Strong
production
performance
ANNUAL
REPORT
2020
CONTENTS
2
Chairman’s
letter
4
Chief
Executive
Officer’s report
39
Auditor’s
independence
declaration
6
Directors’
report
22
Remuneration
report (audited)
40
Financial
statements
92
Independent
auditor’s
report
101
105
Shareholder
information
Other
information
107
Stanmore’s
five-year
financial history
IBC
Corporate
information
1
Stanmore Coal Annual Report 2020 CHAIRMAN’S
LETTER
Dear Shareholders,
On behalf of the Directors, I am
pleased to make my first report to you
as Chairman of Stanmore Coal Limited.
The Company has delivered another
solid operational performance in a
year of significant change.
Financial performance
The Company’s revenue from operations totalled
$364.5 million, a reduction of 10% on the previous year.
Gross profit was also lower at $97.0 million, compared with
$164.8 million in FY19. Underlying Earnings before Interest,
Tax, Depreciation and Amortisation was $87.4 million,
against the FY19 result of $154.9 million. The reduction is
due to a 42.4% decrease in underlying margin as a result
of increased waste removal costs following changes in
the mine plan and equipment mix to deal with geological
challenges. The average A$ realised price from coal sales
also decreased by A$14.33/tonne as a result of reduced
demand because of the impacts of COVID-19 on our
customers and the relative strength of the Australian
dollar against the US dollar. Stanmore Coal reported Net
Profit After Tax of $34.9 million, compared with $91.6 million
for the previous year.
Cash generated from operations totalled $6.4 million
compared with $140.0 million in FY19. The difference
can mostly be attributed to increases in payments to
suppliers and employees and income tax, and reduced
receipts from customers.
During the June quarter, formal notice was given
by Taurus to cancel the US$12 million bonding facility
and the undrawn US$28 million working capital facility
with effect from 16 September following the change of
control of the Company. The Company subsequently
signed a non-binding term sheet with its parent entity,
Golden Energy and Resources Limited in respect of
a replacement US$40 million term loan facility to
30 June 2022 on terms that are substantially similar
to those entered into with Taurus.
The Board declared a fully franked interim dividend of
3 cents per share which was paid to shareholders on
30 April 2020. Shareholders on the register at that date
also received a bonus issue of 7,788,200 new fully paid
Stanmore shares, for no consideration. Taking account of
the Company’s FY20 earnings and cashflow performance
and the uncertainty relating to the ongoing impacts of
COVID-19 on customers and coal demand, the Board has
elected not to declare a final dividend for the financial year.
Industry outlook
While the COVID-19 pandemic has had minimal direct
impact on our operations, it has affected our customers
and the level of demand for product coal, resulting in
a decrease in realised prices from coal sales.
Metallurgical coal has been relatively less affected by
these market dynamics than thermal coal, and Stanmore’s
concentration on metallurgical coal has supported
the Company’s performance. A large proportion of the
Company’s product coal is contracted to term customers,
which has underpinned relatively stable prices compared
with prevailing market prices. The Company expects
realised prices on coal sales to remain stable, in line
with industry forecasts.
2
Stanmore Coal Annual Report 2020 Corporate activity
The unconditional on-market takeover offer by Golden
Investments (Australia) Pte Ltd was announced on 2 April,
with the offer opening on 17 April and closing on 18 May
2020. The offer closed with Golden Investments’ holding
a 75.33% in Stanmore Coal.
Subsequently, Stewart Butel, Neal O’Connor and
Stephen Bizzell resigned as Directors of the Company
on 18 May 2020. On the same date, four Non-Executive
Directors were appointed: myself as Chairman along
with Mark Trevan, Richard Majlinder and Mary Carroll.
The Company thanks the former Directors for their service
to Stanmore Coal and wishes them the best for the future.
Jimmy Lim and Marcelo Matos also joined the Board
during the reporting period, in October and November
2019 respectively.
The Company also thanks Dan Clifford, who resigned
as Managing Director and CEO in October 2019, for his
leadership of Stanmore Coal over approximately three
years. Craig McCabe was appointed as Chief Executive
Officer on 16 March 2020. After the reporting period, on
31 August 2020, Mr McCabe announced his resignation
from the Company and we wish him well in his future
endeavours. Marcelo Matos is acting as Interim Chief
Executive Officer until a permanent appointment
is announced.
Stanmore Coal has reported a solid operating
performance in a year of significant change for the
Company and uncertainty as a result of the COVID-19
pandemic. On behalf of the Board, I would like to thank
the employees, management team and contract partners
of Stanmore for their efforts which have supported this
result for the business. Thank you also to shareholders
for their continuing support for the Company.
Dwi Suseno
Chairman
Stanmore Coal
has reported a solid
operating performance
in a year of significant
change for the Company
and uncertainty as a
result of the COVID-19
pandemic.
Revenue from operations
$364.5m
Underlying EBITDA
$87.4m
3
Stanmore Coal Annual Report 2020
CHIEF EXECUTIVE
OFFICER’S REPORT
During FY20, Stanmore Coal focused
on maintaining our track record of
operational delivery and extending the
alternatives of coal sources to feed our
Isaac Plains operating infrastructure.
We have made progress against these
objectives in spite of the impacts of
the COVID-19 pandemic on our major
markets in the last quarter of the year.
The Company achieved a record for ROM (run of mine)
coal production of 3.02Mt, driven by industry leading
dragline performance and the commencement of the
Company’s new CAT6060 excavator in November 2019.
Prime overburden removal was 41.319 million bcm, a 60.4%
increase over last year’s figure of 25.756 million bcm, and a
record for the Isaac Plains Complex.
Product coal for the year totalled 2.39Mt which was ahead
of guidance of 2.35Mt and matched the record for coal
produced achieved in FY19. The product mix of semi-soft
coking to thermal coals improved to 99:1. Semi-soft coking
coal is a higher margin product and the Company does
not expect that the volume of thermal coal production will
increase as mining progresses in Isaac Plains East.
Increased waste removal costs at the mine contributed to
a rise in operating costs. Underlying FOB (free on board)
costs were $15.02/tonne higher than last financial year
at $119.67/tonne. This includes state royalties averaging
$13.83/tonne, which was 13% or $2.05/tonne lower than
in FY19. A 14% increase in ROM strip ratio to 10.4 (FY19:
9.1) was the major contributor to increased operating
costs along with changes to the mix of mining equipment
deployed to address challenging geological conditions in
areas of the mine.
Total coal sales were negatively affected in the fourth
quarter as COVID-19 impacted our term contract customers
resulting in reduced demand. However, coal sales for the
full year remained in line with FY19, totalling 2.29Mt. Coal
prices were also affected by this slowdown in demand,
resulting in an average achieved sale price for the full year
of $159.5/tonne, down from $173.8/tonne in FY19.
The health and safety of everyone at our mine site is
the first priority of our operations and critical to the success
of our business. I am pleased to report that the resources
and efforts committed to implementing safety discipline
and initiatives over the past 12-18 months have led to
significant improvements. Stanmore undertook or managed
890,628 hours of coal mining, drilling, exploration and
mine development activities in FY20 (FY19: 657,966 hours)
and recorded no lost time injuries. The Total Reportable
Injury Frequency Rate for the year was 3.4 per million
hours, a substantial improvement from 16.7 in the previous
financial year.
The Company progressively rehabilitates land that has
been disturbed by our mining operations in accordance
with its regulatory obligations. During the year, 99 hectares
of land were recontoured and 140 hectares seeded
for re-vegetation. Currently 19% of available land has
been rehabilitated. A provision is made for rehabilitation
costs, reflecting the area of land disturbed by mining
operations which has not yet been rehabilitated. The total
rehabilitation provision reduced by $4.8 million in the
reporting period due to rehabilitation works completed
at Isaac Plains.
Extending the coal sources to feed the Isaac Plains
operating infrastructure is an important part of the
Company’s strategy. During the year, the Company
progressed environmental approvals for an extension
to the current Isaac Plains East operations within
the existing granted mining leases. The extension
will allow existing operations to bridge any potential
risk of production continuity relatively to the planned
commencement of the Isaac Downs project, when
regulatory approvals are received.
The Isaac Downs project will extend the economic life of
the Isaac Plains Complex, and will be operated as a satellite
open-cut mine providing ROM coal to the Company’s
existing coal processing plant and train loading facilities.
After the reporting period, Mineral Resources for the
project were updated to 36.2 million1 tonnes and the JORC
classification of Mineral Resources significantly improved
with 24.7 million tonnes classified as a Measured Resource
and 11.5 million tonnes as Indicated Resources.
1 Mr James Knowles, “Mineral Resources and Coal Reserve Update for Isaac Downs”, ASX 21 August 2020
4
Stanmore Coal Annual Report 2020 During the year, Stanmore’s Environmental Impact
Statement (EIS) for the project was accepted by the
State Government and the Company is now assessing
submissions received during public consultation. It is
anticipated that a Supplementary EIS will be submitted
after additional field work and investigations are completed.
Additional drilling to increase geological confidence and
improve understanding of coal quality commenced during
the year and will become part of a Bankable Feasibility
Study that will quantify the capital expenditure required
for the project and provide updated information on its
economic attractiveness. Infrastructure designs are also
being developed for the major civil works elements of the
project including a flood protection levee between the
Isaac River and the mining operation, a haul road linking
to Isaac Plains, and site establishment and environmental
protection facilities. At this stage, the Company believes the
process is on track for approvals to be granted in the first
half of 2021 based on no material objections being raised.
The focus on operational excellence and extending the
economic life of the Isaac Plains Complex has underpinned
a solid performance in a challenging year for the industry
and our business. The combination of operational discipline
and capital light project development has positioned
the Company to manage through the uncertainty arising
from the economic impacts of the global pandemic.
I would like to take the opportunity to acknowledge
the dedication and efforts over the past year of the team of
people who make up Stanmore Coal. I thank our employees
and contractors for their contribution to the performance
of the business, and my fellow directors for their strategic
guidance. I would also like to thank our traditional owners,
neighbours, customers and shareholders for their
continuing support of Stanmore Coal.
Marcelo Matos
Interim Chief Executive Officer
The focus on operational
excellence and extending
the economic life of the
Isaac Plains Complex
has underpinned a
solid performance in a
challenging year for the
industry and our business.
Record ROM coal production
of 3.02Mt
Product coal
2.39Mt ahead
of FY20 guidance
5
Stanmore Coal Annual Report 2020
DIRECTORS’ REPORT
The Directors present their report on the Consolidated Entity consisting of Stanmore
Coal Limited (the Company) and the entities it controlled at the end of, or during, the
year ended 30 June 2020 (referred to in this report as Stanmore Coal, the Company,
the Group, or the Consolidated Entity).
Directors
The Directors of the Company during the year and up to the date of this report are:
Marcelo Matos
B. Business Administration, Executive MBA
Non-Executive Director
(Appointed 27 November 2019)
(Resigned 31 August 2020)
Executive Director and Interim
Chief Executive Officer
(Appointed 31 August 2020)
Mr Marcelo Matos has over 20 years of experience in
management, marketing and business development
roles in the mining sector in Australia, Asia, Mozambique
and Brazil. Mr Matos worked for Vale for many years in
various senior roles, including as its Chief Marketing and
Strategy Officer for Coal as well as its Managing Director
in Australia. Prior to his appointment as Interim Chief
Executive Officer, Mr Matos was the Chief Commercial
Officer for M Resources.
Mr Matos holds a Bachelor of Business Administration
degree from the Pontifical Catholic University, Rio de
Janeiro, Brazil, and an Executive MBA from IBMEC
Business School.
Mr Matos is a member of the Health, Safety, Environment
and Community Committee, a member of the Audit
and Risk Management Committee and a member of
the Remuneration and Nominations Committee.
