BOWEN COKING COAL LTD
AND CONTROLLED ENTITIES
ABN: 72 064 874 620
CONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2019
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Contents
Cautionary Statements
Corporate Information
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Shareholder Information
Interests in Tenements
Annual Mineral Resources Statement
Consolidated Statement of Profit or Loss and Other Comprehensive Income for the
Year Ended 30 June 2019
Consolidated Statement of Financial Position as at 30 June 2019
Consolidated Statement of Changes In Equity for the Year Ended 30 June 2019
Consolidated Statement of Cash Flows for the Year Ended 30 June 2019
Notes to The Consolidated Financial Statements for the Year Ended 30 June 2019
Director’s Declaration
Independent Auditor’s Report
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Cautionary Statements
Forward-looking statements
This document may contain certain forward-looking statements. Such statements are only predictions,
based on certain assumptions and involve known and unknown risks, uncertainties and other factors,
many of which are beyond the company’s control. Actual events or results may differ materially from the
events or results expected or implied in any forward-looking statement.
The inclusion of such statements should not be regarded as a representation, warranty or prediction with
respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or
are likely to be fulfilled. Bowen Coking Coal Ltd undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date of this document (subject to securities
exchange disclosure requirements).
The information in this document does not take into account the objectives, financial situation or particular
needs of any person or organisation. Nothing contained in this document constitutes investment, legal,
tax or other advice.
Competent Person Statement
All exploration results and Mineral Resources referred to in this Annual Report have previously been
announced to the market by the Company in accordance with the requirements of Chapter 5 of the ASX
Listing Rules and the JORC Code 2012, including as to the requirements for a statement from a Competent
Person; and the relevant announcements have been referred to in the body of the Annual Report. The
Company confirms that it is not aware of any new information or data that materially affects that
information. In respect of the Mineral Resources, all material assumptions and technical parameters
continue to apply and have not materially changed.
Page 2
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Corporate Information
Directors and Company Secretary
Neville Sneddon (Non-Executive Chairman)
Gerhard Redelinghuys (Managing Director)
Blair Sergeant (Executive Director - Corporate Development)
Steven Formica (Non-Executive Director)
James Agenbag (Non-Executive Director)
Nicholas Jorss (Non-Executive Director)
Mr Duncan Cornish (Company Secretary)
Head Office and Registered Office
Bowen Coking Coal Ltd
Level 19, 1 Eagle Street
Brisbane QLD 4000
Tel: +61 7 3360 0837
Fax: +61 7 3360 0222
www.bowencokingcoal.com.au
Auditors
RSM Australia Partners
Level 6, 340 Adelaide Street
Brisbane QLD 4000
Share Registry
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
Tel: 1300 554 474
www.linkmarketservices.com.au
Stock Exchange Listing
Australian Securities Exchange Ltd
ASX Code: BCB
Australian Company Number
064 874 620
Solicitor
Colin Biggers & Paisley Pty Ltd
Level 35, 1 Eagle Street
Brisbane QLD 4000
Banker
Westpac Banking Corporation Limited
Page 3
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
The year ended 30 June 2019 proved to be an incredibly busy and productive period in the
development of the Company, with material progress being made across the entire portfolio of
coking coal assets held in the Bowen Basin of Queensland, Australia. This included the following
highlights:
• Completed a positive concept mining study on the extractability of the Cooroorah Resource,
completed a drilling program at Cooroorah and twice issued upward revisions of the JORC
Resource, which now stands at 177Mt;
•
Issued a Maiden Resource Statement for Isaac River, whereby over 90% of the resource is
classified in the “Indicated” category, completed a maiden drilling program and issued a
positive Scoping Report;
•
Issued a material Exploration Target at Hillalong, of between 61Mt and 409Mt; and
• Renewed EPC 1230 at Comet Ridge for a further term of 5 years.
CORPORATE
The milestones highlighted above were matched by numerous achievements on the corporate front,
including significant enhancements in the Board skillset, represented by the appointments of Neville
Sneddon as Non-Executive Chairman, Nick Jorss as Non-Executive Director, Blair Sergeant as
Executive Director responsible for Corporate Development and Duncan Cornish as CFO/Company
Secretary. Each of Neville, Nick, Blair and Duncan bring years of active participation in the coal
industry and a wealth of experience in managing public companies. The above-mentioned Board
appointments were complimented by the addition of Michael McKee as Chief Operating Officer,
who also comes with an enviable track record, specifically in the Australian coal industry.
The Company’s exploration activities have been underpinned by several capital raisings at a
premium to the traded price at the time, summarised as follows:
1. $1.2m in gross proceeds raised in September 2018 @ 1.6c per share;
2.
In December 2018, a private placement to St Lucia Resources (an entity associated with Mr
Nick Jorss and his fellow co-founders of Stanmore Coal), raising gross proceeds of $500,000,
also @ 1.6c per share; and
3. $1.7m raised @ 2.1c per share in March 2019.
In addition, the Company’s rapidly rising share price in the last quarter saw it move from 2.1c at the
end of March ’19 to close the year at 5c, a rise of 138% for the quarter. Consequently, the Company
issued 5.3m shares resulting from the conversion of options, which raised gross proceeds of a little
over $100,000.
As at 30 June 2019, the Company held cash at bank of $2,043,310 which in the opinion of the Board,
is more than sufficient to enable it to continue executing on its stated exploration and development
strategy.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
PROJECTS
Figure 1. Project Location
Isaac River Project (100%)
The Project covers an area of 14 km2 and is located in the Bowen Basin in Central Queensland,
approximately 30 km west of Moranbah and 130 km southwest of Mackay. The Project consists of
Mineral Development Licence 444 (“MDL 444”) and Exploration Permit for Coal 830 (“EPC 830”).
BMA’s (BHP Mitsubishi Alliance) Daunia Mine is located to the immediate west, and Peabody’s
Gundyer resource is located to the immediate north of the Project. EPC 830 occurs south of MDL 444
and abuts Peabody’s Olive Downs North Project and is approximately 3km North of Rio Tinto’s
Winchester South project. The Project is well located relative to regional infrastructure with the Peak
Downs Highway located 12km north and the Goonyella rail system within 3km of the Project.
Maiden Resource Statement
In November 2018, the Company issued a maiden Mineral Resource estimate for Isaac River of 5.3Mt,
covering the Leichhardt seam only, which included Indicated Resources of 4.2Mt (open cut) and
Inferred Resources of 1.1Mt (underground). The Leichhardt seam has an average thickness of 4.7m
across the Project and is sub- cropping within the boundary of MDL 444.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
Table 1:Isaac River Project Mineral Resource
Mass
Seam
Thickness
Insitu RD Moisture
Seam
Lease
Mt
(m)
t.cu.m
% (adb)
RAW Ash
% (adb)
FC %
(adb)
VM %
(adb)
TS %
(adb)
RAW CV
kcal/kg
(adb)
LHD
Indicated
MDL 444
4.2
4.4
1.40
1.5
16.8
62.0
19.6
0.33
6779
LHD Inferred MDL 444
1.1
4.7
LHD Total MDL 444
5.3
1.45
1.44
1.5
1.5
17.6
61.2
19.7
0.31
6680
17.0
61.9
19.6
0.33
6758
Stage 1 Concept Study
Following the release of Isaac River’s maiden Resource Estimate, the Company engaged Xenith
Consulting (“Xenith”) to prepare a Mining Concept Study (“the Study”) on the Leichhardt seam only,
referred to as Stage 1. Historic exploration confirmed that the Project hosts various coal seams which
are currently being mined by abutting operations, however, coal quality data was only available for
the Leichhardt seam.
The Study was centred around the extractability of the Leichardt seam via open cut mining methods,
followed by the potential of highwall mining and was based on utilising contract mining and accessing third
party infrastructure.
The key focus areas of the Study covered mine planning, operating cost, capital expenditure and
product optionality.
Key assumptions and recommendations of the Study:
•
The Study included a review of the recent Resource Estimate of 5.3Mt (4.2Mt Indicated
Resources, and 1.1Mt Inferred Resources).
• A margin ranking process based on a contractor truck-excavator mining method was used
to identify the target area. An open-cut pit shell was created based on a maximum 100m
depth of cover for an average in situ strip ratio of 11.4bcm/t. A contractor highwall mining
operation with 300m deep plunges towards the end of the open-cut life was also modelled.
The target areas corresponded largely to the part of the Isaac River Mineral Resource
estimate in the Indicated Resource category.;
• Operating costs included contractor mining rates for overburden removal, coal mining and
hauling, as well as toll treatment fees for the use of a regional wash plant and train loading
facility;
• Coal quality analysis suggested either a high yielding single product PCI coal, or an
alternative configuration to produce a primary semi hard coking coal with secondary PCI /
Thermal coal through washing the top and bottom part of the Leichhardt seam separately;
• Capital costs estimate provided for minimal on-site infrastructure and service equipment, a
haul road to a regional wash plant and train load out facility, land compensation, and
feasibility study costs.
•
The Study recommend the taking of fresh coal samples to test the coking properties of all
the seams, as some of the historical coal samples might have been affected by delays of up
to 14 months before coal quality testing was conducted.
Page 6
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
The Company was delighted with the Study outcome for Stage 1 of the Isaac River Coal Project,
which demonstrated a positive business case for the first stage that in turn supported the Company’s
maiden drilling program, to obtain more data in order to increase the confidence level and
potentially optimise the business case in moving towards project development.
Maiden Drilling Program
Following the release of the above-mentioned Study, the logical next stage of development was
represented by the completion of a maiden drilling program at Isaac River, which commenced in April 2019
and was completed the following month. All core samples were dispatched to the lab and testing
instructions finalised for coal quality analysis. First results were received just prior to year end, with the
remaining results received subsequent to balance date.
With the raw quality data received providing very good early indications of positive coking coal parameters,
the Company is anticipating washability tests to confirm quality coking coal can be produced at Isaac
River, and looks forward to progressing the project next financial year.
Cooroorah Project (100%)
Cooroorah is located 17 kilometres north of Blackwater, between Coronado Coal’s (ASX:CRN)
Curragh mine (and MDL 162) in the West and Jellinbah Mine in the East. The Project targets the well-
known Rangal measures and hosts the Aries, Castor, Pollux and Pisces seams.
As with Isaac River, significant progress was made in the development of the Cooroorah Coking Coal
Project. Firstly, in August 2018, the Company announced the results Mining Scoping Study, which was
positive and encouraging. The positive results of the Study (and maiden drilling program completed
the previous year) was followed up by an additional drilling program, which was completed in
December 2018. Consequently, the JORC Resource estimate was updated resulting in an upward
revision of the total resources. In addition, a subsequent review and validation of the regional historic
drilling results saw the Company obtain data which demonstrated the extension of the Mammoth
and Pollux seams into the Northern area of the tenement. As a result, the total Resource estimate was
once again revised upward, now estimated at 177Mt, of which 96Mt (54%) is classified as Indicated
and 81Mt (46%) as Inferred, of which the Mammoth seam is now estimated to be a total of 60Mt,
comprising 38Mt as Indicated and 22Mt as Inferred.
Coal quality analysis from the December 2018 drilling program confirmed the extension of the high-
quality coal previously observed for the Mammoth seam. Core samples demonstrated the potential
for a washed 3.4% ash, low sulphur, high CSN coking coal with secondary PCI product for a combined
lab yield of over 90%. The analysis also demonstrated the ability to produce an unwashed Low
Page 7
Insitu Density Ash Inherent Moisture Volatile Matter Fixed Carbon Calorific Value CSN Total SulphurGrindabilityChlorinePhosphorusMillion m³Million tonnes(m)(g/cc)% (adb)% (adb)% (adb)% (adb)MJ/kg% (adb)HGI% (adb)% (adb)Aries ¹241.381.6845.40.613.838.117.54.30.29560.020.03Castor11153.061.4213.51.117.668.030.52.30.44900.040.09Mammoth27384.091.4012.51.417.370.231.53.80.40900.050.07Pollux10152.401.4416.91.215.866.129.52.70.45870.040.13Pisces Upper17242.591.4315.61.216.465.829.22.30.35850.030.07Total Indicated67961.4315.41.216.766.829.93.00.40870.040.08Castor342.591.4213.81.117.567.730.42.20.43890.040.09Mammoth16224.231.4012.41.617.470.031.24.20.41470.030.07Pollux7113.091.4315.41.616.366.729.51.80.41180.010.08Pollux U/L ²343.051.5431.71.314.152.623.61.70.47---Pisces Upper28403.211.4516.71.417.563.829.41.80.36850.030.07Total Inferred57811.4315.91.517.265.529.72.50.39620.030.07CategoryIndicatedInferredRaw Coal QualityVolumeMassThicknessCoal Seam
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
Volatile PCI Product. The key washed coal quality parameters for the Mammoth seam are listed in
Table 2 below (average of holes COR 013, COR 001 and COR 014).
