Announcement PDF LITHIUM AUSTRALIA NL ACN 126 129 413 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2017 CONTENTS PAGE CORPORATE DIRECTORY ....................................................................................... 1 CHAIRMAN’S LETTER ............................................................................................... 2 DIRECTORS’ REPORT ............................................................................................. 4 AUDITORS INDEPENDENCE DECLARATION ............................................................ 17 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................................................................................................... 18 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..................................... 19 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...................................... 20 CONSOLIDATED STATEMENT OF CASH FLOWS .................................................. 21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .................................... 22 DIRECTORS’ DECLARATION................................................................................. 45 INDEPENDENT AUDITOR’S REPORT .................................................................... 46 ADDITIONAL ASX INFORMATION ....................................................................... 47 CORPORATE GOVERNANCE STATEMENT..................................................... 52 CORPORATE DIRECTORY AUDITORS DIRECTORS Bentley’s Audit & Corporate (WA) Pty Ltd Level 3 216 St Georges Terrace Perth WA 6000 Adrian Griffin Managing Director George Bauk Non-Executive Chairman Bryan Dixon Non-Executive Director SHARE REGISTRY COMPANY SECRETARY Advanced Share Registry 110 Stirling Highway Nedlands WA 6009 T: +61 8 9389 8033 F: +61 8 9262 3723 Barry Woodhouse REGISTERED OFFICE STOCK EXCHANGE LISTING Level 1 675 Murray Street West Perth WA 6005 The Company is listed on Australian Securities Exchange Limited Home Exchange – Perth ASX Codes: LIT and LITCE T: +61 8 6145 0288 F: +61 8 9475 0847 E: info@lithium-au.com W: www.lithium-au.com Page 1 CHAIRMAN’S LETTER Dear Shareholder It is my pleasure to provide you with Lithium Australia's annual report for the year ended 30 June 2017. Over the past 12 months, Lithium Australia ('LIT' or 'the Company') has significantly progressed its plan to supply lithium chemicals to the current energy paradigm. We continued to be supported by our first institutional shareholder, Lanstead Capital L.P. LIT is appreciative of the innovative nature of the funding mechanism which provided monthly working capital to support its plan. LIT is actively seeking more institutional investors who recognise the opportunities in this booming lithium market. Worldwide, the key industries that utilise lithium continue to do well. Growth rates for electric vehicles ('EVs'), supported by governments around the world, sit at around 53 per cent per annum, while energy storage – which is about to take off – is very close to achieving commercial viability. The consumer electronics sector is also experiencing solid growth, as are the glass and ceramics industries. Indeed, Roskill forecasts a surge in demand for lithium from 184,000 tonnes per annum last year to 535,000 tonnes per annum by 2025 which is the median case. LIT wrote last year that the key to the future success of the lithium industry is the development of a diverse supply chain, involving multiple countries and miners/processes. The challenges this creates within the lithium supply chain are critical to LIT's continuing success, as one of the Company's main goals is the introduction of technology to produce lithium chemicals for downstream consumption by the battery industry. Big Australian mining companies have now recognised this opportunity. Recent announcements by BHP Nickel West demonstrate that the Kwinana / Rockingham area 45km’s south of Perth may be destined to become the world’s battery production centre. Greenbushes miner, Tianqui Lithium Australia Pty Ltd is currently building a 24,000 tpa lithium hydroxide factory with approvals to double its capacity in the short term. Growth in the world market has coaxed BHP to again consider downstream metal processing to produce nickel sulphate at its facilities in Kwinana along with cobalt by-products. Lithium-ion batteries also require graphite. Whilst there are currently no companies the size of Tianqui or BHP with stated intentions to develop a graphite production facility in the region, it would be a logical development. During 2017, and after an extensive safety review of its Sileach® process by the Australian Nuclear Science and Technology Organisation (ANSTO) LIT completed its continuous pilot plan run and subsequently its engineering study. It is LIT’s intention to optimise plant design before