Annual Report
Annual Report
For the period ended 31 December 2017
Period ended 31 December 2017
Coal
For personal use only
CHAIRMAN’S MESSAGE
Dear Fellow Shareholder,
Welcome to our first calendar year “annual” report. At our last AGM in November 2017, shareholders
voted in favour of changing the financial year from July to December, and as such, this “annual” report
covers the last 6 months of the 2017 calendar year. Much has happened since our previous AGM, and
this is an opportune time to update shareholders on past events and the exciting future now that we
have acquired the Elan Hard Coking Coal Project in Alberta, Canada.
I caught up with many of you when I was in Australia for the November AGM. Max Wang, our
Managing Director, and our non-executive directors George Edwards, Charles Fear and James
Chisholm, also met with many shareholders around the November meeting and subsequent to that
meeting. At our last shareholder meeting, we provided an update on the option to acquire the Elan
Hard Coking Coal Project, and I am pleased to say that thanks to the support of our existing and new
shareholders, we have now completed the acquisition of that project. This is an exciting time for the
Company as we were able to raise sufficient capital to explore and progress the Elan Hard Coking Coal
Project for at least the next two years. Once drilling and initial studies have been completed, we
expect to secure a major investment partner to help develop a large hard coking coal export mine at
Elan. And, as shown in the November presentation and in the recent capital raise presentations, the
Elan project is not just a single mine opportunity, but contains a number of potential project areas, all
close to power, roads and rail. Teck Resources Ltd mines some 25Mt of metallurgical coal across
multiple sites nearby Elan, and Riversdale Resources Ltd is advancing its Grassy Mountain project
which is immediately south of Elan. All these bode well for the Company.
Whilst the focus this year will be on the exploration of Elan South, there is still much happening at
Groundhog. Our Joint Venture with JOGMEC is progressing well, and we are in the final stage of
reviewing and approving the 2018 exploration plan. As advised in November, our strategy in relation
to the remaining areas in Groundhog is to secure suitable joint venture partners. The joint venture
with JOGMEC has been very beneficial and the Board agrees that this joint venture model is the best
approach to exploring and developing this world’s largest undeveloped anthracite deposit.
I’d like to take this opportunity to thank Max Wang, our Managing Director, who has managed multiple
projects and tasks over the last few months, many with very short time-frames. We are very thankful
for the long hours that he and his team have put in since September last year. I can advise that the
board, Max and his team have spent many long nights and extra hours in recent months to get things
prepared for the fund raising, Elan acquisition, the Elan field program planning, the 2018 Panorama
North JV program, stakeholder engagement for Groundhog and other projects, restructuring the
Atlantic Carbon’s deal on anthracite marketing, as well as the new year-end report and other structure
and governance matters.
The year ahead promises to be an exciting one for the Company, with the Elan South field exploration
program including coal quality testing being our major focus. My fellow directors and I would like to
thank all the shareholders who have supported the Company. We are looking forward to providing
updates on progresses throughout the year. With a buoyant metallurgical coal market, high quality
tenements and projects, a competent management team in place, and a board intensely focused on
creating shareholder value, I think shareholders should have confidence in the Company’s future.
Chuck Blixt
Chairman
28 March 2018
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OPERATIONS REVIEW
The Company has a substantial coal position in Canada which boasts an abundance of high quality
anthracite and coking coals, a well-developed rail and port infrastructure with excess capacity and
access to deep sea ports with competitive shipping distance to Asia and a positive government stance
on mining. The Company’s projects are: the Elan Hard Coking Coal Project; the Groundhog Anthracite
Project (including the Panorama Anthracite Project); the Bowron River Coal Project and the Naskeena
Coal Project.
Elan Hard Coking Coal Project (Atrum 100%)
During CY17, the Company reached agreement with the owners of and joint venture partners in the
Elan Hard Coking Coal Project to acquire all the Elan Coal properties through the acquisition of Elan
Coal Ltd. The Elan Coal properties consist of six (6) areas which are known to hold shallow
emplacements of hard coking coal. The Elan South area is adjacent to Riversdale Resources’ Grassy
Mountain project and proximate to critical infrastructure for development. Figure 1 below highlights
the strategic location of Elan South, one of several potential projects in Elan, in relation to operating
mines and developing mines.
Figure 1: Elan South Location
Elan South, one of several projects within the Elan Hard Coking Coal Project, is located in the foothills
and front ranges of the Rocky Mountains of Alberta, approximately 13 km north of Coleman, Alberta.
The project is 13km north from a main rail line providing access to port terminals in Vancouver and
Prince Rupert. Elan South is the southernmost project within the Elan hard coking coal project and is
made up of 4 contiguous Coal Lease Applications that cover approximately 6,140 ha (Figure 1) of Elan
Coal’s total 22,951 ha area. Limited previous drillings and explorations have identified thick coal seams
in the area.
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OPERATIONS REVIEW
With the acquisition of 100% of the Elan Coking Coal Project, an extensive road-based drilliing
program is planned in 2018 to further define the resource and structure of Elan South. Other
potential project areas within the Elan Coal properties will also be reviewed (Figure 2).
Figure 2: Elan Hard Coking Coal Project Areas
Subsequent to period end, the Company received a two-year Coal Exploration Permit from the
Alberta Energy Regulators (AER) for field exploration and drilling work for the Elan South Project site.
Groundhog Anthracite Project, British Columbia, Canada (Atrum 100%)
The Groundhog Anthracite Project (“Groundhog”) is in the Groundhog Coalfield in northwestern
British Columbia, Canada and covers an area of almost 600 km2 (Figure 3). Drilling and laboratory
tests have confirmed that the Groundhog field contains high grade anthracite which is suitable for
use in the manufacture of blast furnace steel, as well as a reductant in electric arc furnaces, as a
filter media, and as feedstock for chemical production. The Company has prepared various studies
on appropriate development of the first area under consideration, Groundhog North.
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OPERATIONS REVIEW
Figure 3: The Groundhog and Panorama Anthracite Projects
Atrum has conducted several drilling campaigns in the Groundhog North project area and limited
work in Groundhog East and Groundhog Central areas. Two additional drilling programs have been
conducted in the Panorama North area in 2016 and 2017 with the Company’s joint venture partner,
JOGMEC. The Company has already supplied small samples of Groundhog North anthracite to
various Asian steel mills, and has the permit for the extraction of larger samples for these mills and
other potential customers.
During CY17, Atrum undertook an environmental baseline monitoring program on Groundhog North,
during the Canadian spring “freshet” season in northern British Columbia, where significant water
run-off occurs from the melting of snow. The freshet monitoring program consisted of two
components – surface hydrology monitoring and a baseline surface water quality program. The
surface hydrology program is designed to assess baseline conditions of water quality via the
installation of several hydrometric stations. The surface water quality program involved the
collection of weekly water samples to be used to characterise the existing hydrological environment
and provide additional data for assessing potential water quality effects, mitigation measures and
monitoring.
Information obtained through the program will be critical for further exploration and mine planning
at Groundhog, and is required for permit applications in British Columbia. It will help Atrum evaluate
further exploration and development options for the Company’s Groundhog Central project, an area
south of Groundhog North which has encouraging historic drill results and a previous 500,000tpa
mine scoping study completed.
Panorama North Project (subject to JOGMEC earn-in)
The Panorama North Project is located 15km southwest of Groundhog North in British Columbia
(Figure 3). Atrum entered into an exploration agreement with Japan Oil, Gas and Metals National
Corporation (“JOGMEC”) regarding the Panorama North Project. Under the Agreement, JOGMEC can
acquire up to 35% interest in the Panorama North Project by investing C$5.0 million in exploration
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OPERATIONS REVIEW
expenditures across the project over a three-year period. The Joint Venture was progressing for a
second year in 2017. At the end of March 2018, JOGMEC would have earned-in 20% interest in the
Panorama North Project after spending $3.0 million in exploration expenditures.
Diamond core drilling of four holes at Panorama during October 2016 was successfully completed.
Holes were geo-physically logged, studied and interpreted. Anthracite samples were prepared for
testing and analysis, with laboratory results confirming high-grade anthracite emplaced at Panorama
North.
Atrum received encouraging coal quality results from the 2016 work. A total of 19 seams were
identified within the Currier Formation, with three separate seams identified as prime targets. These
were tentatively correlated across the exploration area given the Company’s detailed understanding
of the broader Groundhog Coalfield. Physical and chemical testing of intersected anthracite seams
showed they have the potential to produce low-ash, low volatile matter, high grade anthracite
products.
Exploration in 2017 at Panorama North was aimed to further define coal seam distribution with
widely-spaced boreholes (Figure 4). Diamond core drilling completed in 5 boreholes in 2017,
provided additional confirmatory quality information to the 4 fully cored boreholes completed in
2016. Refer to 20 September 2017 announcement, “Atrum Coal – Panorama North 2017
Exploration Update” for further information regarding the 2017 exploration activities at Panorama
North. Coal quality testing was also conducted on 2017 samples.
Figure 4: The Panorama North Project – Field Exploration Drill Hole Locations
Groundhog Central (Atrum 100%)
Anthracite was discovered at Groundhog Central in the early 1920s, leading to several small mines
being constructed to extract it. The adits to some of these mines still exist. Areas of Groundhog
Central were explored in the 1970s and 1980s and again in 2008.
Atrum drilled holes and collected core samples from Groundhog Central in 2012 and 2014.
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OPERATIONS REVIEW
During CY17, management reviewed results from this work and embarked on a program to update
the 500,000 tons per annum (“tpa”) historic mine scoping study in order to commence preparation
of a JORC compliant resource estimate for Groundhog Central. Based on the success of Atrum’s joint
venture with JOGMEC at Panorama North, Atrum is evaluating Groundhog Central as another
potential joint venture area.
Bowron River Coal Project (Atrum 100%)
The Bowron River Project (“Bowron River”) is located 60 km east of the town of Prince George and is
accessible from Prince George by 50 km of paved road and then by 10 km of all-weather gravel road.
It is another early stage exploration project. The Company holds a total land position of 3,750
hectares at Bowron River. No ground-based activities were undertaken at Bowron River during the
period. Atrum continues to assess this project and other coking coal opportunities to increase its
exposure to the metallurgical coal market.
Naskeena Anthracite Project (Atrum 100%)
The Naskeena Anthracite Project (“Naskeena”) is located in western British Columbia, 50 km from
the town of Terrace and 140 km from the Port of Prince Rupert. It is an early-stage project on the far
western extent of the Groundhog Basin. No ground-based activities were undertaken at Naskeena
during the period. Atrum continues to study the project viability and potentials.
Export Sales Joint Venture with Atlantic Carbon Group PLC
During CY16, Atrum announced it would form an unincorporated joint venture with Atlantic Carbon
Group PLC (“ACG”) to market and sell anthracite from ACG’s operations in north-eastern
Pennsylvania, USA to customers outside the US. ACG is an ultra-high grade anthracite producer
operating three mines and two processing plants near Hazleton, Pennsylvania. Definitive
agreements to form the joint venture were signed and Atrum purchased an initial 15,000t in late
December 2016.
By the end of CY17, no export sale was achieved by the JV due to seaborne-export price differentials
and volume issues.
ACG and Atrum have agreed a payment schedule to refund the US$1.5m paid by Atrum to purchase
a 15,000t stockpile from ACG, with some payments already received and the remaining US$1.25m to
be paid out in five equal installments over the coming months.
CORPORATE
Subsequent to period end, the Company successfully completed the first stage of the Equity Raising
with a heavily oversubscribed Two Tranche Placement to raise $8.0 million (before costs). The raising
received strong support from existing shareholders, along with significant demand from new
domestic and international investors. The successful completion of the Placement leaves Atrum well
positioned to proceed with the next stage of the Equity Raising, a non-renounceable 1 to 5
Entitlements to raise up to $4.6 million (before costs). The Placement together with the
Entitlements Offer are expected to raise up to $12.6 million.
In August 2017, Atrum announced the appointment of Max Wang as the Company’s Managing
Director and Chief Executive Officer. Mr Wang is a registered professional engineer and an
experienced coal executive based in Canada. He is the former chairman of the Coal Association of
Canada and still serves as the vice chair on the board. He was also a former board member of
Winsway Coking Coal Holdings Ltd – a Hong Kong Stock Exchange-listed company.
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OPERATIONS REVIEW
Charles (Chuck) Blixt joined the Board as a Non-Executive Director in May 2017 and was appointed
Non-Executive Chairman in August 2017. Mr Blixt has significant experience in strategy development
and execution, with success in diverse businesses and serving as a Director across a 40-year career.
George Edwards and Charles Fear were also appointed as Non-Executive Directors in August 2017.
George Edwards is a metallurgy graduate from the University of New South Wales, and has spent his
life in the coal sector, initially in metallurgy, then establishing, operating and selling his own export
coal mines, in coal negotiations and trade missions around the world, and then in trading coal
shipments. He has worked for BHP, Coal and Allied, the Joint Coal Board and was lately Chief
Executive Officer in Australia for Consolidation Coal Company of the USA (now Consol Energy).
Charles Fear is the Chairman and co-founder of Argonaut and has a distinguished track record in
M&A, advisory and equity capital markets transactions. Mr Fear is regarded as one of Western
Australia’s leading M&A Advisors. He has also been involved in a number of significant capital
raisings for clients totaling over $4 billion.
During CY17, the Company received a refund of A$1.8M from the Canadian Government METC
scheme. This was used to pay out the Moneytech facility entirely. In addition, the Company paid
$245K to Lenark to reduce the amount outstanding to A$1.6m at period end.
Also during the period, the Company granted 15,600,000 options to the CEO and directors, subject
to various vesting conditions and at different strike prices.
Subsequent to period end, the Company received confirmation from the majority of Kuro Coal
convertible note holders that they would convert their notes into shares in Atrum at the same price
as the capital raise.
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DIRECTORS’ REPORT
DIRECTORS
COMPANY SECRETARY
Charles Blixt (Non-Executive Chairman) (appointed 29 May 2017)
James Chisholm (appointed 25 October 2011)
George Edwards (appointed 17 August 2017)
Charles Fear (appointed 17 August 2017)
Max Wang (Managing Director) (appointed on 22 November 2017)
Justyn Stedwell (appointed 1 May 2017)
REGISTERED AND PRINCIPAL OFFICE
Unit 1B, 205-207 Johnston Street
Fitzroy, VIC 3065
Phone: +61 (0) 3 9191 0135
Fax: +61 (0) 3 8678 1747
Website:
Email:
www.atrumcoal.com
info@atrumcoal.com
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone:
Facsimile:
(08) 9315 2333
(08) 9315 2233
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
SOLICITORS
Australia
Sierra Legal Pty Ltd.
Level 5, 9 Sherwood Road
Toowong QLD 4066
AUSTRALIAN SECURITIES EXCHANGE
Atrum Coal Ltd. shares (ATU) are listed on the Australian Securities
Exchange.
Canada
McCarthy Tetrault
777 Dunsmuir Street
Vancouver BC V7Y 1K2
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DIRECTORS’ REPORT
Your directors present their report on the consolidated entity consisting of Atrum Coal Ltd. and the entities it controlled at the
end of, or during, the period ended 31 December 2017. Throughout the report, the consolidated entity is referred to as the
group.
DIRECTORS
The names of the directors of the Company in office during the period and up to the date of this report are as follows:
Charles Blixt
Thomas Borman
Craig Ian Burton
James Chisholm
George Edwards
Charles Fear
Michael John Jardine
Max Wang
Non-Executive Chairman (appointed as Director 29 May 2017 and Non-Executive
Chairman on 17 August 2017))
Non-Executive Director (retired 24 July 2017)
Non-Executive Director (retired 17 August 2017)
Non-Executive Director (appointed 25 October 2011)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (retired 17 August 2017)
Managing Director (as Managing Director and Chief Executive Officer on 21 August
2017 and as a director on 22 November 2017)
The directors remain appointed as at the date of this report unless otherwise stated. The particulars of the qualifications,
experience and special responsibilities of each current director are as follows:
Charles Blixt - Chairman (appointed 29 May 2017)
Mr. Blixt began his 40-year career in private legal practice before taking on legal counsel roles, initially at Fiat-Allis and then at
Caterpillar. In 1985 he joined R. J. Reynolds Tobacco as assistant Counsel Litigation. He spent 20 years at R. J. Reynolds in various
legal roles including as Executive Vice President, General Counsel and Assistant Secretary for Reynolds American Inc. from 1999 to
2006. He served as a Non-Executive Director of Krispy Kreme Doughnuts Inc. (NYSE: KKD) from 2007 to 2016. Mr. Blixt currently
serves as a Non-Executive Director at Lamb Weston Holdings Inc. (NYSE: LW), the largest North American frozen potato producer
(and second largest worldwide) with a market capitalisation over US$6.5b. He serves as a Non-Executive Director of the $6.5b
market cap Swedish Match AB (Stockholm: SWMA), one of the world’s largest Tobacco products manufacturers. He served as
Non-Executive Director of Targacept Inc. prior to its merger with Catalyst Biosciences Inc. in 2015. Mr. Blixt also serves as a
director of several privately held small companies. He is currently a principal in C&D Ventures, which invests in entrepreneurial
start-ups and other businesses which require capital and/or business and legal expertise.