Table 2: Mammoth seam key washed coal quality parameters
Property
Primary Coking coal
Secondary PCI coal
Inherent Moisture (% ad)
Ash (% ad)
Volatile Matter (% ad)
Fixed Carbon (%ad)
Total Sulphur (% ad)
Phosphorus (% ad)
Calorific Value (kcal/kg gad)
HGI
CSN
1.4
3.4
18.5
76.7
0.43
0.02
88
8
Gray-King coke type
G2 – G4
Reflectance Rv max. %
Vitrinite content %
Fluidity (ddpm)
Base-acid ratio
1.57
65
5
0.13
1.5
9.7
17.1
72.0
0.38
0.05
7600
84
Yield % (Lab, dilution free)
40%-45%
45%-50%
A comparison of the Cooroorah coking coal to the range of internationally traded coking coals is
illustrated below:
Page 8
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
The Company was extremely pleased with the outcome of the exploration program complete during
the year, which not only demonstrated the continuance of the Mammoth seam to the East, but also
confirmed the exceptional coal quality of this extension in the Resource.
Hillalong Project (100%)
EPC 1824 and EPC 2141 (“Hillalong Project”) are located in the northern Bowen Basin approximately
105 km west-southwest of Mackay. The tenements comprise 31 sub-blocks (approximately 99km2)
located to the west of the Mount Hillalong anticline and is approximately 16 km northwest of Rio
Tinto’s Hail Creek Mine. The Project contains sub cropping coal seams from the Rangal coal measures
(“RCM”), Fort Cooper coal measures and Moranbah coal measures (“MCM”). Two economic coal
seams, Elphinstone and Hynds (Leichardt and Vermont equivalents) within the Rangal measures are
currently being mined nearby. Within EPC1824, the strata are interpreted to flatten out at depth. Past
work by Rio Tinto Exploration (“RTX”) has shown isolated drill hole intercepts within the tenement and
geophysical surveys that defined good drilling targets as the basis for further exploration by the
Company.
Exploration Target
The Company engaged Xstract Mining Consultants (“Xstract”) to consolidate all the historic and RTX
exploration data into a geological model and to recommend an exploration plan to advance the
Project.
In July 2018, Xstract estimated an Exploration Target* in accordance with the guidelines of the JORC
Code (2012) of between 61Mt and 409Mt from the RCM and MCM as per Table 3 below. The estimate
for the RCM is based on a high-quality coking coal assumption and open pit configuration with strip
ratio <20:1, with the Underground target to a maximum depth of 160m (Low case) and 500m (High
case). The estimate for the MCM is based on Low Volatile PCI and open pit configuration with strip
ratio <15:1, with the Underground target to a maximum depth of 400m (Low case) and 550m (High
case). See Table 3 below for raw coal quality assumptions.
Table 3: Hillalong Project – Exploration target and coal quality assumptions
Exploration Target
RCM Open Cut
RCM Underground
Total
MCM Open Cut
MCM Underground
Total
TOTAL
Low case
Tonnes
Low
case
Raw Ash
Low case
Raw CSN
High case
Tonnes
High
case
Raw Ash
(Mt)
(% adb)
(Mt)
(% adb)
High
case
Raw CSN
18
18
18
36
39
38
5.5
5.5
5.5
2.5
1.5
2.0
8
7
15
18
28
46
61
34
26
31
36
32
34
3.0
4.0
3.5
1.5
1.0
1.0
222
116
338
30
41
71
409
The Company is anticipating a maiden drilling program to commence in H2 2019.
Page 9
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
Comet Ridge Project (EPC 1230, 100%)
BCC acquired the advanced Comet Ridge project from Acacia Coal Limited which is located 60km
East of Emerald and 25km South of the township of Comet.
Comet Ridge is an open pit project with a JORC resource of 57Mt shallower than 50 m. BCC is
targeting the Fair Hill seam and the stratigraphically lower Triumph seam to produce a coking coal
with secondary thermal coal. The Fair Hill seam is a typical (for Fair Hill formation coals) predominantly
dull coal and highly interbedded with carbonaceous siltstones and tuffaceous claystone. Thin bands
of bright vitrinite occur throughout the coal and the Fair Hill seam can vary between 9-14m in
thickness.
The Triumph seam lies approximately 25m below the Fair Hill seam and is generally less banded and
up to 2m in thickness.
Table 4: Comet Ridge Project Resource
In May 2018 the Company announced it had entered into a binding Term Sheet with Springsure
Creek Coal Pty Ltd (SCC) to sell its 100% owned Comet Ridge Project (EPC830 & MLA700005) in
exchange for a $100,000 cash payment and a royalty stream of 1.25% of FOR (Free on Rail) revenue
from the first 2.8Mt coal produced from Comet Ridge.
The transaction was subject to certain conditions precedent, amongst others, entering into final
transaction documents. The parties could not reach agreement on certain key commercial issues,
and therefore the Company terminated the Term Sheet and abandoned the Mining Lease
Application. EPC 1230 underlies Comet Ridge, and the renewal of the tenement was granted in
September 2018 for a further 5 years with an annual exploration commitment of $20 000 per annum.
BCB is currently considering various strategic options to realise value from this tenement.
Lilyvale (15%) and Mackenzie (5%) Joint Arrangements with Stanmore Coal Ltd
Lilyvale Coking Coal Project (15%)
The Lilyvale project is located 25km north east of Emerald in the Bowen basin (Queensland Australia)
and is in close proximity to BHP Mitsubishi Alliance’s Gregory Crinum operating coking coal mine and
bordering Rio Tinto’s Kestrel mine. Cape Coal holds a 15% interest in the project, whilst the remaining
85% is held by Stanmore Coal (ASX:SMR).
A desktop review of the Lilyvale project identified the German Creek (or Lilyvale) seam as potentially
amenable to underground extraction based on depth and estimated seam thickness. This seam is
presently mined as a high-quality coking coal at the adjacent Kestrel and nearby Gregory Crinum
Page 10
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Review of Operations
operations. The project is well located within 15km of existing rail infrastructure given the surrounding
operating mines.
Based on analysis of historical geophysical logs and bore holes in the surrounding region (including
the 2 cored holes with quality data within the project area) Xenith Consulting estimated and Inferred
JORC 2012 Resource of 33Mt. The Joint Arrangement estimates that the Lilyvale project hosts the
German Creek seam from 336m in depth (at hole C2059) with a typical thickness across the project
area of 2.2-2.5m which demonstrate attractive coking properties including CSN values of 5.5 – 6.5.
The north of the project area is estimated to host the shallowest coal and is contiguous to the Kestrel
mine.
The Joint Arrangement is in the process of finalising a drilling program to be executed in the next
financial year
Mackenzie Coking Coal Project (5%)
The Mackenzie Coking Coal Project in the Bowen Basin is well located for export markets as it lies on
the existing Blackwater railway line to Gladstone. The project is located between the Ensham and
Curragh operating mines and is adjacent to the Washpool coking coal project, which is also
targeting the Burngrove Coal Formation.
The project geological model contains a total of 80 bore holes.
The Company has a joint arrangement with Stanmore Coal Limited (ASX:SMR) to jointly progress the
Mackenzie Project.
A technical review of the deposit has previously been undertaken, the key outcomes of which were:
•
Some areas of the deposit are disposed to dual washing which creates a primary 10% - 15%
ash Coking Coal product with a secondary thermal coal product;
• Better yield results are expected to be achieved by utilising best practice and alternative
beneficiation techniques;
• ROM pre-treatment is likely to improve product yield; and
•
The optimal economic approach may be to develop multiple smaller mines within the overall
tenement area.
No further technical work was undertaken during the financial year.
Page 11
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
The directors submit their report on the consolidated entity (“Group”) consisting of Bowen Coking
Coal Ltd and the entities it controlled at the end of, and during, the financial period ended 30 June
2019.
Directors
The following persons were directors of Bowen Coking Coal Ltd during the financial period and up to
the date of this report, unless otherwise stated:
Non-Executive Chairman (appointed 12-Dec-18)
Neville Sneddon
Gerhard Redelinghuys Managing Director
Blair Sergeant
Steven Formica
James Agenbag
Nicholas Jorss
Eddie (Ariel) King
Executive Director - Corporate Development (appointed 28-Sep-18)
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 12-Dec-18)
Non-Executive Chairman (resigned 12-Dec-18)
Information on Directors
The board has a strong combination of technical, managerial and capital markets experience.
Expertise and experience include operating and coal exploration. The names and qualifications of
the current directors are summarised as follows:
Neville Sneddon - Independent Non-Executive Chairman
Qualifications
B. Eng (Mining)(Hons), M. Eng, MAusIMM, Grad AICD
Appointment Date
12 December 2018
Resignation Date
Length of Service
N/A
9 months
Current ASX Listed Directorships
Nil
Former ASX Listed Directorships
Stanmore Coal Limited
A mining engineer with over 40 years’ experience in most facets of the Queensland and NSW
resource sectors, and as the recently retired Chairman of Stanmore Coal Ltd, Mr Sneddon brings
substantial Board and industry knowledge to the Company. He has developed and operated both
underground and open cut mines working for Coal & Allied in the Hunter Valley and from 1997
worked in a senior role in the NSW Mines Inspectorate, covering operations in all forms of mining in
the state.
Moving to Queensland in 1999, Mr Sneddon accepted the position of Chief Operating Officer with
Shell Coal which was acquired by Anglo American’s Australian coal operations the following year.
Leaving as CEO in 2007, he held several Board positions with mining and infrastructure companies
including Chairman of the operating company at Dalrymple Bay Coal Terminal near Mackay and
Director of Port Waratah Coal Services, a major coal export facility at Newcastle. Mr Sneddon has
also been a member of the Boards of the Queensland, NSW and National Mining Councils. His
expertise has been sought by several government committees such as the NSW Mine Subsidence
Board, NSW Mines Rescue Board, Queensland Ministerial Coal Mine Safety Advisory Committee and
the joint federal/ state advisory committee which is developing nationally consistent mining safety
legislation.
Page 12
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Gerhard Redelinghuys – Managing Director
Qualifications
B. Comm. Acc, Hons, B. Compt, GAICD
Appointment Date
27 September 2017
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
N/A
2 years
Nil
Nil
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, he 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 the corporate office, as well as 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, Mr Redelinghuys has extensive experience in mining project acquisitions and
deal making on an international level. He was also the owner’s representative on a multi-billion dollar
underground coal project in Queensland until 2015 and is a graduate member of the Australian
Institute of Company Directors.
Blair Sergeant - Executive Director - Corporate Development
Qualifications
B. Bus, PostGradDip (CorpAdmin), MAICD, AGIA, ACIS,
ASCPA
Appointment Date
28 September 2018
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
N/A
1 year
Nil
Nil
Mr Sergeant is an experienced mining executive, having been the former Founding Managing
Director of Lemur Resources Limited, an ASX listed coal exploration and development company, as
well as the former Finance Director of Coal of Africa Limited, growing the company from a sub-$2m
market capitalisation to over $1.5b at its peak. During his career, Mr Sergeant has also held the
position of Managing Director, Non-Executive Director and/or Company Secretary for numerous
listed entities across a broad spectrum of industry. Mr Sergeant graduated from Curtin University,
Western Australia with a Bachelor of Business and subsequently, a Post Graduate Diploma in
Corporate Administration. He is a member of the Institute of Chartered Secretaries and
Administrators and the Australian Institute of Company Directors.
Page 13
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Steven Formica – Independent Non-Executive Director
Qualifications
N/A
Appointment Date
4 August 2015
Resignation Date
Length of Service
N/A
4 years, 1 month
Current ASX Listed Directorships
High Grade Metals Limited
Ragnar Metals Limited
Veriluma Limited
Former ASX Listed Directorships
Orminex Limited
Lindian Resources Limited
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. Mr Formica is currently a director of both FPG Projects and Viridian Property
Group, both successful property developers.
James Agenbag - Independent Non-Executive Director
Qualifications
B. Eng (Chemical Engineering), MBA
Appointment Date
27 September 2017
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
N/A
2 years
Nil
Nil
Mr Agenbag has 15 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, Mr Agenbag worked as a process design engineer at EPCM
companies including GRD Minproc Limited and DRA Global.
In 2008, Mr Agenbag 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. Mr Agenbag also has substantial experience in beneficiation optimisation
with emphasis on various technologies including some technologies where he jointly holds patent
rights. Mr Agenbag has delivered technical papers within his area of expertise in the minerals
processing field. He held a position responsible for the process engineering discipline across Peabody
Energy Australia PCI Pty Ltd coal projects, and has been a Director of Cape Coal since 2012.
Mr Agenbag 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.
Page 14
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Nicholas Jorss – Non-Executive Director
Qualifications
BE (Hons) Civil, MBA, GDip App Fin (Sec Inst)
Appointment Date
12 December 2018
Resignation Date
Length of Service
N/A
9 months
Current ASX Listed Directorships
Nil
Former ASX Listed Directorships
Stanmore Coal Limited
Mr Jorss is the founding Managing Director of Stanmore Coal Ltd (via St Lucia). Mr Jorss served on
Stanmore’s Board from its formation in June 2008 through to 26 November 2016. He has over 20 years’
experience in investment banking, civil engineering, corporate finance and project management.
Mr Jorss was instrumental in the success of Stanmore Coal Ltd, which currently has a market value of
around $375m. As the Founding Managing Director, Mr Jorss led Stanmore’s growth from a coal
exploration company to a profitable, mid-tier producer. In his prior roles in investment banking (as a
director of Pacific Road Corporate Finance) he has been involved in leading advisory mandates with
corporate, government and private equity clients across industry sectors ranging from resources to
infrastructure.
