ANNUAL REPORT
2024
IMPROVED
PERFORMANCE
POISED FOR
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.
CONTENTS
Cautionary Statements
1
Chairman’s Letter
2
CEO’s Letter
4
Operations Review
6
Directors’ Report
14
Auditor’s Independence Declaration
40
Financial Report
41
Consolidated Statement of Profit or Loss
42
and Other Comprehensive Income
Consolidated Statement of Financial Position
43
Consolidated Statement of Changes in Equity
44
Consolidated Statement of Cash Flows
45
Notes to the Consolidated Financial Statements
46
Directors’ Declaration
94
Independent Auditor’s Report
95
Shareholder Information
100
Interest in Tenements
103
Consolidated Entity Disclosure Statement
104
Annual Mineral Resources and Ore Reserve Statement
105
Corporate Directory
109
BOWEN COKING COAL | ANNUAL REPORT 2024
1
CAUTIONARY
STATEMENTS
30 JUNE 2024
FY2024 WAS A YEAR OF RECORD PRODUCTION FOR BOWEN, BUT ALSO A YEAR OF CONSOLIDATION FOLLOWING THE
RAPID COMMENCEMENT OF MINING AND RAMP UP AT THE BURTON COMPLEX IN THE PREVIOUS YEAR. THE COMPANY MINED
A RECORD 2.86MT OF ROM COAL OVER THE YEAR AND SOLD A RECORD 1.94MT OF CLEAN COAL, 1.5MT OF WHICH WAS
FROM THE CONTINUING BURTON COMPLEX OPERATIONS.
It was a year that featured a strong focus on reducing mining costs
as we reached our steady state production levels. Our strip ratio
(the quantity of overburden moved per tonne of coal mined) is a
critical factor that drives our mining costs and over the course of the
year the Group strip ratio reduced from 16.7:1 to 6.7:1, in accordance
with our mine plan. The continuing Burton mining operations are
now performing strongly and looking forward we see a strong future
for the asset with strip ratios running at under 7:1 for the next five
years and significant operating cost reductions underway. We have a
13-year mine life at Burton at current production rates and the ability
to double production in response to higher coal prices with minimal
capital investment.
Our financial results improved over the course of the year as we
completed the start-up phase, with a maiden positive EBITDA
reported in the second half of the year, driven by mining improvements
at Burton and the closure of Bluff and in spite of challenges from
weaker coal revenues with Bowen’s average received price per tonne
dropping by 15.8% compared to FY2023. We have worked closely
with our debt providers over 2024 to provide a stronger financial
platform for FY2025. Their support sets the Company up for the future
years, with the current equity raise designed to form the final critical
component of strengthening the Company’s balance sheet.
The extreme State Royalties tax increase introduced by the
Queensland Government in June 2022, just as we reached first
production, continues to be a major impediment for the Company.
This is illustrated by the State’s royalty take of $60.2 million this year
soaking up all our pre-royalty operating cash flow for the year, which
is extremely disappointing knowing how hard the team has worked.
Having invested significant capital in our operations our investors and
financiers have yet to make a return on this investment whilst paying
these hefty taxes to the Queensland Government. With costs across
the Bowen Basin having risen substantially, many operators are now
pushing into the new “super royalty” rates (20% - 40% of incremental
revenue), before reaching profitability, despite these high royalty rates
being targeted at windfall profits. Maintaining the world’s highest
royalty tax regime in Queensland is not compatible with a strong and
vibrant coal industry and encouraging further investment.
THE REPORTS OF COAL’S DEATH ARE
GREATLY EXAGGERATED
Coal has a very strong future. It provides energy for life and is essential
for the production of materials which support the way we live. It keeps
our lights on and our energy bills down and provides the raw materials
for making the steel we all need. It builds communities and supports
our way of life in Australia.
Bowen is a founding member of Coal Australia, a new industry body
designed to unleash pride in one of our largest export industries and
provide a voice for coal workers, communities and all supporters.
Recent polling conducted by Coal Australia demonstrates very strong
support for coal in our communities. In our current cost of living
crisis, this support goes well beyond traditional coal communities
CHAIRMAN’S
LETTER
with 79% of Southeast Queensland voters supporting using more of
Queensland’s coal domestically to keep power prices down. A clear
61% majority of SE Queensland voters also support incentivising coal
companies to stay in Queensland with more internationally competitive
royalty rates. While some of our political leaders play catch up on the
importance of our industry, community support is very strong. I would
encourage all shareholders to visit the Coal Australia website and join
over ten thousand supporters as friends of coal who have signed up to
support our critical industry.
As the world electrifies, decarbonises, and urbanises, it will require
more steel, and more steel will require more coking coal. It also
requires more energy, driven by economic growth and our insatiable
demand for data. Global coal demand is at record levels, and coal will
continue to provide low cost and reliable electricity and lift people out
of poverty around the world for many decades to come, pointing to a
strong future for Queensland’s world beating, high quality coal.
In the face of record demand, global coal supply remains constrained
due to lack of new mine approvals and increasing regulatory and
capital constraints. In August 2024, respected global energy analysts
Wood Mackenzie reported that the availability of premium hard-
coking coal was a major concern to international steel makers.
Wood Mackenzie’s coal supply asset data suggested a net drop
in premium supply by 2027, compared to 2023. The growing gap
between demand and supply should support higher prices over the
longer term.
FY2024 got off to a good start when premium coking coal touched
above US$350 a tonne in September 2023 but tracked downward
over 2024 to just over US$200/t currently. Prices have recently started
to bounce up off their recent low levels and are forecast to improve in
the medium-term. Australian investment bank Macquarie predicted
the average price for hard coking coal to reach US$300/t by the end
of this year.
HARD DECISIONS HAVE DELIVERED
INCREASED PERFORMANCE
We faced some significant challenges this year, alongside others in
the coal industry. Significant wet weather, rail delays and increases in
labour, consumables, fuel and power costs have impacted across the
industry. A scuttled attempt by Iolite Capital to unseat the Board was
an unfortunate distraction.
Amid testing times, we made decisive moves to make the Company
more efficient and ready to capitalise on the expected positive market
fundamentals ahead. We closed two pits during the reporting period.
Coal price weakness, unexpected geological difficulties and extreme
state royalties led to the difficult but necessary decision to close
the Bluff operation near Blackwater while the Broadmeadow East
Mine near Moranbah was suspended as the costs of relocating a
powerline traversing the mining lease don’t currently eclipse the value
of doing so.
These hard decisions weren’t made lightly but allowed the Company
to concentrate its efforts at the main Burton Mine Complex where
our larger, longer life mining operations with higher margin deposits
better utilise our infrastructure at lower cost to maximise returns.
The Ellensfield South Mine, which neighbours the Central Handling
and Processing Plant (CHPP) at Burton, produced first coal in
September 2023 and in the June 2024 quarter produced a record
820,000t of ROM coal. Next door to Ellensfield South, the Plumtree
North Mine is currently under development and will ensure production
levels remain above processing capacity for the next five years.
THE COMPANY’S BEST ASSET IS ITS PEOPLE
Welcoming Daryl Edwards to the role of Chief Executive Officer in
January 2024 has been critical to the current operating success and
discipline that the business is now achieving. Daryl was previously
the Company’s Chief Financial Officer and brings significant senior
management experience across coal operations and financing.
He is highly motivated, across every part of our business in detail
and has already delivered marked improvements in the Company’s
cost structure, internal controls and focus.
Daryl leads a small team made up of some of the best people in the
industry from the front line to the front desk. Much was asked of our
people this past financial year but much more was delivered (again).
You don’t hit record production highs while reducing costs without
rolling up your sleeves and bending your back. On behalf of the Board,
I thank you sincerely for your continued hard work and commitment.
WE ARE WELL POSITIONED TO MAKE THE
MOST OF THE OPPORTUNITIES AHEAD
As a coal man, I’ve come to learn the strongest steel comes from
the hottest fire. We’ve been tested this past year due to a long list of
factors but Bowen is now in stronger shape to take advantage of the
once-in-a-generation opportunities ahead. As demand for steel-
making coal grows, and supply remains heavily constrained, Bowen
Coking Coal, located in the heart of the world’s best coal country,
Queensland’s Bowen Basin, will answer the world’s call for more
high-quality coal to be delivered efficiently, sustainably and safely.
While some challenges remain, the Board and management stand
united and positive about the future.
Yours sincerely,
NICHOLAS JORSS
EXECUTIVE CHAIRMAN
BOWEN COKING COAL | ANNUAL REPORT 2024
3
BOWEN COKING COAL HAS ACHIEVED A NUMBER OF SIGNIFICANT MILESTONES IN THE FACE OF MAJOR OPERATIONAL AND
CASH FLOW CHALLENGES AND IS LOOKING FORWARD TO THE NEXT 12 MONTHS WITH RISING CONFIDENCE.
We have executed a debt restructure, become more efficient,
stabilised production and our people and contractors are stepping up.
When I accepted the role as Bowen Coking Coal’s new Chief
Executive Officer in late January 2024, I was under no illusions. In the
prior six months, the first half of the 2024 financial year, the Company
was wide of revenue targets as we closed an underperforming mine
and rallied against a long inventory of challenges such as softening
coal prices, increasing production costs, contractor performance
issues, equipment availability, adverse weather events, and significant
logistical delays. To make matters worse, the world’s highest coal
mining royalties took a good chunk out of expected earnings.
Since my appointment, we paused operations at Broadmeadow
East Mine, experienced train cancellations and shipping delays. We
have been better at utilising our Coal Handling and Preparation Plant
(CHPP) i.e. producing product stock and dealing with wet weather
experienced in June and August 2024. As the new financial year
unfolds, we are better positioned to deal with the challenges that
lie ahead.
On 7 October 2024, Bowen Coking Coal launched a partially
underwritten equity capital raising by way of a pro rata renounceable
entitlement offer of 2.66 new shares for every 1 share at an issue
price of $0.009 per new share to raise up to approximately $70 million
before costs. Every 2 new shares subscribed for are accompanied by
1 free attaching option with an exercise price of $0.009 and an expiry
date of six months from their date of issue.
This anticipated equity raising, combined with renegotiated debt
arrangements will reset Bowen’s capital structure to enable the
Company to move forward and execute its growth strategy. The
equity raising is supported by major incoming shareholders Square
Resources and existing financier, Taurus Mining Finance Fund No. 2,
L.P. (Taurus) as well as several large existing shareholders.
CREDITORS CONFIRM THEIR SUPPORT
On 19 September 2024, the Company announced that it has executed
a Heads of Agreement with its senior and subordinated lenders, Taurus
and New Hope Corporation (New Hope) respectively, agreeing to enter
into long form agreements to amend their respective loan facilities.
BOWEN COKING COAL | ANNUAL REPORT 2024
4
CEO’S
LETTER
The senior debt Taurus facility balance on 30 June 2024 was
unchanged at US$51.0 million ($77.0 million converted at year-end
closing spot USD:AUD exchange rate of 0.6624). A principal repayment
of US$7.0 million relating to the 10% sale of Broadmeadow East
was made in September 2024. The remaining amortisation profile
of US$44.0 million is forecasted to be paid over seven sculpted
quarterly amortisation payments commencing in March 2025. Taurus
has subscribed for shares to the value of $15.5 million and its cash
payment obligation will be set-off against the 31 March 2025 scheduled
repayment obligation, subject to receipt of any required shareholder
and Australian Foreign Investment Review Board approvals.
The subordinated New Hope facility principal balance decreased
to $45.2 million due to a revision of the Burton Complex estimated
rehabilitation cost calculation. New Hope exercised 81,310,580
warrants on 27 September 2024 at an exercise price of $0.1122 per
share to fully repay all redemption premium, any default interest on the
redemption premium and all capitalised interest. Furthermore, New
Hope has subscribed for shares to the value of $2.0 million and its
cash payment obligation will be set-off future interest payable under
the subordinated facility.
The Company is actively seeking a long term fit for purpose solution
for its mandatory rehabilitation bonding obligations, which is primarily
being funded through the subordinated debt facility, with the remaining
rehabilitation bonding being funded by cash security held on deposit
with the State of Queensland. Options being investigated include
contingent surety instruments or guarantees to provide a more
durable, low-cost solution that is better matched to the contingent
nature of the rehabilitation bonding obligations.
PRODUCTION REACHES RECORD HIGHS
Keeping our people safe is our priority. Another important operational
performance measure is the Company’s utilisation of the CHPP at our
Burton Mine Complex near Moranbah versus availability. That is, closing
the gap between what we can produce and what we do produce.
The CHPP consists of a crushing circuit which is capable of feeding
run-of-mine (ROM) coal into two separate, independently operated
modules. While the refurbishment of module 2 is currently on hold,
module 1 has been up and running since May 2023. Its nameplate
capacity is 2.75 million tonnes per annum (Mtpa), which translates to a
steady-state benchmark of 229Kt feed tonnes per month. In the March
2024 quarter, utilisation of the CHPP was 73%. It’s now above 90%.
In June, we mined 370Kt of ROM coal at the Ellensfield South Mine
which neighbours the CHPP at the Burton Mine Complex. This was a
record monthly result. A record 820Kt of ROM was mined for the June
quarter despite the suspension of operations at the Broadmeadow
East Mine in May 2024, around 20km south of the CHPP. During
the final quarter of FY2024, 458Kt of saleable coal was produced
and 425Kt of coal sales were achieved over nine cargoes. ROM
and product stocks have been built up considerably, setting the
business up for a successful FY2025. The Company currently has a
month of product stock on hand. Meanwhile, we are now developing
the Plumtree North Mine, adjacent to Ellensfield South and a short
distance to the CHPP, which will provide production continuity. First
coal is expected in the first quarter of 2025 and with an 11Mt JORC
Reserve, the mine is forecasted to be in production for several years.
At the same time, the final quarter of FY2024 saw Burton Complex’s
strip ratio reduce by 65% and mining costs, inclusive of boxcut costs,
decrease by 48% to $57/ROMt compared to the first quarter of the
2024 financial year.
1. Refer to Annual Mineral Resources and Ore Reserve Statement.
Record operating results are testament to the team we have, we thank
you all. Additionally, we are grateful for a marked improvement in
performance from our mining contractor, who has been working with
us in achieving a coal recovery plan and the consistent performance of
our CHPP and haulage contractors.
During the year we upgraded coal Resources1 at the Burton Complex
and Hillalong and increased our Reserves at the Lenton Deposit just
north of the CHPP. These assets together with Plumtree North and the
Isaac pit will serve our ambition to refurbish module 2 at the CHPP and
increase production capacity to 5.5Mtpa.
LEARNING FROM OUR LESSONS
The closure of the Bluff Mine towards the end of 2023 after a little
more than a year of production was undoubtedly a lowlight. We
backed ourselves to make it work but struggled to outperform the
tricky geology, high State royalties and the aforementioned challenges
troubling coal miners in Queensland.
Bluff was a compelling opportunity which stacked up well before
Covid and the imposition of the world’s highest coal royalties. We cut
our losses at Bluff and doubled down on the Burton Mine Complex
where we’re now setting new production records as outlined. Bluff
was a tough lesson which we’re now using to make the most of our
promising growth trajectory.
LEADERSHIP CHANGES
I would like to express my thanks to my predecessor, Mr Mark Ruston,
and former non-executive director, Mr David Conry, who both left
the Company during the reporting period but made a significant
and valued contribution to the Company, particularly during a very
demanding time. The appointment of experienced executive Mr Malte
von der Ropp as a non-executive director in April 2024 markedly
expanded the board’s capabilities, particularly in the fields of corporate
finance and corporate governance and reflected our openness to
refining and enhancing our leadership to build the business and, in
turn, shareholder value.
POISED FOR GROWTH
Our commitment to fact-based decisions, metrics and our people will
continue to be drivers of our success. While disappointed with FY2024
results, the Company is now in the best operational position it has ever
been in. We are confident this will translate into positive financial results
in future periods, coupled with further work being done to reduce
costs, generate free cash flow and strengthen the balance sheet.
We are well poised to capitalise on the forecast growth in global steel
production for which our high-quality, low ash, and low sulphur coking
coal is a critical input. Our culture is strong, we have sound processes
in place, an excellent asset portfolio, and a team of employees I’d
trade for no other. We will continue to drive toward outstanding
financial performance and be mindful of the needs and contributions
of all our stakeholders.
Thank you for joining us in this journey and thank you for being a
Bowen shareholder.
DARYL EDWARDS
CHIEF EXECUTIVE OFFICER
BOWEN COKING COAL | ANNUAL REPORT 2024
5
BOWEN COKING COAL | ANNUAL REPORT 2024
6
OPERATIONS
REVIEW
Operations
Review
Bowen Coking Coal has established a dominant hard coking coal
position in Queensland’s world class Bowen Basin as the Company
serves the increasing demand for high, quality steelmaking coal
around the world.
The Company’s flagship Burton Mine Complex near Moranbah
encompasses multiple operations with the Ellensfield South Mine
serving a centralised Coal Handling and Preparation Plant (CHPP) and
train load out facility connected by a haul road. Lenton and Plumtree
North are co-located, undeveloped open-cut projects which will
provide production continuity at Burton.
The Company ended the financial year by achieving record operating
results and reaching steady state production at the Burton Mine
Complex. Following a detailed strategic review, the Group made the
decision to focus on the development of its low-cost Ellensfield South
Mine to yield stronger investment returns and introduce a higher
quality coking coal product into the sales mix.
The Group placed the Bluff asset into care and maintenance in
November 2023. Operations at the Broadmeadow East Mine were
also paused at the end of May 2024 due to the high capital cost
associated with relocating powerline infrastructure traversing the
mine. The Company continues to seek an economic solution for the
relocation of the powerline, providing optionality to recommence
mining activities.
Group Consolidated
Managed Production
Total
FY2024
Total
FY20231
Change
%
ROM Coal Mined
Kt
2,862.6
1,658.7
72.6%
ROM Strip Ratio
Prime
11.0
13.4
18.0%
Saleable Coal Produced
Kt
1,944.4
975.2
99.4%
Sales of Produced Coal
Kt
1,937.8
760.4
154.8%
Sales of Third Party Purchased Coal
Kt
41.6
35.2
18.1%
Total Coal Sales
Kt
1,979.4
795.6
148.8%
Saleable Coal Stocks at period end
Kt
165.8
231.5
(28.4%)
Group Consolidated
Equity Share Production2
Total
FY2024
Total
FY20231
Change
%
ROM Coal Mined
Kt
2,732.1
1,658.7
64.7%
ROM Strip Ratio
Prime
10.9
13.4
18.2%
Saleable Coal Produced
Kt
1,878.2
975.2
92.6%
Sales of Produced Coal
Kt
1,890.2
760.4
148.6%
Sales of Third Party Purchased Coal
Kt
40.9
35.2
16.1%
Total Coal Sales
Kt
1,931.1
795.6
142.7%
Saleable Coal Stocks at period end
Kt
151.8
231.5
(34.5%)
1. Prior year comparatives restated for minor amendments.
2. Reflects the Group’s equity interest during the year ended 30 June 2024 of 90% in the Burton Lenton Joint Venture (comprising Ellensfield South Mine and the Burton
Complex) and 100% of the Broadmeadow East and Bluff Mines.
BOWEN COKING COAL | ANNUAL REPORT 2024
7
0
5km
N
Railway
Road
Bowen Tenement
Coal Project
Wash Plant
Norwich Park Branch
Goonyella Branch
Peak Downs Hwy
Blair Athol Branch
Mallawa
Train Load-out
145°05
145°10
145°15
145°20
B
r
o
a
d
le
a to
C
a
r
b
o
r
o
u
g
h
D
o
wns
H
au
l
R
o
a
d
M
al
la
w
a
H
a
ul
R
o
a
d
MDL315
MDL349
50’
00’
00’
Plumtree West
Bullock Creek
Ironbark No. 1
Wallanbah
Isaac Plains
Millennium
Isaac Plains
East
Broadlea
Red Hill
Isaac Downs
Mavis Downs
Carborough Downs U/G
Carborough
Downs CHPP
Broadmeadow West
Burton
MIA & CHPP
ISAAC PITT
ELLENSFIELD SOUTH PITT
BURTON COMPLEX
PLUMBTREE NORTH PITT
BROADMEADOW EAST PITT
LENTON
Strip ratio at the
Burton Complex saw
an improved low
of 6.7:1 (BCM/t)
in Q4 FY24 down
from 15.1:1 (BCM/t)
in Q1 FY24.
Record
production rates
were achieved at the
Burton Mine Complex
during Q4 FY24.
Steady-state
benchmarks
have been achieved
with the Burton
CHPP availability and
utilisation now both
above 90%.
Record Run of Mine
(ROM) coal mined
during financial year
2024 of 2.86Mt,
up 73% from the
previous year.
Record total coal
sales for financial
year 2024 of 1.94Mt,
up 154% from the
previous year.
Execution of a
Heads of Agreement
with our senior and
subordinated lenders,
agreeing to enter
into long form
agreements to
amend their respective
loan facilities.
Operations
Review
BOWEN COKING COAL | ANNUAL REPORT 2024
8
All of the key infrastructure refurbishments were completed in the previous year and have performed well, requiring no additional
significant capital spend during the 2024 financial year. The Burton CHPP’s availability increased to an average of 95% during the
June quarter of 2024, along with improved utilisation recorded of 86%, both measures being higher than the prior March 2024 quarter.
OPEN
CUT
LOCATION
150KM SOUTHWEST
OF MACKAY, BOWEN
BASIN, QUEENSLAND
TENEMENTS
ML 700053, ML 70337,
ML 700054, ML 70109,
ML 70260, EPC 766,
EPC 1675, EPC 865,
EPC 857, MDL 349,
MDL 315
COAL TYPE
COKING COAL
WITH SECONDARY
THERMAL
TOTAL RESOURCE
BURTON 108MT
LENTON 140MT
OWNERSHIP
90%
PROJECT BURTON
COMPLEX
BOWEN COKING COAL | ANNUAL REPORT 2024
9
Ellensfield South Mine
Managed Production
Total
FY2024
Total
FY2023
ROM Coal Mined
Kt
1,305.8
0.0
ROM Strip Ratio
Prime
12.9
0.0
Saleable Coal Produced
Kt
662.3
0.0
Sales of Produced Coal
Kt
476.1
0.0
Sales of Third Party Purchased Coal
Kt
7.1
0.0
Total Coal Sales
Kt
483.2
0.0
Saleable Coal Stocks at period end
Kt
140.9
0.0
ELLENSFIELD SOUTH MINE
The Ellensfield South Mine continued in its box cut development phase
for majority of the financial year, mining first coal in August 2023 and
reaching steady-state production target during the June 2024 quarter.
The ROM strip ratio for the Burton Complex (comprising both
Broadmeadow East and Ellensfield South mines) achieved a record
low strip ratio of 6.7:1 (BCM/t) during the June 2024 quarter, signalling
a strong and stable operating platform. The Group announced plans
to commence development of a nearby third open cut pit at the Burton
Complex during the 2025 financial year, called Plumtree North, which
is planned to complement ROM coal flow as the Ellensfield South Mine
is depleted in the 2025 financial year.
The Burton Complex CHPP has the capability to double its feed
throughput capacity to 5.5Mt by bringing the second module of the
plant into operation, at an estimated capital cost of $12.0 million to
$15.0 million1.
1. Refer ASX release Investor Presentation June 2024 Quarterly Update dated 29 July 2024.
2. Refer ASX announcement dated 1 November 2023: Lenton Deposit Coal Reserve Update.
3. Refer ASX announcement dated 4 August 2021: Transformational Acquisition and Equity Capital Raising.
LENTON DEPOSIT
Lenton is an undeveloped open-cut deposit in the north-western part
of the greater Burton Complex, of which the Company holds a 90%
interest through its wholly owned subsidiary, New Lenton Coal Pty Ltd.
In November 2023, the Company announced a Coal Reserve upgrade
for its Lenton Deposit. Total coal Reserves increased to 19Mt2 (13Mt
proved and 5.8Mt probable) at 6% total moisture, which is a 32%
increase on the previous declared Reserves. The proposed pits at
Lenton, once operational, will produce low ash metallurgical coal and
moderately high ash thermal coal.
Total Marketable Coking Coal Reserves are 6.6Mt (4.4Mt proved
and 2.2Mt probable) at 10% total moisture, with the total Marketable
Thermal Coal Reserves at 6.1Mt (4.1Mt proved and 2.0Mt probable) at
9.3% total moisture, representing an upgrade of 18%11 for Marketable
Coal. The average strip ratio for the deposit is planned at 7.5:1 (BCM:t)
over a mine life of 13 years. The total coal Resource at Lenton Deposit
is 140Mt.3
PROJECT BURTON
COMPLEX
BOWEN COKING COAL | ANNUAL REPORT 2024
10
Broadmeadow East Mine
Managed Production
Total
FY2024
Total
FY2023
Change
%
ROM Coal Mined
Kt
1,211.2
1,177.2
2.9%
ROM Strip Ratio
Prime
8.2
9.4
13.2%
Saleable Coal Produced
Kt
958.4
647.9
47.9%
Sales of Produced Coal
Kt
1,073.0
478.8
124.1%
Sales of Third Party Purchased Coal
Kt
0.0
29.2
(100.0%)
Total Coal Sales
Kt
1,073.0
508.0
111.2%
Saleable Coal Stocks at period end
Kt
25.0
170.9
(85.4%)
OPEN
CUT
LOCATION
25KM NORTHEAST OF
MORANBAH, BOWEN
BASIN, QUEENSLAND
TENEMENTS
ML 70257
COAL TYPE
COKING COAL
WITH SECONDARY
THERMAL
TOTAL RESOURCE
30MT
OWNERSHIP
100% – 10% SALE
COMPLETED AFTER
END OF FINANCIAL
YEAR.
The Broadmeadow East mine was
an undeveloped asset purchased
from Peabody Australia in 2020.
Coal production started in July 2022
and was initially processed through
neighbouring mine Carborough
Downs CHPP under a coal
washing and infrastructure sharing
arrangement with Fitzroy Australia.
