Bowen Coking Coal Ltd
Annual Report 2017

Plain-text annual report

(FORMERLY CABRAL RESOURCES LIMITED) ABN 72 064 874 620 And its Controlled Entities Annual Financial Report 30 June 2017 CONTENTS PAGE Corporate Directory ................................................................................................................ 3 Directors’ Report .................................................................................................................... 4 Auditor’s Independence Declaration ........................................................................................ 13 Statement of Profit or Loss and Other Comprehensive Income .................................................... 14 Statement of Financial Position ............................................................................................... 15 Statement of Changes in Equity ............................................................................................. 16 Statement of Cash Flows ....................................................................................................... 17 Notes to the Financial Statements .......................................................................................... 18 Directors’ Declaration ........................................................................................................... 41 Independent Auditors’ Report ................................................................................................. 42 Corporate Information .......................................................................................................... 45 Page 2 CORPORATE DIRECTORY Directors: Ariel (Eddie) King (Non-Executive Chairman) Gerhard Redelinghuys (Managing Director) Steven Formica (Non-Executive Director) James Agenbag (Non-Executive Director) Company Secretary: Mr Stephen Brockhurst Registered Office and Principal place of Business: Share Register: Auditors: Level 11 216 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9481 0389 Facsimile: +61 8 9463 6103 Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Postal Address Locked Bag A14 Sydney South NSW 1235 Nexia Sydney Partnership Level 16 1 Market Street Sydney NSW 2000 Securities Exchange Listing: Bowen Coking Coal Limited Australian Securities Exchange Limited (Code: “BCB”) Company Numbers: ACN: 064 874 620 ABN: 72 064 874 620 Page 3 DIRECTORS' REPORT Your Directors present their report on the Bowen Coking Coal Group, consisting of Bowen Coking Coal Limited (Formerly Cabral Resources Limited, "the Company") and the entities it controlled at the end of, or during, the year ended 30 June 2017. DIRECTORS The names of the Directors of the Company at any time during or since the end of the year are:      Ariel (Eddie) King Non-Executive Chairman Gerhard Redelinghuys Managing Director (appointed 27 September 2017) James Agenbag Non-Executive Director (appointed 27 September 2017) Gregory D’Arcy Former Non-Executive Director (resigned 27 September 2017) Steven Formica Non-Executive Director PRINCIPAL ACTIVITIES The principal activity of the Company was iron ore mineral exploration in Bahia State, Brazil until 18 October 2016 when the Company signed a binding term sheet for the purchase of 100% of the issued share capital in Tapit Media, a revolutionary location based mobile advertising company. The Company subsequently terminated the Tapit acquisition on 14 March 2017. On 24 April 2017, the Company signed a binding term sheet to acquire Bowen Coking Coal Pty Ltd, which holds interests in and rights to coking coal exploration and development projects in the Bowen Basin in Queensland. RESULTS The loss after tax for the year ended 30 June 2017 was $648,291 (30 June 2016: $49,525). REVIEW OF OPERATIONS Iron Ore - Brazil During the first half of the financial year, the Company conducted, in accordance with the Company’s business plan, due diligence on the interests of Cabral Metais Ltda in the Brazilian mining tenements. In the course of its due diligence investigations the Company received confirmation from Brazilian counsel that the Preliminary Assignment Agreements were now unenforceable and as such, Cabral Metais Ltda does not hold any rights to tenure over the exploration assets. Tapit Media On 18 October 2016, the Company signed a binding term sheet for the purchase of 100% of the issued share capital in Tapit Media, a revolutionary location based mobile advertising company. AirmarketTM gives advertisers access to a global network of beacons to deliver personalised, targeted advertising to consumers based on their physical location in real time. Page 4 On 14 March 2017, the Company announced termination of the proposed agreement with Tapit Media. Under the terms of the Agreement, the proposed acquisition was subject to a number of conditions precedent including completion of due diligence, completion of a successful capital raising and the Company’s re-compliance with Chapters 1 and 2 of the Listing Rules. Despite the best endeavours of all parties associated with the transaction, the Board considered it is unlikely these conditions precedent would be satisfied in a reasonable time frame and as such, that it was in the best interests of the Company to terminate the proposed acquisition. Bowen Coking Coal Pty Ltd The Company announced on 24 April 2017 that it had signed a binding terms sheet (Terms Sheet) with Cape Coal Pty Ltd (Cape Coal) for the acquisition of 100% of the issued capital of Bowen Coking Coal Pty Ltd (ACN 615 317 907) (BCC) (the Transaction). BCC currently is a joint venture participant in, or has the right to acquire, interests in 5 coal exploration projects, made up of 5 Exploration Permits for Coal (EPCs), 1 Mining Development Licence (MDL) and 1 Mining Licence Application (MLA). Subsequent to balance date, the Company advised the acquisition of Coking Coal One Pty Ltd (formerly Bowen Coking Coal Pty Ltd) which holds interests in the Lilyvale, MacKenzie and Comet Ridge Projects was completed. EARNINGS PER SHARE Basic and diluted earnings per share from continuing operations (0.51) Basic and diluted earnings per share (0.51) 2017 (cents) 2016 (cents) (0.12) (0.12) DIVIDENDS The Directors do not recommend the payment of a dividend at this time and no dividend has been paid or declared during the financial year. EVENTS SUBSEQUENT TO BALANCE DATE On 19 September 2017, the Company announced that the minimum subscription had been reached and the offer pursuant to the prospectus dated 3 August 2017 had closed. On 28 September 2017, the Company confirmed the issue of 200,434,782 ordinary fully paid shares at an issue price of 2.3 cents per share, raising $4,610,000 before costs. On 28 September 2017, the Company advised completion of the acquisition of Coking Coal One Pty Ltd (formerly Bowen Coking Coal Pty Ltd), issuing 70,000,000 ordinary fully paid shares, 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares as consideration. The Company appointed Gerhard Redelinghuys as Managing Director and James Agenbag as Non-Executive Director, replacing Greg D’Arcy on 27 September 2017. The Company also completed the acquisition of the Comet Ridge Project, issuing 17,391,304 ordinary fully paid shares and paying $350,000 in cash as consideration. The Company will update the market on the timing of the completion of the acquisition of the Cooroorah and Hillalong Projects and is confident that it has satisfied the applicable requirements of Chapters 1 and 2 of the ASX Listing Rules and will advise the market when the outstanding conditions of the reinstatement to quotation of its securities have been met and a date has been fixed for the resumption of trading. There were no other known significant events from the end of the financial year to the date of this report. Page 5 Particulars of Directors’ interests at the date of this report Ordinary shares Performa nce Shares Options 2,000,000 Nil 15,000,000 DIRECTORS’ INTERESTS Information on Directors Director / experience Eddie King - Non-Executive Chairman BComm, BEng (Mining - Hons) Mr. King is a qualified mining engineer and holds a Bachelor of Commerce and Bachelor of Engineering from The University of Western Australia. Mr. King is currently a representative for CPS Capital. Mr. King’s past experience includes being manager for an investment banking firm, where he specialised in the technical and financial requirements of bulk commodity and other resource projects. Mr. King was born in the Philippines where he has an extensive network. Other current directorships Lindian Resources