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LEIGH CREEK ENERGYLimited
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017ENERGYFor personal use only
Leigh Creek Energy would like to acknowledge
the Adnyamathanha people, the traditional owners of the land
on which we operate and pay our respects to their Elders past
and present and extend that respect to other Aboriginal and
Torres Strait Islander people.
For personal use only 3
L E I G H C R E E K E N E R GY L I M I T E D A N N U A L R E P O R T 2 0 1 7
Leigh Creek Energy Project
The Resource
Chairman’s Report
CEO Report
Keys to Development
Key Achievments
ISG 101
Tenement Schedule
Directors’ Report
Auditor’s Independence
Corporate Governance Statement
Directors’ Declaration
Auditor’s Independence Declaration
Financial Information
Independent Audit Report
Shareholder Information
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Corporate Directory
Inside back cover
Right market, right time, right place
Photos in this report have been taken by LCK Geoscience Manager, Geoff Borg. Front cover: Looking south towards the town of Copley as the sun sets. Inside front cover: Aroona Dam under a starry sky.
ContentsFor personal use only 4
Leigh Creek Energy (LCK) is the owner and proposed
phase of the project. The demonstration phase involves
operator of the Leigh Creek Energy Project (LCEP), located
establishment of an underground single-cavity gasifier and
at Leigh Creek in South Australia, 550 km north of Adelaide.
aboveground infrastructure on a small footprint to produce
The project is located on Petroleum Exploration Licence 650
syngas. This will allow us to confirm the composition and
(PEL 650), which contains the Leigh Creek Coalfield,
performance of the process while gathering environmental
and will develop the deep coal resources that are unable
data to support the commercial plant approvals process.
to be accessed by open-cut mining through in situ
gasification (ISG).
LCK is committed to developing the LCEP using a best
practice approach to mitigate the technical, environmental,
The ISG process converts coal from its solid state into
and financial project risks.
a gaseous form, resulting in the production of synthesis
gas (syngas) containing methane, hydrogen and carbon
monoxide. The syngas can either be used to produce
electricity directly or further refined into a variety of products
including natural gas, ammonia, urea, or methanol.
LCK’s pathway to development of the LCEP comprises the
following stages, with each stage requiring careful planning
and engineering, in addition to the necessary regulatory
assessments and approvals:
• Characterisation Phase – This will determine the
environmental, geological, geotechnical and
hydrogeological perspectives of the site for a low risk ISG
project.
• Demonstration Phase – Through a Pre-Commercial
Demonstration Facility (PCD) we will demonstrate ISG at
the LCEP using a low cost rapid deployment technique.
This will provide environmental and gas quality data to
inform regulators and determine commercial project
design and feasibility study direction.
• Commercial Phase - Conduct engineering design and
feasibility studies to support the selected commercial
deployment of ISG at the LCEP. LCK intends to use
existing technologies and develop enhanced techniques
for our specific location and geology.
The PCD is planned to be operational for approximately
2-3 months, during which time it will obtain process and
environmental data of importance for the commercial
Leigh Creek Coalfield — ideal for ISG
LCK’s commitment to engaging with
our project stakeholders is central
to the success of developing strong
community partnerships.
The Leigh Creek Energy ProjectFor personal use only 5
LCK has announced an Inferred Coal Resource
of 377 Million Tonnes (Mt) at the LCEP reported
in accordance with the JORC Code (2012). Coal
samples were taken from the LCEP target coal
seams, analysed and modelled for expected gas
composition from ISG, which showed that the
Leigh Creek coal was capable of producing ISG
Syngas at the rate of 15.2 GJ of syngas per tonne
of coal gasified. This information underpinned an
initial ISG Syngas Resource of 2,963.9 Petajoules
(PJ) (2C) at the LCEP. The Syngas Resource
was independently assessed and certified
in accordance with the Society of Petroleum
Engineers – Petroleum Resources Management
System (PRMS).
S O U T H
A U S T R A L I A
Moomba
The Leigh Creek
Energy Project (LCEP)
is located near major
Prominent Hill
Olympic Dam
LCEP
energy consumers as
well as the metropolitan
Whyalla
Port Pirie
Central Eyre
demand centre in
Adelaide.
Adelaide
Gas Pipelines
Transmision Lines
Coal Resource: JORC 2012: 377 million tonnes inferred.
Syngas resource: SPE-PRMS: 2,964 PJ 2C.
Category
Syngas Resource (PJ)
1C
2,747.7
2C
2,963.9
3C
3,303.1
• Resources will likely convert from 2C to 2P Reserves once gas demonstration is completed in 2017.
• Options include power production and/or natural gas production.
• Offering 25-50 years of production, depending on production profile.
•
In the whole of Australia, the Economically Demonstrated Resources (EDR) total is 113,193 PJ1
1 Source: ABS, Australian System of National Accounts, 30 June 2016.
Ideal Location with existing infrastructure
• Remote from major populations
• Self-contained groundwater system
• Power transmission lines
• Sealed road, airport, rail, water
• Major gas pipeline 125km away
• Township of Leigh Creek
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017The ResourceFor personal use only 6
This year has proved to be a very interesting and productive
Perhaps our most significant moment of the past 12 months
year that has not been without its challenges. The dedicated
came in March 2017 when we welcomed China New
team at LCK continued to forge ahead with our fundamental
Energy (CNE) as a new cornerstone investor and strategic
goal of demonstrating gas flows at the Leigh Creek Energy
partner. Through the March 2017 capital raising, LCK raised
Project (LCEP). Work completed in the past 12 months has
$21.85m (before costs) via a 3 Tranche commitment, which,
enabled the likelihood of making this a reality, with the Pre-
along with our CBA facility, will allow us to deliver on the
Commercial Demonstration Facility (PCD) now fully funded
PCD. Much work went into securing CNE as a cornerstone
(subject to shareholder’s approval). The completion of the
investor, and in a show of support and commitment to the
PCD campaign will bolster the case for a commercial facility
LCEP, CNE have completed Tranches 1 and 2 ahead of time.
with the potential to bring much needed energy reliability and
Additionally we have agreed to split the third tranche into
security to South Australia.
Throughout the year our people continued to make a
difference in our operations and with the departure of our
Managing Director we took the opportunity to restructure
the Company for the betterment of our shareholders. The
two payments to ensure progress of the PCD is not delayed
due to funding constraints. We look forward to working with
CNE in the future and to this extent CNE will be providing
two coal gasification experts to work with us on our studies in
Adelaide. A true commitment to our new partnership.
Executive team took shape with Phil Staveley as CEO, Mark
Since the capital raise in March 2017, LCK was able to
Terry as CFO and Justin Haines as COO. Jordan Mehrtens
mobilise quickly, leveraging off relationships already formed
continued in the capacity of Company Secretary and Noreen
with suppliers. In May 2017 we awarded construction
Byrne joined us as our HR Manager. This rounded out a well-
contracts for the PCD, specifically the Thermal Oxidiser,
balanced Executive Team. It is pleasing to be able to report
Gas Analyser and Gas Instruments package. The awarding
that not only did our Executive Team bring stability to the
of these long lead item contracts is important and it is
Company, but additional savings were also realised with the
significant that these contracts were awarded so quickly
restructure.
In late 2016 we were pleased to announce that Innovation
Australia granted LCK an ‘Advance Finding’ for the LCEP,
after the placement to CNE was announced, once again
demonstrating how focussed your Company is on delivering
this project.
enabling a refundable tax offset on estimated eligible
Another milestone was reached in June 2017 when we
expenditure of $21m to be incurred on the PCD stage of the
completed the environmental baseline drilling programme
project. The process undertaken by Innovation Australia to
consisting of groundwater and pressure monitoring wells.
grant this finding is tremendously rigorous and enabled LCK
Initial data from these wells has been encouraging and
to secure a Research and Development Working Capital
continued analysis will enable us to create a conceptual
Facility with the Commonwealth Bank of Australia (CBA) in
model for environmental baseline characterisation which
February 2017. Securing this facility was, and is, extremely
will assist in progressing the regulatory assessments and
important to the Company and shows that a bank with the
approvals process.
calibre of the CBA is prepared to support our project.
South Australian Treasurer
Tom Koutsantonis meeting
with representatives of
China New Energy.
Chairman’s ReportFor personal use only 7
In June 2017 we also appointed a new Director to the Board
of your Company, the completion of environmental baseline
of LCK as part of the agreement with CNE. CNE suitably
drilling programme, the awarding of construction contracts,
nominated Mr Zhe Wang whose key areas of expertise
being granted a positive “Advance Finding” by Innovation
in China include Coal Combustion, Renewable Energy
Australia, the obtaining of the CBA Working Capital debt
applications and Steel Sinter. Mr Wang holds a bachelor in
facility and, most importantly, securing our cornerstone
Thermo Dynamics, Renewable Energy Applications and a
investor and partner CNE.
Masters in Energy Engineering and Thermal Physics and
Coal Combustion. Mr Wang’s competencies will add value to
the LCK Board and we look forward to working with him as
our relationship with CNE progresses.
The year ahead promises to be a great one for the Company.
We all have our part to play and I am confident that we have
the right team in place to complete the task of demonstrating
syngas flows at the LCEP. Successful demonstration
Early July saw a further two significant contracts awarded
and decommissioning of the PCD will enable us to move
to South Australian companies for the fabrication and
toward commercialisation of the LCEP with confidence and
installation of the above ground plant and electrical and
assurance that we can operate responsibly. I have no doubt
communications systems. What is particularly pleasing about
that throughout 2017-18 there will be a number of significant
these contracts is that they were awarded to two South
milestones we as a Company will have to meet, but we are
Australian companies after an intensive tender process
confident we have the funding, the team, and the right market
supported by the South Australian Governments Industry
to deliver on our goals.
Capability Network. These two work packages, along with
those announced earlier in the year, represent a significant
component of the total commitment for completion of the
above ground aspect of the PCD.
To recap, a great deal of progress has been made over the
Mr Justyn Peters
past 12 months by LCK to deliver the PCD. The restructuring
Executive Chairman
…we have the funding, the
team and the right market to
deliver on our goals.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
8
Year in Review
Energy Markets
On July 5 2016, LCK announced to the market the
As we head toward initiation of the PCD, it is hard to ignore
commencement of drilling operations at the Leigh Creek
the ever-worsening electricity and gas markets throughout
Energy Project (LCEP). Effectively, this was the first
Australia and in particular South Australia. The Australian
physical stage in the development of the LCEP. Throughout
energy markets are in a state of turmoil. Both electricity and
the year we have transformed our Company and have
gas pricing have reached historically high levels and at the
transitioned from a Company engaged in planning to one
same time supply has become much less reliable. Wholesale
engaged in doing.
During the year we restructured our team to better align the
roles and responsibilities of each team member with the goal
of achieving approval for, and operating, the Pre-Commercial
Demonstration Facility (PCD). Rest assured, as we move
forward each and every one of the LCK team is clearly
focussed on the goal of completing the PCD.
With the detailed design complete we have now awarded
extremely important long lead contracts for above ground
construction of the PCD. We continue our positive
power prices have more than doubled to $90/MWh and gas
prices have more than tripled to $9/GJ. South Australia has
experienced the worst combination of prices and unreliability
as the state has the highest concentration of intermittent
renewable supplies. As can be seen below, the financial
markets expect that the future price of electricity will continue
to remain high in SA well past 2020. As South Australia has
taken a strong stance in support for unconventional gas
development, it stands apart from most other states, which
have pushed to limit supplies of new gas. In combination with
the export of LNG from Gladstone, the domestic gas market
relationship with the State Government and preparation for
is now caught between foreign demand for Australian gas
submission of our Environmental Impact Report (EIR) is
and government restrictions on new development.
well advanced – a critical document in the assessment and
approvals process.
In addition to the operations, LCK’s commitment to engaging
with our project stakeholders is central to the success of
developing strong community partnerships. The operations
and community engagement are both equally critical to the
success of the project.
Whilst the operations team have been pushing ahead
towards the PCD, the studies team completed a positive
scoping study in January 2017. This has enabled them to
move to the next stage and they are now focussed on the
completion of the prefeasibility study within three months of
the completion of the PCD.
200
180
160
140
120
100
SA Daily Gas Consumption for
power (TJ) and Price ($/GJ)*
TJ
Gas price
South Australia
$/GJ
10.00
8.00
6.00
4.00
2.00
0.00
Electricity Futures Price
Quarterly ($/MWh)*
Vic July - 2016
Vic July - 2017
SA July - 2016
SA July - 2017
0
1
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S
1
1
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1
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7
1
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South Australia stands
apart, as most other
states limit the supply of
new gas.
160
140
120
100
80
60
40
20
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1
6
2
1
0
0
2
2
6
1
0
2
6
1
0
2
7
1
0
2
7
1
0
2
7
1
0
2
7
1
0
2
8
1
0
2
8
1
0
2
8
1
0
2
8
1
0
2
9
1
0
2
9
1
0
2
9
1
0
2
9
1
0
2
0
2
0
2
0
2
0
2
0
2
0
2
0
2
0
2
* Source: AER, NEM Quarterly Spot and Futures Prices, Gas Use, and STTM.
CEO ReportFor personal use only
9
Strategy
The year ahead
At LCK, we recognise that our future depends on developing
The year ahead will be a transformative one for LCK. By the
the LCEP. Each development stage completed brings us
end of the year we will be a gas company with a significant
closer to our goals and contributes to de-risking the project.
energy resource, proven method to market and a confirmed
Notwithstanding the numerous development stages along
pathway to commercialisation. The market we serve will
the way, we recognise that the major upcoming de-risking
be one in severe need of our product – whatever the
event for the Company is the demonstration of syngas from
commercialisation pathway.
the PCD.
