Annual Report
Annual Report
For the period ended 31 December 2017
Year ended 31 December 2019
Coal
For personal use only
Dear Shareholders,
It is my pleasure to write to you following what has been another strong year for Atrum and its flagship, 100%-
owned Elan Hard Coking Coal Project.
The 2019 field program at Elan was sizeable. A total of 168 RAB drillholes delivered approximately 28,000
metres of exploration drilling across our two key project areas of Elan South and Isolation South. This was
complemented by the 12 large diameter core holes and 7 PQ core holes drilled in these areas for coal quality
testwork purposes.
The headline result: global resources at the Elan Project increased by over 50% to now stand at 454 Mt.
However, the outcomes are even more positive than simply the strong headline. Of the global total,
approximately 142 Mt is now in the higher-confidence Indicated resource classification. Further, much of the
resource increase was delivered from shallow, thick coal seams offering strong potential for attractive project
economics via low strip ratio mining. Finally, the Elan Project resource estimate is expected to see a significant
upgrade in classifications with additional exploration via the planned 2020 field program.
Initial coal quality testwork results from the 2019 quality analysis program (still in progress) have also
confirmed the outcomes from 2018 testing and historical testwork – again evidencing premium, Tier 1 hard
coking coal quality. All these elements have further confirmed the strong potential of the Elan Project to be
developed into a multi-mine, large-volume, Tier 1 quality hard coking coal producer.
The 2019 field program also culminated in the release of the Elan Project Scoping Study during April 2020. The
Scoping Study demonstrated the strong technical and economic viability of developing a 4.5 – 6.0 Mtpa hard
coking coal operation from mining and processing of the Isolation South and Elan South deposits. The forecast
cash operating cost of US$81 – 84/t FOB Vancouver places Elan attractively in the lower second cost quartile
of all global metallurgical export coal production.
Significant upside potential to the Scoping Study outcomes remains. This includes the extension of the
Isolation South pit to incorporate approximately 108 Mt of Inferred Resources that were excluded from the
Scoping Study mine schedule, financing of the coal preparation plant and product transport infrastructure via
BOOT arrangement, the higher processing yield suggested by regional experience, and the substantial further
resource potential that exists across the entire Elan Project tenement base.
As a result of the excellent Scoping Study outcomes, the Atrum Board has approved progression to a Pre-
Feasibility Study (PFS) on the Elan Project. The PFS is currently scheduled for completion in mid-2021.
Atrum also successfully raised approximately A$22M of new equity funds in April 2020. This was completed
through a share placement to predominantly Australian institutions and sophisticated investors. I believe the
strong demand shown for the issue was indicative of the market’s belief in the Elan Project, and Atrum’s
strategy for the rapid progression and development of this world-class asset.
I would like to thank the entire Atrum site and office team, including our contract operational partners, for
their efforts over 2019. Our people, well led by Managing Director, Max Wang, have worked long and hard to
deliver these excellent outcomes – and in a consistently safe and sustainable manner. The results are a credit
to their significant talents and strong application to the task.
I would also like to thank my fellow non-executive directors, George Edwards, Charles Fear and Richard Barker,
for their intensive efforts over the past year. Serious mining development companies require appropriately
qualified, hard-working and diligent directors. I can assure all shareholders that Atrum has a Board comprised
of such people.
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In February 2020, Atrum welcomed Bill Fleming to the Board. His extensive Canadian coking coal operational
and management experience, including over 25 years at Teck Resources, has already proven highly valuable
to Atrum and the Elan Project. I would like to thank Bill for his significant contributions to date and I look
forward to his further valuable insights going forward.
In March 2020, we were very pleased to see Tim Roberts (Warburton Group) become a significant and
supportive shareholder of Atrum. Mr. Roberts’ substantial subscription to the April 2020 share placement will
see his total shareholding increasing to 19.9% post issuance of both tranches.
I would also like to extend our appreciation to our geological and mining consultant, Palaris Australia, our IR
consultant, Fivemark Partners, as well as our company secretary, Justyn Stedwell.
Finally, I'd like to thank all Atrum shareholders for their continuing support. We appreciate your belief in our
projects and people. We also remain focussed on delivering further sustainable growth in shareholder value
for you over the months and years ahead.
Yours sincerely,
Chuck Blixt
Chairman, Atrum Coal Limited
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SUMMARY
The past year has been one of significant progress for Atrum and its flagship Elan Hard Coking Coal
Project (Elan or Elan Project).
The sizeable 2019 field exploration program was successful in growing Elan Project resources by over
50%, mostly in shallow and thick deposits, with further testwork also confirming the Tier 1 hard coking
coal properties that make the Elan coal deposits so attractive. The delineation of a very large volume
of shallow and thick coal resources at Isolation South prompted the Company to incorporate this deposit
into key Scoping Study workstreams from late 2019.
The Elan Project Scoping Study was released in April 2020. The excellent results validate the Elan
Project’s technical and economic viability across two operating cases of 6 Mtpa and 4.5 Mtpa clean coal
production, respectively. A very low overall product strip ratio of 7.2 (as compared with the Teck
Resources average of 11.4 for 2019) underwrites the attractively low operating cost projection of US$81
– 84/t FOB Vancouver for Elan. One of the key upsides stemming from the Scoping Study is the
potential to expand the Isolation South pit, where 108Mt of Inferred Resources were excluded from the
Scoping Study mining schedule in order to comply with the prevailing ASIC/ASX regulatory framework.
In summary, key achievements over the year included:
▪ Completion of the Elan Project resource update and coal quality testing (for the 2018 field
program) in early 2019, confirming Tier 1 hard coking coal quality for Elan South.
▪ Placement of A$20 million of new equity funds in March 2019 to predominantly Australian
institutions. These funds enabled an expanded 2019 field season program in order to accelerate
a rapid progression of the Elan Project towards targeted development.
▪ A total of 168 RAB holes were drilled in 2019 delivering approximately 28,000 metres of
exploration drilling across our two key Elan Project areas of Elan South and Isolation South. This
was complemented by the 12 large diameter core holes and 7 PQ core holes also drilled in these
areas for coal quality testwork purposes.
▪ Total Elan Project resources increased to 454 Mt (142 Mt Indicated and 312 Mt Inferred);
representing a 156 Mt increase delivered from the 2019 drilling program.
‒ Elan South resource increased 46 Mt to 143 Mt (60 Mt Indicated and 83 Mt Inferred);
includes a 93% increase to Indicated component.
‒
Isolation South resource increased 110 Mt to 230 Mt (82 Mt Indicated and 148 Mt Inferred);
includes a 110% increase to Indicated component.
▪ Much of the resource increase was delivered from shallow, thick coal seams offering strong
potential for attractive project economics via low strip ratio mining.
▪ The 2019 field work also evidenced substantial further resource upside potential at both Elan
South and Isolation South.
▪
Initial coal quality testwork results from the 2019 program confirmed outcomes from the 2018
program, and historical testwork, again evidencing the Tier 1 hard coking coal quality at Elan.
‒ Carbonisation testing of multi-seam composites from the South East Corner discovery at
Elan South returned high, Tier 1 coke strength (CSR) values averaging 70% (actual range
69 - 71%).
‒
Initial Isolation South testwork on RAB cuttings confirmed coal rank is comparable to Elan
South, with vitrinite reflectance (RoMax) values ranging 1.10 - 1.21%.
‒ Further detailed coal quality, washability and carbonisation testwork results are expected
in coming months for both Elan South and Isolation South cored holes.
▪ Full-scope environmental baseline study and engagement activities were undertaken at Elan
South, including with First Nations, government agencies, local municipalities and ranchers.
▪ The 2019 field program culminated in the very recent release of the Elan Project Scoping Study
in April 2020 with the following highlights:
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‒ Development and open-pit mining of low-strip Isolation South and Elan South deposits yields
a technically robust, highly economic, world-class operation delivering Tier 1 HCC to seaborne
markets.
‒ Two production cases (6Mtpa and 4.5Mtpa HCC) with initial life-of-mine of 15 – 19 years.
‒ Pre-production capex of US$587 – 683M and cash opex FOB Vancouver of US$81 – 84/t
(2nd quartile).
‒ Base case post-tax, real, ungeared NPV9% of US$790 – 860M and IRR of 25 – 26%.
As a result of the excellent Scoping Study outcomes, the Atrum Board has approved progression to a
Pre-Feasibility Study on the Elan Project, scheduled for completion in mid-2021.
In 2019, we also progressed our Panorama North JV with JOGMEC to deliver a maiden Inferred
resource estimate of 174 Mt. Further study of development options for Panorama North and
examinations of joint-venture exploration and development opportunities for Groundhog also continued.
Atrum continued to maintain a tight fiscal discipline and high levels of drilling and operational efficiency
during the year. This is a testament to our skilled and dedicated management and site team, and strong
operational contract partners. I would also like to thank the Atrum Board for its guidance, support and
hard work over the past year.
ELAN HARD COKING COAL PROJECT (100% ATRUM)
Background
In March 2018, Atrum acquired a 100% interest in the Elan Project, which is located in the Crowsnest
Pass area of Alberta, Canada. It consists of several deposition areas which are known to contain
shallow emplacements of high quality hard coking coal of the Mist Mountain Formation (Kootenay
Group).
The Elan Project has a significant areal footprint comprising 27 coal exploration tenements spread over
a 50km x 20km zone and totalling approximately 22,951ha (229.5 square kilometres).
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Figure 1: Location of the Elan Hard Coking Coal Project with proximate rail and port infrastructure
Approximately 30km to the west of the Elan Project, Teck Resources Limited operates four large mines,
also in the same Mist Mountain Formation, producing approximately 25Mt per annum of Tier 1 hard
coking coal for the global steel industry. The coal seams at Elan correspond to those horizons of the
same Mist Mountain Formation found in Teck Resources’ hard coking coal mines and have similar rank
and coal quality ranges.
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Figure 2: Elan Project tenement areas and scale comparative with Teck’s nearby Elk Valley Complex
(Greenhills, Line Creek, Elkview, Coal Mountain (closed) HCC Mines)
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The southernmost area within the Elan Project is the Elan South area, which is approximately 13km
north of the townships of Coleman and Blairmore, where an existing rail line operated by Canadian
Pacific Railway is located. This line provides direct rail access to export terminals in Vancouver and
Prince Rupert.
Elan South shares its southern boundary with Riversdale Resources’ Grassy Mountain Project, which
is in the final permitting stage for a 4.5Mtpa open-cut operation producing hard coking coal. The current
Grassy Mountain resource estimate totals 195Mt, with 85Mt Measured and 110 Mt Indicated (see
Riversdale Resources’ Annual Report 2018).
2019 Elan Project Drilling Campaign
Elan South
A total of 119 rotary air blast (RAB) exploration holes were completed at Elan South during 2019 for a
total of 20,150 metres of drilling. The main focus of drilling was at South East Corner (65 RAB holes
completed) and Fish Hook (39 holes completed), with an additional 15 holes completed at Oil Pad
Ridge.
Large diameter coring was completed at three sites and PQ coring was undertaken at eight sites at
South East Corner, with the coring undertaken at defined intervals at sites with known coal seam
stratigraphy (existing RAB drillhole locations). Five LD cored holes were completed at Fish Hook, and
at Oil Pad Ridge another three LD holes were undertaken.
Isolation South
A total of 49 RAB exploration holes were completed at Isolation South for 7,850 metres of drilling. Eight
holes were drilled in the southern area and 41 completed in the area north of the Oldman River on
Cabin Ridge. The RAB holes at Isolation South complement 19 historical HQ size fully cored holes
drilled in the 1970’s.
