BOWEN COKING COAL LTD
AND CONTROLLED ENTITIES
ABN: 72 064 874 620
CONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2020
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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 2020
Consolidated Statement of Financial Position as at 30 June 2020
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2020
Consolidated Statement of Cash Flows for the Year Ended 30 June 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
Directors’ Declaration
Independent Auditor’s Report
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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)
Matthew Latimore (Non-Executive Director)
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
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
The year ended 30 June 2020 was not unlike the previous year, represented by a long list a notable
achievements and progress across the Company’s highly prospective portfolio of coking coal assets held in
the Bowen Basin of Queensland, Australia. Below is a list of some of the more material highlights:
▪ A Farm‐In Agreement at the Hillalong Coking Coal Project with Japanese conglomerate, Sumitomo
was completed, whereby Sumitomo may earn up to 20% of the project in return for spending $7.5m
over a two-Phase exploration program
▪ Phase 1 of the above-mentioned program was completed, with Sumitomo investing $2.5m for the
first 10%
▪ Sumitomo elects to proceed with the Hillalong JV post successful completion of Phase 1 Farm-In
▪ As part of Phase 1, a maiden drilling program was completed at both Hillalong South and Hillalong
North
▪
Issuance of maiden JORC Resource of 43Mt at Hillalong North
▪ Positive drilling results, coal quality and washability analysis received from Hillalong South’s
maiden drilling program
▪ Acquisition of the 33mt Broadmeadow East Coking Coal project and associated $2.25m capital
raising
▪ Establish a Marketing JV with M Resources Trading, which included M Resources agreeing to
provide a $15m Finance Facility
▪ Maiden drilling program at Isaac River resulted in a revised resource estimate of 8.7Mt, being a 67%
increase on the previous estimate
▪ Subsequent coal analysis and washability data from the Isaac River drilling program confirmed
improved coal qualities
▪ Mining Lease Application for Isaac River was lodged and the documentation relating to the
Environmental Authority application was near completion
CORPORATE
From a corporate perspective, the Company also achieved a number of significant milestones during the year
ended 2020. In addition to the Sumitomo Farm-in Agreement and acquisition of Broadmeadow East, both
mentioned above, BCB agreed to establish a Marketing JV with M Resources Trading, which included M
Resources agreeing to provide a $15m Finance Facility, to be used for the development of any one of BCB’s
projects. M Resources specialises in marketing coking coal, including hard coking coal, semi hard coking coal,
semi soft coking coal, PCI coals for steel manufacturing, and is controlled and managed by Mr Matt Latimore,
who, along with certain of his related entities, is a substantial shareholder of BCB, with an interest in excess
of 15%.
Following shareholder approval of the aforementioned Marketing JV, Matt joined the Board as a Non-Executive
Director.
Funding of the Company’s activities were facilitated by several capital raisings as summarised below:
1. Private placement to raise $500,000 completed in August 2019
2. $2m received from the exercise of 50m listed options exercised at 4c each
3. $489,760 received from the exercise of 24,488,000 unlisted options exercised at 2.0c each
4.
In late June 2020, the Company completed $2.25m private placement, which was in association with
the acquisition of Broadmeadow East Project.,.
As at 30 June 2020, the Company held cash at bank of $2.4m, which in the opinion of the Board, is more than
sufficient to enable it to continue executing on its stated exploration and development strategy. Further, post
balance date, an additional $1.75m was received, being the balance of the $2.25m placement referred to
above.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
PROJECTS
Figure 1. Project Location.
Hillalong Project (90%) (EPC 1824 & EPC 2141)
EPC 1824 and EPC 2141 (“Hillalong Project”) are located in the northern Bowen Basin approximately 105km
west-southwest of Mackay. The tenements comprise 31 sub-blocks (approximately 99km2) located to the west
of the Mount Hillalong anticline and is approximately 16km 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. See Figure 2.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Hillalong JV with Sumitomo Corporation
During the year, BCB executed a formal Farm‐In with Japanese conglomerate, Sumitomo Corporation
(“Sumitomo”), in relation to the Hillalong Coking Coal Project (“Sumitomo Farm‐In”). Under the terms of the
Sumitomo Farm‐In:
▪ Sumitomo agreed to fund $2.5m of pre‐defined exploration expenditure, being the entire Phase 1
exploration program for both Hillalong North and Hillalong South, to earn an initial 10% interest in
Hillalong;
▪ Sumitomo has the right to then earn an additional 10% interest, post a further $5m funding of agreed
exploration and study activities at Hillalong (“Phase 2”);
▪ BCB and Sumitomo will form an unincorporated Joint Venture (“JV”) managed by BCB, post Sumitomo
earning either the initial 10% or 20% interest, as the case may be; and
▪ Sumitomo will provide support to BCB to secure future Hillalong development funding.
Figure 2. Location of Hillalong North and Hillalong South within the Hillalong Coking Coal Project
(EPC 2141 & EPC 1824).
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
The formal, binding Sumitomo Farm‐In Agreement was signed with SCAP Hillalong Pty Ltd, which is a wholly
owned subsidiary of Sumitomo, a multi‐billion dollar diversified Japanese conglomerate with a long history of
investing in Australian mines and currently holds interests in Hail Creek, Clermont, Rolleston and Oaky Creek
mines in the Bowen Basin, Queensland, mainly through Glencore managed joint ventures.
The Phase 1 program as referred to above was completed, with Sumitomo having contributed the agreed
$2.5m to earn an initial 10% interest in Hillalong. Consequently, Sumitomo elected to proceed with the JV and
as a result, the formal documentation governing such is being prepared.
Sumitomo’s decision to proceed with the Hillalong JV, reflects the success of the maiden drilling programmes
undertaken by BCB at both Hillalong North and Hillalong South, more detailed below.
Hillalong North & Hillalong South Phase 1 Exploration Program
The Phase 1 exploration program forming part of the Sumitomo Farm-In included the completion of a maiden
drilling program at both Hillalong North and Hillalong South.
At Hillalong North, the Company confirmed that the target seams were intersected in 26 of the 27 drill sites,
and the main target seams (Elphinstone and/or Hynds Upper) were encountered in approximately 75% of
the holes from depths as shallow as 5m (weathered) and 12m (unweathered).
The 2020 Hillalong North exploration program covered less than 10% of the surface area of the total Hillalong
Project, albeit it is the most prospective target area, emanating from historic Rio Tinto drilling data. Xenith
Consulting has estimated a total resource of 43Mt in accordance with the JORC Code, of which 19.5Mt is
shallower than 150m deep, a typical depth cut-off for open cut resources (see table 1 below). Importantly,
the resource area remains open in the East and South West directions, providing opportunities to expand on
this maiden resource estimate. Raw coal quality data is extremely positive in terms of coking coal indicators
for both the Elphinstone and Hynds seams as can be seen in Table 2 below.
Table 1. Summary of the resource estimate for Hillalong North.
DEPTH
SEAM
<150m
Elphinstone
Hynds Upper
Subtotal
>150m
Hynds Upper
Subtotal
TOTAL
RESOURCE CATEGORY (MT)
MEASURED
INDICATED
INFERRED
TOTAL
4.0
9.1
13.1
7.7
7.7
21
4.5
1.9
6.4
15.9
15.9
22
8.5
11.0
19.5
23.7
23.7
43
Note – Some rounding to the nearest significant figure has occurred and this may reflect in minor differences in the overall
reported resource. Tonnes were calculated for an in situ Relative Density (RD). No total moisture or moisture holding
capacity analysis results were available to use as in situ moisture.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Table 2. Average raw coal quality per seam and resource category (Air Dried Basis).