As at 28 March 2018, Mr. Blixt holds 350,000 fully paid ordinary shares in the Company and 2,400,000 options.
James Chisholm – Non - Executive Director (appointed 25 October 2011)
James Chisholm is a qualified engineer, holding a degree in electrical engineering, who has worked in the engineering and mining
sectors for the past 29 years, initially in engineering, then management, then M&A roles. James co-founded The Chairmen1 Pty Ltd
(which is the largest shareholder of Guildford Coal Limited ASX: GUF), Ebony Iron Pty Ltd (now part of Strategic Minerals PLC, AIM:
SML), Fertoz Limited (ASX: FTZ) and Ebony Energy Limited. Mr Chisholm is currently a non-executive director of ASX listed Fertoz
Limited (ASX: FTZ) and is currently a director of unlisted Ebony Coal Limited. Mr Chisholm was not a director of any other publicly
listed companies in the last three years.
As at 28 March 2018, Mr Chisholm has an indirect holding of 36,562,266 fully paid ordinary shares through Lenark Pty Ltd and an
indirect holding of 2,189,118 fully paid ordinary shares through Bucket Super Pty Ltd in the Company and 750,000 performance
rights in the Company.
George Edwards – Non-Executive Director (appointed 17 August 2017)
George Edwards is a metallurgy graduate from the University of New South Wales, and has spent his life in the coal sector, initially
in metallurgy, then establishing, operating and selling his own export coal mines, in coal negotiations and trade missions around
the world, and then in trading coal shipments. He has worked for BHP, Coal and Allied, the Joint Coal Board and was latterly Chief
Executive Officer in Australia for Consolidation Coal Company of the USA (now Consol Energy). Since establishing his own companies
32 years ago he has been responsible for export sales of up to 5 million tonnes of coal a year from his own and other mines in
Australia, and some from other countries. He has close links with Asian and Indian coal buyers and has been mandated by several
Chinese companies to secure coal and coal projects. He was Chairman of SAI Global Limited (ASX listed) from listing in 2003 until
2008, the Energy Council of Australia (from 1993 to 2006) and Standards Australia (from 2000 to 2004); in 1995 he was President
of The AusIMM. He has authored more than 150 talks, articles and presentations in Australia and in 14 countries overseas, mainly
on mining and coal-related matters.
As at 28 March 2018, Mr. Edwards holds has an indirect holding of 102,675 fully paid ordinary shares in the Company through
Edwards Global Services Pty Ltd and 1,600,000 options.
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DIRECTORS’ REPORT
Charles Fear – Non-Executive Director (appointed 17 August 2017)
Charles Fear is Chairman of Argonaut Limited. He co-founded Argonaut Limited in 2002 to provide M&A advice, undertake primary
and secondary capital raisings, and provide stock-broking services to natural resources companies and companies that operate in
the resources sector. Over the last ten years, Argonaut has advised on over $4B worth of M&A transactions, raised more than $3B
in equity and more than $1.5B in debt for resource companies and projects. Argonaut works across the globe, and has conducted
business in Australia, North and South America, throughout the Asia-Pacific region, and in Africa.
As at 28 March 2018, Mr. Fear holds an indirect holding of 400,000 fully paid ordinary shares in the Company and 1,600,000 options
through Areley Kings Pty Ltd, an indirect holding of 2,550,000 fully paid ordinary shares through Argonaut Equity Partners Pty
Limited and an indirect holding of 500,000 options through Argonaut Investments Pty Ltd.
Max Wang – Managing Director (appointed Managing Director and Chief Executive Officer on 21 August 2017 and as a director
on 22 November 2017)
Mr. Wang was appointed as Managing Director and Chief Executive Officer on 21 August 2017 and as a director on 22 November
2017.
Mr. Wang is a Registered Professional Engineer in Alberta, Canada. He holds a Bachelor degree in Railway Engineering from
Southwest Jiaotong University in China and a PhD in Civil Engineering from the University of Calgary. From 1990 to 1997, Max was
an independent consultant on various engineering projects across Canada. In 1998, he joined Bantrel Corp with progressive
responsibilities from Lead Civil/Structural Engineer to Project Engineering Manager and Civil/Structural/Architectural Department
Manager and Chief Engineer overseeing mining, in-situ and downstream oil sands and other projects. In 2006, he joined Petro-
Canada Inc as Engineering Manager for Oil Sands, and with the merger of Petro-Canada with Suncor in 2009, he took on the role of
Director of Engineering, Major Projects. In 2012, Marubeni and Winsway purchased Alberta-based, Grande Cache Coal, and Max
led the business as President and Chief Executive from January 2013 until joining Atrum. Marubeni and Winsway sold the bulk of
the business to UP-Energy and the mine is now being offered for sale. Mr. Wang is a technical committee member of the Canadian
National Standards on Concrete Materials, Construction, Testing and Design, and a founding steering committee member of the
annual Sino-Canadian Oil and Gas Symposium.
As at 28 March 2018, Mr. Wang holds zero fully paid ordinary shares in the Company and 10,000,000 options through a nominee.
Justyn Stedwell – Corporate Secretary (appointed 1 May 2017)
Mr. Stedwell is a professional company secretary with a decade of experience with ASX listed companies in various industries,
including mining and exploration, IT & telecommunications, biotechnology and agriculture. Mr Stedwell’s qualifications include a
Bachelor of Commerce (Economics and Management) from Monash University, a Graduate Diploma of Accounting at Deakin
University and a Graduate Diploma in Applied Corporate Governance at the Governance Institute of Australia.
He is currently Company Secretary at several ASX-listed companies, including Lifespot Health (ASX: LSH); \], Cirralto Ltd (ASX:CRO),
Rhinomed Ltd (ASX:RNO), Imugene Ltd (ASX:IMU), Pacific Dairies Ltd (ASX:PDF), Rectifier Technologies Ltd (ASX:RFT), Lanka
Graphite Ltd (ASX:LGR), WONHE Multimedia Commerce Ltd (ASX:WMC) and Broo Ltd (ASX:BEE).
CORPORATE INFORMATION
Corporate Structure
Atrum is incorporated and domiciled in Australia.
Nature of Operations and Principal Activities
The principal continuing activities during the period, of entities within the Group was anthracite exploration and development in
British Columbia, Canada.
OPERATING AND FINANCIAL REVIEW
Review of Operations
A review of operations for the period, and the results of those operations is contained within the company review.
Operating Results
Consolidated loss after income tax for the period was $370,072 (30 June 2017: $10,597,929).
Financial Position
At 31 December 2017, the Group had cash reserves of $2,019,636 (30 June 2017: $4,390,934).
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DIRECTORS’ REPORT
Financing and Investing Activities
During the period ended 31 December 2017, the Company repaid in full the Confirmed Capital Receivables Facility from
Moneytech, after receipt of the METC refund from the Canada Revenue Agency.
Dividends
No dividends were paid during the year and no recommendation is made as to dividends with respect to the period ended 31
December 2017.
Acquisition of Elan
On 23 August 2017, the Company’s wholly-owned subsidiaries, Kuro Coal Limited (“Kuro”) and Kuro Coal Canada Inc (“Kuro Coal
Canada”), have entered into a share sale deed under which it is proposed that:
(cid:1)
(cid:1)
Kuro Coal Canada will purchase all of the shares in Elan Coal Ltd (“Elan”) (a company incorporated in Canada); and
Kuro will seek to separately list on the ASX, TSX-V or an alternative international exchange, (“Proposed Transaction”).
As consideration for the acquisition of Elan, the Vendors should receive cash consideration of $3.1million (including C$100,000
which was paid on the signing of the share sale deed) and Kuro Coal Canada should also be required to issue $3.65 million in
script. Under the share sale deed, Kuro has an exclusivity period until 31 March 2018. A further exclusivity extension to 30 June
2018 is available if Kuro lodges a listing application with the ASX or an Alternative Stock Exchange before the end of Q1 2018 or
concludes an alternatively acceptable settlement outcome with the Vendors. The exclusivity can be extended at any time by
mutual agreement.
On 6 December 2017, the share sale deed was amended to allow Atrum to acquire Elan directly instead of through Kuro. Under
the amended deed, Atrum will assume all the obligations of Kuro, which include the payment of C$3.65M in Atrum shares at a
price of A$0.19 and a cash payment of C$3M. As a result, Kuro will no longer seek a separate listing on any exchange. The
acquisition must be completed by 31 March 2018, unless the parties agree otherwise.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the year are detailed in the Company review.
During the period ended 31 December 2017, the Group sought and was granted a change in reporting date from 30 June to 31
December, and consequently the reporting period subsequent to the year ended 30 June 2017 is for a six-month period ended 31
December 2017. The comparative numbers are for the twelve months ended 30 June 2017.
Other than as disclosed, there has been no matter or circumstance that has arisen that has significantly affected, or may significantly
affect:
1.
2.
3.
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
In the opinion of the directors, there were no other significant changes in the state of affairs of the Company that occurred during
the period under review not otherwise disclosed in this report or in the financial report.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
Capital Raise
On 21 March 2018, the Company announced it has successfully raised via a two-tranche placement an amount of $8M by the issue
of shares at a price of $0.10 per unit. As a consequence, and in accordance to the amended Lenark agreement, 10% of the proceeds
will be applied towards the repayment of the loan (see Note 12 to the financial statements).
In addition, the Company announced that it will proceed with an Entitlement issue of 1 new share for every 5 held by eligible
shareholders at a price of $0.10 per unit.
Each unit comprises of one ordinary share and a free attaching listed option to purchase an ordinary share at a price of $0.20 on or
before 31 March 2021.
Kuro Coal Convertible Notes
On 29 January 2017, the Company announced a proposal to reduce its financial liabilities by offering to exchange Kuro Coal
convertible notes to a total of 8,000,000 Atrum Shares.
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DIRECTORS’ REPORT
Proceeds from sale of inventory
Subsequent to the period ended 31 December 2017, the Company sold the inventory for the carrying value of USD1,225,000.
Payment will be received in 10 equal instalments of USD122,500 on the first and last day of each month. The first instalment was
received in the month of March 2018.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Company will continue to pursue its principal activity of exploration and evaluation, particularly in respect to the Projects as
more particularly outlined in the company review. The Company will also continue to pursue other potential investment
opportunities to enhance shareholder value.
The Company continues with the ongoing development at the Groundhog Anthracite Project following the award of the bulk sample
permit for the north-west zone of Groundhog.
MEETINGS OF DIRECTORS
The numbers of meetings of directors (including meetings of committees of directors) held during the period and the number of
meetings attended by each director was as follows:
Charles Blixt
Thomas Borman
Craig Ian Burton
J Chisholm
George Edwards
Charles Fear
Michael J Jardine
Max Wang
Period ended 31 December 2017
Board of Directors
Year ended 30 June 2017
Board of Directors
Number eligible to
attend
4
-
2
4
2
2
2
-
Number
attended
4
-
2
4
2
2
2
-
Number eligible to
attend
1
2
4
10
-
-
4
-
Number
attended
1
2
2
10
-
-
4
-
Outside of the above meetings of directors, the Company conducted its directors’ meetings and resolved certain corporate matters
via circular resolutions of directors.
REMUNERATION REPORT (AUDITED)
The directors are pleased to present Atrum Coal Ltd.’s remuneration report for the period ended 31 December 2017 which sets out
the remuneration information for the company’s non-executive directors, executive directors and other key management
personnel.
This report details the nature and amount of remuneration for each director and executive of Atrum Coal Ltd. The information
provided in the remuneration report includes remuneration disclosures that are audited as required by section 308(3C) of the
Corporations Act 2001.
For the purposes of this report Key Management Personnel of the Group are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the group, directly or indirectly, including any director
(whether executive or otherwise) of the parent company.
For the purposes of this report the term “executive” includes those key management personnel who are not directors of the parent
company.
(a) Remuneration policy
(b) Remuneration structure
(c) Service agreements
(d) Details of remuneration for the year
(e) Details of share-based compensation and equity instruments held by Key management personnel
(f) Voting and comments made at the Company’s 2017 Annual General Meeting
(g) Other transactions with key management personnel
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REMUNERATION REPORT (AUDITED) (CONT.)
The KMP’s covered in this report include:
Charles Blixt
Craig Ian Burton
Thomas Borman
James Chisholm
George Edwards
Charles Fear
Michael John Jardine
Max Wang
Non-Executive Chairman (appointed as Director 29 May 2017 and Non-Executive Chairman on
17 August 2017))
Non-Executive Director (retired 17 August 2017)
Non-Executive Director (retired 24 July 2017)
Non-Executive Director (appointed 25 October 2011)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (retired 17 August 2017)
Managing Director (appointed as Managing Director and Chief Executive Officer on 21 August
2017 and as a director on 22 November 2017)
REMUNERATION GOVERNANCE
Remuneration Committee
The full Board carries out the roles and responsibilities of the Remuneration Committee and is responsible for determining and
reviewing the compensation arrangements for the Directors themselves, the Managing Director and any Executives.
Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative
remuneration and internal and independent external advice. No independent advice has been sought by the Company during the
respective financial year in relation to remuneration structure and levels.
A.
Remuneration policy
The Board policy is to remunerate directors at market rates for time, commitment and responsibilities. The Board determines
payments 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 a general meeting, from time to time. The current maximum aggregate amount as approved by
shareholders at the Company’s general meeting held on 20 April 2012 is $250,000 per annum. However, to align directors’ interests
with shareholders’ interests, the directors are encouraged to hold shares and options in the company.
The Company’s aim is to remunerate at a level that reflects the size and nature of the Company. Company officers and directors
are remunerated to a level consistent with the size of the Company.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation of this size
and maturity.
In accordance with its remuneration policy, the Company granted performance rights to Key Management Personnel and
Employees as disclosed in Part E of this remuneration report.
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REMUNERATION REPORT (AUDITED) (CONT.)
B.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and executive compensation is
separate and distinct.
Non-executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the Company with the ability to attract and retain directors
of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be determined
from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors
as agreed. The latest determination approved by shareholders on 20 April 2012 was an aggregate compensation of $250,000 per
year.
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is apportioned amongst
directors is reviewed annually. The Board considers advice from external consultants as well as the fees paid to non-executive
directors of comparable companies when undertaking the annual review process. Non-Executive Directors’ remuneration may
include an incentive portion consisting of options and/or performance rights, as considered appropriate by the Board, which may
be subject to Shareholder approval in accordance with ASX listing rules. At the date of this report the Company had not engaged
remuneration consultants.
Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities
within the entity so as to:
(cid:1) reward executives for company and individual performance against targets set by appropriate benchmarks;
(cid:1) align the interests of executives with those of shareholders;
(cid:1) link rewards with the strategic goals and performance of the Company; and
(cid:1) ensure total compensation is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reflect the market salary
for a position and individual of comparable responsibility and experience. Due to the limited size of the Company and of its
operations and financial affairs, the use of a separate remuneration committee is not considered appropriate. Remuneration is
regularly compared with the external market by participation in industry salary surveys and during recruitment activities generally.
If required, the Board may engage an external consultant to provide independent advice in the form of a written report detailing
market levels of remuneration for comparable executive roles. At the date of this report the Company had not engaged
remuneration consultants.
Compensation may consist of the following key elements:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
Fixed Compensation;
Variable Compensation;
Short Term Incentive (STI); and
Long Term Incentive (LTI).
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
B.
Remuneration structure (continued)
Fixed Remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is
competitive in the market. Fixed remuneration is reviewed annually by the Board having regard to the Company and individual
performance, relevant comparable remuneration in the mining exploration sector and external advice.
The fixed remuneration is a base salary or monthly consulting fee.
Variable Pay – Short Term Incentives
The purpose of the short-term incentive plan is to reward achievement of business objectives on a year by year basis. Each financial
year the board, in conjunction with senior management, sets the business objectives aimed to be achieved during the year to
implement the Company’s business plan.
