A N N U A L R E P O R T
MAKING THE
MOST OF EVERY
OPPORTUNITY
B O W E N C O K I N G C O A L
B OW E N C O K I N G C OA L A N N UA L R E P O R T 2 0 2 2
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CONTENTS
Cautionary
Statements
Corporate
Information
Chairman’s
Letter
Managing Director’s
Report
Review of
Operations
Directors’
Report
Auditor’s Independence
Declaration
Financial
Report
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of
Financial Position
2
3
4
7
9
25
42
43
44
45
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’
Declaration
Independent Auditor’s
Report
Shareholder
Information
Interests in
Tenements
Annual Mineral
Resources Statement
46
47
48
82
83
89
92
93
CAUTIONARY
STATEMENTS
2
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.
BOWEN COKING COAL ANNUAL REPORT 2022 CORPORATE
INFORMATION
3
DIRECTORS AND
COMPANY SECRETARY
NOTICE OF ANNUAL
GENERAL MEETING
HEAD OFFICE AND
REGISTERED OFFICE
PRINCIPAL PLACE
OF BUSINESS
AUDITORS
SHARE REGISTRY
STOCK EXCHANGE
LISTING
AUSTRALIAN
COMPANY NUMBER
SOLICITOR
BANKER
Nicholas Jorss (Executive Chairman)
Gerhard Redelinghuys (Managing Director)
Matthew Latimore (Non-Executive Director)
Neville Sneddon (Non-Executive Director)
Daryl Edwards (Chief Financial Officer)
Duncan Cornish (Company Secretary)
The details of the annual general meeting of
Bowen Coking Coal Ltd are:
Level 35, Waterfront Place
1 Eagle Street, Brisbane QLD 4000
10.00 am (AEST) on 23 November 2022
Bowen Coking Coal Ltd
Level 4, 167 Eagle Street
Brisbane QLD 4000
Tel: +61 7 3191 8413
www.bowencokingcoal.com
Level 4, 167 Eagle Street
Brisbane QLD 4000
RSM Australia Partners
Level 6, 340 Adelaide Street
Brisbane QLD 4000
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
Tel: 1300 554 474
www.linkmarketservices.com.au
Australian Securities Exchange Ltd
ASX Code: BCB
064 874 620
Colin Biggers & Paisley Pty Ltd
Level 35, 1 Eagle Street
Brisbane QLD 4000
Westpac Banking Corporation Limited
BOWEN COKING COAL ANNUAL REPORT 2022 4
CHAIRMAN’S
LETTER
The 2022 financial year has been a year of transformation for Bowen Coking Coal as the
Company transitioned from exploration and development to first production.
DEAR SHAREHOLDERS,
Amid very strong coal pricing, Bowen’s
first 35,000 tonne delivery of ultra-
low volatile pulverised coal injection
(ULVPCI) from the Company’s Bluff
Mine near Blackwater in the Bowen
Basin was shipped from Gladstone’s
RG Tanna Port on 30 June 2022. This
landmark first sale for the Company
was shipped under a sales contract
to Formosa Plastics Group, a large
diversified multi-national conglomerate
headquartered in Taiwan. The ULVPCI
coal produced at Bluff typically attracts
a premium in the market for its low ash,
high energy and high coke replacement
ratio. Notably, the shipment was made
before 1 July 2022, the starting date of
Queensland’s new coal royalties super
tax. More about that later.
First production is a significant
accomplishment for any mining
company and for Bowen it marked
the culmination of a tremendous
team effort since Bluff’s acquisition in
December 2021. The milestone was
also a terrific reward and reflection of
the Company’s relentless efforts since
listing in 2017. Bowen is well on track to
beat its production target of five million
tonnes per annum (Mtpa) of Run-of-
Mine coal by the end of 2024.
“FIRST PRODUCTION IS A
SIGNIFICANT ACCOMPLISHMENT
FOR ANY MINING COMPANY
AND FOR BOWEN IT MARKED
THE CULMINATION OF A
TREMENDOUS TEAM EFFORT”
All of this progress has not been
without its challenges. The
aforementioned supertax, which
now imposes three new progressive
royalty tiers up to 40% on revenues,
was an unexpected burden introduced
by the Queensland Government.
Alongside the rest of the industry
and other investors who value the
previous stability of Queensland as
an investment destination, we will
continue to fight for a reasonable
outcome on royalties for an industry
that is the engine room of the state
economy. While disappointed by the
lack of any meaningful consultation
with industry on what now represents
the highest royalty regime in the world,
we’re determined not to let this poor
decision for Queensland and future
Queensland jobs cost the Company any
momentum.
Both coking and thermal coal pricing
reached historic highs this year and
are forecast to remain strong as supply
falls and several majors consider
an exit from the market. The world’s
planned energy transition away from
hydrocarbons toward sustainable
sources, such as wind farms and
solar stations, is going to require
more steel. More steel will demand
more coking coal which really has no
credible or near horizon substitute
in the steel making process. The
International Energy Agency concurs,
forecasting that, under its aggressive
decarbonisation case, by 2050, steel
produced from green hydrogen will
total 8%. Given the constraints of
physics and the significant energy
losses involved in hypothetically
creating steel from green hydrogen it
is likely that even this target will prove
difficult to achieve. The future for
Queensland’s first-class metallurgical
coal is strong and Bowen is proud to
stand beside our coal workers and
deliver increasing amounts of this key
steel making material to the world.
As a new producer, we expect robust
coal prices to translate to strong cash
flows which will help support further
development. Our projects are located
in the heart of the world’s best coking
coal province. We have convenient
access to existing infrastructure and
a skilled mining labour force. We
have a proven leadership team made
up of passionate and experienced
people who between them have now
successfully opened 13 coal mines
and operated more than 25 coal mines
worldwide.
As the call from global steelmakers
for higher quality, energy-rich coking
coal grows louder, our resolve to
become a top ten metallurgical coal
producer in Australia has never been
stronger. The 2022 financial year was
a pivotal year but it’s only the start of
things to come. We will continue to
deliver growth and make the most of
a once-in-a-generation opportunity to
grow a significant metallurgical coal
business. On behalf of the Board, I
thank you for your continued support
and look forward to delivering on your
investment in Bowen.
Yours faithfully,
Nick Jorss
Chairman
BOWEN COKING COAL ANNUAL REPORT 2022
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BOWEN COKING COAL ANNUAL REPORT 2022 6
BOWEN COKING COAL ANNUAL REPORT 2022 7
MANAGING DIRECTOR’S
REPORT
FY2022 was a milestone year for Bowen Coking Coal. The company successfully and
safely completed the transition from an explorer and developer of coal assets to an
operating mine owner.
The company’s Bluff Mine near
Blackwater was acquired in December
2021 and was shipping coal by June
2022, just seven months later. Coal
production is ramping up in coming
months to a steady state Run-of-Mine
(ROM) target of 80,000t to 100,000t
per month, representing an annualised
production rate of between 1Mtpa and
1.2Mtpa ROM over four to six years to
supply the global steel industry.
That’s some achievement given the
many challenges associated with
bringing a decommissioned mine
back to life particularly within an
accelerated time span. In achieving
such a rapid mine development the
team has managed a complex chain
of downstream demands including
procuring labour and equipment,
negotiating trucking, rail and port
agreements, accessing washing and
processing facilities, and securing
sales contracts. Overlaying the entire
pit to port process are important
environmental, safety and regulatory
considerations. Suffice to say,
farewelling our first coal shipment from
Gladstone’s RG Tanna Port was not
only a major career highlight for me but
testament to Bowen’s ability to get the
job done.
Our executive team and key contractors
led by HSE Mining worked around
the clock during the Bluff mine’s
recommissioning. The marketing of
the Bluff product coal was negotiated
by the Company’s 50:50 Marketing
Joint Venture with M Resources which
leveraged its strong relationships
with Asian buyers to achieve Bowen’s
first sales contract in February 2022.
Importantly, on the ground activities
were undertaken with a key focus
on safety. Bluff reported no lost time
injuries during the rapid restart of
operations where there were many
moving parts.
Our first shipment from Bluff is just the
start of our production ramp up. On
22 July 2022, subsequent to the end
of the financial year, we announced
first coal had been mined at the
Broadmeadow East Pit, the first
producing pit of the Company’s Burton
Complex which also comprises the
Burton and Lenton pits. Announced
in December 2021, the purchase of a
90% interest in the Burton Complex
from New Hope Corporation Limited
materially increased the Company’s
attributable resources to more than
500 million tonnes (Mt) and included
the co-located Burton coal handling
and processing plant (CHPP), train
loadout facility, a haul road, 350 plus
person camp, offices and workshops.
All this infrastructure has than a $300
million replacement value and is key
to our plans for self-sufficiency. When
refurbished it should comfortably
accommodate 4.5Mtpa to 5Mtpa of
long‐term ROM production.
The Burton CHPP’s staged
refurbishment is due to be
progressively completed through
to the end of FY2023. Prior to this,
Broadmeadow East coal is being
processed at the neighbouring Fitzroy
CHPP under an infrastructure sharing
agreement with Fitzroy (CQ) Pty Ltd
and exported through the Dalrymple
Bay Coal Terminal in Mackay for the
remainder of the year. First ROM coal
is expected late in Q1 2023 from the
Burton Pit.
In June, Bowen announced it
had executed a series of funding
arrangements totalling approximately
A$190 million to cover the development
of the Burton Complex, including the
CHPP refurbishment. This was an
extremely complex transaction, some
three years in the making, and I would
like to personally acknowledge the
fantastic efforts of the team at Bowen,
our advisors, along with the goodwill of
our incoming funding providers Taurus
Mining Finance Fund and the New
Hope Group.
In time, the Company’s Hillalong Coking
Coal Project, located only 10km to the
north of the Burton and Lenton pits, aims
to have its production processed through
the Burton Complex as well. The ongoing
exploration program at Hillalong is being
funded by farm-in partner, Sumitomo
Corporation, which has now spent A$5
million for a 15% stake. Sumitomo has
an option to earn an additional 5% by
spending another $2.5m.
Around 50km south of Broadmeadow
East, our Isaac River Project is on track
to produce first coal in 2023, should
Federal environmental approval be
obtained later this year. The project was
granted a site-specific Environmental
Authority from the Queensland State
Government in March while sole
objections have now been removed
against the Mining Lease Application
“FAREWELLING OUR FIRST
COAL SHIPMENT FROM
GLADSTONE’S RG TANNA
PORT WAS NOT ONLY A MAJOR
CAREER HIGHLIGHT FOR ME
BUT TESTAMENT TO BOWEN’S
ABILITY TO GET THE JOB DONE”
BOWEN COKING COAL ANNUAL REPORT 2022 8
by the Isaac Regional Council. Federal
environmental approval under the
Environment Protection and Biodiversity
Conservation (EPBC) Act is underway
and expected to be obtained towards
the end of the year. The project requires
only a modest capital investment as it
is planned to leverage off existing third-
party infrastructure.
In closing, Bowen has now rapidly
opened its first two mines this year and
is on track to have another two mines in
production next year as we target 6.2Mt
of ROM production by the end of 2024.
The team’s considerable achievements
to date provide us with a strong
financial platform for further logical and
accretive growth. Amid strong market
fundamentals for metallurgical coal
driven by underinvestment in capacity
and growing steel demand, Bowen
is looking forward to several years of
strong cash flows and growth.
colleagues, our partners, shareholders,
government and other key stakeholders
for supporting the Company since its
listing. In return, your board will always
strive to grow long term value for all
stakeholders as we deliver on our vision
to become a significant independent
metallurgical coal producer.
We may be confident of our future but
at the same time, we’re very proud of
our past. The success we’ve shared
follows a lot of hard work, continuing
teamwork and enduring belief in our
combined capabilities and endless
potential. I sincerely thank my Bowen
Gerhard Redelinghuys
Managing Director & CEO
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REVIEW
OF
OPERATIONS
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BOWEN COKING COAL PROJECTS
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During the year ended 30 June 2022, Bowen Coking Coal Ltd delivered on its strategy
of taking the Company from a developer to a producer, by shipping first coal from its
Bluff PCI mine and progressing its portfolio of high-quality coking coal assets readying
Broadmeadow East for first production and working towards the finalisation of the
transformational acquisition of the Burton Lenton Project.
2022 OPERATIONAL & FINANCIAL HIGHLIGHTS
BLUFF MINE ACQUISITION
COMPLETE WITH FIRST COAL
MINED AND MAIDEN SHIPMENT
FROM THE PORT OF GLADSTONE
FINAL APPROVAL FOR
BROADMEADOW EAST AND
MINING CONTRACTOR
MOBILISED TO SITE
BINDING AGREEMENT SIGNED
FOR ACQUISITION OF THE
BURTON MINE AND LENTON
PROJECT
STATE ENVIRONMENTAL
APPROVAL FOR ISAAC RIVER
INFRASTRUCTURE AND ACCESS
DEAL WITH FITZROY
MAIDEN 44MT RESOURCE
ESTIMATE ANNOUNCED FOR
HILLALONG SOUTH
HIGH QUALITY COKING
COAL CONFIRMED AT
BROADMEADOW EAST
SECURING FINANCE FACILITIES
FOR $190 MILLION TO UNDERPIN
THE DEVELOPMENT OF ASSETS
BLUFF
MINE
12
LOCATION
20km east of Blackwater,
Bowen Basin, Queensland
TENEMENTS
ML 80194, EPC 1175, EPC 1999
COAL TYPE
Ultra-low volatile pulverised coal injection
(UVPCI)
TOTAL JORC RESOURCE
13.5Mt
OWNERSHIP
100%
The Bluff Mine (Bluff) is
an open cut mine located
in the southern Bowen
Basin, near the township
of Bluff and 20km east of
Blackwater. The mine is
adjacent to the Blackwater
rail line which connects it
to the Port of Gladstone.
The Bluff acquisition was completed
in December 2021 and first coal was
mined and shipped in June 2022.
The Ultra Low Volatile PCI I coal
produced at Bluff is well regarded for
its low ash, high energy and high coke
replacement ratio. The marketing of the
Bluff product coal is being handled by
the Company’s 50:50 Marketing Joint
Venture with M Resources, a specialist
metallurgical coal trading company.
Bowen operates under an agreement
with the QCoal Group to wash coal
from Bluff through their nearby Cook
coal handling and processing plant.
The company has also signed
agreements with third parties for rail
and port services and has appointed
HSE Mining as contractor on site.
Coal production at Bluff mine is
expected to ramp up to a steady state
ROM target of 80,000t to 100,000t per
month, representing an annualised
production rate of between 1Mtpa and
1.2Mtpa ROM over four to six years to
supply the global steel industry.
The coal produced at the mine will
complement the rest of the Bowen
asset portfolio, adding to the product
mix of high-quality coal for the steel
making industry.
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BLUFF
MINE
FIRST COAL SHIPPED JUNE 2022
BENCHMARK QUALITY ULV PCI COAL
MINE PRODUCTION – HSE MINING
CHPP AND TLO – COOK COLLIERY
December 2021
Acquisition
April 2022
First coal mined
January 2021
Production crew mobilised
June 2022
First coal shipped
ANNUAL ROM
PRODUCTION TARGET
JORC
RESOURCE
~1.0Mt*
14Mt
*Further exploration planned to test possible LOM extension
BURTON
COMPLEX
LOCATION
Northern Bowen Basin
TENEMENTS
ML 700053, ML 70337, ML 700054, ML
The Burton Complex is
located around 50km
south of Bowen’s Hillalong
Project, and 35km
70109, ML 70260, EPC 766, EPC 1675,
north of the Company’s
EPC 865, EPC 857, MDL 349, MDL 315
COAL TYPE
Coking coal and secondary thermal coal
TOTAL JORC RESOURCE
Burton Pit 64Mt
Lenton Pit 140Mt
OWNERSHIP
90%
Broadmeadow East
Project in the northern
Bowen Basin. The Burton
Complex includes the
Burton Mine and Lenton
deposit.
Burton is an open-cut coal mine
currently in care and maintenance
which contains three unmined open
pit deposits with total coal resources
of 64Mt and substantial infrastructure,
including the Burton Coal Handling
and Preparation Plant (CHPP), with
a total replacement value of more
than A$300m. Lenton is an adjacent
undeveloped open-cut project with
total coal resources of 140Mt.
In August 2021, Bowen announced
its intention to acquire New Hope
Corporations 90% interest in the
Lenton Joint Venture, owner of the
Burton Coal Mine and New Lenton
Project. (Formosa Plastics Group holds
the remaining 10%).