Dwi Suseno
B.Commerce, Grad. Dip Tax, Grad.Dip in Business, MBA, CA
(Singapore), FCPA
Non-Executive Director
(Appointed 15 May 2020)
Chairman
(Appointed 15 May 2020)
Mr Dwi Suseno is an Executive Director and Deputy Group
Chief Executive Officer of Golden Energy and Resources
Limited (GEAR). GEAR is the parent company of Golden
Investments (Australia) Pte Ltd and the major shareholder
of Stanmore Coal Limited.
Mr. Suseno has over 25 years’ experience in management,
commercial, finance and commodities in both Australia
and internationally. Mr Suseno was previously an Executive
Director and CFO of Straits Corporation Group, which was
then part of the SGX-listed coal mining company Straits
Asia Resources Limited. Mr Suseno has previously worked
with Baker Hughes Inc. (Fortune 500 NYSE listed oilfield
services company), Arthur Andersen Australia and Ernst
& Young LLP.
Mr Suseno is a Certified Public Accountant in both Australia
and Singapore, graduated with a Bachelor of Commerce
Degree from the University of Western Australia, Graduate
Diploma in Tax from the University of Melbourne’s Law
Masters program, as well as a Postgraduate Diploma in
Business from Curtin University. He also holds an executive
Masters in Business Administration from the Kellogg
School of Management & Hong Kong University of Science
and Technology.
Mr Suseno is a member of the Audit and Risk
Management Committee.
6
Stanmore Coal Annual Report 2020 Jimmy Lim
B. Science, B. Engineering, Fellow FINSIA, MBA
Mary Carroll
MAICD
Non-Executive Director
(Appointed 23 October 2019)
Non-Executive Director
(Appointed 15 May 2020)
Ms Mary Carroll is the Chief Executive Officer, Capricorn
Tourism and Economic Development Ltd (Capricorn
Enterprise). Capricorn Enterprise is a not-for-profit,
membership-based organisation that aims to assist
the central Queensland region in tourism and economic
development, working with businesses and government
to promote the region. Ms Carroll was also previously a
Member of the Central Queensland University Council
(appointed by the Governor In Council), Director of the
Queensland Tourism Industry Council and Chair of the
Regional Tourism Network in Queensland.
Richard Majlinder
B. Science (Hons) (Economic History), Fellow ICA England
and Wales, ICAA, MAICD
Non-Executive Director
(Appointed 15 May 2020)
Mr Richard Majlinder is the Chief Commercial Officer for
Madison Group Enterprises which is a manufacturer and
B2B distributor of technology infrastructure and hardware.
Prior to this, Mr Majlinder held a number of roles at
PriceWaterhouseCoopers including as a Partner in Private
Clients Advisory leading client projects across mergers
and acquisitions, consulting and financial management.
Mr Majlinder holds a Bachelor of Science (Honours) in
Economic History from the London School of Economics
and is a Fellow of the Institute of Chartered Accountants in
England and Wales, a Member of the Institute of Chartered
Accountants in Australia & New Zealand, and a Member of
the Australian Institute of Company Directors.
Mr Majlinder is a member of the Remuneration and
Nominations Committee and the Chairman of the Audit
and Risk Management Committee.
Mr Jimmy Lim has 19 years of experience in finance and
investment management in the metals and mining sector,
with extensive industry relationships in Australia and
globally. Mr. Lim started his career in Perth with Ernst &
Young in Tax, serving natural resources and infrastructure
companies of all sizes before moving into Corporate
Finance with Ernst & Young and then KPMG where he
continued advising clients in the natural resources sector.
From there, Mr. Lim then moved on to work for JPMorgan
in Melbourne where he worked on assignments advising
and financing some of the largest mining companies
in the world before moving to Hong Kong with Morgan
Stanley and Goldman Sachs, where he was responsible
for coverage of Metals and Mining in Asia excluding China.
Mr Lim is a Fellow of FINSIA and holds an MBA and
degrees in Engineering and Science from the University
of Western Australia.
Mr Lim is a member of the Health, Safety, Environment
and Community Committee and the Chairman of the
Remuneration and Nominations Committee.
Mark Trevan
Dip. Business (Accounting), Grad. Dip. Applied Finance
and Investment
Non-Executive Director
(Appointed 18 May 2020)
Mr Mark Trevan has extensive experience in the coal mining
industry in Queensland and internationally. Most recently, he
was a Director and Deputy Chairman of the Wiggins Island Coal
Export Terminal, a Director and consultant at Caledon Coal Pty
Ltd and a Non-Executive Director of Ncondezi Energy Limited
(a London listed, Mozambique focused coal mine development
company). Prior to those appointments, he was the Managing
Director of Caledon Resources Plc, based in Brisbane, where
under his management the Cook underground coking coal
mine was recommissioned, and the Minyango underground
coking coal project was advanced. Mr Trevan also oversaw the
takeover of Caledon by Guandong Rising Asset Management,
and the delisting of the company. Prior to joining Caledon
in 2006, Mr Trevan spent 25 years with Rio Tinto in senior
executive roles in the areas of marketing, general commercial,
corporate strategy and project feasibility.
Mr Trevan holds a Diploma in Business from the Preston
Institute of Technology (now Latrobe University) and a
Graduate Diploma in Applied Finance and Investment
from the Securities Institute.
Mr Trevan is the Chairman of the Health, Safety,
Environment and Community Committee.
7
Stanmore Coal Annual Report 2020 Stewart Butel
B. Science (Geology), Grad Dip in Business Studies,
Advanced Certificate of Coal Mining, GAICD
Non-Executive Director
(Resigned 15 May 2020)
Chairman
(Resigned 15 May 2020)
Mr Butel has more than 40 years of experience in
operational management and board roles in the
resources industry in New South Wales, Queensland
and Western Australia.
During the past three years, Mr Butel has also served as
a Director of the following listed companies
•
RPM Global Holdings Limited
(Appointed 01/09/2018 – resigned 18/05/2020)
Prior to his resignation Mr Butel was a member of the
Remuneration and Nominations Committee, the Audit
and Risk Management Committee and the Health, Safety,
Environment and Community Committee.
Dan Clifford
B. Eng (Mining)
Managing Director
(Resigned 22 November 2019)
Mr Clifford has more than 25 years’ experience in the
coal mining industry and has worked in Australia, South
Africa and New Zealand. He gained substantial open cut
and underground coal mining experience under previous
employers including Glencore, Anglo Coal, BHP Billiton
and Solid Energy.
Prior to his resignation, Mr Clifford was a member of the
Health, Safety, Environment and Community Committee
from 26 October 2018 to 3 May 2019.
Stephen Bizzell
B. Com, MAICD
Non-Executive Director
(Resigned 15 May 2020)
Mr Bizzell is the Chairman of boutique corporate advisory
and funds management group, Bizzell Capital Partners
Pty Ltd. He was an Executive Director of Arrow Energy
Ltd from 1999 until its acquisition in 2010 by Shell and
PetroChina for $3.5 billion. He was also a co-founder and
director of Bow Energy Ltd until its $550 million takeover.
During the past three years, Mr Bizzell has also served as
a Director of the following listed companies:
•
•
•
•
•
Armour Energy Limited
(Appointed 09/03/2012 – current)
Laneway Resources Limited
(Appointed 28/06/1996 – current)
Renascor Resources Limited
(Appointed 01/09/2010 – current)
UIL Energy Ltd
(Appointed 01/08/2014 – delisted 03/01/2019)
Strike Energy Limited
(Appointed 31/12/2018 – current)
Prior to his resignation, Mr Bizzell was the Chairman of the
Audit and Risk Management Committee and a member of
the Remuneration and Nominations Committee.
Neal O’Connor
B. Laws and Dip. Legal Practice, GAICD
Non-Executive Director
(Resigned 15 May 2020)
Mr O’Connor has 30 years of legal experience in private
practice in Australia and the United Kingdom, and within
the resources industry. He was Company Secretary and
General Counsel of the global copper business unit of
Xstrata plc between 2003 and 2013, prior to which he
was the General Manager Legal at MIM Holdings.
During the past three years, Mr O’Connor has also served
as a Director of the following listed company:
•
Mitchell Services Limited
(Appointed 21/10/2015 – current)
Prior to his resignation, Mr O’Connor was the Chairman
of the Remuneration and Nominations Committee
and a member of the Health, Safety, Environment
and Community Committee.
8
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Darren Yeates
B. Eng. (Mining), Grad Dip in Mgmt, Grad Dip in Applied
Fin & Invest., MBA, FAICD
Non-Executive Director
(Appointed 3 May 2019)
(Resigned 5 February 2020)
Mr Yeates is an experienced Director with over 30 years’
experience in the mining and metals industry. Most
recently he was Chief Executive of GVK Hancock Coal.
He spent over 22 years working with Rio Tinto including
as Acting Managing Director and Chief Operating Officer
for Rio Tinto Coal Australia, General Manager Ports and
Infrastructure for Pilbara Iron and General Manager
Tarong Coal.
During the past three years, Mr Yeates has also served as
a Director of the following listed company:
•
EMECO Holdings Limited
(Appointed 01/04/2017 – current)
Prior to his resignation, Mr Yeates was the Chairman
of the Health, Safety, Environment and Community
Committee and a member of the Audit and Risk
Management Committee.
Chief Executive Officer
Craig McCabe
B. Eng (Mining), B. Sci (Geoscience), Grad. Cert.
Business Administration
(Appointed 1 April 2020)
(Resigned 31 August 2020)
Mr McCabe has worked in a wide range of operational
and leadership roles within Wesfarmers Limited between
2008 and 2019, including as CEO of Wesfamers Resources
between 2017 and 2019 with the responsibility of Curragh
and Bengalla mining operations.
Chief Financial Officer
Frederick Kotzee
(Appointed 21 September 2020)
Interim Chief Financial Officer
(Appointed 2 June 2020 – 20 September 2020)
LLB., CA (SA)
Mr Kotzee is an experienced Chief Financial Officer of listed
companies across a range of industries and commodities.
Mr Kotzee has served as Chief Financial Officer of Kidman
Resources Limited before the successful takeover by
Wesfarmers Limited. Prior to this Mr Kotzee was Chief
Financial Officer of Kumba Iron Ore Limited, a global iron
ore miner listed on the Johannesburg Stock Exchange,
and a member of the Anglo American Plc Group. Mr Kotzee
has extensive experience in investment banking, joint
ventures, corporate finance and business development.
Mr Kotzee holds a Bachelor of Laws from the University of
South Africa and is a qualified Chartered Accountant (SA).
Company Secretary
Tristan Garthe
B. Comm (Accounting and Finance), MBA, CPA,
GIA (Affiliate)
(Appointed 16 June 2020)
Mr Garthe has worked in a wide range of financial and
commercial roles within the coal mining sector, and the
mining industry in general. Mr Garthe’s experience crosses
both open cut and underground mining operations in
Australia and Africa. Mr Garthe has held senior positions
in finance and company secretarial roles for listed and
international resources companies.
Mr Garthe holds a Masters in Business Administration
and a Bachelor of Commerce (Accounting and Finance).
He is a Certified Practising Accountant and a Member
of the Governance Institute of Australia.
Ian Poole
B. Econ, CA
Chief Financial Officer (resigned 26 June 2020)
and Company Secretary (resigned 16 June 2020)
Ian has 30 years’ experience in financial and commercial
roles in the resources industry in Australia and the United
States. He was Chief Financial Officer of ASX-listed
minerals processing and infrastructure company, Sedgman
Limited between 2010 and 2016. Prior to this, he worked for
Rio Tinto Coal Australia Pty Ltd and Pasminco Resources.
9
Stanmore Coal Annual Report 2020 Directors’ interests
The relevant interests of each Director in the shares and rights issued by the Consolidated Entity, as notified by the
directors to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the
date of this report.