Favourable weather conditions allowed Atrum to complete a program of three large diameter (150 mm)
cored holes at Cabin Ridge during late January and early February. The large diameter coring has
enabled Atrum to undertake coal quality, washability and carbonisation testwork on Isolation South in
order to confirm and extend the already substantial historical test results from this area. Coal quality
testwork results for Isolation South are expected in the June 2020 quarter.
Table 1: Summary of exploration drilling completed in 2019 / 2020
PROJECT AREA
RAB Holes
LD Cored Holes
PQ Cored Holes
HQ Hydrogeology
Holes
SOUTH EAST CORNER
FISH HOOK
OIL PAD RIDGE
ISOLATION SOUTH
TOTAL
65
39
15
49
168
3
4
2
3
12
7
-
-
-
7
3
2
4
-
9
5
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Figure 3: Location map of the Elan South and Isolation South exploration areas
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Elan HCC Project Resources
Elan South resources
Based on the drilling results available at the end of 2019, an update to the Elan South resource
increased the total estimate by 46 Mt to 143 Mt (60 Mt Indicated and 83 Mt Inferred). This included a
93% increase in the Indicated classification of resources (to 60 Mt), as confidence levels improved
through definition of structure and acquisition of coal quality and washability data.
Table 2: Elan South resource estimate (February 2020)
AREA (ELAN SOUTH)
INDICATED (Mt)
INFERRED (Mt)
TOTAL (Mt)
SOUTH EAST CORNER
FISH HOOK
OIL PAD RIDGE
TOTAL
16
15
29
60
22
11
50
83
38
26
80
143
The previous Elan South resource estimate was 97 Mt (31 Mt Indicated and 66 Mt Inferred), as reported
in Atrum ASX release dated 8 January 2019, Elan South Hard Coking Coal Resource Increased by
170% to 97 Mt.
Isolation South resources
With the completion of 49 RAB holes at Isolation South in 2019, drillhole spacing was reduced to 100-
200m on the dip slope of Cabin Ridge. Positive to exceptional results were returned in all completed
drill holes, including a number of holes with apparent cumulative coal thickness exceeding 100m.
An interim update to the Isolation South resource in early December 2019 increased it by 97 Mt to 217
Mt (79 Mt Indicated and 138 Mt Inferred) (see Atrum ASX release dated 2 December 2019, 97 Mt
Increase in Isolation South Resource).
Following incorporation of residual drilling results to the end of 2019, the Isolation South resource was
further increased to 230 Mt (82 Mt Indicated and 148 Mt Inferred) as reported in early February 2020.
Table 3: Isolation South resource estimate (February 2020)
AREA
INDICATED (Mt)
INFERRED (Mt)
TOTAL (Mt)
NORTH (CABIN RIDGE)
SOUTHERN AREA
TOTAL
82
-
82
126
22
148
208
22
230
This brought the total increase to the Isolation South resource delivered via 2019 drilling to 110 Mt (see
Table 3A).
Table 3A: Isolation South resource increase from 2019 drilling
UPDATE DATE
INDICATED (Mt)
INFERRED (Mt)
TOTAL (Mt)
Starting base (Jan 2019)
Interim resource (Dec 2019)
39
79
81
138
120
217
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Final resource (Feb 2020)
2019 Program Increase (Mt)
2019 Program Increase (%)
Total Elan Project resources
82
43
110%
148
67
83%
230
110
92%
As a result of the additional resource definition at Elan South and Isolation South during 2019 and early
2020, overall Elan Project resources now total 454 Mt (142 Mt Indicated and 312 Mt Inferred).
Table 4: Total Elan Project resource estimate
PROJECT
PROJECT AREA
INDICATED
(Mt)
INFERRED
(Mt)
TOTAL
(Mt)
DATE OF
ANNOUNCEMENT*
SOUTH EAST
CORNER
ELAN SOUTH
FISH HOOK
OIL PAD RIDGE
ISOLATION SOUTH
ISOLATION
SAVANNA
ELAN
NORTHERN
TENEMENTS
TOTAL
16
15
29
82
-
-
142
22
11
50
148
51
30
312
38
26
80
230
51
30
454
10-Feb-20
10-Feb-20
10-Feb-20
10-Feb-20
22-Jan-19
22-Jan-19
* Atrum confirms that it is not aware of any new information or data that materially affects the information included
in Atrum ASX releases dated 10 February 2020 (Total Elan Project Resources Exceed 450 Mt) and 22 January
2019 (Additional 201 Mt JORC Resources Defined for Elan Project), the latter relating to the Isolation and Savanna
resource estimates. All material assumptions and technical parameters underpinning the estimates in these
releases continue to apply and have not materially changed.
In aggregate, the 2019 Elan Project exploration program delivered an increase in total resources of
156Mt (see Table 5).
The 2019 field work also evidenced substantial further resource upside potential at both Elan South and
Isolation South, which is planned to be targeted in the 2020 field program. Additionally, other areas
within the Elan Project, including Cat Mountain, Wildcat, Isolation, Isola and Savannah, were not
explored in 2019 and offer further exploration upside potential.
Table 5: Total Elan Project resource increase from 2019 drilling
UPDATE DATE
INDICATED (Mt)
INFERRED (Mt)
TOTAL (Mt)
Starting base (Jan 2019)
Interim resource (Dec 2019)
Final resource (Feb 2020)
2019 Program Increase (Mt)
70
110
142
72
2019 Program Increase (%)
103%
228
285
312
84
37%
298
395
454
156
52%
The shallow and thick nature of coal deposition across much of the updated Elan Project resources
offers strong potential for attractive project economics via low strip ratio mining. As highlighted in Figure
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4 below, a total of 167 Mt of the resource base is at less than 100m depth and a total of 278 Mt is at
less than 150m depth. A typical Isolation South cross section is shown in Figure 5 and a photographic
example of outcropping coal deposition in Figure 6.
120
100
80
60
40
20
0
ISOLATION SOUTH
OIL PAD TREND
FISH HOOK
SOUTH EAST CORNER
)
T
M
(
S
E
C
R
U
O
S
E
R
0 - 50
54
9
5
6
50 - 100
100 - 150
150 - 200
200 - 250
63
13
7
10
77
18
6
10
29
20
4
7
7
19
3
5
SOUTH EAST CORNER
FISH HOOK
OIL PAD TREND
ISOLATION SOUTH
Figure 4: Elan Project resources according to depth of cover subsets
Figure 5: Cross section through Isolation South
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Figure 5: Thick, shallow coal deposition at Isolation South
Elan Project Coal Quality
Initial coal quality testwork results from the 2019 exploration program have continued to support results
from the 2018 program, and historical testwork, showing excellent potential for medium volatile, Tier 1
hard coking coal products.
Due to the significant amount of coal quality core samples collected during the 2019 program (including
early 2020 drilling at Isolation South), coal quality and washability testwork remains ongoing and full
results will be provided to the market when received.
The Elan Project hard coking coal seams correspond to those horizons of the Mist Mountain Formation
found in nearby Teck Resources’ coal mines. The Elan Project coal quality test results to date indicate
a high degree of similarity in clean coal and coking properties to the Teck Premium products.
Carbonisation testing results from South East Corner
Seam composite samples from the PQ coring program at South East Corner (Elan South) were tested
individually at GWIL Birtley (Calgary) for physical, chemical rheological and petrographic analysis,
before clean coal samples were transferred to CoalTech laboratory (USA) and DMT (Germany) for
clean coal properties and coking characterisation testing include carbonisation testwork (by DMT).
The carbonisation testwork was undertaken on a blended composite, containing a blend of the main
seam groups 1, 2 and 4 at South East Corner. Coke strength (CSR) values for the blended composite
were 69 – 71 % and were within a similar range to Elan South results from the 2018 LDC program at
Oil Pad Ridge (Elan South).
Preliminary Results from Isolation South Testing
While a significant amount of coal quality testing was undertaken during historical exploration programs
at Isolation South, the clean coal testing program at that time was more limited. Atrum completed a
program of three large diameter (150 mm) cored holes at the dip slope on Cabin Ridge in late January
and early February 2020. This large diameter coring has enabled Atrum to undertake coal quality,
washability and carbonisation testwork on Isolation South. Results from this testwork are expected to
be received during the June 2020 quarter. The initial resting results on raw coal have demonstrated
similar properties as Elan South, i.e. indicating Tier 1 HCC quality.
The sampling of RAB drill cuttings has allowed some preliminary coal quality testing to be undertaken
on clean coal composites, prepared on cumulative floats (CF) at 1.45. The initial testing has delivered
positive results, including low ash, high CSN and fluidity, with low phosphorus content. Petrographic
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analysis has also indicated mean maximum vitrinite reflectance values averaging 1.19% for Seams 2,
3 and 4 and 1.10% for Seam 1.
For more detail on initial results from the 2019 coal quality testwork program refer to Atrum ASX release
dated 10 February 2020, Total Elan Project Resources Exceed 450 Mt.
Environmental Programs
Environmental impact assessment is a critical part of the overarching permitting process of a key mining
development such as the Elan Project. The environmental baseline data collection for Elan South, the
foundation for impact assessment, was initiated in the summer of 2018, including wildlife monitoring
and surface water testing for water stream hydrology and water quality.
In 2019, a full scope environmental baseline study was started for Elan South, including wildlife,
vegetation, surface water hydrology and water quality, aquatic resources, fish and fish habitat,
hydrogeology, geochemistry, geotechnical investigation, and physiography and soils.
A total of 10 deep (fully cored) and 4 shallow hydrogeology holes were drilled at Elan South for testing
and monitoring ground water conditions as well as for taking rock core samples for geochemistry
characterization and geotechnical property testing. The full environmental program has now been
expanded to include Isolation South in anticipation of the combined development plan for both Elan
South and Isolation South.
Stakeholder Engagement
Another important component of the project approval process is the stakeholder engagement and
consultation framework. All Elan Project tenements are on Crown (public) land and on the traditional
territories of the Alberta Tready 7 First Nations. Other industries and stakeholders also share land
surface access or rights with the Elan Project, including oil and gas companies, forestry product
companies, cattle ranchers and trappers.
The consultation and engagement of Treaty 7 Nations and other stakeholders, including those
mentioned above as well as the municipalities of the Crowsnet Pass, was initiated in early 2019. A
Traditional Land Use Study (TUS) program was carried out with the individual Treaty 7 Nations on the
Elan South site in the summer of 2019, including several weeks of field work by their elders and
consultation officers. These study reports will aid the overall assessment of environmental impact from
the proposed development and operation of the Elan Project.
The TUS work with the Treaty 7 Nations will be expanded to Isolation South in 2020 while the overall
project consultation continues throughout the project permitting process and beyond. The Elan Project
team also plans to expand the consultation to all other First Nations within Alberta and BC who may
have some historical or present interest in the land. These additional First Nations groups have already
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been idenfitied with the help of the Federal Impact Assessment Office, and they are generally the same
as for the neighbouring Grassy Mountain Project.
Throughout 2019, senior executives of Atrum also had numerous meetings and engagement activities
with Alberta government officers and minsters of Alberta Energy, Alberta Environment and Parks, and
Alberta Infrastructure. The objective of these discussions was to advance the prospect of water
licensing and approval of open cut mining for the Elan Project.