Limited, European Cobalt Ltd, Drake Resources Limited and Axxis Technology Group Ltd Former directorships in last 3 years None Steve Formica – Non-Executive Director Nil Nil Mr Formica is a successful businessman with over 30 years' experience. He has been involved in multiple business ventures either as a founding shareholder, operational Managing Director or as a Non-Executive Director. Steve is currently a director of both FPG Projects and Viridian Property Group, both successful property developers. Other current directorships Lindian Resources Limited and Quest Minerals Limited Former directorships in last 3 years Enerji Limited Gregory DÁrcy - Former Non-Executive Director (resigned 27 500,000 Nil 3,000,000 September 2017) BComm, GradDipAppGeol From 2008 to July 2016, Mr D’Arcy was the Managing Director of Report Card Pty Ltd which owns and operates the Australian stock market forum known as HotCopper (hotcopper.com.au). Mr D’Arcy was responsible for expanding the business, budgeting, making critical decisions, setting timelines and managing staff. Prior to this role he worked in commercial real estate in both Perth and Melbourne. Other current directorships None Former directorships in last 3 years None Page 6 Director / experience Particulars of Directors’ interests at the date of this report Ordinary shares Performa nce Shares Options Gerhard Redelinghuys – Managing Director (appointed 27 70,000,000* 26,000,000* Nil September 2017) B. Comm. Acc, Hons, B. Compt, GAICD. Mr Redelinghuys is the Managing Director of Cape Coal and has 24 years’ experience in financial and project development within the mining sector. After studying finance at the University of Pretoria in South Africa, Gerhard joined Price Waterhouse Coopers, before commencing his employment with EXXARO Resources Ltd (former ISCOR and KUMBA Resources) in 1995. Since 1995 he has held various senior management positions in both open cut and underground mining operations in South Africa. He has held directorships in Australia, including the position of Managing Director of Exxaro Australia Pty Ltd. In addition to his business analysis experience, Gerhard has extensive experience in mining project acquisitions and deal making on an international level. Gerhard was the owner’s representative on a multi-billion underground coal project in Queensland. In 2013, Gerhard became a graduate member of the Australian Institute of Company Directors. Other current directorships None Former directorships in last 3 years None James Agenbag – Non-Executive Director (appointed 27 70,000,000* 26,000,000* Nil September 2017) B. Eng, Chemical Engineering. Mr Agenbag has 14 years’ experience in the mining industry covering all phases of business and project development, process design, including the commissioning and optimisation of processing facilities across multiple commodities. After completing his Chemical Engineering degree at the University of Stellenbosch in 2003, James workedas a process design engineer at EPCM companies including GRD Minproc Limited and DRA Global. In 2008, James moved to Australia to help build DRA’s Brisbane office. His responsibilities included research and development of new business and client management in Southern Africa, Australia and Indonesia. James also has substantial experience in beneficiation optimisation with emphasis on various technologies including some technologies where he jointly holds patent rights. James has delivered technical papers within his area of expertise within the chemical engineering area. More recently, he has been responsible for the process engineering discipline across Peabody Energy Australia PCI Pty Ltd coal projects. James has been accredited with ECSA as a Professional Engineer. He is a Member of IEAust (Chem), and is an active Member of the South African and Australian Coal Processing Societies. Other current directorships None Former directorships in last 3 years None Page 7 * Gerhard Redelinghuys and James Agenbag have beneficial interests in and are directors of Cape Coal Pty Ltd. Cape Coal Pty Ltd holds 70,000,000 ordinary shares, 13,000,000 Class A performance shares and 13,000,000 Class B performance shares. COMPANY SECRETARY Mr. Brockhurst has fifteen years of experience in the finance and corporate advisory industry and has been responsible for the due diligence process and preparation of prospectuses on a number of initial public offers. His experience includes corporate and capital structuring, corporate advisory, and company secretarial services, capital raising, ASX and ASIC compliance requirements. Mr. Brockhurst has served on various boards and is acting as a company secretary for numerous ASX listed and unlisted companies. Meetings of Directors The number of meetings held during the year and the number of meetings attended by each Director whilst in office are as follows: Directors’ meetings Audit Committee Meetings Remuneration Committee Meetings No. held while in office No. attended No. held while in office No. attended No. held while in office No. attended Eddie King Gregory D’Arcy Steve Formica - - - - - - - - - - - - - - - - - - It is noted that the Directors were able to attend to business of the Company during the year by circulated resolution and telephone meetings as permitted by the Company’s Constitution in place of conducting meetings. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Other than those disclosed in this annual report no significant changes in the state of affairs of the Company occurred during the financial year. REMUNERATION REPORT – AUDITED The Remuneration Report, which has been audited, outlines the key management personnel remuneration arrangements for the Group in accordance with the requirements of the Corporations Act and its Regulations. The remuneration report is set out under the following main headings:       Key management personnel disclosed in this report Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share based compensation Additional disclosures relating to key management personnel Page 8 Key management personnel disclosed in this report Non-executive and executive directors:    Eddie King: Non-Executive Chairman Gregory DÁrcy: Non-Executive Director Steve Formica: Non-Executive Director Principles used to determine the nature and amount of remuneration The Board determines the remuneration of Executive and Non-Executive Directors from time to time. Executive remuneration and other terms of employment are reviewed annually having regard to performance, relevant comparative information and independent expert advice. Remuneration packages are set at levels that are intended to attract and retain Executives capable of managing the Group’s business activities and operations. Currently, no element of any Director’s remuneration is dependent on the satisfaction of a performance condition. Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. Non-Executive Directors’ fees and payments are reviewed annually by the Board. The Board has also drawn on external sources of information to ensure Non-Executive Directors’ fees and payments are appropriate and in-line with the market for comparable companies for time, commitment and responsibilities. Fees for Non-Executive Directors are not linked to the performance of the consolidated entity. Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is currently set by the Constitution of the Company at $400,000. This maximum can be changed by Company shareholders in general meeting. All Directors receive a superannuation guarantee contribution required by the government, which was 9.5% for the year ended 30 June 2017, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation or elect to receive their Directors’ fees by way of consultancy fees for which no superannuation guarantee contribution applies. Remuneration paid to all Directors is valued at the cost to the Company and expensed. The value of any unlisted options granted to Directors is brought to account over the vesting period of the options. Independent advice on the appropriateness of remuneration packages is obtained should the Board of Directors consider it necessary. Remuneration packages are based on fixed remuneration, performance based remuneration and equity based remuneration in the year ended 30 June 2017. In relation to any element of the remuneration of key management personnel or executives which consists of securities, the Board has no policy in relation to those persons limiting their exposure to risk in relation to the securities. No other element of remuneration for key management personnel or executives was dependent on a performance condition as the Board determined that these elements were fair and appropriate remuneration. Details of Remuneration Details of the remuneration of the Directors, other key management personnel of the Group and specified executives of the Group for the years ended 30 June 2017 and 30 June 2016 respectively are set out on the following tables: Page 9 Eddie King Steve Formica Gregory DÁrcy Eddie King Salary, fees & entitle- ments $ 60,000 57,000 24,000 141,000 Salary, fees & entitle- ments $ 47,333 Steve Formica (Appointed 04/08/15) 18,933 Gregory DÁrcy 18,933 Michael Bogue (Resigned 03/08/15) - 85,199 Service Agreements 30 June 2017 Super- annuation and other entitlements $ Entitle- ments $ Termination benefits $ - - - - - - - - - - - - 30 June 2016 Super- annuation and other entitlements $ Entitle- ments $ Termination benefits $ - - - - - - - - - - - - - - - Total $ 60,000 57,000 24,000 141,000 Total $ 47,333 18,933 18,933 - 85,199 There were no service agreements with directors or other key management personnel as at 30 June 2017. Share based compensation No options over ordinary shares in the Company were provided as remuneration to Directors and other key management personnel of the Group and specified executives of the Company and Group in this or the previous reporting period. No ordinary shares in the Company were provided as a result of an exercise of remuneration options to Directors and other key management personnel of the Group in this or the previous reporting period. Additional disclosures relating to key management personnel The movement during the reporting period in the number of ordinary shares of the Company held directly, indirectly or beneficially, by each Director or key management personnel, including their personally-related entities is as follows: Page 10 Shares Director Eddie King Held at 30 June 2016 2,000,000 Steve Formica - Gregory DÁrcy 500,000 * Shares held on a post consolidated basis Received during the year on the exercise of options Other changes Held at Resignation Held at 30 June 2017 - - - - - - - - - 2,000,000 - 500,000 Options Director Held at 30 June 2016 Received on grant of options Other changes Held at Resignation Held at 30 June 2017 Eddie King 15,000,000 Steve Formica - Gregory DÁrcy 3,000,000 End of Remuneration Report SHARE OPTIONS - - - - - - - - - 15,000,000 - 3,000,000 At the date of this report, the unissued ordinary shares of the Company under option are as follows: Date of Expiry Exercise Price Number under Option 30 October 2019 $0.04 30 October 2019 $0.02 50,000,000 30,000,000 During the year ended 30 June 2017, no ordinary shares were issued on the exercise of options. No shares have been issued as a result of the exercise of options since year end. ENVIRONMENTAL REGULATION The Group is not aware of any breaches in relation to environmental matters. LIKELY DEVELOPMENTS AND ANNOUNCEMENTS The Directors have excluded from this report any further information on the likely developments in the operations of the Company and the expected results of those operations in future financial years, as the Directors believe that it would be speculative and prejudicial to the interests of the Company. INDEMNIFICATION AND INSURANCE OF OFFICERS During the year, the Company paid premiums in respect of a contact insuring all the directors and officers of the Company against liabilities, past present and future. In accordance with normal commercial practice, the disclosure of the total amount of premiums under and the nature of the liabilities covered by the insurance contract is prohibited by a confidentiality clause in the contract. Page 11 CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of Corporate Governance. Refer to the Company’s Corporate Governance Statement at bowencokingcoal.com.au. NON AUDIT SERVICES The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: - - all non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. During the year ended, 30 June 2017 no fees were paid to Nexia Sydney Partnership for non-audit services. AUDITOR INDEPENDENCE Section 307C of the Corporations Act 2001 requires our auditors, Nexia Sydney Partnership to provide the directors of the Company with an Independence Declaration in relation to the audit of the Financial Report. The directors received the Independence Declaration set out on page 12 for the year ended 30 June 2017. Signed in accordance with a resolution of the Directors. Dated: 29 September 2017 Eddie King Non-Executive Chairman Page 12 To the Board of Directors of Bowen Coking Coal Limited Auditor’s Independence Declaration under section 307C of the Corporations Act 2001 As lead audit partner for the audit of the financial statements of Bowen Coking Coal Limited for the financial year ended 30 June 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of: (a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) any applicable code of professional conduct in relation to the audit. Yours sincerely Nexia Sydney Partnership Lester Wills Partner Date: 29 September 2017 Page 13 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the financial year ended 30 June 2017 Other income Administration expenses Employee benefits expense Consolidated Note 2017 $ Restated 2016 $ 2 3 13,487 478,446 (433,040) (424,577) (141,000) (85,199) Exploration expenditure and project evaluation costs - (18,195) Impairment of loans Loss before income tax (87,738) - (648,291) (49,525) Income tax benefit 4 - - Loss attributable to owners of the Company (648,291) (49,525) Other comprehensive income, net of tax - - Total comprehensive loss attributable to members of the Company (648,291) (49,525) Basic and diluted loss per share 5 (0.51) ¢ (0.12) ¢ The accompanying notes form part of these financial statements. Page 14 STATEMENT OF FINANCIAL POSITION as at 30 June 2017 Current assets Cash and cash equivalents Trade and other receivables Other assets Total current assets TOTAL ASSETS Current liabilities Trade and other payables Total current liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity Reserves Accumulated losses TOTAL EQUITY Consolidated Note 2017 $ Restated 2016 $ 6 7 8 9 325,153 1,287,985 31,731 234,882 54,177 - 591,766 1,342,162 591,766 1,342,162 61,928 61,928 144,393 144,393 61,928 144,393 529,838 1,197,769 10 11 42,064,761 42,084,401 800 800 (41,535,723) (40,887,432) 529,838 1,197,769 The accompanying notes form part of these financial statements. Page 15 STATEMENT OF CHANGES IN EQUITY for the financial year ended 30 June 2017 Consolidated Contributed equity $ Note Reserves $ Accumulated losses $ Total equity $ Balance as at 1 July 2015 39,938,263 - (40,837,907) (899,644) Total comprehensive loss for the year (restated) 1 - Transactions with owners in their capacity as owners Issue of ordinary shares (net) 10 2,146,138 - - Issue of options - 800 (49,525) (49,525) - - 2,146,138 800 Balance as at 30 June 2016 (restated) 42,084,401 800 (40,887,432) 1,197,769 Balance as at 1 July 2016 42,084,401 800 (40,887,432) 1,197,769 Total comprehensive loss for the year - - (648,291) (648,291) Transactions with owners in their capacity as owners Issue of ordinary shares (net) 10 (19,640) - - (19,640) Balance as at 30 June 2017 42,064,761 800 (41,535,723) 529,838 The accompanying notes form part of these financial statements. Page 16 STATEMENT OF CASH FLOWS for the year ended 30 June 2017 Consolidated Note 2017 $ 2016 $ Cash flows from operating activities Payments to suppliers, employees and creditors (inclusive of GST) Interest received (657,911) (494,330) 18,166 2,755 Net cash outflows from operating activities 19 (639,745) (491,575) Cash flows from investing activities Payments under Deed of Company Arrangement 2 - (569,227) Payments for exploration assets (160,000) - Net cash outflows from investing activities (160,000) (569,227) Cash flows from financing activities Loans to unrelated entities (87,738) - Proceeds from issue of shares and options Payments for capital raising costs 10 10 - 2,322,338 (75,349) (175,400) Net cash outflows from investing activities (163,087) 2,146,938 Net increase / (decrease) in cash held (962,832) 1,086,136 Cash and cash equivalents at 1 July 1,287,985 201,849 Cash at 30 June 6 325,153 1,287,985 The accompanying notes form part of these financial statements. Page 17 NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principals accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Bowen Coking Coal Limited is a company domiciled in Australia. The financial statements are for the Consolidated Entity consisting of Bowen Coking Coal Limited and its subsidiaries. The Consolidated Entity is a for-profit entity and is primarily involved in mineral exploration. a. Basis of Preparation These general purpose financial statements have been prepared in accordance with the Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The presentation currency is Australian dollars. i. Compliance with IFRS The consolidated financial statements of Bowen Coking Coal Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). ii. 