Dwi Suseno
Jimmy Lim
Marcelo Matos
Mark Trevan
Mary Carroll
Richard Majlinder
Directors’ meetings
Ordinary
shares
–
–
–
–
–
–
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number
of meetings attended by each Director was as follows:
Board
Audit and Risk
Management
Committee
Remuneration
and Nominations
Committee
Health, Safety,
Environment
and Community
Committee
Held while
in office
Meetings
attended
Held while
in office
Meetings
attended
Held while
in office
Meetings
attended
Held while
in office
Meetings
attended
Dwi Suseno
Jimmy Lim
Marcelo Matos
Mark Trevan
Mary Carroll
Richard Majlinder
Stewart Butel
Dan Clifford
Stephen Bizzell
Neal O'Connor
Darren Yeates
3
20
18
2
2
2
28
11
28
28
18
3
15
15
2
2
2
28
11
27
27
16
1
-
4
-
–
1
4
1
4
1
3
1
-
4
-
-
1
4
1
4
1
3
-
2
-
-
-
-
4
2
4
4
-
-
2
-
-
-
-
4
2
4
4
-
-
3
3
1
-
-
2
-
-
2
1
-
2
3
1
-
-
2
-
-
2
1
Principal activities
The principal activities of Stanmore Coal Limited and its subsidiaries (‘the Company’, ‘the Group’ or ‘the Consolidated
Entity’) is the exploration, development, production and sale of metallurgical and thermal coal in Queensland, Australia.
10
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Operating and financial review
Highlights
Highlights for the year ending 30 June 2020 include:
• Full year net profit after tax of $34.893m
• Underlying EBITDA (non-IFRS measure) of $87.470m (FY19 $154.895m)
• Net cash of $32.244m at 30 June 2020 (FY19 $90.465m), with no working capital debt drawn
• Prime overburden removal for FY20 41.319m bcm (FY19 25.756m bcm) a record for the Isaac Plains Complex
• Acquisition of 600 tonne excavator using OEM finance
•
Isaac Downs Environmental Impact Study (EIS) submitted and approvals progressing in line with consenting timetable
• Unconditional on market takeover by Golden Investments of $1.00 per share announced on 2 April. Offer opened on
17 April 2020 and closed on 18 May 2020. At the end of the offer Golden Investments’ shareholding increased from
31.35% to 75.33% in the Consolidated Entity
• Final FY19 dividend of 8 cps fully franked paid 31 October 2019
• H1 FY20 interim dividend of 3 cps fully franked paid on 30 April 2020
• Bonus share issue of 7,788,200 new fully paid ordinary shares issued to shareholders on the register as at 30 April 2020
for no consideration
• A$10m working capital facility entered into with parent entity, Golden Energy and Resources Limited (GEAR)
• Non-binding Term Sheet entered into with parent entity, GEAR in relation to a US$40m financing facility.
Financial Performance and Financial Position
Coal Sales and Other Revenue
Cost of sales
Gross Profit/(Loss)
Other income and expenses
Profit/(loss) before income tax and net finance expenses
Finance income
Financial expenses
Profit/(loss) before income tax benefit/(expense)
Income tax benefit/(expense)
Profit/(loss) after income tax expense
2020
$M
2019
$M
364.485
403.059
(267.514)
(238.285)
96.971
(37.375)
59.596
0.579
(8.597)
51.578
(16.685)
34.893
164.774
(26.620)
138.154
0.476
(10.100)
128.530
(36.932)
91.598
11
Stanmore Coal Annual Report 2020 Operating and financial review (continued)
Underlying EBITDA result (non-IFRS measure)
Underlying EBITDA (non-IFRS measure) reflects statutory EBITDA as adjusted to reflect the Director’s assessment of the
result for the ongoing business activities of the Consolidated Entity. The items adjusted for are determined to be not in
the ordinary course of business. The presentation of non-IFRS financial information provides stakeholders the ability to
compare against prior periods in a consistent manner. These numbers have not been audited.
Profit/(loss) before income tax and net finance expenses
Depreciation and amortisation
Earnings before interest, depreciation and amortisation
(EBITDA)
Adjustments for Underlying EBITDA (non-IFRS measure)
Write-off of non-current inventory
Takeover costs
Remeasurement of onerous contracts
Remeasurement of rehabilitation provision
Fair value movement contingent consideration
Underlying EBITDA (non-IFRS measure)
Note
2
2
2
15
16
17
2020
$M
59.596
26.916
86.512
–
4.419
(0.150)
1.076
(4.387)
2019
$M
138.154
11.383
149.537
4.364
1.143
(9.428)
3.134
6.145
87.470
154.895
The Underlying EBITDA (non-IFRS measure) of $87.470m in FY20 was a $67.425m decrease compared to Underlying
EBITDA (non-IFRS measure) of $154.895m in FY19. The reduction in EBITDA was due to a 42.4% reduction in underlying
margin of A$39.8/t in FY20 compared to $69.1/t in FY19. The driver behind the significant reduction in margin for the
financial year was as a result of lower sales prices and an increase in waste removal costs. The waste removal costs have
increased due to higher strip ratio, longer haulage distance, additional geological challenges that were experienced and
changes in equipment mix to accommodate these changes.
The primary drivers contributing to the NPAT result $34.893m include:
• Gross revenue from coal sales decreased to $364.485m in FY20 from $403.059m in FY19. The decrease was driven by
a $14.33/t decrease in the A$ realised price to an average of A$159.47/t from $173.8/t in FY19 and a decrease in sales
of produced coal to 2,286kt in FY20 from 2,319kt in FY19.
• Underlying FOB costs of $119.67/t were $15.02/t higher than FY19 as a result of the above operational and geological
issues and included $13.83/t of state royalties.
• Depreciation and amortisation costs increased by $15.533m following the increased mining undertaken at Isaac Plains
East mine and a change in estimates of the useful life of certain depreciable assets.
12
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020
The variance between Underlying EBITDA (non-IFRS measure) and cashflow from operations is primarily due to the
movement in working capital, as outlined in the table below.
Underlying EBITDA (non-IFRS measure)
Net Financing costs
Settlement of onerous contracts
Completion of rehabilitation works
Settlement of vendor royalties – contingent consideration
Net movement in working capital
Cash flow from operations
Note
2
15
16
17
2020
$M
2019
$M
87.470
154.895
(0.319)
(0.866)
(4.896)
(8.980)
(65.967)
(1.268)
(1.849)
(4.848)
(9.560)
2.673
6.442
140.043
In FY20 $65.967m was invested in working capital, primarily $36.721m for overburden in advance and $12.979m in
product coal stocks. Trade and other payables also decreased $17.610m. The investment in overburden in advance was a
commercial decision to build inventories to assist with the anticipated transition to Isaac Downs.
In FY20 $4.896m (FY19 $4.848m) was invested in rehabilitation at the Isaac Plains Complex. Stanmore Coal integrates
this core activity with operations to ensure timely and efficient close out of rehabilitation.
Cashflow
In the year to 30 June 2020, a total net cash outflow of $58.221m was recorded. The net inflow from operating activities
was $6.442m. Cash outflows from investing activities were $45.108m. Of this $26.454m related to payments for plant
and equipment, including the acquisition of the CAT 6060 excavator and ancillary equipment and maintenance of the
CHPP and Dragline. The final acquisition payment of $5m for Isaac Downs was also made. At the end of year, no funds
were drawn from the working capital facility. The net outflow from financing activities includes $13.719m drawn down from
the equipment loan to finance the CAT 6060 excavator, finance lease payments, dividends paid during the year totalling
$24.073m and payment for financial securities that were historically secured by way of bank guarantees of $3.707m.
Net cash at beginning of year
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net increase/(decrease) in cash held
Net cash at end of year
Operational summary
2020
$M
90.465
6.442
(45.433)
(19.230)
(58.221)
32.244
2019
$M
19.817
140.043
(60.777)
(8.618)
70.648
90.465
Health, Safety, Environment and Community Performance
The Consolidated Entity continues to be committed to the current and future performance of the business for the health,
safety and wellbeing of our people, the environment and the communities in which we operate.
The Consolidated Entity undertook or managed 890,628 hours (FY19 657,966 hours) of coal mining, drilling, exploration,
and mine development activities (directly and through its contractors) during the year and reported no lost time injuries
(FY19 – 5). The Total Reportable Injury Frequency Rate for the year was 3.4 per million hours, with a Lost Time Injury
Frequency Rate of 0 per million hours. The Consolidated Entity is encouraged by the safety performance results for
FY20 which were supported by several safety initiatives implemented over the past 12 months.
13
Stanmore Coal Annual Report 2020
Operational summary (continued)
Rehabilitation continues to be a strong focus of the Consolidated Entity with 99ha recontoured and 140ha seeded. The
Consolidated Entity will continue to focus on rehabilitation and has currently rehabilitated 32% of available land. Additionally,
several improvement projects were completed during FY20 to reduce the consumption of raw water and increase the use of
mine affected water. This has improved the overall environmental integrity across the Isaac Plains Complex.
The Consolidated Entity supported the communities in which our operations are located with a number of grants,
sponsorships and important community initiatives and events. Significant ‘in-kind’ time was also dedicated to regional
industry bodies and professional groups to enhance local industry and services in the region.
Operations
The Isaac Plains Complex mined 41,319k bcm of prime overburden, which is a record for the complex and provides the
Consolidated Entity with a strong investment in working capital moving into FY21. Mining operations delivered 3,020kt
of ROM coal to the coal handling and processing plant (CHPP) at a prime strip ratio of 13.7x. The strip ratio is up against
that of FY19 as the depth of the pit increases as mining progresses and overburden stocks are increased at Isaac Plains
East. The Consolidated Entity is currently reviewing the existing mine plan and evaluating options around switching to the
lowest cost operation given the pricing volatility as a result of COVID-19. The lowest cost mine plan would also extend the
life of Isaac Plains East and ensure a smooth transition to Isaac Downs following the grant of the required approvals.
Product coal production was 2,390kt, with the CHPP delivering a total yield of 78.1%. The FY20 production split of semi soft
and thermal coal was 99% semi-soft and 1% thermal. The thermal coal produced was from small faulted areas within the
mine and is not expected to significantly increase as mining progresses at Isaac Plains East.
The Consolidated Entity completed capital works for the CHPP and dragline during the year. There is a major dragline shutdown
planned for August 2020. Other capital outflows included the commissioning of the new CAT 6060 excavator and associated
infrastructure. These capital outflows contributed to the net capital outflow for the Consolidated Entity of $26.454m.
The average sale price achieved for all coal (both metallurgical and thermal) during the year was A$159.47/t, compared
to FY19 of A$173.8/t. The reduction in price is driven by the recent impacts of COVID-19 which have reduced overall global
demand for coking coal, whilst strengthening the Australian dollar against the United States dollar, in which our revenue
is received. The Consolidated Entity continues to place emphasis on tethering pricing dynamics to premium hard coking
coal indices, further distancing its brand from the Hunter Valley semi-soft products and focusing sales to customers on
a long-term contract basis rather than being exposed to the spot market.
The Consolidated Entity notes potential continued pricing volatility as a result of the cyclical nature of the business and
the global impacts of COVID-19. However, it should be noted that our products traditionally have an advantage in these
market conditions, with end users able to extend coke oven times allowing for greater utilisation of lower quality coking
coals. Within the short term, the Consolidated Entity has seen term contract recovery from its customer base, and this is
forecast to continue. With a large proportion of tonnage contracted into term customers, the Consolidated Entity expects
its achieved prices to remain stable, in line with industry forecasts.
Coal Type Price
e
n
n
o
t
/
$
S
U
350
300
250
200
150
100
50
Jan 2017
Jan 2018
Jan 2019
Jan 2020
Hard Coking Coal
HCC64
PCI
Semi-soft Coking Coal
SMR Coking Achieved
Source: Platts – August 2020 Coal Trader International.
14
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 COVID-19 Impacts
The Consolidated Entity continues to follow recommendations from Queensland Health and the Australian Government
to provide a COVID-19 safe workplace.
The Consolidated Entity is also aware that travel restrictions to remote indigenous communities were in place during
the financial year ending 30 June 2020. These restrictions delayed some exploration activities to be undertaken by the
Consolidated Entity. These restrictions continue to be in place in some communities. The Consolidated Entity remains
committed to following the guidelines released by the Government.