Processing transitioned through
the nearby Burton CHPP, post
refurbishment. BUMA Australia was
appointed as the mining services
contractor. Up to three fleets at the
mine produced a mix of low-volatile
hard coking coal and thermal coal
for export markets.
The decision to pause the
Broadmeadow East Mine followed
a detailed strategic review by the
Company of its portfolio which
included a strict capital allocation
assessment. Due to an uneconomic
sum of capital expenditure
required to move the powerline
currently traversing the mining
lease, the asset was placed in care
and maintenance in May 2024.
The Company retains optionality
to return to Broadmeadow East on
a reasonably quick restart basis
should an economic solution for the
powerline infrastructure relocation
be secured.
PROJECT BROADMEADOW EAST
COKING COAL PROJECT
BOWEN COKING COAL | ANNUAL REPORT 2024
11
The Bluff mine was acquired in late 2021. Operations restarted in April
2022 and achieved its first coal shipment in just under four months.
Bluff’s coal was processed at the nearby Cook Colliery CHPP under
an agreement with the QCoal Group. Customer demand was strong
for Bluff’s ultra-low volatile PCI product due to its low ash content
and high energy properties, with shipments exported to tier 1 steel
producers in South East Asia.
Bluff Mine
Managed Production
Total
FY2024
Total
FY20231
Change
%
ROM Coal Produced
Kt
345.6
481.5
(28.2%)
ROM Strip Ratio
Prime
13.8
21.0
34.3%
Saleable Coal Produced
Kt
323.7
327.3
(1.1%)
Sales of Produced Coal
Kt
388.6
281.6
38.0%
Sales of Third Party Purchased Coal
Kt
34.5
6.0
472.2%
Total Coal Sales
Kt
423.2
287.6
47.1%
Saleable Coal Stocks at period end
Kt
0.0
60.7
(100.0%)
1. Prior year comparatives restated for minor amendments.
OPEN
CUT
LOCATION
20KM EAST OF
BLACKWATER,
BOWEN BASIN,
QUEENSLAND
TENEMENTS
ML80194, EPC 1175,
EPC 1999
COAL TYPE
ULTRA-LOW
VOLATILE
PULVERISED COAL
INJECTION (ULVPCI)
TOTAL RESOURCE
12MT
OWNERSHIP
100%
A series of operational challenges including significant pit dewatering,
wet weather impacts, and poor contractor performance impeded the
ability for Bluff to achieve planned steady-state mining volumes. The
asset incurred significant operating losses and drew heavily on the
Group’s funding sources. The rapid decline of PCI coal prices from
April 2023 coincided with higher costs, and the introduction of a new
Queensland State Royalty tax regime just as the Bluff Mine restarted
production. Consequently, the Company made the decision to place
the asset into care and maintenance in November 2023. Since final
coal sales in March 2024, Bluff’s holding costs have been reduced as
far as possible.
PROJECT BLUFF MINE
BOWEN COKING COAL | ANNUAL REPORT 2024
12
Bruce Hwy
Peak Downs Hwy
GLADSTONE
Duaringa
Dululu
Dingo
EMERALD
CLERMONT
MACKAY
ROCKHAMPTON
Marlborough
Moranbah
Glenden
Dysart
Railway
Major Road
Bowen Tenements
Mine
Proposed mine
0
50km
N
Brisbane
QLD
Dalrymple Bay
Coal Terminal
RG Tanna
Coal Terminal
Wiggins Island
Coal Terminal
HILLALONG
85% BCB | 15% Sumitomo
Open Cut
-
Total Resources 87Mt
CARBOROUGH
LENTON
90% BCB | Open Cut
Open Cut
-
Total Resources 140Mt
Total Reserves 14MT
BURTON
90% BCB | Open Cut
-
Total Resources 65Mt
Total Reserves 16MT
BROADMEADOW EAST
100% BCB | Open Cut
-
Total Resources 32Mt
Total Reserves 3MT
ISAAC RIVER
100% BCB | Open Cut
-
Total Resources 9Mt
LILYVALE
15% BCB | 85% SMR
Underground
-
Total Resources 33Mt
MACKENZIE RIVER
5% BCB | 95% SMR
Open Cut
-
Total Resources 143Mt
COOROORAH
100% BCB | Underground
-
Total Resources 177Mt
BLUFF
100% BCB | Open Cut
-
Total Resources 13Mt
COMET RIDGE
100% BCB | Open Cut
-
Total Resources 60Mt
Haul Road
PROJECT HILLALONG
COKING COAL
TENEMENTS
EPC 1824 & EPC 2141
The Company’s ownership in the Hillalong Coal Project is 85% and the
balance of 15% is held by Sumitomo Corporation, with Sumitomo’s
interest in the project due to increase a further 5%, once the Phase 2b
Exploration Work Program has been completed.
The current exploration program is focused on the Hillalong South
area to further define the 64Mt Resource as announced 9 August
20231 (35Mt indicated and 28Mt inferred category) through a series of
infill drill holes and extensions to the north and west, which has been
completed. Results from this drilling program are expected towards
the end of the calendar year 2024 and will be used to update the
geological model and inform pre-feasibility study.
Hillalong is planned to operate as a satellite pit within the Burton
Complex with coal processed through the Burton CHPP’s common
infrastructure.
1. Refer ASX release dated 9 August 2023: “Shipping Update and Hillalong South Resource Upgrade”. In accordance with ASX Listing Rule 5.23, the Company confirms
that it is not aware of any new information or data that materially affects information included in the cited ASX release and that in respect of the Mineral Resources
referenced in that release, all material assumptions and technical parameters continue to apply and have not materially changed.
2. Refer ASX release dated 28 July 2021: “Production Targets for Broadmeadow East and Isaac River”. In accordance with ASX Listing Rule 5.19, the Company confirms
that all the material assumptions underpinning the production target in the cited ASX release continue to apply and have not materially changed.
PROJECT ISAAC RIVER
COKING COAL
TENEMENTS
MDL 444, EPC 830,
MLA 7000062
Grant of the Isaac River Mining Lease is in the final phase with the
application at decision assessment. The Isaac River Project once
operational will produce up to 500,000 tonnes of high quality, high
yielding metallurgical coal for approximately five years2. The Company
continues to explore the merits of a potential sale of Isaac River as it
focusses on its low cost, longer life Burton Lenton assets.
BOWEN COKING COAL | ANNUAL REPORT 2024
13
DIRECTORS’
REPORT
BOWEN COKING COAL | ANNUAL REPORT 2024
14
BOWEN COKING COAL | ANNUAL REPORT 2024
15
Directors’
Report
The Directors of Bowen Coking Coal Limited (the Company) present their report together with the financial statements of the Consolidated Entity
(the Group), being the Company and the entities it controlled, for the period ended 30 June 2024.
DIRECTORS
The following persons were directors of Bowen Coking Coal Limited during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Nicholas Jorss
Executive Chairman
Neville Sneddon
Non-Executive Director
David Conry AM
Non-Executive Director (resigned 22 August 2024)
Malte von der Ropp
Non-Executive Director (appointed 8 April 2024)
Gerhard Redelinghuys
Executive Director (resigned 23 August 2023)
Matthew Latimore
Non-Executive Director (resigned 25 July 2023)
Stephen Downs
Alternative Director for Matthew Latimore (resigned 25 July 2023)
INFORMATION ON DIRECTORS AND EXECUTIVES
The board has a strong combination of technical, managerial and capital markets experience. Expertise and experience include coal exploration, coal
mining development and operations, as well as financial markets and capital structuring. The names and qualifications of the current directors are
summarised as follows:
NICHOLAS JORSS
EXECUTIVE CHAIRMAN
QUALIFICATIONS:
BE (HONS) CIVIL, MBA, GDIP APP FIN (SEC INST)
APPOINTMENT DATE: 12 DECEMBER 2018
LENGTH OF SERVICE: 5.8 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: BALLYMORE RESOURCES LIMITED
FORMER ASX LISTED DIRECTORSHIPS: NIL
Nicholas Jorss was the founding Managing Director of Stanmore Resources Ltd (via St Lucia). Nicholas 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. Nicholas Jorss was instrumental in the success of Stanmore Resources Ltd, which currently has a market value of around
$3.0 billion. As the Founding Managing Director, Nicholas 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 Nicholas Jorss was an engineer with Baulderstone Hornibrook where he delivered significant infrastructure and resource projects over a
period of approximately 8 years. Nicholas Jorss is a founding shareholder and Director of 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.
Nicholas Jorss is also a founder and the Chairman of Coal Australia Limited, a not-for-profit membership organisation whose purpose is to promote
the significant and positive contribution of the Australian coal industry. Nicholas 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.
BOWEN COKING COAL | ANNUAL REPORT 2024
16
Directors’
Report
NEVILLE SNEDDON
INDEPENDENT NON-EXECUTIVE DIRECTOR
QUALIFICATIONS:
B. ENG (MINING)(HONS), M. ENG, MAUSIMM, GRAD AICD
APPOINTMENT DATE: 12 DECEMBER 2018
LENGTH OF SERVICE: 5.8 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: NIL
FORMER ASX LISTED DIRECTORSHIPS: NIL
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, Neville 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, Neville 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. Neville 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.
Neville Sneddon is on the Company’s Audit & Risk Management and chair of the Nomination & Remuneration Committees.
DAVID CONRY AM
INDEPENDENT NON-EXECUTIVE DIRECTOR
QUALIFICATIONS:
AICD, HARVARD BUSINESS SCHOOL
APPOINTMENT DATE: 23 JUNE 2023
RESIGNATION DATE:
22 AUGUST 2024
LENGTH OF SERVICE: 1.2 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: NIL
FORMER ASX LISTED DIRECTORSHIPS: AUSTRALIAN PACIFIC COAL LIMITED
David Conry AM is an experienced company director and senior executive, who has held several board roles in the private and public sectors and for
all three levels of government. David Conry AM has experience in the mining industry, strategy and communication, corporate administration, finance
and compliance as well as private and executive interests in investment and advisory services.
Most recently, David Conry AM was Chairman and Chief Executive Officer of Australian Pacific Coal Limited where he oversaw the successful
application to extend the mining lease of the company’s primary underground asset at Dartbrook in the Hunter Valley. Prior to his retirement from
this role the company announced a joint venture that would see the mine work toward recommencing operations from care and maintenance.
This, together with complete debt repayment including a $100.0 million recapitalization added significantly to the company’s value over the period
of his tenure.
David Conry AM served as chair of the Company’s Audit & Risk Management and on the Nomination & Remuneration Committee.
BOWEN COKING COAL | ANNUAL REPORT 2024
17
Directors’
Report
MALTE VON DER ROPP
INDEPENDENT NON-EXECUTIVE DIRECTOR
QUALIFICATIONS:
MBA
APPOINTMENT DATE: 8 APRIL 2024
LENGTH OF SERVICE: 0.4 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: NIL
FORMER ASX LISTED DIRECTORSHIPS: NIL
Malte von der Ropp holds positions on supervisory and advisory boards for companies operating in the European technology arena, offering his
expertise in investment analysis and organizational supervision. As Managing Director at venturecapital.de VC GmbH & Co. KGaA in Frankfurt
am Main, he has steered a diverse array of technology-focused investments, both in the early and later stages, facilitating the growth and
diversification of the fund’s portfolio.
In earlier roles, he played a significant part on the supervisory and advisory boards of companies such as amaysim Australia Pty Ltd, which undertook
an IPO in 2015 on the ASX, and Brille24 GmbH/Tejado GmbH, later acquired by the industry leader, Essilor Luxottica. Notably, the unparalleled leader
in electronic sports, Turtle Entertainment/Electronic Sports League (ESL), was also within the portfolio of venturecapital.de prior to its acquisition
by the Swedish-based Modern Times Group. As the Senior Vice President at Corporate Finance Partners CFP Beratungs – GmbH in Frankfurt,
Germany, Mr von der Ropp was involved in a multitude of transactions in the Technology, Media and Telecom sector, advising clients on capital
raises, trade sales, initial public offerings, and public takeovers.
Malte von der Ropp is on the Company’s Audit & Risk Management and Nomination & Remuneration Committees.
GERHARD REDELINGHUYS
EXECUTIVE DIRECTOR
QUALIFICATIONS:
B. COMM. ACC, HONS, B. COMPT, GAICD
APPOINTMENT DATE: 29 SEPTEMBER 2017
RESIGNATION DATE:
23 AUGUST 2023
LENGTH OF SERVICE: 5.9 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: NIL
FORMER ASX LISTED DIRECTORSHIPS: NIL
Gerhard 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, Gerhard 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.
Gerhard Redelinghuys is also a graduate member of the Australian Institute of Company Directors.
MATTHEW LATIMORE
NON-EXECUTIVE DIRECTOR
QUALIFICATIONS:
EXECUTIVE EDUCATION PROGRAM, M.BUS. (EXECUTIVE),
ADV. DIP. OF LEADERSHIP AND MANAGEMENT, B.I.B
APPOINTMENT DATE: 17 JUNE 2020
RESIGNATION DATE:
25 JULY 2023
LENGTH OF SERVICE: 3.1 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: STANMORE RESOURCES LIMITED,
MAGNUM MINING AND EXPLORATION LTD
FORMER ASX LISTED DIRECTORSHIPS: NIL
Matthew Latimore is the President and Founder of M Resources Pty Ltd, 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. Matthew 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, as well as rail, port, coal quality and finance functions. Matthew Latimore was a
Director of Curragh Coal Sales. Prior to joining Wesfarmers in early 2001, Matthew Latimore held various positions with Mitsui & Co (Australia) Pty Ltd.
BOWEN COKING COAL | ANNUAL REPORT 2024
18
Directors’
Report
STEPHEN DOWNS
ALTERNATIVE DIRECTOR
FOR MATTHEW LATIMORE
QUALIFICATIONS:
B. ENG (ELECTRICAL), MBA
APPOINTMENT DATE: 4 NOVEMBER 2022
RESIGNATION DATE:
25 JULY 2023
LENGTH OF SERVICE: 0.7 YEARS
CURRENT ASX LISTED DIRECTORSHIPS: NIL
FORMER ASX LISTED DIRECTORSHIPS: NIL
Stephen Downs is a project management professional with extensive experience delivering mining and large infrastructure projects. In the past
20 years, he has delivered over $1.0 billion in capital projects, regulatory approvals for mining leases and due-diligence reviews on mining assets.
Stephen Downs has previously served as Chief Operating Officer M Mining, which is the operator of Millennium Mine.
DARYL EDWARDS
CHIEF EXECUTIVE OFFICER
APPOINTMENT DATE:
2 FEBRUARY 2021 (CHIEF FINANCIAL OFFICER)
APPOINTMENT DATE:
29 JANUARY 2024 (CHIEF EXECUTIVE OFFICER)
LENGTH OF SERVICE:
3.6 YEARS
Daryl Edwards is a Chartered Accountant with over 25 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 4.0 million tonnes per annum (Mtpa) Kangala Colliery and the 3.3Mtpa
New Clydesdale Colliery. Previously, Daryl Edwards was CFO at Asenjo Energy, a Botswana-based coal exploration and development company, held
privately by Aquila Resources, Sentula Mining and Jonah Capital.
MARK RUSTON
CHIEF EXECUTIVE OFFICER
APPOINTMENT DATE:
27 MARCH 2023
RESIGNATION DATE:
25 MAY 2024
LENGTH OF SERVICE:
1.2 YEARS
Mark Ruston is a mining executive with over 30 years of experience in coal and metalliferous open pit and underground operations, across Australasia
and Africa, both for mining contractors and principals.
Mark Ruston is a highly accomplished executive having recently held General Manager roles for Thiess, Golding Contractors, Baralaba Coal Company
and Macmahon Holdings. He has a demonstrated track record of maximising all areas of operational performance, contractor management and new
project integration.
He holds a Bachelor of Engineering (Civil) (Monash University), a Graduate Diploma of Mining (University of Ballarat) and a MBA from Latrobe
University (Dean’s Award – Academic Performance). Mark has also served as an alternate director on the Queensland Resources Council and served
on the Monash University Resources Engineering Board.
DUNCAN CORNISH
COMPANY SECRETARY
APPOINTMENT DATE:
1 MAY 2019
LENGTH OF SERVICE:
5.4 YEARS
Duncan 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 2024
19
Directors’
Report
INTEREST IN SECURITIES
As at the date of this report, the interests of each (current) director in shares and options issued by the Company are shown in the table below:
Directors
Shares
Options
Performance
rights
Nicholas Jorss
62,195,796
25,000,000
15,000,000
Neville Sneddon
8,362,863
10,500,000
–
David Conry AM1
–
7,500,000
–
Malte von der Ropp
325,000
7,500,000
–
1. Reflects options held by David Conry AM at date of resignation on 22 August 2024.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors (‘the Board’) held during the year ended 30 June 2024, and the number of meetings
attended by each director were:
Full Board
Audit & Risk Management
Committee
Nomination & Remuneration
Committee
Held
Attended
Held
Attended
Held
Attended
Nicholas Jorss
12
10
–
–
–
–
Neville Sneddon
12
11
1
1
3
3
David Conry AM
12
12
1
1
3
3
Malte von der Ropp
4
4
–
–
1
1
Gerhard Redelinghuys
2
2
–
–
–
–
Matthew Latimore
1
–
–
–
–
–
Stephen Downs
1
–
–
–
–
–
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
It is noted that the Directors were also 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.
PRINCIPAL ACTIVITIES
During the period, the principal continuing activities of the Group consisted of the exploration, development and production activities at the
consolidated entity’s mining tenements situated in Queensland, Australia, with a primary focus on metallurgical coal. The Group also continues
to review potential future projects and conduct exploration activity.
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
There were no dividends paid, recommended or declared during the current or previous financial year.
BOWEN COKING COAL | ANNUAL REPORT 2024
20
Directors’
Report
CORPORATE
EQUITY RAISING
In July 2023, the Company completed the $4.3 million remainder (before transaction costs) of its June 2023 capital raise which included $2.2 million
of director participation. A total of 25,489,047 ordinary shares were issued at the issue price of $0.17.
In November 2023, the Company completed a fully underwritten $56.8 million (before transaction costs) capital raising with funds primarily directed to
the ramp up of mining (completion of box cut activities) at the Ellensfield South Pit, prepayments, guarantees, and general working capital. The capital
raising consisted of a fully underwritten offer of fully paid ordinary shares issued at a price of $0.09 with:
• $33.8 million raised through a fully underwritten placement of 375,040,092 new fully paid ordinary shares on 13 November 2023;
• $16.2 million raised through a rights issue of 180,515,463 shares completed by 27 November 2023; and
• $6.7 million raised through a retail underwriting top up of 75,028,667 shares on 4 December 2023.
SECURED FINANCING FACILITIES
REVISED DEBT TERMS – TAURUS AND NEW HOPE
In September 2023, Bowen renegotiated key terms with its senior and subordinated lenders, Taurus Mining Finance Fund No. 2, L.P. and New Hope
Corporation respectively, amending the loan facilities. The material amendments include extension of tenor, deferment of principal amortisation for
the next 12 months and a modest increase in interest margins and royalties payable. The extended maturities provided headroom for the Company’s
debt repayment while focusing on getting to steady-state production rates at the Ellensfield South Mine.
TAURUS DEBT FACILITY
Changes to the Taurus debt facility of US$51.0 million (A$77.0 million) included an extension to loan termination date to 31 December 2025 (previously
31 March 2024) and revised repayment profile. The facility interest rate (paid quarterly) increased to 10.0% (previously 8.0%) on the facility drawn
balance of US$44.0 million, with the remaining US$7.0 million credit line unchanged at an interest rate of 10%. In addition, royalties increased for
both the Broadmeadow East and Burton tenements (now 0.75%, previously 0.35%). Bluff royalties were unchanged at 1.00%.
NEW HOPE PERFORMANCE BONDING FACILITY
Changes to the New Hope performance bonding subordinated debt facility included an extension to the loan termination date to 31 March 2026
(previously 30 June 2024) and a Share Purchase Agreement (summarised below). The interest rate of 3-month BBSY Bid plus 10% per annum
was unchanged.
Key terms of the Company’s and New Hope’s share purchase agreement are:
• 76,923,076 shares at exercise price of $0.13 per share used to immediately repay $9.1 million of historical capitalised interest and accrued interest
owing on the New Hope facility up to 29 September 2023 as well as $0.9 million towards principal loan repayment.
• Future interest repayments on the facility up to 30 September 2024 are planned to be settled in quarterly warrants (derivative liability) tranches of
25,000,000 each. The 100,000,000 of warrants were subject to shareholder approval and issued at $0.1144. These warrants, when exercised in
full, constitute 100,000,000 shares.
No warrants were exercised during the financial year ended 30 June 2024.
REVIEW OF FINANCIAL RESULTS
Although the Group generated operating losses during the 2024 financial year, focusing on the development of the Ellensfield South Mine delivered
higher average achieved realised sales prices and significantly lowered free on board (FOB) cost per tonne, due to the operation’s attractive low strip
ratio. The Group’s results in terms of operating loss and cash generated from operating activities improved in the second half of the financial year post
the transition of the Bluff Mine into care and maintenance from November 2023. With steady-state mining rates achieved at the Burton complex, the
Group is well set up to deliver consistent coal production and drive improved financial performance for the next financial year.
The Group’s financial highlights for the year ended 30 June 2024 are described below, all of which have improved from the previous comparative
period except for the closing cash balance on hand:
• Revenues and other income of $450.2 million (2023: $209.9 million), 114% improvement;
• Operating loss before income tax and net finance expenses of $68.8 million (2023: $152.8 million), 55% improvement;
• Loss after income tax expense of $95.5 million (2023: $162.9 million), 41% improvement;
• Cash used in operating activities of $5.0 million (2023: $105.1 million), 95% improvement and
• Closing cash on hand of $21.7 million (2022: $48.9 million), 56% reduction.
BOWEN COKING COAL | ANNUAL REPORT 2024
21
Directors’
Report
FINANCIAL PERFORMANCE
The Group’s operating loss for the year ended 30 June 2024 totalled $68.8 million driven primarily by the under-performing Bluff Mine, with
$54.6 million of the loss already incurred by the 31 December 2023 half year. While the Group’s financial performance started to turn around in the
second half of the financial year after Bluff transitioned into care and maintenance, it was offset by steeply falling coal prices – the hard coking coal
premium low volatile (PLV) price decreased 27% from US$324/t at the end of December 2023 to US$234/t at June 2024 close, which has severely
impacted profit margins given the weighting of metallurgical coal in the Group’s product mix. Thermal coal prices fluctuated less over the same
period, with API 5500 NAR index (applicable to the Group’s thermal product) closing at US$87/t in June 2024 compared to US$94/t at the end
of December 2023.
Summary of average realised coal prices:
Managed Sales of Produced Coal
Total
FY2024
Total
FY2023
Change
%
Coking Coal Sales
Kt
705.8
0.0
100.0%
PCI Coal Sales
Kt
416.0
281.6
47.7%
Thermal Coal Sales
Kt
816.0
478.8
70.4%
Total Managed Produced Coal Sales
Kt
1,937.8
760.4
154.8%
Volume Mix of Coking Sales
%
36.4%
0.0%
100.0%
Volume Mix of PCI Sales
%
21.5%
37.0%
(42.0%)
Volume Mix of Thermal Sales
%
42.1%
63.0%
(33.1%)
Average Realised Sales Price1
Coking Coal Realised Price
US$/t
$212.9
$0.0
100.0%
PCI Coal Realised Price
US$/t
$174.0
$238.2
(27.0%)
Thermal Coal Realised Price
US$/t
$92.1
$149.8
(38.5%)
Total Average Realised Price
US$/t
$153.7
$182.6
(15.8%)
Vessels dispatched2
39
15
24
1. Refers to average realised coal price achieved as recognised on accounting revenue basis, during the period.
2. Number of shipments dispatched, during the period.
The Group benefited from the introduction of coking coal volumes from the Burton Complex from 1 July 2023, post the successful recommissioning
of the Burton CHPP from care and maintenance state. Total metallurgical coal mix, inclusive of Bluff PCI product, comprised 58% of the sales mix for
2024 (2023: 37%). However declining coal prices resulted in the overall average realised coal price for the Group decreasing almost 16% year on year,
despite the favourable coking coal mix.
Bluff’s losses were driven by operational challenges including significant pit dewatering, wet weather impacts and contractor performance which
impeded the ability for Bluff to achieve planned steady-state mining volumes, ultimately leading to the decision to place the asset into care and
maintenance in November 2023.
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Summary of Group’s financial performance for each project:
On Managed Basis
A$ whole dollars unless indicated
Bluff
Broadmeadow
East
Ellensfield South
Total Mining
Operations
Sales Revenue
103,818,080
227,475,445
110,564,722
441,858,247
Other Income
249,699
41,290
8,058,137
8,349,126
Total Revenue A$
104,067,779
227,516,735
118,622,860
450,207,373
Total Sales Volumes (Kt)
388.6
1,073.0
428.5
1,890.2
Average Realised Sales Price A$/tonne sold
$267.13
$212.00
$258.02
$233.77
Total FOB1 Cost excluding Royalties A$
109,821,502
182,720,896
132,347,995
424,890,393
Royalties Expense A$
16,891,413
26,933,280
16,391,178
60,215,871
Total FOB1 Cost including Royalties A$
126,712,915
209,654,176
148,739,173
485,106,264
FOB Cost excluding royalties A$/tonne sold
$282.58
$170.29
$308.85
$224.79
FOB Cost including royalties A$/tonne sold
$326.04
$195.39
$347.11
$256.65
EBITDA A$ from Mining Operations A$
(22,645,136)
17,862,560
(30,116,314)
(34,898,890)
EBITDA from Corporate/Other A$
(12,210,247)
Total Underlying Group Consolidated EBITDA2
(47,109,137)
1. Free on Board (FOB) cost includes all operating, logistics, sales related costs and coal inventory movement.
2. Refer to the below reconciliation from statutory EBITDA (earnings before interest, tax, depreciation and amortisation) to underlying EBITDA being an unaudited,
non-IFRS measure.