it considers a Final Investment Decision to develop the Large-Scale Pilot Plant with a capacity to produce up to 2,500 tpa lithium carbonate equivalent. LIT drilled at two of its prospects this year. With its joint venture partner in Mexico, LIT drilled its Agua Fria prospect. Whilst there were no big hits, the clays provide an ideal opportunity for entrance into the USA market in the event that LIT unlocks the key to the best beneficiation process. LIT also drilled at its Ravensthorpe prospect. Unfortunately, weather conditions did not allow the full program and results to date have been unfavourable. LIT has identified that the Tin International AG project in Saxony may provide the required feed for its LargeScale Pilot Plant and beyond. LIT has committed resources to develop feed-stock and we are confident that this historic tin mine will contribute significantly to future lithium supplies. Page 2 CHAIRMAN’S LETTER (Continued) LIT has developed a number of alliances with companies such as Pilbara Minerals Ltd, MetalsTech Ltd, Venus Metals Corporation Ltd, Alix Resources Corporation, Tin International and Focus Minerals NL for the reason of securing a diverse supply of lithium resources in the world’s major lithium provinces. LIT also has investments in companies including Lepidico Ltd and Venus Metals, which together provide significant exposure to future supply potential. Meanwhile, the Company continues to develop a strong international exploration portfolio, the aim being not only to develop its own resources but also utilise existing sources of lithium concentrates to feed its planned lithium chemical production hubs. To that end, in June 2016 Lithium Australia entered into a Sileach® joint venture with Pilbara Minerals Limited to establish a carbonate plant that will produce both lithium carbonate and lithium hydroxide from spodumene sourced from Pilbara Minerals’ Pilgangoora deposit located in the northwest of Western Australia. Thus, in the 2017 financial year, the Company's principal aim – that of creating value for shareholders – has been achieved in numerous ways. In addition to the above-mentioned increase in share price, long-term shareholders benefited from the 5-cent partly paid share series, which in 2015-16 peaked at 30 cents with a bonus issue from a previous year, while in August 2016 a further bonus issue of a one-for-two 25-cent partly-paid share was listed and traded at a high of 6.5 cents. Moreover, in May 2016, Lithium Australia announced its proposed spin-out of the Company's graphite assets, for which an IPO in late 2017 is planned. I would like to thank all of our stakeholders who continue to participate in this lithium boom and the inevitable energy revolution. In no particular order, I would like to thank our shareholders, the Lithium Board, our employees, ANSTO, Murdoch University the Federal Government and the WA State Government. We know that it takes a team effort to achieve extraordinary results, and that is our aim. Finally, as chairman, I wish to acknowledge the drive and expertise of the Company's Managing Director, Adrian Griffin, whose commitment has been pivotal to LIT's development, and to also applaud the contribution of nonexecutive Director Bryan Dixon, also an enthusiastic and dedicated member of the board. George Bauk Chairman Page 3 DIRECTORS’ REPORT The Directors present their report on Lithium Australia NL (“LIT” or the “Company”) and its controlled entities (the “Consolidated entity”) for the year ended 30 June 2017 (the “year”). BOARD OF DIRECTORS The names and details of the Consolidated entity’s directors in office during the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Adrian Griffin George Bauk Bryan Dixon Managing Director Non-Executive Chairman Non-Executive Director INFORMATION ON DIRECTORS Adrian Griffin (Managing Director) Qualifications Bsc(Honours),GSA,MAusIMM Experience Mr Griffin has extensive experience in the resources sector accumulated over 40 years. He has held directorships in a number of private and listed resource companies and has been responsible for operating large integrated mining and processing facilities including the Bulong nickel-cobalt operation in the late 1990s. Mr Griffin has substantial experience in the mining industry in South Africa and in particular was founder and technical director of Ferrum Crescent Ltd, a developer of iron ore in that country. Mr Griffin is currently a director of Northern Minerals Limited, Parkway Minerals NL, and Reedy Lagoon Corporation Limited. Other current directorships in listed entities Non-executive Director – Northern Minerals Ltd Chairman – Parkway Minerals NL Non-executive Director – Reedy Lagoon Corporation Ltd George Bauk Non-Executive Chairman Qualifications MBA, BBus Experience Mr Bauk has more than 25 years’ mining industry experience including particular