Prior to this Mr Jorss was an engineer with Baulderstone Hornibrook where he delivered significant
infrastructure and resource projects over a period of approximately eight years. Mr Jorss is a founding
shareholder and Director of St Lucia Resources, Konstantin Resources, Ballymore Resources and
Wingate Capital. He was previously a Director of Kurilpa Uranium, Vantage Private Equity Growth,
Vantage Asset Management and WICET Holdings Pty Ltd. Mr Jorss holds a Bachelor with Honours in
Civil Engineering from the University of Queensland, a Master of Business Administration from the
University of NSW (AGSM) and a Graduate Diploma of Applied Finance and Investment.
Eddie King – former Non-Executive Chairman
Qualifications
BComm, BEng (Mining - Hons)
Appointment Date
23 April 2015
Resignation Date
Length of Service
12 December 2018
3 years, 7 months
Current ASX Listed Directorships
Eastern Iron Limited
European Cobalt Limited
Pure Minerals Limited
Six Sigma Limited
Former ASX Listed Directorships
Lindian Resources Limited
Sultan Resources Limited
Drake Resources Limited
Axxis Technology Group Limited
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.
Page 15
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Company Secretary
Duncan Cornish –Company Secretary and CFO
Appointment Date
1 May 2019
Resignation Date
N/A
Mr Cornish was the founding CFO and Company Secretary for Stanmore Coal Ltd (ASX:SMR),
Waratah Coal Ltd (TSX and ASX:WCI) and Cokal Ltd (ASX:CKA) and is a Chartered Accountant with
significant experience as a public company CFO and Company Secretary, focused on finance,
administration and governance roles. He has more than 20 years’ experience in the accountancy
profession both in England and Australia, mainly with the accountancy firms Ernst & Young and
PricewaterhouseCoopers. He has extensive experience in all aspects of company financial reporting,
corporate regulatory and governance areas, business acquisition and disposal due diligence,
capital raising, company initial public offerings and company secretarial responsibilities, and has
served as CFO and/or Company Secretary of several Australian and Canadian public companies.
Stephen Brockhurst – former Company Secretary
Appointment Date
Resignation Date
22 May 2015
1 May 2019
Mr Brockhurst has over 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.
Interests in Securities
As at the date of this report, the interests of each director in shares and options issued by the
Company are shown in the table below:
Directors
Shares
Options ($0.025
@ 12-Dec-20)
Options ($0.03
@ 12-Dec-20)
Options ($0.035
@ 12-Dec-20)
Neville Sneddon
2,380,952
Gerhard
Redelinghuys
111,382,826#
Blair Sergeant
11,335,000
Steven Formica
9,407,100
James Agenbag
110,057,826#
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options
($0.0338 @ 30-
Jun-21)
3,500,000
14,000,000
10,500,000
2,100,000
2,100,000
Nicholas Jorss
39,957,120
10,000,000
10,000,000
10,000,000
-
#Note: 110,057,826 of these shares are held by both Gerhard Redelinghuys and James Agenbag through their
respective associations with Cape Coal Pty Ltd
Page 16
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Principal Activities
The principal activity of the Group during the period was the exploration and development of coal
projects with a primary focus on Metallurgical coal.
Corporate
Bowen Coking Coal Ltd ACN 064 874 620 was incorporated as an Australian public company limited
by shares on 6 July 1994, listing on the Australian Stock Exchange shortly thereafter.
Dividends Paid or Recommended
There were no dividends paid or recommended during the financial year.
Review of Operations
Information on the operations of the Group during the financial year and up to the date of this report
is set out separately in the Annual Report under Review of Operations.
Operating Results
The Group’s operating loss for the financial year was $1,579,050 (2018: $1,327,448). The increased loss
was caused principally by:
• General corporate and administrative expenses ($631,115);
• Employee benefits expense ($596,189); and
•
Share-based payments ($382,163).
Review of Financial Condition
Capital Structure
As at 30 June 2018 the Company had 499,486,810 ordinary shares, 26,000,000 performance shares
and 80,000,000 options on issue.
During the year ended 30 June 2019, the following shares were issued:
• 188,465,452 shares were issued and raised $3,427,150;
• 5,322,000 shares were issued for $106,440 from the exercise of options; and
• 13,000,000 Class B performance shares with a fair value of $167,794 were converted into
ordinary shares for nil consideration.
During the year ended 30 June 2019, the following options were issued:
• 30,000,000 options were granted to a director for nil consideration on 12 December 2018. The
options vest on 12 December 2019 and expire on 12 December 2020. 10,000,000 options have
an exercise price of $0.025, 10,000,000 options have an exercise price of $0.03 and10,000,000
options have an exercise price of $0.035;
• 35,700,000 options with an exercise price of $0.0338 were granted to directors and an officer
for nil consideration on 31 May 2019. The options vested on grant date and expire on 30 June
2021.
As at 30 June 2019 the Company had 706,274,262 ordinary shares, 13,000,000 performance shares
and 140,378,000 options on issue.
Page 17
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Financial Position
At 30 June 2019, the Group’s net assets totalled $9,427,700 (2018: $7,225,304) which included cash
assets of $2,043,310 (2018: $1,461,445). The movement in net assets largely resulted from the following
factors:
• Operating losses of $1,579,050;
• Cash outflows from operating activities of $1,283,093;
• Cash outflows on exploration and evaluation assets of $1,535,125; and
• Net cash inflows from issue of shares of $3,400,083.
Throughout the year the Group focussed on commencing exploration and development on the
Group’s coal projects.
The Group’s working capital, being current assets less current liabilities has increased from $1,293,092
in 2018 to $1,902,691 in 2019.
Treasury policy
The Group does not have a formally established treasury function. The Board is responsible for
managing the Group’s finance facilities. The Group does not currently undertake hedging of any
kind and is not currently directly exposed to material currency risks.
Liquidity and funding
The Group has sufficient funds to finance its operations and exploration activities, and to allow the
Group to take advantage of favourable business opportunities, not specifically budgeted for, or to
fund unforeseen expenditure.
Significant Changes in State of Affairs
Other than the securities issued as noted above, there were no other significant changes in the state
of affairs of the Group in the financial year.
Subsequent Events
On 6 August 2019, the Company announced that it had agreed terms whereby the exercise of the
Company’s 50 million listed options, exercisable at 4.0 cents each on or before 30 October 2019,
have been fully underwritten. In addition, the Company agreed to a private placement to the
Underwriter of 10 million shares at 5c per share, to raise $500,000. The placement was completed on
7 August 2019.
On 19 August 2019 13,000,000 Class A Performance Shares were converted in to 13,000,000 fully paid
ordinary shares, having met the conversion criteria. The conversion of the Class A Shares marks the
completion of the delayed compensation milestones for the Acquisition of the tenements as
stipulated in the Prospectus dated 3 August 2017 and as approved by shareholders on 10 August
2017.
On 22 August 2019 the Company reported an increase in the Isaac River Resource as set out in the
Annual Resource Statement. Further details can be found in the Company’s ASX announcement
dated 22 August 2019.
On 4 September 2019, the Company announced that an agreement has been reached with Rio
Tinto Exploration Pty Limited (“RTX”) to amend the original acquisition agreement relating to EPC’s
2141 & 1860, whereby the Company will pay RTX $100,000 consideration to terminate a buy-back
right and amend both the royalty rate (from 1.25% to 1.50%) and the deferred payment right. Full
Page 18
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
details of the amended agreement are set out in the Company’s ASX announcement dated 4
September 2019.
On 16 September 2019, the Company issued 12,000,000 unlisted performance rights to a consultant
COO, with various vesting conditions and expiry dates.
Subsequent to 30 June 2019 (and up to the date of this report), a total of 13,155,234 options have
been exercised in to 13,155,234 ordinary shares, as follows:
• 7,726,000 $0.02 options, raising $154,520; and
• 5,429,234 $0.04 options, raising $217,169.
Other than the matters noted above, there are no material matters or circumstances that have arisen
since the end of the year which significantly affected or may significantly affect the operations of
the Group, the results of those operations, or the state of affairs of the Group in future financial years.
Business Results
The prospects of the Group in progressing their exploration projects may be affected by a number
of factors. These factors are similar to most exploration companies moving through exploration
phase and attempting to get projects into development. Some of these factors include:
▪ Exploration - the results of the exploration activities may be such that the estimated resources
are insufficient to justify the financial viability of the projects. The Group undertakes extensive
exploration and product quality testing prior to establishing JORC compliant resource
estimates and to (ultimately) support mining feasibility studies. The Group engages external
experts to assist with the evaluation of exploration results where required and utilises third party
competent persons to prepare JORC resource statements or suitably qualified senior
management of the Group. Economic feasibility modelling of projects will be conducted in
conjunction with third party experts and the results of which will usually be subject to
independent third party peer review.
▪
Social Licence to Operate – the ability of the Group to secure and undertake exploration and
development activities within prospective areas is also reliant upon satisfactory resolution of
native title and (potentially) overlapping tenure. To address this risk, the Group develops
strong, long term effective relationships with landholders with a focus on developing mutually
acceptable access arrangements. The Group takes appropriate legal and technical advice
to ensure it manages its compliance obligations appropriately.
▪ Environmental - All phases of mining and exploration present environmental risks and hazards.
The Group’s operations are subject to environmental regulations pursuant to a variety of state
and municipal laws and regulations. Environmental legislation provides for, among other
things, restrictions and prohibitions on spills, releases or emissions of various substances
produced in association with mining operations. Compliance with such legislation can require
significant expenditures and a breach may result in the imposition of fines and penalties, some
of which may be material. Environmental legislation is evolving in a manner expected to result
in stricter standards and enforcement, larger fines and liability and potentially increased
capital expenditures and operating costs. Environmental assessments of proposed projects
carry a heightened degree of responsibility for companies and directors, officers and
employees. The Group assesses each of its projects very carefully with respect to potential
environmental issues, in conjunction with specific environmental regulations applicable to
each project, prior to commencing field exploration. Periodic reviews are undertaken once
field exploration commences.
Page 19
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
▪
Safety - Safety is of critical importance in the planning, organisation and execution of the
Group’s exploration and development activities. The Group is committed to providing and
maintaining a working environment in which its employees are not exposed to hazards that
will jeopardise an employee’s health, safety or the health and safety of others associated
with our business. The Group recognises that safety is both an individual and shared
responsibility of all employees, contractors and other persons involved with the operation of
the organisation. The Group has a Safety and Health Management system which is designed
to minimise the risk of an uncontrolled safety and health event and to continuously improving
safety culture within the organisation.
▪
Funding - the Group will require additional funding to continue exploration and potentially
move from the exploration phase to the development phases of its projects. There is no
certainty that the Group will have access to available financial resources sufficient to fund its
exploration, feasibility or development costs at those times.
▪ Market - there are numerous factors involved with exploration and early stage development
of its projects, including variance in commodity price and labour costs which can result in
projects being uneconomical.
Environmental Issues
The Group is subject to significant environmental regulations under the (Federal, State and local)
laws in Australia.
The directors monitor the Group’s compliance with environmental obligations. The directors are not
aware of any compliance breach arising during the year and up to the date of this report.
Native Title
Mining tenements that the Group currently holds, may be subject to Native Title claims. The Group
has a policy that is respectful of the Native Title rights and will, as required, negotiate with relevant
indigenous bodies.
Remuneration Report (Audited)
This report details the nature and amount of remuneration for each director and other key
management personnel.
The names of key management personnel of Bowen Coking Coal Ltd who have held office during
the financial year are:
Neville Sneddon
Non-Executive Chairman (appointed 12-Dec-18)
Gerhard Redelinghuys Managing Director
Blair Sergeant
Executive Director - Corporate Development (appointed 28-Sep-18)
Steven Formica
Non-Executive Director
James Agenbag
Non-Executive Director
Nicholas Jorss
Non-Executive Director (appointed 12-Dec-18)
Eddie (Ariel) King
Non-Executive Chairman (resigned 12-Dec-18)
Duncan Cornish
Company Secretary and Chief Financial Officer (appointed 1-May-2019)
Page 20
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
The Group’s remuneration policy seeks to align director and executive objectives with those of
shareholders and the business, while at the same time, recognising the early development stage of
the Group and the criticality of funds being utilised to achieve development objectives. The board
believes the current policy has been appropriate and effective in achieving a balance of these
objectives.
The Group’s remuneration policy provides for long-term incentives to be offered through a director
and employee equity incentive plan. Options, shares or performance rights may be granted under
this plan to align directors’, executives’, employees’ and shareholders’ interests. Two methods may
be used to achieve this aim, the first being securities that vest upon reaching or exceeding specific
predetermined objectives, and the second being options granted with higher exercise prices (than
the share price at issue) rewarding share price growth.
The board of directors is responsible for determining and reviewing the Group’s remuneration policy,
remuneration levels and performance of both executive and non-executive directors. Independent
external advice will be sought when required. No independent external advice was sought during
the current year.
Performance-Based Remuneration
Performance-based remuneration includes both short-term and long-term incentives and is designed
to reward key management personnel for reaching or exceeding specific objectives or as
recognition for strong individual performance. Short-term incentives are available to eligible staff of
the Group and may be comprised of cash bonuses, determined on a discretionary basis by the
board. No short-term incentives were made available during the year.