Underlying EBITDA result (unaudited, non-IFRS measure)
30 June 24
Net profit after tax
(95,456,843)
Add back:
Depreciation and amortisation expense
32,108,146
Income tax expense
–
Finance costs – net
28,890,614
Earnings before interest, tax, depreciation and amortisation (EBITDA)
(34,458,082)
Onerous Contract Adjustment
(12,995,612)
Foreign exchange losses
(1,927,812)
Share of profit/(loss) of joint ventures accounted for using equity method
2,272,369
Underlying EBITDA (non-IFRS measure)
(47,109,137)
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Underlying EBITDA (an unaudited, non-IFRS measure) reflects statutory EBITDA which is reflective of the Group’s assessment of performance from
the current operations. The items adjusted are determined to be primarily non-cash transactions.
Broadmeadow East Mine made positive EBITDA for the 2024 financial year driven by strong production, sales volumes and a lower strip ratio of
8.4 favorably impacting unit costs. However, as the mining sequence was approaching a powerline which traverses the mining lease and required
significant capital cost to move, it was a natural point to pause the operations in May 2024. The Company is currently seeking an economic solution
to relocate the powerline infrastructure.
The Ellensfield South Mine delivered strong average realised coal sales prices from improved sales mix with a higher portion of low-volatile hard
coking coal produced. However, it generated negative EBITDA for the year, largely due to the delayed completion of box-cut development activity
and ramp-up to steady-state mining rates, which was achieved in the fourth quarter of 2024 financial year. The mine was also impacted by additional
costs associated with haul road rectification work for safety and compliance along with significant demurrage driven by system-wide logistical delays
getting coal to the port.
Overall, the investment into Ellensfield South has set-up the mine to be well positioned to deliver consistent coal volumes going forward at a very
attractive low strip ratio of 5:1 (BCM/t) for the mine’s remaining life.
CASH FLOW
While significantly improved from the prior comparative period, the Group’s net cash outflows of $5.0 million from operating activities included
$14.7 million of interest payments associated with servicing the Group’s debt arrangements. Additionally, $46.5 million in coal royalty taxes included
within the operating cash outflows were paid to the Queensland State during the 2024 financial year period.
Cash used in investing activities relates mainly to $80.0 million for Ellensfield South box-cut development costs. The mine reached steady-state
production rates during the June 2024 quarter and is well setup to deliver consistent coal volumes into the 2025 financial year, following the
development investment.
Net cash of $54.1 million from investing activities relates primarily to the capital proceeds from the equity raising activity undertaken by the Group
during the financial year, after associated transaction and debt refinancing costs.
Consolidated
30 June 2024
30 June 2023
Net cash at beginning of period
48,944,668
72,520,051
Net cash used in operating activities
(4,991,646)
(105,142,515)
Net cash used in investing activities
(78,701,663)
(100,363,586)
Net cash from financing activities
53,621,852
181,643,585
Effects of exchange rate changes on cash and cash equivalents
2,814,872
287,133
Net decrease in cash held
(27,256,585)
(23,575,383)
Net cash at end of period
21,688,083
48,944,668
FINANCIAL POSITION
At 30 June 2024, the Group’s net assets totalled $9.8 million (2023: $35.0 million) which included cash assets of $21.7 million (2022: $48.9 million),
$21.7 million in trade receivables and $27.0 million in coal inventories. The negative current liability position includes debt repayments on the senior
secured Taurus facility become due and payable within the next 12 months. The September 2023 refinancing and amendments to the secured loan
facilities provided significant headroom for the Group while it continued its development of the Ellensfield South Mine, however recent coal pricing
headwinds, continued higher input production costs along with the Queensland Government’s high taxing State royalties regime have resulted in
lower operating cash generation for the Group.
While the Group has completed the financial year on a stronger operating position having achieved steady-state mining rates at the Ellensfield South
Mine and Bluff placed into care and maintenance, in order to ensure the Group has sufficient liquidity, it is actively pursuing options to restructure its
current secured debts and is seeking funding assistance through debt deferral, deferral of Queensland Government royalty payments, and potentially
obtaining an equity injection or conducting an asset sale.
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CAPITAL STRUCTURE
As at 30 June 2024 the Company had 2,848,005,498 ordinary shares, 44,289,768 performance rights, 86,679,000 options, 100,000,000 warrants
and 40,000,000 Convertible Notes on issue.
During the year ended 30 June 2024, the following securities were issued:
• 25,489,047 Ordinary fully paid shares following placement on 24 July 2023 raising $4.3 million;
• 9,100,652 Performance rights were issued on 27 July 2023 to Company employees (pursuant to the Company’s Employee Equity Incentive Plan);
• 76,923,076 Ordinary fully paid shares issued to New Hope on 29 September 2023 to settle capitalised interest and principal on the bonding facility
as part of the September 2023 refinancing event with a total value of $12.3 million;
• 375,040,092 Ordinary fully paid shares issued following placements on 13 November 2023 raising $33.8 million;
• 180,515,463 Ordinary fully paid shares were issued following a Rights issue on 27 November 2023 raising $16.2 million;
• 75,028,667 Ordinary fully paid shares issued following placements during November 2023 and December 2023 with a total value of $6.8 million;
• 22,500,000 Performance rights were issued on 29 April 2024 to the Chief Executive Officer;
• 30,000,000 Options were issued on 29 April 2024 to the Chief Executive Officer and Management;
• 4,512,322 Ordinary fully paid shares following the exercise of performance rights during October 2023, November 2023, December 2023,
February 2024 and May 2024;
• 15,000,000 Performance rights were issued on 27 June 2024 to Directors;
• 37,500,000 Options were issued on 27 June 2024 to Directors.
TREASURY POLICY
The Board has overall oversight of the Group’s treasury activities, including cash flow management, foreign currency risk mitigation and compliance
and management of the Group’s finance facilities. During the period the Group undertook foreign exchange hedging to protect its exposure to
movements in the AUD:USD FX rate, given it earns revenue in United States Dollar and settles majority of its operating costs in Australian Dollar.
LIQUIDITY AND FUNDING
Subject to the matters disclosed in note 1 of the consolidated financial statements, the Group anticipates that it has sufficient funds to continue
operational activities as well as conduct exploration activities, as necessary.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
10% SALE OF BME MINE TO FORMOSA
On 5 July 2024, Bowen Coking Coal Ltd and MPC Lenton Pty Ltd (MPC), a wholly-owned subsidiary of the Formosa Plastics Group, successfully
completed the transaction which was announced to the ASX on 11 July 2023: the acquisition by MPC of a 10% interest in the Broadmeadow East
Mine for cash plus royalties. Until this transaction, Broadmeadow East was a 100% owned project of the Company’s wholly-owned subsidiary Coking
Coal One Pty Ltd (CCO).
Completion followed the successful achievement of conditions precedent, including FIRB approval and State Minister for Resources approval.
A significant driver of the transaction was for the Broadmeadow East Mine to become an asset of the Lenton Joint Venture, given the close proximity
of that mine to the Burton Mine Complex and expected synergies from operating the assets together. The Burton Mine Complex is owned and
operated by the Lenton Joint Venture, in which BCB indirectly holds a 90% interest and MPC holds a 10% interest. The assets of the Lenton Joint
Venture include the Burton Coal Handling and Processing Plant, the Mallawa Train Loadout Facility and Haul Road, the Kerlong Accommodation
Village and, in the future, the Lenton Joint Venture’s Lenton Coal Project.
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The transaction which has now been completed to achieve the above has been varied in its structuring from that originally planned and announced.
CCO sold a 10% interest in the Broadmeadow East Mine to MPC as originally envisaged. However, instead of CCO selling a 90% interest in the
Broadmeadow East Mine to its sister Company New Lenton Coal Pty Ltd (NLC), CCO has retained that interest and NLC, CCO and MPC are now
participants in an unincorporated joint venture in respect of both the Burton/Lenton Project and the Broadmeadow East Mine and have dedicated
their interests in the respective assets of that Project and Mine to the joint venture. Amendments will be made to the Lenton Joint Venture Agreement
to reflect the new arrangements.
As announced on 11 July 2023, the agreed Effective Economic Date of the transaction was 1 May 2023.
The financial terms of the consideration to be paid by MPC are as previously announced. There are two primary elements:
a. A$13 million cash on Completion. This amount was received by the Company on 5 July 2024.
b. A royalty of A$2.10 per ROM tonne of MPC’s share of production from the Broadmeadow East Mine on a quarterly basis in the period from
1 May 2023 to 31 December 2026, provided that in that Quarter a defined weighted average coal price index exceeds a threshold (and subject
to an annual reconciliation and true-up process). The thresholds which apply are based on blended (thermal/coking) coal price indices and are
US$188 in calendar 2023, US$169 in 2024, US$151 in 2025 and US$142 in 2026. The thresholds in the Quarters between 1 May 2023 and
Completion were not exceeded, so no acquisition royalty was paid.
Consistent with the Group’s senior debt facility documentation (the Taurus facility), the Company has utilised US$7 million (A$10.6 million) of the sale
proceeds to repay a portion of the Taurus facility, reducing the principal debt balance of the Taurus facility from US$51 million to US$44 million and
reducing the final debt repayment accordingly.
DEBT RESTRUCTURE
The Company has executed a Heads of Agreement with its senior and subordinated lenders, Taurus Mining Finance Fund No. 2, L.P. and New
Hope Corporation respectively, agreeing to amend their respective loan facilities, conditional on a minimum A$25 million equity raising. The material
amendments include extension of tenor, deferment of principal amortisation in respect of the Taurus facility so that the next payment is due at the
earlier of the end of March 2025 and the sale of the Isaac River Project and final repayment occurs in September 2026, substitution of obligations
to New Hope with cash or equity and a net decrease in interest margins and royalties payable. The extended maturities provide headroom for the
business, while the Company considers options to relieve working capital constraints.
OTHER EVENTS
Since 30 June 2024, the following securities were issued:
• Conversion of 1,173,625 of staff issued performance rights into ordinary shares.
On 22 August 2024, the Company announced that David Conry AM has tendered a resignation notice, resigning as a Non-Executive Director.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the Group’s operations,
the results of those operations, or the Group’s state of affairs in future financial years.
BUSINESS RISKS
The Company identifies and actively manages the material risks and internal control systems. The risk management framework is overseen by
Executive and the Board of Directors. The framework assists the organisation to identify, classify, document, manage and report on the risks facing
the Company. The perceived likelihood and potential consequence of each risk are used to determine the risk level, which in turn determines the
actions required to manage the risk and reporting obligations. The Audit and Risk Management Committee has performed the function of ensuring
that relevant risks have been recognised and has provided oversight of the risk management systems.
At the front-line operational level, all employees are required and empowered to identify and manage the risks that arise within their area of
responsibility. This governance structure supports the Company’s risk management framework and enables effective management of material risks.
The prospects of the Group in progressing their exploration and development projects and successfully operating mines 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. The risks described below are considered to have the greatest potential impact on the Group’s ability to
successfully execute its strategy, however additional or unknown risks not listed below may also have the ability to impair business operations.
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A summary of the significant risks facing the entity include the following:
Potential risks
Description
Current actions to manage
Funding
The Group’s ability to continue and grow its business may
be dependent upon several factors including restructuring of
its debt, speed of mine development activities, the ability to
manage working capital requirements, delivery of consistent
cashflows, successful mining operations, funding of 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
to execute its strategy and continue operating 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 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 credit 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.
Taking into account the level of coal product stocks, forecast
improved operational performance and recent cashflows
from coal sales, as well as the Group’s historical support from
major shareholders and its past ability to raise further capital
and restructure its debts, the Directors believe that the Group
will have adequate resources to fund its future operational
requirements.
The Group’s budgeting, forecasting and cashflow reports
assist in actively managing funding risks on a day-to-day
basis.
The Group also actively monitors market conditions and
explores opportunities to diversify funding sources, while
also maintaining active engagement with existing and future
potential providers of funding.
Social Licence
A number of stakeholders have varying interests in the
Group’s prospective areas of operations. The ability of the
Group to secure and undertake exploration and development
activities within those areas is reliant upon the adequate
acknowledgement of the interests of those stakeholders
and the satisfactory resolution of native title and (potentially)
overlapping tenure.
Failure to adequately acknowledge and address this risk
could negatively impact the operations of the Company, and
potentially result in an inability to secure, maintain or renew
the regulatory approvals required to continue operations.
To address this risk, the Group develops strong, long term
effective relationships with landholders with a focus on
developing mutually acceptable access arrangements.
This is supported by the Company’s induction and training
systems which educate personnel as to the stakeholder
interests and relevant requirements for access and
operations.
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.
Environment Management Systems are established at
Corporate and at the operations to assist in monitoring
compliance against relevant obligations.
Reviews, and inspections are undertaken regularly to ensure
the controls are operating as designed.
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Potential risks
Description
Current actions to manage
Safety
The Health and Safety of the Group’s employees and
contracting partners remains of critical importance in
the planning, organisation and execution of the Group’s
exploration, development, and operating activities.
Failure to provide adequate Safety and Health management
system could lead to the injury of employees and contractors
and as a consequence result in financial and reputational
losses from the shutdown of operations.
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.
The Group is committed to providing and maintaining a
working environment in which its people are not exposed to
hazards that will jeopardise an employee’s health and safety
or the health and safety of others associated with the Group’s
activities.
Development
and operating
The Group is planning to advance towards development of a
third open cut pit, Plumtree North, at the Burton Complex.
As a result, there are numerous mine development and
operating risks 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.
These risks may result in financial losses and/or cash flow risk
to the business.
The Group use highly experienced and reputable contractors
and other third parties for exploration, development, mining
and other general services, and are reliant on several third
parties for the success of the Group’s operations and the
development of growth projects.
While this is normal for the mining industry, problems caused
by third parties may arise, which may have an impact on the
Group’s performance and operations.
Executives and senior management closely oversee and
manage the operational activities at the Group’s projects to
ensure that third party providers perform as per expectations
and monitor compliance to the contract.
Additionally, the mines maintain operational risk registers
which outline their controls for managing the relevant risks
and this is communicated to the Board.
Geological
There is a risk of loss of coal resources, and/or material
inaccuracies in geological databases and supporting
information, as well as changes in geological structures which
may negatively impact the Group’s mining operations and
project financial viability.
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. 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 and become more defined as more detailed planning
is undertaken.
Exploration
The results of the exploration activities may be such that the
estimated resources are insufficient to justify the financial
viability of the projects and therefore impact longevity of
activities.
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 or suitably qualified senior
management of the Group to prepare JORC resource
statements.
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.
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Potential risks
Description
Current actions to manage
Market
In addition to the funding and finance risks noted above,
the Group is exposed to market risks relating to commodity
prices, interest rates and foreign currency which can result in
exploration, development and/or operating assets becoming
uneconomical.
The Group’s exposure to commodity price risk is
predominantly changes in metallurgical and thermal coal
prices, which are driven by various factors, including but not
limited to, changes in seaborne supply, geopolitical economic
activity, commodity substitution, international demand and
contract sales negotiations.
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, similar to other companies in this
industry.
The Group sells export coal in United States (US) dollar and
is therefore exposed to movements in currency rates. While
the Group has not historically entered into mechanisms to
hedge against coal price volatility and foreign currency risk,
it continuously reviews opportunities to implement such
options.
Insurance
There is a risk that the policies of financial institutions and
various markets with respect to the funding of coal projects,
may extend to an unwillingness to provide insurance products
to coal producers and associated companies or on terms that
are acceptable to the Group.
This could result in a material increase in the cost to the
Group of obtaining appropriate levels of insurance or the
Group being unable to secure adequate insurance cover.
While positive and proactive relationships are maintained
with the insurance market, opportunities exist for the Group
to continuously monitor the market with respect to insurance
products as well as undertake various improvement and
capital projects that lower the exposure and risk to a potential
significant business interruption event.
The Group also actively participates in a comprehensive
insurance program to ensure assets are insured for
appropriate value.
Other risks and opportunities that the Group actively monitors and manages revolve around cyber security and information systems, transportation
and logistics, and human resources.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Information on likely developments in the operations of the Group and the expected results of operations have not been included in this report
because the directors believe it would be likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL REGULATION
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.
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REMUNERATION REPORT (AUDITED)
The report details the nature and amount of remuneration for key management personnel remuneration of the Group. This report forms part of the
Directors’ Report and has been audited in accordance with section 300A of the Corporations Act 2001.
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
Executive Chairman
Neville Sneddon
Non-Executive Director
David Conry AM
Non-Executive Director (resigned 22 August 2024)
Malte von der Ropp
Non-Executive Director (appointed 8 April 2024)
Gerhard Redelinghuys
Executive Director (resigned 23 August 2023)
Matthew Latimore
Non-Executive Director (resigned 25 July 2023)
Stephen Downs
Alternative Director for Matthew Latimore (resigned 25 July 2023)
Daryl Edwards
Chief Executive Officer (appointed 29 January 2024), previously Chief Financial Officer.
Mark Ruston
Chief Executive Officer (resigned 25 May 2024)
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, 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.
During the reporting period, the Nomination & Remuneration Committee was 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. During the year the Nomination & Remuneration Committee engaged an independent remuneration consultant, AltoPartners Australia Pty
Ltd, to provide a remuneration benchmarking update. The Nomination & Remuneration Committee are satisfied the report received from AltoPartners
Australia Pty Ltd is free from undue influence from the KMP to whom the remuneration recommendations apply. The report provided input into
decision making only.
The Nomination & Remuneration Committee will continue to ensure that all engagements with independent external remuneration consultants,
and recommendations (if any) are free from undue influence. At times, remuneration consultants may be required to interact with management to
obtain relevant information required to form any remuneration recommendations. The Chair of the Nomination & Remuneration Committee will have
oversight of these interactions.
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. During the reporting
period nil shares and 46,600,652 performance rights which have various vesting conditions (including continuous employment) were issued to key
management personnel and staff (under the Company’s Employee and Executive Incentive Plan).
Long-term incentives are currently comprised of share options and performance rights, which are granted from time-to-time to encourage sustained
strong performance in the realisation of strategic outcomes and growth in shareholder value.
The exercise price of the options is determined after taking into account the underlying share price performance in the period leading up to the date
of grant and if applicable, performance conditions attached to the share options. Subject to specific vesting conditions, each option is convertible into
one ordinary share.
The Group’s policy for determining the nature and amount of remuneration of board members and key executives is set out below.
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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, excluding approved securities. 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 Non-executive Directors (Neville Sneddon, David Conry AM and Malte von der Ropp) received fees of an annual total value of $108,489 each,
including superannuation (where applicable) and excluding value of securities issued. The fees received by each Non-executive Director were pro-
rated where required for the period of time in which they served during the year ended 30 June 2024, as detailed in the tables below.
EXECUTIVE
The remuneration structure for executives is based on a number of factors, including length of service, particular experience that the executive brings,
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 an executive services agreement with Nicholas Jorss, the Company’s Executive Chairman. The current material
terms include:
• Notice period: The Company must give 4 months’ notice to terminate the agreement other than for cause. The executive must give 4 months’
notice to terminate the agreement.
• Remuneration: $541,106 per annum including superannuation.
• Discretionary benefits: Annual cash bonus up to 50% of gross salary can be earned on achieving certain performance metrics (at Board discretion).
• Following shareholder approval, a long-term incentive of 15,000,000 options was issued to Mr Jorss during the period.
• Following shareholder approval, a performance-based incentive of 15,000,000 performance rights, subject to achieving certain production and
share price performance hurdles, was issued to Mr Jorss during the period.
The Company has entered an executive services agreement with Daryl Edwards, the Company’s Chief Executive Officer (appointed 29 January 2024).
The current material terms include:
• Notice period: The Company must give 4 months’ notice to terminate the agreement other than for cause. The executive must give 4 months’
notice to terminate the agreement.
• Remuneration: $702,106 including superannuation per annum (effective from 29 January 2024).
• Discretionary benefits: Annual cash bonus up to 50% of gross salary can be earned on achieving certain performance metrics (at Board discretion).
• Performance rights of 568,386 issued in three equal tranches under the Company’s Employee and Executive Retention Incentive Plan with vesting
conditions of continuous employment until 30 June 2024, 2025 and 2026 respectively for each tranche.
• A long-term incentive of 22,500,000 options was issued to Mr Edwards during the period.
• A performance-based incentive of 22,500,000 performance rights, subject to achieving production milestones, was issued to Mr Edwards during
the period.
• Other industry standard provisions for senior executive of a public listed company are included in the agreement.
The Company entered an employment agreement with Gerhard Redelinghuys, the Company’s previous Executive Director (resigned 23 August 2023).
The material terms included:
• Notice period: The Company must give 3 months’ notice to terminate the agreement other than for cause. The parties have come to a mutual
agreement to end his employment 23 August 2023.
• Remuneration: $730,106 including superannuation per annum.
• Other industry standard provisions for senior executive of a public listed company are included in the agreement.
The Company entered an executive employment agreement with Mark Ruston, the Company’s previous Chief Executive Officer (resigned 25 May 2024).
The material terms included:
• Notice period: The Company must give 4 months’ notice to terminate the agreement other than for cause. The executive must give 4 months’
notice to terminate the agreement.
• Remuneration: $700,000 including superannuation per annum.
• Performance rights of 843,384 issued in three equal tranches under the Company’s Employee and Executive Retention Incentive Plan with vesting
conditions of continuous employment until 30 June 2024, 2025 and 2026 respectively for each tranche.
• Discretionary benefits: Annual cash bonus up to 50% of gross salary (at Board discretion) plus 15.0 million performance rights issued on commencement.
• Other industry standard provisions for senior executive of a public listed company are included in the agreement.
BOWEN COKING COAL | ANNUAL REPORT 2024
31
Directors’
Report
REMUNERATION DETAILS OF KEY MANAGEMENT PERSONNEL
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended 30 June 2024 was as follows:
Short Term Benefits
Post-
Employment
Equity-settled
Share-based
Payments
Key Management
Personnel
Salary and
Fees
$
Cash bonus
paid and/or
payable
$
Other Benefits
Provision for leave
entitlements
$
Super-
annuation
$
Options/Rights
$
Total
$
Performance
related
%
Nicholas Jorss
515,991
128,4271
(24,716)6
25,116
206,836
851,654
15%
Neville Sneddon
97,738
–
–
10,751
102,000
210,489
–
David Conry AM
97,738
–
–
10,751
102,000
210,489
–
Malte von der Ropp2
25,070
–
–
–
102,000
127,070
–
Gerhard Redelinghuys2
117,118
–
20,570
6,850
–
144,538
–
Matthew Latimore2
8,145
–
–
896
–
9,041
–
Daryl Edwards3
567,376
318,6774
26,969
27,399
450,403
1,390,824
33%
Mark Ruston2
604,366
116,6905
25,978
25,116
(611,816)
160,334
–
Total
2,033,542
563,794
48,801
106,879
351,423
3,104,439
1. A Short-Term Incentive (STI) plan bonus of $128,427 (25%) was earned up to the date of the report with a deferred payment date of December 2024. Under the STI
plan Nicholas Jorss can earn a further 25% (up to a maximum of 50% of salary), subject to certain performance metrics being met, which are measured up until
31 December 2024.
2. Amounts represent the remuneration relating to the period during which the individuals were Key Management Personnel.
• Malte von der Ropp became a member of the KMP on 8 April 2024.
• Gerhard Redelinghuys ceased as a member of the KMP on 23 August 2023.
• Matthew Latimore ceased as a member of the KMP on 25 July 2023.
• Mark Ruston ceased as a member of the KMP on 25 May 2024. $611,816 of share-based payments relating to forfeited performance rights were reversed on
resignation.
3. During the period the Company’s Chief Financial Officer, Daryl Edwards, was appointed as the Company’s Chief Executive Officer (29 January 2024).
4. A discretionary cash bonus of $150,000 was awarded to Mr Edwards by the Board in his capacity as the Chief Financial Officer and was paid in November 2023.
The remaining portion of $168,677 (25%) represents the STI plan bonus earned up to the date of the report with a deferred payment date of December 2024.
Under the STI plan Mr Edwards can earn a further 25% (up to a maximum of 50% of salary), subject to certain performance metrics being met, which are measured
up until 31 December 2024.
5. A STI plan bonus of $116,690 was earned and paid to Mr Ruston during the year ended 30 June 2024 based on meeting certain performance metrics.
6. Negative amount reflects annual leave taken exceeding leave accrued during the year ended 30 June 2024.
BOWEN COKING COAL | ANNUAL REPORT 2024
32
Directors’
Report
The remuneration of the key management personnel of Bowen Coking Coal Ltd for the year ended 30 June 2023 was as follows:
Short Term
Benefits
Post-
Employment
Equity-settled
Share-based
Payments
Key Management
Personnel
Salary & Fees
$
Other Benefits
Provision for leave
entitlements
$
Super-
annuation
$
Options/Rights
$
Total
$
Performance
related
%
Nicholas Jorss
439,579
–
24,671
–
464,250
–
Neville Sneddon
89,140
–
9,360
–
98,500
–
David Conry AM1
2,048
–
225
–
2,273
–
Gerhard Redelinghuys
620,708
133,019
25,292
–
779,019
–
Matthew Latimore
89,140
–
9,360
–
98,500
–
Daryl Edwards
432,139
52,773
25,292
230,363
740,567
31%
Mark Ruston2
181,652
18,688
7,685
611,816
819,841
75%
Total
1,854,406
204,480
101,885
842,179
3,002,950
1. Represents remuneration from appointment date, 23 June 2023 to 30 June 2023.
2. Represents remuneration from appointment date 27 March 2023 to 30 June 2023.
The percentage of equity-based remuneration for persons who were key management personnel of the Group during the year ended 30 June 2024 is
set out below:
Key Management Personnel
Proportion of
Remuneration
Equity Based %
Proportion of
Remuneration
Salary, Fees and
Bonus3
%
Nicholas Jorss
24%
76%
Neville Sneddon
48%
52%
David Conry AM
48%
52%
Malte von der Ropp1
80%
20%
Gerhard Redelinghuys
–
100%
Matthew Latimore
–
100%
Daryl Edwards
32%
68%
Mark Ruston2
–
100%
1. Malte von der Ropp was appointed on 8 April 2024 and was approved by the shareholders to be included in the equity incentive plan for the year ended 30 June 2024.
