Globe Metals & Mining : Annual Financial Report 2019

Globe Metals & Mining

Limited

(ABN 33 114 400 609)

And Controlled Entities

Annual Report

For the year ended

30 June 2019

CONTENTS

CHAIRPERSON'S ADDRESS	1
CORPORATE REVIEW & REVIEW OF OPERATIONS	2
DIRECTORS' REPORT	5
REMUNERATION REPORT - AUDITED	8
AUDITOR'S INDEPENDENCE DECLARATION	14
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND	15
OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	16
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	17
CONSOLIDATED STATEMENT OF CASH FLOWS	18
NOTES TO THE FINANCIAL STATEMENTS	19
DIRECTORS' DECLARATION	45
INDEPENDENT AUDITOR'S REPORT	46
ASX ADDITIONAL INFORMATION	51

CORPORATE DIRECTORY

Directors

Ms Alice Wong, Non-Executive Chairperson

Mr Alistair Stephens, Deputy Chairperson, Managing Director and CEO Mr William Hayden, Non-Executive Director

Mr Alex Ko, Non-Executive Director

Mr Bo Tan, Non-Executive Director

Company Secretary

Mr Michael Fry

Principal & Registered Office

137 Lake Street

Perth WA 6000

Telephone: [phone]

Facsimile: [phone]

ABN: 33 114 400 609

Auditors

Australia:

Ernst & Young

11 Mounts Bay Road

Perth WA 6000

Malawi:

Ernst & Young

Apex House

Kidney Crescent

Blantyre

Malawi

Share Registrar

Security Transfers Registrars Pty Ltd

770 Canning Highway

Applecross WA 6153

Telephone: [phone]

Facsimile: [phone]

Securities Exchange Listing

Australian Securities Exchange

(Home Exchange: Perth, Western Australia)

Level 40

Central Park

152-158 St Georges' Terrace

Perth WA 6000

Code: GBE

Bankers

Westpac

109 St Georges Terrace

Perth WA 6000

Chairperson's Address

On behalf of the Board of Globe Metals & Mining Limited ("Globe" or "the Group"), it is my pleasure to present to you the 2019 Annual Report.

Consistent with the strategy outlined in my address in the 2018 Annual Report, the Group has maintained momentum on advancing the Kanyika Development Agreement, updating the technical components of a Feasibility Study, and assessing a range of project financing options.

After 7 years of collaboration, it appears that the Kanyika Development Agreement with the Government of Malawi is nearing finalisation. The Development Agreement has been circulated amongst government departments for final comment and as at the date of this annual report, the Company is of the understanding that all of the comments received back have been worked through, with no matters remaining unresolved. We look forward to execution of the Development Agreement in the short term.

With execution of the Kanyika Development Agreement imminent the Company has recently finalised the technical components of the feasibility study, technical designs and development plans for the Project. Once the Kanyika Development Agreement is executed, the Company will be in a position to move forward with project funding and off-take arrangements and the Company's Board and management is optimistic in realising project financing and development opportunities in the near term.

On a positive note for Kanyika, global steel demand is predicted to continue to grow according to latest reports by the World Steel Association. As demand for higher quality steels rises as a proportion of all steel demand, the need for niobium is increasing at a faster rate than steel output.

Analysts are predicting that demand for niobium will grow at a compound annual growth rate (CAGR) of 5.90% during the period 2019. Major factors driving the market are the increased consumption of niobium in structural steel due its characteristics of tensile strength and durability (for use in bridges, buildings and other large constructions such as hangars and stadiums) and extensive utilisation of niobium-based alloys in the manufacture of aircraft engines and automobiles. Lightweight materials and designs have become increasingly important in the manufacture of automobiles, where driving dynamics are a major factor. Additionally, the emerging focus of governments across the world on minimising carbon emissions and enhancing fuel economy has increased the importance of lightweight materials in the production of automobiles.

These combinations of growth and demand bode well for the price of niobium. As does the new emerging market of niobium in new technologies like wind turbines, medical imaging, particle accelerators, as well as an exciting development in the manufacture of batteries for electrical vehicles. Industry leader Toshiba has recently commenced production of its next generation SCiBTM rechargeable battery for electric vehicles featuring a niobium anode, allowing higher performance, longer-life, quicker charging and improved safetyand has been adopted by Mazda, Mitsubishi and Nissan.

In the coming year the Group will continue to be cost prudent, whilst maintaining momentum on Kanyika development opportunities.

In closing, I thank all shareholders, board of directors, and employees for their support of the Group in the year past and I am looking forward to their continued support in the year to come.

Yours sincerely,

GLOBE METALS & MINING LIMITED

ALICE WONG

CHAIRPERSON

Globe Metals & Mining Limited & Controlled Entities Annual Report 2019

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Corporate Review

Finance

• Cash and cash equivalents at 30 June 2019 of $7.387 million.

Corporate

• As at the date of this report, shares on issue total 465,922,373.
• A total of 1,000,000 options over ordinary shares lapsed during the 2018 financial year.
• A total of 1,000,000 options remain on issue; exercisable at $0.25 on or before 30 June 2020.
• 2 Substantial Shareholders control a total of 364,126,673 shares or 78.15% of the Company.

Company Focus

Consistent with the strategy outlined by the Chairperson in her Address in the 2018 Annual Report, the Group has focussed its efforts in the 2019 financial year on advancing its Kanyika Niobium Project towards production by progressing with its mining licence application, that is only conditional on the finalisation of a Development Agreement and by seeking out and assessing a range of financing options.

Review of Operations

Globe is an Australian registered public company and has been listed on the ASX since December 2005 (ASX: GBE). The Company has an administration and operational centre in Lilongwe, Malawi in support of its on- the-ground Project exploration activities that currently employs 4 staff. The Malawi operations are supported from Globe's corporate head office in Perth, Australia.

Globe's Kanyika Niobium Project, which is located in central Malawi, has contains niobium and tantalum mineralisation commodities that are key additives in steel manufacture and electronics.

Kanyika Niobium Project ("KNP")

Overview

Globe identified niobium and tantalum mineralisation in 2007 at Kanyika. Subsequent drilling confirmed the mineralisation leading to an extensive exploration and metallurgical testwork program. A scoping study in 2008 and further drilling led to a feasibility study in 2012 and the release of a JORC (2004) Mineral Resource Estimate in January 2013 (refer below).

During 2013, Globe commissioned metallurgical optimisation work, and subsequently in 2014 commissioned a pilot plant to demonstrate and further optimise metallurgical processes.

Feasibility Study

In February 2018, Globe commenced work aimed at updating and finalising the technical components of the engineering program in order to support project funding initiatives and in light of the changing outlook for the mining and resources industry, and in particular for niobium.

To facilitate this, the Company advised it had engaged specialists to revise and update the previous engineering study to incorporate the findings and outcomes of the pilot plant work undertaken and other necessary engineering design changes.

In January 2019, Globe advised that it had finalised the revision of all studies and plans, such that the technical programs associated with the mineral resource, mining, metallurgical studies, processing, engineering design and infrastructural support are all done to a technical detail that is satisfactory to engineering classification standards.

Globe Metals & Mining Limited & Controlled Entities Annual Report 2019

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