The other impact that COVID-19 has had on the Consolidated Entity is discussed further on page 14 of this report.
This impact is not material to the Consolidated Entity.
These impacts are not significant to the Consolidated Entity and will not negatively impact the financial statements or
trigger any significant uncertainties with respect to events or conditions which may adversely impact the Consolidated
Entity as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Prime Overburden (bcm)
ROM coal produced – Open cut (kt)
ROM strip ratio (prime)
CHPP feed (kt)
ROM stockpile (kt)
Saleable coal produced (kt)
Saleable coal purchased (kt)
Coal sales
- Metallurgical (kt)
- Thermal (kt)
Total gross coal sales (kt)
Product Yield
Coal product stockpiles (kt)
Average sale price achieved (A$/t)
Unit costs of sales (A$/t sold)
FOR cost (A$/t sold)
FOR to FOB cost (ex. State royalty) (A$/t sold)
State royalty (A$/t sold)
FOB cash cost (A$/t sold)
Margin (A$/t sold)
2020
41,319
3,020
13.7
3,061
69
2,390
–
2,266
20
2,286
78.1%
276
159.5
88.7
17.2
13.8
119.7
39.8
2019
25,758
2,929
8.8
2,951
109
2,390
27
1,985
334
2,319
81.0%
191
173.8
70.0
18.8
15.9
104.7
69.1
15
e
n
n
o
t
/
$
S
U
350
300
250
200
150
100
50
Jan 2017
Jan 2018
Jan 2019
Jan 2020
Hard Coking Coal
HCC64
PCI
Semi-soft Coking Coal
SMR Coking Achieved
Stanmore Coal Annual Report 2020
Operational summary (continued)
The variance between coal margins and Underlying EBITDA (non-IFRS measure) is due to toll loading margin and net
corporate overheads as shown in the table below.
Coal sales (t’000)
Margin (A$/t)
Coal sales margin
Margin from toll loading 3rd party coal
Unallocated corporate overhead
Underlying EBITDA (non-IFRS measure)
2020
$M
2,286
39.80
2019
$M
2,319
69.1
90.983
160.243
–
(3.513)
(0.003)
(5.345)
87.470
154.895
Isaac Downs Project
In July 2019, the final payment for the acquisition of Isaac Downs was made. Isaac Downs is located 10 kilometres south of
the existing Isaac Plains operations. Isaac Downs will be operated as a satellite open cut mining operation which will utilise
the existing Isaac Plains infrastructure with coal washing and train loading activities to be undertaken at the existing
CHPP, ensuring a capital light approach is maintained.
During the year, the Consolidated Entity completed an exploration drilling programme to improve the geological confidence
and coal quality understanding of the resource. This was an important input into the feasibility studies that commenced
to formalise the detailed assessment of Isaac Downs. Palaris Australia was the successful tenderer in December 2019 for
the preparation of a Bankable Feasibility Study (BFS) and as at 30 June 2020, the BFS was close to being finalised. The
BFS addresses all the main study components to define the project in sufficient detail to quantify the capital expenditure
requirement to establish the mine.
The Consolidated Entity also commissioned a consulting contract with an experienced civil construction company after a
competitive tender process. The Early Contractor Involvement (ECI) contract is aimed at undertaking sufficient engineering
design to finalise a design and construction contract for the major civil works required to establish the mine. The main
components are an underpass and bridge structure for the haul road to cross the Peak Downs highway, the construction
of the haul road to link Isaac Downs to Isaac Plains, the construction of a flood protection levee between the Isaac River
and the mining operation, and site establishment and environmental protection facilities.
The Mineral Resources for the Isaac Downs Project were updated as at August 2020 to 36.21 million tonnes (Mt) from
22.9Mt at the time of acquisition from Peabody. Importantly the JORC classification of Mineral Resources has improved
significantly such that 24.7 Mt is classified as a Measured Resource and 11.5 Mt is classified as Indicated Resources
(no Inferred tonnes estimated).
Isaac Downs EIS was accepted by the Queensland State Government and made available for comment during the formal
public notification stage from 9 March to 21 April 2020. The EIS process is being undertaken under the bilateral agreement
between the Queensland Government (Environmental Protection Act) and Commonwealth Government (EPBC Act – the
project is a ‘controlled action’) for project assessment. Three mining lease applications were submitted to the Queensland
Department of Natural Resources Mines and Energy (DNRME) and all the requisite third party agreements required for the
grant of the mining leases are well advanced. At this stage, the approval process is on track for approvals to be granted in
the first half of 2021 (based on no material objections being raised).
1
Represented by Indicated 11.5Mt, Measured 24.7Mt and Inferred 0Mt. Mr James Knowles, “Mineral Resources and Coal Reserve Update for Isaac Downs”,
ASX 21 August 2020
16
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Approvals Timeline: Isaac Downs
Jun
2020
Sep
2020
Dec
2021
Mar
2021
Jun
2021
Sep
2021
Dec
2021
March
2022
Prepare Supplementary EIS
EA approval process
& objection period
•
ERC¹ process
& Financial
assurance
Construction
Coal production²
Mining Lease process
EPBC approval process – bilateral arrangement
EPBC approval conditions finalised
Finalise biodiversity offset management plan
1 EIS – Environmental Impact Statement; EA – Environmental Authority; ERC – Estimated Rehabilitation Cost
2 Based on no material objections arising during public notification processes or any matter requoreing Land Court determination
CAT Excavator Purchase
On 2 July 2019, the Consolidated Entity entered into a binding agreement with Hasting Deering (Australia) Limited to
acquire a 600-tonne excavator (CAT 6060) for the Isaac Plains East mine. The CAT 6060 has joined the current operations
at Isaac Plains East and will be supported by a trucking fleet supplied by the existing contractor, Golding (ASX: NWH).
The purchase of the CAT 6060 was financed through an equipment loan facility with Caterpillar Financial Australia Limited,
who are a lender associated with Hastings Deering. The term of the loan facility is 5 years.
Following the granting of approvals for the Isaac Downs Project, it is planned that the CAT 6060 will transition to the Isaac
Downs Project, where it will establish the initial mine operations. Operations at Isaac Plains East will continue in parallel
during this time.
The total investment in the CAT 6060 is $14.6m which includes additional capital to support the CAT 6060, such as
warehouse facilities, and associated equipment expenditure. The expected life of the equipment is greater than 10 years
and this investment is considered an integral part of the Isaac Downs Project, as well as currently supporting the Isaac
Plains East operations in the shorter term.
17
Stanmore Coal Annual Report 2020 Operational summary (continued)
On-market Takeover – Golden Energy and Resources
On 2 April 2020, Golden Investments (Australia) Pte. Ltd (Golden Investments) announced an on-market, unconditional
takeover offer for all the remaining shares in the Consolidated Entity, at $1.00 per share.
At the time of the announcement, Golden Investments held 31.35% (80,291,962 shares) of the issued share capital in the
Consolidated Entity. The key features of the offer were;
•
It was an on-market, unconditional offer of $1.00 per share in the Consolidated Entity. At the time of the announcement
this was a 22.0% premium to the closing share price on 1 April 2020
• The offer period opened on 17 April 2020 and ended on 18 May 2020
Following close of the offer period on 18 May 2020, Golden Investments held 75.33% of the Consolidated Entity.
This represents 203,697,945 shares in the Consolidated Entity.
Golden Investments is a company owned by Golden Energy and Resources Limited (GEAR) and Ascend Global Investment
Fund SPC (Ascend Global).
GEAR is a Singapore listed energy and resources company. GEAR’s operations include mining of thermal coal through
its subsidiary PT Golden Energy Mines Tbk operating in Indonesia, mining of metallurgical coal through Stanmore Coal
Limited operating in Bowen Basin in Queensland and mining of gold through a 50% interest in the Ravenswood gold
mine operating in Queensland.
Ascend Global is an investment fund with assets under management of US$52.6 million as at 31 December 2019. Ascend
Global is managed by Ascend Capital, a Singapore based company registered with the Monetary Authority of Singapore.
Debt Refinance
On 18 June 2020, the Consolidated Entity was given formal notice by its current financier that the working capital and
bank guarantee facility would be cancelled from 16 September 2020. This was following the change of control of the
Consolidated Entity, after completion of the on-market takeover by Golden Investments. Effective from this date, no
further drawdowns were available, and the balance drawn under the bank guarantee facility was to be repaid by the
cancellation date. As at 30 June 2020, there were no drawdowns under the working capital facility and at the date of
this report, all bank guarantees provided under this facility have been replaced.
The Consolidated Entity has also signed a non-binding term sheet with its parent entity, Golden Energy and Resources
Limited (GEAR) in respect to a new financing facility. The terms of this facility are similar to the terms provided by the
previous financier. The Consolidated Entity is progressing this facility.
The key terms of the proposed facility are:
• Facility will be a US$40m facility until 30 June 2022
• Upfront commitment fee of 2.0%
•
•
Interest rate on drawn funds of 8.0% per annum
Interest rate on undrawn funds 2.0% per annum
On 26 June 2020, the Consolidated Entity entered into a short-term financing agreement with its parent entity, GEAR
to cover the period up until the US$40 million finance facility is finalised and in place. The key terms of this short-term
facility are:
• Facility is a A$10m facility which expires on the earlier of 31 October 2020, or when the US$40m facility agreement is
finalised
•
Interest rate is 8.0% per annum on drawn funds
18
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Outlook and likely developments
Operations
• The current plan, subject to approvals assumes mining at Isaac Plains East with the dragline until the completion of
the Isaac Downs mine development. It is planned that the Isaac Downs development will commence in FY22, with the
dragline moving to Isaac Downs during calendar year 2022.
• Following the on-market takeover by Golden Investments, commercial contracts currently in place are being
renegotiated to ensure the lowest cost structure is secured by the Consolidated Entity given current market conditions.
• The Consolidated Entity will continue to pursue high value coal sales opportunities to expand its customer base as well
as continuing to meet the requirements of its existing customers.
• Of the coal sales made during FY20 1.771Mt was sold to existing customers, with the balance sold to new customers or
to well established coal traders. The Consolidated Entity is continuing to work on selling to new customers and markets
in FY21 where it makes financial sense to do so.
Exploration and development
On 21 August 2020, the Consolidated Entity issued an ASX announcement regarding the increase to the coal resources
and reserves under the relevant Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC code). The total Recoverable Coal Reserves across all tenements formally declared and published are
now 166.7Mt2, and total Marketable Coal Reserves are 130Mt3.
The Consolidated Entity will continue to monitor and assess the opportunities to develop or monetise its existing portfolio
of assets in the Surat Basin and South Bowen Basin and explore acquisition opportunities where it makes financial and
commercial sense to do so.
Managing Risk
The Consolidated Entity is a producing coal group operating in a volatile pricing market. Factors specific to the
Consolidated Entity, or those which impact the market more broadly, may individually or in combination impact the
financial and operating performance of the Consolidated Entity. These events may be beyond the control of the Board
or management of Stanmore Coal.
The major risks associated with an investment in the Consolidated Entity are summarised below. The Consolidated Entity
identifies and actively manages the material risks as part of its risk management governance framework and internal
control systems.
Operating risks
The Consolidated Entity is a single-mine producer and therefore reliant on continued performance of operations at the
Isaac Plains Complex. There are numerous operating risks which may result in a reduction in performance that decreases
the Consolidated Entity’s ability to produce high quality coal to meet customer shipping needs. The risks include, but are
not limited to, factors such as weather conditions, machinery failure, critical infrastructure failure or natural disasters.
Market risks
The key drivers for the business’s financial performance are commodity price and foreign currency markets. The
Consolidated Entity is not of a size to have influence on coal prices or the exchange rate for Australian Dollars and is
therefore a price-taker in general terms.