Long-term incentives are currently comprised of share options and performance rights, which are
granted from time-to-time to encourage sustained strong performance in the realisation of strategic
outcomes and growth in shareholder value.
The exercise price of the options is determined after taking into account the underlying share price
performance in the period leading up to the date of grant and if applicable, performance conditions
attached to the share options. Subject to specific vesting conditions, each option is convertible into
one ordinary share.
The Group’s policy for determining the nature and amount of remuneration of board members and
key executives is set out below.
Directors
Board policy is to remunerate non-executive directors at market rates for comparable companies
for time, commitment and responsibilities. The maximum aggregate amount of fees that can be paid
to non-executive directors is subject to approval by shareholders at the Annual General Meeting and
is not linked to the performance of the Group. The maximum aggregate amount of fees that can be
paid to non-executive directors approved by shareholders is currently $300,000. One-third, by
number, of non-executive directors retires by rotation at the Company’s Annual General Meeting.
Retiring directors are eligible for re-election by shareholders at the Annual General Meeting of the
Company. The appointment conditions of the non-executive directors are set out and agreed in
letters of appointment.
Page 21
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Remuneration Report (Audited) (Continued)
Executives
The remuneration structure for executives is based on a number of factors, including length of service,
particular experience of the individual concerned, and overall performance of the Group.
The executives receive payments provided for under an employment or service agreement, which
may
incentives, and equity-based performance
remuneration.
include cash, superannuation, short-term
The Company has entered into an executive services agreement with Red House Consulting Pty Ltd,
for Gerhard Redelinghuys’ services on the following material terms:
• Position: Managing Director and CEO.
• Commencement Date: 11 October 2017.
•
• Notice period: The Company must give 3 months’ notice to terminate the agreement other
than for cause. The executive must give 3 months’ notice to terminate the agreement.
Term: Initial period of 12 months, renewed for consecutive periods of 12 months.
• Remuneration: $240,000 per annum, indexed per CPI Brisbane on 1 July each year, plus an
allowance of $5,000 per annum for death & disability insurance.
• Other industry standard provisions for senior executive of a public listed company are
included in the agreement.
The Company has entered into executive services agreements with Blair Sergeant on the following
material terms:
• Position: Executive Director with respect to the Company’s promotion to investors, corporate
development and potential acquisitions.
• Commencement Date: 28 September 2018.
• Remuneration: $198,000 plus superannuation per annum.
The Company has a services agreement with Corporate Administration Services Pty Ltd (“CAS”) and
Duncan Cornish, the Company’s CFO and Company Secretary. Under the agreement, CAS also
provides accounting, bookkeeping and administrative services. Both the Company and CAS are
entitled to terminate the agreement upon giving not less than three months’ written notice. The base
fee under the services agreement is $120,000 per annum, in effect from 1 May 2019.
Page 22
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Remuneration Report (Audited) (Continued)
Remuneration Details of Key Management Personnel
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended
30 June 2019 was as follows:
Short Term Benefits
Equity-settled
Share-based
Payments
Key
Management
Personnel
Salary &
Fees
Non-cash
Benefits
Other
fees
Post-
Employme
nt Super-
annuation
Shares Options
Total
/Rights
Performa
nce
related %
%
consisting
of options
$
$
$
$
$
$
$
%
N. Sneddon#
33,226
G. Redelinghuys
244,668
B. Sergeant
159,342
S. Formica
J. Agenbag
N. Jorss#
E. King*
D. Cornish
Total
Notes:
39,420
36,000
26,581
13,437
20,000
572,674
*director resigned on 12-Dec-18
#directors appointed on 12-Dec-18
-
-
-
-
-
-
-
-
-
3,156
4,412
9,248
-
-
2,525
-
-
19,341
-
-
-
-
-
-
-
-
-
/rights
%
45.0%
32.4%
34.6%
31.2%
33.2%
72.9%
0.0%
29,785
66,167
119,140
368,220
89,355
257,945
17,871
57,291
17,871
53,871
78,356
107,462
-
13,437
45.0%
32.4%
34.6%
31.2%
33.2%
72.9%
0.0%
-
-
-
-
-
-
-
-
29,785
49,785
59.8%
59.8%
-
382,163
974,178
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended
30 June 2018 was as follows:
Short Term Benefits
Equity-settled
Share-based
Payments
Key
Management
Personnel
Salary &
Fees
Non-cash
Benefits
Post-
Employme
nt Super-
annuation
Other
fees
Share
s
Options
/Rights
Total
Performa
nce
related %
%
consisting
of options
/rights
$
$
$
$
$
$
$
%
%
G. Redelinghuys
164,764
3,333
15,653
S. Formica
J. Agenbag
E. King
G. D’Arcy#
Total
Notes:
44,565
27,000
48,822
6,000
-
-
-
-
30,000<
8,000<
-
-
-
-
291,151
3,333
15,653
38,000
-
-
-
-
-
-
-
-
-
-
-
183,750
74,565
35,000
48,822
6,000
348,137
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
#director resigned on 27-Sep-17
< relates to consultancy provided on an arm’s length basis at commercial rates
Page 23
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Remuneration Report (Audited) (Continued)
The percentage of equity-based remuneration for persons who were key management personnel of
the Group during the year ended 30 June 2019 is set out below:
Key Management Personnel
Proportion of Remuneration
Equity Based
Salary and Fees
N. Sneddon#
G. Redelinghuys
B. Sergeant
S. Formica
J. Agenbag
N. Jorss#
E. King*
D. Cornish
45.0%
32.4%
34.6%
31.2%
33.2%
72.9%
0.0%
59.8%
55.0%
67.6%
65.4%
68.8%
66.8%
27.1%
100.0%
40.2%
Notes: *director resigned on 12-Dec-18, #directors appointed on 12-Dec-18
Company Performance, Shareholder Wealth, and Director and Executive Remuneration
During the financial year, the Company generated losses as its principal activity was mineral
exploration.
As the Company is still in the exploration and development stage, the link between remuneration,
company performance and shareholder wealth is tenuous. Share prices are subject to the influence
of commodity prices and market sentiment towards the sector, and as such, increases and
decreases might occur independent of executive performance and remuneration.
Options Held by Key Management Personnel
Details of options held directly, indirectly or beneficially by key management personnel during the
year ended 30 June 2019 were as follows:
Key
Management
Personnel
Balance at
1 July 2018
Granted as
Compensat
ion
Exercised
Expired
Balance at
30 June 2019
Total Vested
30 June 2019
Total Vested
and
Exercisable
30 June 2019
N. Sneddon#
G. Redelinghuys
B. Sergeant
S. Formica
J. Agenbag
N. Jorss#
E. King*
-
-
-
-
-
3,500,000
14,000,000
10,500,000
2,100,000
2,100,000
30,000,000
15,000,000
-
D. Cornish
-
3,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,500,000
3,500,000
3,500,000
14,000,000
14,000,000
14,000,000
10,500,000
10,500,000
10,500,000
2,100,000
2,100,000
2,100,000
2,100,000
2,100,000
2,100,000
30,000,000
-
-
15,000,000
15,000,000
15,000,000
3,500,000
3,500,000
3,500,000
Notes: *director resigned on 12-Dec-18, #directors appointed on 12-Dec-18
Page 24
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Remuneration Report (Audited) (Continued)
Options Granted as Remuneration
• 30,000,000 options were granted to a director for nil consideration on 12 December 2018. The
options vest on 12 December 2019 and expire on 12 December 2020. 10,000,000 options have
an exercise price of $0.025, 10,000,000 options have an exercise price of $0.03 and10,000,000
options have an exercise price of $0.035;
• 35,700,000 options with an exercise price of $0.0338 were granted to directors and an officer
for nil consideration on 31 May 2019. The options vested on grant date and expire on 30 June
2021.
Performance Shares Held by Key Management Personnel
Details of performance shares held directly, indirectly or beneficially by key management personnel
during the year ended 30 June 2019 were as follows:
Key Management
Personnel
Balance at
1 July 2018
Granted as
Compensation
Converted
Expired
Balance at
30 June
2019
Total
Vested 30
June
2019
Total Vested
and
Convertible
30 June 2019
G. Redelinghuys *
26,000,000
J. Agenbag *
26,000,000
-
-
13,000,000
13,000,000
-
-
13,000,000
13,000,000
-
-
-
-
*Held at appointment. Represents the Class A and Class B Performance Shares issued to Cape Coal Pty Ltd.
Performance Rights Granted as Remuneration
No performance shares were granted during the year ended 30 June 2019 as remuneration.
Shares Held by Key Management Personnel
Details of shares held directly, indirectly or beneficially by key management personnel during the
year ended 30 June 2019 were as follows:
Balance at
1 July 2018
Granted as
Compensation
Other Changes
Balance at
30 June 2019
Key
Management
Personnel
N. Sneddon#
-
G. Redelinghuys
101,325,000
B. Sergeant
S. Formica
3,600,000
8,970,807
J. Agenbag
100,000,000
N. Jorss#
E. King*
D. Cornish
-
5,000,000
-
-
-
-
-
-
-
-
-
2,380,952
2,380,952
13,000,000##
114,325,000#
7,735,000
11,335,000
436,293
9,407,100
13,000,000##
113,000,000#
38,528,548
38,528,548
-
5,000,000
2,380,952
2,380,952
Notes: #13,000,000 of these shares are held by both Gerhard Redelinghuys and James Agenbag through their
respective associations with Cape Coal Pty Ltd
*director resigned on 12-Dec-18
#directors appointed on 12-Dec-18
Page 25
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
Remuneration Report (Audited) (Continued)
Other transactions with Key Management Personnel
There have been no other transactions with key management personnel during the year ended 30
June 2019.
End of Remuneration Report (Audited)
Options
At the date of this report, the unissued ordinary shares of the Company under options are as follows:
Unlisted Options
Issue Date
22-Apr-16
22-Apr-16
12-Dec-18
12-Dec-18
12-Dec-18
31-May-19
TOTAL
Expiry Date
Exercise Price
No. Under Option
30-Oct-19
30-Oct-19
12-Dec-20
12-Dec-20
12-Dec-20
30-Jun-21
$0.04
$0.02
$0.025
$0.03
$0.035
$0.0338
44,570,766
16,952,000
10,000,000
10,000,000
10,000,000
35,700,000
127,222,766
At the date of this report, there are 12,000,000 unlisted performance rights on issue, with various
vesting conditions and expiry dates.
There have been no unissued shares or interests under option of any controlled entity within the
economic entity during or since reporting date. Option holders do not have any rights to participate
in any share issue or other interests in the Company or any other entity.
Directors’ Meetings
The meetings (held while a director) attended by each director during the financial year were:
Directors
Neville Sneddon
Gerhard Redelinghuys
Blair Sergeant
Steven Formica
James Agenbag
Nicholas Jorss
Eddie (Ariel) King
Board
Meetings
Attended
2
4
3
4
4
2
2
2
4
3
4
4
2
1
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.
Page 26
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Directors’ Report
The Company does not have an audit committee. The Board is of the opinion that due to the nature
and size of the Company, the functions performed by an audit committee can be adequately
handled by the full Board. At such time when the Company is of sufficient size, a separate Audit and
Risk Management Committee will be formed.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the
directors of Bowen Coking Coal Ltd support and, where practicable or appropriate, have adhered
to the ASX Principles of Corporate Governance. The Company’s Corporate Governance Statement
is
the Company’s website
(www.bowencokingcoal.com.au).
the ASX and can be
separately on
found on
lodged
Indemnifying Directors and Auditors
The Company has entered into a Deed with each of the Directors (and the Company Secretary)
whereby the Company has agreed to provide certain indemnities to each Director (and the
Company Secretary) to the extent permitted by the Corporations Act and to use its best endeavours
to obtain and maintain directors’ and officers’ indemnity insurance, subject to such insurance being
available at reasonable commercial terms.
The Company has paid premiums to insure each of the directors (and the Company Secretary) of
the Company against liabilities for costs and expenses incurred by them in defending any legal
proceedings arising out of their conduct while acting in the capacity of director (or Company
Secretary) of the Company, other than conduct involving a wilful breach of duty in relation to the
Company. The contracts include a prohibition on disclosure of the premium paid and nature of the
liabilities covered under the policy.
The Company has not given an indemnity or entered into an agreement to indemnify, or paid or
agreed to pay insurance premiums in respect of any person who is or has been an auditor of the
Company or a related entity during the year and up to the date of this report.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or
intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or any part of those proceedings. The Company was not a party
to any such proceedings during the year.
Non-Audit Services
During the financial year, RSM Australia does not provide non-audit services (2018: nil).
Auditor’s Independence Declaration
The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is
attached to and forms part of this financial report.
Signed in accordance with a resolution of the board of directors.
Gerhard Redelinghuys, Director
24 September 2019
Brisbane, Queensland
Page 27
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Bowen Coking Coal Limited for the year ended 30 June 2019,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Brisbane, Queensland
Dated: 24 September 2019
Albert Loots
Partner
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Shareholder Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere
in this report is as follows. The information is current as at 20 September 2019.