CATEGORY MT
Relative
Density
g/cm3
Inherent
Moisture
%
Ash
%
Volatile
Matter
%
Fixed
Carbon
%
Total
Sulphur
%
Calorific
Value
MJ/kg
CSN
INDICATED
Elphinstone
4.0
1.45
Hynds
Upper
16.8
1.49
INFERRED
Elphinstone
4.5
1.46
Hynds
Upper
17.8
1.49
2.7
1.9
2.6
1.9
19.0
21.3
27.3
25.9
52.4
53.9
0.39
0.35
19.8
20.6
27.0
26.3
51.7
54.4
0.39
0.37
26.8
27.8
26.6
27.8
5
4.5
5
4.5
TOTAL
43
1.48
2.0
20.7
26.3
53.7
0.36
27.6
4.5
Fast float laboratory testing, a procedure designed to test the expected product coal after washing at a density
of 1.375, which provides a first indication of coking properties and yields for a primary coking product, indicated
the potential to wash to a high quality coking coal from both the Elphinstone and Hynds Upper seams in all 3
boreholes of which the results have been received at 30 June 2020. CSN results as high as 8.5 (average of 7
for all seams) and fluidity as high as 1500ddpm (average of 822ddpm for all seams) were observed at an
average ash of 8.1% (air dried) at yields ranging between 44% and 80% for a primary product only.
Hillalong South
Also included in the Hillalong Phase 1 exploration program were several drill holes, which encountered the
main target seams (Elphinstone and Hynds) between 116m and 167m deep with an average thickness of 5.6m
for the Elphinstone seam and 2.5m for the Hynds Upper seam. Both seams in hole HIL015C and the unaffected
part of the Elphinstone seam in HIL018C underwent fast float tests, which indicated the potential to wash a
primary, high quality coking coal from both the Elphinstone and Hynds Upper seams. Two drill holes
encountered heat affected coal which impacted the coking properties of the coal.
The washability tests demonstrated that washing a primary coking coal with a secondary PCI, or a primary
coking coal with a secondary Energy coal, will result in an overall increase in the yield from raw coal, as per
Table 3 below.
Further washability tests on the heat affected coal in Holes HIL016C and HIL017C have exceeded initial
expectations as results have indicated that the heat affected coal can be washed to a primary PCI coal with
secondary energy coal, or a primary energy coal with a calorific value of between 6,167 and 6,675 kcal/kg
(Gross Air Dried, “gad”).
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Table 3. Coal quality from HIL015C and HIL018C (Not materially affected by intrusions)*
Primary coking coal with secondary PCI option
Seam
Elphinstone Upper
Elphinstone Lower
Hynds Upper
Primary Coking Coal
Secondary PCI Coal
Product Ash%1
Yield%1
CSN
Product Ash%
Yield%
Total Yield%
8.8
7.9
8.6
35-45
54-73
61-85
3½-6½
3½-4
4½-7
10.6
10.5
9.8
8-14
16-18
0 to 82
49-53
71-89
69-85
Primary coking coal with secondary energy coal
Primary Coking Coal
Secondary Energy Coal
Seam
Product
Ash%1
Yield%1
CSN
Product
Ash%
Yield%
CV
(kcal/kg)(gad)
Elphinstone Upper
Elphinstone Lower
Hynds Upper
8.8
7.9
8.6
35-45
3½-6½
54-73
61-85
3½-4
4½-7
19.1
19.2
16.1
33
333
233
6263
6107
6661
* See ASX Release of 27 November 2019 and 24 February 2020 for detail of the exploration outcomes
1 Air-dry basis, nil dilution and loss
2 HIL018C is only washing a Primary coking coal at 85% yield and no PCI
3. Yield from hole HIL015C only as HIL018C is only washing a Coking and secondary PCI
4. Data from hole HIL017C only as HIL016C did not encounter the Hynds Upper seam at the cut off depth
Total
Yield%
68-78
73-87
69-85
Broadmeadow East Coking Coal Project (ML 70257)
In a significant milestone, the Company announced in late June 2020, that it had executed binding agreements
with Peabody (Burton Coal) Pty Ltd (“Peabody”), a wholly owned subsidiary of US headquartered Peabody
Energy Corporation, whereby BCB will acquire the Broadmeadow East coking coal project, located within
undeveloped Mining Lease 70257 (“Project” or “Broadmeadow East”).
The Company’s independent consultants, Xenith Consulting, were commissioned to review all available and
relevant data and have completed a Resource Estimate of 33Mt, in accordance with the JORC Code (2012),
as per Table 4 below.
The transaction includes access rights to both the New Lenton Joint Venture Coal Handling and Preparation
Plant (“CHPP”) and the Train Load Out Facility (“TLO”), which are connected by an established haul road
passing immediately adjacent to ML 70257, as shown in Figure 3. The Company has secured throughput
capacity of a minimum of 1Mtpa, with the ability to potentially increase this capacity to a total of 2Mtpa, subject
to agreement.
Table 4. Summary of the Resource Estimate for Broadmeadow East.
SEAM
< 100m
> 100m
TOTAL RESOURCES
RESOURCE CATEGORY (MT)
MEASURED
INDICATED
INFERRED
TOTAL
6.4
0.1
6.5
1.9
2.2
4.1
3
20
26
11
22
33
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Figure 3. Regional Location.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Figure 4. Project and Infrastructure Location.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Key Terms and Conditions of the Acquisition
Assets being acquired:
The Company has agreed to acquire and assume the following from Peabody:
Granted Mining Lease ML 70257:
Land access for the purposes of exploration, development and mining; and Assignment of 1Mtpa throughput
capacity at (a) the New Lenton Joint Venture CHPP and (b) the New Lenton Joint Venture TLO, with access
to the haul road. The parties may agree the assignment of a further potential 1Mtpa throughput capacity.
Consideration:
Total consideration payable for the above-mentioned assets is as follows:
1. Cash consideration of $1,000,000, payable upon Completion;
2. Royalty payable of $1/t on all coal produced and sold from ML 70257, to a maximum of 1.5Mt, being
$1.5M;
3. Assumption of environmental rehabilitation obligations; and
4. $500,000 cash consideration for land compensation, payable only upon site works commencing or the
renewal of the ML, whichever occurs first.
Conditions Precedent:
The above-mentioned Acquisition is subject to the following conditions precedent:
1.
Indicative Approval to transfer from the Minister of Mines, any conditions attached subject to BCB’s
approval, acting reasonably;
2. Entering into the Deeds of Covenant relating to CHPP, Haul Road and TLO tolling/access with the
consent of New Lenton Joint Venture; and
3. The De-amalgamation of ML 70257 from the Burton Mine Environmental Authority.
Satisfaction of the above-mentioned conditions precedent, and therefore Completion, is expected to take
between 3 and 6 months.
Next steps:
The Company will work with Peabody to complete the transaction as soon as possible and thereafter all efforts
will be made to have the project ‘shovel ready’ at the earliest possible time. The project has a low capital
intensity and short development timeframe due to the availability of existing regional infrastructure.
Commencing immediately, the Company will evaluate several mine operation options to determine the best
value proposition. The selected option will inform environmental impact assessments undertaken by specialist
environmental consultants engaged by the Company. Although ML 70257 will come with certain Environmental
Authorisations, it is planned to apply for an Environmental Authority (“EA”) amendment when the project is de-
amalgamated. Application will then be made for a site-specific EA after environmental impact assessments
have been completed, reflecting the optimal mine plan as referred to above.
Coal washability optimisation in terms of quality, yield and final product specifications will be undertaken,
aiming to support an optimal configuration to maximise financial value.