The challenges in achieving this objective are too numerous
Our strategy is clear and well understood with two main
to mention, but the opportunities are outstanding. Each
streams – operational and commercial.
member of the team at LCK has embraced the task of
• The operational side of the business is clearly focussed
on developing the PCD. The flaring of syngas will
achieving these goals over the next 12 months.
It is truly an exciting time to be a part of the development
demonstrate our ability to produce gas safely and in
of this project. We at LCK are all fully engaged in realising
an environmentally responsible manner. Results of the
our Company goals and maximising the value from this
demonstration will also inform the ultimate design of the
outstanding energy resource to the benefit of all of our
commercial project.
valued stakeholders.
• On the commercial side, the LCEP has a number of
An exciting and challenging year lies ahead.
possible pathways to commercialisation. These could
include the production of natural gas, electricity, or
fertiliser products such as ammonia. The studies team
is tasked with demonstrating the preferred pathway to
commercialisation. They are focussed on completing
Prefeasibility Studies. These studies are being rapidly
advanced and will be completed shortly after the
completion of the PCD.
Sincerely,
Mr Phil Staveley
Chief Executive Officer
Decide, commit, succeed!
The LCK team at
Aroona Dam just out
of Leigh Creek
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
10
scheduled for late 2017. Once commissioning is completed
and gasification has commenced, the PCD will be operated
continuously for a period of approximately 2-3 months. On
completion of the demonstration and collection of necessary
data, the PCD will be decommissioned, with plant and
equipment removed from site and the area rehabilitated.
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Site Investigation
Aboveground Plant Design
Environmental Baseline Drilling
Plant Fabrication
Belowground Plant Design
Stakeholder Engagement
EIR and SEO Preparation
Regulatory Approvals
Monitoring Well Installation
PCD Plant Installation
PCD Initiation
PCD Operation
As at 11/07/2017
Project Execution
LCK has developed a team of technical professionals
who are committed to achieving the design, construction,
operation and decommissioning of the Pre-Commercial
Demonstration Facility (PCD). The in-house technical team
is supported by recognised external consultants who are
assisting in executing delivery of this project.
Key development tasks include site investigation, regulatory
assessments and approvals, stakeholder relations,
engineering design and fabrication, installation and
operation. Completed tasks are announced to the market
regularly to ensure transparency between the Company and
its stakeholders.
Regulatory Assessment and Approvals
LCK requires approval from various State government
agencies before commencing Demonstration and
Commercial In Situ Gasification (ISG) operations.
Of relevance is the Department of Premier and Cabinet’s
(DPC) requirements for an Environmental Impact Report
(EIR) under the Petroleum and Geothermal Energy Act, 2000.
In addition to the EIR, LCK is required to prepare a Statement
of Environmental Objectives (SEO), in which we outline the
environmental objectives to which our ISG activities will
conform, and the criteria upon which the achievement of
these objectives will be assessed.
Engineering Design
In Situ Gasification is not a new process. Plant and
equipment that control the ISG process have been
developed and improved for almost a century. LCK has
drawn and improved upon the knowledge from successful
designs and processes from other sites and industries to
develop a simple, robust and cost-effective design for the
PCD that minimises project risk.
The objectives of the PCD are to safely implement,
commission, operate and decommission the ISG process
to meet environmental requirements and industry best
practices. The design has undergone a stringent risk
assessment process to ensure that it meets or exceeds
the highest appropriate local, national and international
standards.
With design and fabrication contracts already awarded, the
offsite construction of the PCD has commenced. Subject to
obtaining the necessary approvals, the initiation of the PCD is
With design and fabrication
contracts already awarded, the
offsite construction of the PCD
has commenced.
Keys to DevelopmentFor personal use only
11
Relationship with Traditional Owners
LCK will introduce a targeted online community portal via
LCK has been developing a working relationship with the
Adnyamathanha Traditional Lands Association (ATLA) who
are the prescribed body corporate and Native Title holders
for 41,085km2 in and around the Ikara-Flinders Ranges.
ATLA comprises over twenty different groups and represents
more than 2,500 people running east from the edge of Lake
the LCK website for ease of use for interested stakeholders.
Community members can easily log in and share their
experiences of the project, leave feedback, and locate or
request information. In addition, a suite of educational
materials about the company and the project are being
developed for use in community engagement activities.
Torrens, through the northern Ikara-Flinders Ranges, and
Commercial Studies
across to Lake Frome in the west.
LCK is continuing to develop technical and commercial
LCK will continue to engage with the Traditional Owners,
studies for development of the LCEP, however some key
through ATLA Board meetings and at specialised information
information required in order to finalise these studies will
sessions.
Stakeholder Engagement
LCK will continue its commitment to respectful and
transparent communication and aims to have informed
discussions to proactively work with stakeholders. LCK plans
to maintain a level of communication with stakeholders that
respects their rights, interests, and connections to land.
Our overarching message is to create value for the local
community and deliver two-way communication to address
issues and opportunities raised by members of the public.
With a key focus of operations moving forward being
community engagement, LCK will continue to hold
information sessions throughout Leigh Creek, Copley,
Hawker and surrounding communities.
be derived from operation of the PCD. Specifically, proof
of syngas production from the Leigh Creek Coal Measures
will allow us to better analyse the technical design and
environmental data supporting the Commercial Project
Development Case.
As the financial year begins the studies team is preparing
for Pre-Feasibility Studies for various cases including natural
gas, power generation and ammonia products. The team
plans to complete its Pre-Feasibility Studies and report in the
second half of the financial year, providing a recommendation
on how to proceed on the commercialisation path into the
following term.
LCK will continue to hold information
sessions throughout Leigh Creek, Copley,
Hawker and surrounding communities.
Historic fence posts
surrounding the
wider Copley area.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only 12
Project Financing
Project Development
In March 2017, LCK announced that it had successfully
Design work for the aboveground PCD has been completed
completed a capital raising effort to new cornerstone investor,
and contracts have been awarded to various fabricators
China New Energy (CNE) and institutional investors. CNE’s
for construction. Design and construction packages were
investment is an acknowledgement of LCK’s significant
awarded during the year for the Thermal Oxidiser and Cold
gas resources, project management and commercial
Vent, the Gas Analyser, Gas Instrumentation, aboveground
expertise. CNE intends to be a long-term partner with LCK
plant, and electrical and communications systems.
in developing the LCEP and future commercialisation of the
Construction is on schedule and on budget to be completed
technology developed at Leigh Creek.
later in 2017.
The equity funding from CNE and other investors through
The PCD below ground plant design is nearing completion
the year is supplemented by our access to R&D funding.
with key elements such as drilling plans, wellheads, and
The R&D Working Capital Facility with the CBA allowed the
tubing being completed and procured. Final elements are
Company to bring forward access to $1.6m of refundable tax
casing, grout and drilling contractors which are expected to
offsets during the year. The facility provides for progressive
be confirmed and procured later in the year.
drawdowns of eligible R&D expenditure in line with the
Company’s ‘Certificate of Advance Finding’ as provided by
Innovation Australia in 2016.
Environmental Baseline Drilling
Environmental baseline drilling activities were completed
during June 2017. In total four drill holes were required to
measure groundwater pressures, levels, and chemistry at a
location central to the proposed PCD. The purpose of each
well is as follows:
Operational readiness is progressing with operating
procedures and operator training packages also under
development.
Completed Studies
During the year Scoping Studies investigated
commercialisation opportunities for the syngas to be
produced and included the potential for producing
natural gas for sale to the eastern states gas market, and
generating power for the South Australian electricity market.
• One drillhole is required to measure groundwater
Both options are attractive and will be assessed further,
pressures and levels in each of the relevant geological
along with alternative commercial product streams, to
formations using vibrating wire piezometers VWPs; and
determine which case will be taken forward through to a
Pre-Feasibility Study level phase. Other options continuing
to be assessed for future studies are production of ammonia
and urea, ammonium nitrate, methanol, and the potential for
manufacturing derivative products from these.
• Three groundwater monitoring wells are required to
collect groundwater samples from specific geological
formations.
The baseline conditions will be used to monitor and assess
any changes outside of the operational area that may occur
during and after operation of the PCD.
Further drilling to install additional monitoring wells for the
PCD phase is being defined post completion of these initial
four wells.
Key AchievementsFor personal use only 13
Cultural Heritage
Government Relations and Compliance
LCK recognises cultural heritage significance as aesthetic,
LCK has engaged independent third-party consultants
historic, scientific, social or spiritual value for past, present
to undertake environmental assessments of the PCD
or future generations, specifically including places
site including surface water, fauna and flora, and air
of significance to the cultural and spiritual beliefs of the
quality. These assessments in conjunction with data
Adnyamathanha people. The Company has worked
from groundwater monitoring wells, seismic surveys and
collaboratively with the Adnyamathanha Traditional
geological data will help LCK to understand relationships
Lands Association (ATLA) to undertake cultural heritage
between landforms, groundwater and historic operations and
assessments and work area clearance surveys of
the current and potential environmental impacts.
LCK also participates in the Leigh Creek Energy Internal
Government Agency Reference Group which meets
regularly to discuss technical progress and stakeholder
relations updates. These meetings occur between LCK,
the Environment Protection Authority (EPA), Department of
Environment, Water and Natural Resources (DEWNR) and
DPC’s Energy Resources and Minerals Divisions.
the environmental baseline drilling locations to identify,
record and manage cultural heritage as per agreed protocols
with ATLA.
Stakeholder Relations
LCK developed a comprehensive Stakeholder Relations
Plan and has rolled out its implementation through the
employment of both in-house and consultant specialised
stakeholder relations personnel. In addition to holding
informal open house community events in Copley and
Hawker, LCK has been invited to attend ATLA Board
meetings to give project updates and is committed to open
and transparent communication with all stakeholders.
During the year Scoping Studies
investigated commercialisation
opportunities for the syngas to
be produced and included the
potential for producing natural
gas for sale to the eastern states
gas market, and generating
power for the South Australian
electricity market.
Aroona Dam
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only 14
Surface Coal Gasification and
In Situ Gasification (ISG)
Surface gasification of coal was originally used for making
town gas with the first commercial gasification used in the
1800’s for industrial and residential heating and lighting –
this was often known as a ‘Gasworks’. Most major cities in
the western world had them.
In modern gasifiers, the coal is typically exposed to
air or steam and oxygen under high temperatures and
pressures. Under these conditions, molecules in the
coal dissociate resulting in the production of synthesis gas
(“syngas”) containing methane, hydrogen and
carbon monoxide. ISG and surface gasification can each
be used to produce similar syngas that have identical
downstream uses.
Gasifying the coal underground (in situ) allows the
energy extraction from large coal resources that are not
economically or technically recoverable by conventional
mining techniques. The hazards related to conventional
mining practices are also removed. Surface disruption is
minimised and handling of solid materials is eliminated i.e.
coal and ash handling at the surface is not required.
An aerial view of the Brompton
Gasworks in the 1900s.
ISG allows for the
potential of large
scale economic
recoveries.
A gas street lamp on the
intersection of Hindley and
King William streets in 1885.
ISG 101For personal use only 15
What is In Situ Gasification (ISG)?
Decommissioning of the ISG chamber occurs through a
ISG technology has been acknowledged since the 1800’s,
however it was first adopted commercially in the Soviet Union
during the 1930’s and remains in use there today at the
Angren plant in Uzbekistan which feeds a power generation
plant. Recent advances in oil and gas technologies (notably
directional drilling and computer-based process control)
have combined to further enhance ISG to become more
commercially attractive.
The ISG syngas can be either used to produce electricity
directly or further refined into a variety of products including
natural gas and ammonia.
The ISG process is controlled via the injection of air or steam
and oxygen into the coal seam, plus the injection rate and
reactor pressure. The injected air or steam and oxygen are
introduced to the coal via an inlet well that is drilled vertically
and then horizontally into the coal seam.
The syngas is extracted through an outlet well drilled in the
coal seam to the surface where the gas is processed for use
in downstream applications or direct sale.
To facilitate gasification initiation, a channel is created
between the inlet and outlet wells. This is achieved by
directional drilling which creates a tube-shaped cavity along
which gases can travel.
well-defined and monitored process. Gasification ceases
when the air or steam and oxygen injection is stopped. Once
injection has ceased, gasification stops within 48 hours. The
pressure in the gasifier chamber is then reduced, promoting
the inflow of groundwater which causes steam within the
cavity. Volatile material is flushed by the steam to the surface
for combustion through the Thermal Oxidiser.
While the precise method to be utilised in the commercial
operation at the LCEP will be finalised during the front end
engineering design phase of the commercial development
programme of work, based on preliminary analysis, it is
likely to utilise a Linear Continuous Retraction Injection Point
(CRIP) method. This method has been proven at several
ISG trial sites and is widely considered to be the preferred
method for efficient production of syngas from underground
coal seams.
The Linear CRIP process utilises a vertical outlet well and
an inlet well that is drilled using standard oilfield directional
drilling techniques in order to connect the wells as shown in
the following figure.
ISG process
In Situ Gasification is not
a new process. Plant and
equipment that control
the ISG process have
been developed and
improved for almost a
century.