(a) Distribution of equity securities
The number of holders, by size of holding, in each class of security are:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Ordinary Shares
Quoted Options ($0.04 @ 30-Oct-19)
No. Holders
No. Shares
No. Holders
No. Options
133
18
19
326
344
840
28,603
46,065
152,101
18,910,764
723,291,963
742,429,496
-
-
-
21
31
52
-
-
-
1,120,571
43,450,195
44,570,766
Unlisted Options ($0.02 @ 30-Oct-19)
Unlisted Options ($0.025 @ 12-Dec-20)
No. Holders
No. Options
No. Holders
No. Options
-
-
-
10
14
24
-
-
-
640,000
16,312,000
16,952,000
-
-
-
-
1
1
-
-
-
-
10,000,000
10,000,000
Unlisted Options ($0.03 @ 12-Dec-20)
Unlisted Options ($0.035 @ 12-Dec-20)
No. Holders
No. Options
No. Holders
No. Perf. Rights
-
-
-
-
1
1
-
-
-
-
10,000,000
10,000,000
-
-
-
-
1
1
-
-
-
-
10,000,000
10,000,000
Unlisted Options ($0.0338 @ 30-Jun-21)
Performance Rights
No. Holders
No. Options
No. Holders
No. Perf. Rights
-
-
-
-
6
6
-
-
-
-
35,700,000
35,700,000
-
-
-
-
1
1
-
-
-
-
12,000,000
12,000,000
There are 156 shareholders holding less than a marketable parcel of 6,849 shares.
Page 29
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Shareholder Information
(b) Twenty Largest Shareholders
The names of the twenty largest holders of Quoted Ordinary Shares are:
Number of
Shares
% of total
Shares
110,057,826
14.8%
69,206,608
50,008,762
35,300,000
31,250,000
19,047,826
18,001,231
17,363,549
17,300,000
11,335,000
10,000,000
10,000,000
9,716,702
9,407,100
9,019,354
7,000,000
6,847,827
6,736,460
6,665,373
9.3%
6.7%
4.8%
4.2%
2.6%
2.4%
2.3%
2.3%
1.5%
1.3%
1.3%
1.3%
1.3%
1.2%
0.9%
0.9%
0.9%
0.9%
0.9%
461,263,618
62.1%
742,429,496
100.0%
#
Registered Name
1
2
3
4
5
6
7
8
9
10
11
12
CAPE COAL PTY LTD
LATIMORE FAMILY PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
OLD FORRESTER PTY LTD
ST LUCIA RESOURCES CAPITAL FUND PTY LTD
AREA COAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR PAUL GABRIEL SHARBANEE
CROCODILE CAPITAL OFFSHORE FUND
RIO SUPER PTY LTD
SAS INVESTMENTS PTY LTD
BRAZIL FARMING PTY LTD
13 M RESOURCES PTY LTD
14
15
STEVSAND INVESTMENTS PTY LTD
PERSHING AUSTRALIA NOMINEES PT Y LTD
17
18
19
NORFOLK ENCHANTS PTY LTD
FIRST ONE REALTY PTY LTD
FOLEY SUPER PTY LTD
20 MR DEANE ROBERT FIRMIN
TOP 20 TOTAL
Total of Securities
Page 30
16 MR ROBERT JOHNSON ROACH & MRS DIANA KATHLEEN ROACH
7,000,000
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Shareholder Information
The names of the twenty largest holders of Quoted Options ($0.04 @ 30-Oct-19) Shares are:
#
Registered Name
Number of
Options
% of total
Options
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
MRS DENISE JOY SHARBANEE
FIRST ONE REALTY PTY LTD
MIKADO CORPORATION PTY LTD
MR JASON YIN
MR GREGORY KENNETH D'ARCY
MR DANIEL AARON HYLTON TUCKETT
LAKE SPRINGS PTY LTD
WAVELL BROCKMAN PTY LTD
MR DEREK DECLAN BRUTON
CROWN LUGGERS PTY LTD
TANGO88 PTY LTD
FINMIN SOLUTIONS PTY LTD
ANNBROOK CAPITAL PTY LTD
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
STATSMIN NOMINEES PTY LTD
16 OOFY PROSSER PTY LTD
17
18
19
20
LANTECH DEVELOPMENTS PTY LTD
BROWNLOW PR PTY LTD
BAYTOWER HOLDINGS PTY LTD
FUTURITY PRIVATE PTY LTD
TOP 20 TOTAL
Total of Securities
7,815,000
5,900,000
4,000,000
3,781,000
3,500,000
3,113,330
1,980,000
1,600,000
1,300,000
1,200,000
1,076,865
950,000
950,000
930,000
800,000
600,000
500,000
500,000
400,000
300,000
17.5%
13.2%
9.0%
8.5%
7.9%
7.0%
4.4%
3.6%
2.9%
2.7%
2.4%
2.1%
2.1%
2.1%
1.8%
1.3%
1.1%
1.1%
0.9%
0.7%
41,196,195
92.30%
44,570,766
100%
Page 31
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Shareholder Information
(c) Substantial Shareholders
The Company has received substantial shareholder notices from the following entities:
Name of Shareholder
Ordinary Shares
% of total Shares
M Resources Pty Ltd and Matthew Latimore
Cape Coal Pty Ltd and Gerhard Redelinghuys
Crocodile Capital (and associated entities)
St Lucia Resources Capital Fund Pty Ltd
Nicholas Jorss (and associated entities)
87,548,303
111,382,826
50,000,000
31,250,000
38,528,548
11.86%
15.09%
7.37%
5.16%
5.46%
The Company notes that, as at the date of this report, the following shareholders own substantial
shareholdings (≥ 5.0%) in Bowen Coking Coal Ltd:
Name of Shareholder
Ordinary Shares
% of total Shares
M Resources Pty Ltd and Matthew Latimore
Cape Coal Pty Ltd and Gerhard Redelinghuys
JP Morgan Nominees Australia Pty Limited
87,548,303
111,382,826
50,008,762
11.8%
15.0%
6.7%
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
Options and performance rights do not carry voting rights.
(e) Restricted securities
As at the date of this report, there are 96,000,000 ordinary shares subject to ASX escrow.
(f) On-market buy back
There is not a current on-market buy-back in place.
(g) Business objectives
The Group has used its cash and assets that are readily convertible to cash in a way consistent with
its business objectives.
Page 32
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Interests in Tenements
Bowen Coking Coal Ltd held the following interests in tenements as at the date of this report:
Country
Location
Project
Tenement
Status
Current Interest
(%)
Australia
Queensland
Cooroorah
MDL 453
Granted
Australia
Queensland
Mt Hillalong
EPC 1824
Granted
Australia
Queensland
Hillalong East
EPC 2141
Granted
Australia
Queensland
Hillalong East
EPC 1860
Granted
Australia
Queensland
Lilyvale
EPC 1687
Granted
Australia
Queensland
Lilyvale
EPC 2157
Granted
Australia
Queensland
Mackenzie
EPC 2081
Granted
Australia
Queensland
Comet Ridge
EPC 1230
Granted
Australia
Queensland
Isaac River
MDL 444
Granted
Australia
Queensland
Isaac River
EPC830
Granted
100%
100%
100%
100%
15%
15%
5%
100%
100%
100%
Page 33
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Annual Mineral Resources Statement
Resources Statement on 30 June 2018 (JORC 2012, Mt)
Project
Tenement
Cooroorah MDL 453
EPC 1687
&2157
EPC 1230
Lilyvale
Comet
Ridge
TOTAL
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
69
9
78
85
33
43
154
33
60
100%
15%
100%
161*
247*
8
8
* Includes 28Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture
Resources Statement as at 30 June 2019 (JORC 2012, Mt)
Project
Tenement
Cooroorah MDL 453
Lilyvale
Comet
Ridge
EPC 1687
&2157
EPC 1230
Isaac River
MDL 444 &
EPC830
TOTAL
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
96
9
4
81
33
43
1
177
33
60
5
100%
15%
100%
100%
109
158*
275*
8
8
* Includes 28Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture
Movements:
- On 1 November 2018 the Company announced its maiden Resource estimate for its 100%
owned Isaac River Project following a review from historic information
- On 12 February 2019 the Company announced an update to the Resource estimate of its
100% owned Cooroorah project following the 2018 exploration program, and a further
update on 3 April 2019 after obtaining further information from historic drilling.
On 22 August 2019 the Company reported an increase in the Isaac River Resource as set out below.
Further details can be found in the Company’s ASX announcement dated 22 August 2019.
Project
Tenement
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
Isaac River
MDL 444 &
EPC830
6
3
-
9
100%
Other than the change to the Isaac River Project noted above, the Group confirms that it is not
aware of any new information or data (since 30 June 2019) that materially affects any other Mineral
Resources for the projects set out above.
The Group regularly reviews its Mineral Resources and Reserves to assess their reasonableness,
engaging suitably qualified competent person/s where required. A summary of the governance and
controls applicable to the Group’s Mineral Resources and Reserves processes is as follows:
▪ Review and validation of drilling and sampling methodology and data spacing, geological
logging, data collection and storage, sampling and analytical quality control;
Page 34
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Annual Mineral Resources Statement
▪ Geological interpretation — review of known and interpreted structure, lithology and
weathering controls;
▪ Estimation methodology —
relevant to mineralisation style and proposed mining
methodology;
▪ Comparison of estimation results with previous mineral resource models, and with results using
alternate modelling methodologies;
▪ Visual validation of block model against raw composite data; and
▪ Peer review by independent consultants as required.
This Annual Mineral Resources and Ore Reserves Statement:
▪
is based on, and fairly represents, information and supporting documentation prepared by
competent persons (referred to on page 2); and
▪ has been approved by Mr Troy Turner who is a Member of the Australasian Institute of Mining
and Metallurgy. Mr Turner, Managing Director and a fulltime employee of Xenith Consulting
Pty Ltd, has sufficient experience that is relevant to the styles of mineralisation under
consideration and to the activity which he is undertaking to qualify as a Competent Person
as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Mr Turner has approved this Annual Mineral Resources
and Ore Reserves Statement as a whole in the form and context in which it appears in this
Annual Report.
Page 35
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2019
Revenue
Corporate and administrative expenses
Employee benefits expense
Impairment of loans
Share-based payments
Loss before income tax expense
Income tax expense
Loss for the period
Note
30 June 2019
30 June 2018
$
$
2
3
3
18
4
30,521
31,106
(631,115)
(1,203,367)
(596,189)
(155,187)
(104)
(382,163)
-
-
(1,579,050)
(1,327,448)
-
-
(1,579,050)
(1,327,448)
Other comprehensive income
Other comprehensive income/(loss) for the period, net of
tax
-
-
Total comprehensive income/(loss) for the period
(1,579,050)
(1,327,448)
Total comprehensive income for the period attributable to
the owners of the Company
(1,579,050)
(1,327,448)
Loss per share attributable to owners of the parent
company
Basic and diluted earnings per share
14
Cents
(0.26)c
Cents
(0.34)c
The accompanying notes form part of these financial statements.
Page 36
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Consolidated Statement of Financial Position
As at 30 June 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Current Assets
NON-CURRENT ASSETS
Exploration and evaluation assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Total Current Liabilities
Note
30 June 2019
30 June 2018
$
$
5
6
7
8
9
2,043,310
1,461,445
89,446
15,780
66,234
12,098
2,148,536
1,539,777
7,525,010
7,525,010
5,932,212
5,932,212
9,673,546
7,471,989
245,846
245,846
246,685
246,685
TOTAL LIABILITIES
245,846
246,685
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
9,427,700
7,225,304
10
11
53,398,058
49,830,181
471,863
258,294
(44,442,221)
(42,863,171)
9,427,700
7,225,304
The accompanying notes form part of these financial statements.
Page 37
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2019
Note
Issued Capital
Reserve
Accumulated
Losses
Total Equity
$
$
$
$
Balance at 30 June 2017
42,064,761
800
(41,535,723)
529,838
Loss for the period
Total comprehensive income
Issue of shares
Share-based payments
Share issue costs
Balance at 30 June 2018
Loss for the period
Total comprehensive income
Issue of shares
Exercise of options
Conversion of performance shares
Share-based payments
Recognise prior years general reserve
to other income
10
18
10
10
10
18
-
-
8,419,000
-
-
-
-
257,494
(653,580)
-
(1,327,448)
(1,327,448)
(1,327,448)
(1,327,448)
-
-
-
8,419,000
257,494
(653,580)
49,830,181
258,294
(42,863,171)
7,225,304
-
-
3,427,150
106,440
167,794
-
-
-
-
-
-
(167,794)
382,163
(800)
-
(1,579,050)
(1,579,050)
(1,579,050)
(1,579,050)
-
-
-
-
-
-
3,427,150
106,440
-
382,163
(800)
(133,507)
Share issue costs
(133,507)
Balance at 30 June 2019
53,398,058
471,863
(44,442,221)
9,427,700
The accompanying notes form part of these financial statements.
Page 38
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts
Other receipts/payments
Payments to suppliers and employees
30 June 2019
30 June 2018
$
$
25,708
(22,628)
26,560
-
(1,286,173)
(1,379,136)
Net cash used in operating activities
13
(1,283,093)
(1,352,576)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Loans to unrelated entities
Payments for capital raising costs
(1,535,125)
(1,523,623)
(1,535,125)
(1,523,623)
3,533,590
4,610,000
-
(19,922)
(133,507)
(580,323)
Net cash provided by financing activities
13
3,400,083
4,009,755
Net increase in cash held
581,865
1,133,556
Cash at Beginning of Period
Coking Coal One cash acquired
1,461,445
-
325,153
2,736
Cash at End of Year
5
2,043,310
1,461,445
The accompanying notes form part of these financial statements.