Isaac River Project (100%) (MLA 700062, MDL 444 & EPC 830)
The Isaac River Project covers an area of 14 km2 and is located in the Bowen Basin in Central Queensland,
approximately 30km west of Moranbah and 130km southwest of Mackay. The Project consists of Mining Lease
Application 700062 (“MLA700062’), 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. Please see Figure 5 below.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Review of Operations
Maiden Drilling Program & Upgrade to Resource Statement
Following completion of a maiden drilling program at Isaac River, the Company confirmed the existence of the
higher quality Vermont Upper seam, which was intersected in all six drill holes. Consequently, the total Coal
Resource was upgraded to 8.7Mt, of which 8.35Mt is classified as Measured & Indicated, with the Vermont
Upper seam estimated to be 3.2Mt, of which 89% is classified as Measured & Indicated. The increase in
tonnage from the previous estimate of 5.2Mt, primarily reflects the inclusion of 3.2Mt of the Vermont Upper
seam. (See ASX Release 23 August 2019)
Washability results from the above-mentioned maiden exploration program were received and the washability
tests from the Vermont Upper seam and bottom section of the Leichhardt seam confirm the ability to wash the
raw coal to a primary Coking Coal product with a typical PCI secondary product. This potential configuration,
based on the 2019 exploration outcomes, is a significant quality upgrade from the historical coal quality results,
which initially suggested a primary semi‐soft coking coal with a secondary thermal coal. See Table 5 below.
Table 5. Key outcomes of the washability tests (Average of all 6 drill holes)*
Seam
VU2
LHD TOP
LHD BOT
Primary
Secondary
Product Ash%1
Yield%2
CSN
Product Ash%1
Yield%2
Total Yield%2
8.0
8.0
10.0
45‐60
20‐30
50‐60
6‐7½
4‐5
4‐4½
10.5
10.5
10.5
10‐35
15‐50
20‐35
70‐90
40‐85
70‐85
*See ASX release 15 July 2019 for detail on the program
1Air‐dry basis.
2Air‐dry basis, nil dilution and loss, wash simulations using limiting density ranges and efficiency factors in
line with standard processing equipment utilised.
Mining Lease Application & Environmental Authorisations
As part of the effort to have Isaac River “shovel ready”, the Company completed and lodged a Mining Lease
Application (“MLA”) with Queensland Government’s Department of Natural Resources, Mines & Energy. The
MLA covers most of MDL 444 and access to the project, as well as a small section of EPC 830 (see Figure 5
below).
The lodging of the MLA for Isaac River represents a significant milestone in the critical path to converting the
project to a producing asset. The Initial Development Plan submitted with the MLA proposes a contractor
operated open cut along with highwall mining, utilizing off site infrastructure and toll washing of mined coal at
a nearby facility. The proposal is based on a mine plan targeting a high-quality coking coal and secondary PCI
coal from the Leichhardt and Vermont seams in the Rangals coal measures, similar to regional operating
mines. (See ASX Release 12 September 2019).
The Company continues to engage specialist Environmental Consultants to conduct all necessary studies to
prepare a site-specific Environmental Authority Application for the Project, which will be lodged as soon as
possible.
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BOWEN COKING COAL LTD - ACN 064 874 620
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Review of Operations
Figure 5. Isaac River Mine Licence Application area.
Cooroorah Project (100%) (MDL 453)
Cooroorah is located 17km 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.
The Company and Coronado Global Resources Inc. (ASX: CRN) entered into a data and mobilization cost
sharing arrangement relating to a 6,500m 2D seismic program covering Bowen’s Cooroorah Coking Coal
Project. Seismic acquisition is widely used to interpret seam continuance and geological structure and forms
a vital component of mine planning.
The acquisition part of the program was completed successfully by Velseis, who specialize in the acquisition
and interpretation of seismic data. They confirmed that the data quality was of a high standard which
contributed to a higher level of confidence in the interpretation. Only one significant fault was interpreted with
an estimated displacement of +/- 15m, and the overall risk of structure is now materially less than what was
originally anticipated, given the interpreted proximity of the Jellinbah fault.
Carborough (100%) (EPC 1860)
The Company has progressed geological and technical studies to gain a better understanding of the project’s
potential. The Company has reached agreement with the landowner for site access and has also completed a
Fauna and Flora survey. The planned exploration program for the project was postponed to later in the year
once COVID-19 restrictions have eased.
In addition, the Company undertook a study of the regional geology proximate to the Carborough Project.
Furthermore, the Company lodged a tender to the Department of Natural Resources, Mines and Energy for an
exploration area abutting the Project, the outcome of which has not yet been determined.
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Review of Operations
Comet Ridge Project (100%) (EPC 1230)
Comet Ridge is an open pit project with a JORC resource of 57Mt shallower than 50m. BCC is targeting the
Fair Hill seam and the stratigraphically lower Triumph seam to produce a coking coal with secondary thermal
coal.
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 Ventures 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. Planned exploration has been postponed to 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.
No further technical work was undertaken during the financial year.
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BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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 2020.
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:
Neville Sneddon
Gerhard Redelinghuys
Blair Sergeant
Steven Formica
James Agenbag
Nicholas Jorss
Matthew Latimore
Non-Executive Chairman
Managing Director
Executive Director - Corporate Development
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 17-Jun-20)
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
Appointment Date
Resignation Date
Length of Service
B. Eng (Mining)(Hons), M. Eng, MAusIMM, Grad AICD
12 December 2018
N/A
1.5 years
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 16
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Gerhard Redelinghuys – Managing Director
Qualifications
Appointment Date
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
B. Comm. Acc, Hons, B. Compt, GAICD
27 September 2017
N/A
3 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 PricewaterhouseCoopers, 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
Appointment Date
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
B. Bus, PostGradDip (CorpAdmin), MAICD, AGIA, ACIS, ASCPA
28 September 2018
N/A
2 years
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 17
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Steven Formica – Independent Non-Executive Director
Qualifications
Appointment Date
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
N/A
4 August 2015
N/A
5 years
High Grade Metals Limited
Ragnar Metals Limited
Veriluma Limited
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
Appointment Date
Resignation Date
Length of Service
Current ASX Listed Directorships
Former ASX Listed Directorships
B. Eng (Chemical Engineering), MBA
27 September 2017
N/A
3 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 18
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Nicholas Jorss – Non-Executive Director
Qualifications
Appointment Date
Resignation Date
Length of Service
BE (Hons) Civil, MBA, GDip App Fin (Sec Inst)
12 December 2018
N/A
1.5 years
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 $190m. 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.
Matthew Latimore - Non-Executive Director
Qualifications
Executive Education Program, Columbia University Graduate School of
Business, New York.
Master of Business (Executive), Australian Graduate School of Management
Advanced Diploma of Leadership and Management, The University of
Western Australia.
Bachelor of International Business, Griffith University.
Appointment Date
Length of Service
17 June 2020
3 months
Current ASX Listed Directorships
Former ASX Listed Directorships
Nil
Nil
M Resources, an entity controlled and managed by Mr Matt Latimore, specialises in marketing coking coal,
including hard coking coal, semi hard coking coal, semi soft coking coal and PCI coals for steel manufacturing.
Mr Latimore held the position of General Manager Sales and Marketing for Wesfarmers Curragh mine and
was responsible for global sales of Curragh metallurgical coal products to international steel mills and thermal
coal to domestic and international power utilities, rail and port and quality and finance functions. Mr Latimore
was a Director of Curragh Coal Sales. Prior to joining Wesfarmers in early 2001, Mr Latimore held various
positions with Mitsui & Co (Australia) Pty Ltd.
Page 19
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Company Secretary
Duncan Cornish –Company Secretary and CFO
Appointment Date
Resignation Date
1 May 2019
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.