On 24 December 2021, Bowen entered
into a binding Share Sale and Purchase
Agreement (‘SPA’) with New Hope
Corporation Limited for the acquisition
15
of 100% of the shares in New Lenton
Coal Pty Ltd (which currently owns
a 90% interest in the Lenton Joint
Venture). The Conditions Precedent
to the SPA were satisfied on 24 June
2022 and a Deed of Variation to the
SPA was signed on 1 July 2022. The
Deed of Variation included agreement
of the Completion Date, Completion
Payments and other matters including
the replacement of security bonds
which was required in order to
complete the Transaction. Accordingly,
on 1 July 2022, subsequent to period
end, the Company completed the
acquisition.
Bowen’s immediate focus is to
recommission the CHPP along with
the train load out facility and >350 bed
accommodation village. During the
period work commenced to refurbish
the mine camp under an Early Access
Agreement. Orders were also placed for
long lead items required for the rebuild
of the CHPP and refurbishment of the
accommodation village commenced.
The Burton mine has a proven track
record for the reliable production of
coking coal that was valued by the steel
industry worldwide for its high quality,
low ash and low sulphur.
The acquisition will facilitate the
creation of the wider Burton Complex,
which will include Broadmeadow East,
targeting up to 4.5Mtpa of long-term
ROM production.
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BURTON
COMPLEX
FIRST ROM COAL FROM BURTON PITS DUE Q1 2023
WORLD RENOWNED COKING COAL BRAND
MINE PRODUCTION – BUMA (DOWNER)
CHPP/TLO – BURTON COMPLEX 2023
RAIL & PORT – EXPORT VIA DBCT AND POTENTIALLY ABBOT POINT
ANNUAL ROM
PRODUCTION TARGET
JORC
RESOURCE*
3.5–4.5Mt 204Mt
*Burton and Lenton Pits combined
BROADMEADOW EAST
COKING COAL PROJECT
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LOCATION
25km north-east of Moranbah,
Bowen Basin, Queensland
TENEMENTS
ML 70257
COAL TYPE
Coking coal and secondary thermal coal
TOTAL JORC RESOURCE
33Mt
OWNERSHIP
100%
Located around 25km
north-east of the coal
mining town of Moranbah,
Broadmeadow East
is Bowen’s second
producing mine.
In March 2022, final environmental
approvals were received for the project
which forms the first planned pit of the
expanded Burton complex.
In May 2022 Bowen announced the
appointment of BUMA Australia Pty
Ltd (BUMA) as mining contractor for
the project. First phase mobilisation of
site infrastructure, ancillary equipment,
haul trucks and an EX3600 excavator
supported early site works, and
were later supported with another
EX3600 excavator and haul trucks
for production. First coal was mined
at Broadmeadow East in July 2022,
subsequent to period end. First
production will be processed under
an infrastructure sharing agreement
with Fitzroy (CQ) Pty Ltd until the full
upgrade to infrastructure at the Burton
complex is completed.
The project hosts a 33Mt Resource
and had an initial ROM production
target of 0.8Mtpa to 1.1Mtpa over a
five-to-seven-year period. Under the
contract with BUMA this has now been
fast tracked to a rate of ~1.2Mt annually
over a shorter period with close to
600,000 tonnes of ROM forecast
before the end of this calendar year.
The resource at Broadmeadow East
has the flexibility to produce a primary
coking coal product of either high
quality (7.5% ash, CSN 7.5) or high yield
(9.2% ash, CSN 4.5). In both primary
product cases, the secondary energy
coal created from the primary coking
coal discard has a calorific value of
more than 6,500kcal/kg air dried basis,
which is also a sought-after product for
the export coal markets.
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BROADMEADOW
EAST
FIRST COAL MINED JULY 2022
FLEXIBILITY TO PRODUCE VARIOUS PRODUCTS
MINE PRODUCTION – BUMA, WHO ACQUIRED DOWNER’S MINING CONTRACTOR BUSINESS
CHPP/TLO – FITZROY RESOURCES 2022
CHPP/TLO – BURTON COMPLEX FROM Q4 2022
EXPORT VIA DALRYMPLE BAY COAL TERMINAL
March 2022
EA granted
July 2022
First coal mined
May 2022
Mobilisation
Q3/4 2022
First coal shipped target
ANNUAL ROM
PRODUCTION TARGET
JORC
RESOURCE
0.8–1.1Mt
33Mt
Bowen coking coal ann ua l rep or t 202 2
2020
HILLALONG COKING
COAL PROJECT
LOCATION
Northern Bowen Basin,
105km southwest of Mackay
TENEMENTS
EPC 1824, EPC 2141
COAL TYPE
Low ash coking coal and secondary
thermal coal
TOTAL JORC RESOURCE
87Mt
OWNERSHIP
85%
The Hillalong Coking
Coal Project (“Hillalong”)
is located in the
northern Bowen Basin
approximately 105km
west-southwest of Mackay
and 10km North of Burton.
The project is currently the subject of
a farm-in agreement (“Hillalong Farm-
In”) with the Sumitomo Corporation
(“Sumitomo”) which earned a 10%
interest in the project post expending
$2.5m on the successful Phase 1
exploration program completed in 2020.
Significantly, in March 2021, Sumitomo
confirmed its commitment to continue
farming into the Hillalong project through
a further expenditure of $2.5m in the
Phase 2a exploration program to earn an
additional 5% interest. Sumitomo now
has the ability to earn an additional 5%
in Hillalong by funding a further $2.5m
of exploration in Phase 2b. This will be
subject to the success of the Phase 2a
program. The Hillalong Farm-In is in the
process of being converted into a formal
joint venture.
In August 2021, Bowen announced a
significant maiden Resource Estimate
for Hillalong South of 44 Mt. The
maiden resource estimate for Hillalong
South follows an earlier exploration
program which demonstrated seam
continuance and an exceptional
intersection of the 9m thick coalesced
Elphinstone and Hynds seams.
Based on the previous exploration
program and coal quality and
washability results, there is potential to
produce a Mid Volatile Matter (25% ad
basis) coking coal from the Hillalong
South project, which complements
the other products within the Bowen
Coking Coal portfolio, including the
Low Volatile Matter coking coals
of Broadmeadow East. The third
exploration program for Hillalong
commenced just before the end of the
period and is currently underway.
BOWEN COKING COAL ANNUAL REPORT 2022 21
BOWEN COKING COAL ANNUAL REPORT 2022 ISAAC RIVER COKING
COAL PROJECT
22
LOCATION
30km south-east of Moranbah,
Bowen Basin, Queensland
TENEMENTS
The Isaac River Coking
Coal Project (“Isaac
River”) covers an area of
14km2 in the Bowen Basin
MDL 444, EPC 830, MLA 7000062
in Central Queensland,
COAL TYPE
Coking coal with secondary PCI
TOTAL JORC RESOURCE
8.7Mt
OWNERSHIP
100%
approximately 30km west
of Moranbah. The project
is in close proximity to
BMA’s (BHP Mitsubishi
Alliance) Daunia Mine,
and Peabody’s Moorvale
South Project.
Bowen completed studies for the
project which indicated a production
target of between 0.4Mtpa to 0.6Mtpa
over a four-to-five-year period.
Similar to Broadmeadow East, the
agreement with Fitzroy on access
to their Carborough Downs coal
processing facilities could fast track the
development of the project, following
the Company’s decision to mine which
is expected in 2023.
On 30 March 2022, Bowen announced
the project had been granted a site-
specific Environmental Authority from
the Queensland government. The
project’s Progressive Rehabilitation and
Closure Plan (PRCP) was also approved,
making it one of the first coal projects to
have a PRCP approved.
The Mining Lease application is
advancing in parallel with the Federal
environmental approval under the
EPBC Act and is now expected to be
completed in the 2023 financial year.
BOWEN COKING COAL ANNUAL REPORT 2022 CORPORATE
23
BOARD CHANGES
Blair Sergeant resigned as Non-
Executive Director on 17 September
2021, having moved from the role of
Executive Director in May 2021.
The Board would like to extend its
gratitude to Blair for the contribution he
made to the Company during his tenure.
INFRASTRUCTURE DEAL WITH
FITZROY CQ PTY LTD
In September 2022, Bowen announced
it had entered into an infrastructure
sharing and co-operation Term Sheet
with Fitzroy CQ Pty Ltd (Fitzroy)
allowing early infrastructure access to
enable the commencement of initial
coal exports while mining approvals
and infrastructure refurbishment is
underway at Burton.
Under the terms of the agreement,
Bowen agreed to provide Fitzroy with
access to the haul road, camp facilities
and water supply at the Burton Mine. In
return, Fitzroy will provide Bowen with
port and rail capacity.
Fitzroy has also agreed to grant Bowen
access to its Broadlea Mine surface
infrastructure, including the office
and laydown area, in reciprocation
for access to Bowen’s Burton
infrastructure including the workshop,
office, communications and power
infrastructure.
Additionally, Fitzroy will relinquish a
small part in the northern area of its
exploration permit (EPC667) that is
contiguous and immediately adjacent
to Bowen’s Broadmeadow East Project,
and allow for a mining lease over that
area. In return, Fitzroy earns the right
to mine underneath the Mallawa Haul
Road at the Burton Mine, and approval
to apply for a mining lease in that area.
The agreement is subject to approval
from the Lenton JV with Bowen voting
its majority ownership in favour of the
proposal, and the parties agreeing
a royalty type compensation for
any coal extracted from the Burton
Mine by Fitzroy during this process,
similar to the compensation Bowen is
subjected to under Fitzroy’s EPC667.
In the interest of timing for both
parties, provision was made for early
access to some of the infrastructure
prior to the completion of the Burton
transaction.
PLACEMENT AND RIGHTS ISSUE
On 10 August 2021 the Company
completed a private placement of
149,253,731 shares at $0.067 per share,
raising $10,000,000. The institutional
placement was strongly supported by
new strategic investor, Ilwella Pty Ltd,
an investment entity of the Flannery
Family Office.
On 30 August 2021, the Company
completed an Entitlement Offer
(‘Offer’), being a fully underwritten
pro-rata non-renounceable entitlement
issue of Shares, of 1 New Share for
every 12 Shares held by Eligible
Shareholders on the Record Date, at an
Issue Price of $0.067 per New Share,
to raise $5,478,185 (before costs of the
Offer). Accordingly on the same date,
the Company issued 81,763,969 new
shares at $0.067 per share. The issue
was heavily oversubscribed, resulting
in $7.6 million being returned to
shareholders.
In addition, on 30 August 2021 the
Company applied for the issue
30,000,000 unlisted options each
exercisable at $0.10 per share on or
before 31 August 2024. 21,000,000
unlisted options were issued on this
date with a further 9,000,000 unlisted
options to be issued at a future date
subject to shareholder approval.
In November 2021, the Company
successfully completed an
oversubscribed $11m placement
to facilitate the restart of the
Company’s first two projects, Bluff and
Broadmeadow East.
The $11m (before costs) equity capital
was raised through the placement
of 68,750,000 shares (49,552,623
issued under ASX Listing Rule 7.1A and
19,197,377 issued under ASX Listing
Rule 7.1) at an issue price of $0.16 per
share, which represented an 8.6%
discount to the closing share price of
17.5c on 18 November 2021.
In February 2022 the Company
has successfully completed a
$41.5 million placement (before costs)
to sophisticated and institutional
investors.
Bowen issued a total of 207,353,813
new shares (135,288,440 under ASX
Listing Rule 7.1 and 72,065,373 under
ASX Listing Rule 7.1A) at an issue
price of $0.20 per share. Funds will be
directed to the acquisition of the Burton
Lenton project, and to the restart of
operations at Burton.
CORPORATE FUNDING FACILITY
In February 2022, Bowen announced
the execution of a $15 million senior
secured debt facility agreement with
Remagen Capital Management Pty Ltd.
The facility was originally intended to
support the restart of operations at the
Bluff PCI mine.
BOWEN COKING COAL ANNUAL REPORT 2022 24
2,100,000 shares issued at $0.07 and
600,000 shares issued at $0.08
per share.
COVID-19 IMPACT
The company and its contractors
adhere to recommendations
from Queensland Health and the
Australian Government to provide
a COVID-19 safe workplace and to
minimise impacts of the pandemic
on its operations. Social distancing
restrictions and inter-state travel
restrictions resulted in roadshows,
shareholder meetings and board
meetings being scheduled as virtual
events. Negotiations and discussions
on major transactions and operational
matters took place via telephone or
video conferencing while restrictions
remained in place.
The company elected to not utilise this
facility (and no establishment, break
or non-utilisation fee was payable to
Remagen by the Company as a result of
that election) and instead entered into
a broader debt financing package with
Taurus Mining Fund No 2. L.P. (Taurus)
to support its capex requirements
across its entire asset portfolio of
development-ready assets.
agreement with New Hope Corporation
Limited, subject to the completion of
the SPA, with an aggregate limit of
$70 million to provide a $61.6 million
bank guarantee to the Queensland
Government for the Burton/Lenton
Mine rehabilitation costs. As at 1 July
2022, Bowen drew down $61.6 million
due to the completion of the acquisition
of Burton/Lenton on the same date.
In April 2022, the Company signed a
mandate with Taurus for debt financing
to support the Bowen’s capital
requirements. The new debt facility is
proposed to be senior secured with
an aggregate limit of US$55 million
(~$79m). The facility is intended for
capital expenditure, general working
capital and costs of recommissioning
the Burton CHPP, development costs
for the Burton and Broadmeadow East
projects, and Bluff mine operating
costs. The facility is structured as an
amortisable term loan with an initial
term of 18 months and no financial
maintenance covenants. At period end,
Bowen had drawn US$14 million and
US$41 million remained undrawn.
NEW HOPE PERFORMANCE
FACILITY
In June 2022, Bowen signed and
utilised a two-year bilateral facility
CONVERTIBLE LOAN NOTE
ISSUANCE
Also in June 2022, the Company
signed a convertible note deed for the
issuance of $40 million convertible
loan notes (Convertible Notes) with
the Crocodile Capital 1 Global Focus
Fund and the Crocodile Capital
Offshore Fund. The Convertible Notes
are convertible into fully paid ordinary
shares in Bowen and will carry an
interest rate of 3.0% per annum and
have an initial conversion price of
$0.325 per share.
Proceeds will be used for working
capital to support development of
Bowen’s assets.
EXERCISE OF OPTIONS
On 5 August 2021 the Company issued
2,700,000 fully paid ordinary shares
on the exercise of unlisted options, with
BOWEN COKING COAL ANNUAL REPORT 2022 B OW E N C O K I N G C OA L A N N UA L R E P O R T 2 0 2 2
25
DIRECTORS’
REPORT
B OW E N C O K I N G C OA L A N N UA L R E P O R T 2 0 2 2
26
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 2022.
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:
Nicholas Jorss
Gerhard Redelinghuys
Matthew Latimore
Neville Sneddon
Blair Sergeant
Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned on 17 September 2021)
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:
27
NICHOLAS JORSS
Executive Chairman
GERHARD REDELINGHUYS
Managing Director
Qualifications: BE (Hons) Civil, MBA, GDip App Fin (Sec Inst)
Qualifications: B. Comm. Acc, Hons, B. Compt, GAICD
Appointment Date: 12 December 2018
Appointment Date: 29 September 2017
Length of Service: 3.5 years
Length of Service: 4.75 years
Current ASX Listed Directorships: Ballymore Resources Limited
Current ASX Listed Directorships: Nil
Former ASX Listed Directorships: Nil
Former ASX Listed Directorships: Nil
Mr Jorss was the founding Managing Director of Stanmore
Resources 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 25 years’ experience in investment banking,
civil engineering, corporate finance and project management. Mr
Jorss was instrumental in the success of Stanmore Resources
Ltd, which currently has a market value of around $1.78b. 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 8 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.
Mr Redelinghuys is the Managing Director of Cape Coal
and founder of Bowen Coking Coal Ltd, and has 27 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. 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 before founding Bowen Coking Coal
Ltd. Mr Redelinghuys is also a graduate member of the
Australian Institute of Company Directors.
BOWEN COKING COAL ANNUAL REPORT 2022 28
MATTHEW LATIMORE
Non-Executive Director
NEVILLE SNEDDON
Independent Non-Executive Director
Qualifications: Executive Education Program, M.Bus.