Page 39
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards, and other
authoritative pronouncements of the Australian Accounting Standards Board. Bowen Coking Coal
Ltd is a for-profit entity for the purpose of preparing the financial statements. The financial statements
are presented in Australian dollars.
Compliance with Australian Accounting Standards ensures that the financial statements and notes
also comply with International Financial Reporting Standards.
The financial statements are for the consolidated entity consisting of Bowen Coking Coal Ltd and its
Controlled Entities. Bowen Coking Coal Ltd is a listed public company, incorporated and domiciled
in Australia. The financial statements have been prepared on an accruals basis and are based on
historical cost, modified by the measurement at fair value of selected non-current assets, financial
assets and liabilities. The financial report was authorised for issue on 24 September 2019 by the
directors of the Company.
Separate financial statements for Bowen Coking Coal Ltd as an individual entity are no longer
presented following a change to the Corporations Act 2001. However, financial information required
for Bowen Coking Coal Ltd as an individual entity is included in Note 23.
Material accounting policies adopted in the preparation of these financial statements are presented
below. They have been consistently applied unless otherwise stated.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate for for-profit orientated entities. These financial
statements and notes also comply with the International Financial Reporting Standards and
Interpretations as issued by the International Accounting Standards Board (‘IASB’).
Historical Cost Convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial
assets at fair value through other comprehensive income, investment properties, certain classes of
property, plant and equipment.
Going Concern
The financial statements have been prepared on a going concern basis which contemplates the
continuity of normal business activities and the realisation of assets and discharge of liabilities in the
ordinary course of business.
For the year ended 30 June 2019 the Group generated a consolidated loss of $1,579,050 and incurred
operating cash outflows of $1,283,093. As at 30 June 2019 the Group has cash and cash equivalents
of $2,043,310 and net assets of $9,427,700.
The Group’s ability to continue to adopt the going concern assumption will depend upon the Group
being able to manage its liquidity requirement and by taking some or all of the following actions:
1.
raising additional capital;
2. successful exploration and subsequent exploitation of the Group’s tenements;
Page 40
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Going Concern (Continued)
3.
reducing its working capital expenditure; and
4. disposing of non-core projects.
The directors have concluded as a result of the requirement to raise funds in the future there exists a
material uncertainty that may cast significant doubt regarding the Group's ability to continue as a
going concern and therefore, the Group may be unable to realise their assets and discharge their
liabilities in the normal course of business. Nevertheless, after taking into account the current financial
position of the Group, and the Group’s ability to raise further capital, the directors have a reasonable
expectation that the Group will have adequate resources to fund its future operational requirements
and for these reasons they continue to adopt the going concern basis in preparing the financial
report.
Should the Group be unable to continue as a going concern, it may be required to realise its assets
and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ
from those stated in the financial statements. This financial report does not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts or
classification of liabilities and appropriate disclosures that may be necessary should the Group be
unable to continue as a going concern.
Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bowen
Coking Coal Ltd ("Company" or "parent entity") as at 30 June 2019, and the results of all subsidiaries
for the period then ended. Bowen Coking Coal Ltd and its subsidiaries together are referred to in
these financial statements as the Group or the economic entity.
The names of the subsidiaries are contained in Note 21. All subsidiaries in Australia have a 30 June
financial year end and are accounted for by the parent entity at cost.
Subsidiaries are all entities over which the Group has control. The Group has control over an entity
when the Group is exposed to, or has a right to, variable returns from its involvement with the entity,
and has the ability to use its power to affect those returns. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are de-consolidated from the date that
control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of controlled entities have
been changed where necessary to ensure consistency with the policies adopted by the Group.
Changes in ownership interests
When the Group ceases to have control, joint control or significant influence, any retained interest in
the entity is remeasured to its fair value, with the change in the carrying amount recognised in profit
or loss.
The fair value is the initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
Page 41
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the
Executive Director/Chief Executive Officer.
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and
determining the allocation of resources.
The Group is managed primarily on the basis of geographical locations as these locations have
notably different risk profiles and performance assessment criteria. Operating segments are
therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments
are considered to have similar economic characteristics and are similar with respect to any external
regulatory requirements. Management currently identifies the Group as having only one reportable
segment, being the exploration of mineral projects in Australia.
Income Tax
The income tax expense/(income) for the period comprises current income tax expense/(income)
and deferred tax expense/(income). Current income tax expense charged to profit or loss is the tax
payable on taxable income calculated using applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities/(assets) are therefore measured at the amounts
expected to be paid to/(recovered from) the relevant taxation authority. Deferred income tax
expense reflects movements in deferred tax asset and deferred tax liability balances during the
period as well unused tax losses. Current and deferred income tax expense/(income) is charged or
credited directly to equity instead of profit or loss when the tax relates to items that are credited or
charged directly to equity.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates enacted or substantively
enacted at reporting date. Their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred
tax assets also result where amounts have been fully expensed but future tax deductions are
available. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
The Company and its Australian 100% owned controlled entities have not yet formed a tax
consolidated group.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised. The amount of benefits brought to account or which may be
realised in the future is based on the assumption that no adverse change will occur in income
taxation legislation and the anticipation that the economic entity will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
Page 42
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. Such expenditures comprise net direct costs and an appropriate portion of related
overhead expenditure but do not include overheads or administration expenditure not having a
specific nexus with a particular area of interest. These costs are only carried forward to the extent
that they are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage which permits reasonable assessment of the
existence of economically recoverable reserves and active or significant operations in relation to the
area are continuing.
A regular review will be undertaken on each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest. A provision is raised against
exploration and evaluation assets where the directors are of the opinion that the carried forward net
cost may not be recoverable or the right of tenure in the area lapses. The increase in the provision is
charged against the results for the year. Accumulated costs in relation to an abandoned area are
written off in full against profit or loss in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised
over the life of the area according to the rate of depletion of the economically recoverable reserves.
Restoration Costs
Costs of site restoration are provided over the life of the facility from when exploration commences
and are included in the costs of that stage. Site restoration costs include the dismantling and removal
of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in
accordance with clauses of the exploration and mining permits. Such costs have been determined
using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration
due to community expectations and future legislation. Accordingly, the costs have been determined
on the basis that the restoration will be completed within one year of abandoning the site.
The economic entity is not currently liable for any future restoration costs in relation to current areas
of interest. Consequently, no provision for restoration has been deemed necessary.
Impairment of Assets
At each reporting date, the economic entity reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's
carrying value over its recoverable amount is expensed to profit or loss.
Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the
entity becomes a party to the contractual provisions of the instrument. Trade date accounting is
adopted for financial assets.
Page 43
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Instruments (Continued)
Financial instruments are initially measured at fair value plus transactions costs where the instrument
is not classified as at fair value through profit or loss. Transaction costs related to instruments classified
as at fair value through profit or loss are expensed to profit or loss immediately.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled
or expire. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-
cash assets or liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective
interest rate method, or cost.
Fair value is the price that would be received to sell an asset or paid to transfer an asset. Amortised
cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount
initially recognised and the maturity amount calculated using the effective interest method;
and
(d) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that exactly discounts estimated future cash payments or
receipts (including fees, transaction costs and other premiums or discounts) through the expected
life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to
the net carrying amount of the financial asset or financial liability. Revisions to expected future net
cash flows will necessitate an adjustment to the carrying value with a consequential recognition of
an income or expense in profit or loss.
The economic entity does not designate any interests in subsidiaries, associates or joint venture
entities as being subject to the requirements of accounting standards specifically applicable to
financial instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost.
Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
Page 44
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Instruments (Continued)
Impairment
At each reporting date, the economic entity assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale financial instruments, a
significant or prolonged decline in the value of the instrument is considered to determine whether an
impairment has arisen. Impairment losses are recognised in profit or loss.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-
term highly liquid investments with original maturities of less than 3 months.
Issued Capital
Ordinary shares are classified as equity. Transaction costs (net of tax where the deduction can be
utilised) arising on the issue of ordinary shares are recognised in equity as a reduction of the share
proceeds received.
Share Based Payments
The economic entity makes equity-settled share based payments to directors, employees and other
parties for services provided or the acquisition of exploration assets. Where applicable, the fair value
of the equity is measured at grant date and recognised as an expense over the vesting period, with
a corresponding increase to an equity account. The fair value of shares is ascertained as the market
bid price. The fair value of options is ascertained using the Black and Scholes option valuation pricing
model which incorporates all market vesting conditions. Where applicable, the number of shares
and options expected to vest is reviewed and adjusted at each reporting date such that the amount
recognised for services received as consideration for the equity instruments granted shall be based
on the number of equity instruments that eventually vest.
Where the fair value of services rendered by other parties can be reliably determined, this is used to
measure the equity-settled payment.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST (or overseas VAT), except
where the amount of GST incurred is not recoverable. In these circumstances the GST (or overseas
VAT) is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST. Cash
flows are presented in the statement of cash flows on a gross basis except for the GST component of
investing and financing activities which are disclosed as operating cash flows.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional and presentation currency of Bowen Coking Coal Ltd and its Australian subsidiaries is
Australian dollars ($A).
Page 45
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Foreign Currency Transactions and Balances (Continued)
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-
end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the
date of the transaction. Non-monetary items measured at fair value are reported at the exchange
rate at the date when fair values were measured. Exchange differences arising on the translation of
monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash
flow or net investment hedge.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the
economic entity’s presentation currency are translated as follows:
▪ assets and liabilities are translated at period-end exchange rates prevailing at that reporting
date;
▪
▪
income and expenses are translated at average exchange rates for the period;
retained earnings are translated at the exchange rates prevailing at the date of the
transaction.
Exchange differences arising on translation of foreign operations are recognised in other
comprehensive income.
Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable,
any accumulated depreciation and impairment losses.
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of plant and
equipment is greater than the estimated recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment losses are recognised either in
profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal
assessment of recoverable amount is made when impairment indicators are present.
The carrying amount of plant and equipment is reviewed periodically by directors to ensure it is not
in excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Entity includes the cost of materials,
direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future benefits associated with the item will flow to the
Consolidated Entity and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period
in which they are incurred.
Page 46
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Plant and Equipment (Continued)
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s
useful life to the Consolidated Entity commencing from the time the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease
or the estimated useful lives of the improvements.
The depreciation rates used for plant and equipment is 33%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains and losses are included in the statement of comprehensive income. When revalued
assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to
retained earnings.
Employee Benefits
Short-term employee benefit obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave expected to be settled wholly within 12 months after the end of the reporting period are
recognised in liabilities in respect of employees' services rendered up to the end of the reporting
period and are measured at amounts expected to be paid when the liabilities are settled.
Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial period adjusted for any bonus
elements in ordinary shares issued during the period.
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.
Page 47
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
New and Amended Standards and Interpretations For Future Periods
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued
by the AASB that are necessary for the current reporting period.
The following Accounting Standards and Interpretations are most relevant to the entity:
AASB 15 Revenue from Contracts with Customers
AASB 15 supersedes AASB 111 Construction Contracts, AASB 118 Revenue and related Interpretations
and it applies to all revenue arising from contracts with customers, unless those contracts are in the
scope of other standards. The new standard establishes a five-step model to account for revenue
arising from contracts with customers. Under AASB 15, revenue is recognised at an amount that
reflects the consideration to which an entity expects to be entitled in exchange for transferring goods
or services to a customer. The standard requires entities to exercise judgement, taking into
consideration all of the relevant facts and circumstances when applying each step of the model to
contracts with their customers.
The standard also specifies the accounting for the incremental costs
of obtaining a contract and the costs directly related to fulfilling a contract. The adoption of AASB
15 has not impacted the amounts disclosed within the financial statements.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement
for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the
accounting for financial instruments: classification and measurement; impairment; and hedge
accounting. The adoption of this standard has not impacted the amounts disclosed in these financial
statements.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial statements based
on historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the economic entity.
Key Judgements:
Exploration and Evaluation Assets
The economic entity performs regular reviews on each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest. These reviews
are based on detailed surveys and analysis of exploration and drilling results performed to reporting
date. Exploration and evaluation assets at 30 June 2019 were $7,525,010.