Elan Scoping Study
The Elan Project Scoping Study was completed and released to the ASX on 16 April 2020. It
demonstrated that development and open-pit mining of the low-strip Isolation South and Elan South
deposits under two cases (10 Mtpa ROM for 6 Mtpa product HCC, and 7.5 Mtpa ROM for 4.5 Mtpa
product HCC) yields a technically robust, highly economic, world-class operation delivering Tier 1 HCC
into seaborne markets.
All coal extraction is via open pit method and based on mining of a single large pit at Isolation South
and three discrete pits at Elan. Conventional coal processing is undertaken through a single coal
handling and preparation plant (CHPP), to be located near Isolation South. Processing yield to product
coal is forecast at 60%, delivering total LOM product HCC of 76 Mt.
The implied product coal life-of-mine (LOM) strip ratio for the Elan Project is approximately 7.2 bcm/t
HCC. This product strip ratio is considered very low, particularly when compared with the 2019 average
at the nearby Teck Resources mines in the Elk Valley, which was 11.4 bcm/t HCC (see page 46, Teck
Resources Q4 2019 Financial Report, 20 February 2020). The Isolation South pit is particularly low
strip ratio (3.3 bcm/t ROM), yielding a product strip ratio of just 5.5 bcm/t HCC product.
Product HCC is transported approximately 36km across a dedicated covered conveyor system from the
CHPP to a new train loadout area located close to Canadian Pacific Rail’s Crowsnest subdivision
mainline. From train load-out the product HCC is railed approximately 1,100km via existing tracks
operated by Canadian Pacific Rail (CPR) and Canadian National Railways (CN) to the preferred export
terminal of Westshore in Vancouver, British Columbia, for export to global seaborne HCC markets.
Table 6: Elan Project Scoping Study key metrics
Total ROM coal mined
Initial life-of-mine
Average strip ratio (ROM)
Key outcomes
Unit
Mt ROM
years
bcm:t
10Mtpa ROM
7.5Mtpa ROM
126
15
4.3
126
19
4.3
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Processing yield
Nameplate HCC production
Total product coal (HCC)
Resultant product coal strip ratio (HCC)
Pre-production capital expenditure
%
Mtpa saleable
Mt saleable
bcm:t
US$M
Cash operating cost (FOB Vancouver)
US$/t saleable
Elan HCC price (FOB Vancouver)
US$/t saleable
NPV9% (post-tax, real basis, ungeared, Y-1)
IRR (post-tax, real basis, ungeared, Y-1)
Project net cashflow (post-tax)
US$M
%
US$M
60
6.0
76
7.2
683
81
138
860
25
60
4.5
76
7.2
587
84
138
790
26
2,610
2,580
The low strip ratio helps realize the attractive cash operating cost for Elan product HCC averaging
US$81/t FOB (10 Mtpa ROM) or US$84/t (7.5 Mtpa ROM), which are comparable with the nearby Teck
Resources Elk Valley operations (average opex of C$105/t FOB in 2019). This operating cost estimate
places the Elan Project in the lower second quartile of the global seaborne hard coking coal operating
cost curve (based on S&P Global Market Intelligence 2019 FOB cash cost curve).
The Atrum Board considers the Scoping Study to be a conservative representation of the long-term
development potential of the Elan Project with several significant potential upside drivers. One such
driver is the potential expansion of the Isolation South pit to incorporate the 108 Mt of Inferred
Resources that were excluded from the Scoping Study mine schedule.
PANORAMA / GROUNDHOG ANTHRACITE PROJECTS
Panorama North JV with JOGMEC (65% Atrum)
The Panorama North Project is located in north-west British Columbia, Canada. It consists of 12 coal
licences and covers an area of approximately 74km2. The Company has a Joint Exploration Agreement
over Panorama North (Panorama North JEA) with Japan Oil, Gas and Metals National Corporation
(JOGMEC).
Panorama North is adjacent to Atrum’s 100%-owned Groundhog Project (Figure 6), which hosts a 1.02
Bt anthracite resource (156 Mt Measured, 453 Mt Indicated and 407 Mt Inferred).
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Figure 6: Panorama North and Groundhog Anthracite Projects (note: in 2019 the Company relinquished
a number of none-core tenements at Groundhog Central and Panorama South)
In early 2019, JOGMEC completed its earn-in of a 35% equitable interest in the Panorama North Project
via the Panorama North JEA by having sole spent C$5M in exploration expenditure across Panorama
North over the previous three years.
A maiden Inferred resource estimate of 174 Mt anthracite was reported for Panorama North in March
2019. Approximately 50% of this resource estimate is delineated at less than 100m depth and the total
resource was conservatively limited to 200m depth for potential open cut mining. Coal quality samples
exhibit characteristics of a high-grade anthracite with reflectance (RoMax) range of 2.6-3.3% and clean
coal volatile matter (VM) of 5-7%. For full details of the Panorama North resource, see Atrum ASX
release dated 2 April 2019, Initial High-Grade Anthracite Resource Defined at Panorama North.
A high-level, low-cost project development options study was undertaken on Panorama North in 2019.
This was targeted at evaluating various development options for the project including infrastructure
solutions, capital expenditure requirements and expected mining economics. In 2019, the Company
also continued to explore joint venture exploration and development opportunities for the Groundhog
Anthracite Project.
CORPORATE ACTIVITIES
Successful Equity Raising
Approximately A$20M of new equity funding was raised in March 2019 by private placement at A$0.175
per share to predominantly Australian institutions. These funds enabled an expanded and accelerated
2019 field season program in order to drive the rapid progression of the Elan Project.
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MANAGEMENT REPORT
Approximately A$22M of new equity funding was raised in April 2020 by private placement at A$0.23
per share to predominantly Australian institutions and sophisticated investors. Atrum is now well-funded
to progress the Elan Project through Pre-Feasibility Study (PFS) completion and formal permitting
application, with concurrent drilling activities, coal quality testing, environmental studies and stakeholder
engagement.
Operational Discipline and Efficiency
During the year Atrum continued its push to maximise operational efficiency and minimise corporate
and other overhead costs. As a company we seek to remain strategically focussed, managerially
disciplined and operationally efficient in order to maximise targeted growth in shareholder value over
coming years.
2020 PLANS
Atrum continues to focus on the rapid progression of its 100%-owned Elan Project toward targeted
development. We believe this world-class asset has the clear potential to support multiple, large Tier 1
hard coking coal mines. Following the recent release of a successful Scoping Study, the Atrum Board
has approved progression to a Pre-Feasibility Study (PFS).
We are currently well advanced in planning for the 2020 drilling and environmental study programs at
Elan. This drilling program is targeted at both resource growth and classification upgrade of the 108 Mt
of in-pit Inferred Resources at Isolation South that were excluded from the Scoping Study mine
schedule. A comprehensive coal quality testing program and environmental baseline study for Isolation
South, followed by impact assessment as well as stakeholder engagement, will run in parallel with the
drilling and broader PFS work. The PFS is targeted for completion in mid-2021.
Current social and operating constraints associated with the COVID-19 pandemic have meant that full
commencement of these activities is necessarily paused, with work limited to predominantly desktop
study activities for the time being. The Atrum Board will be regularly reassessing this status as local
and global conditions evolve and is targeting rapid commencement of full-scale PFS and drilling
activities as soon as is safe and appropriate for local circumstances in the Crowsnest Pass.
In summary, 2019 was transformational for Atrum and our world-class Elan Project. We have and
continue to deliver on the promise that Elan holds. I look forward to reporting next year on the outcomes
of our intensive 2020 workstreams.
Yours sincerely
Max Wang
Managing Director and CEO
Atrum Coal Limited
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DIRECTORS’ REPORT
DIRECTORS
COMPANY SECRETARY
Charles Blixt (Non-Executive Chairman) (appointed 29 May 2017)
Richard Barker (appointed 4 February 2019)
James Chisholm (resigned on 26 June 2019)
George Edwards (appointed 17 August 2017)
Charles Fear (appointed 17 August 2017)
William (Bill) Fleming (appointed on 24 February 2020)
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
Automic Pty Ltd
Level 5, 126 Phillip St, Sydney NSW 2000
Telephone: +61 2 9698 5414
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
SOLICITORS
Australia
Lavan Legal
1 William Street
Perth, WA 6000
Australia
AUSTRALIAN SECURITIES EXCHANGE
Atrum Coal Ltd. shares (ATU) are listed on the Australian Securities
Exchange.
Canada
Osler, Hoskin & Harcourt LLP
Suite 2500, TransCanada Tower
450 – 1st Street SW
Calgary, AB T2P 5H1
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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 year ended 31 December 2019. 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
Richard Barker
James Chisholm
George Edwards
Charles Fear
William (Bill) Fleming
Max Wang
Non-Executive Chairman (appointed as Director 29 May 2017 and Non-Executive
Chairman on 17 August 2017))
Non-Executive Director (appointed 4 February 2019)
Non-Executive Director (resigned on 26 June 2019)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (appointed 24 February 2020)
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 31 March 2020, Mr. Blixt holds 1,400,000 fully paid ordinary shares in the Company and 2,400,000 unlisted options, 550,000
listed options and 1,750,000 performance rights.
Richard Barker - Non - Executive Director (appointed 4 February 2019)
Mr Barker has more than 30 years’ experience in metals and mining industry financing, investment and M&A advisory. He is
currently the Managing Director of Mosaic Capital Pty Ltd, a corporate finance company, a non-executive director and founding
director of Batchfire Resources Pty Ltd, which owns and operates a 12Mtpa thermal coal mining operation in Queensland,
Australia, a non-executive director and founding director of Australian Future Energy Pty Ltd, an emerging Queensland-based
clean coal technology (above ground coal gasification) company, and a non-executive director of Cape River Resources Pty Ltd,
which owns a thermal coal project in northern Queensland. Among many other senior management and executive roles, Mr.
Barker was previously a non-executive director of ASX-listed Silver Heritage (ASX: SVH), managing director of RBC Capital Markets
and co-head of its Australian Metals & Mining Investment Banking division, chief executive officer of ASX-listed Betcorp Ltd, and
executive director of NM Rothschild & Sons (Australia) Ltd’s Corporate Advisory Division.
Over the past 25 years in his investment banking career, Mr Barker managed or oversaw financings, M&A, JV formation or fund
raising for various global companies in values from $10M to over $1B.
As at 31 March 2020, Mr. Barker holds 1,824,000 fully paid ordinary shares, 1,429,000 listed options through Aleste Investments
Pty Ltd, 1,300,000 performance rights and 1,500,000 unlisted options.
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.
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DIRECTORS’ REPORT
As at 31 March 2020, Mr. Edwards holds has an indirect holding of 1,299,849 fully paid ordinary shares in the Company through
Edwards Global Services Pty Ltd and 1,500,000 unlisted options, 550,000 listed options and 1,300,000 performance rights.
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. Argonaut works across the globe, and has conducted business in Australia, North and South America,
throughout the Asia-Pacific region, and in Africa. Previous executive roles include Managing Director of CIBC World Markets,
Director of Hartley Poynton and Senior Insolvency Partner at KPMG.