(Executive), Adv. Dip. of Leadership and Management, B.I.B
Qualifications: B. Eng (Mining)(Hons), M. Eng, MAusIMM,
Grad AICD
Appointment Date: 17 June 2020
Appointment Date: 12 December 2018
Length of Service: 2 years
Length of Service: 3.5 years
Current ASX Listed Directorships: Stanmore Resources
Limited, Magnum Mining and Exploration Ltd
Current ASX Listed Directorships: Nil
Former ASX Listed Directorships: Nil
Former ASX Listed Directorships: Nil
Mr Latimore is the President and Founder of M Resources, an
entity which 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.
A mining engineer with over 40 years’ experience in most
facets of the Queensland (QLD) and New South Wales (NSW)
resource sectors, and as the recently retired Chairman of
Stanmore Resources 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 QLD,
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, QLD
Ministerial Coal Mine Safety Advisory Committee and the
joint federal/state advisory committee.
BOWEN COKING COAL ANNUAL REPORT 2022 29
CHIEF FINANCIAL OFFICER
COMPANY SECRETARY
DARYL EDWARDS
Chief Financial Officer
DUNCAN CORNISH
Company Secretary
Appointment Date: 2 February 2021
Appointment Date: 1 May 2019
Length of Service: 1.4 years
Length of Service: 3.2 years
Mr Edwards is a Chartered Accountant with over 22 years’
experience in the mining and manufacturing industries.
He has held various executive positions including CEO of
a private Australian coal explorer, Pioneer Coal, and CFO
and Head of Corporate Development for Universal Coal
plc (ASX:UNV) for over 7 years, where he managed the
commercialisation of the 4Mtpa Kangala Colliery and the
3.3Mtpa New Clydesdale Colliery. Previously, Mr Edwards
was CFO at Asenjo Energy, a Botswana-based coal
exploration and development company, held privately by
Aquila Resources, Sentula Mining and Jonah Capital.
Mr Cornish was the founding CFO and Company Secretary
for Stanmore Resources 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.
BOWEN COKING COAL ANNUAL REPORT 2022 30
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
Nicholas Jorss
Gerhard Redelinghuys
Matthew Latimore
Neville Sneddon
PRINCIPAL ACTIVITIES
Shares
51,036,882
55,237,358
184,448,072
7,454,365
Options
10,000,000
15,000,000
6,179,000
3,000,000
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. The name of the Company was officially changed to Bowen Coking
Coal Ltd in 2017.
DIVIDENDS PAID OR RECOMMENDED
There were no dividends paid or recommended during the financial year.
REVIEW OF OPERATIONS
Information on the operations of the Group during the financial year and up to the date of this report is set out separately in the
Annual Report under Review of Operations.
OPERATING RESULTS
The Group’s operating loss for the financial year was $18,302,414 (2021: $3,224,368). The increased loss was caused principally by:
• Gross loss $8,338,793;
• Administrative expenses $5,158,480; and
• Employee benefits expense $3,476,236.
REVIEW OF FINANCIAL CONDITION
CAPITAL STRUCTURE
As at 30 June 2022 the Company had 1,542,124,952 ordinary shares, 13,300,000 performance rights, 43,000,000 options and
40,000,000 Convertible Notes on issue.
During the year ended 30 June 2022, the following shares were issued:
• 425,357,544 shares were issued following share placements (raising $62,470,762);
• 81,763,969 shares were issued following a rights issue (raising $5,478,186);
• 27,941,177 shares were issued as part of Bluff project consideration;
• 24,400,000 shares were issued following option exercises (raising $2,349,740);
• 4,200,000 shares were issued following the exercise of vested performance rights;
• 21,000,000 fee options were issued on 31 August 2021 and 9,000,000 fee options were issued on 30 November 2021 relating
to the share placement and rights issue;
• 34,000,000 (incentive) options were issued to directors and the company secretary;
• 4,000,000 performance rights lapsed;
BOWEN COKING COAL ANNUAL REPORT 2022 31
•
1,500,000 performance rights were issued to a senior executive; and
• 40,000,000 Convertible Notes were issued (raising $40,000,000).
Since 30 June 2022 the following securities were issued:
• 948,560 shares and 2,165,913 performance rights were issued to staff and management (under the Company’s Employee
and Executive Incentive Plan); and
• 4,450,000 shares were issued following the exercise of vested performance rights.
As at the date of this report the Company had 1,547,523,512 ordinary shares, 11,015,913 performance rights, 43,000,000 options
and 40,000,000 Convertible Notes on issue.
FINANCIAL POSITION
At 30 June 2022, the Group’s net assets totalled $83,446,758 (2021: $14,948,951) which included cash assets of $72,520,051
(2021: $2,997,030). The movement in net assets largely resulted from the following factors:
• Operating losses of $18,302,414;
• Cash outflows from operating activities of $19,012,290;
• Cash outflows from investing activities of $32,628,646; and
• Net cash inflows from financing activities of $121,163,957.
Throughout the year the Group focussed on exploration and development on the Group’s coal projects and the return to
operations of the acquired Bluff Mine which recorded first coal sales at the year end.
The Group’s working capital, being current assets less current liabilities has increased from $2,175,369 in 2021 to $55,326,526 in 2022.
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 other than exposure to the United States Dollar.
LIQUIDITY AND FUNDING
The Group anticipates that it has sufficient funds to finance its mine development, 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
In August 2021, Bowen announced its intention to acquire New Hope Corporation’s 90% interest in the Lenton Joint Venture,
owner of the Burton Coal Mine and New Lenton Project. (Formosa Plastics Group holds the remaining 10%). On 24 December
2021, Bowen entered into a binding Share Sale and Purchase Agreement (‘SPA’) with New Hope Corporation Limited (‘NHC’)
for the acquisition of 100% of the shares in New Lenton Coal Pty Ltd (‘New Lenton’) (which currently owns a 90% interest in the
Lenton Joint Venture) (‘Lenton JV’, the ‘Acquisition’). The Conditions Precedent to the SPA were satisfied on 24 June 2022 and
a Deed of Variation to the SPA was signed on 1 July 2022. The Deed of Variation included agreement of the Completion Date,
Completion Payments and other matters including the replacement of security bonds which was required in order to complete
the Transaction. Accordingly, on 1 July 2022, subsequent to period end, the Company completed the acquisition.
On 5 July 2022, 948,560 shares and 2,165,913 performance rights were issued to staff and management (under the Company’s
Employee and Executive Incentive Plan), and the Company issued 4,000,000 ordinary shares on 9 August 2022 and 450,000 ordinary
shares on 5 September 2022 following the exercise of vested performance rights.
Other than the matters noted above, there are no material matters or circumstances that have arisen since the end of the year
which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
BOWEN COKING COAL ANNUAL REPORT 2022 32
BUSINESS RISKS
The prospects of the Group in progressing their exploration and development projects may be affected by a number of factors.
These factors are similar to most exploration and development companies moving through the exploration phase and advancing
projects into development and production. Some of these factors include:
EXPLORATION
The results of the exploration activities may be such that the estimated resources are insufficient to justify the financial viability
of the projects. The Group undertakes extensive exploration and product quality testing prior to establishing JORC compliant
resource estimates and to (ultimately) support mining feasibility studies. The Group engages external experts to assist with
the evaluation of exploration results where required and utilises third party competent persons to prepare JORC resource
statements or suitably qualified senior management of the Group. Economic feasibility modelling of projects will be conducted
in conjunction with third party experts and the results of which will usually be subject to independent third party peer review.
SOCIAL LICENCE TO OPERATE
The ability of the Group to secure and undertake exploration and development activities within prospective areas is also reliant upon
satisfactory resolution of native title and (potentially) overlapping tenure. To address this risk, the Group develops strong, long term
effective relationships with landholders with a focus on developing mutually acceptable access arrangements. The Group takes
appropriate legal and technical advice to ensure it manages its compliance obligations appropriately.
ENVIRONMENTAL
All phases of mining and exploration present environmental risks and hazards. The Group’s operations are subject to environmental
regulations pursuant to a variety of state and municipal laws and regulations. Environmental legislation provides for, among other things,
restrictions and prohibitions on spills, releases or emissions of various substances produced in association with mining operations.
Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties,
some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement,
larger fines and liability and potentially increased capital expenditures and operating costs. Environmental assessments of proposed
projects carry a heightened degree of responsibility for companies and directors, officers and employees. The Group assesses each of its
projects very carefully with respect to potential environmental issues, in conjunction with specific environmental regulations applicable to
each project, prior to commencing field exploration, development and in operations. Periodic reviews are undertaken regularly.
SAFETY
Safety is of critical importance in the planning, organisation and execution of the Group’s exploration, development and operating
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.
DEVELOPMENT AND OPERATING
The Group has historically undertaken exploration activities only but has advanced towards operating activities through the
acquisition and restarting of the Bluff mine and through mine development activities at the Broadmeadow East pit. As a result,
numerous mine development and operating risks have been highlighted which may result in delayed mine development and / or a
reduction in performance that decreases the Group’s ability to develop assets on time and on budget and to produce high quality
coal to meet customer shipping needs. The risks include, but are not limited to, factors such as delayed mine development, weather
conditions, machinery failure and under performance, labour and equipment shortages, critical infrastructure failure or natural
disasters.
GEOLOGICAL
Resource and Reserve estimates are prepared by external experts in accordance with the JORC Code 2012 for reporting. Coal
Resources are estimated using various assumptions regarding drill spacing and drilling depth, coal quality and other geotechnical
constraints. The Group has no Reserves at 30 June 2022 and for the reported Resources, some of the deposits are more sensitive
to the cost and revenue assumptions used than others due to the characteristics and geological structure of those deposits. Due
care is taken with each estimation, but is expected to change as more detailed planning is undertaken.
BOWEN COKING COAL ANNUAL REPORT 2022 33
FUNDING
At 30 June 2022 the Group remains well funded with cash reserves and debt finance facilities expected to be sufficient to meet
the business’ operating and development costs. The Group’s ability to effectively transition into a coal producing business may be
dependent upon several factors including speed of mine development activities, the ability to limit working capital requirements,
delivery of early cashflows, successful mining operations, funding rail and port bonding requirements and/or the successful
exploration and subsequent development of the Group’s tenements. Should these avenues be delayed or fail to materialise, the
Group may need to raise additional funding through debt, equity or farm out/sell down to allow the Group to continue as a going
concern and meet its debts as and when they fall due. There is no guarantee that additional funding through debt will be available,
or if it is, there is no guarantee that such new funding will be on terms acceptable to the Group. Global credit markets have been
severely constrained in the past, and the ability to obtain new funding or refinance may in the future be significantly reduced.
Increasingly, financial institutions have made public statements in relation to their unwillingness to finance certain types of coal
mines and coal- fired power stations. If the Group is unable to obtain sufficient funding, either due to banking and capital market
conditions generally, or due to factors specific to the coal sector, the Group may not have sufficient cash to meet its ongoing capital
requirements or the ability to expand its business.
MARKET
There are numerous factors involved with exploration, development and operating projects, including variance in commodity price
and foreign currency markets which can result in exploration, development and / or operating assets becoming uneconomical. The
Group is not of a size to have an influence on coal prices or the exchange rate for Australian Dollars and is therefore a price-taker
in general terms. The Group sells export coal in United States Dollars and is therefore exposed to movements in currency rates.
The Group has not adopted mechanisms to hedge any portion of its currency risk, however may do so in the future once coal sales
volumes stabilise.
INSURANCE
There is a risk that the policies of financial institutions with respect to the funding of coal projects, may extend to an unwillingness
to provide insurance products to coal producers and associated companies on terms that are currently provided to such
companies. This could result in a material increase in the cost to Bowen Coking Coal of obtaining appropriate levels of insurance or
Bowen Coking Coal being unable to secure adequate insurance cover.
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 significant 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.
BOWEN COKING COAL ANNUAL REPORT 2022 REMUNERATION
REPORT (AUDITED)
34
The remuneration report details the key management personnel remuneration
arrangements for the Group, in accordance with the requirements of the Corporation
Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the
activities of the entity, directly or indirectly, including all directors.
The names of key management personnel of Bowen Coking Coal Ltd who have held office during the financial year are:
Nicholas Jorss
Gerhard Redelinghuys
Matthew Latimore
Neville Sneddon
Blair Sergeant
Daryl Edwards
Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned 17 September 2021)
Chief Financial Officer
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
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 development and early production 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 short-term bonuses, long-term incentives and staff retention to be offered through
an employee equity incentive plan. Options, shares or performance rights may be granted under this plan to align directors’,
executives’, employees’ and shareholders’ interests. Methods used to achieve this aim, include securities that vest upon
reaching or exceeding specific predetermined objectives, securities with future vesting dates based on continued employment
and 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.
Independent external advice was sought during the year ended 30 June 2022 and subsequent to 30 June 2022 to assist in
setting appropriate directors and senior executive remuneration levels and incentives.
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 and/or shares bonuses, determined on
a discretionary basis by the board. No short-term incentives were made available during the year ended 30 June 2022, however
shares and performance rights were issued to all employees subsequent to 30 June 2022 as short and long-term incentives.
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.
BOWEN COKING COAL ANNUAL REPORT 2022 35
The exercise price of the options is determined after taking into account the underlying share price performance in the period
leading up to the date of grant and if applicable, performance conditions attached to the share options. Subject to specific
vesting conditions, each option is convertible into one ordinary share.
The Group’s policy for determining the nature and amount of remuneration of board members and key executives is set out below.
DIRECTORS
Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and
responsibilities. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval
by shareholders at the Annual General Meeting and is not linked to the performance of the Group. The maximum aggregate
amount of fees that can be paid to non-executive directors approved by shareholders is currently $500,000. 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.
The Company’s non-executive directors (Matthew Latimore and Neville Sneddon) are currently receiving fees of $70,000
including superannuation per annum. Subsequent to 30 June 2022 the Board resolved (and Messrs Latimore and Sneddon
accepted) to vary the non-executive fees to $97,737.56 (plus superannuation) effective from 1 October 2022.
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, the Company’s Managing Director and
Chief Executive Officer on the following material terms:
• 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: $400,000 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.
• Subsequent to 30 June 2022 the Board resolved (and Mr Redelinghuys accepted) to vary the remuneration for Mr
Redelinghuys to $702,707.60 (plus superannuation) effective from 1 October 2022.
The Company has entered an employment agreement with Nicholas Jorss (recently converted to an executive services
agreement), the Company’s Executive Chairman. The current material terms include:
• 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: $240,000 per annum including superannuation per annum.
• Subsequent to 30 June 2022 the Board resolved (and Mr Jorss accepted) to vary the remuneration and notice period for
Mr Jorss to $513,707.60 (plus superannuation) and 4 months (respectively) effective from 1 October 2022. The revised
remuneration is based on Mr Jorss allocating 70% of his time to Bowen Coking Coal Ltd.
The Company has entered an executive services agreement with Daryl Edwards, the Company’s Chief Financial Officer. The
material terms include:
• 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: $388,000 including superannuation per annum, indexed per CPI, Brisbane on 1 July each year.
• Other industry standard provisions for senior executive of a public listed company are included in the agreement.
• Subsequent to 30 June 2022 the Board resolved (and Mr Edwards accepted) to vary the remuneration and notice period for
Mr Edwards to $454,707.60 (plus superannuation) and 4 months (respectively) effective from 1 October 2022.