Page 48
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 2: REVENUE
Revenue from operating activities:
Interest received from other persons
Excess capital raising funds received
NOTE 3: EXPENSES
Included in expenses are the following items:
Accounting and audit fees
ASX, ASIC, share registry expenses
Consulting fees
Insurance
Legal fees
Marketing
Occupancy costs
Other
Travel expenses
Employee benefits expense comprises:
Directors and senior management fees
Provision for leave entitlement
30 June 2019
30 June 2018
$
$
25,707
4,814
30,521
31,106
-
31,106
30 June 2019
30 June 2018
$
$
151,613
66,231
128,050
48,610
54,829
61,385
17,790
50,179
52,428
587,014
9,175
195,314
54,680
373,152
28,566
28,247
154,035
15,641
99,836
73,480
335,603
-
Page 49
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 4: INCOME TAX EXPENSE
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
(Loss) from ordinary activities before income tax expense
Income tax benefit calculated at domestic rate of 30% (2018:
27.5%)
Tax effect of permanent differences:
Non-deductible items
Non-assessable income
Movement in unrecognised temporary differences
Deductible equity raising costs
Income tax adjusted for permanent differences
Tax effect of losses not recognised
Income tax expense
4.3 Tax losses
Unused revenue losses for which no deferred tax asset has been
recognised
Unused capital losses for which no deferred tax asset has been
recognised
30 June 2019
30 June 2018
$
$
-
-
-
-
-
-
(1,579,050)
(1,327,448)
(473,715)
(365,048)
162,146
(46,572)
-
(56,586)
58,988
414,727
6,959
-
(30,152)
(44,529)
(67,722)
432,770
-
-
13,173,627
12,172,105
3,682,968
3,682,968
16,856,595
15,855,073
The Company is of the opinion that tax and capital losses from prior periods will continue to be available
to the Consolidated Entity. 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 50
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
NOTE 6: RECEIVABLES
Current:
Other receivables
NOTE 7: OTHER CURRENT ASSETS
Current:
Prepayments
Other
NOTE 8: EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation expenditure carried forward in
respect of areas of interest are:
Acquisitions - at cost
Exploration and evaluation phase - at cost
Movement in exploration and evaluation assets:
Acquisitions:
Opening balance - at cost
Acquisition costs during the period (see below)
Total acquisitions costs
Exploration and evaluation phase – at cost:
Opening balance - at cost
Capitalised exploration expenditure
Deposit – Isaac River project
Total exploration and evaluation phase – at cost:
30 June 2019
30 June 2018
$
693,310
1,350,000
2,043,310
$
411,445
1,050,000
1,461,445
30 June 2019
30 June 2018
$
$
89,446
89,446
66,234
66,234
30 June 2019
30 June 2018
$
$
15,780
-
15,780
11,514
584
12,098
30 June 2019
30 June 2018
$
$
4,219,997
3,305,013
7,525,010
4,131,531
88,466
4,219,997
1,800,681
1,504,332
-
3,305,013
4,131,531
1,800,681
5,932,212
-
4,131,531
4,131,531
-
1,750,681
50,000
1,800,681
Carrying amount at the end of the year
7,525,010
5,932,212
Page 51
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 8: EXPLORATION AND EVALUATION ASSETS (Continued)
On 28 September 2017, the Company completed the acquisition from Cape Coal Pty Ltd (Cape
Coal) of all of the issued capital of Coking Coal One Pty Ltd (formerly Bowen Coking Coal Pty Ltd)
(CCO). The Company issued to Cape Coal 70,000,000 ordinary fully paid shares, 13,000,000 Class A
Performance Shares and 13,000,000 Class B Performance Shares. On 28 September 2017, CCO
completed the acquisition of MLA 700005 and EPC 1230 (Comet Ridge Project) from Acacia Coal
Limited (ACN 009 092 068) (Acacia Coal). The Company issued 17,391,304 ordinary fully paid shares
to Acacia Coal and paid the sum of $350,000 in cash. On 28 September 2017, CCO completed the
acquisition of the Cooroorah Project (MDL 453) and Hillalong Project (EPC1824) from Australian
Pacific Coal Ltd. The Company issued 54,347,826 ordinary fully paid shares to Area Coal Pty Ltd, a
subsidiary of Australian Pacific Coal Ltd. The acquisition of Coking Coal One Pty Ltd was treated as
an asset acquisition via the issue of equity under AASB 2 Share-based Payment (“AASB 2”)
Consideration:
Pre-acquisition costs transferred from other current assets
70,000,000 ordinary shares – Cape Coal Pty Ltd
13,000,000 class A performance shares – Cape Coal Pty Ltd
13,000,000 class B performance shares – Cape Coal Pty Ltd
17,391,304 ordinary shares and $350,000 cash component –
Acacia Coal Limited
54,347,826 ordinary shares - Area Coal Pty Ltd
Stamp duty on tenement acquisitions
Identifiable assets acquired:
Cash and cash equivalents
Trade and other receivables
Exploration expenditure
Trade and other payables
30 June 2018
$
165,637
1,610,000
89,700
167,794
750,000
1,250,000
98,400
4,131,531
2,736
6,141
4,227,331
(104,677)
4,131,531
Recoverability of the carrying amount of exploration assets is dependent on the successful
development and commercial exploitation of projects, or alternatively, through the sale of the areas
of interest.
Page 52
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 9: TRADE AND OTHER PAYABLES
Current:
Trade payables and accrued expenses
Short term employee benefits
Other
Total payables (unsecured)
30 June 2019
30 June 2018
$
$
236,671
9,175
-
245,846
242,672
-
4,013
246,685
The average credit period on purchases of goods and services is 30 days. No interest is paid on trade
payables.
NOTE 10: CONTRIBUTED EQUITY
Fully paid ordinary shares
2019
2018
No. of
Shares
$
No. of
Shares
$
Balance at the beginning of period
499,486,810
49,830,181
127,312,898
42,064,761
Share issues:
Placement – 28 September 2017
Cape Coal acquisition
September 2017
–
28
Acacia Coal acquisition
September 2017
– 28
Area Coal acquisition – 2 October
2017
Cape Coal acquisition – 11 May 2018
Placement – 28 September 2018
Placement – 12 December 2018
Placement – 20 March 2019 and 31
May 2019
Conversion of Class B performance
shares – 9 April 2019
Exercise of options – May & June 2019
Transaction costs associated with
share issues
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
-
-
-
-
-
-
-
-
-
-
200,434,782
4,610,000
70,000,000
1,610,000
17,391,304
400,000
54,347,826
1,250,000
30,000,000
549,000
74,875,000
1,198,000
31,250,000
500,000
82,340,452
1,729,150
13,000,000
167,794
5,322,000
106,440
-
(133,507)
-
-
-
-
-
-
-
-
-
-
-
(653,580)
Balance as at 30 June
706,274,262
53,398,058 499,486,810
49,830,181
Page 53
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 10: CONTRIBUTED EQUITY (continued)
Fully paid ordinary shares (Continued)
Ordinary shareholders are entitled to participate in dividends and the proceeds on the winding up
of the company in proportion to the number of and amount paid on the shares held. Every ordinary
shareholder present at a meeting in person or by proxy is entitled to one vote on a show of hands or
by poll. Ordinary shares have no par value.
Notes for the above table:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
200,434,782 shares issued at $0.023 each in the placement on 28 September 2017, raising
$4,610,000.
70,000,000 shares with a fair value of $1,610,000 issued to Cape Coal Pty Ltd at no
consideration, as part of consideration to acquire Coking Coal One Pty Ltd. The shares
were valued at $0.023 per share.
17,391,304 shares with a fair value of $400,000 issued to Acacia Coal Pty Ltd at no
consideration, as part of consideration to acquire the Comet Ridge Project (MLA 700005
and EPC1230). The shares were valued at $0.023 per share.
54,347,826 shares with a fair value of $1,250,000 issued to Area Coal Pty Ltd at no
consideration, as part of consideration to acquire the Cooroorah Project (MDL 453) AND
Hillalong Project (EPC1824). The shares were valued at $0.023 per share.
30,000,000 shares with a fair value of $549,000 issued to Cape Coal Pty Ltd at no
consideration, as part of consideration to acquire the Hillalong East tenements (EPC2141
and EPC1860). The shares were valued at $0.0183 per share.
74,875,000 shares issued at $0.016 each in the placement on 28 September 2018, raising
$1,198,000.
31,250,000 shares issued at $0.016 each in the placement on 12 December 2018, raising
$500,000.
82,340,452 shares issued at $0.021 each in the placement issued on 20 March 2019 (for
72,680,952 shares) and 31 May 2019 (for 9,659,500 shares), raising $1,729,150.
13,000,000 Class B performance shares with a fair value of $167,794 converted into
ordinary shares at no consideration.
(j)
5,322,000 shares were issued upon exercise of options at $0.02 each, raising $106,440.
Listed Options
Listed Share Options
$0.04
50,000,000
$0.04
50,000,000
Note
Weighted
average
exercise price
30 June 2019
No. of Options
Weighted
average
exercise price
30 June 2018
No. of Options
Balance at the beginning of the
reporting period
No change during the period
Exercisable at end of year
$0.04
50,000,000
$0.04
50,000,000
$0.04
50,000,000
$0.04
50,000,000
Page 54
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 10: CONTRIBUTED EQUITY (continued)
Unlisted Options
Unlisted Share Options
$0.029
90,378,000
$0.02
30,000,000
Note
Weighted
average
exercise price
30 June 2019
No. of Options
Weighted
average
exercise price
30 June 2018
No. of Options
Balance at the beginning of the
reporting period
Change of options during the
period:
Issued to a director
Issued to directors & an officer
Exercised during the period
Exercisable at end of year
Performance Shares
$0.02
30,000,000
$0.02
30,000,000
18
18
$0.03
30,000,000
$0.0338
35,700,000
$0.02
$0.029
(5,322,000)
90,378,000
-
-
-
-
-
-
$0.02
30,000,000
Weighted
average
exercise price
Note
Unlisted Performance Shares
Balance at the beginning of the
reporting period
Changes of Performance Shares
during the period:
Issued to Cape Coal Pty Ltd
Converted
Balance at end of year
Capital Management
8
10
-
-
-
-
-
30 June 2019
No. of
Performance
Shares
13,000,000
26,000,000
-
13,000,000
13,000,000
Weighted
average
exercise price
-
-
-
-
-
30 June 2018
No. of
Performance
Shares
26,000,000
-
26,000,000
-
26,000,000
Exploration companies such as Bowen Coking Coal Ltd are funded almost exclusively by share
capital. Management controls the capital of the Group to ensure it can fund its operations and
continue as a going concern. Capital management policy is to fund its exploration activities
principally by way of equity, and where required, debt and/or project finance. No dividend will be
paid while the Group is in exploration stage. There are no externally imposed capital requirements.
There have been no other changes to the capital management policies during the year.
NOTE 11: RESERVES
Share-Based Payments Reserve
The share-based payment reserve is used to recognise the fair value of options and performance
shares issued to consultants. This reserve can be reclassified as retained earnings if options lapse.
Page 55
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 12: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and
determining the allocation of resources.
The Group is managed primarily on geographic basis, that is, the location of the respective areas of
interest (tenements) in Australia. Operating segments are determined on the basis of financial
information reported to the board of directors which is at the consolidated entity level. The Group
does not have any products or services that it derives revenue from. The Group’s exploration and
development activities in Australia is the Group’s sole focus.
Accordingly, management currently identifies the Group as having only one reportable segment,
being the exploration of mineral projects in Australia. There have been no changes in the reporting
segments during the year. Accordingly, all significant operating decisions are based upon analysis of
the consolidated entity as one segment. The financial results from this segment are equivalent to the
financial statements of the Group as a whole.
NOTE 13: CASH FLOW INFORMATION
30 June 2019
30 June 2018
$
$
A. Reconciliation of Cash Flow from Operations with Loss after
Income Tax:
Loss after income tax
(1,579,050)
(1,327,448)
Non-cash flows in loss from ordinary activities:
Impairment of loans
Equity settled compensation
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(Increase)/Decrease in prepayments and other assets
104
382,163
(22,628)
(4,370)
(34,503)
222,784
Increase/(decrease) in payables and accruals
(59,312)
(213,409)
Cash flows from operations
(1,283,093)
(1,352,576)
Page 56
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 13: CASH FLOW INFORMATION (Continued)
B. Non-cash Financing Activities
Share issue:
-
-
-
-
-
70,000,000 shares with a fair value of $1,610,000 issued to
Cape Coal Pty Ltd at no consideration, as part of
consideration to acquire Coking Coal One Pty Ltd. The
shares were valued at $0.023 per share.
17,391,304 shares with a fair value of $400,000 issued to
Acacia Coal Pty Ltd at no consideration, as part of
consideration to acquire the Comet Ridge (MLA 700005
and EPC1230). The shares were valued at $0.023 per share.
54,347,826 shares with a fair value of $1,250,000 issued to
Area Coal Pty Ltd at no consideration, as part of
consideration to acquire the Cooroorah project (MDL 453)
AND Hillalong project (EPC1824). The shares were valued at
$0.023 per share.
30,000,000 shares with a fair value of $549,000 issued to
Cape Coal Pty Ltd at no consideration, as part of
consideration to acquire the Hillalong East tenements
(EPC2141 and EPC1860). The shares were valued at $0.0183
per share.
13,000,000 Class B performance shares with a fair value of
shares at no
$167,794 converted
consideration.
into ordinary
NOTE 14: EARNINGS PER SHARE
-
-
-
-
1,610,000
400,000
1,250,000
549,000
167,794
30 June 2019
30 June 2018
$
$
Net loss used in the calculation of basic and diluted EPS attributable
to owners of the parent company
Weighted average number of ordinary shares outstanding during
the period used in the calculation of basic EPS
(1,579,050)
(1,327,448)
597,920,773
389,648,811
Options are considered potential ordinary shares. Options issued are not presently dilutive and were
not included in the determination of diluted earnings per share for the period.