expertise in critical metals. Regarded for his strategic management, business planning, establishment of high-performing teams and capital-raising skills, he has held senior operational and corporate positions with WMC Resources, Arafura Resources and Indago Resources (formerly Western Metals). Since 2010, Mr Bauk has also been Managing Director and CEO of Northern Minerals Limited, overseeing that company’s heavy rare earth project moving to production in northern Australia. Other current directorships in listed entities Managing Director – Northern Minerals Limited Page 4 DIRECTORS’ REPORT (Continued) Bryan Dixon Non-Executive Director Qualifications BCom, CA, ACIS Experience Mr Dixon has over 20 years’ experience in the mining sector and is currently Managing Director of Blackham Resources Ltd, a West Australian gold producer. Mr Dixon is a Chartered Accountant and has extensive experience in the management of public and listed companies. Previously, Mr Dixon has been employed by an international accounting firm, Resolute Limited, and Archipelago Resources Plc. He was a joint winner of the Asia-Pacific Mining Executive of the year in 2017. Mr Dixon has held a numerous director and management roles with emerging resource companies. Mr Dixon specializes in project feasibility, development, project acquisition and financing of mining projects. Other current directorships in listed entities Managing Director – Blackham Resources Non-Executive Director – Hodges Resources COMPANY SECRETARY Barry Woodhouse Qualifications BCom, BLaws, CPA, FCIS, FGIA Experience Mr Woodhouse is a CPA and a Fellow of Governance Institute of Australia and has almost 30 years’ experience in the junior mineral exploration, mineral production, mining services and manufacturing sectors in both private and public companies in Australian and foreign jurisdictions. Mr Woodhouse has held roles including CFO, Company Secretary, Director and Chairman. PRINCIPAL ACTIVITIES The principal activity of the consolidated entity during the financial year was project acquisition, mineral exploration and process development, primarily for the extraction and recovery of lithium. There were no significant changes in the nature of the consolidated entity’s principal activities during the financial year other than as stated in the Chairman’s Report and outlined in the Review of Operations. RESULTS OF OPERATIONS The operating loss after income tax of the Consolidated entity for the year ended 30 June 2017 was $4,592,255(2016: loss of $1,774,446). No dividend has been paid during or is recommended for the financial period ended 30 June 2017. FINANCIAL POSITION The Consolidated entity’s working capital surplus, being current assets less current liabilities was $2,726,613 at 30 June 2017 (2016: working capital surplus of $8,890,671). In the Directors’ opinion, there are reasonable grounds to believe that the Consolidated entity will be able to pay its debts as and when they become due and payable. Page 5 DIRECTORS’ REPORT (Continued) REVIEW OF OPERATIONS It was an exceptional year for LIT. Having advanced from bench scaling testing of its revolutionary Sileach® lithium extraction process to pilot testing, and subsequent engineering design, and financial modelling. This progression has shown that not only is Sileach® a versatile and efficient process but there is scope for further significant advances in the development of the technology. These advances will be built into subsequent testing evaluation and design in the current year. LIT believes that the application of Sileach® to the processing of lithium silicates will provide avenues for revenue generation not available by employing conventional lithium processing technology. This advantage places LIT ahead of all of its peers in the hard rock lithium industry. It is the intention of LIT to utilise Sileach® on materials that are considered non-conventional sources of lithium. These non-conventional sources include low-grade spodumene concentrates, lithium micas and other lithium silicates. Presently, on a global basis, vast quantities of such materials are discharged as waste. This creates the opportunity to procure feed sources for Sileach® which potentially have low or no exposure to mining cost. Indeed, the application of Sileach® to such materials can create sustainability within the lithium industry which is otherwise not available. Furthermore, the application of such processing technology to previously accumulated waste repositories can provide environmental advantages during clean-up and rehabilitation of sites containing such materials. While advanced processing technology remains the main focus, LIT has accumulated a lithium exploration portfolio and significant strategic relationships with other parties in the lithium industry. This has been done to ensure that, regardless of location, a