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. The Group incurred a net loss for the year ended 30 June 2017 of $648,291 and experienced net cash outflows from operating activities of $639,745. At 30 June 2017, cash and cash equivalents was $325,153. As disclosed in note 20, on 19 September 2017 the Company announced that the minimum subscription of $4.6m had been reached and the offer pursuant to the prospectus dated 3 August 2017 had closed. The Company is now liaising with the ASX in order to complete the acquisition and to seek to be re-instated to quotation. In considering the above, the Directors have reviewed the Group’s financial position and are of the opinion that the use of the going concern basis of accounting is appropriate. The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the amounts or classification of recorded assets or liabilities that might be necessary should the Group not be able to continue as a going concern. iii. Correction of a prior period error As previously disclosed, the Brazilian mining tenements held by Cabral Metais Ltda (“Metais”) are via a Preliminary Instrument of Future Mining Tenements Assignment with Cabral Mineracao Ltda Page 18 (“Mineracao”). Mineracao is a Company which is no longer under the control of the Company and therefore does not form part of the Group. The Group has been conducting, in accordance with the Company’s business plan, due diligence on the interests of Metais in the Brazilian mining tenements. The Company has in the course of this process further considered the validity of the obligations existing between Mineracao and Metais under contracts for the assignment of mining tenement agreements between those companies (Preliminary Assignment Agreements) pursuant to which Metais’ interests were supposed to arise. None of the tenements the subject of the Preliminary Assignment Agreements have ever been transferred from Mineracao to Metais. The Company has discovered that no instrument of assignment of the relevant mining tenements has been executed by the parties, contrary to the terms of the Preliminary Assignment Agreements. Execution of an instrument of assignment is a condition precedent for the effecting of the transfer of the tenements. As this condition precedent has not been complied with, and the parties had not taken any other steps towards registration of the transfer of the tenements, the contractual obligations of Metais cannot now be enforced by Mineracao. In any case, the obligation to transfer the mining tenements cannot now be carried out because the vast majority of the tenements have been cancelled. In the course of its due diligence investigations the Company has received confirmation from Brazilian counsel that the Preliminary Assignment Agreements are now unenforceable and as such, Metais does not hold any rights to tenure over the exploration assets. The Company had previously treated exploration expenditure undertaken by Mineracao on the tenements the subject of the Preliminary Assignment Agreements as if it were a non-interest bearing loan of BRL 6,940,494 owed by Metais to Mineracao. Under Brazilian law, a tenement holder is obliged to pay all costs relating to obtaining and maintaining exploration tenements. Therefore this was Mineracao’s obligation until such time as an instrument of assignment was executed and the transfer of tenements to Metais was registered at the National Department of Mineral Production (“DNPM”). As the relevant tenements were never transferred to Metais (and cannot now be transferred), the Company considers that the above should not have been recognised. The error has been rectified by restating each of the affected financial statement line items for prior periods as follows: Statement of Financial Position Liabilities directly associated with exploration assets - 2,882,991 (2,882,991) Restated Change Previously Reported 30 June 2016 30 June 2016 Accumulated losses (40,887,432) 2,882,991 (43,770,423) Statement of Profit or Loss and Other Comprehensive Income Impairment of exploration assets - 2,882,991 (2,882,991) Total comprehensive loss for the year (49,525) 2,882,991 (2,932,516) Basic and diluted loss per share (0.12) ¢ 7.25 ¢ (7.37) ¢ Page 19 b. Principals of Consolidation- Subsidiaries The consolidated financial statements comprise the financial statements of Bowen Coking Coal Limited and its subsidiaries at 30 June each year (“the Group”). Subsidiaries are entities over which the Group has the power to govern the financial and operational policies generally accompanying a shareholding of more than one half of the voting rights. Potential voting rights that are currently exercisable or convertible are considered when assessing control. Consolidated financial statements include all subsidiaries from the date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from intragroup transactions have been eliminated. Unrealised losses are also eliminated unless costs cannot be recovered. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income and statement of financial position respectively. Subsidiaries are accounted for in the parent entity at cost. c. Foreign Currency Translation i. Functional and Presentation Currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Australian dollars, which is Bowen Coking Coal Limited’s functional and presentation currency. ii. Transactions and Balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss and other comprehensive income within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss and other comprehensive income on a net basis within the other income and other expenses. Non-monetary items that are measured at their fair value in a foreign currency are translated using exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. iii. Group Companies The results and financial positions of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.  Page 20   Income and expenses for each income statement and statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions). All resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other comprehensive income. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. d. Revenue Recognition Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following specific recognition criteria must also be met before revenue is recognised:  Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.  Revenue from dividends is recognised when the Group’s right to receive payment is established. e. Income Taxes The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets are recognised for all differences, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. f. Impairment of Assets At each reporting date the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, the recoverable amount is determined and impairment losses are recognised in the statement of profit or loss and other comprehensive income where the asset’s carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of 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 assets. Where it is not possible to estimate the recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs. Page 21 g. Cash and Cash Equivalents For presentation purposes of the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. h. Trade Receivables Trade receivables are recognised at fair value as the amounts receivable are due for settlement no more than 30 days from the date of recognition. Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is raised where there is some doubt over collection. i. Investments in Other Financial Assets The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date. i. Financial Assets at Fair Value through Profit or Loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within twelve months of the balance sheet date. Financial assets at fair value through profit or loss are carried at fair value. Realised and unrealised gains and losses arising from changes in the fair value are included in the statement of profit or loss and other comprehensive income in the period in which they arise. The fair value of investments traded in active markets is determined by reference to quoted market bid prices at balance date. The fair value of investments not traded in an active market is determined using valuation techniques including reference to recent arm’s length transactions, net asset backing and current market value of another similar instrument. ii. Loan and Receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than twelve months after balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position. Receivables are stated at their cost less impairment losses. Page 22 iii. Held-to-Maturity Investments Held-to-maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. iv. Available for Sale Financial Assets Available for sale financial assets, comprising principally marketable equity securities, are non derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months. Available-for-sale financial assets are carried at fair value. Unrealised gains and losses arising from changes in fair value are recognised in equity. When sold the accumulated fair value adjustments are included in the statement of profit or loss and other comprehensive income as gains and losses from investment securities. j. Intangible Assets i. Exploration and Evaluation Expenditure Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward where rights to tenure of the area of interest are current and:   It is expected that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively by its sale; and/or Exploration and evaluation activities are continuing in an area of interest but at balance date have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. Where the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised “mine properties in development”. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment. If facts and circumstances suggest that the carrying amount of any recognised exploration and evaluation assets may be impaired, the entity must perform impairment tests on those assets in accordance with AASB 136 “Impairment of Assets’. Impairment of exploration and evaluation assets is to be assessed at a cash generating unit or group of cash generating units level provided this is no larger than an area of interest. Any impairment loss is to be recognised as an expense in accordance with AASB 136. Accumulated costs in relation to an abandoned area are written off to the statement of profit or loss and other comprehensive income in the period in which the decision to abandon the area is made. Page 23 k. Earnings per Share i. Basic Earnings per Share Basic earnings per share is determined by dividing the net result attributable to members of the Company 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 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. l. Employee Benefits i. Short-Term Obligations Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees’ services provided to reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax. ii. Share Based Payment Benefits Share based compensation benefits are provided to Directors and employees via share or option plans in place from time to time. The fair value of options granted under the Plans is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The fair value of the options is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions (e.g. profitability or transaction specific targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of profit or loss and other comprehensive income with a corresponding adjustment to equity. m. Lease Payments Leases where the lessor retains substantially all the risks and rewards of ownership of the net asset are classified as operating leases. Payments under operating leases (net of incentives received from the lessor) are charges to the statement of profit or loss and other comprehensive income on a straight line basis over the period of the lease. Page 24 n. Trade and other Payables Trade and other payables represent liabilities for goods and services provided to the Group prior to year-end and which are unpaid. These amounts are unsecured and have 30 to 60 day payment terms. o. Goods and Services Tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. p. Contributed Equity Ordinary shares are classified as equity. Costs attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration. q. Fair Value Fair values may be used for financial asset and liability measurement as well as for sundry disclosures. Fair values for quoted financial instruments traded in active markets are based on quoted market prices at the date of the statement of financial position. The quoted market price for financial assets is the current bid price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. r. Non-current assets or disposal groups classified as held for sale Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, the must be available for immediate sale in their present condition and their sale must be highly probable. An impairment loss is recognised for any initial or subsequent write down on the non-current assets and assets of disposal groups to fair value less cost of disposal. A gain is recognised for any subsequent increase in fair value less costs of disposal of non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised. Page 25 Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of the assets held for sale continue to be recognised. Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities. s. Changes in accounting policies and disclosure In the year ended 30 June 2017, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies. t. New Standards and Interpretations not yet Adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2017. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below. AASB 9 Financial Instruments This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the consolidated entity. AASB 15 Revenue from Contracts with Customers This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to Page 26 customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the consolidated entity. AASB 16 Leases This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (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. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity will adopt this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by the consolidated entity. Page 27 u. Use of Estimates and Judgements The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. i. Exploration and evaluation costs Exploration and evaluation costs have been capitalised on the basis that the Consolidated Entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resource. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. Page 28 2. OTHER INCOME Gain on effectuation of DOCA (i) Interest Consolidated 2017 $ 2016 $ - 471,012 13,487 13,487 7,434 478,446 (i) On 13 October 2015, the Administrators confirmed that all funds required to be paid by CPS under the DOCA (totalling $450,000) were received and accordingly, the DOCA has been fully effectuated and control of Cabral returned to its Directors. Concurrently with the effectuation of the DOCA, the Cabral Creditors’ Trust was established (as provided for in the DOCA). Any assets not included in the sale agreement with CPS (i.e. all assets other than certain interests in Cabral Metais Limitada and Northern Yeelirrie Pty Limited) have either been transferred to or are being held in trust for the Creditors’ Trust. The assets and liabilities transferred to the creditors trust upon effectuation on 13 October 2015 were as follows: Cash and cash equivalents Trade and other receivables Trade and other payables Employee benefits Net liabilities transferred to the creditors trust 3. EXPENSES Administration Accounting, legal and compliance costs Other $ 569,227 22,289 (408,799) (653,729) 471,012 Consolidated 2017 $ 2016 $ 376,959 324,582 56,081 99,995 433,040 424,577 Page 29 4. INCOME TAX BENEFIT 4.1 Income Tax Benefit Current tax Deferred tax Income tax benefit attributable to (loss) from continuing operations 4.2 Numerical Reconciliation of Income Tax Benefit to Prima Facie Tax Payable Consolidated 2017 $ 2016 $ - - - - - - (Loss) from ordinary activities before income tax expense (648,291) (2,932,516) Income tax benefit calculated at domestic rate of 27.5% (2016 – 30%) (178,280) (879,755) Tax effect of permanent differences: Non-deductible items Non-assessable income Additional deductions Income tax adjusted for permanent differences Tax effect of losses not recognised Income tax expense 4.3 Tax Losses 90,162 886,087 - (141,303) (8,582) 33,962 (96,700) 96,700 (101,009) 