BOWEN COKING COAL ANNUAL REPORT 2022 REMUNERATION DETAILS OF KEY MANAGEMENT PERSONNEL
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended 30 June 2022 was as follows:
36
Short Term Benefits
Salary & Fees
Provision
for leave
entitlements
Post-
Employment
Equity-settled
Share-based
Payments
Superannuation Options/Rights
$
206,061
349,765
53,333
53,333
7,500
378,208
1,048,200
$
-
44,136
-
-
-
14,017
58,153
$
20,606
23,568
5,333
5,333
-
11,784
66,624
Total
$
696,136
1,121,673
199,507
199,507
7,500
657,983
Performance
related
%
67%
63%
71%
71%
0%
39%
$
469,469
704,204
140,841
140,841
-
253,974
1,709,329
2,882,306
Key
Management
Personnel
N. Jorss
G. Redelinghuys
M. Latimore
N. Sneddon
B. Sergeant1
D. Edwards
Total
1. Represents remuneration from 1 July 2021 to 17 September 2021.
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended 30 June 2021 was as follows:
Short Term Benefits
Post-
Employment
Equity-settled
Share-based
Payments
Key
Management
Personnel
N. Jorss
G. Redelinghuys
M. Latimore
N. Sneddon
B. Sergeant
S. Formica1
J. Agenbag1
D. Cornish2
D. Edwards
Total
Salary & Fees
$
117,384
298,306
34,521
51,479
187,721
13,140
12,000
116,000
165,900
996,451
Provision
for leave
entitlements
$
-
17,978
-
-
-
-
-
-
-
Superannuation Options/Rights
$
10,495
21,694
3,279
4,891
14,952
-
-
-
-
Performance
related
%
0%
0%
45%
0%
0%
0%
0%
0%
41%
Total
$
127,879
337,978
68,563
56,370
202,673
13,140
12,000
116,000
280,571
1,215,174
$
-
-
30,763
-
-
-
-
-
114,671
145,434
1. Represents remuneration from 1 July 2020 to 31 October 2020.
2. Represents remuneration from 1 July 2020 to 2 February 2021.
17,978
55,311
BOWEN COKING COAL ANNUAL REPORT 2022 37
The percentage of equity-based remuneration for persons who were key management personnel of the Group during the year
ended 30 June 2022 is set out below:
Key Management Personnel
Equity Based
Salary and Fees
Proportion of Remuneration
N. Jorss
G. Redelinghuys
M. Latimore
N. Sneddon
B. Sergeant
D. Edwards
67%
63%
71%
71%
0%
39%
33%
37%
29%
29%
100%
61%
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 2022
were as follows:
Balance
at 1 July
2021
Granted as
Compensation
Acquired
Exercised
Sold
Balance
at 30 June
2022
Total
Vested
30 June
2022
Total Vested
& Exercisable
30 June
2022
Key
Management
Personnel
N. Jorss
G. Redelinghuys
-
-
10,000,000
15,000,000
-
-
-
-
M. Latimore
2,100,000
3,000,000
3,179,0001
(2,100,000)
N. Sneddon
-
3,000,000
-
-
Total
2,100,000
31,000,000
3,179,000 (2,100,000)
1. Options issued as part of the August 2021 rights issue
PERFORMANCE RIGHTS HELD BY KEY MANAGEMENT PERSONNEL
-
-
-
-
-
10,000,000
10,000,000
10,000,000
15,000,000
15,000,000
15,000,000
6,179,000
6,179,000
6,179,000
3,000,000
3,000,000
3,000,000
34,179,000
34,179,000
34,179,000
Details of Performance Rights held directly, indirectly or beneficially by key management personnel during the year ended 30
June 2022 were as follows:
Key
Management
Personnel
Balance at
1 July 2021
Granted as
Compensation
Vested/
Exercised
Lapsed
Balance at
30 June 2022
Total Vested
30 June 2022
D. Edwards
12,000,000
-
4,000,000
-
8,000,000
-
BOWEN COKING COAL ANNUAL REPORT 2022 38
OPTIONS GRANTED AS REMUNERATION
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year are as follows:
Key
Management
Personnel
N. Jorss
G. Redelinghuys
M. Latimore
N. Sneddon
Number of
options granted
Grant
date
Vesting
date
Expiry
date
Exercise
price
10,000,000
15,000,000
3,000,000
3,000,000
30.11.2021
30.11.2021
30.09.2024
30.11.2021
30.11.2021
30.09.2024
30.11.2021
30.11.2021
30.09.2024
30.11.2021
30.11.2021
30.09.2024
$0.25
$0.25
$0.25
$0.25
Fair Value
per option
at grant date
$0.0469
$0.0469
$0.0469
$0.0469
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management personnel as part
of compensation during the year ended 30 June 2022 are set out below:
Key
Management
Personnel
N. Jorss
G. Redelinghuys
M. Latimore
N. Sneddon
Value of options
granted
during the year
Value of options
exercised
during the year
Value of options
lapsed
during the year
Remuneration
consisting of
options for the year
$469,469
$704,204
$140,841
$140,841
-
-
$30,763
-
-
-
-
-
67%
63%
71%
71%
No options have been granted to Key Management Personnel since the end of the financial year.
PERFORMANCE RIGHTS GRANTED AS REMUNERATION
The terms and conditions of each grant of performance right over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year are as follows:
Key Management
Personnel
Number of Performance
rights granted
Grant
date
Expiry
date
Exercise
price
Fair Value per
option at grant date
D. Edwards1
D. Edwards
D. Edwards
1. Exercised on 29 December 2021
4,000,000
4,000,000
4,000,000
01.02.2021
30.04.2022
01.02.2021
31.12.2023
01.02.2021
31.12.2024
$Nil
$Nil
$Nil
$0.05
$0.05
$0.05
Values of performance rights over ordinary shares granted, exercised and lapsed for directors and other key management
personnel as part of compensation during the year ended 30 June 2022 are set out below:
Key
Management
Personnel
D. Edwards
Value of performance
rights recognised
during the year
Value of performance
rights vested
during the year
Value of performance
rights lapsed
during the year
Remuneration consisting
of performance rights
for the year
$253,974
$200,000
-
39%
No performance rights have been granted to Key Management Personnel since the end of the financial year.
BOWEN COKING COAL ANNUAL REPORT 2022 39
SHARES HELD BY KEY MANAGEMENT PERSONNEL
Details of shares held directly, indirectly or beneficially by key management personnel during the year ended 30 June 2022 were
as follows:
Key Management
Personnel
Balance at
1 July 2021
Performance
rights
Rights
issues
Shares
acquired
Options
exercised
Shares
disposed
Resignation
N. Jorss
60,957,120
G. Redelinghuys
117,449,868
M. Latimore
156,320,726
N. Sneddon
B. Sergeant1
D. Edwards
6,880,952
21,835,000
-
4,000,000
-
-
-
-
-
5,079,762
9,787,490
-
-
-
-
-
(65,000,000)
13,201,729 65,000,000
2,100,000
(2,174,383)
573,413
-
-
-
1,819,584
-
-
-
-
-
-
-
1. Held at date of resignation 17 September 2021
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
There have been no other transactions with key management personnel during the year ended 30 June 2022.
This concludes the remuneration report, which has been audited.
Balance at
30 June
2022
66,036,882
62,237,358
234,448,072
7,454,365
-
-
-
-
(23,654,584)
-
-
4,000,000
BOWEN COKING COAL ANNUAL REPORT 2022 40
OPTIONS AND PERFORMANCE RIGHTS
At 30 June 2022 and as at the date of this report, the unissued ordinary shares of the Company under options are as follows:
UNLISTED OPTIONS
Issue Date
30 November 2021
30 November 2021
Total
Expiry Date
Exercise Price
No. Under Option
30 November 2024
30 September 2024
$0.10
$0.25
9,000,000
34,000,000
43,000,000
At the date of this report, there are 11,015,913 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.
MEETINGS OF DIRECTORS
The meetings (held while a director) attended by each director during the financial year were:
Directors
Nicholas Jorss
Gerhard Redelinghuys
Matthew Latimore
Neville Sneddon
Blair Sergeant
Board
Meetings
Attended
13
13
13
13
2
13
13
11
11
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 or nomination and remuneration committee. The Board is of the opinion that
due to the nature and size of the Company, the functions performed by an audit committee and nomination and remuneration
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 and Nomination and Remuneration 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).
INDEMNITY AND INSURANCE OF OFFICERS
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.
BOWEN COKING COAL ANNUAL REPORT 2022 41
INDEMNITY AND INSURANCE OF AUDITORS
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 to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are
outlined in note 26 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 26 to the financial statements do not compromise the
external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or
auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate
for the Company or jointly sharing economic risks and rewards.
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 directors’ report.
AUDITOR
RSM Australia continue in office in accordance with section 327 of the Corporation Act 2001.
Signed in accordance with a resolution of the board of directors
Gerhard Redelinghuys, Director
29 September 2022
Brisbane, Queensland
BOWEN COKING COAL ANNUAL REPORT 2022 AUDITOR’S INDEPENDENCE
DECLARATION
42
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001 T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880 www.rsm.com.au 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 2022, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS Albert Loots Partner Brisbane, Queensland Dated: 29 September 2022 THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001 T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880 www.rsm.com.au 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 2022, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS Albert Loots Partner Brisbane, Queensland Dated: 29 September 2022 BOWEN COKING COAL ANNUAL REPORT 2022 B OW E N C O K I N G C OA L A N N UA L R E P O R T 2 0 2 2
43
FINANCIAL
REPORT
44
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Revenue
Cost of sales
Gross loss
Administrative expenses
Other expenses
Operating loss
Finance income
Finance expense
Share of profit/(loss) of joint ventures accounted for using equity method
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
Note
2
3(A)
3(B)
3(C)
4
4
18
6
2022
$
11,862,313
(20,201,106)
(8,338,793)
2021
$
-
-
-
(5,158,480)
(1,699,722)
(4,105,577)
(1,454,494)
(17,602,850)
(3,154,216)
5,506
(716,260)
11,190
531
(5,682)
(65,001)
(18,302,414)
(3,224,368)
-
-
(18,302,414)
(3,224,368)
-
-
(18,302,414)
(3,224,368)
(18,302,414)
(3,224,368)
Loss per share attributable to owners of the parent company
Basic earnings per share
Diluted earnings per share
7
7
Cents
(1.39)
(1.39)
Cents
(0.35)
(0.35)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
BOWEN COKING COAL ANNUAL REPORT 2022 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AT 30 JUNE 2022
45
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
NON-CURRENT ASSETS
Receivables
Property, plant & equipment
Exploration and evaluation assets
Mine development assets
Mining assets
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Lease Liability
Provisions
Total Current Liabilities
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings
Investments accounted for using the equity method
Lease Liability
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share based payment reserve
Convertible Note reserve
Accumulated losses
TOTAL EQUITY
Note
30 June 2022
$
30 June 2021
$
8
9
10
11
9
12
13
13
13
11
14
15
16
17
15
18
16
17
19
20
20
72,520,051
15,088,758
5,999,733
2,505,614
2,997,030
150,126
-
23,142
96,114,156
3,170,298
255,000
384,469
133,000
134,688
10,250,911
12,648,191
20,862,235
22,202,648
22,632,803
-
-
206,824
76,588,066
13,122,703
172,702,222
16,293,001
31,871,292
8,726,924
53,596
135,818
897,787
-
46,738
50,404
40,787,630
994,929
32,607,061
53,810
29,201
15,777,762
48,467,834
-
65,000
82,797
201,324
349,121
89,255,464
1,344,050
83,446,758
14,948,951
134,113,511
63,917,409
4,149,174
13,210,888
755,943
-
(68,026,815)
(49,724,401)
83,446,758
14,948,951
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
BOWEN COKING COAL ANNUAL REPORT 2022 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
46
Issued
Capital
$
Share based
payment
reserve
$
Convertible
Note
reserve
$
Accumulated
Losses
$
Total
Equity
$
Note
Balance at 30 June 2020
56,399,643
581,039
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 2021
Loss for the year
Total comprehensive loss
Issue of shares
Exercise of options
Issue of Bluff consideration
Conversion of performance shares
Share-based payments
Convertible Notes issued
Share issue costs
19
19
19
5
19
19
19
19
5
15
-
-
5,250,000
2,106,660
-
-
-
-
332,000
(332,000)
-
506,904
(170,894)
-
63,917,409
755,943
-
-
67,948,948
2,349,740
4,750,000
-
-
-
-
-
261,000
(261,000)
2,164,809
-
-
-
13,210,888
(5,113,586)
1,489,422
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(46,500,033)
10,480,649
(3,224,368)
(3,224,368)
(3,224,368)
(3,224,368)
-
-
-
-
-
5,250,000
2,106,660
-
506,904
(170,894)
(49,724,401)
14,948,951
(18,302,414)
(18,302,414)
(18,302,414)
(18,302,414)
-
-
-
-
-
-
-
67,948,948
2,349,740
4,750,000
-
2,164,809
13,210,888
(3,624,164)
Balance at 30 June 2022
134,113,511
4,149,174
13,210,888
(68,026,815)
83,446,758
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
BOWEN COKING COAL ANNUAL REPORT 2022 CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
47
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts
Payments to suppliers and employees
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for exploration and evaluation assets
Payments for mine development assets
Payments for mining assets
Payments for rehabilitation security
Payments for loans to joint venture
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 borrowings
Financing transaction costs
Proceeds from issue of shares and options
Proceeds from Convertible Notes
Payments for capital raising costs
Payments for lease liability
Net cash provided by financing activities
Net increase in cash held
Cash at beginning of the year
Cash at end of the year
Note
2022
$
2021
$
5,506
531
(19,017,796)
(2,646,343)
22
(19,012,290)
(2,645,812)
11
15
15
(320,120)
(9,533)
(3,372,219)
(3,077,371)
(3,809,830)
(7,493,255)
(18,115,402)
(122,000)
(432,610)
1,036,790
-
-
(206,824)
(131,500)
(1,463,210)
1,463,210
(32,628,646)
(3,425,228)
20,207,252
(5,662,379)
-
-
70,298,688
6,871,659
40,000,000
(3,624,164)
(55,440)
-
(170,894)
(27,014)
121,163,957
6,673,751
69,523,021
602,711
2,997,030
2,394,319
8
72,520,051
2,997,030
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
BOWEN COKING COAL ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
48
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 29 September 2022 by the directors of the Company.
Material accounting policies adopted in the preparation of these financial statements are presented below. They have been
consistently applied unless otherwise stated.
NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
The Group has early adopted AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–
2020 and Other Amendments from 1 July 2021. The impact of this adoption is that the Group now recognises the sales proceeds
from selling items produced while preparing property, plant and equipment for its intended use and the related cost in profit or
loss, instead of deducting the amounts received from the cost of the asset. This change has not impacted prior periods
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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, financial assets at fair value through other comprehensive
income, certain classes of property, plant and equipment and derivative financial instruments.
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 2022 the Group generated a consolidated loss of $18,302,414 and incurred operating and investing
cash outflows of $19,012,290 and $32,628,646 respectively. As at 30 June 2022 the Group has cash and cash equivalents of
$72,520,051 and net working capital of $55,326,526.
BOWEN COKING COAL ANNUAL REPORT 2022 49
Subsequent to year end (as set out in Note 30), the Group concluded the acquisition of New Lenton Coal Pty Ltd. Pursuant to
the Share Sale and Purchase Agreement (SPA), the Group was required to make a $19 million cash payment on 1 July 2022 and
assumed a $61.6 million environmental obligation. The environmental obligation was funded through a loan facility agreement
with New Hope Corporation Limited which has an aggregate limit of $70 million. Pursuant to the terms of the Taurus Mining
Finance Fund No. 2 LP facility (refer Note 15), the Group has access to unutilised loan facilities totalling US$41 million after
conclusion of the SPA.
Management has prepared a cash flow forecast for the next 12 months which anticipates that the Group will trade profitably and
generate positive cash flows during that period. The cash flow forecast includes the assumption that the Group’s Bluff Mine and
Broadmeadow East operations will reach steady state production in the first half of FY2023 and that the Burton operation will
produce first coal in the second half of FY2023. Underpinning cash flow forecast assumptions include the US$/AUD$ exchange
rate, coking and thermal coal spot prices, coal production rates and the cash cost of coal production. Directors note that the
Group is yet to achieve steady state production at each of its operations and certain of these assumptions can also be subject to
volatility beyond the direct control of the Group.
Whilst recognising the above matters, the Directors have concluded that with the recent equity and debt capital raises
successfully completed and the onset of production, the cash flow forecast of the Group is reasonable. Accordingly, Directors
believe that the Group will be able to realise its assets and discharge its liabilities in the normal course of business and that it is
appropriate that the financial report be prepared on the going concern basis.
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 2022, 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 28. 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
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or
loss in profit or loss.
OTHER ACCOUNTING POLICIES
Significant and other accounting policies relevant to gaining an understanding of the Consolidated Financial Statements have
been grouped with the relevant Notes to the Financial Statements.
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.
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.
BOWEN COKING COAL ANNUAL REPORT 2022 50
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.
Foreign operations
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;
•
•
income and expenses are translated at average exchange rates for the period;
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are recognised in other comprehensive income.
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.
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.
NEW AND AMENDED STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2022.
The Group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
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.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the Financial Statements are disclosed within the following notes:
Note 5: Share-based Payments
Note 6: Income Tax Expense
Note 10: Inventories
Note 13: Exploration and Evaluation, Mine Development and Mining Assets
Note 17: Provisions
BOWEN COKING COAL ANNUAL REPORT 2022 51
NOTE 2
REVENUE
ACCOUNTING POLICY
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until
the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are recognised as a refund liability.