The Consolidated Entity sells export coal in United States Dollars and is therefore exposed to movements in currency
rates. The Consolidated Entity may from time to time use forward exchange contracts to hedge a portion of its short-term
currency risk where agreed appropriate between management and the Board. The market price for Stanmore Coal’s
coking coal and thermal coal products is impacted by many factors which could be favourable or unfavourable for the
Consolidated Entity.
2
3
Represented by Proved 31.6Mt and Probable 135.1Mt. Mr Mark McKew, Mr Tony O’Connel, Mr Richard Hoskings and Mr Michael Barker, “2020 Annual Coal
Resources and Reserve Summary”, ASX 21 August 2020
Represented by Proved 22.8Mt and Probable 107.2Mt. Mr Mark McKew, Mr Tony O’Connel, Mr Richard Hoskings and Mr Michael Barker, “2020 Annual Coal
Resources and Reserve Summary”, ASX 21 August 2020
19
Stanmore Coal Annual Report 2020 Outlook and likely developments (continued)
Geological risk
Resource and Reserve estimates are prepared by external experts in accordance with the JORC Code 2012 or JORC
Code 2004 (as applicable) for reporting. The estimates are inherently subjective in some respects therefore there is a risk
that the interpretation of data may not align with the future experienced conditions in the field. Due care is taken with
each estimation.
Regulatory and land access risk
The Consolidated Entity’s operations and projects are subject to State and Federal laws and regulations regarding mining,
environmental protection, land access and native title. These laws and regulations regulate the conduct of mining
operations, set requirements in relation to landholder compensation, environmental protection and certain aspects of
health, and provide for penalties and other consequences for the breach of such laws.
There is also an obligation to rehabilitate areas impacted by mining activities, including the Consolidated Entity providing
financial assurances in respect of the likely costs and expenses that may be incurred when taking action to rehabilitate
areas impacted by mining activities. The Mineral and Energy Resources (Financial Provisioning) Act 2018 has changed
the method by which such financial assurance is calculated but the cost of this change to the Consolidated Entity has
not been material.
In order to undertake exploration and production activities, it is first necessary to apply for and obtain necessary government
permits, leases and approvals that authorise such activities. To secure such exploration and mining approvals, or to
undertake activities within the area of a granted mining tenement, native title, land access and overlapping tenure
are matters that need to be addressed.
The Consolidated Entity seeks to develop strong, long-term effective relationships with landholders and other
stakeholders, with a focus on developing mutually acceptable compensation and access arrangements. The
Consolidated Entity seeks to minimise these risks by conducting its activities in an environmentally responsible manner,
in accordance with applicable laws and regulations. In addition, the Consolidated Entity engages experienced lawyers,
consultants and other technical advisors to provide expert advice where necessary to ensure it manages its compliance
obligations appropriately.
Climate Change risk
The Consolidated Entity acknowledges climate change. The Consolidated Entity seeks to be proactive and investigate
opportunities for benefits commensurate with the size of the Consolidated Entity to be delivered.
The Consolidated Entity includes business and operational risks associated with changes caused by global warming as
part of its business planning cycle.
The operations of the Consolidated Entity are focused on the production of coal for steel making. There remains no
viable alternative to metallurgical coal for steel making. The Consolidated Entity puts significant focus on minimising its
environmental footprint and is continually exceeding its obligations in terms of rehabilitation.
The Consolidated Entity supports Australia’s commitments under the Paris Agreement to work towards a global
agreement to limit global warming to below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the
temperature increase even further to 1.5 degrees Celsius. The Consolidated Entity abides by any legislative requirements
imposed, but also continues to improve greenhouse gas efficiency as part of our operations.
20
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Indigenous Engagement
As part of the Isaac Downs approval process it was recognised that increased collaboration was required with the
traditional owners of the land on which the Consolidated Entity operates.
Through a process of facilitation and recognition of the need for reconciliation, the Consolidated Entity is dedicated to
developing a working and collaborative relationship with the Barada Barna people, who are the traditional owners of the
land that the Consolidated Entity operates. The Consolidated Entity has committed to developing a Reconciliation Action
Plan working committee. This process will not only strengthen ties with the Barada Barna people but pave the way for true
reconciliation within the broader meaning.
The Consolidated Entity and the Barada Barna people have developed a Native Title Consent Agreement and reviewed
a Cultural Heritage Management Plan. Further, the Consolidated Entity aims to facilitate and implement a Reconciliation
Action Plan process that develops long-term strategies including increasing Indigenous employment and business
opportunities which will enable the Barada Barna people to become more involved in the Consolidated Entity and
encourage a strong working relationship between both parties.
Safety
Safety remains of critical importance in the planning, organisation and execution of the Consolidated Entity’s exploration
and operational activities. The Consolidated Entity is committed to providing and maintaining a working environment in
which its employees are not exposed to hazards that will jeopardise an employee’s health and safety, or the health and
safety of others associated with our business.
Sovereign risk
The Consolidated Entity has limited influence over the direction and development of government policy. Successive
changes to the Australian resources policy, including taxation policy, have impacted Australia’s global competitiveness
and reduced the attractiveness of Australian coal projects to foreign investors. The Consolidated Entity’s view is coking
coal is critical for future steel production and thermal coal will continue to play a key role in the global energy mix as part
of sustaining global growth, particularly in developing regions, through efficient electricity generation.
Access to capital
At 30 June 2020, the Consolidated Entity remains well funded with cash reserves and a at call working capital facility
expected to be sufficient to meet the business’s operating costs. The Consolidated Entity’s ability to effectively continue
as a coal producing business may be dependent upon several factors including the success of the mine operations, or
the successful exploration and subsequent development of the Consolidated Entity’s tenements. Should these avenues
be delayed or fail to materialise, the Consolidated Entity may need to raise additional funding through debt, equity or
farm out/sell down to allow the Consolidated Entity to continue as a going concern and meet its debts as and when they
fall due.
There is no guarantee that additional funding through debt will be available, or if it is, there is no guarantee that such
new funding will be on terms acceptable to the Consolidated Entity. Global credit markets have been severely constrained
in the past, and the ability to obtain new funding or refinance may in the future be significantly reduced. Increasingly,
financial institutions have made public statements in relation to their unwillingness to finance certain types of coal mines
and coal-fired power stations.
Following the on-market takeover by Golden Investments, the Consolidated Entity has been able to access funding
through GEAR. See details of the debt refinance on page 18 of this report. At the time of this report GEAR has a credit
rating of B1 by rating agency Moody’s and B+ by rating agency Fitch. This has reduced the risk that the Consolidated Entity
may not have access to capital. Any present risk is still being actively monitored by the Consolidated Entity.
If the Consolidated Entity is unable to obtain sufficient funding, either due to banking and capital market conditions
generally, or due to factors specific to the coal sector, the Consolidated Entity may not have sufficient cash to meet
its ongoing capital requirements or the ability to expand its business.
There is a risk that the policies of financial institutions with respect to the funding of coal projects may, in the future,
extend to an unwillingness to provide insurance products to coal producers and associated companies on terms that
are currently being provided to such companies. This could result in a material increase in the cost to Stanmore Coal
of obtaining appropriate levels of insurance.
21
Stanmore Coal Annual Report 2020 REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Director of Stanmore Coal Limited and its
controlled entities, and for the Company’s Key Management Personnel (“KMP”). KMP are defined as those persons who
have the authority and responsibility for planning, directing and controlling the activities of the Consolidated Entity.
The Consolidated Entity’s KMP during the year were:
Details of key management personnel
Directors
Dwi Suseno
Non-Executive Director
Non-Executive Chairman
Marcelo Matos
Non-Executive Director
(Appointed 15 May 2020)
(Appointed 15 May 2020)
(Appointed 27 November 2019)
(Resigned 31 August 2020)
Executive Director and Interim Chief Executive Officer
(Appointed 31 August 2020)
Jimmy Lim
Mark Trevan
Mary Carroll
Non-Executive Director
Non-Executive Director
Non-Executive Director
Richard Majlinder
Non-Executive Director
Stewart Butel
Non-Executive Director
Non-Executive Chairman
Dan Clifford
Managing Director
Stephen Bizzell
Non-Executive Director
Neal O’Connor
Non-Executive Director
Darren Yeates
Non-Executive Director
Senior management
Craig McCabe
Chief Executive Officer
Bernie O’Neill
General Manager Operations
Jon Romcke
General Management Development
(Appointed 23 October 2019)
(Appointed 18 May 2020)
(Appointed 15 May 2020)
(Appointed 15 May 2020)
(Resigned 15 May 2020)
(Resigned 15 May 2020)
(Resigned 22 November 2019)
(Resigned 15 May 2020)
(Resigned 15 May 2020)
(Resigned 5 February 2020)
(Appointed 1 April 2020)
(Resigned 31 August 2020)
Current Appointee
Current Appointee
Interim Chief Executive Officer
(18 October 2019 – 31 March 2020)
Frederick Kotzee
Interim Chief Financial Officer
Chief Financial Officer
Brendan Schilling
Group Manager Marketing and Logistics
Ian Poole
Chief Financial Officer
Company Secretary
(Appointed 2 June 2020 –
20 September 2020)
(Appointed 21 September 2020)
(Appointed 15 July 2019)
(Redundant 15 September 2020)
(Resigned 26 June 2020)
(Resigned 16 June 2020)
22
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Remuneration policy overview
The Consolidated Entity’s business strategy of managing an operating coal business can only be achieved by identifying
and retaining high calibre employees with appropriate experience and capability. Developing an appropriate compensation
strategy for the Consolidated Entity’s employees is a key factor in ensuring employees are engaged and motivated to
improve the Consolidated Entity’s performance over the long term. The Board’s intention is to maximise stakeholder
benefit by the retention of a high-quality Board and executive team without creating an undue cost burden for the
Consolidated Entity.
The Board regularly reviews the appropriateness of employees’ fixed compensation considering the Consolidated Entity’s
cost structure and the practices of its peers.
The following describes the Consolidated Entity’s remuneration arrangements for KMP.
Fixed remuneration
Chief Executive Officer and senior management remuneration
The Consolidated Entity aims to reward the Chief Executive Officer and senior management with a base level of
remuneration which is both appropriate to the position and competitive in the market. Fixed remuneration is reviewed
annually by the Remuneration and Nominations Committee and the Board. The Chief Executive Officer reviews all senior
management performance and remuneration and then makes recommendations to the Remuneration and Nominations
Committee. The Remuneration and Nominations Committee reviews the performance and remuneration of the
management team.
The process consists of a review of Company and individual performance, relevant comparative remuneration both in the
market and internally, and where appropriate, external advice on policies and remuneration practices.
Non-Executive Director fixed remuneration
The Board seeks to set aggregate remuneration at a level which provides the Consolidated Entity with the ability to attract
and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Constitution of Stanmore Coal Limited and the ASX Listing Rules specify that the Non-Executive Directors are entitled
to remuneration as determined by the Company in a general meeting to be apportioned among them in such manner as
the Directors agree and, in default of agreement, equally. The maximum aggregate remuneration currently determined by
Stanmore Coal Limited shareholders is $750,000 (FY19: $500,000) per annum.
The Non-Executive Director’s fee is $50,000 per annum (FY19 $65,000). Committee fees are also paid to the Chairman of
the committee of $10,000 per annum and membership of the committee of $5,000 per annum. The maximum aggregate
of the fees paid is within the shareholder annual agreed limit.
Total Non-Executive Director remuneration for FY20 was $512,242 (FY19 $439,232) including additional remuneration of
$111,127 in aggregate for additional work undertaken as result of and in connection with the takeover offer.
A Non-Executive Director is entitled to be paid travel and other expenses properly incurred by them in attending Directors’
or general meetings of Stanmore Coal Limited or otherwise relating to the business of the Consolidated Entity.
The fixed remuneration of Non-Executive Directors for the year ending 30 June 2020 is detailed in this
Remuneration Report.