As at 31 March 2020, Mr. Fear holds the following through the following entities, in addition to 1,300,000 performance rights:
Argonaut Equity Partners Pty Limited
500,000 Unlisted options
510,000 Listed options
Areley Kings Pty Ltd ATF C Fear Super A/C
2,806,526 Ordinary fully paid shares
1,080,000 Listed options
Areley Kings Pty Ltd ATF RAEF A/C
4,205,000 Ordinary fully paid shares
350,000 listed options
1,500,000 Unlisted options
Argonaut Investments Pty Limited
4,799,382 Listed Options
William (Bill) Fleming - Non - Executive Director (appointed 24 February 2020)
Mr Fleming is a qualified mining engineer with extensive experience in the Canadian coal and iron ore industries. His professional
career spans over35 years in technical, operational and management roles, including 25 years at the leading Canadian coking coal
producer – Teck Resources Limited. He initially worked at the Bullmoose Coking Coal Mine (1.7Mtpa) and Elkview Coking Coal
Mine as Site General Manager. He was also the Vice President, Operations, of the Cardinal River Coking Coal Mine (1.6Mtpa).
As at 31 March 2020, Mr. Fleming holds 40,000 fully paid ordinary shares, 1,300,000 performance rights and 1,500,000 unlisted
options.
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 the execution of 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 for C$1B, and Max led the business as President and Chief Executive from January 2013 until joining Atrum.
Mr. Wang is a technical committee member of the Canadian National Standards on Concrete Materials, Construction, Testing and
Design, and the past board chair and current vice chair of the Coal Association of Canada. From 2013 to 2015, Mr. Wang was a
Director of Winsway Enterprises Holdings Ltd (now called E-Commodities) which is a Hong Kong stock exchange listed company and
one of the largest independent metallurgical coal trading and logistics management companies in the global market. Since April
2018, Mr. Wang is also a non-executive director of Huadian Natural Gas Canada Ltd. – a whole owned North American subsidiary
of China Hudian Corporation Ltd which has an installed power generation capacity of approximately 150,000 MW.
As at 31 March 2020, Mr. Wang holds 675,236 fully paid ordinary shares in the Company and 5,000,000 unlisted options through a
nominee, 550,000 listed options and 6,500,000 performance rights.
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.
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DIRECTORS’ REPORT
He is currently Company Secretary at several ASX-listed companies, including Tymlez Group Ltd (ASX:TYM), Candy Club Holdings
Ltd (ASX:CLB), Golden Mile Resources Limited (ASX:G88), Fertoz Ltd (ASX:FTZ), Lifespot Health (ASX: LSH), Cirralto Ltd (ASX:CRO),
Imugene Ltd (ASX:IMU), Rectifier Technologies Ltd (ASX:RFT) 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 financial year, of entities within the Group was hard coking coal exploration and
development in Alberta, Canada and anthracite in British Columbia, Canada.
OPERATING AND FINANCIAL REVIEW
FINANCIAL POSITION
At 31 December 2019, the Group had cash reserves of $10,122,166 (2018: $3,101,677).
The net assets of the Group increased by $1,027,050 during the financial year from $16,050,018 to $17,077,068.
During the year ended 31 December 2019, the Company received $559,528 (USD 392,869) from Atlantic Carbon Group as complete
settlement from the receivable it held at 31 December 2018.
FINANCING AND INVESTING ACTIVITIES
During the financial year, the Company issued a total of 114,537,714 shares from two tranches of a placement, raising $20,000,000
in cash. In addition, 2,000,200 listed options exercisable at a price of $0.20 each were exercised for a total amount of $400,400.
During the year, the Company redeemed the final 250,000 Kuro convertible notes through the issuance of 250,000 shares of the
Company. The Company also repaid the remaining $141,371 outstanding on the Lenark loan.
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.
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
(i)
(ii)
(iii)
789,667 listed options, at a strike price of $0.20 were exercised for a total amount of 157,933
On 24th February 2020, the board appointed Mr. William (Bill) Fleming as director. Mr. Fleming has extensive
experience in the Canadian coking coal operational and management expertise.
Subsequent to the year end, the COVID-19 pandemic announced by the World Health Organisation is having a
negative impact on world stock markets, currencies and general business activity. The Company has developed a
policy and is evolving procedures to address the health and wellbeing of employees, consultants and contractors in
relation to COVID-19. The timing and extent of the impact and recovery from COVID-19 is unknown but it may have
an impact on exploration activities, the future assessments of the recoverable values of exploration assets and the
ability of the company to raise funds as and when required.
The Company is currently reviewing and closely monitoring the Novel Coronavirus 2019 (COVID-19) situation as it unfolds,
ensuring compliance and cooperation with protocols and advice as and when issued by the Government. The Directors are
reviewing business operations and strategies and assessing the impact on the Group. The Group is unable to determine at this
time the potential impact COVID-19 will have.
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DIRECTORS’ REPORT
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 may also continue to pursue other potential investment
opportunities to enhance shareholder value.
The Company continues with the ongoing exploration and development at the different project areas within the Elan Coal, with
immediate focus on Elan South and Isolation South.
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
Richard Barker
J Chisholm
George Edwards
Charles Fear
Max Wang
Year ended 31 December 2019
Board of Directors
Period ended 31 December 2018
Board of Directors
Number eligible to
attend
13
13
7
13
13
13
Number
attended
13
12
7
13
12
13
Number eligible to
attend
11
-
11
11
11
11
Number
attended
10
-
11
11
11
11
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 year ended 31 December 2019 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 2019 Annual General Meeting
(g) Other transactions with key management personnel
The KMP’s covered in this report include:
Charles Blixt
Richard Barker
James Chisholm
George Edwards
Charles Fear
Max Wang
Non-Executive Chairman (appointed as Director 29 May 2017 and Non-Executive Chairman on
17 August 2017))
Non-Executive Director (appointed 4 February 2019)
Non-Executive Director (resigned 26 June 2019)
Non-Executive Director (appointed 17 August 2017)
Non-Executive Director (appointed 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)
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DIRECTORS’ REPORT
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 31 May 2019 is $400,000 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 share purchase options to Key Management Personnel and
Employees as disclosed in Part E of this remuneration report.
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 31 May 2019 was an aggregate compensation of $400,000 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.
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DIRECTORS’ REPORT
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:
reward executives for company and individual performance against targets set by appropriate benchmarks;
align the interests of executives with those of shareholders;
link rewards with the strategic goals and performance of the Company; and
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:
Fixed Compensation;
Variable Compensation;
Short Term Incentive (STI); and
Long Term Incentive (LTI).
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.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
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:
21 August 2017
Full time employment
Salary of C$350,000 per annum plus 5% superannuation and refund of expenses
3 Months termination notice by Mr. Wang; 1 – 12 months termination notice depending on years of
service if terminated by the Company.
9,000,000 options at exercise prices between $0.396 and $0.996, which were cancelled during the year.
5,000,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
Charles Blixt – Non-Executive Chairman
Agreement Commenced:
Term of Agreement:
Details:
29 May 2017
No set tenure
Director’s fees USD 55,000 per year
2,000,000 options at exercise prices between $0.396 and $0.996, which were cancelled during the year.
2,400,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
Richard Barker – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
4 February 2019
No set tenure
Director’s fees $55,000 per year (inclusive of superannuation)
1,500,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
James Chisholm – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
25 October 2011
No set tenure
Director’s fees $3,000 per month
1,500,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
This agreement was terminated on 26 June 2019 and all the options expired
George Edwards – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
17 August 2017
No set tenure
Director’s fees $55,000 per year
1,350,000 options at exercise prices between $0.396 and $0.996, which were cancelled during the year.
1,500,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
Charles Fear – Non-Executive Director
Agreement Commenced:
Term of Agreement:
Details:
17 August 2017
No set tenure
Director’s fees $55,000 per year (inclusive of superannuation)
1,350,000 options at exercise prices between $0.396 and $0.996, which were cancelled during the year.
1,500,000 options at exercise prices between $0.35 and $0.45 with expiry dates that are between 12
and 36 months from the issue dates.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
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:
Directors
Year
Ended
31
December
Short Term
Benefits
Salary and fees
(including
Directors Fees)
Charles Blixt
Richard Barker(1)
James Chisholm(2)
George Edwards
Charles Fear(3)
Max Wang(4)
2019
2019
2019
2019
2019
2019
$
67,754
40,258
22,428
47,083
42,998
584,920
Post Employment
Superannuation
$
Share Based
Payments
Performance
rights and
Options(A)
$
Performance related
Total
$
Fixed
%
LTI
%
-
3,825
-
-
4,085
-
302,350
370,104
190,752
234,835
66,726
89,154
197,293
244,376
197,293
244,376
742,154 1,327,074
18%
19%
25%
19%
19%
44%
Total
(1)
(2)
A.
2019
Appointed as Non-Executive Director on 4 February 2019
Resigned as Non-Executive Director on 26 June 2019. There was no termination payment.
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
31 December 2019, that the vesting conditions will realise. Please refer Note 13(d) for fair value methodology. None of the directors exercised any options
or received any such payment during 2019.
1,696,568 2,509,919
805,441
7,910
32%
Directors
Year
Ended 31
December
Short Term
Benefits
Salary and fees
(includes
Directors Fees)
$
Post Employment
Share Based
Payments
Performance related
Superannuation
Options(B)
Total
Fixed
$
$
$
%
Charles Blixt(1)
James Chisholm
George Edwards(2)
Charles Fear(3)
Max Wang(4)
Total
2018
2018
2018
2018
2018
2018
49,138
38,880
36,000
33,658
389,320
-
-
-
2,342
-
9,219
-
6,214
6,214
58,357
38,880
42,214
42,214
57,051
446,371
546,996
2,342
78,698
628,036
84%
100%
85%
85%
87%
87%
82%
81%
75%
81%
81%
56%
68%
LTI
%
16%
0%
15%
15%
13%
13%
(1)
(2)
(3)
(4)
B.
Appointed as Non-Executive Director on 29 May 2017
Appointed as Non-Executive Director on 17 August 2017
Appointed as Non-Executive Director 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
31 December 2018, that the vesting conditions will realise. Please refer Note 13(d) for fair value methodology. None of the directors exercised any options
or received any such payment during 2018.
10
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
E.
Details of share-based compensation and equity instruments held by key management personnel
Unlisted Options
During the year ended 31 December 2019, movements in options were as follows:
Balance at the
start of the
year
Granted
Cancelled
Expired/
Exercised
Balance
at the end of the
year
Unlisted Options
Directors
Charles Blixt
Richard Barker
James Chisholm*
George Edwards
Charles Fear
Max Wang
Total
2,000,000
-
-
1,350,000
1,350,000
9,000,000
13,700,000
2,400,000
1,500,000
1,500,000
1,500,000
1,500,000
5,000,000
13,400,000
(2,000,000)
-
-
(1,350,000)
(1,350,000)
(9,000,000)
(13,700,000)
-
-
(1,500,000)
-
-
-
(1,500,000)
2,400,000
1,500,000
-
1,500,000
1,500,000
5,000,000
11,900,000
The following are movements in listed options during the year ended 31 December 2019:
Balance at the start of
the year
Acquired
Expired/
Exercised
Balance at the end of
the period
Listed Options
Directors
Charles Blixt
James Chisholm*
George Edwards
Charles Fear
Max Wang
Total
Charles Blixt
Richard Barker
James Chisholm*
George Edwards
Charles Fear
Max Wang
550,000
3,950,000
550,000
6,739,382
550,000
12,339,382
-
-
-
-
-
-
-
-
-
-
-
-
Charge due to
cancelled options
$
9,642
-
-
6,541
6,541
45,967
68,691
Vesting of
options 2019
$
228,154
142,596
66,726
142,596
142,596
455,405
1,178,073
Vesting of
performance
Rights ($)
64,554
48,156
-
48,156
48,156
240,782
449,804
550,000
3,950,000
550,000
6,739,382
550,000
12,339,382
Total
$
302,350
190,752
66,726
197,293
197,293
742,154
1,696,568
* James Chisholm resigned on 26 June 2019
11
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
E.