Sale of coal
Sale of coal is recognised at the point of sale, which is where the customer has taken delivery of the goods, the risks and
rewards are transferred to the customer and there is a valid sales contract.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
REVENUE FROM OPERATING ACTIVITIES
REVENUE
Sale of Coal
2022
$
11,862,313
11,862,313
2021
$
-
-
BOWEN COKING COAL ANNUAL REPORT 2022 NOTE 3
EXPENSES
INCLUDED IN EXPENSES ARE THE FOLLOWING ITEMS:
(A) BREAKDOWN OF COST OF SALES
Mining costs
Processing costs
Transport and logistics
State royalties
Private royalties
Production overheads
Other production costs
Total cost of sales
(B) ADMINISTRATIVE EXPENSES
Accounting and audit fees
ASX, ASIC, share registry expenses
Consulting fees
Corporate advisory fees
Insurance
Legal fees
Marketing
Occupancy costs
Other
Travel expenses
Total administrative expense
(C) OTHER EXPENSES
Other expenses
Total other expenses
OTHER EXPENSES INCLUDE THE FOLLOWING SPECIFIC ITEMS:
Breakdown of Employee benefits expense
Directors and senior management fees
Superannuation expense
Salaries and wages
Provision for leave entitlements
Share based payments
Total employee benefits expense
Breakdown of other overhead expenses
Depreciation
Exploration expense
Total other expenses
52
2022
$
2021
$
12,770,908
2,627,440
976,493
1,430,105
770,693
978,814
646,653
20,201,106
136,206
296,013
3,186,673
51,210
401,222
365,048
318,103
191,887
96,002
116,116
-
-
-
-
-
-
-
-
78,283
101,248
1,008,632
-
75,102
289,917
27,796
60,440
39,284
19,020
5,158,480
1,699,722
4,105,577
4,105,577
1,454,494
1,454,494
852,209
92,243
286,450
80,525
2,164,809
3,476,236
629,341
-
629,341
829,251
55,311
-
11,531
506,904
1,402,997
25,713
25,784
51,497
BOWEN COKING COAL ANNUAL REPORT 2022 53
NOTE 4
FINANCE INCOME AND FINANCE EXPENSES
ACCOUNTING POLICY
Interest received is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net
carrying amount of the financial asset.
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the
period in which they are incurred.
FINANCE INCOME
Interest received from other persons
FINANCE EXPENSE
Finance cost
Interest paid
Total finance expense
NOTE 5
SHARE-BASED PAYMENTS
ACCOUNTING POLICY
2022
$
5,506
689,494
26,766
716,260
2021
$
531
-
5,682
5,682
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-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.
BOWEN COKING COAL ANNUAL REPORT 2022 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 directors and company secretary1
Options issued to placement lead manager2
Performance rights issued to a consultant3
Performance rights vested for the Chief Financial Officer4
Performance rights issued to an employee5
54
2021
$
30,763
25,350
336,120
114,671
-
2022
$
1,596,196
-
77,333
253,974
237,306
2,164,809
506,904
Notes for the above table, relating to the years ended 30 June 2022 and 30 June 2021 are:
1. 34,000,000 options were granted to directors and the company secretary with an exercise price of $0.25 on 30 November 2021. The options
vested on 30 November 2021 and expire on 30 September 2024 (Tranche 1).
2. None in the current year.
3.
4.
5.
12,000,000 performance rights which have various vesting conditions, performance hurdles and expiry dates were granted to a consultant
on 16 September 2019 (Tranche 2).
12,000,000 performance rights which have various vesting conditions, performance hurdles and expiry dates were granted to the Chief
Financial Officer on 2 February 2021 (Tranche 3).
1,500,000 performance rights which have various vesting conditions, performance hurdles and expiry dates were granted to an employee
on 13 April 2022 (Tranche 4).
KEY JUDGEMENTS AND ESTIMATES
The Group measures the cost of equity-settled transactions with Directors, executives and employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity. The estimates include volatility, risk
free rates and consideration of satisfaction of performance criteria for recipients of equity instruments.
The following table lists the inputs to the models used:
For the 30 June 2022 year
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Grant date
30 Nov 2021
16 Sept 2019
2 Feb 2021
13 Apr 2022
Number of options/performance rights
34,000,000
12,000,000
12,000,000
1,500,000
Expected volatility
Risk-free interest rate
Weighted average share price at grant date
Expected life
Expected dividend
70.0%
0.874%
$0.150
2.9 years
-
79.2%
0.930%
$ 0.083
various
-
70.0%
0.085%
$ 0.050
various
-
70.0%
2.132%
$ 0.305
Various
-
Fair Value per option/performance rights
$ 0.069
$ 0.083
$ 0.050
$ 0.305
Notes for the above share-based payment expense, relating to the 30 June 2021 year are:
1. 2,100,000 options with an exercise price of $0.07 were granted to a director for nil consideration on 11 November 2020. The options vested
on grant date and expire on 31 December 2022). (Tranche 1).
2.
1,300,000 options with an exercise price of $0.08 were granted to the June 2020 placement lead manager on 03 July 2020. The options
vested on grant date and expire on 30 September 2023. (Tranche 2).
BOWEN COKING COAL ANNUAL REPORT 2022 55
Tranche 1
Tranche 2
11 Nov 2020
2,100,000
70.0%
0.15%
$0.050
3 Jul 2020
1,300,000
77.74%
0.27%
$ 0.058
2.14 years
3.24 years
-
-
$ 0.018
$ 0.019
For the 30 June 2021 year
Grant date
Number of options
Expected volatility
Risk-free interest rate
Weighted average share price at grant date
Expected life
Expected dividend
Fair Value per option
NOTE 6
INCOME TAX EXPENSE
ACCOUNTING POLICY
The income tax expense or benefit 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.
BOWEN COKING COAL ANNUAL REPORT 2022 Recognised in the Consolidated statement of profit or loss and other comprehensive income
(A) TAX EXPENSE
Current tax expense
Deferred tax expense
Total income tax expense per the consolidated statement
of profit or loss and other comprehensive income
56
2021
$
-
-
-
2022
$
-
-
-
(B) NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX NET PROFIT OR (LOSS)
Net loss before tax
Corporate tax rate applicable
Income tax benefit on above at applicable corporate rate
Increase in income tax due to tax effect of:
Share-based payments expense
Non-deductible expenses
Current year tax losses not recognised
Movement in unrecognised temporary differences
Decrease in income tax expense due to:
Utilisation of previously unrecognised tax losses
Deductible equity raising costs
Income tax expense attributable to entity
(C) AMOUNTS CHARGED/(CREDITED) DIRECTLY TO EQUITY
Deferred tax assets
Deferred tax assets and liabilities
(D) RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets
Employee provisions
Other provisions and accruals
Plant & Equipment
Blackhole – previously expensed
Blackhole – Capital Raising Cost reflect in equity
Tax losses
Provision for rehabilitation
Amount recognised in equity
Tax losses
Set-off of deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Prepayments
Exploration and evaluation and mine development assets
Plant and Equipment
Mining Assets
Other
Gross deferred tax liabilities
(18,302,414)
(3,224,368)
30%
(5,490,724)
30%
(967,310)
649,443
1,001,134
4,123,104
-
(3,357)
(279,600)
-
-
152,071
83,975
756,415
37,942
-
(63,093)
-
-
30%
30%
40,745
21,966
-
42,060
917,915
3,505,319
4,733,328
9,261,333
3,973,560
13,234,893
(13,234,893)
-
-
(4,412,242)
(92,648)
(4,733,328)
(23,115)
15,121
12,435
(2,627)
157,498
-
1,946,402
-
2,128,829
-
2,128,829
(2,128,829)
-
(6,943)
(2,121,886)
-
-
-
(9,261,333)
(2,128,829)
BOWEN COKING COAL ANNUAL REPORT 2022 Amount recognised in equity
Convertible Note
Set-off of deferred tax assets
Net deferred tax liabilities
(E) 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:
Deductible temporary differences
Tax revenue losses
Tax capital losses
Total unrecognised deferred tax assets
57
2021
$
-
2022
$
(3,973,560)
(13,234,893)
(2,128,829)
13,234,893
2,128,829
-
-
30%
-
9,198,043
1,104,890
10,302,933
30%
148,208
5,280,653
1,104,890
6,533,751
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.
KEY JUDGEMENTS AND ESTIMATES
Income tax
The consolidated Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business
for which the ultimate tax determination is uncertain. The consolidated Group recognises liabilities for anticipated tax audit issues based
on the consolidated Group’s current understanding of the tax law. Where the final tax outcome of these matters is different from the
carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
NOTE 7
EARNINGS PER SHARE
ACCOUNTING POLICY
Basic earnings per share
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
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.
BOWEN COKING COAL ANNUAL REPORT 2022 Net loss used in the calculation of basic and diluted EPS attributable to owners of the
parent company
58
2022
$
2021
$
(18,302,414)
(3,224,368)
Weighted average number of ordinary shares outstanding during the period used in
the calculation of basic EPS
1,314,961,259
910,093,769
Options are considered potential ordinary shares. Options issued are not presently dilutive and were not included in the
determination of diluted earnings per share for the period.
NOTE 8
CASH AND CASH EQUIVALENTS
ACCOUNTING POLICY
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.
Cash at bank and on hand
Short term deposit
2022
$
72,474,044
46,007
72,520,051
2021
$
2,895,033
101,997
2,997,030
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the consolidated
statement of cash flows.
The short term deposit is secured against the Group’s guarantee facilities in relation to premises the entity leases for its
corporate office under an operating lease.
NOTE 9
RECEIVABLES
ACCOUNTING POLICY
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
CURRENT
Receivable from joint venture entities
Other receivables
NON-CURRENT
Receivable from joint venture entities
2022
$
11,587,700
3,501,058
15,088,758
255,000
255,000
2021
$
-
150,126
150,126
133,000
133,000
BOWEN COKING COAL ANNUAL REPORT 2022 59
NOTE 10
INVENTORIES
ACCOUNTING POLICY
Coal Stocks are valued at the lower of cost and net realisable value on a ‘first in first out’ basis. The cost of coal inventories
comprises direct cost (including blasting, overburden removal, coal mining, processing and transport costs), direct labour and
an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity.
Inventories are classified as follows:
• Overburden in advance material extracted through the pre-strip mining process and includes blasting activities.
• Run-of-mine material (ROM) extracted through the mining process and awaiting processing at the coal handling and
preparation plant
• Product coal stock which has been processed into final saleable form. Product coal may be held at site or at port shared
stockpile facilities awaiting delivery to customer.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.
Run-of-mine (ROM) stockpiles (Mine)
Run-of-mine (ROM) stockpiles (Wash plant)
Coal product stockpiles
Total inventories
KEY JUDGEMENTS AND ESTIMATES
2022
$
1,744,908
805,384
3,449,441
5,999,733
2021
$
-
-
-
-
Inventory stockpiles are measured by appropriately qualified persons, applying surveying methodologies, which consider
the size and grade of the coal stockpile. The estimated recovery percentage is based on the expected processing method. In
addition, net realisable value tests are performed at each reporting date and represent the estimated future sales price of the
run-of-mine (ROM) coal the entity expects to realise when the ROM coal is processed and sold, less estimated costs to bring
the ROM coal to sale. Judgment is applied in estimating the variables noted above.
NOTE 11
OTHER ASSETS
ACCOUNTING POLICY
Other current assets relate to operational costs paid in advance of the period to which the Group will receive the benefit from
those goods or services.
Non-current assets relate to cash security bond payments made to key operational suppliers and security bonds in relation to
rehabilitation bonding obligations to Queensland Treasury, a property rental security bond and payments relating to an asset
currently under acquisition.
BOWEN COKING COAL ANNUAL REPORT 2022 60
2021
$
23,142
23,142
5,500
201,324
-
206,824
2022
$
2,505,614
2,505,614
5,500
18,316,725
4,310,578
22,632,803
CURRENT
Prepayments
NON-CURRENT
Rental bonds
Security deposit
Other receivable
NOTE 12
PROPERTY PLANT AND EQUIPMENT
ACCOUNTING POLICY
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Motor vehicles
Office equipment
Plant and equipment
Computer equipment
5 years
5 years
5 years
3 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
RIGHT-OF-USE ASSETS
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of
12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
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.
BOWEN COKING COAL ANNUAL REPORT 2022 61
2021
$
-
-
-
-
-
-
9,533
(775)
8,758
-
-
-
150,867
(24,937)
125,930
134,688
Total
$’000
135
320
(70)
385
Motor Vehicles – at cost
Less: Accumulated depreciation
Plant & equipment – at cost
Less: Accumulated depreciation
Office equipment – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Right of use asset
Less: Accumulated depreciation
Reconciliations
2022
$
135,000
(9,395)
125,605
153,133
(6,597)
146,536
13,523
(2,837)
10,686
27,997
(1,995)
26,002
150,867
(75,227)
75,640
384,469
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
Motor
vehicles
$’000
Plant &
equipment
$’000
Office
equipment
$’000
Computer
equipment
$’000
Right of use
asset
$’000
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
-
135
(9)
126
-
153
(7)
146
9
4
(2)
11
-
28
(2)
26
126
-
(50)
76
NOTE 13
EXPLORATION AND EVALUATION, MINE DEVELOPMENT AND MINING ASSETS
ACCOUNTING POLICY
Exploration and evaluation asset
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.
BOWEN COKING COAL ANNUAL REPORT 2022 62
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes which
could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes
to commodity process.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits
and net assets will be reduced in the period in which the determination is made.
Mine development assets
Exploration and evaluation assets are transferred to “Mine development assets” once the technical feasibility and commercial viability
of extracting the mineral resources supports the future development of the property and such development has been appropriately
approved. Prior to transferring the exploration and evaluation assets to mine development assets, an impairment test is completed.
Mine development assets represents the costs incurred in preparing mines for production and includes plant and equipment under
construction and operating costs incurred before production commences. These costs are capitalised to the extent they are expected to
be recouped through the successful exploitation of the related mining leases. Once production commences, these costs are transferred
to property, plant and equipment and mining assets, as relevant, and are depreciated and amortised using the units-of-production
method based on the estimated run-of-mine ore included in the life of mine plan to which they relate or are written off if the mine property
is abandoned. Any proceeds from sales in the pre-production phase are recognised in the statement of comprehensive income.
Any costs incurred in testing the assets to determine if they are functioning as intended, are capitalised.
Rehabilitation assets
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for
restoration are recognised as rehabilitation assets.
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.
Mining assets
Once the development phase is complete and production starts, all assets included in “Mine development assets” are
transferred to “Mining assets”.
Amortisation of mining asset is computed by the units of production basis over the estimated proved and probable reserves.
Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered
in the future from known mineral deposits. These reserves are amortised from the date on which production commences.
The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage of the
recoverable measured, indicated and inferred resource. This percentage is reviewed annually.
Pre-strip costs
In open pit mining operations, it is necessary to remove overburden and waste materials to access the coal. This process is
referred to as stripping and the Group capitalises stripping costs incurred during the development phase of a mine (or pit) as
part of the investment in constructing the mine (“pre-strip”). These costs are subsequently amortised over the run-of-mine coal
included in the life of mine plan on a units of production basis, where the unit of account is run-of-mine tonnes of coal mined.
BOWEN COKING COAL ANNUAL REPORT 2022 63
Production stripping costs
Once access to the coal is attained, all waste that is removed from that point forward is considered production stripping
activity. The amount of production stripping costs deferred is based on the extent to which the current period cost per tonne of
coal mined exceeds the expected cost per tonne for the life of the identified component. A component is defined as a specific
volume of the coal resource that is made more accessible by the stripping activity, and is identified based on the mine plan.
The production stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the
stripping activity that improves access to the identified component of the coal resource. The production stripping asset is then
carried at cost less accumulated amortisation and any impairment losses. The production stripping asset is amortised over the
expected useful life of the identified component (determined based on run-of-mine coal included in the life of mine plan), on a
unit of production basis. The unit of account is run-of-mine tonnes of coal mined.
Capital development costs
Costs associated with extraction of waste material in order to gain access to the coal mining operations are considered capital
development costs. Capital development costs are stated at cost, less accumulated amortisation and accumulated impairment losses.
The capital development asset is amortised over the expected total recoverable run-of-mine coal tonnes of the mine concerned.
The unit of account is run-of-mine tonnes of coal mined.