Short-term and long-term incentive plan structures
The Board considers that the use of Short-Term Incentives (STI) and Long-Term Incentives (LTI) are a reasonable means
of remunerating Senior Management, on the basis that they:
• encourage Senior Management to drive toward the realisation of shareholder value
• provide flexibility to the Company to actively manage the way in which it remunerates and incentivises
Senior Management
• preserve the Company’s cash resources
• contribute to the attraction and retention of skilled talent in a competitive market.
23
Stanmore Coal Annual Report 2020 Fixed remuneration (continued)
STI and LTI’s were provided in FY20 for KMP. The STI rewards KMP based on key performance outcomes associated
with mining at the Isaac Plains Complex except for the General Manager Development whose KPIs align to key business
development activities which are more aligned to the role. The STI thresholds are set between 0% representing the
minimum STI performance and 52% of base salary, representing the Stretch performance that can be achieved. The
award structure is based on a mix of financial and non-financial performance conditions aligned to the Consolidated
Entity’s strategy.
The LTI plan contains links to the Stanmore Coal Absolute Shareholder returns with Performance Rights issued with a
three-year measurement period for KMP that qualify under the LTI plan rules. The LTI Rights eligible for vesting are set
between 0% (threshold) and 100% (Stretch).
The change of control provisions within both the STI and LTI plans were triggered when Golden Investments reached a
holding of 51% on 2 April 2020 following the announcement of the on-market takeover. As a result, on 17 April 2020 the
STI was partially paid out to eligible employees on a pro-rata basis up to the date at which the change of control occurred.
The balance of the STI was paid to eligible employees in August 2020.
For the LTI plan, the Board exercised its discretion in relation to the Rights currently on issue at the time the change of
control occurred and made the following decisions;
(a) to vest 100% of the Rights granted in FY18 under the Plan Rules;
(b) in the case of the Rights granted in FY19 under the Plan Rules;
(i) to vest 50% of the Rights granted
(ii) to allow the balance (50%) of the Rights granted not to lapse and instead to survive the change of control and vest
if the relevant vesting criteria for those Rights are satisfied in accordance with the terms of the initial grant.
(c) in the case of the Rights granted in FY20 under the Plan Rules
(i) to vest 50% of the Rights granted
(ii) to allow 25% of the Rights granted to lapse immediately
(iii) to allow the balance (25%) of the Rights granted not to lapse and instead to survive the change of control and vest
if the relevant vesting criteria for those Rights are satisfied in accordance with the terms of the initial grant.
Following the change of control, the Board is reviewing the current STI and LTI plans currently on foot to ensure they align
to the Consolidated Entity’s strategy.
Incentive outcomes for FY20 and FY19
The incentive outcomes for the STI and LTI schemes are below.
Short term incentive
Incentive
Award structure
FY20 STI
Preconditions
• Zero fatalities
• Company can fund STI
Based on multiple key performance indicators
• TRIFR
• Prime overburden
• Product Tonnes
• Sales Tonnes
• Underlying FOB costs
• Balanced Business Plan.
24
Outcome/discussion
Preconditions (achieved)
• Zero fatalities
• Company can fund STI
The key performance indicators were met
to varying levels resulting in a total accrued
payout percentage of 77%. All KMP met
eligibility requirements. FY20 STI amounts are
highlighted below.
The FY20 STI was paid out to eligible employees
on a pro-rata basis as a result of the Change of
Control triggered by the Golden Investments on-
market takeover. The balance of the FY20 STI will
be paid in August 2020.
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020
Incentive
Award structure
FY19 STI
Preconditions
• Zero fatalities
• Company can fund STI
Based on multiple key performance indicators
• TRIFR
• Prime overburden
• Product Tonnes
• Underlying FOB costs
• Balanced Business Plan
• Development targets.
Outcome/discussion
Preconditions (achieved)
• Zero fatalities
• Company can fund STI
The key performance indicators were met to
varying levels resulting in a total accrued payout
percentage of 86%. All KMP met eligibility
requirements. FY19 STI amounts are highlighted
below and were paid out during FY20.
In FY20 all KMP were entitled to a payment under the STI scheme. During FY20, the FY20 STI was paid out to eligible
KMP on a pro-rata basis. This payout was triggered as a result of the change of control of the Consolidated Entity following
the on-market takeover by Golden Investments. The balance of the FY20 is still outstanding at 30 June 2020 was paid in
August 2020. The FY19 STI was paid out during FY20 to those KMP entitled to a payment.
Maximum STI
FY20
Maximum STI
FY19
% of Base
salary
Max.
amount
$
Awarded
$
% of Base
salary
% of Base
salary
Max.
amount
$
Awarded
$
% of Base
salary
Craig McCabe1
Bernie O’Neill
Jon Romcke
Brendan Schilling2
Dan Clifford3
52%
39%
39%
30%
–
60,120
48,280
134,550
108,842
134,550
108,842
72,131
58,581
–
–
42%
32%
32%
24%
–
–
39%
39%
–
–
–
126,855
101,000
124,612
112,000
–
–
39%
224,120
202,000
39%
Ian Poole4
1 Started 1 April 2020, pro-rata STI paid based on start date
2 Started 15 July 2019, pro rata STI paid based on start date
3 Resigned 22 November 2019, not eligible for STI payment
4 Resigned 26 June 2020, pro-rata STI payment made in May 2020 as a result of the change of control of the Company. No further STI paid
130,650
105,000
136,937
81,977
39%
23%
–
31.1%
35.1%
–
46.9%
31.3%
Long term incentive
Incentive
Award structure
Outcome/discussion
FY20 LTI
LTI is based on the Absolute Shareholder Total
Return (ASTR) with price targets resulting in the
LTI benefits potentially vesting two financial years
after the relevant remuneration year.
Rights are issued annually with measurement
periods of three years, total Rights issued are
based on the performance target tested at the end
of three years i.e. FY22. In the event that no rights
become eligible to vest at the end of three years,
the Rights may be retested for vesting after four
years (FY23) subject to the escalated performance
target. Further details regarding the LTI plan are
shown below.
During FY20, Rights were granted to KMP as
outlined below to: Ian Poole, Bernie O’Neill,
Jon Romcke and Brendan Schilling.
Following the change of control triggered by the
on-market takeover by Golden Investments on
2 April 2020, the Board exercised its discretion
and vested 50% of the Rights issued. 25% of the
Rights that did not vest, are subject to the existing
vesting conditions and the remaining 25% of
Rights lapsed. The Rights that vested were paid
in Shares.
25
Stanmore Coal Annual Report 2020
Fixed remuneration (continued)
Incentive
Award structure
Outcome/discussion
FY19 LTI
FY18 LTI
LTI is based on the Absolute Shareholder Total
Return (ASTR) with price targets resulting in the
LTI benefits potentially vesting two financial years
after the relevant remuneration year.
Rights are issued annually with measurement
periods of three years, total Rights issued are based
on the performance target tested at the end of three
years i.e. FY21. In the event that no rights become
eligible to vest at the end of three years, the Rights
may be retested for vesting after four years (FY22)
subject to the escalated performance target. Further
details regarding the LTI plan are shown below.
LTI is based on the Absolute Shareholder Total
Return (ASTR) with price targets resulting in the
LTI benefits potentially vesting two financial years
after the relevant remuneration year.
Rights are issued annually with measurement
periods of three years, total Rights issued are
based on the performance target tested at the end
of three years i.e. FY20. In the event that no rights
become eligible to vest at the end of three years,
the Rights may be retested for vesting after four
years (FY21) subject to the escalated performance
target. Further details regarding the LTI plan are
shown below.
During FY19, Rights were granted to KMP as
outlined below to: Dan Clifford, Ian Poole, Bernie
O’Neill and Jon Romcke.
Following the change of control triggered by the
on-market takeover by Golden Investments on
2 April 2020, the Board exercised its discretion
and vested 50% of the Rights issued. The balance
of the Rights that did not vest, are subject to the
existing vesting conditions. The Rights that vested
were paid in Shares.
During FY18, Rights were granted to KMP as
outlined below to: Dan Clifford, Ian Poole, Bernie
O’Neill and Jon Romcke.
Following the change of control triggered by the
on-market takeover by Golden Investments on
2 April 2020, the Board exercised its discretion
and vested 100% of the Rights. The Rights that
vested were paid in Shares.
As a result of the Board exercising its discretion in relation to the Rights outstanding on 1 April 2020, the day immediately
before the change of control, a modification under AASB 2 Share Based Payments was triggered. This modification
required the Rights that vested as a result of the change in control to be revalued immediately before the change of
control and any value increase between the revalued amount and the share price on the day of modification be recognised
in the Statement of Profit or Loss and Other Comprehensive Income.
The performance conditions attached to the Rights were unchanged. The performance conditions for the Rights are
referenced on page 27 – 28 of this report.
This modification had the following impact to the Statement of Profit or Loss and other Comprehensive Income.
Tranche
Exercise
Price
Vesting
No. of rights Modification
FY18
FY19
FY19
FY20
FY20
FY20
$0.00
2-Apr-20
1,506,488 100% of the rights vested
$0.00
2-Apr-20
332,884 50% of the rights vested
$0.00
31-Jul-21
332,883 50% of the Rights did not vest
$0.00
2-Apr-20
254,596 50% of the rights vested
$0.00
-
127,298 25% of the rights lapsed
$0.00
31-Jul-22
127,298 25% of the Rights that did not
Fair
Value1
0.28
0.15
N/A
0.13
N/A
N/A
vest
2,681,447
Share
price2
Impact on
profit and loss
0.96
0.96
N/A
0.96
N/A
N/A
1,024,412
269,636
-
211,315
-
-
1,505,363
1 The fair value is the accounting valuation of the Rights on the day immediately before change of control occurred
2 The closing share price following change of control on 2 April 2020
26
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 During FY20 509,192 rights were granted to KMP. The FY20 rights were granted at the maximum amount issuable if stretch
targets are reached, all rights will be payable as cash or shares as decided by the Board upon vesting. 308,971 (FY19 and
FY20) rights remain on issue at 30 June 2020.
Key Management
Personnel1
FY
# of rights
Vesting
date2
Target %
Bernie O’Neill
Jon Romcke
FY20
FY19
FY20
FY19
36,342
30/06/2022
110,510
30/06/2021
36,342
30/06/2022
108,556
30/06/2021
Brendan Schilling FY20
17,221
30/06/2022
Total
308,971
30%
30%
30%
30%
30%
Salary
package
value at
Stretch3
$207,000
$195,161
$207,000
$191,711
$150,000
Price4
$1.42
$0.88
$1.42
$0.88
$1.42
Value of
Rights5
Total
Value
$0.37
$0.45
$0.37
$0.45
$0.37
$13,447
$49,730
$13,447
$48,850
$6,372
1 KMP employed as at 30 June 2020 and have Rights outstanding
2 Retest available after 12 months if no Rights have vested on vesting date
3 Stretch target based on 2 x Target %
4 Based on the 10-day VWAP of shares in the 24 hours following the release of the annual results
5 Accounting value of shares issued
Below is a summary of the performance conditions for vesting for Tranche 4 (FY20) Rights granted:
Performance Level
Stretch
Between Target and stretch
Target
Between Threshold and Target
Threshold
Below Threshold(d)
(a) Absolute Total Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY23 at CAGR
ATSR (a) of SMR (b)
CAGR (c)
% of Stretch/
Maximum Vesting
Jun 22 Share Price
for vesting
20.00%
>15.00%<20.00%
15.00%
>10.00%<15.00%
10.00%
<10.00%
100.00%
Pro-rata
50.00%
Pro-Rata
0%
0%
$2.46
Pro-Rata
$2.17
Pro-Rata
$1.90
$0.00
Below is a summary of the performance conditions for vesting for Tranche 3 (FY19) Rights granted:
Performance Level
Stretch
Between Target and stretch
Target
Between Threshold and Target
Threshold
Below Threshold(d)
(a) Absolute Total Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY22 at CAGR
ATSR (a) of SMR (b)
CAGR (c)
% of Stretch/
Maximum Vesting
Jun 21 Share Price
for vesting
36.24%
>26.23%<36.24%
26.23%
>14.33%<26.23%
14.33%
<14.33%
100.00%
Pro-rata
50.00%
Pro-Rata
0%
0%
$2.20
Pro-Rata
$1.75
Pro-Rata
$1.30
$0.00
27
Stanmore Coal Annual Report 2020
Fixed remuneration (continued)
Below is a summary of the performance conditions for vesting for Tranche 2 (FY18 rights) granted:
Performance Level
Stretch
Between Target and stretch
Target
Between Threshold and Target
Threshold
Below Threshold(e)
(a) Absolute Total Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY21 at CAGR
ATSR (a) of SMR (b)
CAGR (c)
% of Stretch/
Maximum Vesting
Jun 20 Share Price
for vesting
52.86%
>39.49%<52.86%
39.49%
>22.92% <39.49%
22.92%
<22.92%
100.00%
Pro-rata
50.00%
Pro-Rata
0%
0%
$1.25
Pro-Rata
$0.95
Pro-Rata
$0.65
$0.00
In relation to the Rights, one retest is available 12 months after the end of the measurement period only if no vesting
occurred in relation to the first test following the completion of the measurement period.