Details of share-based compensation and equity instruments held by key management personnel (Continued)
Details of options granted to Directors as part of remuneration:
(a) Options granted to directors which were cancelled during the year
Director
Charles Blixt
Charles Fear
James Chisholm*
George Edwards
Max Wang
TOTAL
Number of
Options/Conditions
Expiry Date
Exercise Price
400,000
400,000
600,000
600,000
250,000
300,000
400,000
400,000
250,000
300,000
400,000
400,000
250,000
300,000
400,000
400,000
1,000,000
2,000,000
3,000,000
3,000,000
13,700,000
01-Jun-19
01-Dec-19
01-Jun-20
01-Dec-20
01-Jun-19
01-Dec-19
01-Jun-20
01-Dec-20
01-Jun-19
01-Dec-19
01-Jun-20
01-Dec-20
01-Jun-19
01-Dec-19
01-Jun-20
01-Dec-20
01-Jun-19
01-Dec-19
01-Jun-20
01-Dec-20
0.40
0.50
0.70
1.00
0.40
0.50
0.70
1.00
0.40
0.50
0.70
1.00
0.40
0.50
0.70
1.00
0.40
0.50
0.70
1.00
Value Recognised
during the year (A)
$
898
1,800
3,326
3,618
561
1,350
2,218
2,412
-
-
-
-
561
1,350
2,218
2,412
2,246
9,000
16,632
18,089
68,691
* James Chisholm resigned on 26 June 2019
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. None of the directors exercised any options or received any
such payment during 2018.
(b) Options granted to directors during the year
Director
Chuck Blixt
Richard Barker
James Chisholm*
George Edwards
Charles Fear
Max Wang
Vesting
date
04-Jun-19
01-Jun-20
01-Jun-21
04-Jun-19
01-Jun-20
01-Jun-21
04-Jun-19
01-Jun-20
01-Jun-21
04-Jun-19
01-Jun-20
01-Jun-21
04-Jun-19
01-Jun-20
01-Jun-21
04-Jun-19
01-Jun-20
01-Jun-21
Expiry Date
Exercise Price
$
Number of
Options/
30-Jun-20
30-Jun-21
30-Jun-22
30-Jun-20
30-Jun-21
30-Jun-22
30-Jun-20
30-Jun-21
30-Jun-22
30-Jun-20
30-Jun-21
30-Jun-22
30-Jun-20
30-Jun-21
30-Jun-22
30-Jun-20
30-Jun-21
30-Jun-22
0.35
0.40
0.45
0.35
0.40
0.45
0.35
0.40
0.45
0.35
0.40
0.45
0.35
0.40
0.45
0.35
0.40
0.45
800,000
800,000
800,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
1,500,000
1,500,000
2,000,000
12,400,000
Value vested
during the year
$
Value Not
Vested
$
106,762
77,203
44,189
66,726
48,252
27,618
66,726
-
-
66,726
48,252
27,618
66,726
48,252
27,618
200,178
144,755
110,472
1,178,073
-
55,144
107,315
-
34,465
67,072
-
-
-
-
34,465
67,072
-
34,465
67,072
-
103,396
268,289
838,755
12
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
E.
Details of share-based compensation and equity instruments held by key management personnel (Continued)
(c) Performance rights granted to directors during the year
(i) 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.
Director
Class
Year of
Grant
Non Market
Based
Probability
of vesting
Charles Blixt
Richard Barker
George
Edwards
Charles Fear
Max Wang
34
35
36
37
34
35
36
37
34
35
36
37
34
35
36
37
34
35
36
37
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
400,000
400,000
400,000
550,000
300,000
300,000
300,000
400,000
300,000
300,000
300,000
400,000
300,000
300,000
300,000
400,000
1,500,000
1,500,000
1,500,000
2,000,000
12,150,000
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
Total Value at
grant date
$
100,800
100,800
100,800
138,600
75,600
75,600
75,600
100,800
Value vested
during the year
$
28,997
14,499
9,666
11,392
21,748
10,874
7,249
8,285
75,600
75,600
75,600
100,800
75,600
75,600
75,600
100,800
378,000
378,000
378,000
504,000
3,061,800
21,748
10,874
7,249
8,285
21,748
10,874
7,249
8,285
108,740
54,370
36,247
41,425
449,804
Value Not
Vested
$
71,803
86,301
91,134
127,208
53,852
64,726
68,351
92,515
53,852
64,726
68,351
92,515
53,852
64,726
68,351
92,515
269,260
323,630
341,753
462,575
2,611,996
Balance at the
start of the
period
Granted as
remuneration
Disposed /
Lapsed /
Forfeited
Vested and
Exercised
Balance at the end
of the year
Year ended
31 December 2019
Directors
James Chisholm*
750,000
750,000
-
-
(750,000)
(750,000)
-
-
-
-
*James Chisholm resigned as director on 26 June 2019
13
For personal use only
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
E.
Details of share-based compensation and equity instruments held by key management personnel (Continued)
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:
Ordinary
Shareholding
(Fully and
Partly Paid)
Year ended 31 December 2019
Directors
Charles Blixt
Richard Barker
George Edwards
Charles Fear
Max Wang
Total
Balance at the start of
the year
Additions
Disposals
Balance
at the end of
the year
1,400,000
-
1,299,849
7,060,000
675,236
10,435,085
1,824,000
156,256
1,980,256
-
-
-
(205,000)
-
(205,000)
1,400,000
1,824,000
1,299,849
7,011,256
675,236
12,210,341
The shareholdings presented in the table above comprise all ordinary shares.
No options were granted to key management personnel as part of remuneration during the year.
F.
Voting and comments made at the Company’s 2019 Annual General Meeting
The Company received 0.31% of votes “against” the adoption of the remuneration report for the 2018 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 a former director in the amount of $2,394 (2008:
$59,363). At 31 December 2019, loan due to companies related to the former director amounted to $Nil (2018: $141,371) (See
note 12).
During the year ended December 31, 2019 the Company paid capital raising cost of $501,229 in cash to Argonaut Capital Ltd, a
company related to Mr. Fear. The Board considers that these costs are arms-length.
*** This is the end of the Audited Remuneration Report. ***
14
For personal use only
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 financial year ended 31 December 2019, the following options were granted to employees of the Company:
(i) 100,000 options exercisable at a price of $0.10, expiring on 20 February 2022
(ii) 100,000 options exercisable at a price of $0.22, expiring on 23 April 2022
(iii) 3,550,000 options, which vested immediately, exercisable at a price of $0.35, expiring on 30 June 2020
(iv) 3,550,000 options, which vest on 1 June 2020, exercisable at a price of $0.40, expiring on 30 June 2021
(v) 4,400,000 options which vest on 1 June 2021, exercisable at a price of $0.45, expiring on 30 June 2022
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.
15
For personal use only
DIRECTORS’ REPORT 16 Consolidated 2019 2018 Auditor’s Remuneration (a) Non-Audit Services Amounts received by, related practices of BDO Audit (WA) Pty Ltd for non-audit services 14,850 18,420 14,850 18,420 AUDITOR’S DECLARATION OF INDEPENDENCE The auditor’s independence declaration for the period ended 31 December 2019, 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, 31 March 2020 For personal use only 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 20 March 2020 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 six directors, five 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 or 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.
17
For personal use only
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
6
1
9
Women
-
-
2
1.6
A listed entity should:
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.
Company
response
The Company undertakes review of its board at least every two years, 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 formal review was not completed during the period. The next review is anticipated to be conducted during 2020.
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
18
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.
2.
has at least three members, a majority of whom are independent directors; and
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 not 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
The Company is not 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 not been formed. The Board will consider
establishing a nomination committee in the future.
2.2
Company
response
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 current Board which collectively
has the expertise to guide the company’s directions and operations, the Board will consider developing a Board skills
matrix during 2020.
2.3
A listed entity should disclose:
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 not 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.
Company
response
The Board considers three of its directors, namely Mr Charles Blixt, Mr Richard Barker and Mr George Edwards, to be
independent. Bill Fleming who was appointed as a director of the Company following the end of the period is also
considered to be independent.
2.4
Company
response
2.5
Company
response
2.6
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 six current directors were deemed independent. Four of the six current directors are considered
independent. The Board considers that there is sufficient independent presence on the Board.
The chair of the board of a listed entity should be an independent director and, in particular, should not 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.
19
For personal use only CORPORATE GOVERNANCE STATEMENT
Principle #
/ Company
Response
Company
response
ASX Corporate Governance Council Recommendations
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.
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
Company
response
4.3
Company
response
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.
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.
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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.
Further details of the risk management processes employed by the Company are detailed in pages 48-52 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.
The risk assessment and management framework were reviewed during the period.
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.
Company
response
7.2
Company
response
7.3
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CORPORATE GOVERNANCE STATEMENT
Company
response
The Company does not have an internal audit function. Internal control measures currently adopted by the Board
include:
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
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 a hard-coking coal and 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 advises its shareholders and
investors on the fact that its ability to obtain the necessary environmental regulatory approvals or permits, including
open cut mining and water use approvals for Elan Coal, is a key risk to its project development, and follow the industry
best practices to evaluate and mitigate the impacts and prepare the applications in order to reduce such risk.
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.
Principle 8
8.1
Remunerate fairly and responsibly
The board of a listed entity should:
(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 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.
22
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated
Note
2019
$
2018
$
Revenue from continuing operations
Interest income
49,256
4,710
Expenses
Administration
Compliance & regulatory
Consultancy
Directors’ fees (Non-executive)
Staffing costs
Exploration expenditure
Finance costs
Foreign exchange loss
Impairment of non-current assets
Debt Settlement
Fair value loss on financial asset at fair value through profit or loss
Occupancy
Public relations and marketing
Share based payments
Travel
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income/(loss)
(96,498)
(414,904)
-
(227,226)
(306,795)
(13,939,827)
(2,394)
(2,349)
(4,150,462)
-
(46,033)
(8,370)
(82,226)
(3,543,539)
(238,277)
(23,009,644)
(92,606)
(331,167)
(1,050)
(160,018)
(247,130)
(3,567,151)
(59,362)
(366)
(73,623)
332,734
(33,120)
(93,724)
(67,294)
(119,437)
(154,709)
(4,663,313)
-
-
(23,009,644)
(4,663,313)
9
21
2
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 year, net of tax
583,964
583,964
265,300
265,300
Total comprehensive loss for the period attributable to members
(22,425,680)
(4,398,013)
Loss per share attributable to members of Atrum Coal Ltd.
