient capital and being requoted on the ASX.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
Note 10. Earnings per share
| ConsolidatedDec 2020$ | Dec 2019$ | |
|---|---|---|
| Loss after income tax attributable to the owners of Resource Base Limited | (1,030,445) | (481,953) |
| Number | Number | |
| Weighted average number of ordinary shares used in calculating basic earnings per share | 27,491,373 | 27,491,373 |
| Weighted average number of ordinary shares used in calculating diluted earnings per share | 27,491,373 | 27,491,373 |
| Cents | Cents | |
| Basic earnings per shareDiluted earnings per share | (3.72)(3.72) | (1.75)(1.75) |
Resource Base Limited Directors' declaration 31 December 2020
In the directors' opinion:
- the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
- the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2020 and of its performance for the financial half-year ended on that date; and
- there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________ Shannon Green Executive Chairman
10 March 2021
INDEPENDENT AUDITOR'S REVIEW REPORT
To the members of Resource Base Limited
Report on the Half-Year Financial Report
Conclusion
We have reviewed the half-year financial report of Resource Base Limited (the 'Company') and its controlled entites (collectively referred as the 'Group'), which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, a summary of significant accounting policies and other explanatory information, and the directors' declaration.
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of the group does not comply with the Corporations Act 2001 including:
(a) giving a true and fair view of the group financial position as at 31 December 2020 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.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our responsibilities are further described in the Auditor's Responsibilities for the Review of the Financial Report section of our report. We are independent of the group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001 which has been given to the directors of the group, would be in the same terms if given to the directors as at the time of this auditor's review report.
Material Uncertainty Related to Going Concern
Without modifying our opinion, we draw attention to Note 2, which outlines that the group is dependent upon continuing financial support from it's major shareholder, Asipac Group Pty Ltd and other Loan creditors, to pays its debts as and when they fall due. As at 31 December 2020, the Group had a working capital deficiency of $3,919,683, $2,722,943 was owing to Asipac Group Pty Ltd and $731,914 was owing to directors/officers . Asipac Group Pty Ltd and other loan creditors have indicated that they will continue to support the group's activities and provide financial support sufficient for the Group to meet its financial commitments.
As a result there is material uncertainty related to events or conditions that may cast significant doubt on the group's ability to continue as a going concern, and therefore whether it will realise its asset and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.
T +61 8 6324 2900 ABN 51 609 542 458 E [email protected] Wwww.eldertongroup.com A Level 2, 267 St Georges Terrace, Perth WA 6000
Responsibility of Management for the Financial Report
The directors of the group are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control 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.
Auditor's Responsibility for the Review of the Financial Report
Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether 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 group's financial position as at 31 December 2020 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
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.
$G$ deston $A$ $\partial_1$ + $P$ $\vdash$ $\forall$ $\forall$ deston Audit Ptv Ltd
Elderton Audit Pty Ltd
Dionalas Mollens
Nicholas Hollens Managing Director
10 March 2021
Perth