The business objectives are clearly defined outcomes in product development and commercialisation, achievement of which can
be readily and objectively measured at the end of the financial year. Measurement of achievement of the business objectives also
involves comparison with factors external to the Company.
No remuneration linked to short term incentives have been issued to date.
Variable Pay — Long Term Incentives
The objective of long term incentives is to reward directors/executives in a manner which aligns this element of remuneration with
the creation of shareholder wealth. The incentive portion is payable based upon attainment of objectives related to the
director’s/executive’s job responsibilities. The objectives vary, but all are targeted to relate directly to the Company’s business and
financial performance and thus to shareholder value.
Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual receives a promotion
and, as such, is not subsequently affected by the individual’s performance over time.
Variable Pay — Long Term Incentives – Performance Rights
The Company has implemented a Performance Rights Plan for the Directors, Key Management and Staff. The objective of the
Performance Rights Plan is to align the interests of all personnel involved in the operations of the Company and to reward them for
the achievement of milestones relating to market and non-market objectives. Please refer to Section E for further information on
the milestones set in relation to the Performance Rights Plan.
C.
Service Agreements
The employment arrangements of the directors are contained in formal letters of appointment, and in the case of Executive Directors,
contracts for services. Included in these contracts, amongst other things, are reference to the grant of options.
The contract details of each of the Key Management Personnel are as follows:
Max Wang – Managing Director and CEO
Agreement Commenced:
Term of Agreement:
Details: Salary of C$350,000 per annum plus 5% superannuation
21 August 2017
Full time employment
3 Months termination notice by Mr. Wang; 1 – 12 months termination notice depending on years of service if terminated
by the Company.
10,000,000 options at exercise prices between $0.18 and $1.00 with expiry dates that are between 12 and 36 months from
the issue dates and vested upon achieving milestones set out in the employment agreement, as approved by the shareholders
on 3 November 2017.
Charles Blixt – Non-Executive Chairman
Agreement Commenced:
Term of Agreement:
Details:
29 May 2017
No set tenure
Director’s fees USD 3,000 per month
2,400,000 options at exercise prices between $0.23 and $1.00 with expiry dates that are between 12
and 36 months from the issue dates and vested upon achieving milestones set out in the employment
agreement, as approved by the shareholders on 3 November 2017.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
C.
Service Agreements (continued)
James Chisholm – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
25 October 2011
No set tenure
Director’s fees $3,000 per month
George Edwards – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
17 August 2017
No set tenure
Director’s fees $3,000 per month
1,600,000 options at exercise prices between $0.23 and $1.00 with expiry dates that are between 12
and 36 months from the issue dates and vested upon achieving milestones set out in the employment
agreement, as approved by the shareholders on 3 November 2017.
Charles Fear – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
17 August 2017
No set tenure
Director’s fees $3,000 per month (inclusive of superannuation)
1,600,000 options at exercise prices between $0.23 and $1.00 with expiry dates that are between 12
and 36 months from the issue dates and vested upon achieving milestones set out in the employment
agreement, as approved by the shareholders on 3 November 2017.
D.
Details of remuneration for the year
Remuneration
Details of the remuneration of each Director and named executive officer of the Company, including their personally-related entities,
during the year was as follows:
Period
Ended
31
December
2017
2017
2017
2017
2017
2017
2017
2017
2017
Directors
Charles Blixt(1)
Craig Ian Burton(2)
Tom Borman(3)
James Chisholm
George Edwards(4)
Charles Fear(5)
Michael John
Jardine(6)
Max Wang(7)
Total
Post Employment
Share Based
Payments
Performance related
Short Term
Benefits
Salary and fees
(includes
Directors Fees)
Superannuation
Options(A)
Total
Fixed
$
$
$
$
%
24,598
-
-
18,000
12,616
11,420
6,000
146,583
-
-
-
-
-
1,196
-
-
22,031
-
-
-
13,841
13,841
46,629
-
-
18,000
26,457
26,457
53%
-
-
100%
48%
48%
-
6,000
100%
47,072
193,655
76%
69%
219,217
1,196
96,785
317,198
LTI
%
47%
-
-
0%
52%
52%
0%
24%
31%
(1)
(2)
(3)
(4)
(5)
(6)
(7)
A.
Appointed as Non-Executive Director on 29 May 2017
Resigned on 17 August 2017
Resigned on 24 July 2017
Appointed as Non-Executive Director on 17 August 2017
Appointed as Non-Executive Director on 17 August 2017
Resigned on 17 August 2017
Appointed as Managing Director and Chief Executive Officer on 21 August 2017 and as a director on 22 November 2017.
The estimated options value discussed above is calculated at the date of grant using a Black-Scholes model, having regard to the estimated probability, at
the balance sheet date, that the vesting conditions will realise. Please refer Note 13(d) for fair value methodology.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
E.
Details of share-based compensation and equity instruments held by key management personnel
Short Term
Benefits
Post Employment
Share Based
Payments
Performance related
Year
Ended
Salary and fees
(includes
30 June Directors Fees)
Superannuation
$
$
Performance
Rights
$
Total
Fixed
$
%
LTI
%
Directors
Robert Bell
Charles Blixt
Craig Ian Burton
Tom Borman
Steven Boulton
James Chisholm
Michael John Jardine
Cameron Vorias
John Wasik
2017
2017
2017
2017
2017
2017
2017
2017
2017
361,539
3,000
22,500
-
24,000
204,000
13,285
36,000
51,000
-
-
-
-
-
-
-
-
-
104,724
466,263
-
-
-
3,000
22,500
-
(28,980)
(4,980)
-
-
(36,193)
204,000
13,285
(193)
78%
100%
100%
-
-
100%
100%
-
-
51,000
100%
Total
Options
During the period ended 31 December 2017, options were granted to directors following the approval at the 2017 Annual General
Meeting on 3 November 2017.
39,551
-
715,324
754,875
2017
95%
22%
0%
0%
-
-
0%
0%
-
0%
5%
Director
Charles Blixt
Charles Fear
George Edwards
Max Wang
TOTAL
Number of
Options/
Conditions
Expiry Date
Exercise
Price
Expected
Vesting
Period (yrs)
400,000(1)
400,000(3)
400,000(4)
600,000(5)
600,000(6)
250,000(1)
250,000(3)
300,000(4)
400,000(5)
400,000(6)
250,000(1)
250,000(3)
300,000(4)
400,000(5)
400,000(6)
500,000(1)
500,000(2)
1,000,000(3)
2,000,000(4)
3,000,000(5)
3,000,000(6)
15,600,000
1 December 2018
1 June 2019
1 December 2019
1 June 2020
1 December 2020
1 December 2018
1 June 2019
1 December 2019
1 June 2020
1 December 2020
1 December 2018
1 June 2019
1 December 2019
1 June 2020
1 December 2020
1 December 2018
1 December 2018
1 June 2019
1 December 2019
1 June 2020
1 December 2020
$0.23
$0.40
$0.50
$0.70
$1.00
$0.23
$0.40
$0.50
$0.70
$1.00
$0.23
$0.40
$0.50
$0.70
$1.00
$0.18
$0.23
$0.40
$0.50
$0.70
$1.00
-
1.5
2.0
2.5
3.0
-
1.5
2.0
2.5
3.0
-
1.5
2.0
2.5
3.0
-
0.5
1.5
2.0
2.5
3.0
%
Vested
100%
25%
25%
25%
25%
100%
25%
25%
25%
25%
100%
25%
25%
25%
25%
100%
100%
25%
25%
25%
25%
Value vested
during the
Period(A)
Value
Not Vested
$20,567
$418
$340
$394
$312
$12,854
$261
$255
$263
$208
$12,854
$261
$255
$263
$208
$32,624
$8,170
$1,046
$1,700
$1,971
$1,561
$96,785
$ -
$ 3,531
$ 3,940
$ 5,807
$ 5,583
$ -
$ 2,207
$ 2,955
$ 3,871
$ 3,722
$ -
$ 2,207
$ 2,955
$ 3,871
$ 3,722
$ -
$17,539
$ 8,828
$19,702
$29,034
$27,915
$147,389
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DIRECTORS’ REPORT
(1) No vesting conditions;
(2) 6 months service as Managing Director;
(3) Announcement to the ASX during the term of employment (Term), of the appointment of a Board-approved partner to assist in the development
of one or more projects at Groundhog;
(4) Announcement to the ASX during the Term, of the appointment of a Board approved partner to the Company i.e. a partner at Atrum Coal Ltd
level rather than project level;
(5) Announcement to the ASX during the Term, of the award by Government of a 1mtpa (or greater) commercial mining license for any project
(where the majority of that project is owned by Atrum Coal Ltd or any affiliated companies);
(6) The sale of an aggregate of 500,000 tonnes of coal produced by Atrum Coal Ltd or any Affiliated Companies during the Term
A. The estimated options value vested is calculated at the date of grant using a Black-Scholes model, having regard to the estimated probability, at the balance
sheet, date that the vesting conditions will realise. Please refer Note 13(d) for fair value methodology
Performance Rights:
(i) Details of Performance Right Vesting Conditions are detailed in Note 21 to the financial statements.
Performance rights granted carry no dividend or voting rights. When vesting conditions relative to the performance right are met
and the performance right is exercised, each performance right entitles the holder to be issued 1 ordinary share for nil
consideration.
(ii) Details of the performance rights movements for each Key Management Person:
The number of Performance Rights held during the financial period by each director of Atrum Coal Ltd. and other key management
personnel of the Group, including their personally related parties, is set out below.
E.
Details of share-based compensation and equity instruments held by key management personnel (Cont.)
Balance at the
start of the
period
Granted as
remuneration
Disposed /
Lapsed /
Forfeited
Vested and
Exercised
Balance at the end
of the period
Period ended
31 December 2017
Directors
James Chisholm
750,000
750,000
-
-
-
-
-
-
750,000
750,000
Details of performance rights affecting the value of Key Management Personnel remuneration during the period are:
# performance rights
granted
KMP
Year of
grant
Market
based
Non-
market
based
TOTAL
Total value at
grant
date 1
No. of rights
vested during
prior years
No. of
rights
vested
during the
period
Total rights
vested to
date
No. of rights
forfeited
during the
period
Vested
%
Maximum
yet to vest
James
Chisholm
Total
2012
937,500
1,687,500
2,625,000
$185,000
(1,875,000)
-
(1,875,000)
-
71%
$60,000
937,500
1,687,500
2,625,000
$185,000
1)
Value based on grant date value per performance right and class as disclosed above.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
Shareholding
The number of shares in the Company held during the financial period by each director and other members of key management
personnel of the group, including their personally related parties, is set out below:
Balance at the start of
the period
Ordinary
Shareholding
(Fully and
Partly Paid)
Period ended 31 December 2017
Directors
Charles Blixt
James Chisholm
George Edwards
Charles Fear
Total
100,000
38,751,384
-
2,550,000
41,401,384
Issued on
exercise of
performance
rights
Additions
Disposals
Balance at the end of
the period
-
-
-
-
-
250,000
-
102,675
333,442
686,117
-
-
-
-
-
350,000
38,751,384
102,675
2,833,442
42,087,501
The shareholdings presented in the table above comprise all ordinary shares.
No options were granted to key management personnel during the year.
F.
Voting and comments made at the Company’s 2017 Annual General Meeting
The Company received 0.07% of votes “against” the adoption of the remuneration report for the 2016 financial period. The
Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
G.
Other transactions
The Company paid and accrued interest on loans due to companies related to directors in the amount of $77,875. At 31
December 2017, loan due to companies related to directors amounted to $1,620,607 (See note 12).
During the period ended 31 December 2017, 11,125,418 options exercisable at a price of $0.80 expired unexercised and
15,600,000 options exercisable at prices between $0.18 and $1.00 and expiring between 1 December 2018 and 1 December 2020,
were granted to directors (see note 13(d))
*** This is the end of the Audited Remuneration Report. ***
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DIRECTORS’ REPORT
INSURANCE OF OFFICERS
The Company has insured the Directors and Officers of the Company against any liability arising from a claim brought by a third party
against the Company or its Directors and officers, and against liabilities for costs and expenses incurred by them in defending any
legal proceedings arising out of their conduct while acting in their capacity as a Director or officer of the Company, other than
conduct involving a wilful breach of duty in relation to the Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to the insurers has not
been disclosed. This is permitted under Section 300(9) of the Corporations Act 2001.
SHARE OPTIONS
During the period, 15,600,000 options were issued (see note 13(d)) and 11,125,418 expired unexercised.
No person entitled to exercise these options had or has any right, by virtue of the option, to participate in any share issue of any
other body corporate.
LEGAL PROCEEDINGS
There are currently no legal proceedings against the Company.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which
the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
ENVIRONMENTAL REGULATIONS
The Directors believe that the Group has, in all material respects, complied with all particular and significant environmental
regulations relevant to its operations.
AUDITOR
BDO Audit (WA) Pty Ltd continues in office in accordance with Section 327 of the Corporations Act 2001.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in
Note 3 to the financial statements as per the requirements of the Corporations Act 2001. The directors are satisfied that the
provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
The directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have
been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine
the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional & Ethical Standards Board.
Auditor’s Remuneration
(a) Non-Audit Services
Amounts received by, related practices of BDO Audit (WA) Pty Ltd for non-audit services
(incl overseas offices)
Consolidated
Period ended
31 December
2017
$
Year ended
30 June
2017
$
6,854
6,854
89,287
89,287
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DIRECTORS’ REPORT
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the period ended 31 December 2017, as required under section 307C of the Corporations
Act 2001, has been received and is included within the financial report.
Signed in accordance with a resolution of directors.
Charles Blixt
Non-Executive Chairman
North Carolina, 28 March 2018
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CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Atrum is responsible for the corporate governance of the Company. The Board guides and monitors the
business and affairs of Atrum on behalf of the shareholders by whom they are elected and to whom they are accountable. This
statement reports on Atrum’s key governance principles and practices.
1.
COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS
The Company, as a listed entity, must comply with the Corporations Act 2001 and the ASX Limited (ASX) Listing Rules. The ASX
Listing Rules require the Company to report on the extent to which it has followed the Corporate Governance Recommendations
published by the ASX Corporate Governance Council (ASXCGC).
The table below sets out the Company's position as at 31 December 2017 with regards to its compliance with the Corporate
Governance Recommendations (3rd Edition):
ASX Corporate Governance Council Recommendations
Principle #
/ Company
Response
Principle 1
Lay solid foundations for management and oversight
1.1
A listed entity should disclose:
a)
b)
the functions reserved to the board and those delegated to senior management; and
Those matters expressly reserved to the board and those delegated to management.
Company
response
The Company has formalised and disclosed the functions reserved to the board and those delegated to management.
These functions can be viewed at the Company’s website: www.atrumcoal.com.
Post reporting date, the Company board comprises five directors, four of whom are non-executive Directors. The roles
and functions of directors within the Company are designed to allow it to best function within its level of available
resources.
The full board currently meets regularly, and specific significant matters are endorsed and executed via circular
resolution.
A listed entity should:
1.2
a)
b)
undertake appropriate checks before appointing a person, or putting forward to security holders a
candidate for election, as a director; and
provide security holders with all material information in its possession relevant to a decision on whether
or not to elect or re-elect a director.
Company
response
The Company analyses and reviews the qualifications and experience of any potential candidate. Background checks
are performed where deemed appropriate for the position, including speaking with personal and professional
references.
The Company provides biographical details of proposed directors, as well as information relating to other directorships
and interest which may reasonably be perceived to influence their capacity to bring independent judgement to the
board.
A listed entity should have a written agreement with each director and senior executive setting out the terms of their
appointment.
Each director and senior executive has a written contract that sets out the terms of their appointment, including their
responsibilities and remuneration.
The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters
to do with the proper functioning of the board.
The company secretary is directly accountable to the board. Communication between the board and the company
secretary is encouraged, and matters of corporate governance and compliance are a standing agenda item for board
discussion.
1.3
Company
response
1.4
Company
response
Professional development of directors, officers and management are encouraged by the Company and facilitated
through the company secretary.
The Company adopts a policy of circulating board minutes at the earliest possible opportunity following the board
meetings, to expedite the formalisation of items discussed at the meetings.