Sileach® plant established anywhere in the world will have a secure source of feed. To retain a very clear focus for the investing public LIT has undertaken to divest of its very substantial graphite assets. This will be accomplished through the float of BlackEarth Minerals NL in the not-too-distant future. Consistent with LIT’s approach to the development of disruptive technology in the lithium industry it has begun to evaluate opportunities in battery re-cycling and production of cathode materials. The successful integration of these technologies creates greater sustainability and progress towards a circular lithium economy. Company projects LIT has used it first-mover advantage to secure enviable strategic positions within prospective lithium provinces worldwide. Outlined below are lithium projects currently being cost-effectively evaluated by LIT. All have been the subject of ASX releases since the Company changed its name – and its focus from copper/gold to lithium in September 2014. Australian Projects • Ravensthorpe Lithium Project, WA • Greenbushes, WA • The Goldfields Lithium Alliance, including the Coolgardie Rare Metals Venture, WA • Seabrook Rare Metals Venture, WA • Gascoyne, WA • Pilbara, WA • Venus Metals Joint Venture, Pilgangoora, WA • Cape York, Queensland • Bynoe, Northern Territory • Lake Johnston, WA • Kangaroo Island, South Australia • Poseidon, WA Page 6 DIRECTORS’ REPORT (Continued) Global Projects • Mexico – Electra Joint Venture • Germany – Sadisdorf Project Strategic Relationships • MetalsTech • Pilgangoora with Pilbara Minerals, WA • ANSTO • Murdoch University Investments • Lepidico Ltd 320m shares approximating 15% and second largest shareholder • Venus Metals Corporation Ltd • MetalsTech Ltd • Alix Resources Corporation Inc • Lefroy Exploration Ltd • BlackEarth Minerals NL Intellectual Property • SiLeach® & Sileach® PCT application • LieNa® and LieNa® PCT Application • L-Max® WA Exclusive Licence • L-Max® International Licence number 1 • L-Max® International Licence number 2 Shareholder Opportunities • MetalsTech priority entitlement delivered a 30% premium on day 1 of MTC listing to LIT shareholders • BlackEarth Minerals NL Priority Entitlement for proposed ASX IPO details (to be advised) SIGNIFICANT CHANGES IN STATE OF AFFAIRS During the 2017 financial year, there were no significant changes in the state of affairs of the consolidated entity. SUBSEQUENT EVENTS (a) On 11 July 2017, BlackEarth Minerals NL cancelled 15,000,000 ordinary shares and 9,000,000 partly paid shares issued to the Company. (b) On 17 July 2017, the Company received from BlackEarth Minerals NL 1,000,000 ordinary shares as proceeds for the sale of tenements to BlackEarth Minerals NL. (c) On 31 July 2017, the Company issued 2,473,901 shares under the Director & Senior Management Fee & Remuneration Sacrifice Share Plan. (d) On 31 July 2017, the Company entered into a Controlled Placement Agreement (CPA) with Acuity Capital. The CPA provides LIT with up to $5 million of standby equity capital over the coming 29 month period. Importantly, LIT retains full control of all aspects the placement process: having sole discretion as to whether or not to utilise the CPA, the quantum of issued shares, the minimum issue price of shares and the timing of each placement tranche (if any). There are no requirements on LIT to utilise the CPA and LIT may terminate the CPA at any time, without cost or penalty. Acuity Capital and the CPA do not place any restrictions at any time on LIT raising capital through other methods. If LIT does decide to utilise the CPA, LIT is able to set a floor price (at its sole discretion) and the final issue price will be calculated as the greater of that floor price set by LIT and a 10% discount to a Value Weighted Average Price (VWAP) over a period of LIT's choosing (again at the sole discretion of LIT). As collateral for the CPA, LIT placed 10m shares from its LR7.1 capacity, at nil consideration to Acuity Capital (Collateral Shares) but may, at any time, cancel the CPA and buy back the Collateral Shares for no consideration (subject to shareholder approval). Page 7 DIRECTORS’ REPORT (Continued) SUBSEQUENT EVENTS (continued) (e) Pursuant to a term sheet dated 28 August 2017, the Company is evaluating the acquisition of up to 100% of the issued share capital of the Very Small Particle Company Limited(VSPC). Completion of this acquisition is subject to technical corporate finance due diligence to the Company’s satisfaction by 30 September 2017. Subsequent to signing the term sheet, the Company will pay a non-refundable cash payment of up to $45,000 depending on the length of the due diligence period and subject to the successful completion of the due diligence, the Company will issue up to 61,151,326 fully paid ordinary LIT shares and 30,575,663 $0.25 partly paid LIT shares as