Announcement PDF INTERIM CONSOLIDATED FINANCIAL STATEMENTS RAREX LIMITED ABN: 65 105 578 756 AND CONTROLLED ENTITIES FINANCIAL STATEMENTS FOR HALF YEAR ENDED 31 DECEMBER 2020 RAREX LIMITED AND CONTROLLED ENTITIES CORPORATE DIRECTORY DIRECTORS LAWYERS Mr John Young Non-Executive Chairman HWL Ebsworth Lawyers Level 20 240 St Georges Terrace Perth Western Australia 6000 Mr Jeremy Robinson Managing Director Mr Shaun Hardcastle Non-Executive Director Mr Cameron Henry Non-Executive Director AUDITOR Walker Wayland WA Audit Pty Ltd Level 3, 1 Preston Street Como Western Australia 6152 COMPANY SECRETARY SHARE REGISTRY Ms Oonagh Malone PRINCIPAL PLACE OF BUSINESS Suite 23, 513 Hay Street Subiaco Western Australia 6008 Telephone: (08) 6143 6720 Website: www.rarex.com.au REGISTERED OFFICE Suite 23, 513 Hay Street Subiaco Western Australia 6008 ASX CODES: REE Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000 Australia Telephone: 1300 288 664 RAREX LIMITED AND CONTROLLED ENTITIES TABLE OF CONTENTS DIRECTORS’ REPORT .......................................................................................................................................... 1 AUDITOR’S INDEPENDENCE DECLARATION .................................................................................................... 3 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................... 4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................. 5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................. 6 CONSOLIDATED STATEMENT OF CASH FLOWS............................................................................................... 7 NOTES TO THE FINANCIAL STATEMENTS ......................................................................................................... 8 DIRECTORS’ DECLARATION .............................................................................................................................. 25 INDEPENDENT AUDITOR’S REPORT ............................................................................................................... 26 RAREX LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT The Board of Directors have pleasure in presenting its interim consolidated report of RareX Limited (RareX or the Company) and its controlled entities (the Group or consolidated entity) for the half year ended 31 December 2020. 1. DIRECTORS The names of the Company’s directors in office during the half year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated. Mr John Young Mr Jeremy Robinson Mr Shaun Hardcastle Mr Cameron Henry 2. PRINCIPAL ACTIVITIES The principal activities of the Group are mineral exploration and development. No significant change in the nature of these activities occurred during the half year. 3. REVIEW OF OPERATIONS During the half year, the Company:     4. completed a 6,146m Reverse Circulation drilling program at the Cummins Range Rare Earths Project which returned spectacular wide, high-grade intercepts; completed a drilling program at Weld North Rare Earths Project; completed a share placement which raised $3m before costs; and entered into an agreement with Talaxis Group Holdings to secure an option to acquire 24,779,658 shares in Canada Rare Earth Corp. FINANCIAL RESULTS The loss of the Company for the period ended 31 December 2020 was $4,336,711 (Six months to 31 December 2019: loss of $8,115,869). During the half year, total expenses amounted to $4,391,657 (Six months to 31 December 2019: $8,128,232). The total expenses includes an expense for acquisition costs of the Company’s Cummins Range Rare Earths Project of $1,164,936 (Six months to 31 December 2019: $6,095,382) which the Directors have elected to charge to the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Unrestricted cash and cash equivalents amounted to $4,339,065 as at 31 December 2020 (30 June 2020: $3,425,058). 5. EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD There are no matters or circumstances which have arisen since the end of the half year which 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 in subsequent financial periods, other than:  On 4th February 2021, the Company announced it had entered into a non-binding Memorandum of Understanding (“MoU”) with the leading global rare earths producer, Shenghe Resources Holdings Co. (“Shenghe”). The terms of the MoU provide a framework for Shenghe and RareX to establish an alliance via the formation of a jointly owned Rare Earths Trading Company to source rare earths concentrates globally (excluding from within China) for processing at Shenghe’s existing and proposed refining assets within China and around the world.  On 22nd February 2021, the Company announced it had secured a strategic $2.75 million (before costs) investment by prominent resource investor Mr Simon Lee AO via a share placement comprising 25 million new fully-paid ordinary shares at A$0.11 per share. The funds were received on 26th February 2021. 