2. Mark Ruston ceased as a member of the KMP on 25 May 2024 and forfeited his equity-based remuneration on resignation for the year ended 30 June 2024.
3. Bonus relates to short term incentive remuneration that is settled in cash and not equity.
BOWEN COKING COAL | ANNUAL REPORT 2024
33
Directors’
Report
COMPANY PERFORMANCE, SHAREHOLDER WEALTH, AND DIRECTOR AND EXECUTIVE REMUNERATION
The Company has generated losses as it transitioned from its principal activity of mineral exploration through to coal mining development and into
reaching steady-state coal production and sales, driven by a challenging operating environment with unseasonal wet weather impacts, as well as
fluctuating commodity prices, rising input costs, and increased State government coal royalty taxes.
The Company’s share price is subject to the influence of commodity prices and market sentiment towards the mining industry and coal sector, and
as such, share price fluctuations may occur independent of the executives and key management personnel performance. The Company develops
its compensation strategy to ensure the retention of high calibre employees and to align executives to the long-term interests of the Group and
its shareholders.
The table below sets out information about the Group’s earnings and movements in shareholder wealth for the past five years up to and including
the current financial year.
The Group performed a strategic review of its projects following the prior year’s financial performance and made the decision to place its
underperforming Bluff mine into care and maintenance to stem the associated earnings losses, as well as streamline the Group’s strategy going
forward to focus on its high-quality coking project at the Burton Complex. The Group’s share price has also been diluted following capital raisings
during October 2022, June 2023 and November 2023.
30 June 2024
30 June 2023
30 June 2022
30 June 2021
30 June 2020
Loss before income tax expense ($)
(95,456,841)
(162,937,109)
(18,302,414)
(3,224,368)
(2,057,812)
Share price at year end (cents)
0.05
0.16
0.31
0.08
0.05
Basic loss per share (cents)
(3.70)
(9.38)
(1.39)
(0.35)
(0.26)
Total dividends (cents per share)
–
–
–
–
–
SHARE-BASED COMPENSATION
ISSUE OF SHARES
No shares have been granted to directors and other key management personnel as part of compensation during the year ended 30 June 2024.
No shares have been granted to Key Management Personnel since the end of the financial year.
OPTIONS
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 or future reporting years are as follows:
Key Management Personnel
Grant & vesting date
Options
Fair value per option
at grant date
$
Daryl Edwards
29 April 2024
22,500,000
$0.0136
$306,000
Nicholas Jorss
27 June 2024
15,000,000
$0.0136
$204,000
Neville Sneddon
27 June 2024
7,500,000
$0.0136
$102,000
David Conry AM
27 June 2024
7,500,000
$0.0136
$102,000
Malte von der Ropp
27 June 2024
7,500,000
$0.0136
$102,000
No options have been granted to Key Management Personnel since the end of the financial year.
BOWEN COKING COAL | ANNUAL REPORT 2024
34
Directors’
Report
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 granted4
Grant date
Vesting date
Expiry date
Exercise Date
Fair value
per right at grant
date
Daryl Edwards
4,000,000
01/02/2021
21/11/2023
31/12/2024
16/05/2024
0.050
Daryl Edwards
99,296
05/07/2022
30/06/2024
30/06/2026
04/10/2023
0.230
Daryl Edwards
99,296
05/07/2022
30/06/2023
30/06/2026
0.230
Daryl Edwards
99,296
05/07/2022
30/06/2025
30/06/2026
0.230
Daryl Edwards
189,462
21/07/2023
30/06/2024
30/06/2027
0.140
Daryl Edwards
189,462
21/07/2023
30/06/2025
30/06/2027
0.140
Daryl Edwards
189,462
21/07/2023
30/06/2026
30/06/2027
0.140
Daryl Edwards1
11,250,000
29/04/2024
Unvested
30/09/2025
0.049
Daryl Edwards1
11,250,000
29/04/2024
Unvested
30/09/2026
0.049
Mark Ruston2
281,128
21/07/2023
30/06/2024
30/06/2027
0.140
Mark Ruston2
281,128
21/07/2023
30/06/2025
30/06/2027
0.140
Mark Ruston2
281,128
21/07/2023
30/06/2026
30/06/2027
0.140
Nicholas Jorss3
7,500,000
27/06/2024
Unvested
31/12/2025
0.052
Nicholas Jorss3
7,500,000
27/06/2024
Unvested
31/12/2026
0.052
1. On 29 April 2024, 22.5 million performance rights were issued to Daryl Edwards subject to achieving production milestones which are to be measured over
reporting periods through to financial year ended 30 June 2026. 50% of the performance rights expire on 30 September 2025 whilst the remaining 50% expire on
30 September 2026. The performance rights are also subject to Daryl Edwards remaining in continuous employment with the Company to the date the above vesting
condition is met. The performance rights are unvested as the set milestones had not been reached as at 30 June 2024.
2. Performance rights lapsed on resignation effective 25 May 2024.
3. On 27 June 2024, following shareholder approval, 15.0 million performance rights were issued to Nicholas Jorss subject to achieving share price performance
milestones and production milestones which are to be measured over reporting periods through to financial year ended 30 June 2026. 50% of the performance
rights expire on 31 December 2025 whilst the remaining 50% expire on 31 December 2026. The performance rights are also subject to Nicholas Jorss remaining in
continuous employment with the Company to the date the above vesting condition is met. The performance rights are unvested as the set milestones had not been
reached as at 30 June 2024.
4. All performance rights were issued with a nil exercise price.
All performance rights were granted over unissued fully paid ordinary shares in the Company. The number of performance rights granted was
determined having regard to the satisfaction of performance measures and weightings as described above in the section ‘Consolidated entity
performance and link to remuneration’. Performance rights vest based on the provision of service over the vesting period whereby the executive
becomes beneficially entitled to the performance right on vesting date. Performance rights are exercisable by the holder as from the vesting date.
There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient
in relation to the granting of such performance rights other than on their potential exercise.
On 21 July 2023, 843,384 performance rights, in three equal tranches, were issued to Mark Ruston and 568,386 performance rights, in three equal
tranches, were issued to Daryl Edwards under the Company’s Employee and Executive Retention Incentive Plan with vesting conditions of continuous
employment until 30 June 2024, 2025 and 2026 respectively for each tranche.
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 2024 are set out below:
Key Management Personnel
Value of performance
rights recognised
during the year
$
Value of performance
rights lapsed during
the year
$
Remuneration consisting
of performance rights
for the year
%
Daryl Edwards
144,403
–
10%
Nicholas Jorss
2,836
–
<0.5%
Mark Ruston
948,835
(1,560,651)
–
BOWEN COKING COAL | ANNUAL REPORT 2024
35
Directors’
Report
Shares issued on exercise of performance rights during the year ended 30 June 2024:
Key Management Personnel
Shares issued
no.
Paid per share
cents
Daryl Edwards
4,099,292
nil
ADDITIONAL DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL
SHAREHOLDING
The number of shares in the Company held during the financial year by each director and other members of key management personnel of the Group,
including their personally related parties, is set out below:
Key Management
Personnel
Balance at
1 July 2023
Received
as part of
remuneration
Performance
rights exercised
Disposal/
other
Acquisition/
other
Balance at
30 June 2024/
Resignation
Date
Nicholas Jorss
51,036,882
–
–
–
11,158,914
62,195,796
Neville Sneddon
7,454,365
–
–
–
908,498
8,362,863
David Conry AM
–
–
–
–
–
–
Malte von der Ropp1
–
–
–
–
325,000
325,000
Gerhard Redelinghuys2
55,237,358
–
–
–
4,764,707
60,002,065
Matthew Latimore2
144,448,072
–
–
–
5,882,353
150,330,425
Daryl Edwards
3,011,999
–
4,099,296
(1,979,296)
200,000
5,331,999
Mark Ruston2
–
–
–
–
–
–
261,188,676
–
4,099,296
(1,979,296)
23,239,472
286,548,148
1. 325,000 shares were owned prior to appointment as director.
2. The closing balance reflects the number of shares held at date of cessation as a member of the KMP.
OPTIONS HELD BY KEY MANAGEMENT PERSONNEL
The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Key Management Personnel
Balance at
1 July 2023
Granted as
Compensation
Lapsed
Balance at
30 June 2024
Vested &
Exercisable
30 June 2024
Options over ordinary shares
Nicholas Jorss
10,000,000
15,000,000
–
25,000,000
25,000,000
Neville Sneddon
3,000,000
7,500,000
–
10,500,000
10,500,000
David Conry AM
–
7,500,000
–
7,500,000
7,500,000
Malte von der Ropp
–
7,500,000
–
7,500,000
7,500,000
Gerhard Redelinghuys
15,000,000
–
(15,000,000)
–
–
Matthew Latimore1
6,179,000
–
(3,000,000)
3,179,000
3,179,000
Daryl Edwards
–
22,500,000
–
22,500,000
22,500,000
34,179,000
60,000,000
(18,000,000)
76,179,000
76,179,000
1. The closing balance reflects the number of options held by Mr Latimore at date of cessation as a member of the KMP on 25 July 2023. The balance of 3,179,000
options were granted outside of Mr Latimore’s capacity as a Director and did not lapse on Mr Latimore’s cessation as a member of the KMP.
BOWEN COKING COAL | ANNUAL REPORT 2024
36
Directors’
Report
PERFORMANCE RIGHTS HELD BY KEY MANAGEMENT PERSONNEL
Details of Performance Rights held directly, indirectly or beneficially by key management personnel during the year ended 30 June 2024 were as follows:
Key Management
Personnel
Balance at
1 July 2023
Granted as
Compensation
Exercised
Lapsed
Balance at
30 June 2024
Vested &
Exercisable
30 June 2024
Nicholas Jorss
–
15,000,000
–
–
15,000,000
–
Daryl Edwards
4,297,888
23,068,385
(4,099,296)
–
23,266,977
288,758
Mark Ruston
15,000,000
843,385
–
(15,843,385)
–
–
19,297,888
38,911,770
(4,099,296)
(15,843,385)
38,266,977
288,758
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
Bowen Coking Coal Ltd and Marmilu Pty Ltd, an entity controlled by Matthew Latimore (resigned 25 July 2024) formed a 50/50 joint venture via
Bowen Coking Coal Marketing Pty Ltd (BCCM).
Matthew Latimore is the sole Director and owner of M Resources Trading Pty Ltd which is exclusively contracted to provide marketing and logistics
services to the Group via BCCM. During the year BCCM paid a marketing fee to M Resources Trading Pty Ltd based on 0.75% of the sales revenue.
BCCM charges the Group a 1.75% marketing fee on sales of produced coal.
Amounts recognised at the reporting date in relation to other transactions with related parties:
Assets and liabilities
30 June 2024
$
Current assets
Trade receivables from BCCM
15,893,151
Current liabilities
Trade payable to BCCM
3,279,291
Expenses
Marketing fee paid and payable to BCCM
7,772,016
Terms and Conditions:
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances
at the year end are unsecured, interest-free and settlements occurs in cash and are presented as part of trade receivable and trade payables as
appropriate. They have been no guarantees provided or received from any related party receivable or payables. An assessment of the expect credit
losses (ECL) relating to related party receivables is undertaken upon initial recognition and each financial year by examining the financial position of
the related party and the market in which the related party operate applying the general approach of the ECL impairment models of IFRS 9.
This concludes the remuneration report, which has been audited.
BOWEN COKING COAL | ANNUAL REPORT 2024
37
Directors’
Report
SHARES UNDER OPTION AND PERFORMANCE RIGHTS
Unissued ordinary shares of Bowen Coking Coal Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise
price
Number
under option
30 November 2021
30 November 2024
$0.9780
3,179,000
30 November 2021
30 September 2024
$0.2478
19,000,000
29 April 2024
30 June 2028
$0.0900
30,000,000
27 June 2024
30 June 2028
$0.0900
37,500,000
89,679,000
At the date of this report, there are 43,116,143 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.
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).
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive, for which
they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company against a
liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young Australia during or since the financial year.
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
to 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 part of
those proceedings.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF ERNST & YOUNG
There are no officers of the Company who are former partners of Ernst & Young.
BOWEN COKING COAL | ANNUAL REPORT 2024
38
Directors’
Report
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 32 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 32 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.
During the year the following fees were paid or payable for non-audit services to Ernst & Young, the auditor of the Group:
Consolidated
30 June 2024
$
30 June 2023*
$
Other Services – Ernst & Young
Fees for tax compliance and advisory services
39,815
–
Fees for other assurance services
5,500
–
Fees for other advisory services
15,000
–
Other Services – RSM Australia Partners1
–
–
Fees for preparation and lodgement of QLD stamp duty
–
34,932
Fees for other assurance services
–
5,932
Fees for file review
–
2,100
60,315
42,964
1. During the previous year the following fees were paid or payable for non-audit services to RSM Australia Partners, the previous auditor of the Group.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this
directors’ report.
AUDITOR
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
NICHOLAS JORSS
EXECUTIVE CHAIRMAN AND DIRECTOR
19 September 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
39
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s independence declaration to the director of Bowen Coking Coal
Limited
As lead auditor for the audit of the financial report of Bowen Coking Coal Limited for the financial year
ended 30 June 2024, I declare to the best of my knowledge and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit.
b.
No contraventions of any applicable code of professional conduct in relation to the audit.
c.
No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Bowen Coking Coal Limited and the entities it controlled during the
financial year.
Kind regards,
Ernst & Young
Tom du Preez
Partner
19 September 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
40
AUDITOR’S INDEPENDENCE
DECLARATION
FINANCIAL
REPORT
CONTENTS
30 June 2024
Bowen Coking Coal Ltd
ACN 064 874 620
BOWEN COKING COAL | ANNUAL REPORT 2024
Consolidated Statement of Profit or Loss
42
and Other Comprehensive Income
Consolidated Statement of Financial Position
43
Consolidated Statement of Changes in Equity
44
Consolidated Statement of Cash Flows
45
Notes to the Consolidated Financial Statements
46
Directors’ Declaration
94
Independent Auditor’s Report
95
Shareholder Information
100
Interest in Tenements
103
Consolidated Entity Disclosure Statement
104
Annual Mineral Resources and Ore Reserve Statement
105
BOWEN COKING COAL | ANNUAL REPORT 2024
41
Consolidated
Note
30 June 2024
$
30 June 2023
$
REVENUE
Revenue from contracts with customers
3
441,858,247
204,475,121
Other income
4
8,356,211
5,464,592
450,214,458
209,939,713
EXPENSES
Employee benefits expense
(10,755,168)
(7,972,432)
Operating expenses
5
(351,370,481)
(291,864,887)
Other expenses
6
(41,344,763)
(32,222,239)
Net inventory movements
(33,462,290)
54,175,963
Foreign exchange gains
(1,927,812)
501,825
Depreciation and amortisation expense
17
(32,108,146)
(12,856,676)
Impairment expense
7
–
(19,097,657)
Onerous contract adjustment
25
12,995,612
(16,454,000)
Royalties expense
(60,215,871)
(35,142,157)
Share-based payments
8
(864,134)
(1,800,752)
Operating loss
(68,838,595)
(152,793,299)
Finance income
9
17,432,946
13,914,595
Finance expense
10
(46,323,561)
(25,050,903)
Share of profit from joint ventures
39
2,272,369
992,498
Loss before income tax expense
(95,456,841)
(162,937,109)
Income tax expense
11
–
–
Loss after income tax expense for the year attributable
to the owners of Bowen Coking Coal Limited
28
(95,456,841)
(162,937,109)
Other comprehensive income for the year, net of tax
–
–
Total comprehensive loss for the year attributable to the owners of
Bowen Coking Coal Limited
(95,456,841)
(162,937,109)
Cents
Cents
Basic loss per share
12
(3.70)
(9.38)
Diluted loss per share
12
(3.70)
(9.38)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
42
Consolidated
Note
30 June 2024
$
30 June 2023
$
ASSETS
Current assets
Cash and cash equivalents
13
21,688,083
48,944,668
Trade and other receivables
14
21,685,532
36,514,257
Inventories
15
27,022,880
60,485,170
Other assets
16
4,928,583
4,250,602
Assets held for sale
18
92,764
–
Total current assets
75,417,842
150,194,697
Non-current assets
Property, plant and equipment
17
170,000,194
160,309,222
Investments accounted for using the equity method
19
1,861,057
938,688
Exploration and evaluation assets
20
11,265,558
10,989,468
Other assets
16
76,980,062
85,364,117
Total non-current assets
260,106,871
257,601,495
Total assets
335,524,713
407,796,192
LIABILITIES
Current liabilities
Trade and other payables
21
96,329,358
120,631,203
Deferred consideration
22
–
2,500,000
Interest bearing loans and borrowings
23
49,926,188
130,831,285
Lease liability
24
155,356
141,062
Provisions
25
867,098
20,059,715
Total current liabilities
147,278,000
274,163,265
Non-current liabilities
Deferred consideration
22
4,314,189
3,844,606
Interest bearing loans and borrowings
23
108,684,664
28,021,504
Lease liability
24
125,546
280,902
Provisions
25
65,348,069
66,438,505
Total non-current liabilities
178,472,468
98,585,517
Total liabilities
325,750,468
372,748,782
Net assets
9,774,245
35,047,410
EQUITY
Issued capital
26
330,922,475
261,285,098
Reserves
27
5,272,535
4,726,236
Accumulated losses
28
(326,420,765)
(230,963,924)
Total equity
9,774,245
35,047,410
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Consolidated
Issued
capital
$
Share-based
payment reserve
$
Convertible
Note reserve
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2022
134,113,511
4,149,174
–
(68,026,815)
70,235,870
Loss after income tax expense for the year
–
–
–
(162,937,109)
(162,937,109)
Other comprehensive income for the year,
net of tax
–
–
–
–
–
Total comprehensive loss for the year
–
–
–
(162,937,109)
(162,937,109)
Issue of Shares
130,666,861
–
–
–
130,666,861
Exercise of options
582,100
–
–
–
582,100
Conversion of performance shares
1,223,690
(1,223,690)
–
–
–
Share-based payments (note 8)
–
1,800,752
–
–
1,800,752
Share issue costs
(5,301,064)
–
–
–
(5,301,064)
Balance at 30 June 2023
261,285,098
4,726,236
–
(230,963,924)
35,047,410
Consolidated
Issued
capital
$
Share-based
payment reserve
$
Convertible Note
reserve
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2023
261,285,098
4,726,236
–
(230,963,924)
35,047,410
Loss after income tax expense for the year
–
–
–
(95,456,841)
(95,456,841)
Other comprehensive income for the year,
net of tax
–
–
–
–
–
Total comprehensive loss for the year
–
–
–
(95,456,841)
(95,456,841)
Issue of Shares
73,393,408
–
–
–
73,393,408
Conversion of performance shares
317,835
(317,835)
–
–
–
Share-based payments (note 8)
–
864,134
–
–
864,134
Share issue costs
(4,073,866)
–
–
–
(4,073,866)
Balance at 30 June 2024
330,922,475
5,272,535
–
(326,420,765)
9,774,245
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
BOWEN COKING COAL | ANNUAL REPORT 2024
44
Consolidated
Note
30 June 2024
$
30 June 2023
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
467,230,158
185,478,434
Payments to suppliers and employees (inclusive of GST)
(465,952,309)
(287,122,823)
Interest received
220,949
122,323
Other income
8,209,744
3,592,377
Interest and other finance costs paid
(14,700,188)
(7,212,826)
Net cash used in operating activities
43
(4,991,646)
(105,142,515)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
17
(80,531,976)
(66,988,661)
Payments for exploration and evaluation
20
(212,338)
(292,706)
Payments for asset acquisition
22
(2,500,000)
(22,479,435)
Payments for exploration costs recoverable from farmee
20
(1,924,010)
(1,373,404)
Recovered exploration costs from farmee
20
1,860,258
927,553
(Payments)/refunds of rehabilitation bonding and other deposits
3,256,403
(10,411,933)
Dividends received from joint ventures
1,350,000
–
Receipt for loans to joint venture
14
–
255,000
Net cash used in investing activities
(78,701,663)
(100,363,586)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
26
61,085,716
131,248,962
Share issue transaction costs
26
(4,073,866)
(5,301,064)
Proceeds from borrowings
23
–
72,035,415
Repayment of borrowings
23
(1,865,647)
(16,236,165)
Payment of financing transaction costs
(1,370,022)
–
Payment of principal portion of lease liabilities
24
(154,329)
(103,563)
Net cash from financing activities
53,621,852
181,643,585
Net decrease in cash and cash equivalents
(30,071,457)
(23,862,516)
Cash and cash equivalents at the beginning of the financial year
48,944,668
72,520,051
Effects of exchange rate changes on cash and cash equivalents
2,814,872
287,133
Cash and cash equivalents at the end of the financial year
13
21,688,083
48,944,668
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
45
Note 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
REGISTERED OFFICE
PRINCIPAL PLACE OF BUSINESS
Level 4, 167 Eagle Street
Level 4, 167 Eagle Street
Brisbane QLD 4000
Brisbane QLD 4000
A description of the nature of the Group’s operations and its principal activities are included in the directors’ report, which is not part of the financial
statements.
The consolidated financial statements were authorised for issue, in accordance with a resolution of directors, on 19 September 2024. The directors
have the power to amend and reissue the financial statements.
BASIS OF PREPARATION
The consolidated financial statements are general purpose financial statements 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 consolidated financial statements and notes also comply with International
Financial Reporting Standards.
The consolidated financial statements have been prepared on an accruals basis and are based on historical cost, modified by the measurement at
fair value of certain financial assets and liabilities.
Certain prior year comparatives have been reclassified to conform to the current year’s presentation, with no impact on previously reported net assets
or results of operations.
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out either in the respective notes or
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
The Group adopted all new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that
are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations had no material impact on the Group.
ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted
by the Group for the annual reporting period ended 30 June 2024 are outlined below:
AASB 18 PRESENTATION AND DISCLOSURE IN FINANCIAL STATEMENTS
In April 2024, the AASB 18 was issued and becomes effective for annual reporting periods beginning on or after 1 January 2027.
AASB 18 has been issued to improve how entities communicate in their financial statements, with a particular focus on information about financial
performance in the statement of profit or loss. The key presentation and disclosure requirements established by AASB 18 are:
• The presentation of newly defined subtotals in the statement of profit or loss
• The disclosure of management-defined performance measures (MPM)
• Enhanced requirements for grouping information (i.e. aggregation and disaggregation)
AASB 18 is accompanied with limited consequential amendments to the requirements in other accounting standards, including AASB 107 Statement
of Cash Flows.
AASB 18 introduces three new categories for classification of all income and expenses in the statement of profit or loss: operating, investing and
financing. Additionally, entities will be required to present subtotals for ‘operating profit or loss’, ‘profit or loss before financing and income taxes’
and ‘profit or loss’.
For the purposes of classifying income and expenses into one of the three new categories, entities will need to assess their main business activity,
which will require judgement. There may be more than one main business activity.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
BOWEN COKING COAL | ANNUAL REPORT 2024
46
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
AASB 18 also requires several disclosures in relation to MPMs, such as how the measure is calculated, how it provides useful information and a
reconciliation to the most comparable subtotal specified by AASB 18 or another standard.
AASB 18 will replace AASB 101 Presentation of Financial Statements.
In July 2024, the IFRS Interpretations Committee published an agenda decision which discusses how an entity applies the requirements in paragraph
23 of IFRS 8 Operating Segments. The Group is currently analysing the potential impacts of this agenda decision to its segment reporting.
GOING CONCERN
The consolidated financial statements for the year ended 30 June 2024 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 2024 the Group generated a consolidated loss of $95.5 million (2023: $162.9 million) and incurred operating
cash outflows of $5.0 million (outflow in 2023: $105.1 million). As at 30 June 2024 the Group has cash and cash equivalents of $21.7 million
(2023: $48.9 million), current asset deficiency of $71.9 million (2023: $124.0 million) and net asset of $9.8 million (2023: $35.0 million).
The Group’s ability to continue to generate operational cash flows to meet its financial obligations is based on the performance of its operations
and those of the mining contractors, as well as the timing and price received for coal sales shipments. The Directors, in their consideration of
the appropriateness of the going concern basis for the preparation of the financial statements, have prepared a cash flow forecast through to
30 September 2025 which indicates that, subject to the successful restructure of its debt and other liquidity measures referred to below, the Group
will have sufficient cash to continue as a going concern. However, should the Group be unable to restructure its debt and should there be adverse
impacts to coal presentation or performance from the mining assets, due to significant weather or market supply shortages in labour or equipment
or delays in cashflow generation, the Group’s available cash to meet its ongoing commitments may be materially impacted. In addition, volatility in
coal prices realised for coal sales in the forecast may cause operating margins to be constrained or turn negative.
To ensure the Group has sufficient liquidity, the Group has signed a non-binding Heads of Agreement with New Hope Corporation Limited and
Taurus Mining Finance Fund No 2, L.P. to restructure and defer its current debts with these lenders (refer to note 42 ‘Events after the reporting
period’). In addition, the Group is seeking funding assistance through debt deferral, deferral of Queensland Government royalty payments and is
considering obtaining an equity injection or conducting an asset sale to ensure the Group can continue as a going concern and meet its debts as
and when they fall due.
There is no guarantee that additional funding through debt, equity or an asset sale will be available, or if it is, 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. 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 continue
or expand its business.
Taking into account the level of coal product stocks, forecast improved operational performance, cashflows from coal sales as well as the Group’s
historical support from major shareholders and its past ability to raise further capital and restructure its debts, the Directors believe that the Group
will be successful in obtaining additional funding and have adequate resources to fund its future operational requirements and continue as a going
concern for at least 12 months from the date that the financial statements are issued.