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CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council Recommendations
Principle #
/ Company
Response
1.5
A listed entity should:
a)
b)
c)
have a diversity policy which includes requirements for the board or a relevant committee of the board
to set measurable objectives for achieving gender diversity and to assess annually both the objectives
and the entity’s progress in achieving them;
disclose that policy or a summary of it; and
disclose as at the end of each reporting period the measurable objectives for achieving gender diversity
set by the board in accordance with the entity’s diversity policy and its progress towards achieving them,
and either;
1.
the respective proportions of men and women on the board, in senior management positions and
across the whole organisation (including how the entity has defined “senior executive” for these
purposes); or
if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most
recent “Gender Equality Indicators”, as defined in and published under that Act.
2.
Company
response
The Company is an equal opportunity employer and strives to foster diversity across the organisation. The Company
has adopted a diversity policy that is disclosed on its Company website.
Due to the current size, nature and scale of the Company’s activities the Board has not yet developed measurable
objectives regarding gender diversity. As the size and scale of the Company grows the Board will set and aim to achieve
gender diversity objectives as director and senior executive positions become vacant and appropriately qualified
candidates become available.
As at the end of the period, the Company had the following proportion of men and women across the organisation:
Board
Senior Executives
Whole Organisation
Men
5
1
9
Women
-
-
2
1.6
A listed entity should:
Company
response
a)
b)
have and disclose the process for periodically evaluating the performance of the board, its committees
and individual directors; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
The Company undertakes an annual review of its board, and of individual directors. The review is a peer review,
and the process is managed by the Chairman of the Board.
Feedback in relation to the performance of the Board as a whole is tabled at the meeting following the review.
A review was not completed during the period as the reporting period was a six-month period and four members
of the Board have only recently been appointed.
1.7
A listed entity should:
Company
response
a)
b)
have and disclose a process for periodically evaluating the performance of senior executives; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
Currently, the Company engages all senior executives as contractors, and contracts are reviewed annually. For
those contractors that have been engaged by the Company for longer than 12 continuous months under the current
financial year, those contractors underwent a performance appraisal pursuant to their contracts.
The Company is in the process of developing performance evaluation processes and shall undertake reviews of its
senior executives on the anniversary of their start dates.
Principle 2
Structure the board to add value
17
For personal use only
CORPORATE GOVERNANCE STATEMENT
ASX)Corporate)Governance)Council)Recommendations)
)
Principle) #)
/) Company)
Response)
2.1&
The&board&of&a&listed&entity&should:&
a)!
b)!
have&a&nomination&committee&which:&
1.! has&at&least&three&members,&a&majority&of&whom&are&independent&directors;&and&
2.!
is&chaired&by&an&independent&director,&&
and&disclose&
the&charter&of&the&committee;&
the&members&of&the&committee;&and&
as& at& the& end& of& the& reporting& period,& the& number& of& times& the& committee& met& throughout& the&
period&and&the&individual&attendances&of&the&members&at&those&meetings;&or&
3.!
4.!
5.!
if&it&does¬&have&a&nomination&committee,&disclose&that&fact&and&the&processes&it&employs&to&address&
board&succession&issues&and&to&ensure&that&the&board&has&the&appropriate&balance&of&skills,&knowledge,&
experience,& independence& and& diversity& to& enable& it& to& discharge& its& duties& and& responsibilities&
effectively.&
Company&
response&
2.2&
Company&
response&
The&Company&is¬&of&a&relevant&size&to&consider&formation&of&a&nomination&committee&to&deal&with&the&selection&and&
appointment&of&new&Directors&and&as&such&a&nomination&committee&has¬&been&formed.&&&
&
Nominations&of&new&Directors&are&considered&by&the&full&Board.&&If&any&vacancies&arise&on&the&Board,&all&directors&are&
involved&in&the&search&and&recruitment&of&a&replacement.&&The&Board&has&taken&a&view&that&the&full&Board&will&hold&special&
meetings&or&sessions&as&required.&&The&Board&are&confident&that&this&process&for&selection&and&review&is&stringent&and&
full&details&of&all&Directors&are&provided&to&shareholders&in&the&annual&report&and&on&the&Company’s&website.&
A&listed&entity&should&have&and&disclose&a&board&skills&matrix&setting&out&the&mix&of&skills&and&diversity&that&the&board&
currently&has&or&is&looking&to&achieve&in&its&membership.&
The&Board&periodically&assesses&the&competencies&and&experience&of&each&Board&member&and&the&experiences&and&skills&
required& at& Board& level& to& meet& its& operational& objectives.& & The& Board& does& not& currently& have& a& formal& Board& skill&
matrix.&&The&Board&is&satisfied&with&the&skills&and&experience&of&each&director&and&the¤t&Board,&the&Board&will&
consider&developing&a&Board&sills&matrix&during&2018.&
&
2.3&
A&listed&entity&should&disclose:&
Company&
response&
2.4&
Company&
response&
2.5&
Company&
response&
2.6&
Company&
response&
a)!
b)!
c)!
the&names&of&the&directors&considered&by&the&board&to&be&independent&directors;&
if&a&director&has&an&interest,&position,&association&or&relationship&of&the&type&described&in&Box&2.3&but&the&
board&is&of&the&opinion&that&it&does¬&compromise&the&independence&of&the&director,&the&nature&of&the&
interest,&position,&association&or&relationship&in&question&and&an&explanation&of&why&the&board&is&of&that&
opinion;&and&
the&length&of&service&of&each&director.&
The&Board&considers&three&of&its&directors,&namely&Mr&Charles&Blixt,&Mr&Charles&Fear&and&Mr&George&Edwards,&to&be&
independent.&&&
&
Director&appointment&and&resignation&dates&are&disclosed&in&the&Company’s&annual&report.&
A&majority&of&the&board&of&a&listed&entity&should&be&independent&directors.&
Three&of&the&five¤t&directors&are&deemed&independent.&&&
The&chair&of&the&board&of&a&listed&entity&should&be&an&independent&director&and,&in&particular,&should¬&be&the&same&
person&as&the&CEO&of&the&entity.&
The&chair&of&the&board,&Mr&Charles&Blixt&is&an&independent&director.&
&
&
A&listed&entity&should&have&a&program&for&inducting&new&directors&and&provide&appropriate&professional&development&
opportunities&for&directors&to&develop&and&maintain&the&skills&and&knowledge&needed&to&perform&their&role&as&directors&
effectively.&
The& Company& Secretary& ensures& that& all& new& directors& are& inducted& into& the& Company.& & Upon& commencement,& the&
director&formalises&a&letter&of&appointment&setting&out&the&terms&of&their&appointment&and&is&provided&with&a&‘Corporate&
Governance&Pack’&containing&the&Company’s&Constitution,&Corporate&Governance&Policies&and&details&of&the&Company’s&
directors’&and&officers’&insurance&policies.&
&
The& skill& set& of& the& Board& is& monitored& regularly& by& the& Board& as& a& whole,& taking& into& consideration& the& stage& of&
development&of&the&Company’s&assets,&and&the&limited&capital&available&to&the&Company.&
18&
For personal use only
CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council Recommendations
Principle #
/ Company
Response
Principle 3
Act ethically and responsibly
3.1
A listed entity should:
a) have a code of conduct for its directors, senior executives and employees; and
b) disclose that code or a summary of it.
Company
response
The Company has adopted a code of conduct which outlines the behaviour expected of directors, contractors and
employees. The code of conduct can be viewed on the Company’s website www.atrumcoal.com.
Principle 4
Safeguard integrity in corporate reporting
4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of whom are
independent directors; and
is chaired by an independent director, who is not the chair of the board, and disclose:
(2)
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5)
in relation to each reporting period, the number of times the committee met throughout the period
and the individual attendances of the members at those meetings; or
(b)
if it does not have an audit committee, disclose that fact and the processes it employs that independently
verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and
removal of the external auditor and the rotation of the audit engagement partner
Company
response
The Board does not currently have a separate audit committee, instead, the roles and responsibilities of the audit
committee are undertaken by the Board as a whole. The Board and the Company is not currently of a size to justify
separate Board committees. The Board will consider establishing Board committees in the future.
The Company in general meetings is responsible for the appointment of the external auditors of the Company, and
the Board from time to time will review the scope, performance and fees of those external auditors.
4.2
The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive
from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly
maintained and that the financial statements comply with the appropriate accounting standards and give a true and
fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of
a sound system of risk management and internal control which is operating effectively.
Company
response
4.3
Company
response
The Company obtains a declaration from the CEO and CFO (or the persons acting in those capacities) prior to the
completion of its half year and annual financial statements.
A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
The Company ensures that its external auditor attends its AGM and time is set aside for the shareholders to ask
questions of the auditor.
19
For personal use only
CORPORATE GOVERNANCE STATEMENT
Principle 5 Make timely and balanced disclosure
5.1
Company
response
A listed entity should:
a)
b)
The Company has a Continuous Disclosure Policy that forms part of its Corporate Governance Policies, which is available
on the Company’s website www.atrumcoal.com
have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and
disclose that policy or a summary of it.
Principle 6
Respect the rights of security holders
6.1
Company
response
6.2
Company
response
6.3
Company
response
6.4
Company
response
A listed entity should provide information about itself and its governance to investors via its website.
The Company’s website contains comprehensive details about the Company, its directors and management and its
operations.
All Company announcements, as well as its annual and half year financial reports can be located through the website
www.atrumcoal.com
A listed entity should design and implement an investor relations program to facilitate effective two-way
communication with investors.
The Company has adopted a Shareholder Communication Policy as part of its Corporate Governance Policies.
The Company also engages a dedicated investor relations firm to facilitate investor relations.
A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at
meetings of security holders.
The Company considers the country of residency of its shareholders when determining the most appropriate location
to hold its shareholder meetings.
Time is set aside at each meeting whereby attendees are encouraged to query the Board on operational and financial
items.
A listed entity should give security holders the option to receive communications from, and send communications to,
the entity and its security registry electronically.
To the extent permissible by law, the Company sends all communication electronically in an effort to reduce its
environmental footprint.
As new shareholders join the Company, they are invited to communicate with the Company and the share registry
electronically.
Principle 7
Recognise and manage risk
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2)
is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes
it employs for overseeing the entity’s risk management framework
The Company is not currently considered to be of a size, nor is its affairs of such complexity to justify the establishment
of a separate Risk Management Committee. Instead, the Board, as part of its usual role and through direct involvement
in the management of the Company’s operations ensures risks are identified, assessed and appropriately managed.
Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or
mitigating risk.
Company
response
7.2
Further details of the risk management processes employed by the Company are detailed in pages 50-54 of the annual
report.
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound;
and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
Company
response
7.3
The Board reviews its risk assessment and management framework annually. The reporting period was a six month
period a review did not occur during the six months ending 31 December 2017, a review will be conducted during the
year 2018.
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role it performs; or
if it does not have an internal audit function, that fact and the processes it employs for evaluating and
continually improving the effectiveness of its risk management and internal control processes.
20
For personal use only
CORPORATE GOVERNANCE STATEMENT
Company
response
The Company does not have an internal audit function. Internal control measures currently adopted by the Board
include:
(cid:1) weekly reporting to the Board in respect of operations and monthly reporting in respect of the Company’s financial
position, with a comparison of actual results against budget; and
(cid:1) regular reports to the Board by members of the management team and/or independent advisers, outlining the
nature of particular risks and highlighting measures which are either in place or can be adopted to manage or
mitigate those risks.
7.4
Company
response
A listed entity should disclose whether it has any material exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends to manage those risks.
The Company is an anthracite exploration and development company and is inherently exposed to the economic,
environmental and social sustainability risks that are associated with its industry.
The Company carefully considers its operations and their impact on the environment and local communities and
engages extensively with local communities and first nations groups.
The Company has no formal hedging policy for its foreign currency expenditure and is exposed to fluctuations in the
exchange rates of the Australian Dollar, the United States Dollar and the Canadian Dollar. Exchange rates are monitored
closely by senior management and treasury decisions are made on an opportunistic basis. Where necessary, the
Company will enter into FX hedging instruments and has done so in the past.
Remunerate fairly and responsibly
The board of a listed entity should:
Principle 8
8.1
(a) have a remuneration committee which:
is chaired by an independent director, and disclose:
(1) has at least three members, a majority of whom are independent directors; and
(2)
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the
level and composition of remuneration for directors and senior executives and ensuring that such
remuneration is appropriate and not excessive.
Company
response
The Board has not established a separate Remuneration Committee due to the size and scale of its operations, however
the Board as a whole takes responsibility for such issues.
The responsibilities include setting policies for senior officer’s remuneration, setting the terms and conditions for the
Managing Director, reviewing and making recommendations to the Board on the Company’s incentive schemes and
superannuation arrangements, reviewing the remuneration of both executive and non-executive directors and
undertaking reviews of the Executive Chairman’s performance.
The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation
of this size and maturity.
A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive
directors and the remuneration of executive directors and other senior executives.
In accordance with best practice corporate governance, the structure of Non-Executive Directors is separate and distinct
from Executive Directors and Senior Executives.
8.2
Company
response
In determining remuneration, the Board holds special meetings as required. No Director participated in any
deliberation regarding his or her own remuneration or related issues. The Board are confident that this process for
determining remuneration is stringent and full details of remuneration policies and remuneration received by directors
and executives in the current period is contained in the “Remuneration Report” within the Directors’ Report of the
Annual Report.
A listed entity which has an equity-based remuneration scheme should:
8.3
a) have a policy on whether participants are permitted to enter into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
b) disclose the policy or a summary of it.
Company
response
The Company has both an employee share plan and a performance rights plan in place. Neither of the plans contain a
policy as to whether participants are permitted to enter into transactions which limit the economic risk of participating
in the scheme.
21
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2017
Consolidated
Period ended
31 December
2017
$
Year ended
30 June
2017
$
Note
1,214
1,809,510
953
-
(99,400)
(375,508)
(27,121)
(70,567)
(220,413)
(561,055)
(93,144)
(231,838)
(7,134)
(64,499)
(137,515)
(59,809)
-
(131,617)
-
(101,176)
(370,072)
(404,741)
(2,108,520)
(1,278,782)
(157,402)
(277,285)
(1,416,778)
(1,292,155)
(695,610)
(53,124)
(1,372,887)
(383,408)
(65,510)
(101,854)
(19,972)
(615,958)
(354,896)
(10,597,929)
8b
2
-
-
(370,072)
(10,597,929)
Revenue from continuing operations
Interest income
Mineral exploration tax credit
Expenses
Administration expense
Compliance & regulatory expense
Consultancy expense
Depreciation & amortisation
Directors’ fees
Employee benefit expense
Exploration expenditure
Finance costs
Foreign exchange gain/(loss)
Impairment expense
Occupancy expense
Public relations and marketing expense
Reclamation costs
Share based payments expense
Settlement costs
Travel expenditure
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss
-
-
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive loss for the period, net of tax
320
320
(422,795)
(422,795)
Total comprehensive loss for the period attributable to members
(369,752)
(11,020,724)
Loss per share attributable to members of Atrum Coal Ltd.