~500 m
12 m
20 m
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only 16
Tenement Schedule
Petroleum and Mineral Tenement Schedule
Tenement
Percentage Interest
Grant Date
Location
Petroleum Exploration Licence 650
Petroleum Exploration Licence Application 582
Petroleum Exploration Licence Application 643
Petroleum Exploration Licence Application 644
Petroleum Exploration Licence Application 647
Petroleum Exploration Licence Application 649
Gas Storage Exploration Licence 662
Exploration Licence Application 2016-00009
PEL 650 Coal Resource Analysis
100%
100%
100%
100%
100%
100%
100%
100%
Inherent
Tenement
Working
Thickness
Depth
Moisture
Ash
Volatiles
Block
Section
(m)
(m)
(ad%)
(ad%)
(ad%)
18 November 2014
Leigh Creek
Application Approved
Finniss Springs
Application Approved
Callabonna
Application Approved
Roxby Downs
Application Approved
Leigh Creek
Application Approved
Oakdale
5 February 2016
Under Application
Leigh Creek
Leigh Creek
Fixed
Carbon
(ad%)
Density
Area
Volume
Tonnage
(RD)
(ha)
(m)
(Mt)
PEL650 –
ISG WS-G
Block 1
PEL650 –
ISG WS-G
Block 2
PEL650 –
ISG WS-L1
Block 1
PEL650 –
F G1-G2-H1
2.0-16.0
Av.7.1
200-366
Av. 276
15.2-17.1
Av. 15.8
6.2-20.6
Av. 10.8
23.9-29.5
Av. 27.7
33.6-47.5
Av. 42.9
1.4
159
11,300,000
15.8
F G1-G2-H1
2.0-7.1
Av. 3.68
200-301
Av. 245
17.1-17.8
Av. 17.7
11.6-12.8
Av. 12.6
27.8-27.9
Av. 27.9
41.4-42.2
Av. 41.6
1.4
24
900,000
1.3
L1
2.0-6.3
Av. 3.68
200-392
Av. 245
-
ISG WS-K2
K2
Block 1
PEL650 –
2.0-6.7
Av. 3.3
200-413
-
Av. 307
-
-
-
-
-
-
1.4
204
6,140,000
8.5
1.4
301
9,970,000
13.9
ISG WS-Q
Q1-Q2-Q3
2.0-29.9
200-831
20.9-23.0
11.0-11.2
24.9-25.1
40.9-42.3
1.4
1069
170,800,000
239
Av. 15.97
Av. 477
Av. 22.5
Av. 11.1
Av. 24.9
Av. 41.2
V1-V2-V3-V4
2.0-13.7
201-866
18.4-18.8
15.9-17.4
25.2-25.4
37.0-37.8
1.4
990
52,800,000
74
Av. 5.4
Av. 517
Av. 18.4
Av. 16.0
Av25.3
Av 37.7
Block 1
PEL650 –
ISG WS-V
Block 1
PEL650 –
ISG WS-W1
W1
Block 1
ISG-Project Total
2.0-5.3
Av. 3.4
292-870
Av. 527
-
-
-
-
1.4
503
17,200,000
24.1
376.6
For personal use only
17
Coal and Gas Resources
The Company’s Inferred Coal Resource and equivalent Syngas Resource as at 30 June 2017, reported in accordance with
2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)
guidelines and the 2007 Society of Petroleum Engineers (SPE) Petroleum Resources Management System (PRMS) guidelines
(respectively), are:
Tenement
Location
Coal Resource
Coal Resources
Coal Resources
Syngas Resource
Syngas Energy
Syngas Energy
Category
(Mt) 2017
(Mt) 2016
Classification
(Pj) 2017
(Pj) 2016
Petroleum Exploration
Leigh Creek
Inferred
376.6
376.6
Licence 650
1C
2C
3C
2,747.7
2,963.9
3,303.1
2,747.7
2,963.9
3,303.1
Mineral Resource and Syngas Resource Governance and
Disclosures
Mineral Resources are estimated in accordance with the
requirements of the JORC Code, by qualified competent
persons who are consultants to Leigh Creek Energy.
Syngas Resources are estimated in accordance with the
requirements of the Petroleum Resources Management
System (PRMS) approved by the Society of Petroleum
Engineers, by qualified petroleum reserves and resources
evaluators who are consultants to Leigh Creek Energy.
The Minerals Resource and Syngas Resource Statements in
the 2017 Annual Report are reviewed by qualified consultants
described below. For Mineral Resources, this is the qualified
competent person, and for the Syngas Resources, the
qualified petroleum reserves and resource evaluator.
Notes on Coal Resources
For the purposes of ASX Listing Rule 5.23, Leigh Creek
Energy confirms that it is not aware of any new information
or data that materially affects the information included in the
8 December 2015 Resources Statement and that all material
assumptions and technical parameters underpinning the
estimates in the Resources Statement continue to apply
and have not materially changed. A review of coal quality
data and resource modelling is currently in progress and is
expected to be completed in the next quarter.
The coal resources reported herein, insofar as they relate to
mineralisation, are based on information compiled by
Mr Warwick Smyth of GeoConsult Pty Ltd. Mr Smyth
is a Member of the Australasian Institute of Mining and
Metallurgy and the Australian Institute of Geoscientists, who
has more than 25 years’ experience in the field of activity
being reported. Mr Smyth has sufficient experience which
is relevant to the style of mineralisation and type of deposit
under consideration and to the activity he is undertaking to
qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves”. Mr Smyth consents
to the inclusion in the report of coal resources estimates
based on his information in the form and context in which it
appears.
Notes on Gas Resources
For the purposes of ASX Listing Rule 5.43, Leigh Creek
Energy confirms that it is not aware of any new information
or data that materially affects the information included in the
8 January 2016 Resources Statement and that all material
assumptions and technical parameters underpinning the
estimates in the Resources Statement continue to apply and
have not materially changed.
The Gas Resource estimates stated herein are based on, and
fairly represent, information and supporting documentation
prepared by Timothy Hower of MHA Petroleum Consultants
LLC, Denver USA. Mr Hower is a member of the Society
of Petroleum Engineers and has consented to the use
of the Resource estimates and supporting information
contained herein in the form and context in which it appears.
All estimates are based on the deterministic method for
estimation of petroleum resources.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
18
For personal use only D I R E C T O R S ’ R E P O R T
19
For personal use only 20
D I R E C T O R S ’ R E P O R T
Leigh Creek Energy Limited is a public company
incorporated and domiciled in Australia and listed on
the Australian Securities Exchange.
The directors present their report together with the
financial statements of the consolidated entity, being
Leigh Creek Energy Limited (“the Company” or “Leigh
Creek Energy”) and its controlled entities (“the Group”)
for the year ended 30 June 2017.
Directors
The names of the directors in office at any time during or since the end
of the year are:
Daniel Justyn Peters
(appointed 28.11.2014)
David Shearwood
(appointed 27.05.2015)
(retired 30.09.2016)
Gregory English
(appointed 22.09.2015)
Murray Chatfield
(appointed 30.06.2016)
Zhe Wang
(appointed 01.07.2017)
Directors have been in office since the start of the
financial year to the date of this report unless otherwise
stated.
Information on continuing Directors
Daniel Justyn Peters LLB, BA (Politics/Jurisprudence) GDLP
Executive Chairman
Audit and Risk Committee Member
Director since 2014
Experience & expertise
Mr Peters joined Linc Energy soon after its listing on
the ASX when Linc Energy was considered a world
leader in undergound coal gasification. In his six years
at Linc Energy Mr Peters held the positions of General
Manager Environment and Government Relations,
General Manager Business Development, Executive
General Manager North Asia and finished as Executive
General Manager of Investor Relations. His experience
across a broad range of business units within Linc
Energy will prove invaluable in developing the Leigh
Creek Energy project.
Previously Mr Peters was employed at the Queensland
Environmental Protection Authority (EPA) as head of
Investigations and Compliance and then acting Director
of Central and Northern Regions. He managed the
integration of the environmental regulation of the
Queensland Mining Industry into the EPA.
Other current listed directorships
Oil Basins Ltd
Previous listed directorships (last three years)
None
For personal use only 21
D I R E C T O R S ’ R E P O R T
Information on continuing Directors
Gregory D English LLB, B.Eng (Mining)
Zhe Wang
Non-Executive Director
Director appointed effective from 01.07.2017
Experience & expertise
Zhe joined the Leigh Creek Energy Board as a Non-
Executive Director on 1 July 2017.
Zhe is a Chinese based Energy and Thermal Physics
Engineer, who is currently the Vice President of
China New Energy Group Limited (one of Leigh
Creek Energy’s major shareholders). He has been in
the role since 2015 and has over 8 years Executive
Management experience. Zhe also sits on the
Board of Beijing Raise Mind Technology Ltd. Zhe’s
key areas of expertise include; Coal Combustion;
Renewable Energy Applications and Steel Sinter.
He has a Bachelor of Thermo Dynamics, Renewable
Energy Applications as well as a Masters in Energy
Engineering and Thermal Physics, Coal Combustion.
Other current listed directorships
None
Previous listed directorships (last three years)
None
Company Secretary
Jordan Mehrtens is a qualified Lawyer, and has
other qualifications in finance and urban and regional
planning. Jordan has worked with Leigh Creek Energy
since its commencement, providing regulatory,
compliance and other analytical advice. Jordan is a
member of the Governance Institute of Australia and
Australian Mining and Petroleum Law Association and
performs the secretarial role in the Company. Jordan
has been the Company Secretary of Leigh Creek
Energy Limited since 2015.
Non-Executive Director
Audit and Risk Committee Chair
Director since 2015
Experience & expertise
Mr English is an experienced and qualified mining
engineer and lawyer with over 25 years of involvement
in the resources industry. As a mining engineer he
has worked on underground and open pit coal mines,
including working as a mining engineer at the Leigh
Creek Coalfield where he lived in the Leigh Creek town.
As a lawyer Greg has acted for numerous oil and gas
companies and advised on numerous gas marketing,
gas transportation and similar transactions.
Greg’s experience in the coal industry, and in particular
his knowledge of the Leigh Creek Coalfield, and
experience and contacts in the oil and gas industry is a
significant asset to the Company.
Other current listed directorships
Archer Exploration Limited and Core Exploration
Limited
Previous listed directorships (last three years)
None
Murray K Chatfield B Com Ag (Economics and Marketing), MBA, ACT, MAICD
Non-Executive Director
Audit and Risk Committee Member
Director since 2016
Experience & expertise
Mr Chatfield has extensive experience within finance
with nearly 30 years’ experience within investment
banking, hedge funds and corporate finance both
in Australia and internationally. He was a senior
Economist with the New Zealand government before
joining Bankers Trust in London. He then moved into
Hedge Funds initially as European Treasurer and then
as a Partner and COO in a Relative Value Hedge Fund.
He was the COO and Partner in a Australian based
fund focussed on Global Macro events. He has been
and is still, actively involved as a Director of several
companies in the Commodity and Marketing areas. Mr
Chatfield’s career covers finance, treasury, accounting,
operational efficiency, risk management (business,
market, tax and regulatory), legal and regulatory
compliance and direct financial market interaction.
Other current listed directorships
None
Previous listed directorships (last three years)
None
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
22
D I R E C T O R S ’ R E P O R T
Principal activities
Dividends
The principal activity of the Group was advancing the
development of its Leigh Creek Energy Project (LCEP).
Review of operations and financial results
The consolidated operating loss of the financial year
to 30 June 2017 was $5,758,760 (2016: ($5,366,248)).
Expenditure incurred on the LCEP capitalised as
Exploration expenditure, net of the 2015/16 R&D tax
offset received ($790,684) and R&D rebates receivable
for 2016/17 ($2,135,457), was $3,535,245
(2016:$1,739,813).
In July 2016, the Company commenced the drilling
program for the LCEP. The program provides important
data regarding environmental and groundwater
properties, required for regulatory approvals of
the demonstration, as well as rock formation and
geotechnical information. In June 2017, the Company
announced that environmental baseline drilling for the
Pre-Commercial Demonstration (PCD) stage of the
LCEP had been completed. The Company continues
to progress towards the regulatory approval, award
of major construction contracts and subsequent
operation of the pre-commercial demonstration at the
LCEP scheduled to be completed in early 2018.
During the year, the Company received approval from
AusIndustry for its Advance Finding Application for
the period 1 July 2015 to 30 June 2018. The Advance
Finding Application is in relation to eligible research
expenditure for the Leigh Creek Energy Project
to access Research and Development (R&D) tax
incentives. Further to this, the Company arranged a
working capital facility with the Commonwealth Bank of
Australia (CBA) to bring forward access to refundable
tax concessions (see Note 10 for Borrowings).
In March 2017, Leigh Creek Energy signed a
subscription agreement with China New Energy Group
Limited (CNE) for the issue of 136.3 million Leigh Creek
Energy Limited Ordinary Shares in three tranches at
an average issue price of $0.147 per share. The total
investment by CNE is AUD 20 million before costs.
On completion of the second tranche, CNE were
granted the right to a seat on the Board of Directors
and following completion of the final tranche, subject
to the approval of shareholders at a meeting scheduled
to be held in September/October 2017, CNE will hold
approximately 32.78% of the total shares on issue. In
addition, in March 2017 13.7 million shares were placed
at $0.135 per share with sophisticated and professional
investors to raise a total of $1.8 million (before costs).
The Chairman’s report contains further information on
the detailed operations of the Group during the year.
The Directors do not recommend the payment of a
dividend and no amount has been paid or declared
since the end of the previous financial year.
Significant changes in state of affairs
No significant change in the state of affairs of the
Group occurred during the financial year, other than as
already referred to in this report.
Likely developments, prospects and business
strategies
Approval is currently being sought for the pre-
commercial development phase of the project which is
scheduled to be completed in early 2018. In the context
of the current and forecast gas and electricity markets,
it is anticipated that the Company will then become an
attractive business partner.
The Group will require further capital to sustain its
activities.
After reporting date events
1) Employee Share Options were issued on
11 August 2017 – total of 636,000 options issued
at an exercise price of $0.30, expiring on 30
November 2020.
2) China New Energy Group Limited’s Mr Zhe Wang
was appointed as a non-executive director effective
from 1 July 2017.
3) Extraordinary General Meeting was held on 21 July
2017 to approve tranche 1 and tranche 2 placement
by CNE.