Should the Group be unsuccessful in achieving the matters set out above, a material uncertainty would exist that may cast significant doubt on
the ability of the Group to continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities other than in the
ordinary course of business. This financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue as
a going concern.
PARENT ENTITY INFORMATION
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the
parent entity is disclosed in note 37.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bowen Coking Coal Limited as at 30 June 2024 and
the results of all subsidiaries for the year then ended.
The names of the subsidiaries are contained in note 38. All subsidiaries in Australia have a 30 June financial year end and are accounted for by the
parent entity at cost.
BOWEN COKING COAL | ANNUAL REPORT 2024
47
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. 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 entities in the Group are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
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 Group 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.
FOREIGN CURRENCY
The financial statements are presented in Australian dollars, which is Bowen Coking Coal Limited’s functional and presentation currency.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
FOREIGN OPERATIONS
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and
expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of
the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency
reserve in equity.
GOODS AND SERVICES TAX (‘GST’) AND OTHER SIMILAR TAXES
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax
authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to,
the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
The accounting policies that are material to the Group are set out either in the respective notes or below. The accounting policies adopted are
consistent with those of the previous financial year, unless otherwise stated.
Note 2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts
in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities,
revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and
estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below and where relevant in the respective
notes to the financial statements.
These include:
Judgments:
• Recovery of deferred tax assets (note 11)
• Right of use assets (note 17) and liability (note 24)
• Exploration and evaluation (note 20)
• Asset acquisition (note 22)
BOWEN COKING COAL | ANNUAL REPORT 2024
48
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Estimates and assumptions:
• Provision for impairment of inventories (note 15)
• Recoverability of non-current assets (note 17)
• Unit of production (UOP) depreciation (note 17)
• Asset acquisition (note 22)
• Rehabilitation provision (note 25)
• Other long-term employee benefits (note 25)
Note 3. REVENUE FROM CONTRACTS WITH CUSTOMERS
ACCOUNTING POLICY
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.
SALE OF COAL
Revenue from the sale of coal is recognised in the profit or loss when performance obligations have been met, which is deemed to be when control
of the coal has been transferred from the Group to the customer. Typically, the transfer of control and the recognition of a sale occurs when the coal
passes the ship rail when loading at the port.
As is customary with ‘free on board’ contracts, parameters such as coal quality and mass are tested using independent experts and weight meters
as the vessel is being loaded. The bill of lading is only issued upon verification and confirmation from several parties involved with the logistic and
handling process. Once confirmed, the measured parameters form the basis for calculation of final price on the commercial invoice. All customer
contracts specify a known price and tolerance range for quality parameters prior to the Group committing to the supply of coal to the customer.
Consolidated
30 June 2024
$
30 June 2023
$
Sale of coal
441,858,247
204,475,121
Note 4. OTHER INCOME
ACCOUNTING POLICY
Other revenue is recognised when it is received or when the right to receive payment is established.
Consolidated
30 June 2024
$
30 June 2023
$
Other income1
8,356,211
5,461,455
Profit on disposal of lease
–
3,137
8,356,211
5,464,592
1. Other income relates to recharges from commercial arrangements with third parties for use of the Company’s owned infrastructure and facilities, being primarily the
mining camp accommodation.
BOWEN COKING COAL | ANNUAL REPORT 2024
49
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 5. OPERATING EXPENSES
Consolidated
30 June 2024
$
30 June 2023
$
Mining costs
223,970,270
238,526,257
Processing costs
35,274,429
21,105,113
Site infrastructure costs
39,410,877
5,820,014
Transport and logistics
52,714,905
26,413,503
351,370,481
291,864,887
Note 6. OTHER EXPENSES
Consolidated
30 June 2024
$
30 June 2023
$
Accounting and audit fees
358,682
520,615
Administration and other expenses
20,970,327
17,762,325
Operational accommodation and travel expenses
11,126,767
7,901,886
Corporate compliance expenses
1,116,971
2,503,875
Sales and marketing expenses
7,772,016
3,533,538
41,344,763
32,222,239
Note 7. IMPAIRMENT EXPENSE
ACCOUNTING POLICY
Refer to note 17.
IMPAIRMENT EXPENSE
During the year ended 30 June 2023, as the result of the Bluff mine not having reached steady-state operations and as a result of declining coal
prices, the Group carried out a review of the recoverable amount of the Bluff mine. These assets are used in the Group’s Mining and sale of coal
reportable segment. The Group determined that the carrying value of Bluff mine exceeded its estimated recoverable value. The review led to the
recognition of an impairment expense for the year ended 30 June 2023 of $19.1 million, which has been recognised in profit or loss. The recoverable
amount of the CGU has been determined on the basis of the CGU’s value in use, using discounted future cashflows. The post-tax nominal discount
rate used in measuring value in use over the remaining life of the mine (which was less than 5 years) was 10.33% per annum.
An impairment assessment was not performed for the year ended 30 June 2024, as the impairment indicators were not triggered.
As a result of the recoverable amount analysis performed on the Bluff mine during the previous year, the following impairment losses were recognised:
Consolidated
30 June 2024
$
30 June 2023
$
Impairment losses
Plant and equipment
–
218,033
Mining assets
–
18,879,624
–
19,097,657
BOWEN COKING COAL | ANNUAL REPORT 2024
50
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 8. SHARE-BASED PAYMENTS
ACCOUNTING POLICY
The Group makes equity-settled share-based payments to directors and employees. 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 and performance rights 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.
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.
If equity-settled awards are forfeited prior to vesting, the expense previously recognised is reversed.
Share-based payment expense recognised during the year:
Consolidated
30 June 2024
$
30 June 2023
$
Expense arising from equity-settled share-based payment transactions
(864,134)
(1,800,752)
Set out below are summaries of options granted:
Number
of options
30 June 2024
Weighted
average exercise
price
30 June 2024
Number
of options
30 June 2023
Weighted
average exercise
price
30 June 2023
Outstanding at the beginning of the financial year
37,179,000
$0.2400
43,000,000
$0.2200
Granted
67,500,000
$0.0900
–
$0.0000
Forfeited
(18,000,000)
$0.0500
–
$0.0000
Exercised
–
$0.0000
(5,821,000)
$0.1000
Outstanding at the end of the financial year
86,679,000
$0.1200
37,179,000
$0.2400
Reconciliation of the options at 30 June 2024:
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited
Balance at
the end of
the year
30/11/2021
30/09/2024
$0.2500
34,000,000
–
–
(18,000,000)
16,000,000
30/11/2021
30/11/2024
$0.1000
3,179,000
–
–
–
3,179,000
29/04/2024
30/06/2028
$0.0900
–
67,500,000
–
–
67,500,000
37,179,000
67,500,000
–
(18,000,000)
86,679,000
Weighted average exercise price
$0.2400
$0.0900
$0.0000
$0.0500
$0.1200
BOWEN COKING COAL | ANNUAL REPORT 2024
51
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Reconciliation of the options at 30 June 2023:
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited
Balance at
the end of
the year
30/11/2021
30/09/2024
$0.2500
34,000,000
–
–
–
34,000,000
30/11/2021
30/11/2024
$0.1000
9,000,000
–
(5,821,000)
–
3,179,000
43,000,000
–
(5,821,000)
–
37,179,000
Weighted average exercise price
$0.2200
$0.0000
$0.1000
$0.0000
$0.2400
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
30 June 2024
Number
30 June 2023
Number
30/11/2021
30/09/2024
16,000,000
34,000,000
30/11/2021
30/11/2024
3,179,000
3,179,000
29/04/2024
30/06/2028
30,000,000
–
27/06/2024
30/06/2028
37,500,000
–
86,679,000
37,179,000
For the options granted, the valuation model inputs used to determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
30/11/2021
30/09/2024
$0.1500
$0.2478
70.00%
–
0.87%
$0.0470
30/11/2021
30/11/2024
$0.1500
$0.9780
70.00%
–
0.87%
$0.0860
29/04/2024
30/06/2028
$0.0500
$0.0900
75.00%
–
4.12%
$0.0136
27/06/2024
30/06/2024
$0.0500
$0.0900
75.00%
–
4.12%
$0.0136
Options are valued at fair value using the Black Scholes option valuation methodology.
Set out below are summaries of performance rights granted:
Number of
performance
rights
30 June 2024
Number of
performance
rights
30 June 2023
Outstanding at the beginning of the financial year
21,590,913
13,500,000
Granted
46,600,652
18,879,830
Forfeited
(19,389,475)
(1,573,560)
Exercised
(4,512,322)
(9,215,357)
Outstanding at the end of the financial year
44,289,768
21,590,913
Performance rights were fair valued in accordance with the observable market prices at grant date.
BOWEN COKING COAL | ANNUAL REPORT 2024
52
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 9. FINANCE INCOME
ACCOUNTING POLICY
INTEREST INCOME
Interest income 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.
Consolidated
30 June 2024
$
30 June 2023
$
Interest income, calculated using the effective interest rate method
220,948
122,320
Convertible note, derivative liability fair value adjustment1
5,893,396
13,792,275
Derivative liability revaluation gain2
7,876,533
–
Net gain on debt modification3
3,442,069
–
17,432,946
13,914,595
1. Refer to note 23 for accounting policy on Convertible notes.
2. The fair value remeasurement of the derivative liability that forms part of the New Hope facility (refer to note 23), resulted in the recognition of a derivative liability
revaluation gain of $7.9 million, recognised in the period.
3. The Group’s net gain on debt modification includes a $5.7 million gain relating to the amendment of the Taurus facility and offset by a $2.3 million net loss on debt
modification relating to the amendment of the New Hope facility (refer to note 23).
Note 10. FINANCE EXPENSE
ACCOUNTING POLICY
Finance expense consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Finance expense directly attributable to qualifying assets are capitalised as part of the cost of the respective asset. All other finance costs are
expensed in the period in which they are incurred.
Consolidated
30 June 2024
$
30 June 2023
$
Convertible Note – Interest expense
4,690,125
1,813,779
Interest expense1
38,557,705
21,155,802
Rehabilitation provision unwinding of discount
2,606,148
2,081,322
Deferred consideration unwinding
469,583
–
46,323,561
25,050,903
1. The majority of the interest expense relate to the Taurus facility and New Hope facility (refer to details of facilities as disclosed in note 23). As disclosed in the cashflow
statement, $14.7 million of interest expense costs were cash settled during the financial year. An additional $13.3 million relates to interest on New Hope facility and
$5.9 million relates to interest on Taurus facility using the effective interest method.
BOWEN COKING COAL | ANNUAL REPORT 2024
53
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 11. 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 measured using the full liability balance sheet approach and 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, except for transactions that, on initial
recognition, give rise to equal taxable and deductible temporary differences (such as recognition of an ROU Asset and a lease liability), excluding
a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets relating to deductible 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.
The Company and its Australian wholly owned controlled entities have formed a tax consolidated Group and are taxed as a single entity.
Bowen Coking Limited is the head entity of the tax consolidated group. The separate taxpayer within a group approach has been used to allocate
income tax expense to wholly owned subsidiaries that form part of the tax consolidated group. Bowen Coking Limited has assumed all the current
tax liabilities and tax losses for the tax consolidated group via intercompany receivables and payables as a tax funding arrangement.
Consolidated
30 June 2024
$
30 June 2023
$
Income tax expense
Current tax
–
–
Deferred tax – origination and reversal of temporary differences
–
–
Aggregate income tax expense
–
–
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
(95,456,841)
(162,937,109)
Tax at the statutory tax rate of 30%
(28,637,052)
(48,881,133)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
259,240
540,226
Other assessable income – joint venture accounted for using the equity method
(681,711)
(297,749)
Non-deductible expenses
177,661
81,622
Current year tax losses and temporary differences not recognised
28,881,862
48,557,034
Income tax expense
–
–
BOWEN COKING COAL | ANNUAL REPORT 2024
54
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated
30 June 2024
$
30 June 2023
$
Amounts charged directly to equity
Deferred tax assets
–
–
Deferred tax assets and liabilities
Deferred tax asset comprises temporary differences attributable to:
Employee benefits
520,259
231,208
Provision for onerous contracts
–
4,936,200
Other provisions and accrued expenses
4,188,992
2,727,405
Right of use liability
84,271
126,589
Provision for rehabilitation
793,086
843,364
Deferred tax assets on recognised tax losses
5,618,324
–
Other deferred tax assets
2,778,851
2,688,070
Gross deferred tax assets
13,983,783
11,552,836
Set-off of deferred tax liabilities
(13,983,783)
(11,552,836)
Net deferred tax assets
–
–
Consolidated
30 June 2024
$
30 June 2023
$
Deferred tax liability comprises temporary differences attributable to:
Exploration, evaluation and mine development assets
(1,350,544)
(1,149,621)
Property, Plant & Equipment
(5,098,267)
(6,140,122)
Right of Use Asset
(136,766)
(125,410)
Convertible Note
(5,666,748)
(4,137,683)
Other deferred tax liabilities
(1,731,458)
–
Gross deferred tax liabilities
(13,983,783)
(11,552,836)
Set-off of deferred tax assets
13,983,783
11,552,836
Gross deferred tax liabilities
–
–
Unused tax losses and temporary differences for which no deferred tax asset has been recognised
Consolidated
30 June 2024
$
30 June 2023
$
Deferred tax assets have not been recognised in respect of the following using corporate tax rates of:
Tax Revenue Losses
80,012,984
55,494,097
Tax Capital Losses
1,104,890
1,104,890
Total unrecognised deferred tax assets
81,117,874
56,598,987
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.
BOWEN COKING COAL | ANNUAL REPORT 2024
55
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
KEY JUDGEMENT
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 12. EARNINGS PER SHARE
ACCOUNTING POLICY
BASIC EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) 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/(LOSS) PER SHARE
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings per share to take into account the loss 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.
Consolidated
30 June 2024
$
30 June 2023
$
Loss after income tax attributable to the owners of Bowen Coking Coal Limited
(95,456,841)
(162,937,109)
Number
Number
Weighted average number of ordinary shares used in calculating basic loss per share
2,580,017,972
1,736,922,119
Weighted average number of ordinary shares used in calculating diluted loss per share
2,580,017,972
1,736,922,119
Cents
Cents
Basic loss per share
(3.70)
(9.38)
Diluted loss per share
(3.70)
(9.38)
271.0 million options, performance rights and warrants are considered potential ordinary shares. Options, performance rights and warrants issued are
not presently dilutive and were not included in the determination of diluted loss per share for the period.
Note 13. 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.
Consolidated
30 June 2024
$
30 June 2023
$
Current assets
Cash at bank
21,688,083
48,944,668
BOWEN COKING COAL | ANNUAL REPORT 2024
56
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 14. TRADE AND OTHER RECEIVABLES
ACCOUNTING POLICY
Receivables are classified at initial recognition. The classification depends on the receivable’s contractual cash flow characteristics and the Group’s
business model for managing them. In order for a receivable to be classified and measured at amortised cost, it needs to give rise to cash flows that
are solely payments of principal and interest (‘SPPI’) on the principal amount outstanding. Trade receivables and other receivables that satisfy the
SPPI test are carried at amortised cost using the effective interest method. Except for trade receivables, the Group initially measures a receivable at
its fair value plus transaction costs. Trade receivables are initially measured at the transaction price determined in accordance with the accounting
policy for revenue.
The Group recognises an allowance for estimated credit losses (ECLs) for all receivables. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. For receivables due in less than 12 months, the Group does not track changes in credit risk, but instead, recognises
a loss allowance based on the financial asset’s lifetime ECL at each reporting date. The expected credit loss is based on its historical credit loss
experience in the past two years, current financial difficulties of the debtor and is adjusted for forward-looking factors specific to the debtor and the
economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may
also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is
no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to
enforcement activity.
Consolidated
30 June 2024
$
30 June 2023
$
Current assets
Receivable from BCCM1
15,893,152
31,960,949
Other receivables/assets
2,372,513
1,869,079
GST receivable
3,419,867
2,684,229
21,685,532
36,514,257
1. The Group’s trade receivables from sales of coal to customers is receivable from the Bowen Coking Coal Marketing Joint Venture (BCCM), in accordance with the
marketing agreement.
ALLOWANCE FOR EXPECTED CREDIT LOSSES
The Group assessed the expected credit losses in relation to trade and other receivables in the current and prior years to be immaterial and no
allowance has been recorded.
As at 30 June 2024 no allowance for estimated credit losses has been recognised as it is expected that all receivable amounts will be received in full
when due. No impairment expense was recognised in relation to receivables for the 2024 and 2023 financial years. Refer to note 30 on credit risk of
trade receivables to understand how the Group manages the credit risk and measures credit quality of trade receivables that are neither past due
nor impaired.
BOWEN COKING COAL | ANNUAL REPORT 2024
57
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 15. INVENTORIES
ACCOUNTING POLICY
Coal inventories are valued at the lower of cost and net realisable value (NRV) 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:
• Run-of-mine material (ROM) extracted through the mining process and available for next stage of processing.
• Product coal stock which has been processed into final saleable form. Product coal may be held at site, in transit or at port shared stockpile
facilities awaiting delivery to customer.
NRV 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.
Consolidated
30 June 2024
$
30 June 2023
$
Current assets
Run-of-mine (ROM) stockpiles
8,667,154
23,239,909
Coal product stockpiles
17,819,837
36,935,787
Coal inventories
26,486,991
60,175,696
Fuel on hand
535,889
309,474
Total inventories
27,022,880
60,485,170
During the year, $2.2 million (2023: $7.0 million) was recognised as an expense for inventories carried at net realisable value. This is recognised in net
inventory movements.
Total cost of sales for the year was $364.2 million (2023: $224.1 million), which are costs incurred directly relating to the mining and preparation of
coal for sale to customers, and excludes all downstream, logistics and sales and marketing related costs as well as administration and overheads not
directly related to production.
KEY ESTIMATES AND ASSUMPTIONS
PROVISION FOR IMPAIRMENT OF INVENTORIES
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by
taking into account the recent sales experience and forecast upcoming sales, estimated costs to complete production and bring the product to sale,
the ageing of inventories and other factors that affect inventory obsolescence.
Inventory stockpiles volumes are measured by appropriately qualified persons, applying surveying methodologies, which consider the size and grade
of the coal stockpile. The estimated recovery percentage (yields) are based on the expected processing method. In addition, net realisable value tests
are performed at each reporting date to ensure coal is valued at lower of cost and NRV. Judgment is applied in estimating the variables noted above.
BOWEN COKING COAL | ANNUAL REPORT 2024
58
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 16. 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, over the next twelve months.
Non-current assets relate to cash and non-cash security bond payments made to key operational suppliers and for rehabilitation bonding required
to be held with Queensland Treasury, which has a credit rating of AA+.
Prepayments are recognised at cost. Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Consolidated
30 June 2024
$
30 June 2023
$
Current assets
Prepayments
4,802,917
4,250,602
Other financial asset
125,666
–
4,928,583
4,250,602
Non-current assets
Prepayments
6,006,198
8,735,186
Rehabilitation bonds
66,845,292
69,551,306
Security deposits
4,082,650
7,031,703
Other receivables
45,922
45,922
76,980,062
85,364,117
ALLOWANCE FOR EXPECTED CREDIT LOSSES
The Group assessed the expected credit losses in relation to trade and other receivables in the current and prior years to be immaterial and no
allowance has been recorded.
Note 17. PROPERTY, PLANT AND EQUIPMENT
ACCOUNTING POLICY
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly
attributable to the acquisition of the items and in preparing the items for first use, such as installation and transportation cost.
Depreciation is calculated using the below various methods that best represent their expected useful lives:
Buildings and improvements
5 to 15 years
Plant and equipment
3 to 15 years
Mining assets
Unit of production
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 recognised to profit or loss as incurred.
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.
BOWEN COKING COAL | ANNUAL REPORT 2024
59
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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.
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.
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 by management. 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
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 or mining
assets, as relevant.
MINING ASSETS
Once the development phase is complete and production starts, assets included in “Mine development assets” are transferred to “Mining assets”.
Amortisation of mining asset, except land, is computed 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. Land is not depreciated.
The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage of the recoverable resource.
This percentage is reviewed annually.
PRE-STRIP COSTS
In open pit mining operations, it is necessary to perform overburden and waste material extraction to first access the coal and establish mining
operation. 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.
POST-PRODUCTION STRIPPING COSTS
After the commencement of production, further development of the mine may require a phase of unusually high stripping that is similar in nature
to development phase stripping. The cost of such stripping is accounted for in the same way as development phase stripping (Pre-strip costs as
outlined above).
Production stripping generally results in the production of inventory and as such the production stripping costs are accounted for as part of the cost
of producing those inventories and is charged to the profit and loss as operating costs as incurred. Where there are periods of production stripping
that is unusually high and considered to result in improved access to coal to be mined, it is only recognised as a non-current “stripping activity asset”
if the following criteria are met:
• Future economic benefits (being improved access to the coal reserves) and probable
• The component of the coal reserves for which access will be improved can be accurately identified
• The costs associated with the improved access can be reliably measured
If any of the criteria are not met, the production stripping costs are charged to profit or loss as operating costs as they are incurred. If the criteria are
satisfied, the stripping activity asset will be amortised on a units of production basis.
REHABILITATION COSTS
Costs of site restoration are provided over the life of the mining facility from when exploration commences and are capitalised only to extent there
is future economic benefit to be recovered. 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.
BOWEN COKING COAL | ANNUAL REPORT 2024
60
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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 Group estimates the asset’s recoverable amount using estimated future cash
discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risk
specific to the asset. If the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to
its recoverable amount.
The Group bases its impairment calculation on detailed budgets and forecasts, which are prepared separately for each asset, based on the life-of-
mine plans. The estimated cash flows are based on expected future production, coal selling prices, operating costs and forecast capital expenditure,
and cash flows beyond five years are based on life-of-mine plans.
Impairment losses of continuing operations, including impairment of inventories, are recognised in the statement of profit or loss and other
comprehensive income in those expense categories consistent with the function of the impaired asset.
A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed either its
recoverable amount, or the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such a reversal is recognised in the statement of profit or loss and other comprehensive income as other income.
Consolidated
30 June 2024
$
30 June 2023
$
Non-current assets
Buildings and improvements – at cost
13,391,815
13,391,815
Less: Accumulated depreciation
(2,088,588)
(677,440)
11,303,227
12,714,375
Plant and equipment – at cost
52,620,922
48,122,145
Less: Accumulated depreciation and impairments
(9,561,226)
(2,549,593)
43,059,696
45,572,552
Right of use assets – at cost
455,887
455,887
Less: Accumulated depreciation
(190,092)
(37,852)
265,795
418,035
Mine development assets – at cost
67,449,596
79,883,850
Mining assets – at cost
99,283,683
27,360,642
Less: Accumulated depreciation and impairments
(51,361,803)
(5,640,232)
47,921,880
21,720,410
170,000,194
160,309,222
BOWEN COKING COAL | ANNUAL REPORT 2024
61
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
RECONCILIATIONS
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Buildings and
improvements
$
Plant and
equipment
$
Right of use
asset2
$
Mine
development
assets
$
Mining assets
$
Total
$
At 1 July 2022
–
308,829
75,640
20,862,235
22,202,648
43,449,352
Additions
44,261
590,307
–
66,354,093
–
66,988,661
Additions through asset
acquisition (note 22)
–
–
–
22,481,544
–
22,481,544
New lease addition (note 24)
–
–
435,706
–
–
435,706
Transfer from exploration and
evaluation assets to mine
development assets (note 20)
–
–
–
67,954,974
–
67,954,974
Remeasurement of rehabilitation
(note 25)
(340,417)
(3,319,791)
–
(12,403,128)
7,016,654
(9,046,682)
Transfer from mine
development assets
13,687,971
50,815,663
–
(85,365,868)
20,862,234
–
Impairment expense (note 7)
–
(218,033)
–
–
(18,879,624)
(19,097,657)
Depreciation expense
(677,440)
(2,604,423)
(93,311)
–
(9,481,502)
(12,856,676)
At 30 June 2023
12,714,375
45,572,552
418,035
79,883,850
21,720,410
160,309,222
Additions
–
262,767
–
80,074,224
–
80,336,991
Transfer to operating expenses1
–
–
–
(31,904,142)
–
(31,904,142)
Transfer from mine development
assets to mining assets
–
3,943,410
–
(55,405,920)
51,462,510
–
Depreciation expense
(1,411,148)
(6,718,372)
(152,240)
–
(23,826,386)
(32,108,146)
Remeasurement of rehabilitation
(note 25)
–
–
–
(5,198,414)
(137,004)
(5,335,418)
Assets reclassified as held for sale
–
(662)
–
–
(1,297,651)
(1,298,313)
Balance at 30 June 2024
11,303,227
43,059,695
265,795
67,449,598
47,921,879
170,000,194
1. During the period, $31.9 million was transferred out of Mine Development Assets to recognise a charge to operating expenses relating to Ellensfield South development
coal sales.
2. The consolidated entity leases floorspace for its offices. On 29 March 2023 the Company entered a new lease agreement for its head office for a period of three
years, with no option to extend. The lease agreement commences on 1 April 2023 with lease payments monthly and a fixed annual increase of 4.00% included in the
lease terms.
All property, plant and equipment are encumbered, as disclosed in note 23.
BOWEN COKING COAL | ANNUAL REPORT 2024
62
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
KEY JUDGEMENT AND ESTIMATES
RECOVERABILITY OF NON-ASSETS
Impairment assessments require the use of estimates and assumptions such as long-term commodity prices (considering current and historical
prices, price trends and related factors), discount rates, operating costs, future capital requirements, closure and rehabilitation costs, exploration
potential, reserves and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to
risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable
amount of assets and/or cash generating units (CGUs). In such circumstances, some or all of the carrying amount of the assets/CGUs may be
further impaired or the impairment charge reduced with the impact recognised in the statement of profit or loss and other comprehensive income.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date (note 7).
