Speciality Metals International Limited Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Page | 45 12. KEY MANAGEMENT PERSONNEL COMPENSATION 2019 $ 2018 $ Short-term employee benefits 589,329 332,363 Post-employment benefits - - Other long-term benefits - - Termination benefits - - Share based payments - - Balance at the end of period 589,329 332,363 13. CONTINGENT LIABILITIES The Group has provided guarantees totalling $771,421 in respect of mining exploration tenements and environmental bonds. These guarantees in respect of mining and exploration tenements are secured against deposits with the relative State Department of Mines. The Company does not expect to incur any material liability in respect of the guarantees. 14. COMMITMENTS Exploration Licence Expenditure Requirements – In order to maintain the Company’s tenements in good standing with the various mines departments, the Company will be required to incur exploration expenditure under the terms of each licence. These expenditure requirements will diminish if the Group joint ventures projects to third parties. It is likely that the granting of new licences and changes in licence areas at renewal or expiry will change the expenditure commitment of the Group from time to time. 2019 2018 $ $ Payable not later than one year 245,000 2,773,000 Payable later than one year but not later than two years - 3,577,000 245,000 6,350,000 15. ACQUISITIONS On 28 June 2019, the Group acquired 100% of the equity instruments of Mt Carbine Quarries Pty Ltd (MCQ), a Mt Carbine based business, thereby obtaining control. The acquisition was made for the purpose of securing the established quarry business which operates within Mining Leases (ML 4867 and ML 4919), along with the Mining Leases themselves to provide surety of tenure for the Company’s Mt Carbine Tungsten Project. The quarry is a fully permitted, established business that has been in operation for over 20 years that offers substantial growth opportunities and an invaluable revenue stream, but also the synergies between the quarry and the Company’s future mining activities through waste management. The details of the business combination are as follows: Fair value of consideration transferred: $ Amount settled in cash 8,130,000 Total 8,130,000 Recognised amounts of identifiable net assets Plant & Equipment 329,487 Capitalised exploration & evaluation costs 255,100 Total non-current assets 584,587 Inventory 7,545,413 Total current assets 7,545,413 Identifiable net assets 8,130,000 Net cash outflow on acquisition 8,130,000 Acquisition costs charged to expenses 588,740 Net cash paid relating to the acquisition 8,718,740