4) The Company announced on 11 August 2017
that CNE’s tranche 3 investment will be split into
two payments, the first being 17 million shares at
$0.15 for a total of $2,550,000 on 15 August 2017
increasing CNE’s shareholding in the Company
to 19.98% upon issue of the underlying shares.
The second payment (balance of $10 million) will
increase CNE’s shareholding above 20% and as
such shareholder approval will be required at a
requisitioned General Meeting.
5) On 15 August 2017, the term of the CBA working
capital facility was extended to April 2019 and
the limit increased from $2 million to $6.5 million,
subject to the satisfaction of agreed conditions
precedent.
For personal use only 23
D I R E C T O R S ’ R E P O R T
Meetings of directors
During the financial year, the number of meetings
held at which a director was eligible to attend and the
number actually attended by each director were:
Director
Board Meetings
Audit & Risk Committee
Meetings
Meetings Meetings
Meetings Meetings
held
attended
held
attended
D J Peters
D K Shearwood
G D English
M K Chatfield
13
3
13
13
13
3
12
13
2
–
2
2
2
–
1
2
Unissued shares under options
At the date of this report, the unissued ordinary shares
of Leigh Creek Energy Limited under unlisted and listed
options are as follows:
Grant Date
Date of
Expiry
Exercise
Number under
Price
Option
14 October 2015
14 October 2019
$0.212
1,000,000
14 October 2015
14 October 2020
$0.25
1,000,000
1 December 2015
31 July 2020
$1.50
1,250,000
1 December 2015
30 November 2020
$0.30
8,565,000
6 June 2016
6 June 2018
$0.50
17,687,463
27 June 2016
31 October 2018
$0.20
1,500,000
27 June 2016
31 October 2018
$0.22
1,500,000
27 June 2016
31 October 2018
$0.24
1,500,000
27 June 2016
31 October 2018
$0.26
1,500,000
11 July 2016
30 November 2020
$0.49
141,250
15 July 2016
11 May 2019
$0.30
1,500,000
15 July 2016
8 May 2021
$0.30
800,000
4 October 2016
10 October 2021
$0.35
2,000,000
4 October 2016
10 October 2021
$0.45
2,000,000
11 August 2017
30 November 2020
$0.30
636,000
Total
42,579,713
Options relating to a former KMP’s resignation have
been forfeited (1,500,000) and a further 988,750
options have expired due to vesting conditions not
being met.
Options approved at the June 2016 board meeting
for non-executive directors (4,000,000) were granted
following the Annual General Meeting on 10 October
2016 with an expiry date of 10 October 2021.
Options (831,000) have been granted to employees
with an expiry date of 30 November 2020. Additionally,
2,300,000 options were granted to a consultant in
relation to the capital raising in May 2016.
During the year ended 30 June 2017, and to the date
of this report no ordinary shares of Leigh Creek
Energy Limited were issued on the exercise of options.
None of the options on issue entitles the holders to
participate, by virtue of the options, in any dividend or
share issue of the Company.
Proceedings
The Company is not currently a party to legal
proceedings brought against it or initiated by it at the
date of this report.
Environmental issues
The Company and subsidiaries are required to comply
with various Commonwealth and State environmental
legislation in relation to its planned exploration
activities and future development at the Leigh Creek
site.
No notification of any breach of any environmental
regulation has been received in respect of any of the
Company’s exploration activities during the year.
Indemnities given to, and insurance premiums
paid for, officers
During the year, the company paid a premium to insure
officers of the Group. The officers of the Group covered
by the insurance policy include all Directors.
The liabilities insured are legal costs that may be
incurred in defending civil or criminal proceedings that
may be brought against the officers in their capacity as
officers of the Group, and any other payments arising
from liabilities incurred by the officers in connection
with such proceedings, other than where such liabilities
arise out of conduct involving a willful breach of duty
by the officers or the improper use by the officers of
their position or of information to gain advantage for
themselves or someone else to cause detriment to the
Group.
Details of the amount of the premium paid in respect of
insurance policies are not disclosed as such disclosure
is prohibited under the terms of the contract.
The Group has not otherwise, during or since the end
of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify any current or
former officer of the Group against a liability incurred
as such by an officer.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
24
D I R E C T O R S ’ R E P O R T
The Company’s remuneration structure is based
on a number of factors including the particular
experience and performance of the individual in
meeting key objectives of the Company. The Board
is responsible for assessing relevant employment
market conditions and achieving the overall, long
term, objective of maximising shareholder benefits
through the retention of high quality personnel.
The Board may approve the payment of cash
bonuses from time to time in order to reward
individual executive performance in achieving key
objectives as considered appropriate by the Board.
The Company also has an Employee Share Option
Plan, approved by shareholders, that enables the
Board to offer eligible employees options to acquire
ordinary fully paid shares in the Company. Under
the terms of the Plan, options to acquire ordinary
fully paid shares may be offered to the Company’s
eligible employees at no cost unless otherwise
determined by the Board in accordance with the
terms and conditions of the Plan. The objective
of the Plan is to align the interests of employees
and shareholders by providing employees of the
Company with the opportunity to participate in the
equity of the Company as an incentive to achieve
greater success for the Company and to maximise
the long term performance of the Company.
As the Company is developing an energy asset
which is not yet in production, in the opinion
of the Board, the Company’s earnings and the
consequences of the Company’s performance on
shareholder wealth are not related to the Company’s
remuneration policy.
Voting at 2016 AGM
Of the total valid available votes lodged, Leigh
Creek Energy received 93.48% of “yes” votes on
its remuneration report for the 2016 financial year
with the motion carried unanimously on a show of
hands as an ordinary resolution. The Company did
not receive any specific feedback at the AGM on its
remuneration practices.
Use of remuneration consultants
The Company did not engage remuneration
consultants during the year.
Non-audit services
During the year, Grant Thornton Audit Pty Ltd, the
Company’s auditors, did not perform other services in
addition to their statutory audit duties.
Auditor’s independence declaration
The Auditor’s Independence Declaration for the year
ended 30 June 2017 can be found on page 32 and
forms part of the Directors’ Report.
Proceedings on behalf of the company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or 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.
Remuneration report – audited
a) Principles used to determine the nature and amount of
remuneration
The remuneration policy is designed to align the
objectives of the Key Management Personnel with
shareholder and business objectives by providing
a fixed remuneration package to non-executive
Directors and time based remuneration to Executive
Directors. The Board of Leigh Creek Energy
believes the policy to be appropriate and effective
in attracting and retaining the best Directors and
Executives to manage and direct the Group, as
well as create goal congruence between Directors,
Executives and shareholders.
The Company’s policy for determining the nature
and amounts of emoluments of board members and
other Key Management Personnel of the Company
is as follows.
The Company’s Constitution specifies that the
total amount of remuneration of non-executive
Directors shall be fixed from time to time by a
general meeting. The current maximum aggregate
remuneration of non-executive Directors has been
set at $500,000 per annum. Directors may apportion
any amount up to this maximum amount amongst
the non-executive Directors as they determine.
Directors are also entitled to be paid reasonable
travelling, accommodation and other expenses
incurred in performing their duties as Directors.
Non-executive Director remuneration is by way of
fees and statutory superannuation contributions.
Non-executive Directors do not participate in
schemes designed for remuneration of executives
but they may receive options or bonus payments
subject to shareholder approval and are not
provided with retirement benefits other than salary
sacrifice and statutory superannuation.
For personal use only
25
D I R E C T O R S ’ R E P O R T
b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each Key Management Personnel
(KMP) of the Group are shown in the table below:
Short term benefits
Post employment
benefits
Year
Directors
fees
Salary and
wages
Other Non-monetary
benefits 1
Super
contributions
-
-
-
-
300,000
325,000
68,750
297,917
-
-
-
-
6,262
-
8,267
-
Executive directors
D J Peters
D K Shearwood 3
P L Williams
2017
2016
2017
2016
2017
2016
Non executive directors
G D English
M Chatfield
C Schacht
2017
2016
2017
2016
2017
2016
-
11,667
50,000
38,750
50,192
-
-
13,222
-
-
-
-
-
-
-
-
Other key management personnel
P J Staveley
J Haines
M Terry 7
G Marsden 8
S Appleyard
Total
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
-
-
-
-
-
-
-
-
-
-
275,000
259,583
275,000
206,250
250,000
-
72,917
250,000
-
-
100,192
63,639
1,241,667
1,338,750
33,124
-
33,124
-
-
-
-
-
-
-
-
-
-
1,247
-
-
-
-
-
-
Termination
benefits
Termination
payments
-
-
305,163 4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,498 9
-
-
-
Share based
payments
Options 2
Total
5,655
8,038
340,417
363,913
(5,306)
8,038
383,405
334,257
-
159,288
-
172,063
(97,942)5
163,671 6
(91,171)5
148,877 6
-
-
63,658
43,214
63,658
43,214
31,829
-
6,803
43,214
-
-
(43,192)
206,102
(36,211)
148,877
-
14,478
364,783
327,457
366,030
269,058
305,579
-
99,145
316,964
-
33,124
28,500
30,875
6,531
28,302
-
1,108
4,750
3,681
4,768
-
-
1,256
26,125
24,660
26,125
19,594
23,750
-
6,927
23,750
-
-
15,776
-
127,476
133,226
317,661
-
(22,816)
617,554
1,779,956
2,186,293
Notes
(1)
Non monetary benefits include benefits provided to the KMP on
(5)
Options were approved at the AGM in September 2016 for these
which Fringe Benefits tax is paid.
directors. Under accounting rules, the options were expensed in the
(2)
In accordance with the Accounting Standards, remuneration
includes a proportion of the notional value of the options granted
or outstanding during the year. The notional value of options is
determined as at the issue date and is progressively allocated over
previous financial year using 30 June 2016 as the provisional grant
date. An adjustment to accounting expense has been completed in
this financial year to true-up the expense based on the actual grant
date price.
the vesting period. The amount included as remuneration is not
(6)
Options to be issued to Non-Executive Directors were approved at
indicative of the benefit (if any) that the employee may ultimately
the 30 June 2016 board meeting. As the remuneration is approved at
realise should the option vest. The notional value of the options
the AGM, they were yet to be granted at the end of the last financial
as at the issue date has been determined in accordance with the
year. Under accounting rules, the options needed to be expensed in
accounting policy Note 11.
the financial year using 30 June 2016 as the provisional grant date.
(3)
Mr Shearwood was made redundant on 30 September 2016.
(7)
Mr Terry was appointed to Chief Financial Officer on 1 October 2016.
(4)
Under the terms of Mr Shearwood’s termination, he received a
The amount disclosed represents his full year salary.
redundancy payment of $293,000 plus unused leave.
(8)
Mr Marsden resigned on 16 September 2016.
(9)
In relation to Mr Marsden’s resignation, an amount of $12,498
representing unpaid leave was paid.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
26
D I R E C T O R S ’ R E P O R T
c) Service agreements
Remuneration and other terms of employment for
the Executive Directors and other Key Management
Personnel are formalised in a Service Agreement.
The major provisions of the agreement relating to
remuneration are set out below:
The options were provided at no cost to the
recipients. All options expire on the earlier of
the expiry date or cessation of the individual‘s
employment (excepting retiring directors).
Options issued in previous financial years that lapsed
or were forfeited during the current financial year:
Employee
Base salary
Term of agreement
Notice period
Name
Number of options
Financial year in which
D J Peters
$300,000
3 years + 1 year
12 months
company option1
forfeited(lapsed)
during the year
those options
were granted
P J Staveley
$275,000
Ongoing
J Haines
$275,000
Ongoing
M Terry
$250,000
Ongoing
3 months
12 months
3 months
D J Peters
D K Shearwood
G Marsden
250,0001
250,0001
1,500,0002
2016
2016
2016
Notes:
(1)
(2)
Options have lapsed as vesting conditions were not achieved.
As a result of Mr Marsden’s resignation, the remaining tranches of
unvested options were forfeited.
Notes:
(1) Commenced as salaried executive on 28 May 2015.
d) Share-based remuneration
Unlisted options are granted to Directors and
Key Management Personnel as part of their
remuneration. The options are not granted based
on performance criteria, but are issued to the
relevant directors and Key Management Personnel
of the Group to increase goal congruence between
executives, directors and shareholders. All options
refer to options over ordinary shares of the
Company, which are exercisable on a one-for-one
basis under the terms of the agreements. Options
granted during this financial year:
Name
Number
granted
Grant
date
Number
Vesting and
Last
vested
first exercise
exercise
date
date
G D English1 2,000,000
4 October
2,000,000
10 October
10 October
2016
2016
2021
M Chatfield1 2,000,000
4 October
2,000,000
10 October
10 October
2016
2016
2021
Total
4,000,000
Notes:
(1)
Options issued to Non-Executive Directors were agreed at the 30
June 2016 board meeting. As the remuneration is required to be
approved at the AGM, the options were granted following approval
at the AGM held in September 2016. Under accounting rules, the
options were expensed in the previous financial year using 30 June
2016 as the provisional grant date. An adjustment to accounting
expense is included in this year’s financial results.
For personal use only
27
D I R E C T O R S ’ R E P O R T
e) Other information
Number of Options held by Key Management Personnel
The number of options to acquire ordinary shares in the Company held during the 2017 reporting period by
each of the Group’s Key Management Personnel, including their related parties, is set out below:
Name
Balance
Granted as
Exercised
at start
remuneration
of year
D J Peters 1
1,000,000
D K Shearwood 1
1,000,000
-
-
G D English 2
-
2,000,000
M Chatfield 2
25,000
2,000,000
P J Staveley
2,000,000
J Haines
2,000,000
G Marsden 3
2,000,000
M Terry
1,000,000
-
-
-
-
Total
9,025,000
4,000,000
Other
changes
Closing
Vested & exercisable
Vested & un-exercisable
balance
at the end of the
reporting period
at the end of the
reporting period
-
-
-
-
-
-
-
-
-
(250,000)
750,000
(250,000)
750,000
-
-
-
-
2,000,000
2,025,000
2,000,000
2,000,000
(1,500,000)
500,000
-
1,000,000
-
-
2,000,000
2,025,000
500,000
500,000
500,000
250,000
(2,000,000)
11,025,000
5,775,000
-
-
-
-
-
-
-
-
-
Notes:
(1) Options have lapsed as vesting conditions were not achieved.