consideration. (f) On 13 September 2017, the Company entered into a memorandum of understanding with Poseidon Nickel to evaluate joint exploration and lithium processing opportunities at Lake Johnston and Ravensthorpe in Southern Western Australia. (g) On 26 September 2017, the increase/(decrease) in share prices had the following effect on the fair value of the investments held: INVESTMENT SHARE PRICE AT 30/06/2017 SHARE PRICE AT 26/09/17 $0.013 $0.130 $0.205 $0.050 $0.012 $0.150 $0.120 $0.030 Lepidico Limited Lefroy Exploration Limited Metals Tech Alix Resources INCREASE/ (DECREASE) IN SHARE PRICE ($0.001) $0.020 ($0.085) ($0.020) NUMBER OF SHARES HELD AT 30/06/2017 322,118,748 3,000,000 2,000,000 2,000,000 INCREASE/ (DECREASE) IN FAIR VALUE ($322,119) $60,000 ($170,000) ($40,000) ($472,119) For further information on these investments, please refer to note 9. FUTURE DEVELOPMENTS LIT is the only company actively pursuing the production of battery-grade lithium carbonate from all lithium silicates with a cost competitive processing technique, the halogen based Sileach® process. This gives LIT significant 'first mover' advantage. Meanwhile, LIT is assessing other projects worldwide and reviewing opportunities in Africa, Europe, the Americas and Australia. Other than as referred to in this report, further information as to the likely developments in the operations of the consolidated entity and expected results of those operations would, in the opinion of the Directors, be speculative and prejudicial to the interests of the consolidated entity and its shareholders. DIRECTORS’ MEETINGS The number of meetings attended by each of the Directors of the Consolidated entity during the financial year was: Board Meetings Number held and Number entitled to attend attended Adrian Griffin 11 10 George Bauk 11 10 Bryan Dixon 11 11 ENVIRONMENTAL ISSUES The Consolidated entity’s operations are subject to State and Federal laws and regulation concerning the environment. Details of the Consolidated entity’s performance in relation to environmental regulation are as follows: Page 8 DIRECTORS’ REPORT (Continued) ENVIRONMENTAL ISSUES (continued) The Consolidated entity’s exploration activities are subject to the various state and federal statutes relating to mining and environmental protection. The Board believes that the Consolidated entity has adequate systems in place for the management of its environmental requirements. The Consolidated entity aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Consolidated entity are not aware of any breach of environmental legislation for the financial year under review. SHARE OPTIONS At the date of this report, the unissued ordinary shares of Lithium Australia NL under option are as follows: Grant Date Date of Expiry Number under Option 4,316,666 Fair Value 1 July 2019 Exercise Price $0.15 16 October 2015 16 October 2015 1 July 2019 $0.20 7,875,000 $0.031 23 December 2015 1 July 2019 $0.30 9,200,000 $0.025 $0.036 21,391,666 No new options have been issued subsequent to 30 June 2017. PERFORMANCE RIGHTS Unlisted performance rights on issue as at 30 June 2017 is as follows: Issue Date Cancellation Date Tranche 1a 15 July 2015 Tranche 1b 15 July 2015 Tranche 1c 15 July 2015 Tranche 1a 15 October 2015 Tranche 1b 15 October 2015 Tranche 1c 15 October 2015 Tranche 1d 1 December 2015 Tranche 1d Class A 28 November 2016 Class B 28 November 2016 Class C 28 November 2016 Class D 28 November 2016 Class A 01 December 2016 Class A 28 June 2017 Class B 01 December 2016 Class B 28 June 2017 Class C 01 December 2016 Class C 01 December 2016 28 June 2017 Class D 01 December 2016 Class D 28 June 2017 Class A 20 December 2016 Class B 20 December 2016 Class C 20 December 2016 Class D 20 December 2016 Performance Rights Outstanding as at 30 June 2017 Page 9 Exercised Date 01 December 2016 Number Fair Value 4,050,000 2,025,000 2,025,000 640,000 800,000 800,000 1,000,000 (1,000,000) 1,000,000 2,000,000 3,000,000 4,000,000 500,000 (125,000) 1,000,000 (250,000) 1,500,000 (375,000) 2,000,000 (500,000) 125,000 250,000 375,000 500,000 25,340,000 Nil Nil Nil Nil Nil Nil $105,000 ($105,000) $74,025 $92,532 $53,228 $6,658 $35,694 ($8,923) $44,617 ($11,154) $25,658 ($6,414) $3,195 ($799) $6,985 $8,732 $5,011 $605 $329,650 DIRECTORS’ REPORT (Continued) PERFORMANCE RIGHTS (continued) Performance Hurdles/Restrictions Tranche 1a Number of Rights 4,690,000 Hurdle Tranche 1b 2,825,000 A targeted controlled JORC resource containing 5,000,000t LCE. Tranche 1c 2,825,000 A targeted controlled JORC resource containing 10,000,000t LCE. Tranche 1d 1,000,000 12 months service. Tranche 1d (1,000,000) 12 months service reached. Class A 1,500,000 Successful PFS on Sileach® technology. Class B 3,000,000 Procurement of feed to support 17,000tpa Li Cabrbonate from Sileach® plant. Class C 4,500,000 Commitment decision to large-scale