Basic (loss) per share – dollars per share
Diluted (loss) per share – dollars per share
4
(0.05)
(0.05)
(0.01)
(0.01)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
23
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial asset at amortised cost
Total Current Assets
Non-Current Assets
Reclamation deposits
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other financial liabilities
Borrowings
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Note
2019
$
2018
$
5
6
7
9
10
11
12
10,122,166
3,101,677
715,748
-
285,061
599,122
10,837,914
3,985,860
170,628
9,146,410
9,317,038
161,721
12,622,419
12,784,140
20,154,952
16,770,000
3,077,884
-
-
3,077,884
553,611
25,000
141,371
719,982
3,077,884
719,982
17,077,068
16,050,018
13
22
103,906,611
83,997,420
9,239,853
5,112,350
(96,069,396)
(73,059,752)
17,077,068
16,050,018
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
24
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
December 31 2019
Consolidated
Issued
Capital
$
Share-Based
Payment
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
Balance as at 31 December 2018
83,997,420
4,774,799
337,551
(73,059,752)
16,050,018
Other Comprehensive Income
Movement in reserve
Loss for the year
Total comprehensive income/(loss)
for the year
Transactions with equity holders:
Share-based payments/Options
-
-
-
-
Securities issued for the period
Capital transaction costs
20,425,400
(516,209)
Total contribution by equity holders
19,909,192
3,543,539
-
-
-
583,964
583,964
-
(23,009,644)
(23,009,644)
583,964
(23,009,644)
(22,425,680)
3,543,539
-
-
-
-
-
-
-
-
-
-
3,543,539
20,425,400
(516,209)
23,452,731
Balance as at 31 December 2019
103,906,611
8,318,338
921,515
(96,069,396)
17,077,068
Issued
Capital
$
Share-Based
Payment
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
71,226,236
4,655,362
72,251
(68,396,439)
7,557,410
-
-
-
265,300
265,300
-
(4,663,313)
(4,663,313)
265,300
(4,663,313)
(4,398,013)
December 31 2018
Consolidated
Balance as at 1 January 2018
Other Comprehensive Income
Movement in reserve
Loss for the year
Total comprehensive income/(loss)
for the year
Transactions with equity holders:
Share-based payments/Options
-
-
-
-
Securities issued for the period
Capital transaction costs
13,414,624
(643,440)
Total contribution by equity holders
12,771,184
119,437
119,437
-
-
-
-
-
-
-
-
-
-
119,437
13,414,624
(643,440)
12,890,621
Balance as at 31 December 2018
83,997,420
4,774,799
337,551
(73,059,752)
16,050,018
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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CONSOLIDATED STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 31 DECEMBER 2019
Cash flows from operating activities
Receipts from ACG
Receipts from authorities (GST refunds)
Payments to suppliers and employees
Interest received
Exploration expenditure (net amount)
Net cash used in operating activities
Cash flows from investing activities
Refund of reclamation bond
Addition to mining interests
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of shares and options
Payment of capital raising costs
Repayment of Kuro Convertible Notes
Repayment of Lenark Loan
Interest paid
Net cash provided by/(used in) financing activities
Consolidated
Note
2019
$
2018
$
557,242
415,466
1,028,897
76,674
(1,311,971)
(1,178,724)
49,256
4,710
(12,390,475)
(3,433,347)
5(a)
(12,680,482)
(3,501,790)
-
17,136
(109,749)
(3,133,047)
(109,749)
(3,115,911)
20,400,400
9,598,828
(516,209)
(643,440)
-
(10,000)
(141,371)
(1,179,236)
-
(59,363)
19,742,820
7,706,789
Net increase/(decrease) in cash and cash equivalents
6,952,589
1,089,088
Cash and cash equivalents at the beginning of the year
Effect of foreign currency translation
3,101,677
2,019,636
67,900
(7,047)
Cash and cash equivalents at the end of the year
5
10,122,166
3,101,677
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
26
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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:
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.
(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.
(c)
Statement of compliance
The financial report was authorised for issue by the Directors on 31 March 2020.
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).
(d)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Atrum Coal Ltd. and its subsidiaries as at 31
December 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 or 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.
27
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (continued)
(d)
Basis of consolidation (continued)
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.
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.
(e)
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.
(f)
Revenue recognition
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on
behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(g)
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.
28
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (continued)
(h)
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:
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
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:
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
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.
29
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(i)
Summary of significant accounting policies (continued)
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.
(j)
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.
(k)
Financial assets
Classification
The Group classifies its financial assets in the following measurement categories:
• those measured subsequently at fair value (either through OCI, or through profit or loss), and
• those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments
in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election
at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Debt instruments: Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and the cash flow characteristics of the asset. There are two measurement categories into which the Group classifies
its debt instruments:
These include trade and other receivables and financial assets at amortised cost
30
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1.
Summary of significant accounting policies (continued)
(k)
Financial assets (continued)
• Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit
or loss and presented in other gains/(losses), together with foreign exchange gains or losses. Impairment losses are
presented as separate line items in the statement of profit or loss.
• FVPL:
Assets that do not meet the criteria for amortised cost are measured at FVPL. A gain or loss on a debt investment that
is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the
period in which it arises.
Equity instruments: The Group subsequently measures all equity investments at fair value. Where the Group’s management
has elected to present fair value gains and losses on equity investments in other comprehensive income (OCI), there is no
subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to
receive payments is established. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses)
in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments
measured at fair value through other comprehensive income (FVOCI) are not reported separately from other changes in fair
value
Impairment
The Group assesses on a forward-looking basis, the expected credit losses associated with its financial assets carried at
amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
(l)
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 is 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.
31
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (continued)
(m)
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.
(n)
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.
(o)
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.
(p)
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.
(q)
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.
32
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1.
(r)
Summary of significant accounting policies (continued)
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.
(s)
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.
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.
33
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(t)
Summary of significant accounting policies (continued)
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.
(u)
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(l). 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.
(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.
(vi) Asset Acquisition
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying
amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise in relation
to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 12
applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be include in the
capitalised cost of the asset.
34
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (continued)
(v)
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 recognised 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 capitalised cost is reduced to nil and the remaining adjustment is
recognised 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.
(w)
Changes in Accounting Policies and Accounting Standards
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1 January 2019. The standard replaces AASB 117 'Leases' and for
lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases
of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial
position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use
assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are
subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on
an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable
lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
35
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of significant accounting policies (continued)
(w)
Changes in Accounting Policies and Accounting Standards (continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully written down.
Impact of Adoption of AASB 16 - Leases
The consolidated entity has adopted AASB 16 from 1 January 2019 using the retrospective modified approach and as
such the comparatives have not been restated. The impact of adoption is not material to the financial statements.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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 30% (2018: 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
2019
$
2018
$
-
-
-
-
-
-
(23,009,644)
(4,663,313)
(6,902,893)
2,319,807
559,160
4,023,926
-
(1,282,411)
165,769
58,474
1,058,168
-
(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 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:
1,467,027
13,074,287
5,081,191
19,622,505
1,211,403
6,106,687
5,040,535
12,358,625
(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
Australia
4.
Earnings per share (EPS)
Basic loss per share – dollars
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
2019
$
2018
$
59,926
59,926
60,643
60,643
14,850
14,850
18,420
18,420
(0.05)
(23,009,644)
(0.01)
(4,663,313)
447,184,460
317,691,531
775,322
9,346,843
10,122,166
817,853
2,283,824
3,101,677
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
Fair value loss on financial asset
Impairment
Interest accrued
Non-cash settlements
Changes in assets and liabilities:
Movements in trade and other receivables
Movement in trade and other payables
Cash recovered from financial asset (Note 7)
Net cash flows from operating activities
(23,009,644)
(4,663,313)
-
3,543,539
-
4,196,495
-
-
133,804
119,437
33,120
73,623
59,363
(332,734)
(430,687)
2,462,573
557,242
(12,680,482)
(25,223)
71,233
1,028,897
(3,501,790)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Trade & other receivables
Current
GST receivables & deposits
Other Prepayments
Consolidated
2019
$
2018
$
622,468
93,280
715,748
230,784
54,277
285,061
Terms and conditions relating to the above financial instruments:
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.
Information about the Group’s exposure to credit risk is disclosed in Note 19: Financial instruments.
7. Financial asset at amortised cost
Inventory at start of period
Sale of inventory
Transferred to financial asset at amortised cost(2)
Financial asset at amortised cost
Balance at start
Transferred
Recovered
Expected credit loss provision(1)
Exchange difference
Balance at end
Consolidated
2019
$
2018
$
-
-
-
-
1,691,295
(653,711)
(1,037,584)
-
599,122
-
(557,242)
(46,033)
4,153
-
-
1,037,584
(375,186)
(33,120)
(30,156)
599,122
(1)During the year ended 31 December 2019, the Company received a total of $557,242 as full and final settlement of the
receivable from ACG. Consequently, the balance remaining after the payment of $46,033 was impaired.
39
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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
Furniture & Fixtures – at cost
Less: Accumulated depreciation
Closing balance
9.
Non-current assets – exploration and evaluation expenditure
Naskeena Project
Groundhog Coal Project
Panorama Project
Elan Project
Opening balance
Advanced royalty payment (ii)
Impairment (iii)
Elan project (i)
Foreign exchange translation differences
Closing Balance
Consolidated
2019
$
2018
$
89,905
(89,905)
-
73,886
(73,886)
-
13,919
(13,919)
-
89,905
(89,905)
-
73,886
(73,886)
-
13,919
(13,919)
-
-
-
Consolidated
2019
$
2018
$
-
860,734
2,359,362
5,926,314
9,146,410
12,622,419
109,749
(4,150,462)
-
564,704
9,146,410
37,289
2,046,108
4,888,524
5,650,498
12,622,419
6,831,706
101,066
-
5,394,840
294,807
12,622,419
(i) On March 29, 2018, the Company acquired the Elan project through the acquisition of the shares of Elan Coal Ltd., a company
incorporated in the province of Alberta, Canada. The total consideration for the acquisition amounted to C$3,000,000 in cash
($3,031,981) and 19,690,490 shares at a market value of $2,362,858. The fair value of the Elan project at the date of
acquisition was C$5,332,124 (A$ 5,388,967) and was determined by the market value of the consideration exchanged. During
the period ended 31 December 2017, the Company paid a deposit of $101,783 towards the acquisition of the project.
(ii)
These amounts represent advanced annual 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.
(iii) During the year ended 31 December 2019, the Company relinquished several non-core tenements in the Groundhog and
Panorama projects. The carrying values of the properties represent the acquisition costs of these tenements and as a result,
the impairment has been calculated on the basis of land area relinquished.
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. The recoupment of costs carried forward in relation to areas of
interest in the exploration and evaluation phases are dependent on the successful development and commercial exploitation or
sale of the respective areas.
During the year ended 31 December 2019, the Group incurred total exploration costs of $13,939,827 (2018: $3,567,151) of which
an amount of $13,617,846 (2018: $706,237) was incurred on its flagship Elan project, bringing the cumulative amount spent on the
project at 31 December 2019 to $17,134,303 (31 December 2018: $3,194,476).
40
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Current liabilities - trade and other payables
Trade payables
Other payables
Consolidated
2019
$
2018
$
2,985,883
92,001
3,077,884
491,464
62,147
553,611
Terms and conditions relating to the above financial instruments:
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 and other payables their carrying value is assumed to approximate their fair value.
Information about the Group’s exposure to credit risk is disclosed in Note 19.
11. Other financial Liabilities
Other financial liabilities comprise:
Kuro Coal Limited - Convertible Notes(a)
Consolidated
2019
$
2018
$
-
-
25,000
25,000
During the year ended 31 December 2019, the remaining Convertible Notes holders, converted their notes into 250,000
shares of the Company.
12. Borrowings
Offset loan agreement (see also Note 17)
Due within 12 months
Consolidated
2019
$
2019
$
-
-
141,371
141,371
During year ended 31 December 2019, the Company retired the outstanding loan to Lenark Pty Ltd., by making cash payments
totaling $141,371 and interest payments of $2,394.
Lenark Pty Ltd is an entity associated with Mr. James Chisholm, former director of the Company.
The Board considers that the terms of the Loan Agreement are arms-length.
13.