UNIT OF PRODUCTION (UOP) DEPRECIATION
Estimated economically recoverable reserves are used in determining the depreciation and/or amortisation of mine-specific assets. This results in
a depreciation/amortisation charge proportional to the depletion of the anticipated remaining life-of-mine production. The life of each item, which is
assessed at least annually, has regard to both its physical life limitations and present assessments of economically recoverable reserves of the mine
property at which the asset is located. These calculations require the use of estimates and assumptions, including the amount of recoverable reserves
and estimates of future capital expenditure. The calculation of the UOP rate of depreciation/amortisation could be impacted to the extent that actual
production in the future is different from current forecast production based on economically recoverable reserves, or if future capital expenditure estimates
change. Changes to economically recoverable reserves could arise due to changes in the factors or assumptions used in estimating reserves, including:
• The effect on economically recoverable reserves of differences between actual commodity prices and commodity price assumptions.
• Unforeseen operational issues.
Changes in estimates are accounted for prospectively.
RIGHT OF USE ASSETS
At the inception of a lease agreement, the Group assesses whether a contract contains a lease based on whether the contract conveys the right to
use or control the use of an identified asset for a period of time in exchange for consideration. Determining whether there is a right to use or control
requires significant judgement in particular assessment of substantive substitution rights.
Note 18. ASSETS HELD FOR SALE
On 11 July 2023, the Company announced the sale by Coking Coal One Pty Ltd (a wholly owned subsidiary of Bowen Coking Coal Limited) of a 10%
interest in the Broadmeadow East Mine (BME) to MPC Lenton Pty Ltd (MPC) and executed a series of conditional agreements with MPC as part of a
comprehensive transaction which included the sale of 10% of the assets of BME. Accordingly, the Company has classified the value of 10% of BME’s
net assets as current assets held for sale as at 30 June 2024.
Completion of the transaction occurred subsequent 30 June 2024 (refer to note 42).
Consolidated
30 June 2024
$
30 June 2023
$
Current assets
Assets held for sale
92,764
–
BOWEN COKING COAL | ANNUAL REPORT 2024
63
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 19. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Consolidated
30 June 2024
$
30 June 2023
$
Non-current assets
Investments accounted for using the equity method
1,861,057
938,688
Refer to note 39 for further information on interests in joint ventures.
RECONCILIATION
Reconciliation of the carrying amounts at the beginning and end of the current and previous financial year are set out below:
Consolidated
30 June 2024
$
30 June 2023
$
Opening carrying amount
938,688
(53,810)
Profit after income tax
2,272,369
992,498
Dividends paid
(1,350,000)
–
Closing carrying amount
1,861,057
938,688
Note 20. EXPLORATION AND EVALUATION ASSETS
ACCOUNTING POLICY
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 as an asset 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 is 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.
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including whether the Group
decides to develop 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 prices.
BOWEN COKING COAL | ANNUAL REPORT 2024
64
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, the amounts are written
off to profit and loss in the period in which the determination is made. When capitalised exploration and evaluation costs are transferred to mine
development, it is assessed for impairment.
Consolidated
30 June 2024
$
30 June 2023
$
Non-current assets
Exploration and evaluation assets
11,265,558
10,989,468
RECONCILIATIONS
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Broadmeadow
Project
$
Hillalong Project
$
Isaac River
Project
$
Burton Project
$
Other Projects
$
Total
$
Balance at 1 July 2022
–
1,780,705
3,286,635
–
5,183,571
10,250,911
Additions
–
1,373,404
228,077
–
64,629
1,666,110
Additions through asset
acquisition (note 22)
–
–
–
67,954,974
–
67,954,974
Transfer from exploration
and evaluation assets to
mine development assets
(note 17)
–
–
–
(67,954,974)
–
(67,954,974)
Receipt for exploration
costs from farmee
–
(927,553)
–
–
–
(927,553)
Balance at 30 June 2023
–
2,226,556
3,514,712
–
5,248,200
10,989,468
Additions
–
1,924,010
212,338
–
–
2,136,348
Receipt for exploration
costs from farmee
–
(1,860,258)
–
–
–
(1,860,258)
Balance at 30 June 2024
–
2,290,308
3,727,050
–
5,248,200
11,265,558
KEY JUDGEMENT
EXPLORATION AND EVALUATION
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and
allocating overheads between those that are expensed and capitalised. 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.
The Group performs impairment testing on specific exploration assets as required in AASB 6 para. 20. During current and previous period no
impairment indicator was noted.
BOWEN COKING COAL | ANNUAL REPORT 2024
65
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 21. 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.
Consolidated
30 June 2024
$
30 June 2023
$
Current liabilities
Trade payables
2,860,248
32,573,328
Payable to joint venture partner
9,477,900
1,963,151
State and private royalties payable
31,396,717
23,888,308
Unearned revenue
9,857,971
–
Accrued expenses
40,887,683
60,972,725
Other payables
1,848,839
1,233,691
96,329,358
120,631,203
Refer to note 30 for further information on financial instruments.
Note 22. ASSET ACQUISITION
The Company acquired 100% of the shares in New Lenton Coal Pty Ltd (whose only significant asset is a 90% interest in the Lenton Joint Venture)
on 1 July 2022.
The assets in the Lenton joint venture include the Burton Mine and the New Lenton Project. The Burton Mine was under care and maintenance,
with numerous assets in an inoperable state as at 1 July 2022. The assets requiring the highest cost to cure investment included the coal handling
processing plant as well as a number of supporting mining infrastructure items including the haul road, train load-out facility and accommodation
facilities. The New Lenton Project is still in the exploration phase, and there are significant plant and infrastructure assets held at the mine site.
CLASSIFICATION AS AN ASSET ACQUISITION
The transaction has been reflected as an acquisition of assets and liabilities as of 1 July 2022 under accounting standards as the Lenton Joint Venture
did not meet the definition of a business. The processes acquired were not considered substantive by management as:
i. the set of assets and activities transferred did not include an organised workforce critical to the ability to develop or convert the mine to
production;
ii. there were no strategic management or operational processes in place in relation to production given the mine was in care and maintenance
phase only; and the existing mine and areas of exploration required significant investment in order to restart production.
CONSIDERATION AND ROYALTIES PAYABLE
Total consideration payable was as follows:
• Cash consideration of $20.7 million, including completion adjustments; and
• Up to $7.5 million in payments based on the achievement of production or time-based milestone payments, whichever occurs earlier.
Transaction costs incurred in relation to the acquisition were $2.9 million.
In addition there are royalties are payable (refer to note 34).
BOWEN COKING COAL | ANNUAL REPORT 2024
66
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
COST OF ACQUISITION
The cost of acquiring the assets and liabilities that were recognised for accounting purposes was determined as follows:
Amount
$
Cash consideration
20,738,000
Deferred consideration1
6,271,623
Transaction costs
2,965,769
29,975,392
1. Based on fair value of expected future consideration - at 30 June 2023 the current portion of the liability was $2.5 million and the non-current portion was $3.8 million.
Deferred consideration is included in the consideration transferred and is recognised and measured at fair value at the date of the asset acquisition.
The deferred consideration is subsequently measured at fair value through profit or loss. At 30 June 2024, the remaining portion was $4.3 million and
is classified as non current. A fair value adjustment of $0.5 million is recorded in the statement of profit or loss ending 30 June 2024 (refer to note 10).
The future royalty payments entered into as part of the transaction are excluded from the cost of the transaction and only recognised when they are
incurred given they relate to variable payments based on future sales.
During the year ended 30 June 2023, the transaction costs and the cash consideration paid totalled $22.5 million.
ALLOCATION OF COST TO ASSETS AND LIABILITIES ACQUIRED
The cost of acquisition was allocated to the individual identifiable assets and liabilities on the basis of their related fair values at the date of purchase.
An asset acquisition as distinct from a business combination does not give rise to goodwill under accounting standards.
The assets acquired by way of the transaction comprise of the following:
Amount
$
Property, plant and equipment
22,481,544
Mining information
1,958,174
Mining tenements
65,996,800
Rehabilitation provision
(60,461,126)
29,975,392
KEY JUDGEMENT AND ESTIMATES
ASSET ACQUISITION
The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into consideration all available
information at the reporting date.
BOWEN COKING COAL | ANNUAL REPORT 2024
67
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 23. 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.
COMPOUND FINANCIAL INSTRUMENTS
The initial carrying value of the host instruments is the residual amount after separating the derivate liability. The derivative liability component is
initially recognised at fair value.
Subsequent to initial recognition, the host liability component of a compound financial instrument is measured at amortised cost using the effective
interest method. The derivative component of a compound financial instrument is measured at fair value through profit and loss.
After initial recognition the Group does not reclassify a financial instrument (between equity and liability) upon a change in the nature or risk profile
if that solely arise on the passage of time.
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.
Consolidated
30 June 2024
$
30 June 2023
$
Current liabilities
Taurus facility
– Loan at amortised cost
49,818,841
75,245,990
Loan – New Hope facility
– Loan at amortised cost
–
55,585,295
New Hope facility
– Derivative liability – warrants
107,347
–
49,926,188
130,831,285
Non-current liabilities
Taurus facility
– Loan at amortised cost
30,826,465
–
New Hope facility
– Loan at amortised cost
51,039,966
–
Convertible Notes
– Host debt contract at amortised cost
25,975,541
21,285,416
– Derivative liability (conversion rights) at fair value through profit and loss
842,692
6,736,088
108,684,664
28,021,504
TAURUS FACILITY
The Taurus Mining Finance Fund No.2, L.P. (“Taurus facility”) is senior secured with an aggregate limit of US$51.0 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.
On 29 September 2023, the Company and Taurus agreed to amend the loan facility, the changes included an extension to loan termination date to
31 December 2025 (previously 31 March 2024) and revised repayment profile. The facility interest rate (paid quarterly) increased to 10.0% (previously
8.0%) on the facility drawn balance of US$44.0 million. The total drawn debt balance at 30 June 2024 was US$51.0 million (A$77.0 million) In addition,
royalties have increased for both Broadmeadow East and Burton tenements to 0.75% (previously 0.35%). Bluff royalties were unchanged at 1.00%.
BOWEN COKING COAL | ANNUAL REPORT 2024
68
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
At date of amendment of the loan facility, the debt was remeasured at the fair value of U$49.5 million (A$72.4 million) on 29 September 2023 and
$0.6 million of transaction costs comprising establishment, corporate and legal advisory fees have been offset. The remeasurement of fair value
resulted in the recognition of a gain on debt modification of US$3.7 million (A$5.7 million), included within finance income (refer to note 9 for net gain
on debt modification amount recognised in the period).
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 New Hope Corporation Limited facility (“New Hope facility”) is secured on a second ranking basis to the Taurus facility.
On 29 September 2023, the Company and New Hope Corporation Limited agreed to amend the loan facility, which included an extension to the loan
termination date to 31 March 2026 (previously 30 June 2024) and a share purchase agreement (summarised below). The interest rate of 3-month
BBSY Bid plus 10% per annum remains unchanged.
Key terms of the share purchase agreement are:
• 76,923,076 shares at exercise price of $0.13 per share used to immediately repay $9.1 million of historical capitalised interest and accrued
interest owing on the New Hope facility up to 29 September 2023 as well as $0.9 million towards principal loan repayment. The fair value of
the shares issued on the date of issue was $12.3 million. The difference between the fair value and consideration paid is recognised as loss on
extinguishment of debt through issue of equity.
• Future interest repayments on the facility up to 30 September 2024 are planned to be settled in quarterly warrants (derivative liability) tranches of
25,000,000 each. The 100,000,000 of warrants were subject to shareholder approval and issued at $0.1144. These warrants, when exercised in
full, constitute 100,000,000 shares. No warrants were exercised as at 30 June 2024.
At date of amendment of the loan facility, after the $10.0 million issuance of shares to New Hope, the loan facility had a total remaining balance
of $48.3 million, made up of $8.0 million for warrants (derivative liability recognised at fair value), $39.0 million principal and $1.9 million accrued
redemption premium. The amendment to the loan facility resulted in a $2.3 million loss on extinguishment of debt through issue of equity, which is
included within the amount disclosed in note 9 net gain on debt modification amount recognised in the period.
At 30 June 2024, the loan facility had a total balance of $51.1 million, made up of a warrant (derivative liability) of $0.1 million and principal amount of
$51.0 million including redemption premium. The fair value remeasurement of the warrants resulted in the recognition of a derivative liability revaluation
gain of $7.9 million, included in finance income (refer to note 9).
The New Hope facility was used to provide a bank guarantee under the Queensland financial provisioning regime for rehabilitation performance
bonding for the Burton Complex. The Company’s share of the bond for the Lenton/Burton Mine rehabilitation cost is $45.2 million.
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 $40.0 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.
The Convertible Notes carry an interest rate of 3.0% per annum and have an initial conversion price of $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. Additional adjustments to the conversion price exist if
ordinary shares are issued by the Company at a price lower than the conversion price. There has been share issuance during the period (refer to
note 26). Accordingly, at 30 June 2024 the conversion price has been amended and is currently $0.2637 per conversion note.
At the date of recognition of the convertible note, a derivative liability was recognised at fair value. The fair value was determined utilising the Black
Scholes option valuation methodology. At 30 June 2024, the remeasurement of the fair value resulted in the recognition of a fair value adjustment of
$5.9 million, included in finance income (refer to note 9).
BOWEN COKING COAL | ANNUAL REPORT 2024
69
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 24. LEASE LIABILITY
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.
Consolidated
30 June 2024
$
30 June 2023
$
Current liabilities
Lease liability
155,356
141,062
Non-current liabilities
Lease liability
125,546
280,902
Consolidated
Reconciliation of movements
30 June 2024
$
30 June 2023
$
Opening balance
421,964
82,797
New lease addition
–
435,706
Interest expense
13,267
10,161
Profit on disposal of lease
–
(3,137)
Repayments
(154,329)
(103,563)
280,902
421,964
Refer note 30 for further information on Financial Instruments.
KEY JUDGEMENT
LEASE LIABILITY
At the inception of a lease agreement, the Group assesses whether a contract contains a lease based on whether the contract conveys the right to
use or control the use of an identified asset for a period of time in exchange for consideration. Determining whether there is a right to use or control
requires significant judgement in particular the assessment of substantive substitution rights.
BOWEN COKING COAL | ANNUAL REPORT 2024
70
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 25. PROVISIONS
ACCOUNTING POLICY
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.
EMPLOYEE BENEFITS
SHORT-TERM EMPLOYEE BENEFIT OBLIGATIONS:
Liabilities for wages and salaries, including non-monetary benefits expected to be settled wholly within 12 months after the end of the reporting
period in respect of employees’ services rendered up to the end of the reporting period and are measured at amounts expected to be paid when
the liabilities are settled.
OTHER LONG-TERM EMPLOYEE BENEFITS:
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on high quality 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.
The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred up to when
the producing mine properties are expected to cease operations. These provisions have been created based on the Group’s internal estimates.
Assumptions based on the current economic environment have been made, which management believes are a reasonable basis upon which
to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions because of
changes in laws and regulations, public expectations, prices, discovery and analysis of site conditions and changes in technology to restore the
mine sites. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that
will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at
economically viable rates. This, in turn, will depend upon future coal prices, which are inherently uncertain.
Additions through remeasurements of the rehabilitation is included in the cost of the related asset and amortised over the life of the project using the
estimated unit of production method and the rehabilitation provision is accreted periodically as the discounting of the liability unwinds. The unwinding
of the discount is recorded as a finance cost. Changes in estimates to the rehabilitation cost and discount rate is accounted for prospectively.
The discount rate used in the calculation of the provision at 30 June 2024 equalled 4.31% (2023: 4.03%).
BOWEN COKING COAL | ANNUAL REPORT 2024
71
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
PROVISION FOR ONEROUS CONTRACTS
If the Group has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before
a separate provision for an onerous contract is established, the Group recognises any impairment loss that has occurred on assets dedicated to
that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Group cannot avoid because it has the contract) of
meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract
reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure
to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the contract (i.e., both incremental costs and an allocation of costs
directly related to contract activities).
Consolidated
30 June 2024
$
30 June 2023
$
Current liabilities
Employee leave entitlements
867,098
664,397
Rehabilitation provision
–
2,941,318
Provision for onerous contracts
–
16,454,000
867,098
20,059,715
Non-current liabilities
Employee leave entitlements
204,343
106,295
Rehabilitation provision
65,143,726
66,332,210
65,348,069
66,438,505
REHABILITATION PROVISION
MOVEMENTS IN PROVISIONS
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated
Rehabilitation provision
30 June 2024
$
30 June 2023
$
Carrying amount at the start of the year
69,273,529
15,777,762
Additions through asset acquisition (note 22)
–
60,461,126
(Reductions)/Additions through remeasurement of rehabilitation1
(5,530,401)
(9,046,681)
Unwinding of discount (note 10)
2,606,148
2,081,322
Reclassified as held for sale (note 18)2
(1,205,550)
–
Carrying amount at the end of the year
65,143,726
69,273,529
1. During the year ended 30 June 2024, a credit adjustment of $194,982, which relates to the Bluff mine rehabilitation provision, was taken through Profit and Loss as the
Bluff assets were impaired in the prior period (refer to note 7 ‘Impairment expense’).
2. Rehabilitation provision reclassified as held for sale during the current period (refer to note 18 ‘Assets held for sale’).
BOWEN COKING COAL | ANNUAL REPORT 2024
72
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated
Provision for Onerous Contract
30 June 2024
$
30 June 2023
$
Carrying amount at the start of the year
16,454,000
–
Provision for onerous contracts
–
16,454,000
Onerous contract adjustment1
(12,995,612)
–
Settlement of onerous provision
(3,458,388)
–
Carrying amount at the end of the year
–
16,454,000
1. During the current period, management reassessed the provision for onerous contracts following positive discussion with service providers in relation to the Bluff
mine transition into safe care and maintenance, which resulted in $13.0 million adjustment of the onerous contracts provision, due to reduction in the assessed future
commitments.
KEY ESTIMATES AND ASSUMPTIONS
REHABILITATION PROVISION
The ultimate rehabilitation costs are uncertain, and cost estimates can vary in response to many factors, including estimates of the extent and costs
of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in discount
rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. Therefore, significant estimates
and assumptions are made in determining the provision for mine rehabilitation. As a result, there could be significant adjustments to the provisions
established which would affect future financial result. The provision at reporting date represents management’s best estimate of the present value
of the future rehabilitation costs required.
OTHER LONG-TERM EMPLOYEE BENEFITS
The liability for annual leave and long service leave which is not expected to be wholly settled within 12 months of the reporting date is measured at
the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Note 26. ISSUED CAPITAL
ACCOUNTING POLICY
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.
Consolidated
30 June 2024
Shares
30 June 2023
Shares
30 June 2024
$
30 June 2023
$
Ordinary shares – fully paid
2,848,005,498
2,110,496,831
330,922,475
261,285,098
BOWEN COKING COAL | ANNUAL REPORT 2024
73
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MOVEMENTS IN ORDINARY SHARE CAPITAL
Details
Date
Shares
Issue price
$
Balance
1 Jul 2022
1,542,124,952
134,113,511
Issue of employee shares
5 Jul 2022
948,560
$0.2300
218,168
Performance rights conversion
17 May 2023
55,536
$0.2700
14,995
Performance rights conversion
9 Aug 2022
4,000,000
$0.0800
332,000
Performance rights conversion
5 Sep 2022
450,000
$0.3100
137,250
Placement
27 Oct 2022
253,547,544
$0.3000
76,064,263
Placement
30 Nov 2022
29,785,790
$0.3000
8,935,737
Exercise of options
16 Feb 2023
5,821,000
$0.1000
582,100
Performance rights conversion
11 Jan 2023
4,000,000
$0.0500
200,000
Performance rights conversion
13 Apr 2023
425,000
$0.3500
129,625
Placement
13 Jun 2023
209,805,071
$0.1700
35,666,856
Performance rights conversion
13 Apr 2023
600,484
$0.2700
162,131
Performance rights conversion
3 May 2023
109,337
$0.2700
29,521
Share purchase plan
28 Jun 2023
5,804,557
$0.1700
986,775
Share purchase plan
30 Jun 2023
53,019,000
$0.1700
9,013,230
Transaction costs associated with share issues
–
$0.0000
(5,301,064)
Balance
30 Jun 2023
2,110,496,831
261,285,098
Placement
24 Jul 2023
25,489,047
$0.1700
4,333,137
Issued to New Hope Corporation Limited
under a debt facility agreement
29 Sep 2023
76,923,076
$0.1600
12,307,692
Performance rights conversion
4 Oct 2023
340,035
$0.2300
78,208
Performance rights conversion
9 Nov 2023
43,595
$0.2300
10,027
Placement
13 Nov 2023
375,040,092
$0.0900
33,753,608
Rights Issue
27 Nov 2023
180,515,463
$0.0900
16,246,392
Placement
4 Dec 2023
75,028,667
$0.0900
6,752,580
Performance rights conversion
21 Dec 2023
85,827
$0.2300
19,740
Performance rights conversion
9 Feb 2024
42,865
$0.2300
9,859
Performance rights conversion
16 May 2024
4,000,000
$0.0500
200,000
Transaction costs associated with share issues
(4,073,866)
Balance
30 June 2024
2,848,005,498
330,922,475
BOWEN COKING COAL | ANNUAL REPORT 2024
74
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MOVEMENTS IN UNLISTED OPTIONS
Details
Date
Options
Exercise price
Balance
1 Jul 2022
43,000,000
Options exercised
16 Feb 2023
(5,821,000)
$0.0800
Balance
30 Jun 2023
37,179,000
$0.0000
Options lapsed
26 Oct 2023
(3,000,000)
$0.2478
Options lapsed
23 Nov 2023
(15,000,000)
$0.2478
Options issued
29 Apr 2024
30,000,000
$0.0900
Options issued
27 Jun 2024
37,500,000
$0.0900
Balance
30 June 2024
86,679,000
$0.0000
MOVEMENTS IN PERFORMANCE RIGHTS
Details
Date
Shares
Balance
1 Jul 2022
13,300,000
Issued
5 Jul 2022
2,165,913
Converted
9 Aug 2022
(4,000,000)
Converted
5 Sept 2022
(450,000)
Issued
11 Nov 2022
765,357
Converted
11 Jan 2023
(4,000,000)
Issued
27 Feb 2023
15,000,000
Converted
13 Apr 2023
(425,000)
Converted
13 Apr 2023
(600,484)
Converted
3 May 2023
(109,337)
Converted
17 May 2023
(55,536)
Balance
1 Jul 2023
21,590,913
Issued
27 Jul 2023
9,100,652
Cancellation
1 Aug 2023
(240,832)
Converted
4 Oct 2023
(340,035)
Converted
9 Nov 2023
(43,595)
Converted
21 Dec 2023
(85,827)
Converted
9 Feb 2024
(42,865)
Issued
29 Apr 2024
22,500,000
Converted
16 May 2024
(4,000,000)
Issued
27 Jun 2024
15,000,000
Lapsed
30 Jun 2024
(19,148,643)
Balance
30 June 2024
44,289,768
All Performance Rights have a nil exercise price.
Refer to note 8: Share based payments for more details on Options and Performance Rights.
BOWEN COKING COAL | ANNUAL REPORT 2024
75
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MOVEMENTS IN WARRANTS
Details
Date
Warrants
Exercise price
Issued1
29 September 2023
100,000,000
$0.1144
Balance
30 June 2024
100,000,000
1. Warrants expiring 30 September 2024. Refer to note 23 Interest bearing loans & borrowings.
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and
amounts 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. The fully paid ordinary shares have no par value.
CAPITAL MANAGEMENT
For the purpose of the Group’s capital management, capital includes issued capital, interest bearing loans and borrowings and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise the shareholder’s value.
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants
attached to its interest-bearing loans and borrowings that form part of its capital structure requirements. Breaches in the financial covenants would
permit the lender to immediately call interest bearing loans and borrowings. There have been no breaches in the financial covenants of any interest
bearing loans and borrowings in the current or prior period. The Group manages its capital structure and makes adjustments to it, in light of changes
in economic conditions and the requirements of the financial covenants.
There have been no changes to the capital management policies during the year.
Note 27. RESERVES
Consolidated
30 June 2024
$
30 June 2023
$
Share-based payment reserve
5,272,535
4,726,236
MOVEMENTS IN RESERVES
Movements in each class of reserve during the current financial year are set out below:
Consolidated
$
Balance at 1 July 2023
4,726,236
Share-based payment
864,134
Conversion of performance shares
(317,835)
Balance at 30 June 2024
5,272,535
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, or to share capital when exercised.
BOWEN COKING COAL | ANNUAL REPORT 2024
76
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 28. ACCUMULATED LOSSES
Consolidated
30 June 2024
$
30 June 2023
$
Accumulated losses at the beginning of the financial year
(230,963,924)
(68,026,815)
Loss after income tax expense for the year
(95,456,841)
(162,937,109)
Accumulated losses at the end of the financial year
(326,420,765)
(230,963,924)
Note 29. DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 30. FINANCIAL INSTRUMENTS
FINANCIAL RISK MANAGEMENT POLICIES
The Group’s financial instruments comprises cash balances, receivables and payables, loans and convertible notes. The main purpose of these
financial instruments is to provide finance for the Group operations.
TREASURY RISK MANAGEMENT
Key executives of the Group 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 as well as implementing risk mitigation strategies, 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, liquidity risk and equity
risk. These risks are managed through monitoring of forecast cash flows, interest rates, economic conditions and ensuring adequate funds are
available.
MARKET RISK
Foreign currency risk
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 (US) 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 has fully drawn down on its US$51.0 million finance facility with Taurus. As noted above, the Group’s coal sales are denominated in
US$, which provides a natural economic hedge in relation to adverse foreign currency movements that affect the drawn down facility position.