pilot facility. Class D 6,000,000 Financial investment decision for full scale commercial plant. A targeted controlled JORC resource containing 1,000,000t LCE. 25,340,000 No new performance rights have been issued subsequent to 30 June 2017. PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY No person has applied for leave of Court to bring proceedings on behalf of the Consolidated entity or intervened in any proceedings to which the Consolidated entity is a party for the purpose of taking responsibility on behalf of the Consolidated entity for all or any part of those proceedings. REMUNERATION REPORT (Audited) The report outlines the remuneration arrangements in place for Directors and Key Management Personnel of Lithium Australia NL in accordance with the Corporations Act 2001 and its Regulations. For the purposes of this report Key Management Personnel are defined as those having authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, including any Directors of the consolidated entity. Remuneration Policy The board policy is to remunerate Directors, officers and employees at market rates for time, commitment and responsibilities. The Board determines payment to the Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of Directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for Non-Executive Directors are not linked to the performance of the consolidated entity. However, to align Directors’ interests with shareholders’ interests, the Directors are encouraged to hold securities in the Company. The consolidated entity’s aim is to remunerate at a level that will attract and retain high-calibre Directors, officers and employees. Company officers and Directors are remunerated to a level consistent with the size of the consolidated entity. There is no scheme to provide retirement benefits, other than statutory superannuation, to Non-Executive Directors. All equity based remuneration paid to Directors and executives is valued at the cost to the consolidated entity and expensed. Options are valued using the Black-Scholes methodology. Page 10 DIRECTORS’ REPORT (Continued) REMUNERATION REPORT (Audited) (Continued) Performance Based Remuneration The issue of shares and options to Directors is in accordance with the Company’s employee share option plan to encourage the alignment of personal and shareholder returns. The intention of this program is to align the objectives of Directors/executives with that of the business and shareholders. In addition, all Directors and executives are encouraged to hold shares in the Company. The consolidated entity has not paid bonuses to Directors or executives to date. Details of Remuneration for Period ended 30 June 2017 The remuneration for each director and of the executive officer of the Consolidated entity during the period was as follows: Directors and Executive Officers' Emoluments Short Term Benefits Salary & Fees Other Post Employment NonMonetary Adrian Griffin - Managing Director 287,113 1,963 220,218 George Bauk - Non Executive Chairman 2017 69,750 2016 44,325 - Performance Retirement Performance SuperOption Equity (a) Rights annuation Benefits Rights 2017 2016 Eduardo Valazuela - Non Executive Chairman1 2,292 Bryan Dixon - Non Executive Director 2017 57,500 2016 41,250 Barry Woodhouse - Company Secretary 2017 123,790 1,284 2016 91,700 2017 2016 Total Share Based Payments Options $ Performance Performance Options as % Option Rights Rights as % of of Total as % of Total Total Remuneration Remuneration Remuneration % % % 26,869 - - 242,500 161,378 161,000 37,500 - 477,323 661,218 0% 0% 0% 37% 34% 24% - - 121,250 56,611 - 7,425 - 126,361 173,000 0% 0% 0% 70% 45% 0% - - - - - - 2,292 0% 0% 0% 0% 0% 0% - - 121,250 56,611 - 10,000 - 114,111 172,500 0% 0% 0% 70% 50% 0% - - 57,600 27,291 - 94,010 91,700 - 246,375 241,000 0% 0% 0% 24% 11% 0% 26,869 - - 542,600 301,891 161,000 94,010 146,625 - 964,170 1,250,010 0% 0% 0% 43% 31% 13% Total 2017 2016 538,153 399,785 - 3,247 - 1 Eduardo Valenzuela was appointed as Non-Executive Chairman 19 August 2013 and resigned on 15 July 2015 Employment Contracts of Directors and Senior Executives The Managing Director, Mr Adrian Griffin, is employed under contract. This current contract commenced on 1 November 2015 and has a term of 3 years. This contract provides Mr Griffin with a salary of $250,000 per annum and superannuation. From 1 October 2016 following a remuneration committee meeting held on 12 October 2016, Mr Griffin’s salary increased from $250,000 to $300,000 per annum. The Company may terminate this employment agreement at any time and without prior notice if serious misconduct has occurred. In this event remuneration is only payable up until the date of the termination. The Company may terminate the employment agreement for any reason by giving no less than 6 months’ notice or in lieu of the notice period, paying