Issued Share Capital
(a)
Issued and paid up capital
Ordinary shares – fully paid
(b) Movements in share capital:
Ordinary shares – fully paid
Balance at 1 January 2019
Private placement1
Exercise of listed options 2
Redemption of Kuro Notes3
Capital raising costs
Balance at 31 December 2019
2019
2018
Number
$
Number
$
477,368,492 103,906,611
103,906,611
360,830,778
83,997,420
83,997,420
Number
$
360,830,778
114,285,714
2,002,000
250,000
-
477,368,492
83,997,420
20,000,000
400,400
25,000
(516,209)
103,906,611
41
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
Issued Share Capital (continued)
(b) Movements in share capital: (continued)
During the year ended 31 December 2019, the Company
1. closed a placement of in two tranches, of a total of 114,285,714 shares at a price of $0.175 each;
2. received proceeds of $400,400 pursuant to the exercise of 2,002,000 listed options at a price of $0.20 each;
3. issued 250,000 shares with respect to the conversion of the outstanding $25,000 convertible Kuro notes.
Capital raising costs of $516,209 in total were incurred with respect to the placement, of which $501,229 was paid to Argonaut
Capital Ltd., a company related to Mr. Fear.
Ordinary shares – fully paid
Balance at 1 January 2018
Private placement and Entitlement issue
Acquisition of Elan Project
Redemption of Kuro Notes
Settlement of debt
Capital raising costs
Balance at 31 December 2018
(c)
Movements in unlisted performance rights:
Balance at the start of year
Granted
Expired
Balance at close of year
Number
$
232,112,649
99,937,639
19,690,490
7,650,000
1,440,000
-
360,830,778
71,226,236
9,993,764
2,362,858
914,000
144,000
(643,438)
83,997,420
2019
Number
750,000
12,150,000
(750,000)
12,150,000
2018
Number
750,000
-
-
750,000
During the year ended 31 December 2019, the Company issued 12,150,000 Performance Rights to the directors. Each
Performance Right is a right to be issued with a single Share upon vesting of the Performance Right, free of encumbrances. No
consideration will be payable upon the vesting or conversion of the Performance Rights.
The vesting conditions are as follows:
Class 34:
Performance Rights will vest and become convertible into Shares upon achievement of a 200mt JORC Measured and Indicated at
an Elan project or projects i.e. this could be 200mt Measured and Indicated across one project (e.g. Elan South) or across multiple
projects (e.g. Elan South plus Isolation South plus Wildcat). Needs to be verified by the Company’s independent geologist and
performance rights only vest once the independent JORC report is submitted and signed off by the Company’s independent
geologist.
Class 35:
Performance Rights will vest and become convertible into Shares upon achievement of a 100mt JORC Reserve on any Elan project
i.e. this must be 100mt JORC Reserve on a single project. It must be verified by the Company’s independent engineering
consultant
based on a preliminary feasibility study or feasibility study; it must consist of only JORC Measured and Indicated resource on a
single project (e.g. Elan South, or Isolation South etc) and can be a combination of Proven and Probable Reserve under the JORC
code.
Class 36:
Performance Rights will vest and become convertible into Shares upon the Company obtaining Alberta Government approval to
allow Atrum to proceed with permitting an open cut mine at Elan – this can only be granted once a full Environmental Impact
Study or Assessment is undertaken and submitted to the Alberta Government in preparation for a mining license. It will require at
least two years of environmental monitoring of the site. It is granted by the relevant government authority.
42
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Issued Share Capital (continued)
13.
(c) Movements in unlisted performance rights: (continued)
Class 37:
Performance Rights will vest and become convertible into Shares upon the Company being granted a Mining Permit on any
project at Elan – again, this can only be granted once a mining lease application has been submitted to the relevant government
authority. The
submission must include detailed mine plans, water management plans, environmental management plans, infrastructure plans,
economic impact assessment etc. It is granted by the relevant government authority. Once granted, the Company may begin
construction of a mine.
Year ended 31 December 2019
Class
7
8
34
35
36
37
Balance at start
of year
312,500
437,500
-
-
-
-
750,000
# Granted
during the year
-
-
2,800,000
2,800,000
2,800,000
3,750,000
12,150,000
Year ended 31 December 2018
Vested and
Exercised
Cancelled/
Forfeited
(312,500)
(437,500)
-
-
-
-
(750,000)
Balance at end of
year
-
-
2,800,000
2,800,000
2,800,000
3,750,000
12,150,000
-
-
-
-
-
-
-
Value Vested
during the year
($)
-
-
202,981
101,491
67,660
77,672
449,804
Class
7
8
Balance at start
of year
312,500
437,500
750,000
# Granted
during the year
-
-
-
Vested and
Exercised
-
-
-
Cancelled/
Forfeited
-
-
-
Balance at end of
year
312,500
437,500
750,000
Value Vested
during the year
()
-
-
-
(d) Movements in unlisted options
Balance at the start of year
Granted to directors and employees under ESOP
Cancelled/Expired 1
Balance at close of year
* Weighted average exercise prices
31 December 2019
31 December 2018
Number Price*
Number
Price*
17,730,000
25,100,000
(18,200,000)
$ 0.68
$ 0.40
$ 0.69
28,846,824 $ 0.64
1,030,000 $ 0.10
(12,146,824) $ 0.55
24,630,000
$ 0.39
17,730,000 $ 0.68
1 During the year ended 31 December 2019, 13,700,000 options with an average exercise price of $0.87 were cancelled,
3,000,000 options with an average exercise price of $3.97 expired unexercised and 1,500,000 options with an average
exercise price of $0.40 expired on resignation of a director.
During the year ended 31 December 2019, the Company granted
(i)
100,000 stock options with a fair value of $15,957 for the purchase of 100,000 shares at a price of $0.10 per share for a
period of three years from the date of grant. The stock options vested immediately the grant date. The share price at
the date of grant was $0.22;
(ii) 100,000 stock options with a fair value of $21,632 for the purchase of 100,000 shares at a price of $0.22 per share for a
period of three years from the date of grant. The stock options vested immediately the grant date. The share price at
the date of grant was $0.33;
(iii) 7,850,000 stock options with a fair value of $1,047,599 for the purchase of 7,850,000 shares at a price of $0.35 per
share for a period of one year from the date of grant. The stock options vested immediately the grant date. The share
price at the date of grant was $0.36;
43
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
(d)
Issued Share Capital (continued)
Movements in unlisted options (continued)
(iv) 7,850,000 stock options with a fair value of $1,298,659 for the purchase of 7,850,000 shares at a price of $0.40 per
(v)
share for a period of two years from the date of grant. The stock options will vest 12 months from the grant date. The
share price at the date of grant was $0.36;
9,200,000 stock options with a fair value of $1,742,300 for the purchase of 9,200,000 shares at a price of $0.45 per
share for a period of three years from the date of grant. The stock options will vest 24 months from the grant date. The
share price at the date of grant was $0.36
Outstanding unlisted options at 30 June 2019 are as follows:
Expiry Date
June 30, 2020
June 30, 2021
August 5, 2021
February 20, 2022
April 23, 2022
June 30, 2022
Exercise Price*
$ 0.35
$ 0.40
$ 0.10
$ 0.10
$ 0.22
$ 0.45
Number of Options
Outstanding
7,350,000
7,350,000
1,030,000
100,000
100,000
8,700,000
Number of
Exercisable
Options
7,350,000
-
1,030,000
100,000
100,000
-
Average
Remaining Life
(Years)
0.5
1.5
1.6
2.15
2.32
2.5
$0.39
24,630,000
8,580,000
1.56
The fair values of options granted during the year and period ended December 31, 2019 and 2018 were estimated at the grant
date using the Black-Scholes option pricing model with
(i) the following weighted average assumptions:
Expected annual volatility*
Risk-free interest rate
Expected life
Stock Price at grant date
Expected dividend yield
Estimated forfeitures
2019
89%
1.44%
1.08 – 3.08 years
$0.1-$0.45
0%
0%
2018
89%
1.95%
3 years
$0.07
0%
0%
* The expected stock price volatility was estimated by reference to historical volatility of the Company with a comparable period in their lives.
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
2019
$
2018
$
251,909
-
-
251,909
530,278
-
-
530,278
44
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Asset Acquisition
On 29 March 2018, the Group acquired a 100% interest in Elan Coal Ltd, a company incorporated in Alberta, Canada. Elan Coal
owns 100% interest in the Elan Coking Coal project. The consideration for the acquisition is as follows:
Cash
19,690,490 Shares issued
(see note 13(b))
Total consideration
$ 3,031,982
2,362,858
$ 5,394,840
Fair value of identifiable assets acquired and liabilities assumed at the date of acquisition
Cash and cash equivalents
Accounts receivable
Fair value of exploration and evaluation asset
Total fair value of assets and liabilities
$ 5,714
159
$ 5,388,967
$ 5,394,840
Management determined that the acquisition represented an acquisition of assets rather than a business combination because the
mineral property acquired was in the exploration and evaluation stage and had not yet demonstrated technical feasibility, economic
viability or ability to provide economic benefit. Please see note 1(u)(vi).
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
CAD100,000 per annum (until production royalty commences, at which stage it is
offset against future production royalties)
CAD1,000,000 (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)
CAD500,000 (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)
CAD1,000,000 (upon completion of a positive BFS, paid 50% cash and 50% shares at
the election of the Company)
CAD1,000,000 (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
Future Royalty to Anglo Pacific
Groundhog and Panorama Project
Future Royalty to Panstone
Mines and Minerals Inc.
1% gross revenue royalty or a US1/tonne royalty (whichever is the higher) payable on
anthracite produced from the assets acquired from Anglo Pacific only.
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.
C0.80 per tonne of saleable coal based on the tonnes of coal actually produced and sold.
45
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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:
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.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1.
Year ended 31 December 2019
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 profit/(loss)
Year ended 31 December 2018
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 profit/(loss)
Exploration
$
All Other
Segments
$
Consolidated
$
(18,638,674)
(4,370,970)
(23,009,644)
11,277,463
(2,919,891)
8,877,489
(157,993)
20,154,952
(3,077,884)
-
-
-
(4,150,462)
49,256
(2,394)
-
-
49,256
(2,394)
-
(4,150,462)
(18,638,674)
(4,370,970)
(23,009,644)
Exploration
$
All Other
Segments
$
Consolidated
$
(3,903,265)
(760,048)
(4,663,313)
13,766,642
(428,934)
3,003,358
(291,048)
16,770,000
(719,982)
-
-
-
(73,623)
4,710
(59,362)
-
-
4,710
(59,362)
-
(73,623)
(3,903,265)
(760,048)
(4,663,313)
46
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. Related party transactions
(a) Key management personnel
Short-term benefits
Post-employment benefits
Share-Based Payments
Consolidated
2019
$
767,909
-
1,696,568
2,464,477
2018
$
549,338
-
78,698
628,036
Detailed remuneration disclosures are provided in the audited Remuneration Report in the Directors’ Report.
(b) Other transactions with Key Management Personnel
(i) Offset Loan Agreement with former Non-Executive Director
During the year ended 31 December 2019, the Company repaid an amount of $143,765, including interest of $2,394, with respect
to the retirement of the loan outstanding to Lenark Pty Ltd. The Board considers that the terms of the facility with Lenark Pty Ltd
are arms-length.
(ii)
Capital raising costs
During the year ended 31 December 2019, the Company paid (i) capital raising fees of $501,229 (exclusive of GST) to Argonaut
Capital Limited, a company of which a director was the Chairman at the time of payment and (ii) a bonus of C$150,000 to the
managing director. The Board considers the terms are arm’s length.