BOWEN COKING COAL | ANNUAL REPORT 2024
77
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
The carrying amount of the Group’s foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:
Assets
Liabilities
Consolidated
30 June 2024
A$
30 June 2023
A$
30 June 2024
A$
30 June 2023
A$
US dollars denominated
–
–
–
–
Cash and cash equivalents
883,167
1,511,461
–
–
Trade and other receivables
15,893,152
32,940,999
–
–
Trade and other payables
–
–
(307,299)
(528,360)
Loans – Taurus facilities
–
–
(81,559,522)
(77,109,162)
16,776,319
34,452,460
(81,866,821)
(77,637,522)
The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable
possible fluctuations taking into consideration movements over the last 3 months each year and the spot rate at each reporting date. The foreign
exchange gain for the year ended 30 June 2024 was $1,927,812.22.
The Group had net liabilities denominated in foreign currencies of US$41.9 million (assets of US$11.9 million less liabilities of US$53.8 million as at
30 June 2024 (2023: US$28.3 million [assets of US$23.1 million less liabilities of US$51.3 million]).
A change of 5% in the Australian dollar against the following currencies at 30 June 2024 would have increased/decreased profit or loss before tax and
equity by the amounts shown below. The analysis assumes that all other variables remain constant.
Profit/(Loss)
before tax
Equity
30 June 2024
AUD:USD weakening by 5%
(3,425,816)
(2,398,071)
AUD:USD strengthening by 5%
3,099,548
2,169,683
30 June 2023
AUD:USD weakening by 5%
(2,324,671)
(1,627,270)
AUD:USD strengthening by 5%
2,103,274
1,472,292
Price risk
The Group’s exposure to commodity price risk is predominantly changes in coal prices, which impacts the royalty expense on the Taurus debt
facility. Coal prices are driven by various factors, including but not limited to, changes in seaborne supply, geopolitical economic activity, commodity
substitution, international demand and contract sales negotiations. Currently, the Group does not hedge against coal price volatility.
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, debt facilities and the derivative liability (conversion rights). The risk of fluctuation
in interest rates on bank balances and New Hope facility is managed through the use of variable interest rate while the interest rate risk on the Taurus
debt facility and Convertible Note are managed through the interest rate on these facilities being fixed.
BOWEN COKING COAL | ANNUAL REPORT 2024
78
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Basis points increase
Basis points decrease
Consolidated
30 June 2024
Basis points
change
Effect on profit
before tax
Effect
on equity
Basis points
change
Effect on profit
before tax
Effect
on equity
Australian Dollar-denominated
cash balances
200
415,786
291,051
200
(415,786)
(291,051)
US Dollar-denominated cash
balances
200
17,663
12,364
200
(17,663)
(12,364)
Australian Dollar-denominated
loan balances
200
(911,982)
(638,388)
200
911,982
638,388
(478,533)
(334,973)
478,533
334,973
Basis points increase
Basis points decrease
Consolidated
30 June 2023
Basis points
change
Effect on profit
before tax
Effect
on equity
Basis points
change
Effect on profit
before tax
Effect
on equity
Australian Dollar-denominated
cash balances
200
905,770
634,039
200
(905,770)
(634,039)
US Dollar-denominated cash
balances
200
30,229
21,160
200
(30,229)
(21,160)
Australian Dollar-denominated
loan balances
200
(1,246,427)
(872,499)
200
1,246,427
872,499
(310,428)
(217,300)
310,428
217,300
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with
banks, Queensland Government Authorities and financial institutions, foreign exchange transactions and other financial instruments and sale of coal
to customers.
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 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, financial institutions and Queensland Government Authorities with an ‘A’ rating are utilised for banking transactions and financial surety
for rehabilitation;
• sales to customers are governed by trade finance instruments such as letters of credit and on open credit to creditworthy customers; and
• all other entities are rated for credit worthiness taking into account their size, market position and financial standing.
The below table summarises the assets which are subject to credit risk:
Consolidated
30 June 2024
$
30 June 2023
$
Cash and cash equivalents
21,688,083
48,944,668
Trade and other receivables
21,685,532
36,514,257
Security deposit
4,082,650
76,577,509
47,456,265
162,036,434
BOWEN COKING COAL | ANNUAL REPORT 2024
79
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
TRADE AND OTHER RECEIVABLES
Customer credit risk is managed by BCCM subject to the Group’s established policy, procedures and control relating to customer credit risk
management. The Group trades only with recognised creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit
terms are subject to credit verification procedures. Sales transactions are secured by prepayments and/or letters of credit when deemed appropriate.
Individual credit limits are defined in accordance with this assessment. In addition, outstanding receivable balances are regularly monitored on an
ongoing basis, such that the Group’s exposure to credit-impaired balances and bad debts is not considered to be a significant risk.
At 30 June 2024, the Group had one customer (2023: two customers) that owed the Group more than US$10.0 million and accounted for
approximately 92% (2023: 71%) of all receivables owing.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based
on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type
and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome, the time
value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts
of future economic conditions.
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 cash flow generated from operations as well as from capital raise proceeds and debt facilities for project
financing and capital investment. Refer to note 23 for information on borrowings.
REMAINING CONTRACTUAL MATURITIES
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.
Consolidated
30 June 2024
Weighted
average
interest rate
%
1 year
or less
$
Between
1 and
2 years
$
Between
2 and
5 years
$
Over
5 years
$
Remaining
contractual
maturities
$
Non-derivatives
Non-interest bearing
Trade payables
–
96,329,358
–
–
–
96,329,358
Deferred consideration
12.50%
–
5,000,000
–
–
5,000,000
Interest bearing – fixed rate
Lease liability
–
163,163
127,490
–
–
290,653
Interest bearing loans and borrowings
–
66,606,450
86,958,240
41,203,288
–
194,767,978
Total non-derivatives
163,098,971
92,085,730
41,203,288
–
296,387,989
BOWEN COKING COAL | ANNUAL REPORT 2024
80
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated
30 June 2023
Weighted
average
interest rate
%
1 year
or less
$
Between
1 and
2 years
$
Between
2 and
5 years
$
Over
5 years
$
Remaining
contractual
maturities
$
Non-derivatives
Non-interest bearing
Trade payables
–
120,631,203
–
–
–
120,631,203
Deferred consideration
9.60%
2,500,000
2,500,000
2,500,000
–
7,500,000
Interest bearing – fixed rate
Lease liability
–
141,062
163,163
127,490
–
431,715
Interest bearing loans and borrowings
–
130,831,285
–
–
38,506,104
169,337,389
Total non-derivatives
254,103,550
2,663,163
2,627,490
38,506,104
297,900,307
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
EQUITY PRICE RISK
Equity price risk is the risk of changes in fair value due to changes in the share prices.
The Convertible Notes are convertible into fully ordinary paid shares in Bowen Coking Coal Ltd at maturity date (20 June 2027) or earlier if redeemed
or converted in accordance with their terms and conditions, and may be for a higher number of shares issued than originally anticipated, due to
various actions undertaken by the Group which impact the Convertible Note’s conversion price. Refer to note 23 for information on borrowings.
The unlisted warrants are exercisable into fully ordinary paid shares in Bowen Coking Coal Ltd at maturity date (based on warrants schedule dates),
before expiry date 30 September 2024, if redeemed or converted in accordance with their terms and conditions. Refer to note 23 for information on
borrowings.
FAIR VALUE OF FINANCIAL INSTRUMENTS
At 30 June 2024 the carrying value of financial instruments approximated the fair values of financial assets and liabilities. This is on the basis that the
effective interest rates are considered to approximate a market rate for these instruments.
Note 31. KEY MANAGEMENT PERSONNEL DISCLOSURES
DIRECTORS
The following persons were directors of Bowen Coking Coal Limited during the financial year:
Nicholas Jorss
Neville Sneddon
David Conry AM
Resigned 22 August 2024
Malte von der Ropp
Appointed 8 April 2024
Gerhard Redelinghuys
Resigned 23 August 2023
Matthew Latimore
Resigned 25 July 2023
Stephen Downs
Resigned 25 July 2023
OTHER KEY MANAGEMENT PERSONNEL
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the Group, directly or
indirectly, during the financial year:
Daryl Edwards
Chief Executive Officer – appointed 29 January 2024
Chief Financial Officer – previously served till 29 January 2024
Mark Ruston
Chief Executive Officer – resigned 25 May 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
81
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
COMPENSATION
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Consolidated
30 June 2024
$
30 June 2023
$
Short-term employee benefits1
2,597,336
1,854,406
Other benefits2
48,801
204,480
Post-employment benefits
106,879
101,885
Share-based payments
351,423
842,179
3,104,439
3,002,950
1. Short term benefits comprises of salary and fees as well as cash bonuses paid or payable based on performance targets met or short term incentives approved by
the Board.
2. Other benefits comprises of movement in provisions for leave entitlements during the financial year.
Refer to note 36 for other transactions with key management personnel.
Note 32. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor of the Company, and its network
firms as well as to RSM Australia Partners, the Company’s prior auditors:
Consolidated
30 June 2024
$
30 June 2023
$
Audit services – Ernst & Young
Fees for audit and review of the financial statements of the Group
and auditing the statutory financial reports of any controlled entities
260,583
195,000
Other services – Ernst & Young
Fees for tax compliance and advisory services
39,815
–
Fees for other advisory services
15,000
–
Fees for other assurance services
5,500
–
60,315
–
320,898
195,000
Audit services – RSM Australia Partners
Fees for audit and review of the financial statements of the Group
and auditing the statutory financial reports of any controlled entities
–
49,745
Other services – RSM Australia Partners
Fees for preparation and lodgement of QLD stamp duty
–
34,932
Fees for other assurance services
–
5,932
Fees for file review
–
2,100
–
42,964
–
92,709
BOWEN COKING COAL | ANNUAL REPORT 2024
82
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 33. CONTINGENT ASSETS
There were no contingent assets as at 30 June 2024.
Note 34. CONTINGENT LIABILITIES
BROADMEADOW EAST PROJECT (ML 70257)
The Company completed the acquisition of the Broadmeadow East Project (ML 70257) from Peabody (Burton Coal) Pty Ltd in 2020.
The consideration payable for the acquisition included a contingent item being a royalty arrangement of $1/tonne which is payable on all coal
produced and sold from ML 70257, capped at a maximum of 1.5Mt, being $1.5m and not applicable to the first 500,000 tonnes produced and sold.
BLUFF PCI COAL PROJECT (ML 80194, EPC 1175, EPC 1999)
The Company acquired the Bluff PCI Coal Project from MACA Ltd (who were the appointed receivers for Carabella Resources Pty Ltd) in 2021.
The acquisition comprised the Bluff Coal mine (ML 80194) and coal exploration permits EPC 1175 and EPC 1999. The consideration payable for
the acquisition included the following contingent consideration items:
Base Royalty payable: if Benchmark price for the quarter is more than USD$120/tonne, the royalty applicable is $2/tonne on all coal produced and
sold from ML 80194, EPC 1175 and EPC 1999, subject to a maximum amount payable of $10.0 million;
Super Royalty payable: if Benchmark price for the quarter is more than USD$150/tonne, 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 the 6 July 2023 the Group, MACA Ltd and Nolec TC Pty Ltd as trustee for the Carbon Royalty Trust No. 2 signed a Deed of Novation – Royalty
Deed, as a result the royalty above will be paid to Nolec TC Pty Ltd going forward.
NEW LENTON COAL PTY LTD (WHICH OWNS A 90% INTEREST IN THE LENTON JOINT VENTURE)
As part of the Company’s acquisition of 100% of the shares in New Lenton Coal Pty Ltd from New Hope Corporation Limited in July 2022 (refer to
note 22), consideration payable included a contingent item being payment of royalties as follows:
• A non-indexed royalty of 90% of coal sold (expressed in metric tonnes) by or on behalf of the Lenton Joint Venture multiplied by a royalty rate of
A$0.55 per metric tonne, capped at A$16.0 million;
• Average Price Royalty; A non-indexed royalty of 90% of coal sold (expressed in metric tonnes) by or on behalf of the Lenton Joint Venture
multiplied by a royalty rate of A$0.00 per metric tonne where the Benchmark Price is equal to or less than USD$160 per metric tonne or multiplied
by a royalty rate of A$1.65 per metric tonne where the Benchmark Price is more than USD$160 per metric tonne, capped at A$24.0 million; and
• High Price Royalty; A non-indexed royalty of 90% of coal sold (expressed in metric tonnes) by or on behalf of the Lenton Joint Venture multiplied by
a royalty rate of A$0.00 per metric tonne where the Benchmark Price is equal to or less than USD$190 per metric tonne or multiplied by a royalty
rate of A$3.30 per metric tonne where the Benchmark Price is more than USD$190 per metric tonne, capped at A$30.0 million.
Consistent with the Group’s accounting policy, contingent, production-based royalties are not recorded as part of the consideration in an asset
acquisition, rather they are recognised as an expense in the period of the obligating event i.e. Sale of produced coal occurs.
There were no other contingent liabilities at the end of the reporting period.
BOWEN COKING COAL | ANNUAL REPORT 2024
83
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 35. COMMITMENTS
EXPLORATION COMMITMENTS
The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time
and are expected to be fulfilled in the normal course of operations of the Group. The following commitments exist at balance date but have not been
brought to account. If the relevant option to acquire a mineral tenement is relinquished the expenditure commitment also ceases. The Group has the
option to negotiate new terms or relinquish the tenements and also to meet expenditure requirements by joint venture or farm-in arrangements.
Consolidated
30 June 2024
$
30 June 2023
$
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
113,000
502,000
One to five years
1,315,000
780,500
More than five years
487,000
–
1,915,000
1,282,500
CAPITAL COMMITMENTS
At 30 June 2024 the Group had $0.9 million in capital purchase commitments.
Note 36. RELATED PARTY TRANSACTIONS
PARENT ENTITY
Bowen Coking Coal Limited is the parent entity.
SUBSIDIARIES
Interests in subsidiaries are set out in note 38.
JOINT VENTURES
Interests in joint ventures are set out in note 39.
JOINT OPERATIONS
Interests in joint operations are set out in note 40.
KEY MANAGEMENT PERSONNEL
Disclosures relating to key management personnel are set out in note 31.
TRANSACTIONS WITH RELATED PARTIES
Bowen Coking Coal Ltd and Marmilu Pty Ltd, an entity controlled by Matthew Latimore (resigned as a director of the Group on 25 July 2024) formed a
50/50 joint venture via Bowen Coking Coal Marketing Pty Ltd (BCCM).
Matthew Latimore is the sole Director and owner of M Resources Trading Pty Ltd which is exclusively contracted to provide marketing and logistics
services to the Group via BCCM. During the year BCCM paid a marketing fee to M Resources Trading Pty Ltd based on 0.75% of the sales revenue.
BCCM charges the Group a 1.75% marketing fee on sales of produced coal.
BOWEN COKING COAL | ANNUAL REPORT 2024
84
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated
30 June 2024
$
30 June 2023
$
Payment for goods and services:
Marketing fee paid and payable to BCCM
7,772,016
4,091,630
Marketing fee paid and payable to M Resources Trading Pty Ltd1
–
760,862
Total expenses
7,772,016
4,852,492
1. These expenses related to the marketing fees paid by the Group while M Resources Trading Pty Ltd was considered to be a related party. M Resources Trading Pty Ltd
ceased to be a related party after 25 July 2023 following the resignation of Matthew Latimore from his position as a former director of the Group.
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
30 June 2024
$
30 June 2023
$
Current receivables:
Trade receivables from BCCM
15,893,152
31,960,949
Consolidated
30 June 2024
$
30 June 2023
$
Current payables:
Trade payables to BCCM
3,279,291
1,162,042
LOANS TO/FROM RELATED PARTIES
There were no loans to or from related parties at the current and previous reporting date.
TERMS AND CONDITIONS
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding
balances at the year end are unsecured and interest-free and settlements occurs in cash and are presented as part of trade receivable and trade
payables as appropriate. There have been no guarantees provided or received from any related party receivable or payables. An assessment
of the expect credit losses (ECL) relating to related party receivables is undertaken upon initial recognition and each financial year by examining
the financial position of the related party and the market in which the related party operate applying the general approach of the ECL impairment
models of IFRS 9.
BOWEN COKING COAL | ANNUAL REPORT 2024
85
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 37. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Bowen Coking Coal Ltd at 30 June 2024. This information has been prepared using consistent
accounting policies as presented in note 1.
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements, except as follows:
• Investments in subsidiaries, associates and joint ventures are accounted for at cost less any impairment.
Set out below is the supplementary information about the parent entity.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Parent
30 June 2024
$
30 June 2023
$
Loss after income tax
(49,415,093)
(174,659,069)
Total comprehensive loss
(49,415,093)
(174,659,069)
STATEMENT OF FINANCIAL POSITION
Parent
30 June 2024
$
30 June 2023
$
Total current assets
20,382,409
23,960,994
Total assets
177,876,376
195,673,449
Total current liabilities
85,066,008
132,511,720
Total liabilities
174,512,962
160,912,600
Equity
Issued capital
330,922,476
261,285,098
Share-based payment reserve
5,272,535
4,726,235
Accumulated losses
(332,831,597)
(231,250,484)
Total equity
3,363,414
34,760,849
GUARANTEES ENTERED INTO BY THE PARENT ENTITY IN RELATION TO THE DEBTS OF
ITS SUBSIDIARIES
The parent entity had no guarantees in relation to the debts of its subsidiaries.
CONTINGENT LIABILITIES
The parent entity had no contingent liabilities, other than the transactions described in note 34.
CAPITAL COMMITMENTS – PROPERTY, PLANT AND EQUIPMENT
The parent entity had no capital commitments for property, plant and equipment, other than the transactions described in note 35.
The Company and its Australian controlled entities are in a tax consolidated Group as at the date of this report.
BOWEN COKING COAL | ANNUAL REPORT 2024
86
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 38. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting
policy described in note 1:
Ownership interest
Name
Principal place of business/
Country of incorporation
30 June 2024
%
30 June 2023
%
Bowen PCI Pty Ltd
Australia
100.00%
100.00%
Coking Coal One Pty Ltd
Australia
100.00%
100.00%
New Lenton Coal Pty Ltd
Australia
100.00%
100.00%
Lenton Management and Marketing Pty Ltd
Australia
90.00%
90.00%
Note 39. INTERESTS IN JOINT VENTURES
ACCOUNTING POLICY
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.
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 (BCCM) as a joint venture coal marketing
vehicle, of which the Company and Marmilu Pty Ltd are shareholders in equal proportion. BCCM will market, promote and sell, all coal produced by
and from any of the Company’s existing wholly owned portfolio as well as third party coal for blending purposes. M Resources Trading Pty Ltd will
provide marketing support services to BCCM.
Information relating to joint ventures that are material to the Group are set out below:
Ownership interest
Name
Principal place of business/
Country of incorporation
30 June 2024
%
30 June 2023
%
Bowen Coking Coal Marketing Pty Ltd
Australia
50.00%
50.00%
BOWEN COKING COAL | ANNUAL REPORT 2024
87
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SUMMARISED FINANCIAL INFORMATION
Consolidated
Summarised statement of financial position
30 June 2024
$
30 June 2023
$
Cash and cash equivalents
6,302,345
565,674
Trade and other receivables
28,559,484
33,571,832
Total assets
34,861,829
34,137,506
Trade and other payables, including tax liabilities
31,139,716
32,260,136
Total liabilities
31,139,716
32,260,136
Net assets
3,722,113
1,877,370
Reconciliation of the Group’s carrying amount
Group’s share in equity – 50%
1,861,057
938,688
Group’s carrying amount of the investment (note 19)
1,861,057
938,688
Summarised statement of profit or loss and other comprehensive income
30 June 2024
$
30 June 2023
$
Revenue
18,242,258
4,002,708
Operating expense
(11,059,251)
(1,521,724)
Other expenses
(147,974)
(55,165)
Profit before income tax
7,035,033
2,425,819
Income tax expense
(2,490,295)
(440,823)
Profit after income tax expense for the year
4,544,738
1,984,996
Consolidated
30 June 2024
$
30 June 2023
$
Total comprehensive income for the year
4,544,738
1,984,996
Group’s share of the profit for the year (note 19)
2,272,369
992,498
CONTINGENT LIABILITIES
There are no significant contingent liabilities.
COMMITMENTS
There are no significant commitments.
SIGNIFICANT RESTRICTIONS
There are no significant restrictions.
DISTRIBUTIONS
BCCM must, unless the Board determine otherwise, pay a dividend every financial year out of the funds of the funds of the joint venture available for
distribution under the Corporation Act, less certain allowances, having regard to prudent financial management and relevant taxation considerations.
BOWEN COKING COAL | ANNUAL REPORT 2024
88
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 40. INTERESTS IN JOINT OPERATIONS
The Group has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the
financial statements under the appropriate classifications. Information relating to joint operations that are material to the Group are set out below:
Ownership interest
Name
Principal place of business/
Country of incorporation
30 June 2024
%
30 June 2023
%
Hillalong Joint Venture (un-incorporated)
Australia
85.00%
85.00%
New Lenton Joint Venture (un-incorporated)
Australia
90.00%
90.00%
Note 41. 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 are responsible for allocating resources and assessing performance of the operating segments, has been identified as
the Executive Directors.
The Group has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision makers in
assessing performance and determining the allocation of resources.
IDENTIFICATION OF REPORTABLE OPERATING SEGMENTS
The Group operates in one geographical location being Australia and its operations are organised into two business units from which the Group’s
expenses are incurred and revenues are earned, being for the exploration and development of coal and mining and sale of coal, which align to the
table below.
The non-current assets included in the exploration and development of coal are associated with coal projects located in Queensland, Australia.
All corporate (unallocated) expenditure, assets and liabilities relate to support operations for the business units carried out in Australia. Liabilities
included within Corporate are the Group’s borrowings.
Transfer prices between operating segments are on an arm’s-length basis in a manner similar to transactions with third parties.
MAJOR CUSTOMERS
The Group has several customers to whom it sells coal. A large portion of the Group’s revenues during 2024 of $441.8 million (2023: $204.4 million)
is derived from three external customers who account for 44% of revenue, and whom each represent more than 10% of total revenue, as follows:
• Major Customer A: 19% (2023: 20%)
• Major Customer B: 13% (2023: 40%)
• Major Customer C: 12% (2023: 9%)
The decrease in percentages for Major Customers A and B are related to the fact that during 2024, the Group began selling to a larger base of
customers, with the introduction of coking coal sales from the Burton Complex.
The following table presents revenues as a percent of total revenue from external customers by geographic region:
Revenue by geographic location
30 June 2024
%
30 June 2023
%
Vietnam
20%
26%
Indonesia
15%
–
Japan
15%
14%
India
13%
–
Korea
13%
59%
Other
24%
2%
BOWEN COKING COAL | ANNUAL REPORT 2024
89
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
As at 30 June 2024
Mining and
sale of coal
$
Exploration and
development
of coal
$
Corporate
(Unallocated)
$
Total
$
Revenue
– from contracts with customers
441,858,247
–
–
441,858,247
Other income
8,349,127
–
7,085
8,356,211
Total Revenue
450,207,374
–
7,085
450,214,458
Employee benefits expense
(4,303,045)
–
(6,452,123)
(10,755,168)
Other expenses
(35,754,577)
–
(5,590,189)
(41,344,766)
Operating expenses
(351,370,481)
–
–
(351,370,481)
Net inventory movements
(33,462,290)
–
–
(33,462,290)
Foreign exchange gains
(912,449)
–
(1,015,363)
(1,927,812)
Depreciation and amortisation expense
(31,910,472)
–
(197,674)
(32,108,146)
Onerous contract adjustment
12,995,612
–
–
12,995,612
Royalties expense
(60,215,871)
–
–
(60,215,871)
Share-based payments
–
–
(864,134)
(864,134)
Operating Loss
(54,726,199)
–
(14,112,398)
(68,838,595)
Finance income
8,440,444
–
8,992,504
17,432,948
Finance expense
(5,565,026)
–
(40,758,535)
(46,323,561)
Share of profit from joint ventures
–
–
2,272,369
2,272,369
Loss before income tax expense
(51,850,781)
–
(43,606,060)
(95,456,841)
Income tax expense
–
–
–
–
Loss after income tax expense for the year
(51,850,781)
–
(43,606,060)
(95,456,841)
For the period ended 30 June 2024
Property, plant and equipment
102,217,432
67,449,598
333,164
170,000,194
Investments accounted for using the equity method
–
–
1,861,057
1,861,057
Exploration and evaluation assets
–
11,265,558
–
11,265,558
Other assets
76,980,062
–
–
76,980,062
Total non-current assets
179,197,495
78,715,156
2,194,221
260,106,871
Total assets
234,210,411
78,715,156
22,599,146
335,524,713
Total liabilities
(150,510,310)
–
(175,240,158)
(325,750,468)
BOWEN COKING COAL | ANNUAL REPORT 2024
90
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
As at 30 June 2023
Mining and
sale of coal
$
Exploration and
development
of coal
$
Corporate
(Unallocated)
$
Total
$
Revenue
– from contracts with customers
204,475,121
–
–
204,475,121
Other income
5,461,456
–
3,136
5,464,592
Total Revenue
209,936,577
–
3,136
209,939,713
Employee benefits expense
(632,131)
(2,618,624)
(4,721,677)
(7,972,432)
Operating expenses
(291,864,887)
–
–
(291,864,887)
Other expenses
(4,703,106)
(22,532,529)
(4,986,604)
(32,222,239)
Net inventory movements
54,175,963
–
–
54,175,963
Foreign exchange gains
3,059,987
–
(2,558,162)
501,825
Depreciation and amortisation expense
(9,542,472)
(3,196,386)
(117,818)
(12,856,676)
Impairment
(19,097,657)
–
–
(19,097,657)
Onerous contract expense
(16,454,000)
–
–
(16,454,000)
Royalties expense
(35,142,157)
–
–
(35,142,157)
Share-based payments
–
–
(1,800,752)
(1,800,752)
Operating Loss
(110,263,882)
(28,347,538)
(14,181,880)
(152,793,300)
Finance income
240
3,010
13,911,345
13,914,595
Finance expense
(628,471)
(1,725,007)
(22,697,425)
(25,050,903)
Share of loss from joint ventures
992,498
–
–
992,498
Loss before income tax expense
(109,899,616)
(30,069,536)
(22,967,957)
(162,937,109)
Income tax expense
–
–
–
–
Loss after income tax expense for the year
(109,899,616)
(30,069,536)
(22,967,957)
(162,937,109)
For the period ended 30 June 2023
Property, plant and equipment
21,729,070
138,049,313
530,839
160,309,222
Investments accounted for using the equity method
938,688
–
–
938,688
Exploration and evaluation assets
–
10,898,468
–
10,898,468
Other assets
81,359,140
4,004,977
–
85,364,117
Total non-current assts
104,026,898
152,952,758
530,839
257,510,495
Total assets
205,405,677
175,750,330
26,640,185
407,796,192
Total liabilities
(125,863,930)
(131,225,946)
(115,658,906)
(372,748,782)
BOWEN COKING COAL | ANNUAL REPORT 2024
91
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 42. EVENTS AFTER THE REPORTING PERIOD
10% SALE OF BME MINE TO FORMOSA
On 5 July 2024, Bowen Coking Coal Ltd and MPC Lenton Pty Ltd (MPC), a wholly-owned subsidiary of the Formosa Plastics Group, successfully
completed the transaction which was announced to the ASX on 11 July 2023: the acquisition by MPC of a 10% interest in the Broadmeadow East
Mine for cash plus royalties. Until this transaction, Broadmeadow East was a 100% owned project of the Company’s wholly-owned subsidiary
Coking Coal One Pty Ltd (CCO).