Exploration & evaluation cost
Mine development assets
Mining assets
Less: Accumulated depreciation
Reconciliations
2022
$
10,250,911
10,250,911
20,862,235
20,862,235
22,761,651
(559,003)
22,202,648
53,315,794
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
Exploration &
evaluation
$’000
Mine development
assets
$’000
12,648
-
3,232
(5,629)
-
-
-
-
9,962
5,629
5,271
-
Mining
assets
$’000
-
5,000
7,243
-
10,518
(559)
10,251
20,862
22,202
Balance at 1 July 2021
Additions through asset acquisition (Note 19 & 29)
Additions
Transfer from exploration & evaluation to mine
development asset
Rehabilitation assets
Depreciation expense
Balance at 30 June 2022
KEY JUDGEMENTS AND ESTIMATES
Exploration and Evaluation
2021
$
12,648,191
12,648,191
-
-
-
-
-
12,648,191
Total
$’000
12,648
5,000
20,437
-
15,789
(559)
53,315
Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production in the
future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are
BOWEN COKING COAL ANNUAL REPORT 2022 64
applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and
allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to
be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future
commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the
cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to
be recoverable in the future, they will be written off in the period in which this determination is made.
Production stripping costs
The Group capitalises mining costs incurred during the production stage of its operations in accordance with the accounting
policy described above. The identification of specific components will vary between mines as a result of both the geological
characteristics and location of coal resources. The financial considerations of the mining operations may also impact the
identification and designation of a component.
The expected cost per tonne is a function of an individual mine’s design and therefore changes to that design will generally
result in changes to the expected cost. Changes in other technical or economic parameters that impact resources will also
have an impact on the expected costs per tonne for each identified component. Changes in the expected cost per tonne are
accounted for prospectively from the date of change.
NOTE 14
TRADE AND OTHER PAYABLES
ACCOUNTING POLICY
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
CURRENT
Trade payables and accrued expenses
Farm-in funds received in advance
Total payables (unsecured)
2022
$
30,943,739
927,553
31,871,292
2021
$
622,959
274,828
897,787
The average credit period on purchases of goods and services is 30 days. No interest is paid on trade payables.
Refer Note 27 for further information on Financial Instruments.
NOTE 15
INTEREST-BEARING LOANS AND BORROWINGS
ACCOUNTING POLICY
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
The component of the Convertible Notes that exhibits characteristics of a liability is recognised as a liability in the statement of
financial position, net of transaction costs.
On the issue of the Convertible Notes the fair value of the liability component is determined using a market rate for an equivalent
non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until extinguished on
conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The remainder
of the proceeds are allocated to the conversion option that is recognised and included in shareholders equity as a Convertible
Note Reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent
years. The corresponding interest on Convertible Notes is expensed to profit or loss.
BOWEN COKING COAL ANNUAL REPORT 2022 65
2022
$
2021
$
8,726,924
8,726,924
5,817,949
26,789,112
32,607,061
-
-
-
-
-
CURRENT
Loan – Taurus facility
NON-CURRENT
Loan – Taurus facility
Convertible Notes
Taurus Facility
At 30 June 2022, $20,207,252 (US$14,000,000) was drawn down on the Taurus facility and $5,662,379 of transaction costs
comprising establishment, corporate and legal advisory fees have been offset. $3,397,427 of transaction costs relate to the
current portion and $2,264,952 of transaction costs relate to the non-current portion.
The Taurus Mining Finance Fund No.2, L.P. (“Taurus facility”) is senior secured with an aggregate limit of US$55 million with
the use of proceeds for capital expenditure, general working capital and expenses incurred in recommissioning the Burton
coal handling and preparation plant, developing the Burton and Broadmeadow East projects and operating the Bluff Mine. The
Taurus facility is structured as an amortisable term loan comprising five equal quarterly repayments over its term of 18 months.
The first principal payment is scheduled for 31 December 2022. The Taurus facility has a front-end fee of 2% of the facility limit
and a coupon rate of 8% per annum.
Security over the debt facilities involve first ranking security over assets, including charges over movable and immovable
property and mining leases, development licences and exploration permits.
New Hope facility
The Company has signed a new bilateral facility agreement with New Hope Corporation Limited (“New Hope facility”). The New Hope
facility is secured on a second ranking basis to the Taurus facility. The New Hope facility has an aggregate limit of A$70 million with
funds drawn accreting by 8.0% per annum up to repayment as a redemption premium and a maximum term of 24 months. The New
Hope facility has an interest rate of three-month BBSY plus an initial margin of 8% per annum for the first twelve months of the facility
and 10% per annum for the remainder of its term, in each case payable quarterly or capitalised in certain circumstances.
The New Hope facility will be used to provide a bank guarantee under the Queensland financial provisioning regime. The
Company’s share of the bond that will be required for the Lenton/Burton Mine rehabilitation cost is estimated to be circa
A$61.6 million. Completion of this financing is subject to the satisfaction of customary conditions precedent and the completion
of the acquisition of the Burton Mine and Lenton project (Transaction). At 30 June 2022, the Transaction had not yet completed,
accordingly the New Hope facility has not been accounted for in this financial period.
The Taurus and New Hope facilities contains warranties, indemnities and covenants (including cross default provisions) that are
usual for a facility of this nature.
Convertible Notes
On 20 June 2022, the Company achieved financial close on a convertible note deed for the issuance of A$40 million convertible
loan notes (Convertible Notes) with the Crocodile Capital 1 Global Focus Fund and the Crocodile Capital Offshore Fund.
The Convertible Notes are convertible into fully paid ordinary shares in Bowen Coking Coal Ltd and have a maturity of five years
unless earlier redeemed or converted in accordance with their terms and conditions. Maturity of the Convertible Notes will accelerate
to 15 July 2022 in the event the acquisition of the Burton Mine and Lenton Project does not reach completion by 5 July 2022.
The Convertible Notes carry an interest rate of 3.0% per annum and have an initial conversion price of A$0.325 per share. The
Company has the ability to capitalise interest to the outstanding convertible loan note balance in lieu of cash at an interest
rate of 4.0% per annum. Adjustments to the conversion price include an increase of $0.005 per share every six months, a
proportionate reduction should the Company issue shares at a lower price and other adjustments for dividends, capital
reductions and other corporate actions.
BOWEN COKING COAL ANNUAL REPORT 2022 66
The proceeds have been used to support the Company’s working capital requirements as it ramps up production across its key
development assets.
Refer Note 27 for further information on Financial Instruments.
NOTE 16
LEASE LIABILITIES
ACCOUNTING POLICY
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less
any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in
the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there
is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease
term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
CURRENT
Lease Liability
NON-CURRENT
Lease Liability
Refer Note 27 for further information on Financial Instruments.
NOTE 17
PROVISIONS
ACCOUNTING POLICY
2022
$
53,596
53,596
29,201
29,201
2021
$
46,738
46,738
82,797
82,797
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase
in the provision resulting from the passage of time is recognised as a finance cost.
EMPLOYEE BENEFITS
Short-term employee benefit obligations:
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service 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
BOWEN COKING COAL ANNUAL REPORT 2022 67
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.
REHABILITATION PROVISIONS
Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and
rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using estimates
of future costs, current legal requirements and technology.
Rehabilitation costs are recognised at present value as a non-current liability. An equivalent amount is capitalised as part of the
cost of the asset when an obligation arises to decommission or restore a site to certain condition after abandonment as a result
of bringing the assets to its present location. The capitalised cost is amortised over the life of the project and the provision is
accreted periodically as the discounting of the liability unwinds. The unwinding of the discount is recorded as a finance cost.
CURRENT
Short term employee benefits
NON-CURRENT
Rehabilitation provision – Broadmeadow East ML 70257
Rehabilitation provision – Bluff Coal Mine ML 80194
KEY JUDGEMENTS AND ESTIMATES
Rehabilitation provision
2022
$
135,818
135,818
5,472,373
10,305,389
15,777,762
2021
$
50,404
50,404
201,324
-
201,324
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The
Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment.
The Group recognises management’s best estimate for assets retirement obligations and site rehabilitations in the period in which
they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes
to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.
NOTE 18
JOINT VENTURES
ACCOUNTING POLICY
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint
arrangement.
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated
balance sheet.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in
other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates
and joint ventures are recognised as a reduction in the carrying amount of the investment.
BOWEN COKING COAL ANNUAL REPORT 2022 68
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any
other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of
the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to
ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the Group’s policy.
On 23 March 2020 the Company entered into an Umbrella Deed with M Resources Trading Pty Ltd, Latimore Family Pty Ltd
and Latimore Finance Pty Ltd (Latimore Parties) which sets out the terms of a 50/50 joint venture arrangement between the
Company and the Latimore Parties.
In accordance with the Umbrella Deed the parties have registered Bowen Coking Coal Marketing Pty Ltd (Marketing Co) as
a joint venture coal marketing vehicle, of which the Company and the Latimore Parties are shareholders in equal proportion.
Marketing Co. will market, promote and sell, all coking coal produced by and from any of the Company’s existing wholly owned
coking coal portfolio as well as third party coal for blending purposes. M Resources Trading Pty Ltd will provide marketing
support services to Marketing Co.
Interests in joint ventures are accounted for using the equity method of accounting. Information relating to Marketing Co joint
venture is set out below:
Percentage ownership interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net liabilities (100%)
Group’s share of net assets
Carrying amount of interest in associate
REVENUE
Profit/(loss) from continuing operations (100%)
Total comprehensive income/(loss) (100%)
Group’s share of total comprehensive income/(loss)
NOTE 19
CONTRIBUTED EQUITY
ACCOUNTING POLICY
2022
$
50%
-
14,265,609
(255,000)
(14,118,229)
(107,620)
50%
(53,810)
22,380
22,380
11,190
2021
$
50%
-
3,000
(133,000)
-
(130,000)
50%
(65,000)
(130,000)
(130,000)
(65,000)
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.
BOWEN COKING COAL ANNUAL REPORT 2022 2022
No. of Shares
$
No. of Shares
69
2021
$
Balance at the beginning of the year
978,462,262
63,917,409
803,762,262
56,399,643
Share issues:
Placement: 3 July 2020
Placement: 9 November 2020
Exercise of 2.5c options: 12 December 2020
Exercise of 3.0c options: 12 December 2020
Exercise of 3.5c options: 12 December 2020
Exercise of 3.38c options: Feb to June 2021
Performance rights conversion: 1 March 2021
Exercise of options: 4 August 2021
Placement: 10 August 2021
Rights Issue: 30 August 2021
Placement:18 November 2021
Issue of Bluff consideration shares: 29 Dec 2021
Performance rights conversion: 29 Dec 2021
Placement: 24 February 2022
Exercise of options – 25 May 2022
Performance rights conversion: 30 June 2022
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,000,000
60,000,000
10,000,000
10,000,000
10,000,000
35,700,000
4,000,000
2,250,000
3,000,000
250,000
300,000
350,000
1,206,660
332,000
2,700,000
195,000
149,253,731
10,000,000
81,763,969
5,478,186
68,750,000
11,000,000
27,941,177
4,000,000
4,750,000
200,000
207,353,813
41,470,762
21,700,000
2,154,740
200,000
61,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(170,894)
Transaction costs associated with share issues
-
(5,113,586)
Balance as at 30 June
1,542,124,952
134,113,511
978,462,262
63,917,409
Ordinary shareholders are entitled to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amount paid on the shares held. Every ordinary shareholder present at a meeting in person or by proxy is
entitled to one vote on a show of hands or by poll. Ordinary shares have no par value.
Notes for the above table:
(a) 45,000,000 shares were issued at $0.05 each in the placement on 03 July 2020, raising $2,250,000.
(b) 60,000,000 shares issued at $0.05 each in the placement on 9 November 2020, raising $3,000,000.
(c) 10,000,000 shares were issued upon exercise of options at $0.025 each on 12 December 2020, raising $250,000.
(d) 10,000,000 shares were issued upon exercise of options at $0.03 each on 12 December 2020, raising $300,000
(e) 10,000,000 shares were issued upon exercise of options at $0.035 each on 12 December 2020, raising $350,000.
(f) 35,700,000 shares were issued upon exercise of options at $0.0338 each between February 2021 to June 2021, raising $1,206,660.
(g) 4,000,000 performance rights with a fair value of $332,000 converted into ordinary shares at no consideration on 1 March 2021.
(h) 2,700,000 shares were issued upon exercise of options at $0.08 each (for 600,000 options) and $0.07 each (for 2,100,000 options) on 4
August 2021, raising $195,000.
(i) 149,253,731 shares were issued at $0.067 each in the placement on 10 August 2021, raising $10,000,000.
(j) 81,763,969 shares were issued upon rights exercised $0.067 each on 30 August 2021, raising $5,478,186.
(k) 68,750,000 shares were issued at $0.016 each in the placement on 18 November 2021, raising $11,000,000.
(l) 27,941,177 shares were issued at $0.17 per share to fund part of the Bluff consideration of $4,750,000 on 29 December 2021.
(m) 4,000,000 performance rights with a fair value of $200,000 converted into ordinary shares at no consideration on 29 December 2021.
(n) 207,353,813 shares were issued at $0.20 each in the placement on 24 February 2022, raising $41,470,762.
(o) 21,700,000 shares were issued upon exercise of options at $0.10 each (for 21,000,000) and $0.0782 (for 700,000 options) on 25 May 2022,
raising $2,154,740.
(p) 200,000 performance rights with a fair value of $61,000 converted into ordinary shares at no consideration on 30 June 2022
BOWEN COKING COAL ANNUAL REPORT 2022 70
UNLISTED OPTIONS
Weighted
average
exercise price
2022
No. of Options
Weighted average
exercise price
2021
No. of Options
Unlisted Share Options
Balance at the beginning of the year
CHANGE OF OPTIONS DURING THE YEAR
Issued during the year
Exercised during the year
Exercisable at end of year
PERFORMANCE RIGHTS
$0.218
$0.074
$0.179
$0.096
$0.218
43,000,000
3,400,000
64,000,000
(24,400,000)
43,000,000
$0.074
$0.032
$0.074
$0.032
$0.074
3,400,000
65,700,000
3,400,000
(65,700,000)
3,400,000
Weighted
average
exercise price
2022
No. of Performance
Rights
Weighted
average exercise
price
2021
No. of Performance
Rights
Unlisted Performance Rights
Balance at the beginning of the year
-
-
CHANGE OF PERFORMANCE RIGHTS DURING THE YEAR
Issued
Converted
Lapsed
Balance at end of year
CAPITAL MANAGEMENT
-
-
-
13,300,000
20,000,000
1,500,000
(4,200,000)
(4,000,000)
13,300,000
-
-
-
-
-
20,000,000
12,000,000
12,000,000
(4,000,000)
-
20,000,000
Management controls the capital of the Group to ensure it can fund its operations and continue as a going concern. During
the current year the Group started transition from explorer to developer and now heading towards becoming a steady state
producer, the Company Capital management policy has moved from exclusively funded by share capital to combination of
equity and debt. In the current year the Group raised finance through issuing of share capital, Convertible Notes and secured
debt facilities. There are no externally imposed capital requirements.
There have been no other changes to the capital management policies during the year.
NOTE 20
RESERVES
Balance at beginning of year
Share based payments
Conversion of performance shares
Equity component of Convertible Notes
Share issue costs
Note
5
15
Share Based Payment Reserve
Convertible Note Reserve
2022
$
755,943
2,164,809
(261,000)
-
1,489,422
4,149,174
2021
$
581,039
506,904
(332,000)
2022
$
-
-
-
-
-
13,210,888
-
755,943
13,210,888
2021
$
-
-
-
-
-
-
BOWEN COKING COAL ANNUAL REPORT 2022 71
SHARE-BASED PAYMENTS RESERVE
The share-based payment reserve is used to recognise the fair value of options and performance shares issued to directors,
employees and consultants. This reserve can be reclassified as retained earnings if options lapse or performance hurdles
attached to the performance rights are not achieved.
CONVERTIBLE NOTES RESERVE
The convertible notes reserve relates to the equity component of the Convertible Notes issued (refer Note 15: Interest Bearing
Loans and Borrowings).
NOTE 21
OPERATING SEGMENTS
ACCOUNTING POLICY
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 Managing Director.
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
The Group is managed primarily on the basis of geographical locations as these locations have notably different risk profiles
and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments
disclosed are based on aggregating operating segments where the segments are considered to have similar economic
characteristics and are similar with respect to any external regulatory requirements.
Identification of reportable segments
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 Group level. The Group’s exploration and development activities in Australia is the Group’s sole focus.
All investments in associates and subsidiaries operate in one geographical location being Australia and are organised into
two business units from which the Group’s expenses are incurred and revenues are earned, being (1) for the exploration and
development of coal and (2) mining and sale of coal.
The reporting on these investments to the Chief Operating Decision Makers, the Board of Directors, focuses on the on the key
performance indicators that the Directors monitor on a regular basis which are:
• Run-of-Mine (ROM) tonnages, processing plant yields and sales tonnages
• Revenue per tonne
• Cash cost per run-of-mine tonne (ROMt)
• Gross margin in percentage and gross margin per sales tonne
• Management of liquid resources through regular analysis of working capital requirements, bank balances, stay in business
capital requirements, cash flow forecasts, accounts receivable and accounts payable ageing metrics.