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)
Options ($0.0338
@ 30-Jun-21)
Neville Sneddon
3,380,952
Gerhard
Redelinghuys
111,882,826(1)
Blair Sergeant
11,335,000
Steven Formica
9,407,100
James Agenbag
110,357,826(1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Nicholas Jorss
40,957,120
10,000,000
10,000,000
10,000,000
Matthew Latimore(2)
135,225,840
-
-
-
3,500,000
14,000,000
10,500,000
2,100,000
2,100,000
-
-
Notes:
(1) 110,357,826 of these shares are held by both Gerhard Redelinghuys and James Agenbag through their
respective associations with Cape Coal Pty Ltd
(2) Director appointed on 17-Jun-20
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.
Page 20
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Operating Results
The Group’s operating loss for the financial year was $2,057,812 (2019: $1,579,050). The increased loss was
caused principally by:
• General corporate and administrative expenses ($989,446);
• Exploration expenses ($182,535);
• Employee benefits expense ($807,795); and
• Share-based payments ($198,876).
Review of Financial Condition
Capital Structure
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.
During the year ended 30 June 2020, the following shares were issued:
• 10,000,000 shares were issued (raising $500,000);
• 74,488,000 shares were issued following option exercises (raising $2,489,760); and
• 13,000,000 Class A performance shares with a fair value of $89,700 were converted into ordinary
shares for nil consideration.
During the year ended 30 June 2020, 12,000,000 performance rights were issued with various performance
hurdles and test dates.
As at 30 June 2020 the Company had 803,762,262 ordinary shares, 12,000,000 performance rights and
65,700,000 options on issue.
Financial Position
At 30 June 2020, the Group’s net assets totalled $10,480,649 (2019: $9,427,700) which included cash assets
of $2,394,319 (2019: $2,043,310). The movement in net assets largely resulted from the following factors:
• Operating losses of $2,057,812;
• Cash outflows from operating activities of $1,632,870;
• Cash outflows on exploration and evaluation assets of $1,470,881; and
• Net cash inflows from issue of shares and options of $3,454,760.
Throughout the year the Group focussed on exploration and development on the Group’s coal projects.
The Group’s working capital, being current assets less current liabilities has decreased from $1,902,690 in
2019 to $1,363,381 in 2020.
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.
Page 21
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
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 3 July 2020 the Company completed a private placement of 45.0m shares, raising $2.25million.
Other than the matter 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.
COVID-19 Impact
The COVID-19 pandemic has impacted the Company on several fronts. The Hillalong exploration program
was impacted by inter-state travel restrictions for the exploration team and also additional costs to keep the
team on site and compliant with Queensland Government regulations. International travel restrictions and
working from home policies by larger corporations are impacting Phase 2 Farm-in negotiations with Sumitomo
Corporation, the completion of the Broadmeadow East transaction with Peabody Energy and other interaction
with larger companies. However, the Company has advanced these negotiations and discussions via
telephone and video conferencing with limited face to face interaction. Social distancing restrictions and inter-
state travel restrictions have resulted in roadshows, Shareholder meetings and board meetings being
scheduled as virtual events.
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
Page 22
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
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.
▪ 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 improve the 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.
Page 23
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
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
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
Matthew Latimore
Non-Executive Director (appointed 17-Jun-20)
Duncan Cornish
Company Secretary and Chief Financial Officer
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.
Page 24
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Remuneration Report (Audited) (Continued)
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.
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 include
cash, superannuation, short-term incentives and equity-based performance remuneration.
The Company has entered into an employment agreement with Gerhard Redelinghuys on the following
material terms. This employment agreement replaces the previous executive services agreement dated on 11
October 2017 with Red House Consulting Pty Ltd for Gerhard Redelinghuys’ services.
• Position: Managing Director and CEO.
• Commencement Date: 1 June 2020.
• 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.
• Remuneration: $320,000 including superannuation 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 an employment agreement with Blair Sergeant on the following material terms.
This employment agreement replaces the previous executive services agreement dated on 28 September
2018.
• Position: Executive Director with respect to the Company’s promotion to investors, corporate
development and potential acquisitions.
• Commencement Date: 1 June 2020.
• 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.
• Remuneration: $198,000 including 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. The agreement also provides for additional services to be charged as
agreed in advance.
Page 25
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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
2020 was as follows:
Key
Management
Personnel
Short Term
Benefits
Salary
& Fees
Non-
cash
Benefits
$
$
N. Sneddon
60,000
G. Redelinghuys
241,258
B. Sergeant
180,822
S. Formica
J. Agenbag
N. Jorss
M. Latimore(1)
D. Cornish
Total
Notes:
39,420
36,000
48,000
1,187
125,000
731,687
-
-
-
-
-
-
-
-
-
Post-Employment
Equity-settled
Share-based
Payments
Super-
annuation
Provision for
leave
entitlements
Shares
Options
/Rights
Total
Performance
related %
% consisting of
options/rights
$
$
$
$
%
%
$
5,700
18,450
17,178
-
-
4,560
113
-
-
28,429
1,270
-
-
-
-
-
46,001
29,699
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,700
288,137
199,270
39,420
36,000
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
64,644
117,204
55.2%
55.2%
-
-
1,300
125,000
64,644
872,031
0%
0%
0%
0%
(1) Director appointed on 17-Jun-20
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended 30 June
2019 was as follows:
Key
Management
Personnel
Short Term Benefits
Post-Employment
Equity-settled
Share-based
Payments
Salary &
Fees
Non-cash
Benefits
Super-
annuation
Provision for
leave
entitlements
Shares
Options
/Rights
Total
Performance
related %
% consisting of
options/rights
$
$
$
$
$
$
$
%
%
N. Sneddon(1)
33,226
G. Redelinghuys
244,668
B. Sergeant
159,342
S. Formica
J. Agenbag
N. Jorss(1)
E. King(2)
D. Cornish
Total
Notes:
39,420
36,000
26,581
13,437
20,000
572,674
-
-
-
-
-
-
-
-
-
3,156
4,412
9,248
-
-
2,525
-
-
-
9,175
-
-
-
-
-
-
19,341
9,175
-
-
-
-
-
-
-
-
-
29,785
66,167
119,140
377,395
89,355
257,945
17,871
17,871
57,291
53,871
78,356
107,462
-
29,785
13,437
49,785
382,163
983,353
45.0%
31.6%
34.6%
31.2%
33.2%
72.9%
0.0%
59.8%
45.0%
31.6%
34.6%
31.2%
33.2%
72.9%
0.0%
59.8%
(1) Directors appointed on 12-Dec-18
(2) Director resigned on 12-Dec-18
Page 26
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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 2020 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
M. Latimore(1)
D. Cornish
0%
0%
0%
0%
0%
55.2%
0%
0%
100%
100%
100%
100%
100%
44.8%
100%
100%
Note: (1) Director appointed 17-Jun-20
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 2020 were as follows:
Key
Management
Personnel
Balance at
1 July
2019
Granted
as
Compens
ation
Exercised Expired
Balance at
30 June
2020
Total
Vested 30
June 2020
Total
Vested and
Exercisable
30 June
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
30,000,000
30,000,000
-
-
-
3,500,000
3,500,000
3,500,000
N. Sneddon
3,500,000
G. Redelinghuys 14,000,000
B. Sergeant
10,500,000
S. Formica
2,100,000
J. Agenbag
2,100,000
N. Jorss
30,000,000
M. Latimore(1)
-
D. Cornish
3,500,000
Note: (1) Director appointed 17-Jun-20
Page 27
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Remuneration Report (Audited) (Continued)
Options Granted as Remuneration
No options were granted as remuneration during the financial year ended 30 June 2020.
Performance Shares Held by Key Management Personnel
No performance shares were granted as remuneration during the financial year ended 30 June 2020.