1 RAREX LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT (continued) 6. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 3 and forms part of the Directors’ Report for the half year ended 31 December 2020. This report is made in accordance with a resolution of the Directors. On behalf of the Directors. Jeremy Robinson Managing Director Signed this 16th day of March 2021. 2 Walker Wayland WA Audit Pty Ltd ABN 94 608 776 834 www.ww-wa.com.au Auditor’s Independence Declaration Under Section 307C of The Corporations Act 2001 to The Directors of RareX Limited. I declare that, to the best of my knowledge and belief, during the half-year end 31 December 2020 there have been no contraventions of: (i) the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review. WALKER WAYLAND WA AUDIT PTY LTD Richard Gregson CA Director Level 3, 1 Preston Street, COMO WA 6152 Dated this 16th day of March 2021 Level 3, 1 Preston Street, Como WA 6152 | PO Box 2162, Como Beach WA 6152 | T: +61 8 9364 9988 | F: +61 8 9367 3444 Liability limited by a scheme approved under Professional Standards Legislation RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2020 Notes Consolidated 6 months 6 months ended 31 ended 31 December December 2020 2019 $ $ Income Other income 3 54,946 12,363 54,946 12,363 Administration expenses (303,269) (259,679) Consultants & management expenses (166,891) (122,154) (12,760) - Finance costs (2,588) - Legal expenses (24,805) (33,689) (900,405) (1,294,328) (1,322,747) (324,261) (1,164,936) (6,095,382) (7,705) 1,455 (485,551) - - (194) Total expenses (4,391,657) (8,128,232) Loss from continuing operations before income tax expense (4,336,711) (8,115,869) - - (4,336,711) (8,115,869) 8,133 (1,887) (4,328,578) (8,117,756) (1.16) cents (3.57) cents Total Income Expenses Depreciation, amortisation and impairment expense 4 Share based payments expense 18 Exploration expenses Acquisition of tenements 5 Foreign exchange (loss)/gain Loss on revaluation of financial assets Impairment Income tax expense Loss from continuing operations after income tax expense Other comprehensive income Exchange rate differences on translating foreign operations Total comprehensive loss attributable to owners of the parent Loss per share - basic and diluted The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes 4 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE HALF YEAR ENDED 31 DECEMBER 2020 Consolidated 31 December 2020 30 June 2020 $ $ Notes ASSETS Current Assets Cash and cash equivalents 6 Trade and other receivables Total Current Assets 4,339,065 3,425,058 194,562 152,116 4,533,627 3,577,174 Non-current Assets Exploration & evaluation assets 8 505,032 1,656,046 Financial assets at fair value 10 1,953,392 2,388,942 128,818 66,800 89,884 - Total Non-current Assets 2,677,126 4,111,788 TOTAL ASSETS 7,210,753 7,688,962 200,361 1,318,230 39,695 20,550 19,723 - 259,779 1,338,780 70,831 - Total Non-Current Liabilities 70,831 - TOTAL LIABILITIES 330,610 1,338,780 6,880,143 6,350,182 Plant and equipment Right of use asset 11 LIABILITIES Current Liabilities Trade and other payables 12 Provisions Lease liability 13 Total Current Liabilities Non-Current Liabilities Lease liability 13 NET ASSETS EQUITY Contributed equity 14 33,589,732 29,605,193 Reserves 15 5,739,863 4,857,730 (32,449,452) (28,112,741) 6,880,143 6,350,182 Accumulated losses TOTAL EQUITY The above Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes. 5 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2020 CONSOLIDATED Notes At 1 July 2020 Ordinary Shares Options Reserve Share Based Payments Reserve (Accumulated Losses) Total Equity $ Foreign Currency Translation Reserve $ $ $ $ $ 29,605,193 4,775,912 83,840 (2,022) (28,112,741) 6,350,182 Currency translation differences 8,133 Total comprehensive income for the period, net of tax 8,133 (4,336,711) (4,336,711) Transactions with owners in their capacity as owners Share issues 14 4,177,098 4,177,098 Transaction costs 14 (218,964) (218,964) Share based payments 18 26,405 874,000 At 31 December 2020 33,589,732 5,649,912 83,840 6,111 (32,449,452) 6,880,143 At 1 July 2019 20,405,948 2,294,087 83,840 (1,567) (21,424,950) 1,357,358 900,405 Currency translation differences (1,887) Total comprehensive income for the period, net of tax (1,887) (8,115,869) (8,115,869) Transactions with owners in their capacity as owners Share issues 14 7,379,122 7,379,122 Transaction costs 14 (169,617) (169,617) Share based payments 18 At 31 December 2019 2,042,000 4,336,087 27,615,453 2,042,000 83,840 The above Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 6 (3,454) (29,540,819) 2,491,107 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 Consolidated 6 months to 31 December 2020 6 months to 31 December 2019 $ $ Notes CASH FLOWS USED IN OPERATING ACTIVITIES Payments to suppliers and employees (1,831,430) (660,265) Interest received 5,896 1,704 Interest paid (2,588) - Other income 50,108 - (1,778,014) (658,561) Payments for property, plant and equipment (104,353) - Payments to acquire tenements (582,468) (525,000) Payment to acquire option (50,000) - Payment of tenement deposit (10,000) - Proceeds from disposal of investments - 490,255 Cash acquired on acquisition of subsidiary - 339 (746,821) (34,406) 3,670,150 2,420,000 - 610 (228,132) (169,617) (3,155) - 3,438,863 2,250,993 914,028 1,558,026 3,425,058 427,318 (21) 8 4,339,065 1,985,352 NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS USED IN INVESTING ACTIVITIES NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share issue Proceeds from issue of share options Costs of share issue Reduction in finance lease liabilities NET CASH FLOWS FROM FINANCING ACTIVITIES NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of period Effect of movement in exchange rate CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 The above Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes. 7 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 1. CORPORATE INFORMATION The consolidated financial report of RareX Limited (“the Company”) for the half year ended 31 December 2020 was authorised for issue in accordance with a resolution of the Directors on 16th March 2021. RareX Limited is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. The principal activities during the year of the entities within the consolidated entity were mineral exploration and development. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The half year financial report does not include all the 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, and should be read in conjunction with the annual Financial Report of RareX Limited for the year ended 30 June 2020. It is also recommended that the half year financial report be considered together with any public announcements made by RareX Limited and its controlled entities (‘the Group’) during the half year ended 31 December 2020 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001. (a) Basis of Preparation The half year consolidated financial report has been prepared in accordance with AASB 134 “Interim Financial Reporting”. The half year financial report has been prepared on a historical cost basis, except for the revaluation of financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars. For the purpose of preparing the half year financial report, the half year has been treated as a discrete reporting period. This report presents financials for the six month period to 31 December 2020, with comparatives for the six month period to 31 December 2019. Going concern As at 31 December 2020, the Group had working capital of $4,333,266 (30 June 2020: $2,258,944 and returned a loss attributable to owners of $4,336,041 (31 December 2019: $8,115,869). The loss for the half year to 31 December 2020 included an expense for acquisition costs of the Cummins Range Rare Earths Project of $1,164,936 (31 December 2019: $6,095,382) which the Directors have elected to charge to the Consolidated Statement of Profit or Loss and Other Comprehensive Income. The ability of the Group to continue as a going concern is dependent upon the future successful raising of the necessary funding through disposal of assets, equity and/or debt and the successful exploitation of the Group’s tenements. The Directors believe it is appropriate to prepare the Financial Statements on a going concern basis as the Group has sufficient funds available to meet its committed and required expenditure over the following year. These Financial Statements have been prepared on the basis that the Group can meet its commitments as and when they fall due and can therefore continue normal business activities and the realisation of its assets and settlement of its liabilities can occur in the ordinary course of business. (b) Changes in accounting policies 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 financial statements for the year ended 30 June 2020. The Group has adopted all mandatory new and amended standards and interpretations applicable for the current period. The adoption of these standards and interpretations had no material impact on these financial statements or on the financial position or performance of the Group. 