The non-current assets relating to the capitalisation expenditure associated with the coal projects are located in Australia. All
corporate expenditure, assets and liabilities relate to incidental operations carried out in Australia.
BOWEN COKING COAL ANNUAL REPORT 2022 For the year ended 30 June 2022
Mining and
sale of coal
$’000
Exploration and
development of coal
$’000
Corporate
(Unallocated)
$’000
Revenue
Cost of sales
Gross loss
Administrative expenses
Other expenses
Operating loss
Finance income
Finance expense
Share of profit of joint ventures
accounted for using equity method
Loss before income tax expense
Income tax expense
Loss for the year
Additions to non-current assets
Total non-current assets
Total assets
Total liabilities
11,862
(20,201)
(8,339)
(377)
(575)
(9,291)
-
-
11
(9,280)
-
(9,280)
35,524
35,524
63,957
-
-
-
(365)
-
(365)
-
-
-
(365)
-
(365)
23,536
36,386
37,438
-
-
-
(4,417)
(3,530)
(7,947)
6
(716)
-
-
(8,657)
4,405
4,678
71,307
(30,059)
(15,395)
(43,801)
(8,657)
(18,302)
72
Total
$’000
11,862
(20,201)
(8,339)
(5,159)
(4,105)
(17,603)
6
(716)
11
-
(18,302)
63,465
76,588
172,702
(89,255)
Revenue, from the sale of coal, in the amount of $11,862,313 (2021: $ nil) was received from a single customer, being Formosa Ha
Tinh Steel Corporation.
All revenues were earned in Australia.
For the year ended 30 June 2021
Mining and
sale of coal
$’000
Exploration and
development of coal
$’000
Corporate
(Unallocated)
$’000
Revenue
Cost of sales
Gross loss
Administrative expenses
Other expenses
Operating loss
Finance income
Finance expense
Share of loss of joint ventures
accounted for using equity method
Loss before income tax expense
Income tax expense
Loss for the year
Additions to non-current assets
Total non-current assets
Total assets
Total liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(408)
-
(408)
-
-
-
(408)
-
(408)
3,531
12,850
14,847
(847)
-
-
-
(1,292)
(1,454)
(2,746)
-
(5)
(65)
(2,816)
-
(2,816)
475
273
1,446
(497)
Total
$’000
-
-
-
(1,700)
(1,454)
(3,154)
-
(5)
(65)
(3,224)
-
(3,224)
4,006
13,123
16,293
(1,344)
BOWEN COKING COAL ANNUAL REPORT 2022 73
NOTE 22
CASH FLOW INFORMATION
RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH LOSS AFTER INCOME TAX
Loss after income tax
(18,302,414)
(3,224,368)
NON-CASH FLOWS IN LOSS FROM ORDINARY ACTIVITIES
2022
$
2021
$
Amortisation and depreciation
Interest on lease payments
Share of (profit)/loss of joint ventures accounted for using equity method
Share-based payments
CHANGES IN OPERATING ASSETS AND LIABILITIES
(Increase)/decrease in receivables
Increase in prepayments and other assets
Increase in inventories
Increase/(decrease) in payables and accruals
(Decrease)/increase in provisions
Net cash used in operations
NOTE 23
COMMITMENTS
(A) EXPLORATION COMMITMENTS
629,341
8,702
(11,190)
25,713
5,682
65,001
2,164,809
506,904
(14,938,632)
(6,793,050)
(5,999,733)
24,357,470
(127,593)
12,634
(3,293)
-
(45,616)
11,531
(19,012,290)
(2,645,812)
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.
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
2022
$
362,106
862,500
25,000
2021
$
701,175
651,260
-
1,249,606
1,352,435
On 15 July 2022 the Company entered a lease agreement for its head office for a period of three years, with no option to extend.
The lease agreement commences on 1 August 2022 with lease payment monthly and fixed annual increase of 4% included in the
lease terms.
(C) CAPITAL COMMITMENTS
The Group has no capital commitments.
BOWEN COKING COAL ANNUAL REPORT 2022 74
NOTE 24
CONTINGENT LIABILITIES
On 30 September 2020 the Company completed an agreement to acquire the Broadmeadow East coking coal project, located
within undeveloped Mining Lease 70257. The compensation agreement included the following contingent consideration item:
• Royalty payable of $1/t on all coal produced and sold from ML 70257, to a maximum of 1.5Mt, being $1.5M;
On 25 October 2021 Bowen PCI Pty Ltd (Bowen PCI) signed a Toll Washing and Rail Loadout Agreement with Constellation
Mining Pty Ltd (Constellation). The agreement required Bowen PCI to provide an unconditional bank guarantee in favor of
Constellation for the amount of $500,000 to secure the payment obligations of Bowen PCI. On 9 August 2022 a Cash Surety
Deed replaced the bank guarantee requirement.
On 29 December 2021 the Company completed an agreement to acquire the Bluff PCI Mine, located within developed Mining
Lease 80194 and coal exploration permits EPC 1175 and EPC 1999. The compensation agreement included the following
contingent consideration items:
• Base Royalty payable, if benchmark price for the quarter is more than USD 120, the royalty is $2/tonne on all coal produced
and sold from ML 80194, EPC 1175 and EPC 1999, subject to a maximum amount payable of $10,000,000;
• Super Royalty payable, if benchmark price for the quarter is more than USD 150, the uncapped royalty is $5/tonne on all coal
produced and sold from ML 80194, EPC 1175 and EPC 1999, and if benchmark price for the quarter is more than USD 200,
the uncapped royalty is $10/tonne.
On 24 December 2021 the Company announced that it had executed binding a Share Sale and Purchase Agreement with New
Hope Corporation Limited for the acquisition of 100% of the shares in New Lenton Coal Pty Ltd (which currently owns a 90%
interest in the Lenton Joint Venture).
Total consideration payable is as follows:
1. Cash consideration of $20,000,000 (including an equity component of up to $10,000,000 at Bowen’s election), payable upon
Completion;
2. Up to $7.5 million in milestone payments associated with production ramp-up and time-based payments (24 and 36 months);
3. Assumption of environmental rehabilitation obligations of $61.6 million; and
4. Payment of royalties as follows:
a. Base Royalty; a non-indexed royalty on 90% of all coal mined from the Lenton JV assets at a royalty rate of $0.55 per
product tonne, capped at $16m; and
b. Average Price Royalty; a non-indexed royalty on 90% of all coal mined from the Lenton JV assets during a quarter if the
average price for PLVHA00 for that quarter exceeds US$160/tonne at a royalty rate of $1.65 per product tonne, capped at
$24m; and
c. High Price Royalty; a non-indexed royalty on 90% of all coal mined from the Lenton JV assets during a quarter if the average
price for PLVHA00 for that quarter exceeds US$190/tonne at a royalty rate of $3.30 per product tonne, capped at $30m.
The acquisition was completed on 1 July 2022 and the full cash consideration was paid. Items 2 and 4 above remain a contingent
liability, subsequent to the acquisition date.
In June 2022 Bowen Coking Coal Ltd signed a Royalty Deed with Taurus Mining Funding No 2 LP. The contingent royalty rate is
as follows:
•
1% in respect of the Bluff Tenement’s monthly gross revenue
• 0.25% in respect of the Broadmeadow East Tenement and the Burton Tenement’s monthly gross revenue.
There were no other contingent liabilities at the end of the reporting period.
BOWEN COKING COAL ANNUAL REPORT 2022 NOTE 25
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 28.
KEY MANAGEMENT PERSONNEL
Short-term benefits
Post-employment – superannuation
Share-based payments
75
2022
$
1,106,353
66,624
1,709,329
2,882,306
2021
$
1,014,429
55,311
145,434
1,215,174
During the year the Group paid M Resources Trading Pty Ltd, an entity associated with Mr M. Latimore, $162,625 (2021:
$169,690) for marketing consulting and technical services. At reporting date there was no outstanding amount payable to M
Resources Trading Pty Ltd.
At reporting date there was an amount outstanding to Protea Resources Pty Ltd of $nil (2021: $20,213), an entity associated with
Mr Daryl Edwards for consulting fees due.
At reporting date there was an amount outstanding to Gerhard Redelinghuys of $4,483 (2020: $1,228) for expense
reimbursements due.
NOTE 26
AUDITOR’S REMUNERATION
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of
the Company:
AUDIT SERVICES
Audit or reviewing the financial reports
OTHER SERVICES
Preparation and lodgement of QLD stamp duty
NOTE 27
FINANCIAL INSTRUMENTS
ACCOUNTING POLICY
Recognition and Initial Measurement
2022
$
2021
$
99,000
40,750
15,000
114,000
-
40,750
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.
BOWEN COKING COAL ANNUAL REPORT 2022 76
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.
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.
Compound financial instruments
Compound financial instruments issued by the Group comprise convertible notes denominated in AUD that can be converted to ordinary
shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does
not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of
the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction
costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost
using the effective interest method. The equity component of a compound financial instrument is not remeasured.
Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is
reclassified to equity and no gain or loss is recognised.
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.
BOWEN COKING COAL ANNUAL REPORT 2022 77
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.
(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 and debt facilities. The risk of fluctuation
in interest rates on bank balances is managed through the use of variable interest rate bank accounts while the interest rate risk on
the Taurus debt facility and Convertible Note are managed through the interest rate on these facilities being fixed.
Sensitivity analysis:
At 30 June 2022, if interest rates on Australian Dollar-denominated cash balances had been 2% higher/(lower) with all other
variables held constant, post-tax profit for the year would have been $743,665 (2021: $41,958) higher/(lower), mainly as a result
of higher/(lower) interest rates.
At 30 June 2022, if interest rates on United States Dollar-denominated cash balances had been 2% higher/(lower) with all other
variables held constant, post-tax profit for the year would have been $271,756 (2021: $nil) higher/(lower), mainly as a result of
higher/(lower) interest rates.
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 2022, the Group executed a finance facility with Taurus Mining Finance Fund No. 2 L.P., to provide the
Group with a finance facility of up to US$55 million, primarily for the rebuilding of the Burton Infrastructure. At 30 June 2022, the Group
had drawn US$14 million and at the date of this report, the Group had drawn US$30 million leaving US$25 million in undrawn facilities.
On 20 June 2022, the Company achieved financial close on a convertible note deed for the issuance of A$40 million convertible
loan notes (Convertible Notes) with the Crocodile Capital 1 Global Focus Fund and the Crocodile Capital Offshore Fund. The
Convertible Notes are convertible into fully paid ordinary shares in Bowen Coking Coal Ltd and have a maturity of five years
BOWEN COKING COAL ANNUAL REPORT 2022
78
unless earlier redeemed or converted in accordance with their terms and conditions. Maturity of the Convertible Notes will
accelerate to 15 July 2022 in the event the acquisition of the Burton Mine and Lenton Project does not reach completion by
5 July 2022. The liquidity risk is managed by maintaining sufficient liquidity in cash in should the Burton Mine and Lenton Project
acquisition not reach completion by 5 July 2022, forcing potential acceleration of the redemption of the Convertible Notes
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 outstanding 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.
• Sales transactions are secured by letters of credit when deemed appropriate.
The below table summaries the assets which are subject to credit risk:
Cash and cash equivalents
Trade and other receivables
Security deposit
Loans to related parties
Credit risk exposure
Foreign Currency Risk
2022
$
72,520,051
15,088,758
18,316,725
255,000
2021
$
2,997,030
150,126
201,324
133,000
106,180,534
3,481,480
The Australian dollar is the functional currency of the Group and as a result, currency exposure arises from transactions and
balances in currencies other than Australian dollar.
The Group potential currency exposure comprise:
• Coal sales are denominated in United States dollar. The Group is therefore exposed to volatility in the US$:A$ exchange
rates. The Group generally aligns all coking coal prices to relevant coking coal indexes. The Group has not used any
derivative products to mitigate fluctuations in the relevant coal price indexes or US$:A$ exchange rates.
• The Group drew down US$14m on a US$55m finance facility on 27 June 2022. As noted above, the Group’s coal sales are
denominated in US$, which provides a natural economic hedge in relation to adverse foreign currency movements that
affect the drawn down facility position and the current policy is not to hedge foreign exchange risk.
Foreign Currency Risk Sensitivity Analysis:
Cash and cash equivalents
Trade and other receivables
Loans – Taurus facilities
Total Profit or loss before tax
Carrying
amount
$
19,411,150
11,587,700
Decrease in
FX by 10%
$
2,156,794
1,287,522
(20,207,253)
(2,245,250)
1,199,066
Increase in
FX by 10%
$
(1,764,650)
(1,053,427)
1,837,023
(981,054)
BOWEN COKING COAL ANNUAL REPORT 2022 79
(B) FINANCIAL INSTRUMENT COMPOSITION AND CONTRACTUAL MATURITY ANALYSIS
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
WITHIN 12 MONTHS
Payables1
Lease liability2
Loans3
BETWEEN 12 MONTHS AND 24 MONTHS
Lease liability2
Loans3
MORE THAN 24 MONTHS
Lease liability2
Loans3
Notes
2022
$
2021
$
30,943,740
58,312
12,124,351
43,126,403
29,886
8,082,900
8,112,786
-
46,003,288
46,003,288
814,888
55,440
-
870,328
58,312
-
58,312
29,886
-
29,886
1. Non-interest bearing. The contractual cash flows do not differ to the carrying amount.
2. The Group has recognised a lease liability in relation to premises the entity leases for its corporate office under a three year agreement
commencing on 1 January 2021.
3.
Interest bearing. The contractual cash flows differ to the carrying amount by the amount of transactions costs comprising establishment,
corporate, legal advisory fees and interest.
(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 10% change in the interest rate, with all other variables remaining constant, is immaterial.
NOTE 28
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:
BOWEN COKING COAL ANNUAL REPORT 2022 80
Coking Coal One Pty Ltd
Cabral Metais Ltd (dormant)
Bowen PCI Pty Ltd
Country of
incorporation
Australia
Brazil
Australia
2022
100%
100%
100%
Ownership interest
2021
100%
100%
-
NOTE 29
BLUFF MINE (BLUFF PCI COAL PROJECT) ASSET ACQUISTION
On 26 October 2021, the Company announced that it had executed binding agreements with MACA Ltd, appointed receivers
for Carabella Resources Pty Ltd, to acquire the Bluff PCI Coal Project, located within developed Mining Lease 80194. The
acquisition was completed on 29 December 2021.
The Company agreed to acquire the following:
1. Granted Mining Lease ML 80194;
2. Associated surface infrastructure;
3. 1931ha of grazing land;
4. An Approved Environments Authority to mine to 1.8Mtpa; and
5. Coal exploration permit EPC1175 and EPC 1999.
Total consideration payable in relation to the acquisition was as follows:
1. Cash consideration of $250,000;
2. Shares in the Company with a fair value of $4,750,000; and
3. Assumption of environmental rehabilitation obligations.
In addition, contingent consideration is also payable as follows:
1. Base Royalty payable, if benchmark price for the quarter is more than USD 120, the royalty is $2/tonne on all coal produced
and sold from ML 80194, EPC 1175 and EPC 1999, subject to a maximum amount payable of $10,000,000; and
2. Super Royalty payable, if benchmark price for the quarter is more than USD 150, the uncapped royalty is $5/tonne on all coal
produced and sold from ML 80194, EPC 1175 and EPC 1999, and if benchmark price for the quarter is more than USD 200,
the uncapped royalty is $10/tonne.
The value of the assets acquired and liabilities assumed has been allocated on a Fair Value basis. Details of the purchase
consideration and the net assets acquired are as follows:
Net assets acquired
Mining asset (including Rehabilitation provision)
Land
Rehabilitation provision
Total Purchase consideration
NOTE 30
SUBSEQUENT EVENTS
Note
13
13
17
2022
$
15,118,396
400,000
(10,518,396)
5,000,000
In August 2021, Bowen announced its intention to acquire New Hope Corporation’s 90% interest in the Lenton Joint Venture,
owner of the Burton Coal Mine and New Lenton Project. (Formosa Plastics Group holds the remaining 10%). On 24 December
2021, Bowen entered into a binding Share Sale and Purchase Agreement (‘SPA’) with New Hope Corporation Limited (‘NHC’)
for the acquisition of 100% of the shares in New Lenton Coal Pty Ltd (‘New Lenton’) (which currently owns a 90% interest in the
Lenton Joint Venture) (‘Lenton JV’, the ‘Acquisition’). The Conditions Precedent to the SPA were satisfied on 24 June 2022 and
a Deed of Variation to the SPA was signed on 1 July 2022. The Deed of Variation included agreement of the Completion Date,
BOWEN COKING COAL ANNUAL REPORT 2022 81
Completion Payments and other matters including the replacement of security bonds which was required in order to complete
the Transaction. Accordingly, on 1 July 2022, subsequent to period end, the Company completed the acquisition.