(2)
Options to be issued to Non-Executive Directors were agreed at the 30 June 2016 board meeting. As the remuneration is required to be
approved at the AGM, the options were granted following the September 2016 meeting.
(3)
As a result of Mr Marsden’s resignation, the remaining tranches of unvested options were forfeited.
Number of Shares Held by Key Management Personnel
The number of ordinary shares in the Company during the 2017 reporting period held by each of the Group’s
Key Management Personnel, including their related parties, is set out below:
Name
D J Peters
D K Shearwood
G D English
M Chatfield
P J Staveley
J Haines
G Marsden
M Terry
Total
Notes:
Balance
Granted as
Received
at start
remuneration
on exercise
Other
changes 1
Held at the end
of the reporting
of year
-
238,772
-
1,308,914
550,000
-
250,000
-
2,347,686
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(250,000)
-
period
-
238,772
-
1,308,914
550,000
-
-
-
(250,000)
2,097,686
(1)
Other changes include purchases, sales or transfers during the financial year.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
28
Loans to Key Management Personnel
At balance date, the Group does not have any outstanding receivables relating to loans to
employees or Key Management Personnel.
Related party transactions
During the reporting period, Piper Alderman lawyers were paid $78,015 (2016: $Nil) for legal
services rendered to the Group. Greg English is a partner at Piper Alderman lawyers.
ARK Energy Ltd has a service agreement in place with the Company for facilities and
accounting services. Fees rendered during the financial year were $32,586. Mr Philip Staveley
is a director of ARK Energy Ltd.
A related party purchased second hand goods from the Company in an arm’s length
transaction totaling $1,932. The party is related to Mr Peters, Executive Chairman.
END OF AUDITED REMUNERATION REPORT
For personal use only 29
A U D I T O R ’ S I N D E P E N D E N C E
Grant Thornton Audit Pty Ltd continues in office in accordance with Section 327 of the
Corporation Act.
The auditor has not been engaged during the year for any non-audit services which may
have impaired the auditor’s independence. The auditor’s independence declaration for
the year ended 30 June 2017 has been received and is included in this report.
Signed in accordance with a resolution of the Board.
D J Peters
Director
Dated at Adelaide, South Australia this 17th day of August 2017
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only 30
C O R P O R AT E G O V E R N A N C E S TAT E M E N T
Although the ASX Corporate Governance Council’s
Recommendations are not mandatory, under listing
rule 4.10.3 companies are required to provide a
statement disclosing the extent to which they have
followed the recommendations in the reporting period,
identifying any principles which have not been followed
with reasons for not having done so.
The statement of revised principles and the Company’s
compliance with each principle are set out in the
Company’s website www.lcke.com.au
The Board of Directors (the Board) of Leigh Creek
Energy Limited (the Company) is committed to
achieving and demonstrating the highest standard of
Corporate Governance.
The Board guides the affairs of the Company on
behalf of the shareholders by whom they are elected
and to whom they are accountable. The Board has
responsibility for the overall Corporate Governance
of the Company including its strategic direction,
establishment of goals for its management and
monitoring the achievement of those goals.
The individual Directors recognise that their primary
responsibility is to the owners of the Company, its
shareholders, while simultaneously having regard
for the interests of all stakeholders and the broader
community.
The statement outlines the Company’s Corporate
Governance Practices in place during the financial
year. The Company’s statement is made based on
the ASX Corporate Governance Councils Corporate
Governance Principles and Recommendations
(3rd Edition).
For personal use only 31
D I R E C T O R S ’ D E C L A R AT I O N
1. In the opinion of the Directors of Leigh Creek Energy Limited:
a. The consolidated financial statements and notes of the company are in
accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of the financial position as at 30 June 2017 and of
the performance of the Group for the year ended on that date; and
ii. Complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001; and
b. There are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
2. The Directors have been given the declarations required by Section 295A of the
Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer
for the financial year ended 30 June 2017.
3. Note 1 confirms that the consolidated financial statements also comply with
International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors.
D J Peters
Director
Dated at Adelaide, South Australia this 17th day of August 2017
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
3232
A U D I T O R ’ S I N D E P E N D E N C E D E C L A R AT I O N
Grant Thornton House
Level 3
170 Frome Street
Adelaide, SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF LEIGH CREEK ENERGY LIMITED
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Leigh Creek Energy Limited for the year ended 30 June 2017, I declare that, to the
best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
a
b
GRANT THORNTON AUDIT PTY LTD
Adelaide, 17 August 2017
I S Kemp
Partner – Audit & Assurance
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
For personal use only
F I N A N C I A L I N F O R M AT I O N
33
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only 34
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Other revenue
Other expenses
Depreciation of property, plant and equipment
Employee benefits expense
Finance income
Finance costs
Loss before income tax
Income tax benefit
Loss for the year after income tax
Total other comprehensive income
Note
2a
2b
7
11
3a
3b
4
2017
$
2016
$
53,731
20,930
(2,581,694)
(2,238,576)
(35,251)
(35,664)
(3,171,452)
(3,128,846)
(5,734,666)
(5,382,156)
54,011
(78,105)
18,283
(2,375)
(5,758,760)
(5,366,248)
-
-
(5,758,760)
(5,366,248)
-
-
Total comprehensive (loss) for the year
(5,758,760)
(5,366,248)
Earnings per share
Basic (cents per share)
Diluted (cents per share)
20
20
(0.02)
(0.02)
(0.02)
(0.02)
The accompanying notes form part of these financial statements.
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017
Note
2017
$
2016
$
35
Assets
Current
Cash assets
Trade and other receivables
Other financial assets
Total current assets
Non-current
Property, plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Liabilities
Current
Trade and other payables
Borrowings
Employee entitlements
Total current liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent:
Share capital
Share option reserve
Retained losses
Total equity
5
6
7
8
9
10
11
12
13
8,757,787
2,358,752
-
8,787,946
209,887
16,031
11,116,539
9,013,864
220,720
112,940
5,985,725
2,450,480
6,206,445
2,563,420
17,322,984
11,577,284
1,656,968
1,540,049
298,499
3,495,516
3,495,516
665,711
-
124,519
790,230
790,230
13,827,468
10,787,054
41,100,034
32,361,720
1,456,144
1,395,284
(28,728,710)
(22,969,950)
13,827,468
10,787,054
The accompanying notes form part of these financial statements.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017
SHARE CAPITAL
RETAINED LOSSES
$
$
SHARE OPTION
RESERVE
$
TOTAL EQUITY
$
BALANCE 1 July 2016
32,361,720
(22,969,950)
1,395,284
10,787,054
Total comprehensive income
Total profit or (loss)
Other comprehensive income
Total comprehensive income
Transactions with members in
their capacity as owners:
-
-
-
(5,758,760)
-
(5,758,760)
Issued of share capital (net of costs)
8,738,314
Employee share based payment options
-
Total transactions with owners
8,738,314
-
-
-
-
-
-
-
60,860
60,860
(5,758,760)
-
(5,758,760)
8,738,314
60,860
8,799,174
BALANCE AT 30 June 2017
41,100,034
(28,728,710)
1,456,144
13,827,468
BALANCE 1 July 2015
19,493,353
(17,603,702)
Total comprehensive income
Total profit or (loss)
Other comprehensive income
Total comprehensive income
Transactions with members in
their capacity as owners:
-
-
-
(5,366,248)
-
(5,366,248)
Issued of share capital (net of costs)
9,442,046
Treasury shares sold
3,426,321
Employee share based payment options
-
Total transactions with owners
12,868,367
-
-
-
-
-
-
-
-
-
-
1,395,284
(1,889,651)
(5,366,248)
-
(5,366,248)
9,442,046
3,426,321
1,395,284
1,395,284
14,263,651
BALANCE AT 30 June 2016
32,361,720
(22,969,950)
1,395,284
10,787,054
The accompanying notes form part of these financial statements.
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017
Note
Cash flows from operating activities
Sundry income received
Interest paid
Interest received
R&D rebates received
37
2017
$
20,000
(5,288)
34,411
834,555
2016
$
2,855
(2,375)
11,905
-
Payments to suppliers and employees
(5,458,337)
(3,887,337)
Net cash (used in) operating activities
16(b)
(4,574,659)
(3,874,952)
Cash flows from investing activities
Purchase of property, plant & equipment
Proceeds from disposal of assets
Capitalised exploration costs
Net cash (used in) investing activities
Cash flow from financing activities
Issue of shares
Share issue transaction costs
Proceeds from borrowings
Payment of borrowing costs
(126,955)
29,063
(53,745)
2,250
(5,611,122)
(1,755,702)
(5,709,014)
(1,807,197)
9,315,764
14,027,813
(577,450)
(916,907)
1,610,000
(94,800)
-
-
Advances/(Repayments) from related parties
-
(125,438)
Net cash from / (used in) financing activities
10,253,514
12,985,468
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
(30,159)
8,787,946
7,303,319
1,484,627
Cash and cash equivalents, end of year
16(a)
8,757,787
8,757,946
The accompanying notes form part of these financial statements.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
1. Summary of significant accounting policies
The principal activity of the Group was pursuing the
development of its Leigh Creek Energy Project.
a) General information and statement of compliance
The consolidated general purpose financial statements
have been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting
Standards Board (AASB). Compliance with Australian
Accounting Standards results in full compliance with
the International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards
Board (IASB). Leigh Creek Energy is a for-profit entity for
the purposes of preparing the financial statements. The
financial report has been presented in Australian dollars.
Leigh Creek Energy Limited is the Group’s Ultimate Parent
Company. Leigh Creek Energy Limited is a listed public
company, incorporated and domiciled in Australia. The
address of the registered office and its principal place of
business is Level 11, 19 Grenfell Street, Adelaide SA 5000.
The consolidated financial statements for the year ended
30 June 2017 were approved and authorised for issue by
the Board of Directors on 17 August 2017.
b) Overall considerations
The consolidated financial statements have been prepared
on an accruals basis and are based on historical costs
modified by the revaluation of selected non-current assets,
financial assets and financial liabilities for which the fair
value basis of accounting has been applied.
c) Basis of consolidation
The Group financial statements consolidate those of the
Parent Company and all of its subsidiaries as of 30 June
2017. The Parent controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns
through its power over the subsidiary. All subsidiaries
have a report date of 30 June. The controlled entities are
disclosed in Note 17(a) to the financial statements.
All inter-company balances transactions and
balances between Group companies are eliminated
on consolidation. Amounts reported in the financial
statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting
policies adopted by the Group.
d) Changes in accounting policy
New and revised standards that are effective for these financial
statements
A number of new and revised standards became effective
for the first time to annual periods beginning on or after
1 July 2016. Information on the more significant standards
is presented below.
(i) AASB 2014-4 Amendments to Australian Accounting Standards
– Clarification of Acceptable Methods of Depreciation and
Amortisation.
The amendments to AASB 116 Property, Plant and
Equipment prohibit the use of a revenue-based
depreciation method for property, plant and equipment.
Additionally, the amendments provide guidance in
the application of the diminishing balance method for
property, plant and equipment.
The amendments to AASB 138 Intangible Assets
present a rebuttable presumption that a revenue-
based amortisation method for intangible assets
is inappropriate. This rebuttable presumption can
be overcome (i.e., a revenue-based amortisation
method might be appropriate) only in two (2) limited
circumstances:
a. The intangible asset is expressed as a measure
of revenue, for example when the predominant
limiting factor inherent in an intangible asset is the
achievement of a revenue threshold (for instance,
the right to operate a toll road could be based on a
fixed total amount of revenue to be generated from
cumulative tolls charged); or
b. When it can be demonstrated that revenue and
the consumption of the economic benefits of the
intangible asset are highly correlated.
The adoption of these amendments has not had a material
impact on the Group.
(ii) AASB 2015-2 Amendments to Australian Accounting Standards
– Disclosure Initiative: Amendments to AASB 101 Presentation
of Financial Statements
The Standard makes amendments arising from the
IASB’s Disclosure Initiative project. The amendments:
•
•
•
•
clarify the materiality requirements in AASB 101,
including an emphasis on the potentially detrimental
effect of obscuring useful information with immaterial
information;
clarify that AASB 101’s specified line items
in the statement(s) of profit or loss and other
comprehensive income and the statement of
financial position can be disaggregated;
add requirements for how an entity should present
subtotals in the statement(s) of profit and loss and
other comprehensive income and the statement of
financial position;
clarify that entities have flexibility as to the order in
which they present the notes, but also emphasise
that understandability and comparability should be
considered by an entity when deciding that order;
•
remove potentially unhelpful guidance in AASB 101
for identifying a significant accounting policy.
The adoption of these amendments has not had a
material impact on the Group.
For personal use only
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
(iii) AASB 2015-9 Amendments to Australian Accounting
Standards – Scope and Application Paragraphs
This amendment inserts scope paragraphs into
AASB 8 Operating Segments and AASB 133
Earnings per Share in place of application paragraph
text in AASB 1057.