Details of performance shares held directly, indirectly or beneficially by key management personnel during the
year ended 30 June 2020 were as follows:
Key
Management
Personnel
Balance at
1 July
2019
Granted as
Compensation
Converted Expired
Balance at
30 June
2020
Total
Vested
30 June
2020
Total
Vested and
Convertible
30 June
2020
G. Redelinghuys
13,000,000
- 13,000,000
J. Agenbag
13,000,000
- 13,000,000
-
-
-
-
-
-
-
-
Note:
(1) All of the 13,000,000 performance shares were held by both Gerhard Redelinghuys and James Agenbag through
their respective associations with Cape Coal Pty Ltd (the registered holder of the 13,000,000 performance shares)
Performance Rights Granted as Remuneration
12,000,000 performance rights were granted to Mike McKee (Chief Operating Officer) on 16-Sep-19 for nil
consideration. The performance rights are subject to various performance hurdles and vesting conditions,
and expire as follows:
• 2,000,000 @ 31-Dec-20
• 2,000,000 @ 30-Jun-21
• 4,000,000 @ 31-Dec-21
• 4,000,000 @ 31-Dec-23
Page 28
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Remuneration Report (Audited) (Continued)
Shares Held by Key Management Personnel
Details of shares held directly, indirectly or beneficially by key management personnel during the year ended
30 June 2020 were as follows:
Key Management
Personnel
Balance at
1 July 2019
Granted as
Compensation
Other Changes
Balance at
30 June 2020
N. Sneddon
2,380,952
G. Redelinghuys(2)
114,325,000(2)
B. Sergeant
S. Formica
11,335,000
9,407,100
J. Agenbag(2)
113,000,000(2)
N. Jorss
M. Latimore(1)
D. Cornish
Notes:
38,528,548
117,532,782
2,380,952
(1) Director appointed on 17-Jun-20
-
-
-
-
-
-
-
-
1,000,000
3,380,952
(2,442,174)
111,882,826(2)
11,335,000
9,407,100
(2,642,174)
110,357,826(2)
2,428,572
40,957,120
5,693,058
123,225,840
2,380,952
(2) 110,357,826 of these shares are held (at 30 June 2020) by both Gerhard Redelinghuys and James Agenbag
through their respective associations with Cape Coal Pty Ltd (113,000,000 at 30 June 2019)
Other transactions with Key Management Personnel
There have been no other transactions with key management personnel during the year ended 30 June 2020.
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
12-Dec-18
12-Dec-18
12-Dec-18
31-May-19
TOTAL
Expiry Date
Exercise Price
No. Under Option
12-Dec-20
12-Dec-20
12-Dec-20
30-Jun-21
$0.025
$0.03
$0.035
$0.0338
10,000,000
10,000,000
10,000,000
35,700,000
65,700,000
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 Group 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.
Page 29
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
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
Matthew Latimore
Board
Remuneration
Meetings
Attended
Meetings
Attended
7
7
7
7
7
7
1
7
7
7
7
5
7
1
2
-
-
2
-
-
-
2
-
-
2
-
-
-
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.
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 lodged separately on the ASX
and can be found on the Company’s website (www.bowencokingcoal.com.au).
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.
Page 30
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Report
Non-Audit Services
During the financial year, RSM Australia provided tax services to the value of $6,500 (2019: 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 2020
Brisbane, Queensland
Page 31
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 2020,
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: 23 September 2020
Albert Loots
Partner
BOWEN COKING COAL LTD - ACN 064 874 620ANNUAL REPORT 2020Page 32
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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 15 September 2020.
(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
Unlisted Options ($0.025 @ 12-Dec-20)
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
-
-
-
-
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)
Unlisted Options ($0.08 @ 30-Sep-23)
No. Holders
No. Options
No. Holders
No. Options
-
-
-
-
6
6
-
-
-
-
35,700,000
35,700,000
-
-
-
-
1
1
-
-
-
-
1,300,000
1,300,000
Performance Rights
No. Holders
No. Rights
-
-
-
-
1
1
-
-
-
-
12,000,000
12,000,000
There are 178 shareholders holding less than a marketable parcel of 8,928 shares.
Page 33
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Shareholder Information
(b) Twenty Largest Shareholders
The names of the twenty largest holders of Quoted Ordinary Shares are:
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Registered Name
LATIMORE FAMILY PTY LTD *
CAPE COAL PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
OLD FORRESTER PTY LTD *
ST LUCIA RESOURCES CAPITAL FUND PTY LTD
MAYFAIR VENTURES PTE LTD
BNP PARIBAS NOMINEES PTY LTD
CROCODILE CAPITAL OFFSHORE FUND
FIRST ONE REALTY PTY LTD
BRAZIL FARMING PTY LTD *
SAS INVESTMENTS PTY LTD
RIO SUPER PTY LTD
M RESOURCES PTY LTD
ROACH SUPER PTY LTD
15 WISHART FAMILY SUPER PTY LTD
16
17
18
19
20
MR DEANE ROBERT FIRMIN
STEVSAND INVESTMENTS PTY LTD
FOLEY SUPER PTY LTD
BNP PARIBAS NOMS PTY LTD
MR GOH GEOK KHIM
TOP 20 TOTAL
Total of Securities
*Denotes merged holding
Number of
Shares
% of total
Shares
124,509,138
110,057,826
14.7%
13.0%
55,008,762
40,300,000
37,328,548
21,459,746
20,222,799
19,300,000
17,858,022
15,900,000
15,000,000
11,335,000
10,716,702
10,320,000
10,241,839
9,700,000
9,407,100
6,736,460
6,392,549
6,000,000
6.5%
4.7%
4.4%
2.5%
2.4%
2.3%
2.1%
1.9%
1.8%
1.3%
1.3%
1.2%
1.2%
1.1%
1.1%
0.8%
0.8%
0.7%
557,794,491
848,762,262
65.7%
100%
Page 34
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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)
135,225,840
111,382,826
50,000,000
15.9%
13.8%
7.37%
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
(d) Voting rights
135,225,840
111,882,826
55,008,762
15.9%
13.0%
6.5%
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 no 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 35
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
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
Carborough
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/MLA700062
Granted
Australia
Queensland
Isaac River
EPC830
Granted
100%
100%*
100%*
100%
15%
15%
5%
100%
100%
100%
* Sumitomo Corporation elected to proceed with the Hillalong Joint Venture (“Hillalong JV”)
following the completion of the $2.5m Phase 1 exploration program at Hillalong, resulting in
Sumitomo solidifying a 10% interest in the Project. Completion of the first 10% transfer is expected to
complete after 30 June 2020.
Page 36
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Annual Mineral Resources Statement
Resources Statement on 30 June 2019 (JORC 2012, Mt) * Includes 28Mt attributable to Stanmore Coal Ltd
as part of the Lilyvale Joint Venture
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
Resources Statement as at 30 June 2020 (JORC 2012, Mt)
Project
Tenement
Cooroorah MDL 453
EPC 1687
&2157
EPC 1230
MDL 444 /
MLA700062
& EPC830
EPC2141
&1824
Lilyvale
Comet
Ridge
Isaac River
Hillalong
TOTAL
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
96
9
3
21
129
81
33
43
0
22
177
33
60
9
43
100%
15%
100%
100%
100%**
179*
322*
8
6
14
* Includes 28Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture
**Includes 4Mt attributable to Sumitomo Corporation following the completion of the Phase 1 farm
in. See ASX release 4 May 2020 and 9 June 2020.
Movements:
- On 22 August 2019 the Company reported an increase in the Isaac River resource estimate
following the Company’s completion of its maiden exploration program for the project
- On 9 June 2020 the Company announced its maiden resource estimate for the Hillalong
North project, following its maiden exploration program completed during the year.