Basic (loss) per share – cents per share
Diluted (loss) per share – dollars per share
4
(0.02)
(0.02)
(5.00)
(5.00)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
22
For personal use only
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2017
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Total Current Assets
Non-Current Assets
Plant and equipment
Assets held for resale
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other financial liabilities
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
31 December
2017
30 June
2017
Note
$
$
5
6
7
8
8b
9
10
11
12
2,019,636
4,390,934
339,885
1,691,295
4,050,816
906,145
1,919,221
7,216,300
203,642
-
6,831,706
7,035,348
269,225
62,563
6,139,872
6,471,660
11,086,164
13,687,960
1,108,147
1,220,000
2,328,147
3,304,869
800,000
4,104,869
1,200,607
1,200,607
1,787,546
1,787,546
3,528,754
5,892,415
7,557,410
7,795,545
13
22
71,226,236
71,226,236
4,727,613
4,595,676
(68,396,439)
(68,026,367)
7,557,410
7,795,545
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
23
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
December 31 2017
Consolidated
Balance as at 1 July 2017
Other Comprehensive Income
Movement in reserve
Loss for the period
Total comprehensive income/(loss)
for the year
Transactions with equity holders:
Share-based payments/Options
Total contribution by equity holders
Issued
Capital
$
Share-Based
Payment
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
71,226,236
4,523,745
71,931
(68,026,367)
7,795,545
-
-
-
-
-
-
-
-
131,617
131,617
320
-
320
-
-
320
(370,072)
(370,072)
(370,072)
(369,752)
-
-
131,617
131,617
Balance as at 31 December 2017
71,226,236
4,655,362
72,521
(68,396,439)
7,557,410
30 June 2017
Consolidated
Balance as at 1 July 2016
Other Comprehensive Income
Movement in reserve
Loss for the year
Total comprehensive income/(loss)
for the year
Transactions with equity holders:
Securities issued during the year
Capital raising costs
Share-based payments/Options
Issued
Capital
$
Share-Based
Payment
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
56,107,573
3,933,773
494,726
(57,428,438)
3,107,634
-
-
-
16,767,770
(1,649,107)
-
-
-
-
-
-
589,972
589,972
(422,795)
(422,795)
-
(10,597,929)
(10,597,929)
(422,795)
(10,597,929)
(11,020,724)
-
-
-
-
-
-
-
-
16,767,770
(1,649,107)
589,972
15,708,635
Total contribution by equity holders
15,118,663
Balance as at 30 June 2017
71,226,236
4,523,745
71,931
(68,026,367)
7,795,545
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
24
For personal use only
CONSOLIDATED STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 31 DECEMBER 2017
Cash flows from operating activities
Receipts from customers
Receipts from authorities (METC and GST refunds)
Payments to suppliers and employees
Interest received
Exploration expenditure (net amount)
Net cash used in operating activities
Cash flows from investing activities
Payment on Elan Project
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and convertible notes
Payment of capital raising costs and loans
Repayment of loans
Interest paid
Net cash provided by financing activities
Consolidated
Period ended
31 December
2017
$
Year ended
30 June
2017
$
Note
227,926
1,886,184
440,276
440,276
(2,079,288)
(9,644,286)
1,214
953
(93,144)
(1,292,155)
5(a)
(57,108)
(10,495,212)
(101,783)
(101,783)
-
-
-
-
15,204,879
(1,079,106)
(1,835,925)
(281,581)
(424,555)
(430,702)
(2,117,506)
13,270,516
Net (decrease)/increase in cash and cash equivalents
(2,276,397)
2,775,314
Cash and cash equivalents at the beginning of the period
Effect of foreign currency translation
4,390,934
1,871,124
(94,901)
(255,494)
Cash and cash equivalents at the end of the period
5
2,019,636
4,390,934
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
25
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparing the financial report of the Group, are stated to assist in a general
understanding of the financial report. These policies have been consistently applied to all years presented, unless otherwise
indicated.
Atrum Coal Ltd. (‘Company” or “Parent Entity”) is a Company limited by shares incorporated and domiciled in Australia whose
shares are publicly traded on the official list of the Australian Securities Exchange (code: ATU). The financial statements are
presented in Australian dollars which is the Company’s functional currency.
The nature of the operations and principal activities of the Company are disclosed in the Directors’ Report.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporation Act 2001. Atrum Coal Ltd. is a
for-profit entity for the purpose of preparing the financial statements.
i.
Compliance with IFRS
The consolidated financial statements of Atrum Coal Ltd. also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
ii.
Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following:
(cid:1)
(cid:1)
available-for-sale financial assets, financial assets and liabilities (including derivative instruments) certain
classes of property, plant and equipment and investment property – measured at fair value, and
assets held for sale – measured at fair value less cost of disposal.
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of
selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been
applied.
The separate financial statements of the parent entity, Atrum Coal Ltd., have not been presented within this financial report
as permitted by the Corporations Act 2001.
During the period ended 31 December 2017, the Group sought and was granted a change in reporting date from 30 June to
31 December, and consequently the reporting period subsequent to the year ended 30 June 2017 is for a six-month period
ended 31 December 2017. The comparative figures are for the twelve-month ended 30 June 2017. Therefore the following
statements and their corresponding notes have comparative figures that are not comparable due to the difference in
reporting period for which these statement have been prepared:
-
-
-
-
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cashflow
(b)
Going concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity
and the realisation of assets and settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Group has incurred a net loss after tax for the period ended 31 December 2017
of $370,072 and experienced net cash outflows from operating activities of $57,108. These conditions indicate a material
uncertainty that may cast a significant doubt about the Group’s ability to continue as a going concern and, therefore, that it
may be unable to realise its assets and discharge its liabilities in the normal course of business.
The Directors believe there are reasonable grounds to believe that the Group can meet all liabilities as and when they fall
due, and continue as a going concern after considering the following factors:
-
-
-
-
Cash in hand of $2,019,636
Reduced administration costs
Successful capital raise of over $8M
Entitlement issue of 1 new share for 5 shares held from Eligible shareholders
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(b)
Going concern (cont.)
The financial statements have therefore been prepared on the basis that the entity is a going concern, which contemplates
the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its
liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial
statements. The financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.
(c)
Adoption of new and revised standards
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual
reporting period. The adoption of these new and revised Standards and Interpretations has not resulted in a significant
or material change to the Group’s accounting policies.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the
period ended 31 December 2017. As a result of this review the Directors have determined that there is no impact, material
or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to
Group accounting policies.
(d)
Statement of compliance
The financial report was authorised for issue by the Directors on 28 March 2018.
The financial report complies with the Corporations Act 2001, Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
(e)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Atrum Coal Ltd. and its subsidiaries as at 30 June
each year (“Consolidated Entity” or “Group”). Control is achieved where the company has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in
full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date on which control is transferred out of the Group. Control exists where the company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when assessing when the Group controls
another entity.
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s interests
in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are
presented separately in the statement of Profit or loss and other comprehensive income and within equity in the
consolidated statement of financial position. Losses are attributed to the non-controlling interests even if that results in a
deficit balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity
attributable to owners of the Company.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(e)
Basis of consolidation (cont.)
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured
to its fair value with the change in carrying amount recognised in the Statement of Profit or Loss and Other Comprehensive
Loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as
an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets
or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit
or loss.
(f)
Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment
in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent
entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using average exchange rates for the period, or where
possible, the exchange rates prevailing at the date of the transaction. Foreign currency monetary assets and liabilities
denominated in foreign currencies are translated at the year-end exchange rate.
Group companies
The functional currency of the overseas subsidiaries is currency Canadian and US dollars. The Board of Directors assesses
the appropriate functional currency of these entities on an ongoing basis.
(g)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured.
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and duties and taxes paid.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(h)
Cash and cash equivalents
Cash comprises of cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as described
above, net of outstanding bank overdrafts.
(i)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
impairment. Trade receivables are due for settlement within 30 days from the date of recognition. Collectability of trade
receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off.
An allowance account for doubtful receivables is established when there is objective evidence that the Company will not be
able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial. The amount of the provision is recognised in the statement of profit or loss and other comprehensive income.
When a trade receivable for which an impairment allowance has been recognised becomes uncollectable in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in the statement of profit or loss and other comprehensive income.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(j)
Summary of significant accounting policies (cont.)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes purchase price of coal inventory on the
date it was purchased. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula. Net
realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
(k)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
(cid:1) when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
(cid:1) when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
(cid:1) when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
(cid:1) when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income legislation and the anticipation that the Group will derive sufficient future assessable
income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(l)
Summary of significant accounting policies (cont.)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the GST
incurred on a purchase of goods and service is not recoverable from the taxation authorities, in which case the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense item as applicable and
receivables and payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(m)
Leasehold improvements, plant and equipment
Leasehold improvements, plant and equipment are stated at historical costs less accumulated depreciation. Historical costs
include expenditure that is directly attributable to the items. Repairs and maintenance are charged to the statement of
profit or loss and other comprehensive income during the reporting period in which they were incurred. Depreciation is
calculated using both the straight line method to allocate asset costs over their estimated useful lives, or in the case of
leasehold improvements, the unexpired period of the lease. Annual depreciation / amortisation rates applying to each class
of depreciable asset are as follows:
Leasehold improvements
Computer equipment
Machinery & equipment
Lease term
33%
20-50%
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset
carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its
estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in the statement of profit or loss and other comprehensive income.
(n)
Financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either
financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale
investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case
of investments not at fair value through profit or loss, directly attributable transactions costs. The Group determines the
classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation
at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts
that require delivery of the assets within the period established generally by regulation or convention in the marketplace
(i)
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss are either: i) held for trading, where they are acquired for the
purpose of selling in the short-term with an intention of making a profit; or ii) designated as such upon initial
recognition, where they are managed on a fair value basis or to eliminate or significantly reduce an accounting
mismatch. Except for effective hedging instruments, derivatives are also categorised as fair value through profit or
loss. Fair value movements are recognised in Statement of Profit or Loss and Other Comprehensive Income.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(n)
Financial assets (cont.)
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the
amortisation process. The Group’s receivables fall into this category of financial instruments. Receivables are
considered for impairment when they are past due or when there are objective evidence that a specific counter
party will default or the amount will not be recoverable.
(iii) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or
are not classified as any of the three preceding categories. After initial recognition available-for sale investments are
measured at fair value with gains or losses being recognised as a separate component of equity until the investment
is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss
previously reported in equity is recognised in Statement of Profit or Loss and Other Comprehensive Income.
The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted
market bid prices at the close of business on the reporting date. For investments with no active market, fair value is
determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference
to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option
pricing models.
(o)
Mineral exploration and evaluation expenditure
Exploration and evaluation expenditures incurred by the purchase or acquisition of the asset from a private vendor, or
through government applications and licensing processes are recognised as an exploration and evaluation asset in the year
in which they are incurred where the following conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a)
(b)
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; or
exploration and evaluation activities in the area have not, at the reporting date, reached a stage which permits
a reasonable assessment of the existence, or otherwise, of economically recoverable reserves and active and
significant operations in, or relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost. Ongoing exploration costs are expensed as incurred.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but
only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(p)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such
cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses
relating to continuing operations are recognised in those expense categories consistent with the function of the impaired
asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is
treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(q)
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid
within 30 days of recognition.
(r)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months after the date of the statement of financial position.
(s)
Issued capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration
received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as
a reduction of the share proceeds received.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(t)
Summary of significant accounting policies (cont.)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding
nay costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of the basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(u)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised
as a borrowing cost.
(v)
Share-based payment transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions) or options to
buy shares at a specified price.
When provided, the cost of these equity-settled transactions with employees is measured by reference to the fair value of
the equity instruments at the date at which they are granted. When the valuation is deemed to be significant, the fair value
is determined by using the Black-Scholes model or the binomial option valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of Atrum Coal Ltd. or its subsidiaries (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that
will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of
these conditions is included in the determination of fair value at grant date.
The statement of profit or loss and other comprehensive income charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
Share-based payment transactions with consultants are measured based on the fair value of services provided or where
this cannot be determined, is valued by reference to the fair value of the equity instruments at the grant date.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(v)
Share-based payment transactions (cont.)
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were
a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per
share.
Performance Rights/Options
The Group issues performance rights and options to its Key Management Personnel and employees as part of their
remuneration as required in the service/employment agreement.
Each Performance right gives the holder a right to one share upon vesting conditions being met. Shares are issued upon
Performance rights which vest.
The cost of share-based payments to key personnel with respect to options is measured by reference to the fair value of
the equity instruments at the date at which they were granted. The fair value is determined using Black-Scholes model,
taking into account the terms and conditions upon which the options were granted.
(w)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of the Company.
(x)
Assets held for sale
Non-current assets and liabilities that are expected to be recovered primarily through sale rather than through continuing
use are classified as held for sale. Immediately before classification as held for sale the assets are re-measured in accordance
with the Consolidated Group’s accounting policies. Thereafter generally the assets are measured at the lower of their
carrying amount and fair value less cost to sell. Impairment losses on initial classification as held for sale and subsequent
gains or losses on re-measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative
impairment loss.
(y)
Inventory
Inventories are stated at the lower of cost and net realisable value on a weighted average basis. Cost comprises direct
materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed
overhead expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves
in equity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.
(z)
Significant accounting judgments, estimates and assumptions
In the process of applying the Group’s accounting policies, management has made the following judgments, estimates and
assumptions, which have the most significant effect on the amounts recognised in the financial statements.
(i)
Exploration and evaluation assets
The Group’s accounting policy for exploration and evaluation expenditure is set out at Note 1(o). The application of
this policy necessarily requires management to make certain estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions may change as new information becomes available. If, after
having capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recovered by
future exploitation or sale, then the relevant capitalised amount will be written off to the statement of profit or loss
and other comprehensive income.
(ii)
Impairment of assets held for sale
The fair value of assets is determined with reference to the recoverable amount of the assessed being assed based on
its fair value less costs of disposal.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(z)
Significant accounting judgments, estimates and assumptions (cont.)
(iii) Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using either
the Monte Carlo or Black-Scholes model taking into account the terms and conditions upon which the instruments
were granted. These models require a number of assumptions to be made including the expected future volatility of
the share price, the estimated vesting date and the risk free interest rate. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of
assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
(iv) Convertible notes
In determining the carrying value of the Kuro Convertible Notes, the Group has determined that it is likely that the
Company will either repurchase the Convertible Notes or renegotiate the due date for redemption. The Company is
currently preparing a Notice of Meeting to call the noteholders to a Noteholders meeting. The Convertible notes
were issued at $5,000 face value. No interest is applicable. Notes convert to ordinary shares at $0.10 per share in
Kuro Coal Limited, may be redeemed for cash by the noteholder, or may be repurchased by the Company. Due to
the intention to call a Notice of meeting of noteholders, the convertible notes have been recognised as a liability in
the financial statements.
(v)
Tax in foreign jurisdictions
The Group operates in overseas jurisdictions and accordingly is required to comply with the taxation requirements of
those relevant countries. This results in the consolidated entity making estimates in relation to taxes including but not
limited to Income tax, sales tax, VAT, withholding tax and employee income tax. The Group estimates its tax liabilities
based on the Group’s understanding of the tax law. Where the final outcome of these matters is different from the
amounts that were initially recorded, such differences will impact profit or loss in the period in which they are settled.
(aa)
Reclamation costs
An obligation to incur reclamation costs arises when environmental disturbance is caused by the exploration or
development of a mineral interest. Such costs arising from the decommissioning of plant and other site preparation
work, discounted to their net present value, are provided for and capitalized at the start of each project to the
carrying amount of the asset, along with a corresponding liability as soon as the obligation to incur such costs arises.
The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature
of the asset and the environment in which the mine operates.
Pre-tax discount rates that reflect the time value of money are used to calculate the net present value. These costs
are charged against profit or loss over the economic life of the related asset, through amortization using either the
unit-of-production or the straight-line method. The corresponding liability is progressively increased as the effect of
discounting unwinds creating an expense recognized in profit or loss.
Decommissioning costs are also adjusted for changes in estimates. Those adjustments are accounted for as a change
in the corresponding capitalized cost, except where a reduction in costs is greater than the unamortized capitalized
cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is
recognized in profit or loss.
The operations of the Group have been, and may in the future be, affected from time to time in varying degree by
changes in environmental regulations, including those for site restoration costs. Both the likelihood of new
regulations and their overall effect upon the Company are not predictable.
The Group will make a provision for reclamation obligations where it estimates that the disturbance to date on the
Group's exploration and evaluation properties may become significant.
35
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (cont.)
(ab) New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have been issued or amended but are not yet effective have not been
adopted by the Consolidated Entity for the period ended 31 December 2017. At this time the following standards and
interpretations may have an impact, but the extent of this is not expected to be material:
-
-
-
-
-
AASB 2016-1 Recognition of Deferred Tax Assets for Unrealised Losses - The amendments to AASB 12 Income Taxes clarify the
accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value. Effective for annual
periods beginning on or after 1 January 2017.
ASB 2016-2 Disclosure Initiative - The amendments to AASB 107 Statement of Cash Flows require entities to provide
disclosures about changes in their liabilities arising from financing activities, including both changes arising from cash flows
and non-cash changes (such as foreign exchange gains or losses).
AASB 9 Financial Instruments - A new Principal standard which replaces AASB 139. This new Principal version includes a model
for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed
approach to hedge accounting. Effective for annual periods beginning on or after 1 January 2018.
AASB 15 Revenue from Contracts with Customers. The core principle of AASB 15 is that an entity recognises revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. Effective for annual periods beginning on or after 1 January
2018.
AASB 16 Leases. AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to
finance leases. Effective for annual periods beginning on or after 1 January 2019.
At this time the following interpretation may have an impact, but the extent of this has not been determined:
-
IFRIC 23 Uncertainty over Income Tax Treatments. The Interpretation clarifies the application of the recognition and
measurement criteria in IAS 12 Income Taxes when there is uncertainty over income tax treatments. Effective for annual
periods beginning on or after 1 January 2019. New Accounting Policies and Accounting Standards and Interpretations issued,
but some not yet applicable at 31 December, 2017.