In July and August 2015, the AASB reissued AASB
8, AASB 133 and most of the Australian Accounting
Standards that incorporate IFRSs to make editorial
changes. The application paragraphs in the
previous versions of AASB 8 and AASB 133 covered
scope paragraphs that appear separately in the
corresponding IFRS 8 and IAS 33. In moving those
application paragraphs to AASB 1057 when AASB
8 and AASB 133 were reissued in August, the AASB
inadvertently deleted the scope details from AASB
8 and AASB 133. This amending Standard puts the
scope details into those Standards, and removes the
related text from AASB 1057. There is no change to
the requirements or the applicability of AASB 8 and
AASB 133.
The adoption of these amendments has not had a
material impact on the Group.
Accounting standards issued but not yet effective and not been
early adopted by the Group
The accounting standards that have not been early
adopted for the year ended 30 June 2017, but will be
applicable to the Group in future reporting periods are
detailed below. Apart from these standards, we have
considered other accounting standards that will be
applicable in future reporting periods, however they
have been considered insignificant to the Group.
(iv) AASB 2016-2 Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to AASB 107
This amendment alters AASB 107 Statement of
Cash Flows to require entities preparing financial
statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable
users of financial statements to evaluate changes in
liabilities arising from financing activities, including
both changes arising from cash flows and non-cash
changes.
When this standard is first adopted for the year
ending 30 June 2018, there will be no material
impact on the transactions and balances recognised
in the financial statements.
(v) AASB 9 Financial Instruments (December 2014)
AASB 9 introduces new requirements for the
classification and measurement of financial assets
and liabilities. These requirements improve
and simplify the approach for classification and
measurement of financial assets compared with the
requirements of AASB 139 Financial Instrument. The
main changes are:
a. Financial assets that are debt instruments will be
classified based on:
(i) the objective of the entity’s business model for
managing the financial assets; and
(ii) the characteristics of the contractual cash
flows.
b. Allows an irrevocable election on initial
recognition to present gains and losses on
investments in equity instruments that are not
held for trading in other comprehensive income
(instead of in profit or loss). Dividends in
respect of these investments that are a return on
investment can be recognised in profit or loss and
there is no impairment or recycling on disposal of
the instrument.
c. Introduces a ‘fair value through other
comprehensive income’ measurement category
for particular simple debt instruments.
d. Financial assets can be designated and measured
at fair value through profit or loss at initial
recognition if doing so eliminates or significantly
reduces a measurement or recognition
inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and
losses on them, on different bases.
e. Where the fair value option is used for financial
liabilities the change in fair value is to be
accounted for as follows:
- the change attributable to changes in credit risk
are presented in Other Comprehensive Income
(‘OCI’);
- the remaining change is presented in profit
or loss.
If this approach creates or enlarges an accounting
mismatch in the profit or loss, the effect of the
changes in credit risk are also presented in profit
or loss.
Otherwise, the following requirements have
generally been carried forward unchanged from
AASB 139 into AASB 9:
- classification and measurement of financial
liabilities; and
- derecognition requirements for financial assets
and liabilities.
AASB 9 requirements regarding hedge accounting
represent a substantial overhaul of hedge
accounting that enable entities to better reflect
their risk management activities in the financial
statements.
Furthermore, AASB 9 introduces a new impairment
model based on expected credit losses. This model
makes use of more forward-looking information and
applies to all financial instruments that are subject to
impairment accounting.
When this standard is first adopted for the year
ending 30 June 2019, there will be no material
impact on the transactions and balances recognised
in the financial statements.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
(vi) AASB 2016-5 Amendments to Australian Accounting
Standards – Classification and Measurement of Share-
based Payment Transactions
This Standard amends AASB 2 Share-based
Payment, clarifying how to account for certain
types of share-based payment transactions.
The amendments provide requirements on the
accounting for:
• The effects of vesting and non-vesting conditions
on the measurement of cash-settled share-based
payments;
• Share-based payment transactions with a net
settlement feature for withholding tax obligations;
• A modification to the terms and conditions
of a share-based payment that changes the
classification of the transaction from cash-settled
to equity-settled.
When this standard is first adopted for the year
ending 30 June 2019, there will be no impact on
the transactions and balances recognised in the
financial statements.
(vii) AASB 16 Leases
• replaces AASB 117 Leases and some lease-
related Interpretations;
• requires all leases to be accounted for ‘on-
balance sheet’ by lessees, other than short-term
and low value asset leases;
• provides new guidance on the application of the
definition of lease and on sale and lease back
accounting;
• largely retains the existing lessor accounting
requirements in AASB 117; and
• requires new and different disclosures about
leases.
As this Standard will be first adopted for the year
ending 30 June 2019, the impact has not yet been
determined.
There are no other standards that are not yet effective
and that are expected to have a material impact on the
entity in the current or future reporting periods and on
foreseeable future transactions.
e)
Impairment of Assets
At each reporting date, the group reviews the carrying
values of its assets to determine whether there is any
indication that those assets have been impaired. If
such an indication exists, the recoverable amount of
the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s
carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the
statement of profit or loss and other comprehensive
income. Where it is not possible to estimate the
recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
f) Segment reporting
The Board has considered the requirements of AASB 8
Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the
Board) in allocating resources and has concluded at this
time that there are no separately identifiable segments.
g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net
of the amount of GST, unless the GST incurred is not
recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the
expense.
Receivables and payables in the statement of financial
position are shown inclusive of GST. The net amount
of GST recoverable from the Australian Tax Office is
included with other receivables in the statement of
financial position.
Cash flows are presented in the cash flow statement on
a GST inclusive basis.
(viii) AASB 15 Revenue from Contracts with Customers
h) Comparative Figures
Unless otherwise required by an accounting standard
comparative information is disclosed in respect of the
previous corresponding period, including for narrative
and descriptive information. To the extent that items
are amended or reclassified comparative amounts are
also amended or reclassified. Prior period errors are
retrospectively corrected in the next financial report
following discovery.
• replaces AASB 118 Revenue, AASB 111
Construction Contracts and some revenue-related
Interpretations:
− establishes a new revenue recognition model;
− changes the basis for deciding whether
revenue is to be recognised over time or at a
point in time;
− provides new and more detailed guidance
on specific topics (e.g. multiple element
arrangements, variable pricing, rights of return,
warranties and licensing);
− expands and improves disclosures about
revenue.
As this Standard will be first adopted for the year
ending 30 June 2019, the impact has not yet been
determined.
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
41
i)
Significant management judgement in applying accounting
policies
When preparing the financial statements, management
undertake a number of judgements, estimates and
assumptions about the recognition and measurement
of assets, liabilities, income and expenses. The areas
involving significant estimates and assumptions are listed
below:
• Exploration and Evaluation Expenditure – Note 8
Judgement is required to ensure that the carrying value
of Exploration and Evaluation assets does not exceed
the recoverable amount. Factors considered in this
judgement are:
a) the period for which the entity has the right to explore
in the specific area has expired or will expire in the
near future;
b) substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area is
neither budgeted nor planned;
c) exploration for and evaluation of mineral resources
in the specific area have not led to the discovery of
commercially viable quantities of mineral resources
and the entity has decided to discontinue such
activities;
d) sufficient data exists to indicate that, although a
development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation
asset is unlikely to be recovered in full from
successful development or by sale.
Management has made a judgement that, given
these factors, the balance of Exploration and
Evaluation assets is not impaired.
• Share based payments – Note 11
The valuation for accounting purposes of Share Based
Payments relies on a number of factors that cannot be
accurately measured. These include:
a) the volatility of the LCK share value;
b) the probability that vesting conditions/milestones will
be met;
c) the probability that the employee will remain
employed with the company until the expiry date of
the options;
d) the probability that the employee will exercise their
options.
Final judgement about vesting of the options is retained
by the Board. Management has assessed each of these
factors and made judgements on what factors are used
for the calculation.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
2 OTHER REVENUE AND EXPENSES
Accounting policy – revenue and expenses recognition
Other revenue is recognised on an accruals basis and is recognised at the time the right to receive payment
is established.
Other expenses represents costs incurred for the administration of the business. Costs relating to the project have been
capitalised to Exploration and Evaluation expenditure (as shown in Note 8).
a) Other revenue
Grants
Fair value to P&L (financial assets)
Disposal of fixed assets
Total other revenue
b) Other expenses
Accounting and audit
Communications costs
Corporate advisory
Software and other
Consulting and legal expense
Insurance
Investor relations
Listing and registry fees
Occupancy expense
Printing and office supplies
Travel and accommodation
Sundry
Total other expenses
2017
$
20,000
10,875
22,856
53,731
142,343
54,905
371,302
87,506
424,631
71,553
331,176
61,140
449,661
27,828
346,772
212,877
2016
$
-
-
20,930
20,930
181,688
104,618
200,348
65,200
192,088
62,418
554,460
93,459
227,069
29,828
355,958
171,442
2,581,694
2,238,576
3
FINANCE INCOME AND FINANCE COSTS
Accounting policy – Finance income and finance costs
Finance income includes interest revenue which is recognised on an accruals basis taking into account the interest rates
applicable. It is recognised at the time the right to receive payment is established.
Finance costs include interest paid and amortised borrowing costs from financing arrangements. Costs incurred in
relation to the arrangement are amortised using the effective interest method, over the life of the loan.
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
3
FINANCE INCOME AND FINANCE COSTS continued
43
a) Finance income
Interest earned
Total finance income
b) Finance costs
Interest paid
Amortised borrowing costs
Total finance costs
4
INCOME TAX
Accounting policy – income taxes
2017
$
54,011
54,011
5,288
72,817
78,105
2016
$
18,283
18,283
2,375
-
2,375
Deferred taxes are not recognised in the accounts. As the Group has
significant carried forward tax losses, it does not have sufficient taxable
temporary differences which will result in taxable amounts against which the
unused tax losses can be utilised.
The amount of benefits which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation
and the anticipation that the economic entity will derive sufficient future
assessable income to enable the benefit to be realised and comply with the
condition of deductibility imposed by the law.
Tax consolidation
Leigh Creek Energy Limited and its wholly owned Australian subsidiaries are
part of a tax-consolidated group under Australian taxation law.
a)
Numerical reconciliation of income tax expense
to prima facie tax payable
Loss before income tax
(5,758,760)
(5,366,248)
Prima facie tax (benefit) on loss before income tax at 30% (2016: 30%)
(1,727,628)
(1,609,874)
Permanent differences:
Entertainment non deductible
Share based payments
Fair value adjustment for investments
11,985
18,258
(3,257)
6,060
345,823
-
Movement in unrecognised tax assets and liabilities
(421,243)
(607,015)
Tax loss not recognisable
Under/(Over) provided in prior year
Aggregate income tax expense
b)
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Revenue losses
Capital losses
The Group considers that in the future it will be generating taxable income to
utilise carried forward tax losses, however, it does not meet the recognition
criteria. Additionally, the carried forward tax losses can only be utilised
in the future when taxable income is being generated, if the continuity of
ownership test is passed, or failing that, the same business test is passed.
1,555,672
1,865,006
566,213
-
-
-
15,819,969
14,264,297
50,729
34,803
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
5 CASH ASSETS
Accounting policy – Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call and term deposits with banks.
2017
$
2016
$
i) Cash and cash equivalents
Bank balances and short term deposits 1
8,757,787
8,787,946
Cash and cash equivalents in the statement of cashflows
8,757,787
8,787,946
Notes:
(1) Includes $111,832 of restricted cash to support a bond and credit card facility.
ii) Term deposits
Term deposits 1
Total term deposits
Notes:
(1) Term deposits comprise cash balances with an original maturity of less than three months.
6
TRADE AND OTHER RECEIVABLES
Accounting policy – Trade and other receivables
Trade receivables are recognised initially at fair value. At balance date,
no receivables were considered to be outstanding or impaired
Trade debtors
GST recoverable
Prepayments
R&D tax incentive receivable
Other debtors
8,450,000
8,450,000
26,400
127,032
23,142
2,135,457
46,721
-
-
-
70,870
68,918
43,871
26,228
Total Trade and other receivables
2,358,752
209,887
7 PROPERTY, PLANT AND EQUIPMENT
Accounting policy – Property, plant and equipment
Each class of property, plant and equipment is carried at cost, where applicable, less any accumulated depreciation and
impairment losses.
i) Plant and equipment
Plant and equipment are shown at historical cost less accumulated depreciation and accumulated impairment. Cost
includes expenditure that is directly attributable to the acquisition of the assets.
The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that
will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been
discounted to their present values in determining recoverable amounts.
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
7 PROPERTY, PLANT AND EQUIPMENT continued
ii) Depreciation
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives,
as follows:
• Plant and equipment
• Office equipment
• Motor vehicles
• Leasehold improvement
45
5-33%
10-50%
15%
45%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and
losses on disposal of property, plant and equipment are determined as the difference between the disposal proceeds
and the carrying amount of the assets (including impairment provision) and are recognised in the profit or loss with Other
Income or Other Expenses.
Cost
Balance at 1 July 2016
Additions
Transfers
Disposals
Balance at 30 June 2017
Accumulated depreciation & impairment
Balance at 1 July 2016
Impairment balance
Depreciation
Transfers
Impairment movement
Disposals
Balance at 30 June 2017
Carrying amounts
At 1 July 2016
At 30 June 2017
2017
$
2016
$
515,695
126,956
115
(136,594)
506,172
303,470
99,285
39,873
115
(55,968)
(101,323)
285,452
541,943
53,745
-
(79,993)
515,695
337,585
125,788
35,664
-
(26,503)
(69,779)
402,755
-
112,940
220,720
-
8
EXPLORATION AND EVALUATION EXPENDITURE
Accounting policy – Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These
costs are only carried forward to the extent that right of tenure is current and those costs are expected to be recouped
through the successful development of the area (or, alternatively by its sale) or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and
operations in relation to the area are continuing.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the
area according to the rate of depletion of the economically recoverable reserves.