The Consolidated Entity does not intend to issue more than an aggregate of 5% of its share capital, from time to time,
under the LTI plans.
General incentive and remuneration consultants
From time to time, the Remuneration and Nominations Committee seeks and considers advice from external advisors who
are engaged by and report directly to the Remuneration and Nominations Committee. Such advice will typically cover Non-
Executive Director fees, Executive KMP remuneration and advice in relation to equity plans.
The Corporations Act requires companies to disclose specific details regarding the use of remuneration consultants. The
mandatory disclosure requirements only apply to those advisers that provide a ‘remuneration recommendation’ as defined
in the Corporations Act.
During FY20 the Remuneration and Nominations Committee received recommendations from Godfreys. These
recommendations were received free from undue influence from any affected KMP, and the Directors ensured this
by engaging the consultant independent of any affected KMP. In addition, the recommendation and outcomes were
not discussed or influenced by any KMP’s with the remuneration consultant. The cost of services associated with the
recommendation made by the remuneration consultant totalled $16,000 (FY19 $9,100).
Relationship between remuneration and company performance
Performance Measure
2020
2019
2018
Revenue ($M)
364.485
403.059
208.081
Profit/(loss) attributable to the Group ($M)
Share Price at year end ($/share)
Basic EPS (c/Share)
Diluted EPS (c/Share)
Shareholder dividends paid (c/share)
34.893
$0.78
13.2
13.2
11.0
91.598
$1.425
35.1
35.6
5.0
5.966
$0.87
2.4
2.3
–
2017
137.846
12.035
$0.34
5.1
5.1
–
2016
12.700
(19.746)
$0.28
(8.9)
(8.9)
–
It is the Board’s policy that employment contracts or consultancy agreements are entered into with all Non-Executive
Directors and senior management.
Contracts do not provide for pre-determining compensation values or method of payment. Rather portions of
compensation are discretionary STI and LTI plan awards that are determined by the Remuneration and Nominations
Committee and the Board in accordance with the Company’s remuneration policies.
All other employment contracts or consultancy agreements have either six or three-month (or lower) notice periods.
No current employment contracts contain early termination clauses. All Non-Executive Directors have received letters
outlining the key terms of their appointment. The contracts have no specified duration.
28
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 KMP are entitled to their statutory entitlements of accrued annual leave and long service leave together with statutory
superannuation on termination.
Interim Chief Executive Officer
Stanmore Coal Limited has an Executive Service Agreement (ESA) with Mr Marcelo Matos for the position of Interim Chief
Executive Officer which commenced on 31 August 2020. From commencement date Mr Matos’ base remuneration is
$530,000 per annum plus statutory superannuation. The ESA provides for termination by either party by providing three
month’s written notice, or immediately in the case of serious misconduct or bankruptcy.
Mr Matos is eligible to participate in the STI and LTI schemes. Under the ESA, the maximum annual STI is 52% (Stretch) of
base remuneration. The maximum annual LTI is 60% of base remuneration at Target performance and a further 60% of base
remuneration at Stretch performance. Detail of instruments issued under the LTI scheme are provided on page 25 of this report.
Chief Executive Officer (resigned 31 August 2020)
Stanmore Coal Limited has an Executive Service Agreement (ESA) with Mr Craig McCabe for the position of Chief
Executive Officer which commenced on 1 April 2020. For FY20 Mr McCabe’s base remuneration is $465,000 per annum
plus statutory superannuation. The ESA provides for termination by either party by providing six month’s written notice,
or immediately in the case of serious misconduct or bankruptcy. On 31 August 2020, Mr McCabe resigned from his position
and finishes with the Company on 30 September 2020.
Prior to his resignation, Mr McCabe was eligible to participate in the STI and LTI schemes. For FY20, the maximum annual
STI is 52% (Stretch) of base remuneration. As a result of Mr McCabe’s start date, he was not eligible to participate in the
FY20 LTI scheme.
Senior management
General Manager Operations
Stanmore Coal Limited has an Executive Services Agreement (ESA) with Mr Bernie O’Neill for the position of General
Manager – Operations which commenced on 1 April 2017. For FY20 Mr O’Neill received a base remuneration of $345,000
(FY19 $325,269) per annum plus statutory superannuation. The ESA provides for termination by either party by providing
three month’s written notice, or immediately in the case of serious misconduct or bankruptcy.
Mr O’Neill is eligible to participate in the STI and LTI schemes. The maximum annual STI is 39% (Stretch) of base remuneration
and the maximum annual LTI is 30% of base remuneration at Target performance and a further 30% of base remuneration at
Stretch performance. Detail of instruments issued under the LTI scheme are provided on page 25 of this report.
General Manager Development
Stanmore Coal Limited has an Executive Services Agreement (ESA) with Mr Jon Romcke for the position of General
Manager Development which commenced on 21 August 2017. For FY20 Mr Romcke received a base remuneration of
$345,000 (FY19 $319,518) per annum plus statutory superannuation. The ESA provides for termination by either party by
providing three month’s written notice, or immediately in the case of serious misconduct or bankruptcy. Following the
resignation of the former Managing Director, Mr Dan Clifford, Mr Romcke held the role of Interim Chief Executive Officer
between October 2019 and March 2020. During this time, Mr Romcke’s base remuneration was $445,000 per annum.
Mr Romcke is eligible to participate in the STI and LTI schemes. The maximum annual STI is 39% (Stretch) of base remuneration
and the maximum annual LTI is 30% of base remuneration at Target performance and a further 30% of base remuneration
at Stretch performance. Detail of instruments issued under the LTI scheme are provided on page 25 of this report.
Group Manager Marketing and Logistics
Stanmore Coal Limited has an Employment Contract with Mr Brendan Schilling for the position of Group Manager
Marketing and Logistics which commenced on 15 July 2019. For FY20 Mr Schilling received a base remuneration of
$250,000 (FY19 $nil) per annum plus statutory superannuation contributions. On 15 September 2020, Mr Schilling was
made redundant from this position and is no longer working for Stanmore Coal Limited.
Prior to his redundancy, Mr Schilling was eligible to participate in the STI and LTI schemes. The maximum annual STI is
30% (Stretch) of base remuneration and the maximum annual LTI is 20% of base remuneration at Target performance
and a further 30% of base remuneration at Stretch performance. Detail of instruments issued under the LTI scheme are
provided on page 25 of this report.
29
Stanmore Coal Annual Report 2020 Senior management (continued)
Chief Financial Officer
Stanmore Coal Limited has an Executive Service Agreement (ESA) with Mr Frederick Kotzee for the position of Chief
Financial Officer which commenced on 21 September 2020. Under this ESA, Mr Kotzee receives a remuneration package of
$380,000 per annum plus statutory superannuation. At the signing of the ESA, Mr Kotzee also received a one-off payment
of $80,000 which related to his position as Interim Chief Financial Officer.
Mr Kotzee is eligible to participant in the STI and LTI schemes. The maximum annual STI is 39% (Stretch) of his remuneration package
and the maximum annual LTI is 30% of his remuneration package at Target performance and a further 30% of his remuneration
package at Stretch performance. Details of the instruments issued under the LTI scheme are on page 25 of this report.
Remuneration Details
The following tables detail the components of remuneration for KMP of the Company, for both 30 June 2020 and 30 June 2019.
2020
DIRECTORS
Dwi Suseno1
Jimmy Lim2
Marcelo Matos3
Mark Trevan4
Mary Carroll5
Richard Majlinder5
Steward Butel6
Dan Clifford7
Stephen Bizzell6
Neal O’Connor6
Darren Yeates8
TOTAL
SENIOR MANAGEMENT
Craig MacCabe9
Bernie O’Neill
Jon Romcke
Brendan Schilling10
Frederick Kotzee11
Ian Poole12
TOTAL
Total Director and senior
management remuneration
Short-term benefits
Post-Employment
Share based payments
Salary and Fees
$
Cash Bonus
$
Other Short-term
benefits
$
Other Non-cash
benefits
$
Superannuation
Benefits
(options)
(Shares)
(Rights)
Termination
Equity settled
Equity Settled
Cash Settled
$
$
Total
$
Performance
related
%
-
47,526
39,764
6,744
5,796
7,533
88,304
199,273
69,893
66,316
47,816
578,965
116,250
345,000
345,000
247,115
29,505
352,269
1,435,139
2,014,104
-
-
18,265
-
-
-
32,842
-
30,000
24,566
-
105,673
48,280
108,842
108,842
58,581
-
81,977
406,522
512,195
-
-
-
-
-
-
-
-
-
-
-
-
-
51,750
51,750
-
-
53,250
156,750
156,750
-
-
-
-
-
-
-
2,612
-
-
-
2,612
1,650
-
6,600
-
-
6,600
14,850
17,462
$
-
-
5,294
481
417
542
11,509
10,501
8,634
-
-
6,610
21,003
21,003
21,003
2,803
21,003
93,425
130,803
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,976
3,976
15,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
647,714
586,507
49,326
701,441
1,984,988
1,661,954
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
47,526
63,323
7,225
6,213
8,075
132,655
(98,667)
99,893
99,516
47,816
413,575
172,790
1,174,309
1,119,702
376,025
32,308
1,220,516
4,095,650
4,509,225
29%
25%
30%
25%
28%
64%
62%
29%
64%
11,981
(323,034)
37,378
11,981
(323,034)
1
appointed 15 May 2020. Mr Suseno is a nominee from Golden
Investments and is not paid by the Consolidated Entity
2 appointed 23 October 2019
3 appointed 27 November 2019
4 appointed 18 May 2020
5 appointed 15 May 2020
resigned 15 May 2020
6
30
resigned 22 November 2019
resigned 6 February 2020
7
8
9 appointed 1 April 2020, resigned 31 August 2020
10 appointed 15 July 2020
11 appointed 2 June 2020
12 resigned 26 June 2020
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Remuneration Details
The following tables detail the components of remuneration for KMP of the Company, for both 30 June 2020 and 30 June 2019.
2020
DIRECTORS
Dwi Suseno1
Jimmy Lim2
Marcelo Matos3
Mark Trevan4
Mary Carroll5
Richard Majlinder5
Steward Butel6
Dan Clifford7
Stephen Bizzell6
Neal O’Connor6
Darren Yeates8
TOTAL
Craig MacCabe9
Bernie O’Neill
Jon Romcke
Brendan Schilling10
Frederick Kotzee11
Ian Poole12
TOTAL
SENIOR MANAGEMENT
Total Director and senior
management remuneration
$
-
47,526
39,764
6,744
5,796
7,533
88,304
199,273
69,893
66,316
47,816
578,965
116,250
345,000
345,000
247,115
29,505
352,269
1,435,139
2,014,104
$
-
-
18,265
-
-
-
-
-
-
32,842
30,000
24,566
105,673
48,280
108,842
108,842
58,581
81,977
406,522
512,195
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51,750
51,750
53,250
156,750
156,750
$
-
-
-
-
-
-
-
-
-
-
-
-
-
2,612
2,612
1,650
6,600
6,600
14,850
17,462
Prior to his position of Chief Financial Officer, Stanmore Coal Limited had a fixed term Employment Contract with Mr Kotzee
for the position of Interim Chief Financial Officer which commenced on 2 June 2020. Under this contract, Mr Kotzee
received a base remuneration of $355,000 per annum plus statutory superannuation and accommodation support.