36
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. Income tax
(a)
Income tax expense
Current tax expense
Deferred tax expense
(b) Reconciliation of income tax expense to prima facie tax payable
Net loss before income tax
Income tax at 27.5% (30 June 2017: 27.5%)
Effect of expenses not deductible in determining taxable income
Effect of tax rates in foreign jurisdictions (i)
Tax losses and other timing differences not recognised
Total income tax expense/(benefit)
Consolidated
Period ended
31 December
2017
$
Year ended
30 June
2017
$
-
-
-
-
-
-
(369,754)
(11,020,724)
(101,682)
(359,347)
15,905
445,124
-
(3,030,699)
1,474,365
78,555
1,477,779
-
(i) The subsidiaries of the Group operate in tax jurisdictions with differing tax rates.
Atrum Coal Ltd. has unrecognised tax losses arising in Australia, Canada and the USA, which are available indefinitely to offset
against future profits of the Company providing the tests for deductibility against future profits are met
(c) Unrecognised deferred tax assets arising on timing difference and losses
(ii) Losses – revenue
Foreign losses - revenue
Other
(iii) The benefit for tax losses will only be obtained if:
1,273,188
5,107,547
4,961,505
1,228,921
4,761,415
5,014,903
(i)
(ii)
(iii)
the Group derives future assessable income in Australia or Canada of a nature and of an amount sufficient to enable
the benefit from the deductions for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation in Australia and Canada;
and
there are no changes in tax legislation in Australia or Canada which will adversely affect the Group in realising the benefit
from the deductions for the losses.
37
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
Auditors’ remuneration
(a) Audit services
The auditor of Atrum Coal Ltd. is BDO Audit (WA) Pty Ltd
Audit and review services
(b) Non-audit services
Amounts received by BDO for non-audit services:
Preparation and lodgement of income tax returns
Canada
Australia
United States
4.
Earnings per share (EPS)
Basic loss per share – cents
Loss used in calculation of basic loss per share
Weighted average number of ordinary shares outstanding during the year used
In the calculation of basic and diluted loss per share
5.
Cash and Cash Equivalents
Cash at bank
Deposits at call
Consolidated
Period ended
31 December
2017
$
Year ended
30 June
2017
$
46,065
46,065
137,944
137,944
1,645
5,209
-
6,854
66,355
18,669
4,263
89,287
(0.02)
(370,072)
(5.00)
(10,597,929)
232,024,124
216,850,554
431,517
1,588,119
2,019,636
273,849
4,117,085
4,390,934
Cash at bank earns interest at floating rates based on daily deposit rates. This note should be read in conjunction with Note 19:
Financial instruments.
(a) Reconciliation of loss for the year to net cash flows from operating activities
Loss for the year
Add back:
Depreciation & amortisation
Share Based Payments
Impairment expenses
Interest accrued
Reclamation costs
Non-cash settlements
Changes in assets and liabilities:
Movements in trade and other receivables
Movement in trade and other payables
Movement in inventory
Net cash flows from operating activities
(370,072)
(10,597,929)
70,568
131,617
64,499
302,069
-
-
157,402
19,972
1,372,887
695,610
101,354
260,467
64,509
(548,224)
227,926
(57,108)
313,157
(898,911)
(1,919,221)
(10,495,212)
38
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Trade & other receivables
Current
Rental Bonds and Deposits
GST receivables
Environmental Bond Deposit
Royalty Prepayments
Other Prepayments
Consolidated
31 December
2017
$
30 June
2017
$
19,893
84,567
180,155
-
55,270
339,885
19,749
129,050
177,620
501,751
77,975
906,145
Terms and conditions relating to the above financial instruments:
(cid:1)
(cid:1)
There are no past due and impaired trade receivables.
The above amounts do not bear interest and their carrying value amount is equivalent to their fair value.
Royalty Prepayments have been reclassified under Exploration and Evaluation Assets, as these payments pertain to the
acquisition of Groundhog project and are only recoverable against future royalties from the project.
Information about the Group’s exposure to credit risk is disclosed in Note 19: Financial instruments.
7. Inventory
Inventory consists of
Raw anthracite
Consolidated
31 December
2017
$
30 June
2017
$
1,691,295
1,691,295
1,919,221
1,919,221
The Company acquired 15,000 tons of raw coal for resale outside the United States. Due to poor market conditions prevailing
at the beginning of the year, the supplier has agreed to retake part of the inventory at the original selling price over the
period ending 31 December 2017. During the period ended 31 December 2017, the Company returned 1,750 tons (year
ended 30 June 2017: 1,000 tons) for an amount of US $175,000 (year ended 30 June 2017: US $100,000). Subsequent to 31
December 2017, the supplier has agreed to re-purchase the remaining inventory and pay the remaining balance by level
monthly payments until end of July 2018.
39
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. Non-current assets – plant and equipment
Computer Equipment – at cost
Less: Accumulated depreciation
Closing Balance
Leasehold Improvements – at cost
Less: Accumulated amortisation
Closing Balance
Machinery and equipment – at cost
Less: Accumulated depreciation
Closing balance
Building – at cost (in storage)
Less: Transfer to assets held for resale
Closing balance
Furniture & Fixtures – at cost
Less: Accumulated depreciation
Closing balance
Consolidated
31 December
2017
$
30 June
2017
$
88,718
(53,300)
35,418
72,947
(72,947)
-
621,021
(457,486)
163,535
-
-
-
13,620
(8,931)
4,689
87,958
(47,673)
40,285
72,345
(72,345)
-
612,282
(389,318)
222,964
953,782
(953,782)
-
13,428
(7,452)
5,976
203,642
269,225
Reconciliations
Reconciliations of the written down values and the beginning and end of the current and previous financial year are set out
below:
Computer
Equipment
$
Leasehold
Improvements
$
Machinery &
Equipment
$
Building
$
Balance at 1 July 2017
Depreciation charge
Effect of foreign
exchange
Balance at
31 December 2017
40,285
(5,532)
665
35,418
-
-
-
-
222,964
(63,640)
4,211
163,535
Furniture
& Fixtures
$
Total
$
-
-
-
-
5,976
269,225
(1,395)
(70,567)
108
4,984
4,689
203,642
Computer
Equipment
$
Leasehold
Improvements
$
Machinery &
Equipment
$
Building
$
Furniture
& Fixtures
$
Total
$
Balance at 1 July 2016
Transfer to assets held
for resale
Depreciation charge
Effect of foreign
exchange
Balance at 30 June
2017
63,134
-
8,834
-
357,267
-
972,309
(972,309)
8,955
-
1,410,499
(972,309)
(23,193)
(6,978)
(124,504)
344
(1,856)
(9,799)
40,285
-
222,964
-
-
-
(2,727)
(157,402)
(252)
(11,563)
5,976
269,225
40
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8(b)
Non-current assets – Assets for resale
Balance at beginning of period
Transferred from Building
Impairment (i)
Effect of foreign exchange
Balance at end of period
Consolidated
31 December
2017
$
30 June
2017
$
62,563
-
(64,499)
1,936
-
-
972,309
(891,219)
(18,527)
62,563
(i)
The recognised impairment charge was determined with reference to the recoverable amount of the asset being assessed
based on its fair value less costs of disposal.
9.
Non-current assets – exploration and evaluation expenditure
Naskeena Project
Groundhog Coal Project
Panorama Project
Elan Project
Opening balance
Impairment (i)
Transfer from amounts receivable (ii)
Elan project
Provision for reclamation
Foreign exchange translation differences
Closing Balance
Consolidated
31 December
2017
$
30 June
2017
$
35,994
1,975,087
4,718,842
101,783
6,831,706
6,139,872
-
501,751
101,783
-
88,300
6,831,706
35,484
1,452,448
4,651,940
-
6,139,872
7,046,511
(481,683)
-
-
(101,354)
(323,602)
6,139,872
The Group policy in relation to exploration and evaluation expenditure is to capitalise activities relating to capital acquisitions
and development assets and to expense ongoing exploration costs.
(i)
Impairment indicators in AASB 6 are considered on a project by project basis as at the balance date.
On 30 June 2017, due to the relinquishment of some tenements and expenditure priorities, the Company has no plans at this
stage to undertake active and significant operations on its Peace River and Naskeena projects and on this basis an impairment
test was required. Due to the stage at which the Company’s Peace River and Naskeena projects are at, and in the
absence of an offer to purchase from a third party and because the assets are not traded in an active market there is
no basis for making a reliable estimate of the amount obtainable from the sale of any of the projects in an arm’s length
transaction between knowledgeable and willing parties, an impairment expense of $481,683 has been recognised.
The value of the Group’s interest in exploration and evaluation expenditure is dependent upon:
- the continuance of the consolidated entity’s rights to tenure of the areas of interest;
- the results of future exploration;
- the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by
their sale; and
- no significant changes in laws and regulations that greatly impact the company’s ability to maintain tenure.
(ii)
These amounts represent advanced royalty payments made with respect to the Groundhog Project, which is part of the terms
of acquisition of the project. These amounts are only recoverable against future royalties from the Groundhog Project.
41
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Current liabilities - trade and other payables
Trade payables
Confirmed Capital Receivables Facility
Other payables
Consolidated
31 December
2017
$
30 June
2017
$
602,961
-
505,187
1,108,148
1,008,428
1,648,498
647,943
3,304,869
Terms and conditions relating to the above financial instruments:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
All amounts are expected to be settled.
Trade payables are non-interest bearing and are normally settled on 30 day terms.
Due to the short term nature of trade payable and accruals, their carrying value is assumed to approximate their fair value.
The Confirmed Capital Receivables facility from Moneytech Finance Pty Limited was repaid during the period ended 31
December 2017. It was secured over the Mineral Exploration Tax Credit (METC) which was receive during the period.
Interest was payable at 14.85% per annum.
Information about the Group’s exposure to credit risk is disclosed in Note 19.
11. Other Financial Liabilities
Other financial liabilities comprise:
Current portion of the offset loan agreement (see Note 12)
Kuro Coal Limited Convertible Notes(a)
Consolidated
31 December
2017
$
30 June
2017
$
420,000
800,000
1,220,000
-
800,000
800,000
(a) Convertible notes issued at $5,000 face value. No interest is applicable. Notes convert automatically to ordinary shares
at $0.10 per share in Kuro Coal Limited, may be redeemed for cash by the noteholder, or maybe repurchased by the
Company. Subsequent to 31 December 2017, a resolution was passed by the Kuro Coal Limited Convertible Notes
holders to convert their notes into an aggregate of 8,000,000 shares in the Company.
12. Non-Current liabilities - borrowings
Loans from related parties - Offset loan agreement (see Note 17)
1,200,607
1,200,607
1,787,546
1,787,546
On 30 July 2013, Atrum announced that it has executed an Offset Loan Agreement (“Loan Agreement”) with Lenark Pty Ltd
(“Lenark”), an entity associated with Chairman Mr James Chisholm, providing a limit of $2,681,927 effective from 30 June
2014 which, upon advancement, could be used to offset the outstanding balance owing against 13,412,500 partly paid
shares held by Lenark Pty Ltd.
The facility accrues capitalised interest at a rate of 6% per annum (increased to 10% on 23 February 2015) and matured on
the date by which the last of the partly paid shares were converted to fully paid ordinary i.e. September 2014.
On 30 September 2013, the Company entered into a variation to the Offset Loan Agreement in place with Lenark Pty Ltd.
Pursuant to the variation that was executed, Lenark Pty Ltd increased the credit available pursuant to the Offset Loan
Agreement by an additional $2 million.
The original Facility Limit of $2,681,927 was repaid by way of the conversion of partly paid shares to fully paid shares. The
subsequent $2 million has been drawn down by the Company as noted in previous quarterly reports and a $500,000
increase was agreed between the Company and Lenark in 2015. On 27 August 2015, $1,079,384 of the outstanding loan
was converted into 2,158,766 ordinary fully paid shares in order to take up the Lenark entitlement under a prorate rights
issue.
42
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12.
Non-Current liabilities – borrowings (continued)
On 26 September 2017, a further variation of the loan agreement – Loan Repayment Agreement - was entered into with the
following terms:
(a) The outstanding amount on the Loan be reduced to $1,600,000 through a cash payment of $244,815, which was
effected during the period ended 31 December 2017;
(b) The outstanding balance shall bear interest at 8% per annum;
(c) The loan shall be repaid by monthly payments of $30,000 plus interest
(d)
In the event the Company made a capital raise of above $5M, 10% of the proceeds shall be applied towards the
repayment of the outstanding amount of the loan.
In the event the Company receives proceeds from the sale of coal products, 10% of the net profit derived from the sales
will be applied towards the repayment of the outstanding amount of the loan.
(e)
(f) The loan shall be fully repaid on or before 30 June 2019.
At 31 December 2017, the outstanding loan was as follows:
Amounts due and payable before 31 December 2018
Amounts due and payable after 31 December 2018
Total amount outstanding at 31 December 2017
$ 420,000
$ 1,200,607
-----------------
$ 1,620,607
-----------------
The Board considers that the terms of the facility with Lenark Pty Ltd are arms-length.
13.
Issued Share Capital
31 December
2017
30 June
2017
Number
$
Number
$
(a)
Issued and paid up capital
Ordinary shares – fully paid
232,112,649
71,226,236
71,226,236
231,992,649
71,226,236
71,226,236
(b) Terms and conditions of issued capital
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares
entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
The Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained earnings as well as
its perpetual preference shares which are classified as a financial liability in the statement of financial position.
For details of the Group’s capital risk management refer to Note 19: Financial instruments.
43
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Issued capital (cont.)
(c) Movements in performance rights
The following table sets out the movements in performance rights during the year:
Period ended 31 December 2017
Class
7
8
9
10
11
13
19
20
21
27
28
29
30
31
32
33
Balance at start
of year
382,500
507,500
70,000
70,000
70,000
70,000
100,000
100,000
200,000
250,000
52,500
250,000
600,000
50,000
50,000
150,000
2,972,500
# Granted
during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
Exercised
-
-
-
-
-
-
-
-
(100,000)
-
-
-
-
-
-
-
(100,000)
Cancelled/
Forfeited
(70,000)
(70,000)
(70,000)
(70,000)
(70,000)
(70,000)
(100,000)
(100,000)
(100,000)
(250,000)
(52,500)
(250,000)
(600,000)
(50,000)
(50,000)
(150,000)
(2,122,500)
Balance at end of
year
312,500
437,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
Year Ended 30 June 2017
Class
7
8
9
10
11
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Balance at start
of year
572,500
697,500
140,000
160,000
160,000
160,000
50,000
100,000
100,000
100,000
100,000
130,000
130,000
200,000
100,000
100,000
100,000
100,000
200,000
550,000
400,000
250,000
600,000
50,000
50,000
150,000
5,450,000
# Granted
during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
Exercised
Cancelled/
Forfeited
(190,000)
(190,000)
(70,000)
(90,000)
(90,000)
(90,000)
(50,000)
(100,000)
(100,000)
(100,000)
(100,000)
(30,000)
(30,000)
-
(100,000)
(100,000)
(100,000)
(100,000)
(200,000)
(300,000)
(347,500)
-
-
-
-
-
(2,477,500)
Balance at end of
year
382,500
507,500
70,000
70,000
70,000
70,000
-
-
-
-
-
100,000
100,000
200,000
-
-
-
-
-
250,000
52,500
250,000
600,000
50,000
50,000
150,000
2,972,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Value Vested
during the year
($)
3,666
672
-
-
-
1,008
-
42,750
-
-
-
-
-
(8,070)
(5,194)
-
34,832
Value Vested
during the year
($)
(6,576)
(49,161)
(82,960)
-
6,050
(70,667)
11,897
19,605
9,692
9,692
-
(20,632)
(10,317)
76,164
14,365
8,980
13,688
9,284
20,326
-
50,000
-
-
6,147
4,195
-
19,772
44
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Issued capital (cont.)