8 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Group has not elected to early adopt any other new standards or amendments that are issued but not yet effective. Certain amounts in the comparative financial statements have been reclassified to conform to the current period presentation. (c) Basis of consolidation The half year consolidated financial statements comprise the financial statements of RareX Limited and its controlled subsidiaries. (d) Exploration and Evaluation Expenditure Assets Exploration and evaluation costs are accumulated and accounted for separately on an area of interest basis. An area of interest is represented by an exploration project, which may include multiple tenements within a single geographic region. For each area of interest, the Company makes an election regarding its treatment of exploration and evaluation expenditure (including the costs of tenement acquisitions) and whether it will be charged to the income statement as incurred, under the expense category “exploration expenditure” (or other appropriate expense category), or capitalised as an exploration and evaluation asset, or a combination thereof. An exploration and evaluation asset can only be recognised in relation to an area of interest if the following conditions are satisfied: a) b) the rights to tenure of the area of interest are current; and at least one of the following conditions is also met: i. the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and ii. exploration and evaluation activities in the area of interest have not at the end of the reporting period reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Capitalised exploration and evaluation expenditures are recorded as an exploration asset at cost less impairment charges. All capitalised exploration and evaluation expenditure are monitored for indicators of impairment. Where an impairment indicator is identified, an assessment is performed for each area of interest to which the exploration and evaluation expenditure is attributed. To the extent that capitalised expenditure is not expected to be recovered it is charged to the income statement. (e) Right of use assets A right of use asset is recognised at the commencement date of a lease. The right of use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right of use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The Group has elected not to recognise a right of use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to Consolidated Statement of Profit or Loss and Other Comprehensive Income as incurred. 9 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Lease liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. (g) Critical Accounting Estimates and Judgements The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates (i) Impairment – general The Group assesses impairment at the end of each reporting period by evaluation of conditions and events specific to the Group that may be indicative of impairment triggers. Where impairment has been triggered, assets are written down to their recoverable amounts. (ii) Options and Share Based Payments value The options and share based payments issued by the Group during the half year (refer Note 18) have been valued by the Directors using the Black-Scholes option pricing model based on the inputs shown at Note 18. (iii) Tenement acquisition costs The Directors have elected to expense certain tenement acquisition costs in relation to the Cummins Range Rare Earths Project as disclosed in Note 5. (h) New Standards and Interpretations In the half year ended 31 December 2020, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for annual reporting periods commencing on or after 1 July 2020. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to accounting policies. The adoption of the new Conceptual Framework for Financial Reporting from 1 July 2020 has not led to any changes in accounting or disclosure for the Group, but the new Conceptual Framework may be referred to if accounting matters arise that are not addressed by accounting standards. The adoption of the new definition of Material included in AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material from 1 July 2020 provides a new definition of material, which now extends materiality consideration to obscuration and clarifies that materiality now depends on the nature or magnitude of information. Future effects of the implementation of these standards will depend on future details. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted by the Group. 10 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 3. OTHER INCOME Consolidated 6 months 6 months ended 31 ended 31 December December 2020 2019 $ $ 4. Interest received 4,838 5,582 Australian government cash flow boost 50,108 - Gain on sale of investments - 6,900 Foreign exchange gain/(loss) - (119) 54,946 12,363 EXPENSES Consolidated 6 months 6 months ended 31 ended 31 December December 2020 2019 $ $ Depreciation of property, plant & equipment 5. 