Accumulated costs, in relation to an abandoned area, are written off in full against profit in the period in which the decision
to abandon the area is made.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
8
EXPLORATION AND EVALUATION EXPENDITURE continued
Balance at opening
Licence fees
Costs capitalised for Feasibility Studies
Costs capitalised for LCEP
Less R&D tax concession rebates
Total exploration and evaluation expenditure
During the year the Company applied for R&D Tax Incentives through
AusIndustry in relation to eligible research expenditure incurred during
2015/16 for the Leigh Creek Energy Project. The tax incentive received during
the year is a refundable tax credit and has been credited to Exploration and
Evaluation capitalised expenditure ($790,684). Additionally, the Company
has booked a receivable ($2,135,457) in relation to eligible R&D expenditure
for the period up to and including 30 June 2017 which has been reviewed
externally to ensure it is in accordance with the Advance Finding criteria.
9
TRADE AND OTHER PAYABLES
Trade and other payables consist of the following:
Trade payables
Other payables
Accruals
Total Trade and other payables
10 BORROWINGS
Accounting policy – Borrowings
Borrowings are recognised initially at fair value less attributable transaction
and finance costs.
Subsequent to initial recognition, Borrowings and loans are stated at
amortised cost, with any difference between cost and redemption value
being recognised in the profit or loss over the period of the loan on an
effective interest basis. Loans with a determinable payment due less than
twelve months from reporting date are classified as current liabilities.
Transaction and finance costs include ancillary costs incurred in connection
with the arrangement of loans, interest payable and facility line fees payable
on the loan.
Current
R&D working capital facility
Total loans
Loans
R&D working capital facility – available
R&D working capital facility – undrawn
Loans - drawn
Less : unamortised transaction costs
Carrying amount at 30 June 2017
2017
$
2,450,480
7,198
503,987
5,950,201
(2,926,141)
5,985,725
2016
$
710,667
5,631
87,513
1,690,540
(43,871)
2,450,480
1,036,393
502,013
118,562
1,656,968
295,089
246,641
123,981
665,711
1,540,049
1,540,049
2,000,000
(390,000)
1,610,000
(69,951)
1,540,049
-
-
-
-
-
-
-
For personal use only
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
10 BORROWINGS continued
In February 2017, the Company announced that it had established a Research and Development Working Capital Facility
(R&D working capital facility) with the Commonwealth Bank of Australia (CBA). The 12 month Secured Facility with
the CBA effectively allows the Company to bring forward access to refundable tax offsets by providing a progressive
drawdown of eligible project expenditure up to $4m. Under the terms of the facility, CBA will be repaid from the proceeds
of the Company’s taxation return rebate within 12 months from the date the agreement was signed.
Prior to the first drawdown in April 2017, the R&D working capital facility limit was revised downwards to $2m to reflect
estimated eligible project expenditure up to 30 June 2017.
11
EMPLOYEE REMUNERATION
a) Employee benefits expense
Wages, salaries (inc on-costs)
Superannuation
Share based payments
Total employee benefit liability
2017
$
2016
$
2,890,950
2,207,625
219,642
60,860
214,855
706,366
3,171,452
3,128,846
Under the Company’s Accounting for Exploration policy, labour costs relating to the LCEP are capitalised. The total
staff cost was $5,208,931 (2016: $4,358,081).
b) Share based employee remuneration
Accounting policy – share based payment plans
Share based compensation benefits are provided to employees of the Company. The fair value of the options
granted under the plan is recognised as an employee benefit expense with a corresponding increase in equity
(Share Option Reserve). The fair value is measured at grant date and recognised over the period during which the
employees become entitled to the underlying options.
The fair value at issue date is calculated using the Trinomial option pricing model that takes into account the share
price at issue date, the exercise price, the term until expiry, estimate of implied volatility, the vesting and performance
criteria and the non-tradeable nature of the option. At each balance sheet date, the Company revises its estimate of
the number of options that are expected to become exercisable.
(i) Number of options issued to employees during the year
Outstanding at beginning of the year
Forfeited
Issued
Exercised
Total Options
2017
2016
14,250,000
750,000
(2,000,000)
(750,000)
4,195,000
14,250,000
-
-
16,445,000
14,250,000
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
11
EMPLOYEE REMUNERATION continued
(ii) Valuation assumptions
Grant date
Number issued
Share price at grant date
Volatility (average)5
Fair value at issue date
Exercise price
Exercisable from
Exercisable to
Notes:
Plan 1
Plan 2
Plan 3
15 October 2015
1 December 2015
1 December 2015
2,000,000
2,000,0000
10,250,000
$0.17
70%
$0.08
$0.2121, $0.252
$0.23
70%
$0.02
$1.50
$0.23
70%
$0.04
$0.30
22 October 2015
31 July 20163
31 July 20163
14 October 20204
31 July 2020
30 November 2020
(1) Exercise price for Tranche 1 was the greater of $0.20 and 10% premium to the 5 day VWAP up to 26 May 2015.
(2) Exercise price for Tranche 2 was the greater of $0.25 and 20% premium to the 5 day VWAP up to 26 May 2015.
(3) Options vest at 25% per year on 31 July 2016, 31 July 2017, 31 July 2018 and 31 July 2019 if vesting conditions (milestones) are achieved.
(4) Tranche 1 expiry date is 14 October 2019, and Tranche 2 expiry date is 14 October 2020.
(5) A volatility curve was used for calculations.
Grant date
Number issued
Share price at grant date
Volatility (average) 2
Fair value at issue date
Exercise price
Exercisable from
Exercisable to
Notes:
Plan 4
Plan 5
11 July 2016
4 October 2016
195,000
4,000,000
$0.19
70%
$0.04
$0.13
70%
$0.03
$0.49, $0.30
$0.35, $0.45
11 July 2016 1
10 October 2016
30 November 2020
10 October 2021
(1) Options vest at 25% per year on 31 July 2016, 31 July 2017, 31 July 2018 and 31 July 2019 if vesting conditions (milestones) are achieved.
(2) A volatility curve was used for calculations.
c) Employee benefits
Accounting policy – Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to reporting
date. These benefits include wages, salaries and annual leave. Where these benefits are expected to be settled within 12
months of the reporting date, they are measured at the amounts expected to be paid when the liabilities are settled. The
provision has been recognised at the undiscounted amount expected to be paid.
In relation to employee benefits arising for employees directly involved in the exploration project, these indirect costs have
been capitalised to the project.
Liability for annual leave
Provision for bonus
Total employee benefit liability
2017
$
198,569
99,930
298,499
2016
$
124,519
-
124,519
For personal use only
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
12
ISSUED CAPITAL
Accounting policy – Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares is shown in
equity as a deduction from the proceeds.
The company has granted unlisted options to employees in respect of their employment contracts. The fair value of the
options granted is recognised as an employee benefits expense with a corresponding increase in equity (Share Option
Reserve). The fair value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to exercise the option. Fair value is determined by the use of a Trinomial option pricing model.
a) Ordinary shares
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number
of shares held. At the shareholders’ meeting each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands. All issued shares are fully paid. All unissued shares are ordinary
shares of the Company.
332,368,051 (2016 : 265,894,441)
Ordinary shares
Share issue costs
Total issued capital
2017
$
2016
$
43,009,130
33,693,367
(1,909,096)
(1,331,647)
41,100,034
32,361,720
Additional shares were issued during 2017 in relation to capital raising activities. In March 2017, China New Energy
Group Limited signed an agreement to acquire 150 million shares in the Company in three tranches. Tranches one
and two (52.8 million shares and $7.5 million) were completed during the year. Additionally, the Company has placed
13.7 million shares with sophisticated and professional investors.
b) Detailed table of capital issued during the year
Type of share issue
Date of issue
Opening balance 1 July 2016
Share issue
Share issue
Share issue costs
Issued capital
4 April 2017
12 May 2017
No of ordinary
shares on issue
265,894,441
43,685,181
22,788,429
332,368,051
Issue price
$
Share capital
$
$0.135
$0.150
32,361,720
5,897,499
3,418,265
(577,450)
41,100,034
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
12
ISSUED CAPITAL continued
c) Unlisted Options
Expiry date
31 October 2018
31 October 2018
31 October 2018
31 October 2018
11 May 2019
14 October 2019
14 October 2020
31 July 2020
30 November 2020
30 November 2020
8 May 2021
10 October 2021
10 October 2021
Total
Exercise price
Number of shares
$0.20
$0.22
$0.24
$0.26
$0.30
$0.212
$0.25
$1.50
$0.30
$0.49
$0.30
$0.35
$0.45
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,000,000
1,000,000
1, 500,000
8,790,000
155,000
800,000
2,000,000
2,000,000
24,745,000
At the end of the financial year, unissued shares of the Group under option are:
Options granted under the Employee Share Option Plan will expire on the earlier of the expiry date or termination
of the employee’s employment (unless the employee is a retiring director). For employees that are made redundant,
their future tranches are still able to vest (if existing conditions are met) and the existing expiry date remains.
d) Listed Options
A number of listed options were issued as part of the prospectus for the capital raising finalised in May 2016.
At the end of the financial year, unissued shares of the Group under option are:
Expiry date
6 June 2018
Exercise price
Number of shares
$0.50
17,687,463
All options expire on the expiry date. There are no vesting conditions.
e) Capital Management
Management objectives when managing capital are to ensure that the Group can fund the development of its
operations.
The Group manages the capital structure and makes adjustments to it in light of the forecast cash requirements
of the development programme. To that end, internal capital rationing is complemented by capital raising
activities as required to ensure funding for development activities is in place.
There are no externally imposed capital requirements.
For personal use only
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
13 RESERVES
Accounting policy - Reserves
The share option reserve is used to recognise the fair value of options granted to employees and consultants but not
exercised. Upon exercise of the options, the proceeds are allocated to share capital.
Share option reserve
Total reserves
A breakdown of the share option reserve is as follows1:
Directors
Employees
Former employees
Consultants
Total
Notes:
2017
$
2016
$
1,456,144
1,395,284
1,456,144
1,395,284
No of options
4,750,000
7,490,000
4,205,000
8,300,000
2017
$
137,127
393,430
236,669
688,918
24,745,000
1,456,144
(1) See also Note 11 Employee Remuneration for factors considered in the fair value calculation.
14 COMMITMENTS FOR EXPENDITURE
a) Accounting policy - Operating leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged
as expenses in the periods in which they are incurred. The Company does not have any leases over property, plant or
equipment where lease arrangements would be classed as finance leases.
Operating lease commitment
Not longer than 1 year
Longer than 1 year and not longer than 5 years
The Group has no contingent liabilities at the year end.
2017
$
2016
$
296,687
31,043
163,577
27,773
b) Accounting policy – Capital commitments
Capital commitments relates to expenditure commitments for the Leigh Creek
Energy Project (LCEP) outstanding at balance date.
Leigh Creek Energy Project
1,344,730
790,356
Under the terms of tenement registration and renewal, tenements have commitments to work requirements.
The commitment to work requirements at Leigh Creek is included above.
There are no other commitments at balance date for expenditure by the Group.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
15
FINANCIAL ASSETS & LIABILITIES
Accounting policy – Financial assets & liabilities
Recognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent
measurement of financial assets and financial liabilities are described below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either
discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in the profit or loss.
Impairment
At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen. Impairment losses are recognised in the profit or loss.
a) Categories of financial assets and liabilities
The carrying amount of financial assets and liabilities in each category are as follows:
Financial assets
Note
Assets at fair value
through profit or loss
Financial assets at
amortised cost
30 June 2017
Other financial assets
Trade and other receivables
Cash and cash equivalents
6
5
-
-
-
-
-
-
8,757,787
8,757,787
Total
-
-
8,757,787
8,757,787
Financial liabilities
Note
Designated at fair value
through profit or loss
Other liabilities
Total
30 June 2017
Current borrowings
Trade and other payables
Financial liabilities
10
9
Note
30 June 2016
Other financial assets
Trade and other receivables
Cash and cash equivalents
5
-
-
-
1,610,000
1,538,406
3,148,406
Assets at fair value
through profit or loss
Financial assets at
amortised cost
16,030
-
-
16,030
-
-
8,787,946
8,787,946
1,610,000
1,538,406
3,148,406
Total
16,030
-
8,787,946
8,787,946
Financial liabilities
Note
Designated at fair value
through profit or loss
Other liabilities
Total
30 June 2016
Current borrowings
Trade and other payables
9
-
-
-
-
541,730
541,730
-
541,730
541,730
For personal use only
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
15
FINANCIAL ASSETS & LIABILITIES continued
b) Measurement
a. Financial assets at fair value through profit and loss (FVTPL)
Financial assets at FVTPL include financial assets that are either classified as held for trading or that meet certain
conditions and are designated at FVTPL upon initial recognition. Assets in this category are measured at fair value
with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined
by reference to active market transactions.
b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are stated at amortised cost.
i. Treasury Risk Management
The risk management of treasury functions is managed by the Audit and Risk Committee.
ii. Finance Risks
The Group’s financial instruments are exposed to a variety of financial risks, being Market risk (Interest rate and
Price risk), Credit risk and Liquidity risk. The Group operates mainly in Australia and as such is not subject to
foreign exchange risk.
Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in market interest rates on classes of financial assets and liabilities, is summarised in the
table above.
Sensitivity: At June 30, 2017, if interest rates on cash and term deposits had changed by -/+ 10 basis points
from the year end rates with all other variables held constant post tax loss and total equity would have been
$5,410 more/less as a result of lower/higher interest income.