(d) Options
During the period ended 31 December 2017, the Company granted 15,600,000 options exercisable at prices between $0.18
to $1.00 to the directors, with certain vesting conditions. The movement in options were as follows:
Stock options outstanding at 30 June 2017
Granted
Expired/Cancelled
Stock options outstanding at December 31, 2017
Number of
Options
24,372,242
15,600,000
(11,125,418)
28,846,824
Weighted
Average Exercise
price
$ 0.71
0.65
0.80
$ 0.65
The following table summarizes information about the stock options outstanding and exercisable at December 31, 2017:
Expiry Date
2 July 2018
15 August 2018
31 October 2018
14 November 2018
1 December 2018(1)
1 December 2018
16 February 2019
1 June 2019(2)
1 December 2019(3)
1 June 2020(4)
1 December 2020(5)
Exercise Price
$0.60
$0.75
$0.60
$0.65
$0.18
$0.23
$0.75
$0.40
$0.50
$0.70
$1.00
Number of Options
Outstanding
8,198,786
541,964
1,063,636
442,438
500,000
1,400,000
3,000,000
1,900,000
3,000,000
4,400,000
4,400,000
Number of
Exercisable Options
8,198,786
541,964
1,063,636
442,438
500,000
1,400,000
3,000,000
1,900,000
3,000,000
4,400,000
4,400,000
Average
Remaining Life
(Years)
0.36
0.62
0.83
0.87
0.92
0.92
1.13
1.42
1.92
2.42
2.92
$0.65
28,846,824
28,846,824
1.48
Vested conditions and (associated probabilities) are as follows:
(1) 6 months service as Managing Director (100%);
(2) Announcement to the ASX during the term of employment (Term), of the appointment of a Board-approved partner to assist in the development
of one or more projects at Groundhog (25%);
(3) Announcement to the ASX during the Term, of the appointment of a Board approved partner to the Company i.e. a partner at Atrum Coal Ltd
level rather than project level (25%);
(4) Announcement to the ASX during the Term, of the award by Government of a 1mtpa (or greater) commercial mining license for any project
(where the majority of that project is owned by Atrum Coal Ltd or any affiliated companies) (25%);
(5) The sale of an aggregate of 500,000 tonnes of coal produced by Atrum Coal Ltd or any Affiliated Companies during the Term (25%).
The fair values of options granted during the period ended December 31, 2017 were estimated at the grant date using the Black-
Scholes option pricing model with the following weighted average assumptions:
Expected annual volatility
Risk-free interest rate
Expected life
Stock Price at grant date
Expected dividend yield
Estimated forfeitures
2017
89%
1.95%
1.08-3.08 years
$0.18
0%
0%
The expected stock price volatility was estimated by reference to historical volatility of the Company with a comparable period in
their lives.
Grant Date
Expiry Date
04 November 2017
1 December 2018
04 November 2017
1 December 2018
04 November 2017
1 June 2019
04 November 2017
1 December 2019
04 November 2017
1 June 2020
04 November 2017
1 December 2020
Exercise
Price
Number of
Options
Value per
option
Probability
of vesting
$0.18
$0.23
$0.40
$0.50
$0.70
$1.00
500,000
$ 0.07
1,400,000
$ 0.05
1,900,000
$ 0.04
3,000,000
$ 0.04
4,400,000
$ 0.04
4,400,000
$ 0.04
100%
100%
25%
25%
25%
25%
45
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Commitments
Exploration commitments
Under Canadian legislation there is no minimum expenditure commitments in relation to the tenements held by the Company.
The Company has minimum annual rents due on its projects as follows:
Less than one year
Between one and five years
More than five years
Operating lease agreements
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
Less than one year
Between one and five years
More than five years
31 December
2017
$
30 June
2017
$
687,673
-
-
687,673
604,945
-
-
604,945
31 December
2017
$
30 June
2017
$
98,160
147,240
-
245,400
108,780
168,000
-
276,780
The Company leases office premises in Vancouver, British Columbia, under an operating lease. The lease periods run for 5 years,
and commenced on March 26, 2015.
During the period ended 31 December 2017 an amount of $137,515 (year ended 30 June 2017: $383,408) was recognised as an
expense in the Statement of Profit or Loss and Other Comprehensive Income in respect of operating leases.
Kuro Elan Acquisition
Following the amendment of the share sale deed, the Company will be required to pay to the Vendor a consideration of C$3 million
and C$3.65 million in the Company’s shares at a price of A$0.19 (see note 23 for details).
15.
Contingent liabilities
The following contingent liabilities exist in relation to the Company’s projects located in British Columbia, Canada.
Groundhog Anthracite Project
Annual Royalty
Performance Bonus
BFS Bonus
Production Bonus
CAD$100,000 per annum (until production royalty commences, at which stage it is
offset against future production royalties)
CAD$1,000,000 (upon the delineation of the first 200Mt of coal of a JORC Indicated
status - to the extent that it can be considered a proven reserve)
CAD$500,000 (upon the delineation of each subsequent 100Mt of coal of a JORC
Indicated status - to the extent that it can be considered a proven reserve)
CAD$1,000,000 (upon completion of a positive BFS, paid 50% cash and 50% shares at
the election of the Company)
CAD$1,000,000 (upon commencement of production, paid 50% cash and 50% shares
at the election of the Company)
Production Royalty
1% of ex-mine gate price of all saleable coal to Clive Brookes syndicate
1% gross revenue royalty or a US$1/tonne royalty (whichever is the higher) payable
on anthracite produced from the assets acquired from Anglo Pacific only.
46
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. Contingent liabilities (continued)
Future Royalty to Anglo Pacific
Convertible Note Royalty
0.5% of FOB port selling price royalty overall production within Atrum’s Groundhog
Anthracite Project tenements for a period of ten years from the date that Atrum
commences commercial production on the project; and subsequently 0.1% royalty
from production within the Ground North Mining Complex project area.
The Convertible Notes include a royalty component in respect of Atrum’s Groundhog
North project, whereby each investor is entitled to:
(a) A$2.00 per tonne of high grade or ultra-high grade anthracite of the first 1
million tonnes of production over and above threshold production of 100,000
tonnes;
(b) A$2.00 per tonne of high grade or ultra-high grade anthracite of the first 73,375
thousand tonnes of production over and above threshold production of
1,225,000 tonnes;
(c) each multiplied by
(d) that investor’s proportion (expressed as a percentage) that their commitment
under the relevant Convertible Note bears on the aggregate of all the investors’
commitments under the Convertible Notes
Groundhog and Panorama Project
Future Royalty to Panstone
Mines and Minerals Inc.
Naskeena (North) Coal Project
Performance Bonus
C$0.80 per tonne of saleable coal based on the tonnes of coal actually produced and sold .
CAD$100,000 (upon the delineation of the first 20Mt of coal of a JORC Indicated
status)
CAD$50,000 (upon the delineation of each subsequent 10Mt of coal of a JORC
Indicated status)
BFS Bonus
CAD$500,000 (upon completion of a positive BFS, paid 50% cash and 50% shares at
the election of the Company)
16. Financial reporting by segments
The Group has identified its operating segments based on the internal reports that are used by the Board (the chief operating
decision makers) in assessing performance and in determining the allocation of resources.
The operating segments are identified by the Board based on the location of activity. For management purposes, the Group has
organised its operations into two reportable segments on the basis of stage of development as follows:
(cid:1)
(cid:1)
Exploration - mineral exploration and development in Canada
All other segments – primarily involving corporate management and administration in Australia
The Board as a whole will regularly review the identified segments in order to allocate resources to the segment and to assess its
performance.
47
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Financial reporting by segments (continued)
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1.
Period ended 31 December 2017
Exploration
$
All Other
Segments
$
Consolidated
$
Segment profit/(loss)
367,668
(737,740)
(370,072)
Segment assets
Segment liabilities
9,006,634
2,079,530
11,086,164
(1,456,999)
(2,071,755)
(3,528,754)
Other segment information included in segment loss
Interest revenue
Finance costs
Depreciation and amortisation
Impairment of exploration expense
Segment profit/(loss)
Year ended 30 June 2017
Segment loss
Segment assets
Segment liabilities
Other segment information included in segment loss
Interest revenue
Finance costs
Depreciation and amortisation
Impairment of exploration expense
Segment loss
17. Related party transactions
(a) Key management personnel
Short-term employee benefits
Post-employment benefits
Share-Based Payments
1,214
-
1,214
-
(231,838)
(231,838)
(70,567)
(64,499)
367,668
-
-
(70,567)
(64,499)
(737,740)
(370,072)
Exploration
$
All Other
Segments
$
Consolidated
$
(4,310,105)
(6,287,824)
(10,597,929)
7,418,885
6,269,075
13,687,960
(1,685,026)
(4,207,389)
(5,892,415)
-
-
(135,375)
(1,372,887)
953
(695,610)
(22,027)
953
(695,610)
(157,402)
-
(1,372,887)
(4,310,105)
(6,287,824)
(10,597,929)
Consolidated
31 December
2017
$
30 June
2017
$
220,413
-
96,785
317,198
715,324
-
39,551
754,875
Detailed remuneration disclosures are provided in the audited Remuneration Report in the Directors’ Report.
48
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. Related party transactions (continued)
(b) Other transactions with Key Management Personnel
(i) Offset Loan Agreement with Non-Executive Director
On 30 July 2013, Atrum announced that it has executed an Offset Loan Agreement (“Loan Agreement”) with Lenark Pty Ltd
(“Lenark”), an entity associated with the then Chairman Mr James Chisholm, providing a limit of $2,681,927 effective from 30
June 2014 which, upon advancement, could be used to offset the outstanding balance owing against 13,412,500 partly paid
shares held by Lenark Pty Ltd.
The facility accrues capitalised interest at a rate of 6% per annum (increased to 10% on 23 February 2015) and matured on the
date by which the last of the partly paid shares were converted to fully paid ordinary i.e. September 2014.
On 30 September 2013, the Company entered into a variation to the Offset Loan Agreement in place with Lenark Pty Ltd.
Pursuant to the variation that was executed, Lenark Pty Ltd increased the credit available pursuant to the Offset Loan Agreement
by an additional $2 million.
The original Facility Limit of $2,681,927 was repaid by way of the conversion of partly paid shares to fully paid shares. The
subsequent $2 million has been drawn down by the Company as noted in previous quarterly reports and a $500,000 increase was
agreed between the Company and Lenark in 2015. On 27 August 2015, $1,079,384 of the outstanding loan was converted into
2,158,766 ordinary fully paid shares in order to take up the Lenark entitlement under a prorate rights issue.
During the period ended 31 December 2017, the Company repaid an amount of $244,815 and accrued interest of $77,876,
bringing the amount outstanding on the loan at 31 December 2017, to $1,620,607. The Board considers that the terms of the
facility with Lenark Pty Ltd are arms-length.
(i) Options
During the period ended, the Group granted 15,600,000 options exercisable at prices between $0.18 and $1.00 between 1
December 2018 and 1 December 2020, with vesting conditions (note 13 (d)).
(c)
Subsidiaries
The consolidated financial statements include the financial statements of Atrum Coal Ltd. and the subsidiaries listed in the
following table.
Atrum Coal Australia Pty Ltd
Atrum Infrastructure and
Logistics Pty Ltd
Atrum Coal Groundhog Inc
Atrum Coal Peace River Inc
Atrum Coal Naskeena Inc
Atrum Coal USA Inc
Kuro Coal Limited
Atrum Coal Panorama Inc
Country of
Incorporation
Australia
Australia
% Equity Interest
2017
100
2016
100
Canada
Canada
Canada
USA
Australia
Canada
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Description of Activities
Dormant
Dormant
Development of Groundhog Anthracite Project
Development of Peace River and Bowron River
Coal Project
Development of Naskeena Coal Project
Dormant
Holding Company – Dormant
Development of Panorama Anthracite Project
Atrum Coal Groundhog Inc., Atrum Coal Peace River Inc., Atrum Coal Naskeena Inc. and Atrum Coal USA Inc. have financial years of
30 June. There are no significant restrictions on the ability of the subsidiaries to transfer funds to the parent entity to pay dividends
or loans.
(d)
Parent entity
Atrum Coal Ltd. is the ultimate Australian parent entity and ultimate parent of the Group.
49
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Parent entity disclosures
(a) Summary financial information
Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Accumulated losses
Share Based Payment Reserve
Total Equity
Financial Performance
Gain/(Loss) for the period
Other comprehensive loss
Total comprehensive income (loss)
(b) Guarantees
Parent Entity
31 December
2017
$
30 June
2017
$
2,079,530
7,009,534
9,089,064
871,148
1,200,607
2,071,755
6,269,075
7,009,534
13,278,609
2,419,843
1,787,546
4,207,389
71,226,236
(68,839,207)
4,630,279
7,017,308
71,226,236
(66,653,678)
4,498,662
9,071,220
(2,185,529)
-
(2,185,529)
(9,256,566)
-
(9,256,566)
Atrum Coal Ltd. has not entered into any guarantees in relation to the debts of its subsidiary.
(c) Other Commitments and Contingencies
Atrum Coal Ltd. has no commitments to acquire property, plant and equipment, and has no contingent liabilities apart from the
amounts disclosed in note 14.
19. Financial instruments
Financial risk management
The Group’s principal financial instruments comprise receivables, payables, cash, short-term deposits and borrowings. The Group
manages its exposure to key financial risks in accordance with the Group’s financial risk management policy. The objective of the
policy is to support the delivery of the Group’s financial targets while protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity risk. The Group does not
speculate in the trading of derivative instruments. The Group uses different methods to measure and manage different types of
risks to which it is exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts for
interest rates. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored
through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for
managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow forecast projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised, in respect of each class of financial asset and financial liability are
disclosed in Note 1 to the financial statements.
50
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
Risk exposures and responses
Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments.
Foreign Currency Risk
Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a currency that is not the
functional currency of the Group. The Group has deposits that are denominated in both Canadian and Australian dollars. At the
year end the majority of deposits were held in Australian dollars. The Group treasury function manages the purchase of foreign
currency to meet operational requirements. The Group manages its exposure to foreign currency risk through utilising forward
exchange contracts. The impact of reasonably possible changes in foreign rates for the Group is not material.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date was as follows:
Consolidated
Australian Dollars
Canadian Dollars
US Dollars
Assets
Liabilities
31 December
2017
$
30 June
2017
$
31 December
2017
$
30 June
2017
$
378,787
1,807,201
173,533
2,359,521
4,270,323
929,342
97,414
5,297,079
(3,016,425)
(512,210)
(119)
(3,528,754)
(5,007,389)
(819,510)
(65,516)
(5,892,415)
The group had net foreign currency assets of $1,468,505 as at 31 December 2017 (30 June 2017: net assets $141,730). Based on
this exposure alone, had the Australian dollar moved against these foreign currencies with all other variables held constant, the
consolidated entity's profit before tax for the year would have been affected as follows:
Movement in Australian dollar against foreign currency:
Loss
Equity
31 December
2017
$
Increase/
(decrease)
30 June
2017
$
Increase/
(decrease)
31 December
2017
$
Increase/
(decrease)
30 June
2017
$
Increase/
(decrease)
Strengthening of AUD by 10%
Weakening of AUD by 10%
146,850
(146,850)
14,173
(14,173)
146,850
(146,850)
14,173
(14,173)
Interest rate risk
The Group is exposed to movements in market interest rates on short term deposits. The policy is to monitor the interest rate yield
curve out of 120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Group
does not have short or long term debt, and therefore this risk is minimal.
The Group’s exposure to risks of changes in market interest rates relates primarily to the Group’s cash balances. The Group constantly
analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative
financing positions and the mix of fixed and variable interest rates. As the company has no variable rate interest bearing borrowings
its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits.
The Offset Loan Agreement charges an interest rate of 10% per annum on outstanding balances, capitalised until the maturity of the
loan. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
51
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
As at reporting date, the Group had the following financial assets exposed to variable interest rates that are not designated in cash
flow hedges:
Financial Assets
Cash and cash equivalents (interest-bearing accounts)
Net exposure
Consolidated
31 December
2017
$
30 June
2017
$
1,367,032
1,367,032
4,117,085
4,117,085
During the financial period ended 31 December 2017, the Company earned interest on financial assets of the Group.
The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as
well as management’s expectation of the settlement period of all other financial instruments. As such, the amounts might not
reconcile to the statement of financial position.