Sumitomo Corporation elected to proceed with the Hillalong Joint Venture (“Hillalong JV”)
following the completion of the $2.5m Phase 1 exploration program at Hillalong, resulting in
Sumitomo solidifying a 10% interest in the Project. Completion of the first 10% transfer is
expected to occur after 30 June 2020. See ASX release 4 May 2020 and 9 June 2020.
Other than the change to the Isaac River Project and Hillalong Project noted above, the Group
confirms that it is not aware of any new information or data (since 30 June 2020) that materially
affects any other Mineral Resources for the projects set out above.
Page 37
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Annual Mineral Resources Statement
The Group regularly reviews its Mineral Resources and Reserves to assess their reasonableness,
engaging suitably qualified competent persons 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;
▪ 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 38
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2020
Revenue
Corporate and administrative expenses
Employee benefits expense
Exploration expense
Impairment of loans
Share-based payments
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Total comprehensive loss for the year attributable to the
owners of the Company
Loss per share attributable to owners of the parent company
Basic earnings per share
Diluted earnings per share
The accompanying notes form part of these financial statements.
Note
2020
$
2019
$
2
3
3
19
4
15
15
120,840
30,521
(989,446)
(807,795)
(182,535)
-
(631,115)
(596,189)
-
(104)
(198,876)
(382,163)
(2,057,812)
(1,579,050)
-
-
(2,057,812)
(1,579,050)
-
-
(2,057,812)
(1,579,050)
(2,057,812)
(1,579,050)
Cents
(0.26)
(0.24)
Cents
(0.26)
(0.26)
Page 39
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Consolidated Statement of Financial Position
As at 30 June 2020
Note
30 June 2020
30 June 2019
$
$
5
6
7
8
9
10
11
12
2,394,319
2,043,310
164,260
19,849
89,446
15,780
2,578,428
2,148,536
9,117,268
9,117,268
7,525,010
7,525,010
11,695,696
9,673,546
730,047
485,000
245,846
-
1,215,047
245,846
1,215,047
245,846
10,480,649
9,427,700
56,399,643
53,398,058
581,039
471,863
(46,500,033)
(44,442,221)
10,480,649
9,427,700
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
Other liabilities
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
Page 40
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2020
Note
Issued Capital
Reserve
Accumulated
Losses
Total Equity
$
$
$
$
Balance at 30 June 2018
49,830,181
258,294
(42,863,171)
7,225,304
Loss for the year
Total comprehensive loss
Issue of shares
Exercise of options
Conversion of performance shares
Share-based payments
Recognise prior years general reserve to
other income
Share issue costs
Balance at 30 June 2019
Loss for the year
Total comprehensive loss
Issue of shares
Exercise of options
Conversion of performance shares
Share-based payments
Share issue costs
Balance at 30 June 2020
11
11
11
19
11
11
11
19
-
-
3,427,150
106,440
167,794
-
-
(133,507)
-
-
-
-
(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)
53,398,058
471,863
(44,442,221)
9,427,700
-
-
500,000
2,489,760
89,700
-
(77,875)
-
-
-
-
(89,700)
198,876
-
(2,057,812)
(2,057,812)
(2,057,812)
(2,057,812)
-
-
-
-
-
500,000
2,489,760
-
198,876
(77,875)
56,399,643
581,039
(46,500,033)
10,480,649
The accompanying notes form part of these financial statements.
Page 41
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts
Other receipts/payments
Payments to suppliers and employees
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
Payments for exploration costs recoverable from farmee
Receipts for exploration costs from farmee
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Payments for capital raising costs
Receipts from share placement applications
Net cash provided by financing activities
2020
$
2019
$
20,840
41,199
25,708
(19,428)
(1,694,909)
(1,289,373)
14
(1,632,870)
(1,283,093)
(1,470,881)
(1,535,125)
(2,500,000)
2,500,000
-
-
(1,470,881)
(1,535,125)
2,989,760
(20,000)
485,000
3,533,590
(133,507)
-
3,454,760
3,400,083
Net increase in cash held
351,009
581,865
Cash at beginning of the year
2,043,310
1,461,445
Cash at end of the year
5
2,394,319
2,043,310
The accompanying notes form part of these financial statements.
Page 42
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2020
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 (the Group). Bowen Coking Coal Ltd is a listed public company, incorporated and domiciled in
Australia. The financial report was authorised for issue on 24 September 2020 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 24.
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 the 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.
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 2020 the Group generated a consolidated loss of $2,057,812 and incurred
operating cash outflows of $1,632,870. As at 30 June 2020 the Group has cash and cash equivalents of
$2,394,319 and net assets of $10,480,649.
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; and
3.
reducing its working capital expenditure.
Page 43
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Going Concern (Continued)
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 2020, and the results of all subsidiaries for the year then
ended. Bowen Coking Coal Ltd and its subsidiaries together are referred to in these financial statements as
the Group.
The names of the subsidiaries are contained in Note 22. 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.
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.
Page 44
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Segment Reporting (Continued)
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 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
Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
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.
Page 45
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 Group 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 Group 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. 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 expire 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 or amortised cost using the effective interest
rate method. 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.
Page 46
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Instruments (Continued)
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 Group 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.
Impairment
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the Group's assessment at the end of each reporting period as to whether the
financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls
over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss
allowance is recognised in other comprehensive income with a corresponding expense through profit or loss.
In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through
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.
Page 47
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Share-Based Payments
The Group 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.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting
period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
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).
Transactions and balances
Foreign currency transactions are translated into the 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.
Page 48
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Group Companies
The financial results and position of foreign operations whose functional currency is not Australian dollars are
translated as follows:
▪ assets and liabilities are translated at period-end exchange rates prevailing at that reporting date;
▪
▪
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
income and expenses are translated at average exchange rates for the period;
Exchange differences arising on translation of foreign operations are recognised in other comprehensive
income.
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.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period;
or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Page 49
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 year adjusted for any bonus elements in ordinary shares issued during
the year.
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.
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.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Group.
Key Judgements:
Exploration and Evaluation Assets
The Group 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 as
at 30 June 2020 were $9,117,268.
NOTE 2: REVENUE
Revenue from operating activities:
Interest received from other persons
Cash flow boost
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
Travel expenses
Superannuation expense
Page 50
2020
$
2019
$
20,840
100,000
-
120,840
25,707
-
4,814
30,521
2020
$
2019
$
68,020
124,183
200,817
57,329
367,035
17,671
28,694
68,866
45,889
151,613
66,231
128,050
48,610
54,829
61,385
17,790
52,428
19,341
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 4: INCOME TAX EXPENSE
Recognised in the Statement of profit or loss
a) Tax expense
Current tax expense
Deferred tax expense
Total income tax expense per the Statement of profit or loss
2020
$
2019
$
-
-
-
-
-
-
b) Numerical reconciliation between tax expense and pre-tax net profit or (loss)
Net loss before tax
(2,057,812)
(1,579,050)
Corporate tax rate applicable
30%
30%
Income tax benefit on above at applicable corporate rate
(617,344)
(473,715)
Increase in income tax due to tax effect of:
Share-based payments expense
Non-deductible expenses
Current year tax losses not recognised
Decrease in income tax expense due to:
Non-assessable income
Deductible equity raising costs
59,663
718
648,197
-
162,146
414,727
(29,976)
(61,258)
(46,572)
(56,586)
Income tax expense attributable to entity
-
-
Deferred tax assets and liabilities
(c) Recognised deferred tax assets and liabilities
30%
30%
Deferred tax assets
Employee provisions
Other provisions and accruals
Blackhole – previously expensed
Tax losses
Set-off of deferred tax liabilities
Net deferred tax assets
Page 51
11,662
11,613
62,616
1,281,449
1,367,340
2,753
12,152
32,448
727,169
774,522
(1,367,340)
(774,522)
-
-
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 4: INCOME TAX EXPENSE (Continued)
2020
$
2019
$
(c) Recognised deferred tax assets and liabilities (Continued)
Deferred tax liabilities
Prepayments
Exploration and mine properties
(97)
(1,367,243)
(333)
(774,189)
Gross deferred tax liabilities
(1,367,340)
(774,522)
Set-off of deferred tax assets
Net deferred tax liabilities
1,367,340
774,522
-
-
(d) Unused tax losses and temporary differences for which no deferred tax assets has been recognised
Deferred tax assets have not been recognised in respect of the following
using corporate tax rates of:
30%
30%
Deductible temporary differences
Tax revenue losses
Tax capital losses
122,092
4,548,210
1,104,890
159,987
3,952,088
1,104,890
Total unrecognised deferred tax assets
5,775,192
5,216,966
The corporate tax rates on both recognised and unrecognised deferred tax assets and deferred tax liabilities
have been calculated with respect to the tax rate that is expected to apply in the year the deferred tax asset
is realised or the liability is settled.