At June 30, 2017, if interest rates on borrowings had changed by -/+ 10 basis points from the year end rates
with all other variables held constant post tax loss and total equity would have been $286 more/less as a result
of lower/higher interest expense.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties
of contract obligation that could lead to a financial loss to the Group. The Group’s maximum exposure to credit
risk is its cash and cash equivalents and receivables as noted in the table above. The group manages its credit
risk by depositing with reputable licenced banks.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Group manages liquidity risk by monitoring
forecast cash flows and ensuring that adequate sources of funding are available.
Maturity of the group’s financial liabilities is within 1 year.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
16 NOTES TO THE STATEMENT OF CASH FLOWS
a) Reconciliation of cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks and investments in money
market instruments. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the
related items in the statement of financial position as follows:
2017
$
2016
$
Bank balances and short term deposits
8,757,787
8,787,946
The weighted average effective interest rate on bank deposits is 1.88%
(2016: 1.13%). All deposits are for less than 12 months.
b) Reconciliation of Cash Flow from Operations with Loss after Tax
Loss after income tax
(5,758,760)
(5,366,248)
Cash flows excluded from loss attributable to operating activities:
Non-cash flows in operating loss
Depreciation expense
Share based payments
Impairment change
Fair value assets change
Change in assets and liabilities
35,251
60,860
(55,968)
(10,875)
35,664
1,152,745
-
-
Decrease/(Increase) in receivables / prepayments
(13,407)
(108,270)
Increase/(Decrease) in payables
Increase/(Decrease) in provisions
994,260
173,980
307,441
103,716
Net Cash (used in) / provided by operating activities
(4,574,659)
(4,003,528)
17 PARENT ENTITY DISCLOSURES
a)
Investment in controlled entities
Entity
Country of incorporation
Class of share
Interest held
Bonanza Gold Pty Ltd
Leigh Creek Operations Pty Ltd1
Australia
Australia
Ordinary
Ordinary
Notes:
(1) Name of this Company changed from ARP TriEnergy Pty Ltd on 6 March 2017.
2017
100%
100%
2016
100%
100%
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
17 PARENT ENTITY DISCLOSURES continued
b) Parent entity information
55
Parent Entity
Asset
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Share option reserve
Accumulated losses
Shareholder equity
Financial performance
Profit (loss) for the year
Other comprehensive income
Total comprehensive income
2017
$
2016
$
10,953,732
4,407,387
8,936,167
1,868,783
15,361,119
10,804,950
2,265,234
790,230
-
-
2,265,234
790,230
65,640,664
56,000,502
1,618,294
1,557,434
(54,163,073)
(47,543,216)
13,095,885
10,014,720
(5,758,760)
(5,366,248)
-
-
(5,758,760)
(5,366,248)
The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at the year end.
18 RELATED PARTY TRANSACTIONS
a) Transactions with key management personnel compensation
Key management of the Group are the executive members of the Group’s
Board of Directors and members of the management team. Key
management personnel remuneration includes the following expenses:
Total short term employee benefits
Total post-employment benefits
Share based payments
Total Remuneration
1,357,635
1,435,513
445,137
(22,816)
133,226
617,554
1,779,956
2,186,293
The amounts disclosed in the table are the amounts recognised as an expense during the reporting year.
b) Other transactions with key management personnel
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those to other parties, unless otherwise stated:
i)
Piper Alderman lawyers were paid $78,015 (2016 : $Nil) for legal services rendered to the Group.
Greg English is a partner at Piper Alderman lawyers.
ii) ARK Energy Ltd has a service agreement in place with the Company for facilities and accounting services.
Fees rendered to the Company were $32,586. Mr Philip Staveley is a director of ARK Energy Ltd.
iii) A related party purchased second hand goods from the Company in an arm’s length transaction totalling $1,932.
The party is related to Mr Peters, Executive Chairman.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
19 AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the Auditor of the Group:
Auditing & review services
Other services
20
EARNINGS PER SHARE
Accounting policy – Earnings per share
i) Basic earnings per share
2017
$
44,937
-
2016
$
42,830
-
Basic earnings per share is calculated by dividing the profit (loss) attributable to equity holders excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the year.
ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the weighted average number of shares assuming conversion of all dilutive potential ordinary shares.
2017
$
2016
$
Loss used to calculate basic EPS
(5,758,760)
(5,366,248)
Basic earnings per share – cents per share
Diluted earnings per share – cents per share
(0.02)
(0.02)
(0.02)
(0.02)
Weighted average number of shares used as denominator
Weighted average number of ordinary shares outstanding
during the year used in calculating basic EPS
Shares deemed to be issued for no consideration in respect of
share based payments
Listed options issued for no consideration
Weighted average number of shares used in diluted
earnings per share
279,894,514
228,247,299
24,745,000
20,250,000
17,687,463
17,687,463
322,326,977
266,184,762
For personal use only
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
21 MATTERS SUBSEQUENT TO THE END OF THE YEAR
1. Employee Share Options were issued on 11 August 2017 – total of 636,000 options issued at an
exercise price of $0.30, expiring on 30 November 2020.
2. China New Energy Group Limited’s Mr Zhe Wang was appointed as a non-executive director
effective from
1 July 2017.
3. Extraordinary General Meeting was held on 21 July 2017 to approve tranche 1 and tranche 2
placement by CNE.
4. The Company announced on 11 August 2017 that CNE’s tranche 3 investment will be split into
two payments; the first being 17 million shares at $0.15 for a total of $2,550,000 on 15 August
2017 increasing CNE’s shareholding in the Company to 19.98% upon issue of the underlying
shares. The second payment (balance of $10 million) will increase CNE’s shareholding above
20% and as such shareholder approval will be required at a requisitioned General Meeting.
5. On 15 August 2017 the term of the CBA working capital facility was extended to April 2019 and
the limit increased from $2 million to $6.5 million, subject to the satisfaction of agreed conditions
precedent.
22 COMPANY DETAILS
The registered office and principal place of business is:
Leigh Creek Energy Limited
Level 11, 19 Grenfell Street
Adelaide, South Australia 5000
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
58
Independent Audit Report
Grant Thornton House
Level 3
170 Frome Street
Adelaide, SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEIGH CREEK ENERGY LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Leigh Creek Energy Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; 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
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
For personal use only
Independent Audit Report
59
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Valuation of Exploration and Evaluation Assets
Note 8
At 30 June 2017 the carrying value of Exploration
and Evaluation Assets was $5.986 million.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group is
required to assess at each reporting date if there are
any triggers for impairment which may suggest the
carrying value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each
area of interest involves an element of management
judgement.
This area is a key audit matter due to the valuation of
exploration and evaluation assets being a significant
risk.
-
Our procedures included, amongst others:
Obtaining the management reconciliation of
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
Reviewing management’s area of interest
considerations against AASB 6;
Conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
-
Tracing projects to statutory registers,
exploration licenses and third party
confirmations to determine whether a right of
tenure existed;
Enquiry of management regarding their
intentions to carry out exploration and
evaluation activity in the relevant exploration
area, including review of managements’
budgeted expenditure;
- Understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely
to be recovered through development or sale;
and
Reviewing the appropriateness of the related
disclosures within the financial statements.
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 Group’s annual report for the year ended 30 June 2017, 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 we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
60
Independent Audit Report
In preparing the financial report, the Directors are responsible for assessing the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 24 to 28 of the directors’ report for
the year ended 30 June 2017.
In our opinion, the Remuneration Report of Leigh Creek Energy Limited, for the year ended 30
June 2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
I S Kemp
Partner - Audit & Assurance
Adelaide, 17 August 2017
For personal use only
61
SHAREHOLDER INFORMATION ...
SUBSTANTIAL SHAREHOLDERS AT 7 AUGUST 2017
Name
Fully Paid Shares
Ordinary Shares %
Options
Options %
Allied Resource Partners Pty Ltd
104,767,190
China New Energy Limited
CITIC Australia Pty Ltd
52,788,429
17,242,855
31.52
15.88
5.19
-
-
-
-
-
-
DISTRIBUTION OF SHAREHOLDINGS AT 7 AUGUST 2017
Number of security holders by size of holding:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
Total Holders
Shares
445
638
347
716
285
2,431
Number of
Shares
232,241
1,700,430
2,789,751
27,725,813
299,919,816
332,368,051
Total Holders
Listed Options
Number Of
Listed Options
-
1
10
91
29
131
-
3,333
83,331
3,979,975
13,620,824
17,687,463
The issued capital of the Company is fully paid ordinary shares (entitling the holders to participate in dividends
and proceeds on winding up of the Company in proportion to the number of shares held) and listed options.
On a show of hands every holder of the shares present at a meeting in person or by proxy is entitled to one vote
and upon a poll each share counts as one vote. Holders of listed options do not have any entitlements to vote or
receive dividends.
At 7 August 2017 a marketable parcel constituted 4,545 shares. The number of shareholders holding less than a
marketable parcel was 1,001 (1,527,106 shares).
TWENTY LARGEST SHAREHOLDERS AT 7 AUGUST 2017
Name
Allied Resource Partners Pty Ltd
China New Energy Group Limited
CITIC Australia Pty Ltd
HSBC Custody Nominees (Australia) Limited
One Design & Skiff Sails Pty Ltd (I W Brown Super Fund A/C)
HSBC Custody Nominees (Australia) Limited – A/C 2
JP Morgan Nominees Australia Limited
Mr Nicholas James Redpath
AET SFS Pty Ltd (Peak Opportunities Fund)
Holegata Pty Ltd (Holegata Super Fund A/C)
National Nominess Limited (DB A/C)
Bart Properties Pty Ltd (Scott Flynn Family A/C)
Lawry Super Nominees Pty Ltd (Lawry Family Super Fund A/C)
FMS Pty Ltd (SM Appleyard S/F A/C)
JED Trading Pty Ltd
Roxtrus Pty Ltd (Roxanne Dunkel Trust No 2)
Allsop Family Pty Ltd (Allsop Family No 2 A/C)
Telemark International Pty Ltd
Coopster Pty Limited (Coopster Family A/C)
Allua Holdings Pty Ltd (The Drg A/C)
Totals Top 20
Total Remaining Holders Balance
Fully Paid
% of Issued
Ordinary Shares
Capital
104,767,190
52,788,429
17,242,855
8,166,637
5,167,137
4,483,528
4,164,140
2,528,999
2,222,222
1,959,620
1,666,930
1,666,666
1,635,555
1,537,400
1,481,481
1,481,481
1,450,000
1,424,454
1,396,003
1,250,000
31.52
15.88
5.19
2.46
1.55
1.35
1.25
0.76
0.67
0.59
0.50
0.50
0.49
0.46
0.45
0.45
0.44
0.43
0.42
0.38
218,480,727
113,887,324
65.74
34.36
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017For personal use only
62
TWENTY LARGEST LISTED OPTION HOLDERS AT 7 AUGUST 2017
Name
Listed Options
% of Options
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited – A/C 2
Bart Properties Pty Ltd (Scott Flynn Family A/C)
National Nominees Limited (DB A/C)
Court Wise Pty Ltd
Vesterbo Pty Ltd (J Jorgensen Super Fund A/C)
Mr Jorgen Ulrik Jorgensen
Mrs Siobhan Kathleen Hotz
Mr Benjamin Neil Lindsay
Mrs Snezana Ivanovska
Mr Richard Crawford Grooms
Citicorp Nominees Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
Allsop Family Pty Ltd (Allsop Family No 2 A/C)
UBS Nominees Pty Ltd
Equipment Company of Australia Pty Limited
Mr Jan-Per Hole
April Rose Pty Ltd (Bloom Super Fund A/C)
Mr Christopher Bayliss + Mrs Lynda Bayliss (Bayliss Super Fund A/C)
Jennifer Arnold Pty Limited (The Arnold Super Fund A/C)
Linor Pty Ltd (P E Giblin P/L SBF A/C)
Purflem Super Pty Ltd (Flemming Promotions S/F A/C)
3,350,000
1,665,000
833,333
833,333
650,000
597,666
550,000
481,665
427,500
400,000
350,000
333,333
333,333
250,000
250,000
241,666
221,666
210,000
166,666
166,666
166,666
166,666
18.94
9.41
4.71
4.71
3.67
3.38
3.11
2.72
2.42
2.26
1.98
1.88
1.88
1.41
1.41
1.37
1.25
1.19
0.94
0.94
0.94
0.94
Totals Top 20
Total Remaining Holders Balance
12,645,159
5,042,304
71.46
28.54
UNISSUED EQUITY SECURITIES
Unlisted options
Listed options
Number
24,256,250
17,687,463
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange.
For personal use only
63
Leigh Creek Energy Limited
ABN 31 107 531 822
PO Box 12
Rundle Mall, Adelaide
South Australia 5000
Australia
Phone +61 (8) 8132 9100
contactus@lcke.com.au
www.lcke.com.au
Directors
Daniel Justyn Peters
Executive Chairman
Greg D English
Non-Executive Director
Murray K Chatfield
Non-Executive Director
Zhe Wang
Non-Executive Director
Company Secretary
Jordan Mehrtens
Registered & Principal
Business Office
Level 11, 19 Grenfell Street
Adelaide, South Australia 5000
Bankers
Commonwealth Bank of Australia
96 King William Street
Adelaide, South Australia 5000
Auditors
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide, South Australia 5000
Principal Lawyers
Piper Alderman
Level 16, 70 Franklin Street
Adelaide, South Australia, 5000
Share Registry
Computershare Registry Services Pty Ltd
Level 5,115 Grenfell Street
Adelaide, South Australia, 5000
Investor enquiries: 1300 556 161
International: +61 3 9415 4000
ASX Code
LCK
L E I G H C R E E K E N E R GY
LEIGH CREEK ENERGYLimited
LEIGH CREEK ENERGY LIMITED ANNUAL REPORT 2017ENERGYFor personal use only LEIGH CREEK ENERGYLimited
For personal use only