On 5 July 2022, 948,560 shares and 2,165,913 performance rights were issued to staff and management (under the Company’s
Employee and Executive Incentive Plan), and the Company issued 4,000,000 ordinary shares on 9 August 2022 and 450,000 ordinary
shares on 5 September 2022 following the exercise of vested performance rights.
Other than the matters noted above, there are no material matters or circumstances that have arisen since the end of the year
which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
NOTE 31
PARENT ENTITY INFORMATION
The following information relates to the parent entity, Bowen Coking Coal Ltd at 30 June 2022. This information has been
prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income for the period
Total comprehensive loss for the period
2022
$
66,629,105
74,082,956
2021
$
1,172,888
15,312,062
140,712,061
16,484,950
14,132,326
32,690,072
46,822,398
93,889,663
134,113,511
17,360,062
(57,583,910)
93,889,663
(8,646,338)
-
601,372
147,798
749,170
15,735,780
63,917,409
755,943
(48,937,572)
15,735,780
(2,816,576)
-
(8,646,338)
(2,816,576)
Refer to Note 23 outlining a (conditional) contractual commitments for the acquisition of assets, also considered contingent
liabilities at 30 June 2022. Other than the transactions described in Note 24, 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.
NOTE 32
COMPANY DETAILS
The registered office and principal place of business is:
Level 4, 167 Eagle Street
Brisbane, Queensland, 4000 Australia
NOTE 33
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.
BOWEN COKING COAL ANNUAL REPORT 2022 DIRECTORS’
DECLARATION
82
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 Group’s financial position as at 30 June 2022 and of its performance for the financial
year ended on that date.
2. The Managing Director and chief financial officer have each declared that:
a. the financial records of the Company for the financial year have been properly maintained in accordance with section
286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view.
3. In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Gerhard Redelinghuys
Managing Director
29 September 2022
Brisbane, Queensland
BOWEN COKING COAL ANNUAL REPORT 2022 B OW E N C O K I N G C OA L A N N UA L R E P O R T 2 0 2 2
83
INDEPENDENT
AUDITOR’S REPORT
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001 T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880 www.rsm.com.au 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 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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 2022 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. THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001 T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880 www.rsm.com.au 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 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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 2022 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. 84
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. Key Audit Matter How our audit addressed this matter Carrying value of capitalised exploration and evaluation expenditure Refer to Note 13 in the financial statements At 30 June 2022, the Group held capitalised exploration and evaluation assets of $10,250,911. We consider the carrying amount of these assets under AASB 6 Exploration for and Evaluation of Mineral Resources to be a key audit matter due to the significant management judgments involved, including: • whether the exploration and evaluation spend can be associated with finding specific coal resources, and the basis on which that expenditure is allocated to an area of interest; • the Group's ability and intention to continue to explore the area of interest; • which costs should be capitalised; • the existence of any impairment indicators (such as the potential that coal resources may not be commercially viable for extraction, or that the carrying value of the assets may not be recovered through sale or successful development) - and if so, those applied to determine and quantify any impairment loss; and • whether exploration activities have reached the stage at which the existence of an economically recoverable reserve may be determined. Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • Assessing whether the rights to tenure of those areas of interest are current; • Testing a sample of additions to supporting documentation and assessing whether the amounts capitalised during the year are in compliance the Group’s accounting policy and relate to the relevant area of interest; • Enquiring with management and reading budgets and other documentation as evidence that active and significant operations in, or relation to, the relevant area of interests will be continued in the future; • Assessing and evaluating management’s determination that exploration activities have not yet progressed to the stage where the existence or otherwise of economically recoverable reserves may be determined; • Assessing and evaluating management’s assessment of whether indicators of impairment existed at the reporting date; and • Assessing the appropriateness of the disclosures in the financial statements. Mine development asset The Group has recognized $20,862,235 as mine development assets at 30 June 2022. We determined this to be a key audit matter due to: • the complexity exercised in the classification of these amounts as mine development assets; • complexity and management judgement involved in assessing exploration and Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • In relation to the reclassification of exploration and evaluation assets: • Challenging management's assessment that the technical feasibility and commercial viability of BOWEN COKING COAL ANNUAL REPORT 2022 85
evaluating expenditure for impairment prior to its re-classification to mine development assets; and • judgements and management estimates associated with measuring the rehabilitation obligation applicable to mine development assets. extracting a mineral resource was demonstrable; and • Testing the methods, assumptions and data used by management in its impairment assessment of the exploration and evaluation asset to be reclassified; • Testing, on a sample basis, additions to supporting documentation and assessing whether the amounts were capital in nature; • Testing the methods, assumptions and data utilised by management to measure the rehabilitation obligation applicable to mine development assets and checking the mathematical accuracy of the rehabilitation provision; • Critically evaluating management’s assessment that no indicators of impairment existed; and • Assessing the appropriateness of the disclosures in the financial statements. Mining assets The Group holds mining assets with a carrying value of $22,202,648. Mining assets includes $15,118,396 arising in relation to the acquisition of Bluff PCI Coal Project on 29 December 2021. We considered this to be a key audit matter due to the management judgement and estimation exercised in: • Determining whether the acquisition of Bluff PCI Coal Project was a business combination or an asset acquisition, based on whether the definition of a business in AASB 3 Business Combinations was met; • Determining the acquisition date and management estimates associated with determining the fair value of consideration paid and assets and liabilities acquired with respect to Bluff PCI Coal Project; • the application of units of production method in determining the appropriate run-of-mine production estimate and the attributable cost allocation; and • Measuring the rehabilitation obligation applicable to mining assets. Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • Reading the acquisition agreement for Bluff PCI Coal Project and other documents to understand key terms and conditions relating to the acquisition; • Evaluating management’s determination that the acquisition did not meet the definition of a business within AASB 3 Business Combinations and therefore should be accounted for as an asset acquisition; • Assessing management’s determination of the fair value of consideration paid and the acquisition date; • Evaluating the assumptions and methodology applied by management in determining the fair value of mining assets acquired; • Agreeing, on a sample basis, additions to supporting documentation and checking that the amounts were capital in nature; • Assessing for reasonableness management's mining asset amortisation model, including assessing the methodologies adopted and key assumptions and agreeing key inputs to supporting information. Our testing included an BOWEN COKING COAL ANNUAL REPORT 2022 86
assessment of the work performed by management's expert in respect of the mine plan/life of mine model and the ore reserve estimate, including the competency and objectivity of the expert; • Testing the methods, assumptions and data utilised by management to measure the rehabilitation obligation applicable to mining assets and checking the mathematical accuracy of the rehabilitation provision; • Assessing the appropriateness of the disclosures in the financial statements. Convertible note Refer to Note 15 in the financial statements On 23 June 2022, the Group issued $40 million convertible loan notes to Crocodile Capital 1 Global Focus Fund and Crocodile Capital Offshore Fund. The convertible notes are convertible into fully paid ordinary shares in the Company and have a maturity of five years unless earlier redeemed or converted in accordance with their terms and conditions. The measurement and classification of convertible notes is considered a key audit matter due to the materiality of the balance and the complexity of the accounting treatment required under Australian Accounting Standards. Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • Reading the convertible notes deed to understand their terms and evaluating the classification of the convertible notes against the criteria contained within Australian Accounting Standards; • Vouching the proceeds from the issue of convertible notes to bank statements and other supporting documentation; • Assessing the fair value of the equity and debt components of the convertible notes at inception, including challenging the reasonableness of key inputs used by management to determine fair value; • Challenging management’s classification of the debt component as a non-current liability; • Checking the mathematical accuracy of the remeasurement at year-end of the debt component of the convertible note using the effective interest rate method; and • Assessing the appropriateness of the disclosures in financial report. Emphasis of Matter – Subsequent events We draw attention to Note 30, Subsequent Events, to the financial statements which describes the significant effects related to the acquisition of New Lenton Coal Pty Ltd on 1 July 2022. Our opinion is not modified in respect of this matter. BOWEN COKING COAL ANNUAL REPORT 2022 87
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 2022 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 34 to 39 of the Directors' Report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Bowen Coking Coal Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. BOWEN COKING COAL ANNUAL REPORT 2022 88
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 Albert Loots Partner Brisbane, Queensland Dated: 29 September 2022 BOWEN COKING COAL ANNUAL REPORT 2022 SHAREHOLDER
INFORMATION
89
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 20 September 2022.
(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
Ordinary Shares
Unlisted Options ($0.10 @ 30-Nov-24)
No. Holders
No. Shares
No. Holders
No. Options
173
569
448
1,419
638
3,247
33,193
1,720,914
3,585,548
59,306,232
1,482,877,625
1,547,523,512
-
-
-
-
2
2
-
-
-
-
9,000,000
9,000,000
Unlisted Options ($0.25 @ 30-Sep-24)
Performance Rights
No. Holders
No. Options
No. Holders
No. Rights
-
-
-
-
5
5
-
-
-
-
34,000,000
34,000,000
-
-
-
2
10
12
-
-
-
86,217
10,929,696
11,015,913
No. Holders
No. Options
Convertible Notes
-
-
-
-
2
2
-
-
-
-
40,000,000
40,000,000
There are 192 shareholders holding less than a marketable parcel of 1,316 shares.
BOWEN COKING COAL ANNUAL REPORT 2022 (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
15
16
17
18
19
Registered Name
BNP PARIBAS NOMS PTY LTD*
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED*
CITICORP NOMINEES PTY LIMITED
LATIMORE FAMILY PTY LTD*
METRES INVEST PTY LTD
CAPE COAL PTY LTD*
UBS NOMINEES PTY LTD
ST LUCIA RESOURCES CAPITAL FUND PTY LTD
BRAZIL FARMING PTY LTD*
CS FOURTH NOMINEES PTY LIMITED
MACA LIMITED
SAS INVESTMENTS PTY LTD
WARBONT NOMINEES PTY LTD
NORFOLK ENCHANTS PTY LTD
OLROSS INVESTMENTS PTY LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
SEYMOUR GROUP PTY LTD
BRISPOT NOMINEES PTY LTD
BOND STREET CUSTODIANS LIMITED
20
M RESOURCES PTY LTD
TOP 20 TOTAL
Total of Securities
*Denotes merged holding
90
Number of Shares
% of total Shares
216,560,907
153,891,244
138,852,852
112,150,811
55,000,000
54,849,774
46,162,501
40,439,261
31,533,517
30,838,968
27,941,177
24,000,000
23,543,060
22,500,000
21,666,667
20,548,255
20,000,000
18,015,914
15,921,662
15,022,261
14.0%
9.9%
9.0%
7.2%
3.6%
3.5%
3.0%
2.6%
2.0%
2.0%
1.8%
1.6%
1.5%
1.5%
1.4%
1.3%
1.3%
1.2%
1.0%
1.0%
1,089,438,831
1,547,523,512
70.40%
100.0%
BOWEN COKING COAL ANNUAL REPORT 2022 91
(C) SUBSTANTIAL SHAREHOLDERS
The latest substantial shareholder notices that the Company has received are set out below:
Name of Shareholder
Ordinary Shares
% of total Shares
184,448,072
104,477,612
168,031,652
128,120,642
11.95%
8.62%
10.86%
8.43%
M Resources Pty Ltd and Matthew Latimore
Ilwella Pty Ltd
Regal Funds Management Pty Ltd
Crocodile Capital and its related body VP Fund Solutions
(Luxembourg) SA
(D) VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
Options and performance rights do not carry voting rights.
(E) RESTRICTED SECURITIES
As at the date of this report, there are 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.
BOWEN COKING COAL ANNUAL REPORT 2022 INTERESTS IN
TENEMENTS
92
Bowen Coking Coal Ltd held the following interests in tenements as at the date of this report:
Location
Project
Queensland
Cooroorah
Tenement
MDL 453
Granted
Status
Current Interest (%)
Country
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Queensland
Broadmeadow East
ML 70257
Under renewal
Queensland
Mt Hillalong
Queensland
Hillalong East
Queensland
Carborough
Queensland
Queensland
Queensland
Lilyvale
Lilyvale
Mackenzie
Queensland
Comet Ridge
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Isaac River
Isaac River
Isaac River
Isaac River
Bluff
Bluff
Bluff
Lenton2
Queensland
Lenton North2
Queensland
Lenton West2
Queensland
New Lenton2
Queensland
New Lenton2
Queensland
New Lenton2
Queensland
Queensland
Queensland
Queensland
Queensland
Burton2
Burton2
Burton2
Burton2
Burton2
EPC 1824
EPC 2141
EPC 1860
EPC 1687
EPC 2157
EPC 2081
EPC 1230
MDL 444
EPC 830
ML 700062
ML 700063
EPC 1175
EPC 1999
ML 80194
EPC 766
EPC 865
EPC 1675
ML 70337
ML 700053
ML 700054
EPC 857
MDL 315
MDL 349
ML 70109
Granted
Granted
Under renewal
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Under renewal
Under renewal
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Under renewal
ML 70260
Under renewal
100%
100%
85%1
85%1
100%
15%
15%
5%
100%
100%
100%
100%
100%
100%
100%
100%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
1. Sumitomo Corporation elected to proceed with the Hillalong Joint Venture (“Hillalong JV”) following the completion of the $2.5m on Phase
1 another $2.5m on Phase 2a exploration program at Hillalong, resulting in Sumitomo solidifying a 15% interest in the Project. Completion of
the first 10% transfer was completed on 13 April 2021 and a further 5% transfer was completed on 10 February 2022. Sumitomo Corporation is
currently earning-in for a further 5% by spending $2.5m under Phase 2b of the Farm-In Agreement. Post the completion of Phase 2b, Sumitomo
has the option to obtain an additional 5% (for a total interest of 20%) in the project by spending a further $2.5m on Phase 2b exploration.
2. Bowen Coking Coal Ltd acquired the Burton and Lenton tenements on 1 July 2022 through the acquisition of New Lenton Coal Pty Ltd.
BOWEN COKING COAL ANNUAL REPORT 2022 ANNUAL MINERAL
RESOURCES STATEMENT
93
RESOURCES STATEMENT AS AT 30 JUNE 2022 (JORC 2012, MT)
Project
Broadmeadow
East
Bluff
Tenement
ML70257
ML80194, EPC1175,
EPC1999
Cooroorah
MDL 453
Lilyvale
EPC 1687 &2157
Comet Ridge
EPC 1230
MDL 444/MLA700062
& EPC830
EPC2141 &1824
Isaac River
Hillalong
Total
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
6
-
-
-
8
6
-
20
4
11
96
-
9
3
47
170
23
2
81
33
43
-
40
33
13
177
33
60
9
87
100%
100%
100%
15%
100%
100%
85%**
222*
412*
*Includes 28Mt attributable to Stanmore Resources Ltd as part of the Lilyvale Joint Venture.
** Includes 13Mt attributable to Sumitomo Corporation following the completion of the Phase 1 farm in and Phase 2A farm in. See ASX release
11 December 2020 and 31 August 2021.
RESOURCES STATEMENT AS AT 30 JUNE 2021 (JORC 2012, MT)
Project
Broadmeadow
East
Cooroorah
Tenement
ML70257
MDL 453
Lilyvale
EPC 1687 &2157
Comet Ridge
EPC 1230
MDL 444/MLA700062
& EPC830
EPC2141 &1824
Isaac River
Hillalong
Total
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
6
-
-
8
6
-
20
4
96
-
9
3
21
133
23
81
33
43
-
22
33
177
33
60
9
43
100%
100%
15%
100%
100%
90%**
202*
355*
*Includes 28Mt attributable to Stanmore Resources 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,
9 June 2020 and 11 December 2020.
BOWEN COKING COAL ANNUAL REPORT 2022 94
MOVEMENTS:
On 29 December 2021 the Company announced the completion of the Bluff Mine acquisition. See ASX release 29 December
2021 “Bluff Mine Update”.
On 28 January 2022 Sumitomo farmed in a further 5% into Hillalong under Phase 2A.
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 the previous page); 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.
BOWEN COKING COAL ANNUAL REPORT 2022 B O W E N C O K I N G C O A L
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