Weighted
Average
Effective
Interest
Rate
%
0%
1.05%
8%
31 December 2017
Financial Assets
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
Financial Liabilities
Non-interest bearing
Interest bearing – fixed rate
Fixed interest rate
instruments
Less than 1
month
1 to 3
months
3 months to 1
year
1 to 5 years
Total
339,885
898,974
1,120,662
2,359,521
(1,908,147)
-
(1,908,147)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
339,885
898,974
1,120,662
2,359,521
(1,908,147)
(420,000)
(1,200,607)
(1,620,607)
(420,000)
(1,200,607)
(3,528,754)
(420,000)
(1,200,607)
(1,169,233)
Net Financial Assets/(Liabilities)
451,374
Weighted
Average
Effective
Interest
Rate
%
Less than 1
month
1 to 3
months
3 months to 1
year
1 to 5 years
Total
30 June 2017
Financial Assets
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
906,145
0%
4,327,187
-
-
1.05%
-
5,233,332
63,747
63,747
Financial Liabilities
Non-interest bearing
Interest bearing – fixed rate
Borrowings - Confirmed
Capital Receivables facility
Fixed interest rate
instruments
14.85%
10%
(2,456,371)
-
-
(2,456,371)
-
-
-
-
-
-
-
-
-
(1,648,498)
-
-
-
-
-
-
906,145
4,327,187
63,747
5,297,079
(2,456,371)
(1,648,498)
-
(1,787,546)
(1,787,546)
(1,648,498)
(1,787,546)
(5,892,415)
Net Financial Assets/(Liabilities)
2,776,961
63,747
(1,648,498)
(1,787,546)
(595,336)
52
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
Net fair value of financial assets and liabilities
The carrying amount of cash and cash equivalents approximates fair value because of their short-term maturity.
Interest Rate Sensitivity Analysis
At 31 December 2017, the effect on loss and equity as a result of changes in the interest rate, with all other variable remaining
constant would be as follows:
CHANGE IN LOSS
Increase in interest rate by 1%
Decrease in interest rate by 1%
CHANGE IN EQUITY
Increase in interest rate by 1%
Decrease in interest rate by 1%
Liquidity Risk
31 December
2017
$
3,990
(3,990)
31 December
2017
$
3,990
(3,990)
30 June
2017
$
9,549
(9,549)
30 June
2017
$
9,549
(9,549)
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group has no significant exposure to liquidity risk. The Group manages liquidity risk by monitoring immediate and forecast
cash requirements and ensuring adequate cash reserves are maintained. All financial liabilities are due within 30 days.
Remaining contractual maturities
The following table details the expected maturity of the Group’s financial liabilities based on the earliest date of maturity or
payment respectively. The amounts are stated on an undiscounted basis and include interest.
W.Av
Interest
Rate
%
-
-
8%
Consolidated
31 December 2017
Non-derivatives
Non-interest bearing
Trade and other payables
Convertible notes
Interest bearing – fixed rate
Borrowings – offset loan
agreement
Total non-derivatives
Derivatives
Total derivatives
Less than 1
month
$
1 – 3
Months
$
3 months – 1
year
$
1 – 5 years
$
Remaining
contractual
maturities
$
1,108,147
-
-
1,108,147
-
-
-
-
-
-
-
-
-
-
-
-
800,000
420,000
420,000
1,200,607
1,200,607
-
800,000
-
-
-
-
-
-
53
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19.
Financial instruments (continued)
W.Av
Interest
Rate
%
Less than 1
month
$
1 – 3
Months
$
3 months – 1
year
$
1 – 5 years
$
Remaining
contractual
maturities
$
Consolidated
30 June 2017
Non-derivatives
Non-interest bearing
Trade and other payables
Convertible notes
-
-
1,656,371
-
Interest bearing – fixed rate
Borrowings - Confirmed Capital
Receivables facility
Borrowings – offset loan
agreement
Total non-derivatives
14.85%
10%
Derivatives
Total derivatives
Credit risk
-
-
1,656,371
-
-
-
-
-
-
-
-
-
-
1,648,498
-
-
-
-
1,648,498
1,787,546
1,787,546
-
-
-
-
-
800,000
-
-
800,000
-
-
Credit risk arises from the financial assets of the Group, which comprise deposits with banks and trade and other receivables. The
Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying
amount of these instruments. The carrying amount of financial assets included in the statement of financial position represents
the Group’s maximum exposure to credit risk in relation to those assets.
The Group operates in the mining exploration sector; it therefore does not have trade receivables and is not exposed to credit risk
in relation to trade receivables. The Group does not have any significant credit risk exposure to any single counterparty or any
Company of counterparties having similar characteristics. The Group does not hold any credit derivatives to offset its credit
exposure which is considered appropriate for a junior explorer.
The Group trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Group’s policy
to secure its trade and other receivables. The nature of the business is such that it is common not to maintain material receivables.
Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad
debts.
The Group’s cash deposits are held with a major Australian banking institution (Commonwealth Bank of Australia and NAB) holding
a AA- credit rating, otherwise, there are no significant concentrations of credit risk within the Group. The Company also holds bank
accounts with Chase in the US (A+ Rating) and TD Canada Trust (AA-), Bank of Montreal.
Capital Management Risk
Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the Group can fund
its operations and continue as a going concern.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of expenditure and debt levels and
share and option issues.
The Group has in place the Offset Loan Agreement and trade payables. There have been no changes in the strategy adopted by
management to control capital of the Group since the prior year.
Due to the nature of the Group’s activities, being mineral exploration, it does not have ready access to credit facilities and therefore
is not subject to any externally imposed capital requirements. Accordingly, the objective of the Group’s capital risk management is
to balance the current working capital position against the requirements to meet exploration programmes and corporate
overheads. This is achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required.
Commodity Price Risk
The Group’s exposure to commodity price risk is limited given the Group is still in the development phase.
54
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19.
Financial instruments (continued)
Fair Value
The methods of estimating fair value are outlined in the relevant notes to the financial statements. All financial assets and liabilities
recognised in the statement of financial position, whether they are carried at cost or fair value, are recognised at amounts that
represent a reasonable approximation of fair values unless otherwise stated in the applicable notes.
20.
Key management personnel
Refer to note 17 for details of remuneration paid to key management personnel and other related party transactions.
21.
Share based payments
The follow table outlines the share-based payment expense for the period ended 31 December 2017:
Share based payment expense for the year ended 30 June 2017
Share based payment expense for the current period to 31 December 2017
$
19,972
131,617
The following outlines the fair value calculations for share based payments issued during the period.
(i)
Performance Rights
During the financial year the movements in performance rights issued by the Company was as follows:
Balance at start of
period
2,972,500
Issued as Remuneration
Exercised/Vested
Forfeited/Cancelled
-
(100,000)
(2,122,500)
Balance at End of
Year
750,000
Performance rights forfeited and cancelled during the year, and the value of rights issued in prior years that vested in the current
year resulted in share-based payments expenses of $34,832 (year ended 30 June 2017: $19,972). An amount of $Nil (30 June 2017:
$39,551) related to share based payment was made to the Directors of the Company.
(ii)
Options
During the period under review 15,600,000 options were issued as remuneration to the Directors. This resulted in share-based
expenses of $131,617 (year ended 30 June 2017: $Nil). Details of other performance rights movements and balances are set out in
Note 13(d).
22.
Reserves
Nature and purpose of reserves
Share based payments reserve
The reserve is used to record the fair value of share based payments, such options and performance rights, issued as remuneration
to employees, or as consideration for the purchase of assets, services, or extinguishment of liabilities.
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to
Australian dollars.
55
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23.
Events since the end of the financial year
Capital Raise
On 21 March 2018, the Company announced it has successfully raised via a two-tranche placement an amount of $8M by the issue
of shares at a price of $0.10 per unit. As a consequence, and in accordance to the amended Lenark agreement, 10% of the proceeds
will be applied towards the repayment of the loan (see Note 12 to the financial statements).
In addition, the Company announced that it will proceed with an Entitlement issue of 1 new share for every 5 held by eligible
shareholders at a price of $0.10 per unit.
Each unit comprises of one ordinary share and a free attaching listed option to purchase an ordinary share at a price of $0.20 on or
before 31 March 2021.
Kuro Coal Convertible Notes
On 29 January 2017, the Company announced a proposal to reduce its financial liabilities by offering to exchange Kuro Coal
convertible notes to a total of 800,000 Atrum Shares.
Proceeds from sale of inventory
Subsequent to 31 December 2017, the Company sold the inventory for the carrying value of USD1,225,000. Payment will be
received in 10 equal instalments of USD122,500 on the first and last day of each month. The first instalment was received in the
month of March 2018.
56
For personal use only
Directors')declaration&
&
The&Directors&of&the&Company&declare&that:&
1.!
The&financial&statements,&comprising&the&statement&of&profit&or&loss&and&other&comprehensive&income,&statement&of&financial&
position,& statement& of& cash& flows,& statement& of& changes& in& equity,& and& accompanying& notes,& are& in& accordance& with& the&
Corporations&Act&2001&and:&&
(a)!
(b)!
comply&with&Accounting&Standards,&the&Corporations&Regulations&2001&and&other&mandatory&professional&reporting&
requirements;&and&
give&a&true&and&fair&view&of&the&Group’s&financial&position&as&at&30&June&2017&and&of&its&performance&for&the&year&
ended&on&that&date.&
2.!
3.!
4.!
The&Company&has&included&in&the¬es&to&the&financial&statements&an&explicit&and&unreserved&statement&of&compliance&with&
International&Financial&Reporting&Standards.&
In&the&Directors’&opinion,&there&are&reasonable&grounds&to&believe&that&the&company&will&be&able&to&pay&its&debts&as&and&when&
they&become&due&and&payable.&
The&Directors&have&been&given&the&declarations&by&the&chief&executive&officer&and&the&chief&financial&officer&required&by§ion&
295A.&&
&
This&declaration&is&made&in&accordance&with&a&resolution&of&the&Directors.&
&
&
Charles&Blixt&
North&Carolina,&28&March&2018&
)
)
57&
For personal use only
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF ATRUM COAL LIMITED
As lead auditor of Atrum Coal Limited for the period ended 31 December 2017, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Atrum Coal Limited and the entities it controlled during the period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 28 March 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
For personal use only
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Atrum Coal Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Atrum Coal Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2017 , the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the period then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its
financial performance for the period ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with 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 (the Code) that are relevant to our audit of the
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 Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
For personal use only
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period.
These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our
report.
Carrying Value of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
The Group carries exploration and evaluation
Our procedures included, but were not limited to:
expenditure totalling $6,831,706 in accordance with
the Group's accounting policy as set out in Note 9.
(cid:120)
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
The carrying value of the exploration and evaluation
rights to tenure of those areas of interest
asset is a key audit matter due to:
remained current at balance date;
(cid:120)
(cid:120)
The significance of the total balance; and
(cid:120)
Considering the status of the ongoing
The level of procedures undertaken to evaluate
management’s application of the requirements
of AASB 6 Exploration for and Evaluation of
Mineral Resources in particular whether any
indicators of impairment may be present.
exploration programmes in the respective areas
of interest by holding discussions with
management, reviewing the Group’s exploration
budgets, ASX announcements and director’s
minutes;
(cid:120)
Considering whether any such areas of interest
had reached a stage where a reasonable
assessment of economically recoverable reserves
existed;
(cid:120)
Reviewing the assessment of the carrying value
of the exploration and evaluation costs, ensuring
that management have considered the effect of
potential impairment indicators, commodity
prices and the stage of the Group's project also
against the standard of AASB 6; and
(cid:120) We also assessed the adequacy of the related
disclosures in Note 9 to the Financial
Statements.
For personal use only
Measurement of Share-Based payment
Key audit matter
How the matter was addressed in our audit
During the period Atrum Coal Limited (“the Company”)
Our audit procedures in respect of this area included,
awarded 15,600,000 options to the Directors of the
but were not limited to the following:
company as outlined in note 13(d). The company
performed calculations to record the related share-
based payment expense in the statement of profit or
loss and other comprehensive income.
The Company used assumptions in respect of share
price volatility, risk free rate, vesting dates, and
vesting probability.
(cid:120)
Reviewing the relevant support to obtain an
understanding of the contractual nature of the
share based payment arrangement;
(cid:120)
Holding discussions with management to
understand the share-based payment
arrangements in place and, where applicable,
evaluating management’s assessment of the
Due to the complex and judgemental estimates used in
likelihood of meeting the performance
determining the valuation of the share-based
conditions attached to the share-based
payments, we consider the Company’s calculation of
payments.
the share-based payment expense to be a key audit
matter.
(cid:120)
Reviewing management’s determination of fair
value of the share-based payments issued,
considering the appropriateness of the valuation
model used and assessing the valuation inputs;
(cid:120)
Assessing the allocation of the share-based
payment expense over the relevant vesting
period; and
(cid:120) We also assessed the adequacy of the related
disclosures in Note 13(d) to the Financial
Statements.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Directors Report for the period ended 31 December 2017, but does not
include the financial report and our auditor’s report thereon, which we obtained prior to the date of
this auditor’s report, and the annual report, which is expected to be made available to us after that
date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
For personal use only
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the 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
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 13 of the directors’ report for the
period ended 31 December 2017.
In our opinion, the Remuneration Report of Atrum Coal Limited, for the period ended 31 December
2017, complies with section 300A of the Corporations Act 2001.
For personal use only
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Neil Smith
Director
Perth, 28 March 2018
For personal use only
SECURITIES EXCHANGE INFORMATION
Shareholders’ information set out below was applicable as at 28 March 2018
The number of shareholders, by size of holding is:
Spread of Holdings
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 - and over
Total on register
Total Overseas holders
Substantial Shareholders
Holders
184
283
177
621
241
1,506
58
The company has been notified of the following substantial shareholdings:
Lenark Pty Ltd (and associated entities)
Hoperidge Enterprises Pty Ltd (and associated entities)
Voting Rights
Number
38,751,384
11,775,761
Percentage
16.70%
5.08%
The Constitution of the company makes the following provision for voting at general meetings:
On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has one vote. On a poll,
every shareholder present in person, or by proxy, attorney or representative has one vote for any share held by the shareholder.
60
For personal use only
SECURITIES EXCHANGE INFORMATION
20 LARGEST HOLDERS OF SECURITIES AS AT 28 MARCH 2017:
Ordinary Shareholder
Lenark PL
Jones R M + C R
Carjay Investments Pty Ltd
Citicorp Nom PL
Monex Boom Sec HK LTD
Moran Russell Harold
J P Morgan Nom Aust Ltd
Wallis-Mance PL
Hurst Douglas Culmer
Stephens B O + E J
D'Anna Gino
Mibro NT PL
CTSF PL
Topsfield PL
Booth William
Hoperidge Entps PL
HSBC Custody Nom Aust LTD
Skye Alba PL
Lujeta PL
Argonaut Equity Ptnrs PL
Fully paid
Number
38,751,384
Percentage
16.70%
9,749,240
8,862,946
5,038,339
4,715,214
4,669,200
4,082,700
4,025,000
3,500,000
3,375,000
3,373,370
3,261,600
3,213,976
3,135,505
2,919,508
2,912,815
2,889,174
2,871,498
2,621,446
2,550,000
4.20%
3.82%
2.17%
2.03%
2.01%
1.76%
1.73%
1.51%
1.45%
1.45%
1.41%
1.38%
1.35%
1.26%
1.25%
1.24%
1.24%
1.13%
1.10%
PARTLY PAID SHARES
The Company does not have any partly paid shares on issue.
116,517,915
50.19%
61
For personal use only
Tenure
Number
394847
394848
394849
417079
417080
417081
417082
417085
417088
417089
417090
417094
417095
417096
417098
417100
417101
417291
417293
417294
417295
417297
417298
417300
417301
417520
417521
417522
417523
417528
418443
418444
418445
418446
418587
418588
418589
418590
418924
418925
418926
418927
418928
418929
418930
418931
418932
418941
418942
418943
418944
418950
418951
418952
418955
418959
418960
418962
417084
417086
417292
417296
417299
417525
417526
417527
418953
418957
Owner
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Groundhog Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Project
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Groundhog
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Panorama North
Tenure
Type
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Tenure
Sub Type
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Licence
Area
(ha)
259
259
259
991
565
636
212
1031
777
142
568
71
425
71
1204
71
960
73
426
284
851
918
1059
355
851
212
142
71
354
142
1416
1416
1417
1205
1411
1412
1273
1415
1239
1332
1280
354
1416
1419
1420
1421
1421
1418
1417
1416
1416
1418
1418
1417
1265
1414
1412
1136
708
142
279
71
779
425
707
71
1346
1415
For personal use only
Tenure
Number
418958
418961
418103
419157
419159
417842
417845
Owner
Atrum Coal Panorama Inc.
Atrum Coal Panorama Inc.
Atrum Coal Peace River Inc.
Atrum Coal Peace River Inc.
Atrum Coal Peace River Inc.
Atrum Coal Naskeena Inc.
Atrum Coal Naskeena Inc.
Project
Panorama North
Panorama North
Bowron River
Bowron River
Bowron River
Naskeena
Naskeena
Tenure
Type
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Tenure
Sub Type
Licence
Licence
Application
Application
Application
Application
Application
Area
(ha)
1345
71
1875
1350
1350
1200
1125
For personal use only