NOTE 5: CASH AND CASH EQUIVALENTS
2020
$
1,527,604
866,715
2,394,319
2019
$
693,310
1,350,000
2,043,310
2020
$
2019
$
164,260
164,260
89,446
89,446
Cash at bank and on hand
Short term deposits
NOTE 6: RECEIVABLES
Current:
Other receivables
Page 52
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 7: OTHER CURRENT ASSETS
Current:
Prepayments
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
Total acquisitions costs
Exploration and evaluation phase – at cost:
Opening balance - at cost
Capitalised exploration expenditure
Total exploration and evaluation phase – at cost:
2020
$
2019
$
19,849
19,849
15,780
15,780
2020
$
2019
$
4,319,997
4,797,271
9,117,268
4,219,997
100,000
4,319,997
3,305,013
1,492,258
4,797,271
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
Carrying amount at the end of the year
9,117,268
7,525,010
Page 53
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 9: TRADE AND OTHER PAYABLES
Current:
Trade payables and accrued expenses
Short term employee benefits
Total payables (unsecured)
2020
$
2019
$
691,174
38,873
730,047
236,671
9,175
245,846
The average credit period on purchases of goods and services is 30 days. No interest is paid on trade
payables.
NOTE 10: OTHER CURRENT LIABILITIES
Current:
Partial proceeds from placement completed in July 2020
Total other current liabilities
NOTE 11: CONTRIBUTED EQUITY
Fully paid ordinary shares
2020
$
2019
$
485,000
485,000
-
-
Balance at the beginning of the year
706,274,262
53,398,058
499,486,810
49,830,181
2020
2019
No. of
Shares
$
No. of
Shares
$
Share issues:
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
Placement - 7 August 2019
Conversion of Class A performance shares
- 19 August 2019
Exercise of 2.0c options: July to October
2019
Exercise of 4.0c options: July to October
2019
Transaction costs associated with share
issues
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
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
10,000,000
500,000
13,000,000
89,700
24,488,000
489,760
50,000,000
2,000,000
-
(77,875)
-
(133,507)
Balance as at 30 June
803,762,262
56,399,643
706,274,262
53,398,058
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.
Page 54
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 11: CONTRIBUTED EQUITY (Continued)
Notes for the above table:
(a) 74,875,000 shares issued at $0.016 each in the placement on 28 September 2018, raising $1,198,000.
(b) 31,250,000 shares issued at $0.016 each in the placement on 12 December 2018, raising $500,000.
(c) 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.
(d) 13,000,000 Class B performance shares with a fair value of $167,794 converted into ordinary shares
at no consideration.
(e) 5,322,000 shares were issued upon exercise of options at $0.02 each, raising $106,440.
(f) 10,000,000 shares issued at $0.05 each in the placement on 7 August 2019, raising $500,000.
(g) 13,000,000 Class A performance shares with a fair value of $89,700 converted into ordinary shares at
no consideration.
(h) 24,488,000 shares were issued upon exercise of options at $0.02 each between July and October
2019, raising $489,760.
(i) 50,000,000 shares were issued upon exercise of options at $0.04 each between July and October
2019, raising $2,000,000.
Listed Options
Listed Share Options
$0.04
50,000,000
$0.04
50,000,000
Note
Weighted
average
exercise price
2020
No. of
Options
Weighted
average
exercise price
2019
No. of
Options
Balance at the beginning of the year
Options exercised
Exercisable at end of year
Unlisted Options
$0.04
(50,000,000)
-
-
$0.04
50,000,000
$0.04
50,000,000
Unlisted Share Options
$0.032
65,700,000
$0.029
90,378,000
Note
Weighted
average
exercise price
2020
No. of
Options
Weighted
average
exercise price
2019
No. of
Options
Balance at the beginning of the year
$0.029
90,378,000
$0.02
30,000,000
Change of options during the year:
Issued to a director
Issued to directors & an officer
Exercised during the year
Options lapsed
19
19
-
-
-
-
$0.02
$0.02
(24,488,000)
(190,000)
$0.03
30,000,000
$0.0338
35,700,000
$0.02
(5,322,000)
Exercisable at end of year
$0.032
65,700,000
$0.029
90,378,000
Page 55
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 11: CONTRIBUTED EQUITY (Continued)
Performance Shares
Weighted
average
exercise price
Note
Unlisted Performance Shares
Balance at the beginning of the year
Changes of Performance Shares
during the year:
Converted
Balance at end of year
11
Capital Management
-
-
-
-
2020
No. of
Performance
Shares
-
13,000,000
(13,000,000)
-
Weighted
average
exercise price
-
-
-
-
2019
No. of
Performance
Shares
13,000,000
26,000,000
(13,000,000)
13,000,000
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 12: 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.
NOTE 13: 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.
Page 56
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 14: CASH FLOW INFORMATION
A. Reconciliation of Cash Flow from Operations with Loss after Income
Tax:
Loss after income tax
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
Increase/(decrease) in payables and accruals
2020
$
2019
$
(2,057,812)
(1,579,050)
-
198,876
(74,814)
(4,069)
304,949
104
382,163
(22,628)
(4,370)
(59,312)
Net cash used in operations
(1,632,870)
(1,283,093)
B. Non-cash Financing Activities
Share issue:
-
-
13,000,000 Class B performance shares with a fair value of $167,794
converted into ordinary shares at no consideration.
13,000,000 Class A performance shares with a fair value of $89,700
converted into ordinary shares at no consideration.
-
167,794
89,700
-
NOTE 15: EARNINGS PER SHARE
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
Weighted average number of ordinary shares outstanding during the period
used in the calculation of diluted EPS
2020
$
2019
$
(2,116,613)
(1,579,050)
779,784,232
597,920,773
854,959,642
617,473,376
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.
Page 57
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 16: 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.
2020
$
567,400
745,650
-
2019
$
464,025
1,311,925
-
1,313,050
1,775,950
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.
Page 58
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 17: CONTINGENT LIABILITIES
On 24 June 2020 the Company announced that it had executed binding agreements with Peabody (Burton
Coal) Pty Ltd (“Peabody”), a wholly owned subsidiary of US headquartered Peabody Energy Corporation, to
acquire the Broadmeadow East coking coal project, located within undeveloped Mining Lease 70257 (“ML”,
“Project” or “Broadmeadow East”).
The transaction includes access rights to both the New Lenton Joint Venture Coal Handling and Preparation
Plant (“CHPP”) and the Train Load Out Facility (“TLO”), which are connected by an established haul road
passing immediately adjacent to ML 70257. The Company has secured throughput capacity of a minimum of
1Mtpa, with the ability to potentially increase this capacity to a total of 2Mtpa, subject to agreement.