NOTE 15: COMMITMENTS
(a) Exploration Commitments
The Group has certain obligations to expend minimum amounts on exploration in tenement areas.
These obligations may be varied from time to time and are expected to be fulfilled in the normal
course of operations of the Group.
The following commitments exist at balance date but have not been brought to account. If the
relevant option to acquire a mineral tenement is relinquished the expenditure commitment also
ceases. The Group has the option to negotiate new terms or relinquish the tenements and also to
meet expenditure requirements by joint venture or farm-in arrangements.
Page 57
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 15: COMMITMENTS (Continued)
Exploration Commitments (Continued)
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total commitment
(b) Operating Lease Commitments
The Group has no operating leases.
(c) Capital Commitments
The Group has no capital commitments.
NOTE 16: CONTINGENT LIABILITIES
30 June 2019
30 June 2018
$
464,025
1,311,925
-
$
523,000
859,000
-
1,775,950
1,382,000
There were no contingent liabilities at the end of the reporting period.
NOTE 17: RELATED PARTY TRANSACTIONS
Parent Entity
Bowen Coking Coal Ltd is the legal parent and ultimate parent entity of the Group.
Subsidiary
Interest in subsidiaries are disclosed in Note 22.
Key Management Personnel
Short-term employee benefits
Share-based payments
30 June 2019
30 June 2018
$
$
592,014
382,163
974,177
306,804
-
306,804
Page 58
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 18: SHARE-BASED PAYMENTS
Director and Employee Share-based Payments
Share based payment expense recognised during the year:
Share based payment expense recognised during the period:
Allocation of value of options issued to a director in Dec 2018 (1)
Options issued to key management personnel in May 2019 (2)
30 June 2019
30 June 2018
$
$
78,356
303,807
382,163
-
-
-
Notes for the above table, relating to the years ended 30 June 2019 are:
1. 30,000,000 options were granted to a director for nil consideration on 12 December 2018. The
options vest on 12 December 2019 and expire on 12 December 2020. 10,000,000 options have
an exercise price of $0.025, 10,000,000 options have an exercise price of $0.03 and 10,000,000
options have an exercise price of $0.035.
The weighted average fair value of options granted during the period was 0.48 cents. The fair
values at grant date were determined by using a Black-Scholes option pricing model that takes
into account the share price at grant date, exercise price, expected volatility, option life,
expected dividends, the risk free rate, the impact of dilution, the fact that the options are not
tradeable. The inputs used for the Black-Scholes option pricing model for options granted were
as follows:
• grant dates: 12 December 2018
• share price at grant date: 1.6 cents
• exercise prices: 10,000,000 options for 2.5 cents; 10,000,000 options for 3.0 cents; 10,000,000
options for 3.5 cents
• expected volatility: 100%
• expected dividend yield: nil
•
risk free rate: 1.957%
2. 35,700,000 options with an exercise price of $0.0338 were granted to directors and an officer for
nil consideration on 31 May 2019. The options vested on grant date and expire on 30 June 2021.
The weighted average fair value of options granted during the period was 0.85 cents. The fair
values at grant date were determined by using a Black-Scholes option pricing model that takes
into account the share price at grant date, exercise price, expected volatility, option life,
expected dividends, the risk free rate, the impact of dilution, the fact that the options are not
tradeable. The inputs used for the Black-Scholes option pricing model for options granted were
as follows:
• grant dates: 31 May 2019
• share price at grant date: 2.6 cents
• exercise prices: 3.38 cents
• expected volatility: 100%
• expected dividend yield: nil
•
risk free rate: 1.12%
Page 59
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 19: AUDITOR’S REMUNERATION
Remuneration for the auditor of the parent entity:
RSM Australia Partners and its related entities:
Auditing or reviewing the financial reports
NOTE 20: FINANCIAL RISK MANAGEMENT
(a) Financial Risk Management Policies
30 June 2019
30 June 2018
$
$
31,510
31,510
22,000
22,000
The Group's financial instruments comprises cash balances, receivables and payables, loans to and
from subsidiaries and a loan from a related party. The main purpose of these financial instruments is
to provide finance for Group operations.
Treasury Risk Management
Key executives of the Company meet on a regular basis to analyse exposure and to evaluate
treasury management strategies in the context of the most recent economic conditions and
forecasts.
The board of directors has overall responsibility for the establishment and oversight of the Group's risk
management framework. Management is responsible for developing and monitoring the risk
management policies and reports to the board.
Financial Risks
The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. These risks are managed through monitoring of forecast cash
flows, interest rates, economic conditions and ensuring adequate funds are available.
Interest Rate Risk
The Group's exposure to interest rate risk, which is the risk that a financial instrument's cash flows or
fair value will fluctuate as a result of changes in market interest rates, arises in relation to the Group's
bank balances. This risk is managed through the use of variable rate bank accounts.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able meet its financial obligations as they fall due.
This risk is managed by ensuring, to the extent possible, that there is sufficient liquidity to meet liabilities
when due, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group's activities are funded from equity and where required and available debt and/or project
finance. There is no requirement to repay principal or pay interest on the related party loan during
the loan term.
Page 60
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 20: FINANCIAL RISK MANAGEMENT (Continued)
(a) Financial Risk Management Policies (Continued)
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at
balance date to recognised financial assets, is their carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.
Credit risk arises from exposures to deposits with financial institutions and sundry receivables.
Credit risk is managed and reviewed regularly by key executives. The key executives monitor credit
risk by actively assessing the rating quality and liquidity of counter parties:
▪ only banks and financial institutions with an ‘A’ rating are utilised; and
▪ all other entities are rated for credit worthiness taking into account their size, market position
and financial standing.
At 30 June 2019, there was no concentration of credit risk, other than bank balances.
Foreign Currency Risk
The Group has no material exposure to foreign currency risk at the end of the reporting period.
(b) Financial Instrument Composition and Contractual Maturity Analysis
Financial assets:
Within 6 months:
cash & cash equivalents (i)
receivables (i)
prepayments
Financial liabilities:
Within 6 months:
payables (i)
30 June 2019
30 June 2018
$
$
2,043,310
1,461,445
89,446
15,780
66,234
12,098
2,148,536
1,539,777
245,846
245,846
246,685
246,685
(i) Non-interest bearing. The contractual cash flows do not differ to the carrying amount.
(c) Net Fair Values
Fair values of financial assets and financial liabilities are materially in line with carrying values.
Page 61
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 20: FINANCIAL RISK MANAGEMENT (Continued)
(d) Sensitivity Analysis
The Company has performed sensitivity analysis relating to its exposure to interest rate risk. At year
end, the effect on profit and equity as a result of a 1% change in the interest rate, with all other
variables remaining constant, is immaterial.
NOTE 21: SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following
wholly-owned subsidiaries in accordance with the accounting policy described in Note 1:
Country of
incorporation
Australia
Brazil
Australia
Ownership interest
30 June 2019
30 June 2018
100%
100%
-
100%
100%
100%
Coking Coal One Pty Ltd
Cabral Metais Ltd
Northern Yeelirrie Pty Ltd *
* Deregistered on 1 May 2019.
NOTE 22: SUBSEQUENT EVENTS
On 6 August 2019, the Company announced that it had agreed terms whereby the exercise of the
Company’s 50 million listed options, exercisable at 4.0 cents each on or before 30 October 2019,
have been fully underwritten. In addition, the Company agreed to a private placement to the
Underwriter of 10 million shares at 5c per share, to raise $500,000. The placement was completed on
7 August 2019.
On 19 August 2019 13,000,000 Class A Performance Shares were converted in to 13,000,000 fully paid
ordinary shares, having met the conversion criteria. The conversion of the Class A Shares marks the
completion of the delayed compensation milestones for the Acquisition of the tenements as
stipulated in the Prospectus dated 3 August 2017 and as approved by shareholders on 10 August
2017.
On 22 August 2019 the Company reported an increase in the Isaac River Resource as set out in the
Annual Resource Statement. Further details can be found in the Company’s ASX announcement
dated 22 August 2019.
On 4 September 2019, the Company announced that an agreement has been reached with Rio Tino
Exploration Pty Limited (“RTX”) to amend the original acquisition agreement relating to EPC’s 2141 &
1860, whereby the Company will pay RTX $100,000 consideration to terminate a buy-back right and
amend both the royalty rate (from 1.25% to 1.50%) and the deferred payment right. Full details of the
amended agreement are set out in the Company’s ASX announcement dated 4 September 2019.
On 16 September 2019, the Company issued 12,000,000 unlisted performance rights to a consultant
COO, with various vesting conditions and expiry dates.
Subsequent to 30 June 2019 (and up to the date of this report), a total of 13,155,234 options have
been exercised in to 13,155,234 ordinary shares, as follows:
• 7,726,000 $0.02 options, raising $154,520; and
• 5,429,234 $0.04 options, raising $217,169.
Page 62
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2019
NOTE 22: SUBSEQUENT EVENTS (Continued)
Other than the matters noted above, there are no other matters or circumstances that have arisen
since the end of the year which significantly affected or may significantly affect the operations of
the Group, the results of those operations, or the state of affairs of the Group in future financial years.
NOTE 23: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Bowen Coking Coal Ltd at 30 June 2019. This
information has been prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income for the period
30 June 2019
30 June 2018
$
2,000,941
7,525,010
9,525,951
116,559
-
$
1,519,139
5,897,015
7,416,154
166,028
-
116,559
166,028
9,409,392
7,250,126
53,398,058
49,830,181
471,863
258,294
(44,460,529)
(42,838,349)
9,409,392
7,250,126
(1,560,804)
(1,302,626)
-
-
Total comprehensive income for the period
(1,560,804)
(1,302,626)
The Company has no contingent liabilities, nor has it entered into any guarantees in relation to the
debts of its subsidiaries. The Company has not entered into any contractual commitments for the
acquisition of property, plant and equipment.
The Company and its Australian controlled entities have formed a tax consolidated group as at the
date of this report.
NOTE 24: COMPANY DETAILS
The registered office and principal place of business is:
Level 19, 1 Eagle Street
Brisbane, Queensland, 4000 Australia
NOTE 25: DIVIDENDS & FRANKING CREDITS
There were no dividends paid or recommended during the financial year. There are no franking
credits available to the shareholders of the Company.
Page 63
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2019
Director’s Declaration
The directors of the Company declare that:
1. The attached financial statements and notes are in accordance with the Corporations Act
2001, including:
a. complying with Accounting Standards which, as stated in accounting policy note 1
to the financial statements, constitutes explicit and unreserved compliance with
International Financial Reporting Standards (IFRS); and
b. giving a true and fair view of the consolidated entity’s financial position as at 30 June
2019 and of their performance for the financial year ended on that date.
2. The chief executive officer and chief financial officer have each declared that:
a. the financial records of the Company for the financial year have been properly
maintained in accordance with section 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting
Standards; and
c. the financial statements and notes for the financial year give a true and fair view.
3.
In the directors' opinion there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the board of directors.
Gerhard Redelinghuys
Director
Dated 24 September 2019
Brisbane, Queensland
Page 64
INDEPENDENT AUDITOR’S REPORT
To the Members of Bowen Coking Coal Limited
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 2019, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial 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 2019 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 Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors
of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates the Group incurred a loss after tax of $1,579,050 and had
net cash outflows from operating and investing activities of $1,283,093 and $1,535,125 respectively for the year ended 30
June 2019. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our conclusion
is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters
to be communicated in our report.
Key Audit Matter
Carrying Value of Capitalised Exploration Expenditure
Refer to Note 8 in the financial statements
The Group has capitalised exploration expenditure
with a carrying value of $7.525,010 as at 30 June 2019.
How our audit addressed this matter
Our audit procedures in relation to the carrying value of
capitalised exploration costs included:
We determined this to be a key audit matter due to the
significant management
in
assessing the carrying value in accordance with
AASB 6 Exploration for and Evaluation of Mineral
Resources, including:
judgment
involved
• Determination of whether expenditure can be
specific mineral
that
associated with
resources, and
expenditure is allocated to an area of interest;
the basis on which
finding
• Assessing whether any indicators of impairment
are present; and
• Determination of whether exploration activities
have progressed to the stage at which the
existence of an economically
recoverable
mineral reserve may be determined.
Other Information
• Ensuring that the right to tenure of the areas of interest
was current through confirmation with the relevant
government departments;
• Critically assessing and evaluating management’s
assessment that no indicators of impairment existed;
• Agreeing a sample of the additions to capitalised
exploration expenditure during the year to supporting
documentation, and ensuring that the amounts were
capitalised correctly; and
Through discussions with the Group’s Directors, and
review of the Group’s ASX announcements and other
relevant documentation, assessing management’s
determination that exploration activities have not yet
progressed to the point where the existence or
otherwise of an economically recoverable mineral
resource may be determined.
•
The directors are responsible for the other information. The other information comprises the information included in the Group's
annual report for the year ended 30 June 2019 but does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
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Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditorsresponsibilities/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 26 of the directors' report for the year ended 30 June 2019.
In our opinion, the Remuneration Report of Bowen Coking Coal Limited, for the year ended 30 June 2019, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based
on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Brisbane, Queensland
Dated: 24 September 2019
Albert Loots
Partner
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