Other than the foregoing, there was no additional related party transaction.
(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
Elan Coal Ltd
Country of
Incorporation
Australia
Australia
% Equity Interest
2018
100
2017
100
Canada
Canada
Canada
USA
Australia
Canada
Canada
100
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
Dormant
Dormant
Holding Company – Dormant
Development of Panorama Anthracite Project
Development of Elan 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.
47
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
Total Liabilities
Equity
Issued capital
Accumulated losses
Share Based Payment Reserve
Total Equity
Financial Performance
Loss for the period
Other comprehensive loss
Total comprehensive loss
(b) Guarantees
Parent Entity
2019
$
2018
$
8,877,489
12,802,833
21,680,322
3,003,358
12,802,833
15,806,191
71,323
71,323
291,047
291,047
103,906,611
(90,677,537)
8,923,255
21,522,329
83,997,420
(73,231,992)
4,749,716
15,515,144
(17,389,710)
-
(17,389,710)
(4,392,785)
-
(4,392,785)
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 15
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.
48
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
2019
$
2018
$
2019
$
2018
$
8,867,215
1,596,379
374,320
10,837,914
2,396,987
804,634
784,239
3,985,860
(162,645)
(2,915,239)
-
(3,077,884)
(320,699)
(707,939)
-
(1,028,638)
The group had net foreign currency liabilities of $944,540 as at 31 December 2019 (2018: $880,934). 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
2019
$
2018
$
2019
$
2018
$
Increase/
(decrease)
Increase/
(decrease)
Increase/
(decrease)
Increase/
(decrease)
Strengthening of AUD by 10%
Weakening of AUD by 10%
94,454
(94,540)
146,850
(146,850)
94,454
(94,454)
146,850
(146,850)
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.
49
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
2019
$
2018
$
9,346,843
9,346,843
2,341,386
2,341,386
During the year ended 31 December 2019, the Company earned interest on its financial assets.
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%
Weighted
Average
Effective
Interest
Rate
%
0%
1.05%
8%
31 December 2019
Financial Assets
Non-interest bearing
Variable interest rate
instruments
Variable interest rate
instruments
Financial Liabilities
Non-interest bearing
Interest bearing – fixed rate
Net Financial Assets
31 December 2018
Financial Assets
Non-interest bearing
Variable interest rate
instruments
Variable interest rate
instruments
Financial Liabilities
Non-interest bearing
Interest bearing – fixed rate
Fixed interest rate
instruments
Net Financial Assets
Less than 1
month
1 to 3
months
3 months to 1
year
1 to 5 years
Total
715,748
775,323
9,346,843
10,837,914
(3,077,884)
(3,077,884)
7,760,030
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
715,748
775,323
9,346,843
10,837,914
(3,077,884)
(3,077,884)
7,760.030
Less than 1
month
1 to 3
months
3 months to 1
year
1 to 5 years
Total
285,061
760,291
2,341,386
3,386,738
(578,611)
-
(578,611)
2,808,127
-
-
-
-
-
-
-
-
599,122
-
-
599,122
-
(141,371)
(141,371)
457,751
-
-
-
-
-
-
-
-
884,183
760,291
2,341,386
3,985,860
(578,611)
(141,371)
(719,982)
3,265,878
50
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 2019, 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
2019
$
101,222
(101,222)
2019
$
101,222
(101,222)
2018
$
29,603
(29,603)
2018
$
29,603
(29,603)
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
%
Less than 1
month
$
1 – 3
Months
$
3 months – 1
year
$
1 – 5 years
$
Remaining
contractual
maturities
$
Consolidated
31 December 2019
Non-derivatives
Non-interest bearing
Trade and other payables
-
3,077,884
Total non-derivatives
3,077,884
Derivatives
Total derivatives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
W.Av
Interest
Rate
%
-
-
8%
Less than 1
month
$
1 – 3
Months
$
3 months – 1
year
$
1 – 5 years
$
Remaining
contractual
maturities
$
553,611
-
-
553,611
-
-
-
-
-
-
-
-
-
141,371
141,371
-
-
-
-
-
-
-
-
-
25,000
-
25,000
-
-
Consolidated
31 December 2018
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
Credit risk
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, otherwise, there
are no significant concentrations of credit risk within the Group. The Company also holds bank accounts with TD Canada Trust.
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.
52
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 year ended 31 December 2019:
Share based payment expense for the year ended 31 December 2019
Share based payment expense for the year ended 31 December 2018
$
3,543,539
119,437
The following outlines the fair value calculations for share based payments issued during the period.
Performance rights (i)
Acceleration of cancelled options (ii)
Unlisted options to Directors
Unlisted options to Staff
Listed options to Consultants (iii)
(i)
Performance Rights
2019
$
449,804
68,691
1,178,073
1,096,971
750,000
3,543,539
2018
$
-
-
119,437
-
-
119,437
During the financial year the movements in performance rights issued by the Company was as follows:
Class
Year of
Grant
Non Market
Based
Probability
of vesting
Total Value at
grant date
34
35
36
37
34
35
36
37
34
35
36
37
34
35
36
37
34
35
36
37
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
400,000
400,000
400,000
550,000
300,000
300,000
300,000
400,000
300,000
300,000
300,000
400,000
300,000
300,000
300,000
400,000
1,500,000
1,500,000
1,500,000
2,000,000
12,150,000
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
100,800
100,800
100,800
138,600
75,600
75,600
75,600
100,800
75,600
75,600
75,600
100,800
75,600
75,600
75,600
100,800
378,000
378,000
378,000
504,000
3,061,800
Value vested
during the year
$
28,997
14,499
9,666
11,392
21,748
10,874
7,249
8,285
21,748
10,874
7,249
8,285
21,748
10,874
7,249
8,285
108,740
54,370
36,247
41,425
449,804
Value Not
Vested
$
71,803
86,301
91,134
127,208
53,852
64,726
68,351
92,515
53,852
64,726
68,351
92,515
53,852
64,726
68,351
92,515
269,260
323,630
341,753
462,575
2,611,996
Details of other performance rights movements and balances are set out in Note 13(c).
53
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ii)
Options
(a) Cancelled options
During the year the Company cancelled 13,700,000 options granted to Key Management Personnel. The unvested
amount relative to these cancelled options, $68,691 was charged to the income statement.
(b) Options granted during the year
During the year ended 31 December 2019, 25,100,000 (2018:1,030,000) unlisted options were issued as remuneration to
the Directors and employees. Vesting for the current year resulted in share-based expenses of $2,275,045 (2018:
$119,437).
(iii)
Options to Consultants
During the year ended 31 December 2019, the Company issued 5,000,000 listed options, exercisable at $0.20 before
31 March 2021 for a value of $750,000.
22.
Reserves
Balance at start
Share based payment
Foreign currency translation reserve
Balance at end
Nature and purpose of reserves
Consolidated
2019
$
5,112,350
3,543,539
583,964
9,239,853
2018
$
4,727,613
119,437
265,300
5,112,350
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.
23.
Events since the end of the financial year
(i)
(ii)
(iii)
789,667 listed options, at a strike price of $0.20 were exercised for a total amount of 157,933
On 24th February 2020, the board appointed Mr. William (Bill) Fleming as director. Mr. Fleming has extensive
experience in the Canadian coking coal operational and management expertise.
Subsequent to the year end, the COVID-19 pandemic announced by the World Health Organisation is having a
negative impact on world stock markets, currencies and general business activity. The Company has developed a
policy and is evolving procedures to address the health and wellbeing of employees, consultants and contractors in
relation to COVID-19. The timing and extent of the impact and recovery from COVID-19 is unknown but it may have
an impact on exploration activities, the future assessments of the recoverable values of exploration assets and the
ability of the company to raise funds as and when required.
54
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 55The 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) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (b) give a true and fair view of the Group’s financial position as at 31 December 2019 and of its performance for the year ended on that date. 2. The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards. 3. 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. 4. The Directors have been given the declarations by the chief executive officer and the chief financial officer required by section 295A. This declaration is made in accordance with a resolution of the Directors. Charles Blixt North Carolina, 31 March 2020 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 year ended 31 December 2019, 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, 31 March 2020
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.
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 2019, 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 year 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 2019 and of its
financial performance for the year 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.
Emphasis of matter – Subsequent event
We draw attention to Note 23 of the financial report, which describes the non-adjusting subsequent
event on the impact of the COVID-19 outbreak on the entity. Our opinion is not modified with respect
to this matter.
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.
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.
For personal use only
Accounting for share-based payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31 December 2019, the
Our procedures included, but were not limited to:
Group issued equity instruments to employees and key
management personnel, which have been accounted
for as share-based payments, as disclosed in Note 21 of
the Financial Report.
Refer to Note 1(s) of the Financial Report for a
description of the accounting policy and significant
judgements applied to these arrangements.
•
Reviewing the relevant agreements to obtain
an understanding of the contractual nature
and terms and conditions of the share-based
payment arrangements;
•
Holding discussions with management to
understand the share-based payment
transactions in place;
Share-based payments are a complex accounting area
•
Reviewing management’s determination of
and due to the complex and judgemental estimates
the fair value of the share-based payments
used in determining the fair value of share-based
granted, considering the appropriateness of
payments, this is considered a key audit matter.
the valuation models used and assessing the
valuation inputs;
•
Involving our valuation specialists to assess
the reasonableness of management’s
volatility inputs;
•
Assessing the allocation of the share-based
payment expense over the relevant vesting
period; and
•
Assess the adequacy of related disclosures in
Notes 1(s) and 21 of the Financial Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2019, but does not include
the financial report and the auditor’s report thereon.
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
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.
If, based on the work we have performed, 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.
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.
For personal use only
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 14 of the directors’ report for the
year ended 31 December 2019.
In our opinion, the Remuneration Report of Atrum Coal Limited, for the year ended 31 December 2019,
complies with section 300A of the Corporations Act 2001.
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, 31 March 2020
For personal use only
SECURITIES EXCHANGE INFORMATION
Shareholders’ information set out below was applicable as at 20 March 2020
Unlisted Options and Performance Rights
The Company has the following unlisted securities on issue:
1,030,000 Options exercisable at $0.10 each expiring 5/08/2021 held by 6 option holders;
100,000 Options exercisable at $0.10 each expiring 20/02/2022 held by 1 option holder;
100,000 Options exercisable at $0.22 each expiring 23/04/2022 held by 1 option holder;
7,350,000 Options exercisable at $0.35 each expiring 30/06/2020 held by 12 option holders;
7,350,000 Options exercisable at $0.40 each expiring 30/06/2021 held by 12 option holders;
8,700,000 Options exercisable at $0.45 each expiring 30/06/2022 held by 12 option holders;
12,150,000 Performance Rights held by 5 holders.
All unlisted Securities have been issued under employee/director incentive scheme
Distribution
The number of ordinary 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
Holders
189
260
198
655
360
1,662
63
The number of shareholdings held in less than marketable parcels is 369 with a total of 449,851 Shares.
The number of listed option holders, 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
38
53
25
115
111
342
12
The Company has been notified of the following substantial shareholdings:
Regal Funds Management Pty Ltd
Number
70,067,147
Percentage
14.65%
60
For personal use only
SECURITIES EXCHANGE INFORMATION
20 LARGEST HOLDERS OF ORDINARY SHARES AS AT 20 MARCH 2020:
Ordinary Shareholder
WARBONT NOMINEES PTY LTD
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