Completion followed the successful achievement of conditions precedent, including FIRB approval and State Minister for Resources approval.
A significant driver of the transaction was for the Broadmeadow East Mine to become an asset of the Lenton Joint Venture, given the close proximity
of that mine to the Burton Mine Complex and expected synergies from operating the assets together. The Burton Mine Complex is owned and
operated by the Lenton Joint Venture, in which BCB indirectly holds a 90% interest and MPC holds a 10% interest. The assets of the Lenton Joint
Venture include the Burton Coal Handling and Processing Plant, the Mallawa Train Loadout Facility and Haul Road, the Kerlong Accommodation
Village and, in the future, the Lenton Joint Venture’s Lenton Coal Project.
The transaction which has now been completed to achieve the above has been varied in its structuring from that originally planned and announced.
CCO sold a 10% interest in the Broadmeadow East Mine to MPC as originally envisaged. However, instead of CCO selling a 90% interest in the
Broadmeadow East Mine to its sister Company New Lenton Coal Pty Ltd (NLC), CCO has retained that interest and NLC, CCO and MPC are now
participants in an unincorporated joint venture in respect of both the Burton/Lenton Project and the Broadmeadow East Mine and have dedicated
their interests in the respective assets of that Project and Mine to the joint venture. Amendments will be made to the Lenton Joint Venture Agreement
to reflect the new arrangements.
As announced on 11 July 2023, the agreed Effective Economic Date of the transaction was 1 May 2023.
The financial terms of the consideration to be paid by MPC are as previously announced. There are two primary elements:
a. A$13 million cash on Completion. This amount was received by the Company on 5 July 2024.
b. A royalty of A$2.10 per ROM tonne of MPC’s share of production from the Broadmeadow East Mine on a quarterly basis in the period from
1 May 2023 to 31 December 2026, provided that in that Quarter a defined weighted average coal price index exceeds a threshold (and subject
to an annual reconciliation and true-up process). The thresholds which apply are based on blended (thermal/coking) coal price indices and are
US$188 in calendar 2023, US$169 in 2024, US$151 in 2025 and US$142 in 2026. The thresholds in the Quarters between 1 May 2023 and
Completion were not exceeded, so no acquisition royalty was paid.
Consistent with the Group’s senior debt facility documentation (the Taurus facility), the Company has utilised US$7 million (A$10.6 million) of the sale
proceeds to repay a portion of the Taurus facility, reducing the principal debt balance of the Taurus facility from US$51 million to US$44 million and
reducing the final debt repayment accordingly.
DEBT RESTRUCTURE
The Company has executed a Heads of Agreement with its senior and subordinated lenders, Taurus Mining Finance Fund No. 2, L.P. and New Hope
Corporation respectively, agreeing to amend their respective loan facilities, conditional on a minimum A$25 million equity raising. The material
amendments include extension of tenor, deferment of principal amortisation in respect of the Taurus facility so that the next payment is due at the
earlier of the end of March 2025 and the sale of the Isaac River Project and final repayment occurs in September 2026, substitution of obligations
to New Hope with cash or equity and a net decrease in interest margins and royalties payable. The extended maturities provide headroom for the
business, while the Company considers options to relieve working capital constraints.
OTHER EVENTS
Since 30 June 2024, the following securities were issued:
• Conversion of 1,173,625 of staff issued performance rights into ordinary shares.
On 22 August 2024, the Company announced that David Conry AM has tendered a resignation notice, resigning as a Non-Executive Director.
BOWEN COKING COAL | ANNUAL REPORT 2024
92
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 43. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH
USED IN OPERATING ACTIVITIES
Consolidated
30 June 2024
$
30 June 2023
$
Loss after income tax expense for the year
(95,456,841)
(162,937,109)
Adjustments for non-cash items:
Depreciation and amortisation
32,108,146
12,856,676
Onerous contract adjustment
(12,995,612)
–
Impairment of property, plant and equipment
–
19,097,657
Profit on disposal of lease
–
(3,137)
Net gain on disposal of property, plant and equipment
(118,295)
–
Foreign exchange loss
1,250,070
815,525
Share-based payments
864,134
1,800,752
Finance income
(17,211,997)
(13,792,275)
Movement in provisions
19,430,813
2,081,322
Finance expense
31,623,373
13,386,654
Share of profit of joint ventures
(2,272,369)
(992,495)
Cost of goods sold
31,904,142
–
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
14,828,724
(21,425,499)
Decrease/(increase) in inventories
33,462,289
(54,485,438)
Decrease/(increase) in prepayments
2,176,672
(7,393,931)
(Decrease)/increase in trade and other payables
(24,301,842)
88,759,909
(Decrease)/Increase in provisions
(20,283,053)
17,088,874
Net cash used in operating activities
(4,991,646)
(105,142,515)
BOWEN COKING COAL | ANNUAL REPORT 2024
93
In the directors’ opinion:
• the attached consolidated financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
• the attached consolidated financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 of the consolidated financial statements;
• the attached consolidated financial statements and notes give a true and fair view of the Group’s financial position as at 30 June 2024 and of its
performance for the financial year ended on that date; and
• subject to the matters disclosed in note 1 of the consolidated financial statements, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and payable.
• the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
NICHOLAS JORSS
EXECUTIVE CHAIRMAN AND DIRECTOR
19 September 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
94
DIRECTORS’
DECLARATION
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor’s report to the members of Bowen Coking Coal Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Bowen Coking Coal Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2024, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the financial statements, including material accounting policy information, the
consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024
and of its consolidated financial performance for the year ended on that date; and
b.
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 (including Independence Standards) (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 of the financial report, which describes the principal conditions which
raise doubts about the Group’s ability to continue as a going concern. These events or conditions
along with the other matters set forth in Note 1, indicate that a material uncertainty exists that may
cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report. For each matter below, our description of how our audit
addressed the matter is provided in that context.
BOWEN COKING COAL | ANNUAL REPORT 2024
95
INDEPENDENT
AUDITOR’S REPORT
Independent
Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 2
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Why significant
How our audit addressed the key audit matter
In September 2023, the Group executed
agreements with Taurus Mining Finance Fund
No.2, L.P. (“Taurus facility") and New Hope
Corporation Limited facility (“New Hope
facility”), amending the terms of their respective
loan agreements.
The details of the amended terms are disclosed
in Note 23 of the financial statements.
In undertaking the debt amendment accounting,
the Group is required to assess whether the
revised terms are substantially different from
the original terms under the requirements of
AASB 9 Financial instruments. If the revision in
terms is concluded as substantially different, it
should be accounted for as an extinguishment of
existing debt and new debt will be recorded,
otherwise the amendments to the agreements
will be treated as debt modification.
Under the New Hope facility amendment, the
Group agreed to issue 100 million warrants to
lender which can be exercised in equal quarterly
tranches up to 30 September 2024. The Group
determined these warrants to be a derivative
liability.
The accounting for revision in debt terms is a
key audit matter due to:
•
The complexity involved in the
accounting for revision in debt terms
and associated impact on profit and loss
due to modification gain or loss;
•
The judgement involved in determining
the equity or debt classification of the
warrants issued to New Hope;
•
The judgement involved in valuation and
estimation of the embedded derivative
liability;
•
The associated profit and loss volatility
that can result from movements in the
fair value of the derivative liability; and
Our audit procedures included the following:
•
Read the amended debt agreements entered
into with Taurus Mining and New Hope to
obtain an understanding of the terms
revised.
•
In conjunction with our IFRS technical
specialists, assessed the appropriateness of
the accounting treatment adopted by
management for revision in debt terms in
accordance with Australian Accounting
Standards, including the accounting
treatment of the capitalised borrowing
costs.
•
Assessed the competence, capabilities and
objectivity of the Group’s specialist used to
determine the fair value of warrants.
•
In conjunction with our valuation specialists,
assessed the methodology used by the
Group’s valuation expert and the
reasonableness of key valuation inputs.
•
Assessed the adequacy of the disclosures
included in the Notes to the financial
statements, including disclosure of
significant judgements and estimates
adopted by management.
BOWEN COKING COAL | ANNUAL REPORT 2024
96
Independent
Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Why significant
How our audit addressed the key audit matter
•
The size of the liability.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2024 annual report, but does not include the financial report
and our 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, with the exception of the Remuneration Report
and our related assurance opinion.
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 (other than the consolidated entity disclosure statement) that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001; and
►
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001; and
for such internal control as the directors determine is necessary to enable the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
►
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating 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
BOWEN COKING COAL | ANNUAL REPORT 2024
97
Independent
Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
BOWEN COKING COAL | ANNUAL REPORT 2024
98
Independent
Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 5
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2024.
In our opinion, the Remuneration Report of Bowen Coking Coal Limited for the year ended 30 June
2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Kinds regards,
Ernst & Young
Tom du Preez
Partner
Brisbane
19 September 2024
BOWEN COKING COAL | ANNUAL REPORT 2024
99
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 10 October 2024.
A. DISTRIBUTION OF EQUITY SECURITIES
The number of holders, by size of holding, in each class of security are:
Ordinary Shares
No. Holders
No. Shares
1 – 1,000
181
33,158
1,001 – 5,000
535
1,636,873
5,001 – 10,000
438
3,464,177
10,001 – 100,000
1,805
78,027,600
100,001 and over
1,465
2,847,327,895
Total
4,424
2,930,489,703
There are 2,632 shareholders holding less than a marketable parcel of 62,500 shares.
Options ($0.0978 @ 30-Nov-24)
Options ($0.09 @ 30-Jun-28)
No. Holders
No. Options
No. Holders
No. Options
1 – 1,000
–
–
–
–
1,001 – 5,000
–
–
–
–
5,001 – 10,000
–
–
–
–
10,001 – 100,000
–
–
–
–
100,001 and over
1
3,179,000
6
67,500,000
Total
1
3,179,000
6
67,500,000
Performance Rights
Convertible Notes
No. Holders
No. Perf Rights
No. Holders
No. Con Notes
1 – 1,000
–
–
–
–
1,001 – 5,000
–
–
–
–
5,001 – 10,000
–
–
–
–
10,001 – 100,000
6
344,442
–
–
100,001 and over
21
42,771,701
2
40,000,000
Total
27
43,116,143
2
40,000,000
BOWEN COKING COAL | ANNUAL REPORT 2024
100
SHAREHOLDER
INFORMATION
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of Quoted Ordinary Shares are:
Rank
Name
No. Shares
% IC
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
363,412,761
12.4%
2
BNP PARIBAS NOMS PTY LTD
322,201,452
11.0%
3
CITICORP NOMINEES PTY LIMITED
252,668,288
8.6%
4
BNP PARIBAS NOMINEES PTY LTD
191,593,200
6.5%
5
KIRMAR GMBH
177,777,778
6.1%
6
NEW HOPE CORPORATION LIMITED
81,310,580
2.8%
7
ST LUCIA RESOURCES CAPITAL FUND PTY LTD
40,439,261
1.4%
8
UBS NOMINEES PTY LTD
38,924,806
1.3%
9
BRAZIL FARMING PTY LTD*
37,533,517
1.3%
10
BNP PARIBAS NOMINEES PTY LTD
27,758,364
0.9%
11
NORFOLK ENCHANTS PTY LTD
26,833,334
0.9%
12
CAPE COAL PTY LTD
26,226,074
0.9%
13
MR KAI GUANG HE*
23,872,888
0.8%
14
WARBONT NOMINEES PTY LTD
21,321,227
0.7%
15
BOND STREET CUSTODIANS LIMITED
20,000,000
0.7%
16
MR PRABHDEEP MICHAEL SINGH SAHOTA
17,249,830
0.6%
17
PACIFIC DEVELOPMENT CORPORATION PTY LTD
16,041,667
0.5%
18
PIT2 CO PTY LTD
14,569,196
0.5%
19
PEPLON NOMINEES PTY LTD
12,944,382
0.4%
20
SAHOTA SUPERSTAKE PTY LTD
12,674,996
0.4%
Top 20 Total
1,725,353,601
58.9%
Total of Securities
2,930,489,703
100.0%
* Denoted merged holding.
BOWEN COKING COAL | ANNUAL REPORT 2024
101
Shareholder
Information
C. SUBSTANTIAL HOLDERS
The latest substantial shareholder notices that the Company has received are set out below, along with known substantial holders per the register as
at 10 October 2024:
Name / Group
Qty per register
% IC
Qty per forms
% IC
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
363,412,761
12.4%
BNP PARIBAS NOMS PTY LTD
322,201,452
11.0%
CITICORP NOMINEES PTY LIMITED
252,668,288
8.6%
BNP PARIBAS NOMINEES PTY LTD
191,593,200
6.5%
KIRMAR GMBH
177,777,778
6.1%
177,777,778
6.25%
CROCODILE CAPITAL AND ITS RELATED BODY VP FUND
SOLUTIONS (LUXEMBOURG)
276,560,446
9.72%
ILWELLA PTY LTD
136,096,934
7.56%
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 2024
102
BOWEN COKING COAL | ANNUAL REPORT 2024
103
INTEREST IN
TENEMENTS
Bowen Coking Coal Ltd held the following interests in tenements as at the date of this report:
Country
Location
Project
Tenement
Status
Current Interest
Australia
Queensland
Cooroorah
MDL 453
Under review
100%
Australia
Queensland
Broadmeadow East
ML 70257
Under review
90%*
Australia
Queensland
Hillalong
EPC 1824
Granted
85%
Australia
Queensland
Hillalong
EPC 2141
Granted
85%
Australia
Queensland
Carborough
EPC 1860
Granted
100%
Australia
Queensland
Lilyvale
EPC 1687
Granted
15%**
Australia
Queensland
Lilyvale
EPC 2157
Granted
15%**
Australia
Queensland
Mackenzie
EPC 2081
Granted
5%**
Australia
Queensland
Comet Ridge
EPC 1230
Granted
100%
Australia
Queensland
Isaac River
MDL 444
Granted
100%
Australia
Queensland
Isaac River
EPC 830
Granted
100%
Australia
Queensland
Isaac River
MLA 700062
Application
100%
Australia
Queensland
Isaac River
MLA 700063
Application
100%
Australia
Queensland
Bluff
EPC 1175
Granted
100%
Australia
Queensland
Bluff
EPC 1999
Granted
100%
Australia
Queensland
Bluff
ML 80194
Granted
100%
Australia
Queensland
Lenton
EPC 766
Granted
90%
Australia
Queensland
Lenton North
EPC 865
Granted
90%
Australia
Queensland
Lenton West
EPC 1675
Granted
90%
Australia
Queensland
New Lenton
ML 70337
Under renewal
90%
Australia
Queensland
New Lenton
ML 700053
Granted
90%
Australia
Queensland
New Lenton
ML 700054
Granted
90%
Australia
Queensland
Burton
EPC 857
Granted
90%
Australia
Queensland
Burton
MDL 315
Granted
90%
Australia
Queensland
Burton
MDL 349
Granted
90%
Australia
Queensland
Burton
ML 70109
Under renewal
90%
Australia
Queensland
Burton
ML 70260
Under renewal
90%
* On 5 July 2024, the Company’s ownership changed to 90% – Refer to ASX release dated 8 July 2024: “Completion of sale by BCB 10% of Broadmeadow East Mine”.
Notation of change is pending in Departmental records.
** This interest is by contractual arrangement and is not registered in Departmental records.
Entity name
Entity type
Country of incorporation
% of Share Capital Held
Country of tax residency
Bowen Coking Coal Ltd
Body Corporate
Australia
Australia
Bowen PCI Pty Ltd
Body Corporate
Australia
100.00%
Australia
Coking Coal One Pty Ltd
Body Corporate
Australia
100.00%
Australia
New Lenton Coal Pty Ltd
Body Corporate
Australia
100.00%
Australia
Lenton Management and
Marketing Pty Ltd
Body Corporate
Australia
90.00%
Australia
Cabral Metais Ltd *
Body Corporate
Brazil
100.00%
Brazil
* Cabral Metais Ltd is a dormant body corporate entity.
BOWEN COKING COAL | ANNUAL REPORT 2024
104
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
AS AT 30 JUNE 2024
RESOURCES STATEMENT AS AT 30 JUNE 2024 (JORC 2012, MT)
Project
Tenement
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
Bluff
ML 80194
–
10
2
12
100%
Broadmeadow East
ML 70257
4
4
23
30
100%
Burton
ML 70109, ML 70260
73
25
10
108*
90%
Lenton
ML 70337, EPC 766, EPC 865
60
50
30
140**
90%
Comet Ridge
EPC 1230
8
9
43
60
100%
Cooroorah
MDL 453
–
96
81
177
100%
Hillalong
EPC 2141, EPC 1824
–
56
50
107∞
85%
Isaac River
MDL 444, EPC 830
6
3
0
9
100%
Lilyvale
EPC 1687, EPC 2157
–
–
33
33#
15%
Mackenzie River
EPC 2081
–
26
117
143Ω
5%
Total
150
279
390
819
* Includes 11Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
** Includes 14Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
∞ Includes 16Mt 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. It is the intention to move to 20% holding by Sumitomo Corporation with the Phase 2B farm in during FY24.
# Includes 28Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture.
Ω Includes 136Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture.
Note 1: Total and subtotal may not precisely add up due to rounding.
Note 2: All Coal Resources are reported on a 100% bases; Bowen Coking Coal’s economic interest in Burton is 90%, Lenton is 90%, Hillalong is 85%, Lilyvale is 15%
and Mackenzie is 5%.
Note 3: Broadmeadow East was 100% owned by Bowen Coking Coal as at 30 June 2024. On 5 July 2024, MPC Lenton Pty Ltd, a wholly owned subsidiary of the
Formosa Plastics Group, acquired a 10% interest in the Broadmeadow East mine, as announced by BCB on 8 July 2024.
RESOURCES STATEMENT AS AT 30 JUNE 2023 (JORC 2012, MT)
Project
Tenement
Measured
Resource
Indicated
Resource
Inferred
Resource
Total
% Holding
Bluff
ML 80194
–
11
2
13
100%
Broadmeadow East
ML 70257
5
4
23
32
100%
Burton
ML 70109, ML 70260
36
18
11
64*
90%
Lenton
ML 70337, EPC 766, EPC 865
60
50
30
140**
90%
Comet Ridge
EPC 1230
8
9
43
60
100%
Cooroorah
MDL 453
–
96
81
177
100%
Hillalong
EPC 2141, EPC 1824
–
47
40
87∞
85%
Isaac River
MDL 444, EPC 830
6
3
–
9
100%
Lilyvale
EPC 1687, EPC 2157
–
–
33
33#
15%
Mackenzie River
EPC 2081
–
26
117
143Ω
5%
Total
115
264
380
758
* Includes 6.4Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
** Includes 14Mt attributable to Formosa Plastics Group as part of the Lenton 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. It is the intention to move to 20% holding by Sumitomo Corporation with the Phase 2B farm in during FY24.
# Includes 28Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture.
Ω Includes 136Mt attributable to Stanmore Coal Ltd as part of the Lilyvale Joint Venture.
Note 1: Total and subtotal may not precisely add up due to rounding.
Note 2: All Coal Resources are reported on a 100% bases; Bowen Coking Coal’s economic interest in Burton is 90%, Lenton is 90%, Hillalong is 85%, Lilyvale is 15%
and Mackenzie is 5%.
BOWEN COKING COAL | ANNUAL REPORT 2024
105
ANNUAL MINERAL RESOURCES
AND ORE RESERVE STATEMENT
Annual Mineral Resources
and Ore Reserve Statement
RESOURCE MOVEMENTS:
• The Bluff Resource was depleted as at the end of June 2024 with a tonnage amounting to a total of 0.45Mt. The depleted resource was classified
as an Indicated Resource, less than 150m deep.
• The Broadmeadow East Resource was depleted as at the end of June 2024 with a tonnage amounting to a total of 1.5Mt. The depleted resource
was classified as a Measured Resource, less than 100m deep and North of the Powerline.
• The Burton Resource (Ellensfield South pit) was depleted as at the end of June 2024 with a tonnage amounting to a total of 1.2Mt. The depleted
resource was classified as a Measured Resource and less than 100m deep.
• The Burton Resource (Burton North and South pit areas) was increased by 45Mt as released to the market on 10 April 2024 – Burton Coal
Resource Update.
• The Hillalong South Resource was increased by 42Mt as released to the market on 9 August 2023 – Shipping Update and Hillalong South
Resource Upgrade.
RESERVE STATEMENT AS AT 30 JUNE 2024 (JORC 2012, MT)
ROM Coal Reserve
Marketable Coal Reserve
Project
Tenement
Proved
Probable
Total
Proved
Probable
Total
% Holding
Broadmeadow East
ML 70257
1.0
0.5
2
0.8
0.4
1
100%
Burton
ML 70109
12
2
15*
6
1
7
90%
Lenton
ML 70337
13
6
19**
9
4
13
90%
Total
26
9
35
15
6
21
* Includes 0.5Mt attributable Auger Mining.
* Includes 1.5Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
** Includes 0.3Mt attributable Auger Mining.
** Includes 1.9Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
Note 1: Total and subtotal may not precisely add up due to rounding.
Note 2: All Coal Reserves are reported on a 100% bases; Bowen Coking Coal’s economic interest in Burton is 90% and Lenton is 90%.
Note 3: Broadmeadow East was 100% owned by Bowen Coking Coal as at 30 June 2024. On 5 July 2024, MPC Lenton Pty Ltd, a wholly owned subsidiary of the
Formosa Plastics Group, acquired a 10% interest in the Broadmeadow East mine, as announced by BCB on 8 July 2024.
RESERVE STATEMENT AS AT 30 JUNE 2023 (JORC 2012, MT)
ROM Coal Reserve
Marketable Coal Reserve
Project
Tenement
Proved
Probable
Total
Proved
Probable
Total
% Holding
Broadmeadow East
ML 70257
2.6
0.5
3
1.9
0.3
2
100%
Burton
ML 70109
13
2
16*
7
1
8
90%
Lenton
ML 70337
11
3
14**
9
2
11
90%
Total
27
6
33
18
3
21
* Includes 0.5Mt attributable Auger Mining.
* Includes 1.6Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
** Includes 0.3Mt attributable Auger Mining.
** Includes 1.4Mt attributable to Formosa Plastics Group as part of the Lenton Joint Venture.
Note 1: Total and subtotal may not precisely add up due to rounding.
Note 2: All Coal Reserves are reported on a 100% bases; Bowen Coking Coal’s economic interest in Burton is 90% and Lenton is 90%.
BOWEN COKING COAL | ANNUAL REPORT 2024
106
Annual Mineral Resources
and Ore Reserve Statement
RESERVE MOVEMENTS:
• The Broadmeadow East Reserve was depleted as at the end of June 2024 with a tonnage amounting to a total of 1.6Mt in the Proved category.
• The Burton Reserve (Ellensfield South pit) was depleted as at the end of June 2024 with a tonnage amounting to a total of 1.2Mt in the Proved
category.
• The Lenton Reserve was increased by 5Mt as released to the market on 1 November 2023 – Lenton Deposit Coal Reserve Update.
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; and
• Resources have 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.
• Reserves have been approved by Mr Sunil Kumar, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Kumar, Principal
Mining Engineer 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 Kumar 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 2024
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BOWEN COKING COAL | ANNUAL REPORT 2024
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DIRECTORS
Nicholas Jorss (Executive Chairman)
Neville Sneddon (Non-Executive Director)
Malte von der Ropp (Non-Executive Director)
CHIEF EXECUTIVE OFFICER
Daryl Edwards
CHIEF FINANCE OFFICER
Daryl Edwards (served to 29 January 2024)
COMPANY SECRETARY
Duncan Cornish
HEAD OFFICE AND REGISTERED OFFICE
Bowen Coking Coal Ltd
Level 4,
167 Eagle Street
Brisbane QLD 4000
Tel: +61 7 3191 8413
www.bowencokingcoal.com
PRINCIPAL PLACE OF BUSINESS
Level 4,
167 Eagle Street
Brisbane QLD 4000
Tel: +61 7 3191 8413
SHARE REGISTER
Link Market Services Limited
Level 21,
10 Eagle Street
Brisbane QLD 4000
Tel: 1300 544 474
AUDITOR
Ernst & Young
Level 51,
111 Eagle Street
Brisbane QLD 4000
Tel: +61 7 3011 3333
SOLICITORS
HWL Ebsworth
Level 19,
480 Queen Street
Brisbane QLD 4000
STOCK EXCHANGE LISTING
Australian Securities Exchange (ASX code: BCB)
BOWEN COKING COAL | ANNUAL REPORT 2024
109
CORPORATE
DIRECTORY