101,009 - - Unused revenue losses for which no deferred tax asset has been recognised 10,138,363 9,483,023 Unused capital losses for which no deferred tax asset has been recognised 3,682,968 3,682,968 13,821,331 13,165,991 The Company is of the opinion that tax and capital losses from prior periods will continue to be available to the group. These losses have not been recognised as a deferred tax asset as there is uncertainty that future taxable profits will be available against which the losses can be utilised. The future income tax benefit will only be obtained if: a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; b) the conditions for deductibility imposed by tax legislation continue to be applied with; and c) no changes in tax legislation adversely affect the Company in realising the benefit. Page 30 5. LOSS PER SHARE Consolidated 2017 cents 2016 cents Basic and diluted loss per share (0.51) (0.12) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share 127,312,898 39,812,878 2017 No. 2016 No. Loss used in calculating basic and dilutive EPS (648,291) (49,525) 2017 $ 2016 $ 6. CASH AND CASH EQUIVALENTS Cash at bank and on hand Deposits at call Consolidated 2017 $ 2016 $ 217,700 107,453 325,153 287,985 1,000,000 1,287,985 Cash at bank is interest bearing. Deposits at call have a fixed interest rates of 1.50% and maturity of 3 months. 7. TRADE AND OTHER RECEIVABLES Current GST receivable Interest receivable Consolidated 2017 $ 2016 $ 31,731 - 31,731 49,498 4,679 54,177 Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. Page 31 8. OTHER ASSETS Current Prepaid capital raising costs Bowen Coking coal pre-acquisition and due diligence costs 9. TRADE AND OTHER PAYABLES Current Trade creditors and accruals Related party creditors Other creditors Consolidated 2017 $ 2016 $ 69,244 165,638 234,882 61,928 - - - - - 87,176 40,200 17,017 61,928 144,393 2017 No 2016 No 2017 $ 2016 $ 10. CONTRIBUTED EQUITY Ordinary shares 127,312,898 127,312,898 42,064,761 42,084,401 Movements in share capital Opening balance 1 July 127,312,898 293,797,815 42,084,401 39,938,263 Share consolidation (100 to 1) Shares issued – 30 October 2015 Shares issued – 30 October 2015 Shares issued – 2 November 2015 Shares issued – 22 April 2016 Shares issued – 22 April 2016 Capital raising costs - - - - - - - (290,859,917) 2,800,000 500,000 25,000,000 1,000,000 95,075,000 - - - - - - - 28 10,000 410,000 10 1,901,500 - (19,640) (175,400) Closing balance 30 June 127,312,898 127,312,898 42,064,761 42,084,401 Ordinary shares Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company. Page 32 Capital risk management The Group’s capital comprises share capital, reserves less accumulated losses amounted to equity of $529,838 at 30 June 2017 (2016: $1,197,769). The Group manages its capital to ensure its ability to continue as a going concern and to optimise returns to its shareholders. The Group was ungeared at year end and not subject to any externally imposed capital requirements. Share options At 30 June 2017, there were 50,000,000 listed options exercisable at $0.04 on or before 30 October 2019 (2016: 50,000,000) and 30,000,000 unlisted options exercisable at $0.02 on or before 30 October 2019 on issue (2016: 30,000,000). No options were issued, exercised or expired during the financial year. 11. RESERVES Share Option Reserve Balance at 1 July Options issued Balance at 30 June Total Reserves Nature and Purpose of Reserves i. Share Option Reserve Consolidated 2017 $ 2016 $ 800 - 800 800 - 800 800 800 The share option reserve is used to recognise the fair value of options issued but not exercised. Page 33 12. PARENT ENTITY INFORMATION Current assets Total assets Current liabilities Total liabilities Shareholders’ equity Issued capital Reserves Retained earnings Profit / (loss) for the year Other comprehensive income Total comprehensive income Consolidated 2017 $ 2016 $ 591,766 591,766 61,928 61,928 1,342,162 1,342,162 144,393 144,393 42,064,761 42,084,401 800 800 (41,535,723) (40,887,432) 529,838 1,197,769 (648,291) (49,525) - - (648,291) (49,525) 13. INVESTMENT IN SUBSIDIARIES Equity holding Name of subsidiary Country of incorporation Class of shares 2017 % 2016 % Northern Yeelirrie Pty Limited Australia Ordinary Cabral Brazil Pty Limited Australia Ordinary Cabral Metais Ltda Brazil Ordinary 100 -1 100 100 100 100 1 Deregistered on 20 November 2016 Page 34 14. REMUNERATION OF AUDITORS Amounts received, or due and receivable by: The current auditor of the parent entity (Nexia Sydney Partnership – Australian Firm) - for auditing and reviewing the financial reports of the entity or any entity in the consolidated entity Consolidated 2017 $ 2016 $ 32,236 32,236 32,550 32,550 15. CONTINGENT LIABILITIES There are no contingent liabilities of the Company as at 30 June 2017 (2016: Nil). 16. COMMITMENTS FOR EXPENDITURE The Company has no commitments as at 30 June 2017. 17. KEY MANAGEMENT PERSONNEL AND RELATED PARTY INFORMATION 17.1 Key Management Personnel Remuneration Short term employee benefits Long term employee benefits Post- employment benefits Termination benefits Consolidated 2017 $ 2016 $ 141,000 85,199 - - - - - - 141,000 85,199 Details of Directors’ and key personnel remuneration are set out in the Remuneration Report in the Directors’ Report. 17.2 Other Transactions with Key Management Personnel During the year ended 30 June 2017, a total of $nil (2016:$144,740) in corporate and broking services were provided to the Group on arm’s length normal commercial business terms and conditions by CPS Capital Group, a director related entity. During the year ended 30 June 2017, Directors and office holders loaned the Company a total of nil (2016: $80,368), all of which was repaid by 30 June 2016. The loans were interest free and had no maturity date. Page 35 18. SEGMENT INFORMATION a. Description of Segments Management has determined the operating segments based on the reports reviewed by those responsible for decision making which are used to make strategic decisions. The management team have identified one reportable segment based on geographical factors for the year ended 2017 being Australia (2016: two segments - one segment in Australia and one segment in Brazil). b. Segment Information Provided to those Responsible for Decision Making The segment information provided to those responsible for decision making for the reportable segments for the year ended 30 June 2017 are as follows: 2017 Total segment revenue Inter-segment revenue Revenue from external customers Adjusted EBITDA Depreciation and amortisation Impairment Share of loss from associates Total segment assets Total assets includes: Investment in associates Exploration and tenements Additions to non-current assets (other than financial assets and deferred tax) Australia AUD Brazil AUD Total AUD - - - (574,040) - (87,738) - 591,766 - - - - - - - - - - - - - - - - - - (574,040) - (87,738) - 591,766 - - - 61,928 Total segment liabilities 61,928 Page 36 The segment information provided to those responsible for decision making for the reportable segments for the year ended 30 June 2016 are as follows: Australia AUD Brazil AUD Total AUD 2016 Total segment revenue Inter-segment revenue Revenue from external customers - - - Adjusted EBITDA (56,959) Depreciation and amortisation Impairment Share of loss from associates Total segment assets Total assets includes: Investment in associates Exploration and tenements Additions to non-current assets (other than financial assets and deferred tax) - - - 1,342,162 - - - Total segment liabilities 144,393 c. Other Segment Information i. Segment Revenue - - - - - - - - - - - - - - - (56,959) - - - 1,342,162 - - - 144,393 Segment revenue reconciles to total revenue from continuing operations as follows: Total segment revenue Intersegment eliminations Interest revenue Gain on effectuation of DOCA 2017 $ 2016 $ - - - - 13,487 7,434 - 471,012 Total revenue from continuing operations (note 2) 13,487 478,446 ii. Adjusted EBITDA The measurement of adjusted EBITDA excludes the non-recurring expenditure from the operating segment such as restructuring costs, legal expenses and goodwill impairments when the impairment is the result of an isolated, non-recurring event. Furthermore the measure excludes the effects of equity-settled share-based payments and unrealised gains/(losses) on financial instruments. Interest income and expenditure are not allocated to segments, as this type of activity is driven by a central treasury function in managing the cash position of the Group. A reconciliation of adjusted EBITDA