12,760 - 12,760 - ACQUISITION OF TENEMENTS The Directors have elected to expense the following costs in relation to the acquisition of the Cummins Range Rare Earths Project to the Consolidated Statement of Profit or Loss and Other Comprehensive Income: Consolidated 6 months 6 months ended 31 ended 31 December December 2020 2019 $ $ Option fee - 50,000 Upfront consideration – cash - 500,000 Upfront consideration – fair value of RareX Ltd shares issued - 813,634 Exploration asset - Cummins Range Pty Ltd (Note 9) - 4,731,748 Deferred consideration – cash 500,000 - Deferred – fair value of RareX Ltd shares issued 500,000 - Stamp duty 164,936 - 1,164,936 6,095,382 11 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 6. CASH AND CASH EQUIVALENTS Consolidated 31 December 30 June 2020 2020 $ $ Cash at bank 7. 4,339,065 3,425,058 4,339,065 3,425,058 FINANCIAL ASSETS For all financial instruments held as at 31 December 2020, the carrying value approximates fair value. 8. EXPLORATION AND EVALUATION ASSETS Consolidated 31 December 30 June 2020 2020 $ $ Cummins Range Rare Earths Project Opening balance 1,151,014 - Tenement acquisition costs (refer Table 8.1) - 2,363,634 Exploration asset - Cummins Range Pty Ltd (Note 9) - 4,731,748 13,922 151,014 (1,164,936) (6,095,382) - 1,151,014 505,032 505,032 Tenement acquisition costs - - Stamp duty on acquisition of tenement - - Less: Disposal of 70% interest - - 505,032 505,032 Opening balance - - Capitalised exploration costs - - Less: Impairment - - Closing balance - - 505,032 1,656,046 Stamp duty on acquisition of tenement Less: Acquisition costs expensed (Note 5) Closing balance Hong Kong Gold Project Opening balance Closing balance Moroccan Cobalt Project 12 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 8. EXPLORATION AND EVALUATION ASSETS (continued) During the period ended 31 December 2019, Cummins Range Pty Ltd acquired the Cummins Range Rare Earths Project from Element 25 Ltd. The consideration for the acquisition of the project in accordance with the agreement between Cummins Range Pty Ltd and Element 25 Ltd is as follows:     non-refundable option fee of $50,000; upfront consideration of $500,000 cash and $500,000 settled in shares in RareX Ltd being 13,338,261 shares at a deemed price of $0.0375 per shares. As the share price at the date of issue of these shares was $0.061 per share, for accounting purposes these 13,338,261 shares have a fair value of $813,634; deferred consideration, which was settled during the half year ended 31 December 2020, consisting of $500,000 in cash and a further $500,000 to be settled in cash or shares in RareX Ltd at the election of RareX Ltd; and subject to a positive bankable feasibility study (BFS) being achieved within 36 months from settlement, further deferred consideration of $1,000,000 is payable to Element 25 Ltd and is to be settled in cash or shares in RareX Ltd at the election of RareX Ltd. As this further deferred consideration is subject to a positive BFS, it has not being included in the tenement acquisition costs, however, has been disclosed as a contingent liability in Note 16(c). The fair value of the tenement acquisition costs paid or payable to Element 25 Ltd for the Cummins Range Rare Earths Project brought to account is as follows: Table 8.1 $ Option fee paid in cash 50,000 Cash consideration paid 500,000 Fair value of 13,338,261 shares in RareX Ltd 813,634 Deferred consideration settled during the half year ended 31 December 2020 1,000,000 Fair value of tenement acquisition costs paid or payable to Element 25 Ltd 2,363,634 13 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020 9. ACQUISITION OF SUBSIDIARY During September 2019, the Company completed the acquisition of 100% of the issued share capital of Cummins Range Pty Ltd which holds the tenements for the Cummins Range Rare Earths Project. The consideration for the acquisition of Cummins Range Pty Ltd was as follows:  non-refundable deposit of $25,000;  60,000,000 shares in RareX Ltd issued to the shareholders of Cummins Range Pty Ltd or their nominees with a fair value of $3,660,000; and  25,000,000 options in RareX Ltd with an exercise price of $0.025 and an expiry date of 27/9/21 with a fair value of $1,097,250. $ Cash deposit 25,000 Fair value of 60,000,000 shares in RareX Ltd 3,660,000 Fair value of 25,000,000 options in RareX Ltd 1,097,250 Total consideration paid 4,782,250 The assets and liabilities recognised as a result of the acquisition of Cummins Range Pty Ltd are as follows: $ Cash 339 Other receivables 5,626 Exploration and evaluation assets 50,000 Trade and other payables (5,463) Net identifiable assets acquired 50,502 Add: Exploration asset 4,731,748 Net assets acquired 4,782,250 Total consideration paid 4,782,250 The acquisition of Cummins Range Pty Ltd has been accounted for as an acquisition of an asset on the basis that it does not constitute a business as defined by AASB 3 Business Combinations. 10. FINANCIAL ASSETS AT FAIR VALUE Consolidated 31 December 30 June 2020 2020 $ $ Financial assets at fair value through profit or loss Non-Current Shares in listed corporations, at fair value - Kincora Copper Ltd (14