Assets being acquired
The Company has agreed to acquire the following from Peabody:
1. Granted Mining Lease ML 70257;
2. Land access for the purposes of exploration, development and mining; and
3. Assignment of 1Mtpa throughput capacity at (a) the New Lenton Joint Venture CHPP and (b) the New
Lenton Joint Venture TLO, with access to the haul road. The parties may agree the assignment of a
further potential 1Mtpa throughput capacity.
Consideration
Total consideration payable for the above-mentioned assets is as follows:
• Cash consideration of $1,000,000, payable upon Completion;
• Royalty payable of $1/t on all coal produced and sold from ML 70257, to a maximum of 1.5Mt, being
$1.5M;
• Assumption of environmental rehabilitation obligations; and
• $500,000 cash consideration for land compensation, payable only upon site works commencing or the
renewal of the ML, whichever occurs first.
Conditions Precedent
The above-mentioned acquisition is subject to the following conditions precedent:
1.
Indicative approval to transfer from the Minister of Mines, any conditions attached subject to the
Company’s approval, acting reasonably;
2. Entering into the Deeds of Covenant relating to CHPP, haul road and TLO tolling/access with the
consent of New Lenton Joint Venture; and
3. The de-amalgamation of ML 70257 from the Burton Mine Environmental Authority.
Satisfaction of the above-mentioned conditions precedent, and therefore completion, is expected to take
between 3 and 6 months (from 24 June 2020).
There were no other contingent liabilities at the end of the reporting period.
Page 59
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 18: 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
Provision for leave entitlements
NOTE 19: 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:
Options issued to a director in Dec 2018 (1)
Options issued to key management personnel in May 2019 (2)
Performance rights issued to a consultant in Sep 2019 (3)
2020
$
2019
$
777,688
64,644
29,699
872,031
592,014
382,163
9,175
983,352
2020
$
2019
$
64,644
-
134,232
198,876
78,356
303,807
-
382,163
Notes for the above table, relating to the years ended 30 June 2020 and 30 June 2019 are:
1. 30,000,000 options were granted to a director for nil consideration on 12 December 2018. The options
vested 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 an independent valuer 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%
•
Page 60
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 19: SHARE-BASED PAYMENTS (Continued)
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 an independent valuer 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%
3. 12,000,000 performance rights which have various vesting conditions, performance hurdles and expiry
dates were granted to a consultant on 16 September 2019. The undiscounted fair value of the
performance rights granted was 8.3 cents. The fair values at grant date were determined by an
independent valuer taking into account the share price at grant date, expected volatility, vesting
conditions, expiry dates, expected dividends, the risk free rate, the impact of dilution, the fact that the
performance rights are not tradeable and the likelihood that the performance conditions will be achieved
(as assessed at the time of issue by the Board). The fair value of the performance rights after discount
was assessed as $498,000, to be allocated to each accounting period according to the expiry date. The
inputs used for the Black-Scholes pricing model for performance rights granted were as follows:
• grant dates: 16 September 2019
• share price at grant date: 8.3 cents
• exercise prices: nil
• expected volatility: 79.27%
• expected dividend yield: nil
•
risk free rate: 0.93%
NOTE 20: AUDITOR’S REMUNERATION
Remuneration for the auditor of the parent entity:
RSM Australia Partners and its related entities:
Auditing or reviewing the financial reports
Taxation services
2020
$
2019
$
34,135
6,500
40,635
31,510
-
31,510
Page 61
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 21: FINANCIAL RISK MANAGEMENT
(a) Financial Risk Management Policies
The Group's financial instruments comprises cash balances, receivables and payables and loans to and from
subsidiaries. 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.
During the year ended 30 June 2020, the Group executed a finance facility with M Resources Trading Pty Ltd
(“M Resources”), a related entity of Mr Matt Latimore (a director and substantial holder of the Company), to
provide the Group with a finance facility of up to $15.0 million, to be utilised in funding the development of the
Group’s Isaac River Coking Coal Project, or any other of the Group’s coking coal projects, as the case may
be. The Group may draw down on the finance facility in respect of a particular project once the decision to
mine that project has been made, and the finance facility will be secured against the project being developed.
At the date of this report, the finance facility remains undrawn.
Page 62
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 21: 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 2020, 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(1)
receivables(1)
Financial liabilities:
Within 6 months:
payables(1)
Notes:
2020
$
2019
$
2,394,319
58,801
2,453,120
2,043,310
-
2,043,310
643,414
643,414
197,599
197,599
(1) 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.
(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.
Page 63
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 22: 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:
Coking Coal One Pty Ltd
Cabral Metais Ltd (dormant)
Bowen Coking Coal Marketing Pty Ltd(1)
Note: (1) Company registered on 24 June 2020
NOTE 23: SUBSEQUENT EVENTS
Country of
incorporation
Australia
Brazil
Australia
Ownership interest
2020
100%
100%
50%
2019
100%
100%
-
On 3 July 2020 the Company completed a private placement of 45.0m shares, raising $2.25million.
Other than the matter 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 24: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Bowen Coking Coal Ltd at 30 June 2020. This information
has been prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income for the period
Total comprehensive loss for the period
2020
$
2,165,316
9,012,974
11,178,290
771,246
771,246
2019
$
2,000,941
7,525,010
9,525,951
116,559
116,559
10,407,044
9,409,392
56,399,643
53,398,058
581,039
471,863
(46,573,638)
(44,460,529)
10,407,044
9,409,392
(2,174,485)
(1,560,804)
-
-
(2,174,485)
(1,560,804)
Refer to Note 17 outlining a (conditional) contractual commitment for the acquisition of a project, also
considered a contingent liability at 30 June 2020. Other than the transaction described in Note 17, the
Company has:
-
-
no other contingent liabilities, nor has it entered into any guarantees in relation to the debts of its
subsidiaries; and
has not entered into any other 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.
Page 64
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2020
NOTE 25: COMPANY DETAILS
The registered office and principal place of business is:
Level 19, 1 Eagle Street
Brisbane, Queensland, 4000 Australia
NOTE 26: 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 65
BOWEN COKING COAL LTD - ACN 064 874 620
ANNUAL REPORT 2020
Directors’ Declaration
The directors of the Company declare that:
1. The attached financial statements and notes are in accordance with the Corporations Act 2001, the
Corporations Regulations 2001, including:
a. complying with the Australian 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 2020
and of its performance for the financial year ended on that date.
2. The chief executive officer and chief financial officer have each declared that:
a.
b.
the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
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 2020
Brisbane, Queensland
Page 66
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 2020, 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 2020 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
$2,057,812 and had net cash outflows from operating and investing activities of $1,632,870 and $1,470,881
respectively for the year ended 30 June 2020. 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
exploration
The Group
expenditure with a carrying value of $9,117,268
as at 30 June 2020.
capitalised
has
How our audit addressed this matter
Our audit procedures in relation to the carrying value
of capitalised exploration costs included:
the significant management
We determined this to be a key audit matter due
to
judgement
involved in assessing the carrying value in
accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, including:
Determination of whether expenditure can
be associated with finding specific mineral
resources, and the basis on which that
expenditure is allocated to an area of
interest;
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.
Ensuring that the right to tenure of the areas of
interest was current through confirmation with
the relevant government departments;
assessing
evaluating
management’s assessment that no indicators of
impairment existed;
Critically
and
Agreeing a sample of the additions to capitalised
exploration expenditure during
to
supporting documentation, and ensuring that the
amounts were capitalised correctly; and
the year
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.
Other Information
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 2020 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.
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: https://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 24 to 29 of the directors' report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Bowen Coking Coal Limited, for the year ended 30 June 2020,
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 2020
Albert Loots
Partner