to operating loss is provided as follows: Page 37 Adjusted EBITDA Impairment Interest 2017 $ 2016 $ (574,040) (56,959) (87,738) 13,487 - 7,434 Loss from continuing operations (648,291) (49,525) iii. Segment Assets The amounts provided to those responsible for decision making with respect to total assets are measured in a manner consistent with that of the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. Reportable segments’ assets are reconciled to total assets as follows: Segment assets Intersegment eliminations 2016 $ 2016 $ 591,766 1,342,162 - - Total assets as per statement of financial position 591,766 1,342,162 iv. Segment Liabilities The amounts provided to those responsible for decision making with respect to total liabilities are measured in a manner consistent with that of the financial statements. These liabilities are allocated based on the operations of the segment. Reportable segments’ liabilities are reconciled to total liabilities as follows: Segment liabilities Intersegment eliminations 2017 $ 2016 $ 61,928 144,393 - - Total liabilities as per statement of financial position 61,928 144,393 Page 38 19. RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Loss from continuing and discontinued operations Transfer of cash on effectuation of DOCA Impairment of loans Changes in Assets and Liabilities Consolidated 2017 $ (648,291) - 87,738 2016 $ (49,525) 569,227 - Decrease/(increase) in receivables 22,446 (21,220) Increase/(decrease) in trade and other creditors Increase in employee benefits (101,638) - (336,328) (653,729) Net cash outflows from operating activities (639,745) (491,575) 20. EVENTS SUBSEQUENT TO BALANCE DATE On 19 September 2017, the Company announced that the minimum subscription had been reached and the offer pursuant to the prospectus dated 3 August 2017 had closed. On 28 September 2017, the Company confirmed the issue of 200,434,782 ordinary fully paid shares at an issue price of 2.3 cents per share, raising $4,610,000 before costs. On 28 September 2017, the Company advised completion of the acquisition of Coking Coal One Pty Ltd (formerly Bowen Coking Coal Pty Ltd), issuing 70,000,000 ordinary fully paid shares, 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares as consideration. The Company appointed Gerhard Redelinghuys as Managing Director and James Agenbag as Non-Executive Director, replacing Greg D’Arcy on 27 September 2017. The Company also completed the acquisition of the Comet Ridge Project, issuing 17,391,304 ordinary fully paid shares and paying $350,000 in cash as consideration. The Company will update the market on the timing of the completion of the acquisition of the Cooroorah and Hillalong Projects and is confident that it has satisfied the applicable requirements of Chapters 1 and 2 of the ASX Listing Rules and will advise the market when the outstanding conditions of the reinstatement to quotation of its securities have been met and a date has been fixed for the resumption of trading. There were no other known significant events from the end of the financial year to the date of this report. 21. FINANCIAL INSTRUMENTS 21.1 Financial Risk Management The Group’s financial instruments consist of deposits with banks, trade receivable and payables, investments at fair value and loans to and from subsidiaries and associates. Derivative financial instruments are not currently used by the Group. Senior executives meet regularly to analyse and monitor the financial risk associated with the financial instruments used by the Group. The Managing Director and Chief Executive Officer reports regularly to Page 39 the Board which appraises the adequacy of the risk management strategies and also creates policies for risk management. The Group’s activities expose it to market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. Market Risk a. Foreign Exchange Risk The Group has no material exposure to foreign currency risk at the end of the reporting period. b. Interest Rate Risk The Group does not have any exposure to interest rate risk as there were no external borrowings at 30 June 2017 (2016: nil). Any borrowings were intercompany related and unsecured and interest free and therefore there is no exposure to interest rate risk associated with these amounts. Interest bearing assets are all short term liquid assets and the only interest rate risk is the effect on interest income by movements in the interest rate. There is no other material interest rate risk. c. Liquidity Risk The Group manages liquidity risk by maintaining cash reserves, placing funds on fixed term deposits with reputable financial institutions, having limited borrowings or debt and having, to the extent possible, the investments in instruments that are tradeable in highly liquid markets. All trade and other payables are expected to be paid within one year of balance date. The Group’s credit risk primarily arises from cash and deposits with Australian ADIs. The credit risk of financial assets of the Group which have been recognised on the statement of financial position, other than investments in shares, is generally the carrying amount, net of any provision for doubtful debts. There is no collateral or security held for those assets at balance date. There are no financial assets that are past due or impaired. 21.2 Net Fair Value of Financial Assets and Liabilities The carrying amount of the Group’s financial assets and financial liabilities in the financial statements approximates their fair values as at balance date. Page 40 DIRECTORS’ DECLARATION In the directors' opinion: 1. the financial statements and accompanying notes set out on pages 13 to 39 are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards and the Corporations Regulations 2001; and b. give a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for the year ended on that date; 2. the financial statements and notes also comply with International Financial Reporting Standards (IFRS), as disclosed in Note 1(a)(i) to the financial statements; 3. there are reasonable grounds to believe that the Group 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 chief financial officer required by section 295A. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by: Eddie King Non-Executive Chairman Perth, 29 September 2017 Page 41   Independent Auditor’s Report to the Members of Bowen Coking Coal Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Bowen Coking Coal Limited (the Company and its subsidiaries (the Group)), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, 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 30 June 2017 and of its financial performance for the year then ended; 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 entity 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. 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. Key audit matter How our audit addressed the key audit matter Correction of prior period error Refer to note 1a.iii. The Brazilian mining tenements recognised by Cabral Metais Ltda (“Metais”) were via a Preliminary Instrument of Future Mining Tenements Assignment with Cabral Mineracao Ltda (“Mineracao”). Our procedures included, amongst others:  We read the Preliminary Instrument of Future Mining Tenements Assignment agreement and obtained an understanding of the key terms and conditions;  We read the legal advice provided to the Group to understand the key determination of the legal Page 42 Key audit matter How our audit addressed the key audit matter The Group determined that no instrument of assignment of the relevant mining tenements has been executed by the parties. The contractual obligations of Metais cannot now be enforced by Mineracao. The Group considers that these events give rise to a prior period error in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors and has adjusted the comparative information to derecognise the liability of $2,882,991 owing to Mineracao. This is considered a key audit matter due to the material size and complexity of the transaction. Other information opinion;  We assessed the validity of arguments within the legal advice and the legal interpretation of the Preliminary Instrument of Future Mining Tenements Assignment;  We assessed the competence, experience and qualifications of the legal expert;  We assessed the adequacy of the disclosures in accordance with AASB 108. The directors are responsible for the other information. The other information comprises the information in Bowen Coking Coal Limited’s annual report for the year ended 30 June 2017, 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 the other information we are required to report that fact. We have nothing to report in this regard. Directors’ responsibility for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the entity’s ability 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 entity or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibility 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 Page 43 the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at The Australian Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor’s report. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 8 to 11 of the directors’ Report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Bowen Coking Coal Limited for the year ended 30 June 2017, 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. Nexia Sydney Partnership Lester Wills Partner Dated: 29 September 2017 Sydney Page 44 CORPORATE INFORMATION The information contained below is as at 29 September 2017. NUMBER OF SHAREHOLDERS AND OPTION HOLDERS Shares As at 29 September 2017, there were 1,764 shareholders holding a total of 415,138,984 fully paid ordinary shares. Options As at 29 September 2017, there were 50,000,000 Quoted Options exercisable at $0.04 on or before 30 October 2019 held by 77 holders. As at 29 September 2017, there were 30,000,000 Unquoted Options exercisable at $0.02 on or before 30 October 2019 held by 56 holders. Performance Shares As at 29 September 2017, there are 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares held by 1 holder – Cape Coal Pty Ltd. Class A Performance Shares convert into Ordinary Shares on a 1:1 ratio upon the delineation of an increase in JORC-compliant inferred resources of at least 30 million tonnes coal on the Company’s projects, and a 30 day VWAP share price hurdle of 5 cents. Class B Performance Shares convert into Ordinary Shares on a 1:1 ratio upon the delineation of an increase in JORC-compliant inferred resources of at least 50 million tonnes coal on the Company’s projects. The Performance Shares have a term of 24 months from their date of issue. NON-MARKETABLE PARCELS There were 1,118 holders of less than a marketable parcel of ordinary shares, amounting to 1,187,060 ordinary shares. DISTRIBUTION OF EQUITY SECURITIES Analysis of number of share and option holders by size of holding: Fully paid ordinary shares Range 1 1,001 5,001 10,001 - - - - 1,000 5,000 10,000 100,000 100,001 and over Page 45 Number of holders Number of shares 905 165 36 331 327 215,926 453,050 292,633 24,557,725 389,619,650 1,764 415,138,984 Quoted Options exercisable at $0.04 on or before 30 October 2019 Range 1 1,001 5,001 10,001 - - - - 1,000 5,000 10,000 100,000 100,001 and over Unquoted Options exercisable at $0.02 on or before 30 October 2019 Range 1 1,001 5,001 10,001 - - - - 1,000 5,000 10,000 100,000 100,001 and over Number of holders Number of options - - - 40 37 77 - - - 2,289,000 47,711,000 50,000,000 Number of holders Number of shares - - - 22 34 56 - - - 1,439,000 28,561,000 30,000,000 No holder has a 20% or more holding in the unquoted Options exercisable at $0.02 on or before 30 October 2019. VOTING RIGHTS The relevant conditions about voting rights attaching to each share are set out in Article 9.22 of the Constitution as follows: “Subject to any rights or restrictions for the time being attached to any class or classes of shares and to this constitution: a. b. On a show of hands, each Member present in person and each other person present as a proxy, attorney or Representative of a Member has one vote; and On a poll, each Member present in person has one vote for each fully paid share held by the Member and each person present as proxy, attorney or Representative of a Member has one vote for each fully paid share held by the Member that the person represents, but a Member is not entitled to vote at a general meeting in respect of shares which are the subject of a current Restriction Agreement for so long as any breach of that agreement subsists SUBSTANTIAL SHAREHOLDERS The Company has the following substantial shareholders as at 29 September 2017: Name CAPE COAL PTY LTD Page 46 Number of ordinary shares held Percentage of issued shares 70,000,000 16.86% TWENTY LARGEST SHAREHOLDERS The names of the twenty largest holders of ordinary fully paid shares are set out below: Name 1. CAPE COAL PTY LTD 2. ACACIA COAL LIMITED 3. MRS LILY MAH 4. LANTECH DEVELOPMENT PTY LTD 5. 1215 CAPITAL PTY LTD Number of ordinary shares held Percentage of issued shares 70,000,000 16.86% 17,391,304 13,043,478 9,347,827 6,521,739 4.19% 3.14% 2.25% 1.57% 6. V7 INVESTMENT & DEVELOPMENT 6,521,739 1.57% 7. J & J BANDY NOMINEES PTY LTD 8. MR TYLER JOHN FORMICA 9. FLOURISH SUPER PTY LTD 10. MRS DENISE JOY SHARBANEE 11. MR PAUL GABRIEL SHARBANEE 6,000,000 1.45% 5,500,000 4,347,827 4,347,827 1.32% 1.05% 1.05% 4,347,827 1.05% 12. MRS CLAIRE FRANKLIN 4,347,826 1.05% 13. INVIA CUSTODIAN PTY LIMITED 4,347,826 1.05% 14. SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED 4,347,826 1.05% 15. HIRSCH FINANCIAL PTY LTD 4,000,000 16. MR GRANT ANTHONY MURPHY 3,750,000 17. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 3,529,951 18. MR NICOLO FLOYD BONTEMPO 3,500,000 19. SISU INTERNATIONAL PTY LTD 20. A22 PTY LTD 3,500,000 3,304,520 0.96% 0.90% 0.85% 0.84% 0.84% 0.80% 181,997,517 43.84% Page 47 TWENTY LARGEST OPTION HOLDERS ($0.04 OPTIONS) Name 1. CPS CAPITAL GROUP PTY LTD 2. MR ARIEL EDWARD KING 3. FIRST ONE REALTY PTY LTD 11,700,000 10,000,000 3,900,000 Number of options held Percentage of issued options 4. LAKE SPRINGS PTY LTD 3,700,000 5. FIRST INVESTMENT PARTNERS PTY LTD 2,500,000 6. MR NICOLO FLOYD BONTEMPO 2,150,000 7. MR TYLER JOHN FORMICA 8. MR STEPHEN BROCKHURST 9. GREENWOOD RESOURCES PTY LTD 10. MR DAVID CHARLES NEESHAM & MRS PAMELA CHRISTINE NEESHAM 11. WLP INVESTMENTS PTY LTD 12. ALBATROSS PASS PTY LTD 13. CINQUE HOLDINGS PTY LTD 14. LANTECH DEVELOPMENTS PTY LTD 15. ELLAZ PTY LTD 16. MR EDMUND TECK HWANG LIM 17. ALITIME NOMINEES PTY LTD 18. MR DAVID PETER VALENTINO 2,000,000 1,080,000 1,000,000 1,000,000 800,000 700,000 500,000 500,000 500,000 462,000 450,000 438,000 19. BAYTOWER HOLDINGS PTY LTD 400,000 20. DAVID PALUMBO 400,000 23.40% 20.00% 7.80% 7.40% 5.00% 4.30% 4.00% 2.16% 2.00% 2.00% 1.60% 1.40% 1.00% 1.00% 1.00% 0.92% 0.90% 0.88% 0.80% 0.80% 44,180,000 88.36% RESTRICTED SECURITIES The Company has the following restricted securities on issue: Name ordinary shares Performance shares Escrow release date CAPE COAL PTY LTD 70,000,000 26,000,000 24 months from date of ASX re-quotation ACACIA COAL LIMITED 17,391,304 - 12 months from date of issue Page 48 INTERESTS IN EXPLORATION TENEMENTS Tenement Number Project Name Tenement Location Cabral Interest Held EPC 1824 HILLALONG BOWEN BASIN, QUEENSLAND MDL 453 COOROORAH BOWEN BASIN, QUEENSLAND EPC 1687 LILYVALE BOWEN BASIN, QUEENSLAND EPC 2157 LILYVALE BOWEN BASIN, QUEENSLAND EPC 2081 EPC 1230 MLA 7005 MACKENZIE BOWEN BASIN, QUEENSLAND COMET RIDGE BOWEN BASIN, QUEENSLAND COMET RIDGE BOWEN BASIN, QUEENSLAND -1 -1 15%1 15%1 5%1 100%1 100%1 1 On 28 September 2017, the Company advised completion of the acquisition of Coking Coal One Pty Ltd (formerly Bowen Coking Coal Pty Ltd), issuing 70,000,000 ordinary fully paid shares, 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares as consideration. The Company also completed the acquisition of the Comet Ridge Project, issuing 17,391,304 ordinary fully paid shares and paying $350,000 in cash as consideration. The Company will update the market on the timing of the completion of the acquisition of the Cooroorah and Hillalong Projects and is confident that it has satisfied the applicable requirements of Chapters 1 and 2 of the ASX Listing Rules and will advise the market when the outstanding conditions of the reinstatement to quotation of its securities have been met and a date has been fixed for the resumption of trading. Page 49 COMPANY SECRETARY Mr Stephen Brockhurst REGISTERED AND ADMINISTRATION OFFICE Level 11 216 St George’s Terrace PERTH WA 6000 Telephone: Facsimile: +618 9481 0389 +618 9463 6103 Website: bowencokingcoal.com.au SHARE REGISTRAR Link Market Services Limited Level 12 680 George Street Sydney NSW 2000 Postal Address Locked Bag A14 Sydney South NSW 1235 Telephone: Facsimile: +612 8280 7111 +612 9287 0303 DX 1120 Sydney Website: www.linkmarketservices.com.au Email: registrars@linkmarketservices.com.au STOCK EXCHANGE QUOTATION The Company’s shares are quoted only on the Australian Securities Exchange (code “BCB”). Page 50 

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