He was also eligible for a one-off payment, subject to Board discretion of up to $80,000 following the completion of
his contract. This was paid to Mr Kotzee upon his commencement of Chief Financial Officer.
Short-term benefits
Post-Employment
Share based payments
Salary and Fees
Cash Bonus
benefits
benefits
Other Short-term
Other Non-cash
Superannuation
$
Termination
Benefits
$
Equity settled
(options)
$
Equity Settled
(Shares)
$
Cash Settled
(Rights)
Total
$
Performance
related
%
-
-
5,294
481
417
542
11,509
10,501
-
8,634
-
-
-
-
-
-
-
-
11,981
-
-
-
37,378
11,981
6,610
21,003
21,003
21,003
2,803
21,003
93,425
130,803
-
-
-
-
-
3,976
3,976
15,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(323,034)
-
-
-
(323,034)
-
647,714
586,507
49,326
-
701,441
1,984,988
1,661,954
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
47,526
63,323
7,225
6,213
8,075
132,655
(98,667)
99,893
99,516
47,816
413,575
172,790
1,174,309
1,119,702
376,025
32,308
1,220,516
4,095,650
4,509,225
29%
25%
30%
25%
28%
64%
62%
29%
64%
31
Stanmore Coal Annual Report 2020 Remuneration Details (continued)
Short-term benefits
Post-Employment
Share based payments
Salary and Fees
$
Cash Bonus
$
Other Short-term
benefits
$
Other Non-cash
benefits
$
Superannuation
Benefits
Termination
Equity settled
Equity Settled
(options)
$
(Shares)
$
Performance
related
remuneration
%
95,890
431,000
80,000
74,581
12,096
18,750
29,167
4,615
–
202,000
–
–
–
–
–
–
38,813
71,833
32,500
29,680
–
–
–
–
–
6,600
–
–
–
–
–
–
746,099
202,000
172,826
6,600
335,000
325,269
319,518
979,787
1,725,886
105,000
101,000
112,000
318,000
520,000
55,833
54,212
53,253
163,298
336,124
6,600
–
6,600
13,200
19,800
12,797
20,531
9,905
$
–
–
–
–
438
43,671
20,531
20,531
20,531
61,593
105,264
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
264,213
47%
Total
$
147,500
996,177
112,500
114,166
12,096
18,750
29,167
5,053
–
–
–
–
–
–
–
264,213
1,435,409
97,348
102,434
85,705
285,487
549,700
620,312
603,446
597,607
1,821,365
3,256,774
33%
34%
33%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
DIRECTORS
Steward Butel
Dan Clifford
Stephen Bizzell
Neal O’Connor
Darren Yeates4
Patrick O’Connor1
Chris McAuliffe2
Andrew Martin3
TOTAL
SENIOR MANAGEMENT
Ian Poole
Bernie O’Neill
Jon Romcke
TOTAL
Total Director and senior
management remuneration
resigned 28 September 2018
resigned 7 December 2018
1
2
3 appointed 26 October 2018 and resigned 16 November 2018
4 commenced 27 August 2017
32
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 Remuneration Details (continued)
202,000
6,600
$
95,890
431,000
80,000
74,581
12,096
18,750
29,167
4,615
335,000
325,269
319,518
979,787
1,725,886
$
–
–
–
–
–
–
–
105,000
101,000
112,000
318,000
520,000
benefits
$
38,813
71,833
32,500
29,680
–
–
–
–
55,833
54,212
53,253
163,298
336,124
$
–
–
–
–
–
–
–
–
6,600
6,600
13,200
19,800
746,099
202,000
172,826
6,600
2019
DIRECTORS
Steward Butel
Dan Clifford
Stephen Bizzell
Neal O’Connor
Darren Yeates4
Patrick O’Connor1
Chris McAuliffe2
Andrew Martin3
TOTAL
Ian Poole
Bernie O’Neill
Jon Romcke
TOTAL
SENIOR MANAGEMENT
Total Director and senior
management remuneration
1
2
resigned 28 September 2018
resigned 7 December 2018
3 appointed 26 October 2018 and resigned 16 November 2018
4 commenced 27 August 2017
Short-term benefits
Post-Employment
Share based payments
Salary and Fees
Cash Bonus
benefits
Other Short-term
Other Non-cash
Superannuation
$
Termination
Benefits
$
Equity settled
(options)
$
Equity Settled
(Shares)
$
12,797
20,531
–
9,905
–
–
–
438
43,671
20,531
20,531
20,531
61,593
105,264
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
147,500
996,177
112,500
114,166
12,096
18,750
29,167
5,053
–
264,213
–
–
–
–
–
–
264,213
1,435,409
97,348
102,434
85,705
285,487
549,700
620,312
603,446
597,607
1,821,365
3,256,774
Performance
related
remuneration
%
47%
33%
34%
33%
33
Stanmore Coal Annual Report 2020 Remuneration Details (continued)
CASH BONUSES, PERFORMANCE-RELATED BONUSES AND SHARE-BASED PAYMENTS
For the financial year ending 30 June 2020 the balance of the STI not already paid will be paid on the expected
payment date.
Craig MacCabe1
Bernie O’Neill
Jon Romcke
Brendan Schilling2
Ian Poole3
Maximum STI Cap
$
STI Awarded
$
% of STI
% of STI
forfeit
Expected
payment date
60,120
134,550
134,550
64,250
136,937
48,280
108,842
108,842
58,581
81,977
80%
81%
81%
91%
59%
20%
27 August 2020
19%
19%
9%
41%
27 August 2020
27 August 2020
27 August 2020
-
1 Based on pro-rata earnings from start date 1 April 2020
2 Based on pro-rata earning from start date of 15 July 2019
3 Resigned 26 June 2020, STI awarded reflects payment made following change of control
Current Rights on issue to KMP (FY18, FY19 and FY20) are outlined below.
FY20 Rights
Issued
FY20 Rights
vested
FY20 Rights
forfeited
Net FY20
Rights
145,366
145,366
68,882
149,578
72,683
72,683
34,441
74,789
36,341
36,341
17,220
74,789
36,342
36,342
17,221
-
FY19 Rights
Issued
FY19 Rights
vested
FY19 Rights
forfeited
Net FY19
Rights
585,730
227,633
221,021
113,817
110,511
217,113
108,557
-
585,730
113,817
-
-
-
-
110,510
108,556
FY18 Rights
Issued
FY18 Rights
vested
FY18 Rights
forfeited
Net FY18
Rights
1,105,020
593,410
492,863
420,215
-
1,105,020
593,410
492,863
420,215
-
-
-
-
-
-
-
Bernie O’Neill
Jon Romcke
Brendan Schilling
Ian Poole
Dan Clifford
Ian Poole
Bernie O’Neill
Jon Romcke
Dan Clifford
Ian Poole
Bernie O’Neill
Jon Romcke
34
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020
EQUITY INSTRUMENTS
SHAREHOLDINGS
Details of ordinary shares held directly, indirectly or beneficially by KMP and their related parties are as follows:
Directors
Stewart Butel
Dan Clifford
Stephen Bizzell
Neal O'Connor
TOTAL
Balance at
1 July 2019
Issued under
DRP
Bonus issue
Other1 Balance FY20
Net Change
316,379
513,952
7,377,106
125,204
18,607
13,952
2,304
3,964
9,588
(344,574)
-
(527,904)
2,206
3,795
(7,381,616)
(132,963)
8,332,641
38,827
15,589
(8,387,057)
-
-
-
-
-
Senior management
Bernie O’Neill2
Jon Romcke3
Brendan Schilling
Ian Poole
TOTAL
Balance at
1 July 2019
Granted as
remuneration Bonus issue
Exercise of
Rights
Net Change
Other1
Balance
FY20
300,000
33,583
-
94,614
428,197
1,000
1,000
-
1,000
3,000
71
71
-
71
676,057
(976,024)
601,455
(635,005)
34,441
(34,441)
782,016
(877,701)
1,104
1,104
-
-
142
2,093,969
2,523,171
2,208
1 The net change in shareholding for all KMP relates the sale of shares on market.
2 Shares held indirectly.
3 Shares held directly and beneficially.
There were no shares held nominally at 30 June 2020.
OPTIONS HOLDINGS
The Consolidated Entity had no options on issue at 30 June 2020.
RIGHTS
Details of rights held directly, indirectly or beneficially by KMP and their related parties are as follows:
Opening
balance
Rights
issued
Rights
vested
Rights
Forfeited
Closing
balance
Vesting
FY221
Vesting
FY232
Bernie O’Neill
808,869
145,366
(771,042)
(36,341)
146,852
110,510
Jon Romcke
637,328
145,366
(601,455)
(36,341)
144,898
108,556
Brendan Schilling
-
68,882
(34,441)
(17,220)
17,221
Dan Clifford
2,222,247
-
(531,497)
(1,690,750)
Ian Poole
821,043
145,578
(782,016)
(188,605)
-
-
-
-
-
36,342
36,342
17,221
-
-
4,489,487
505,192
(2,720,451)
(1,969,257)
308,971
219,066
89,905
1
2
Following the on-market takeover by Golden Investments, the Rights granted in FY19 have vested at 50% with the balance subject to relevant vesting
criteria set prior to the change of control.
Following the on-market takeover by Golden Investments, the Rights granted in FY20 have vested at 50% with the 25% lapsed and the remaining 25% to
vest subject to the relevant vesting criteria set prior to the change of control.
35
Stanmore Coal Annual Report 2020 Transactions with Directors and Director-related entities
In July 2019, the Consolidated Entity entered into a commercial agreement with a Director-related entity for the purposes
of leasing some office space. The commercial agreement was for a period of 6 months and the Consolidated Entity paid
market-based rent and a share of outgoings. As at the date of this report, the commercial agreement is no longer in place.
Loans to Key Management Personnel
There were no loans to KMP during the FY20.
End of Remuneration Report (Audited).
Indemnification and insurance of Directors, officers and auditor
Each of the Directors and the Company Secretary of Stanmore Coal Limited have entered into a Deed whereby Stanmore
Coal Limited has provided certain contractual rights of access to books and records of Stanmore Coal Limited to those
Directors and the Company Secretary. Stanmore Coal Limited has insured all the Directors and Executive Officers of
the Consolidated Entity. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and
amount of the premium paid. The Corporations Act does not require disclosure of the information in these circumstances.
Stanmore Coal Limited has not indemnified nor insured its auditor.
Options and Rights
At the date of this report there were nil unissued ordinary shares under options, and 308,971 potential unissued ordinary
shares under Rights as follows:
• 219,066 unlisted Rights vesting subject to various performance hurdles in 2021 or in the event that no vesting at
all occurs, the Rights may be retested vesting in 2022 subject to escalated performance hurdles and other agreed
conditions.
• 89,905 unlisted Rights vesting subject to various performance hurdles in 2022 or in the event that no vesting at
all occurs, the Rights may be retested vesting in 2023 subject to escalated performance hurdles and other agreed
conditions.
No Right holder has any right to participate in any other share issue of Stanmore Coal Limited.
During the year ended 30 June 2020 there were 270,417,381 fully paid ordinary shares in Stanmore Coal Limited on issue,
with 4,325,518 issued under DRP, 2,193,969 issued as part of the vesting of LTIP Rights, 7,788,662 issued as part of the
bonus share issue and 14,994 issued to employees as part of the employee share scheme.
During the year ended 30 June 2020, 509,192 Rights were granted to KMP as part of the Stanmore Coal Limited Rights
Plan. During FY20 there were 1,969,257 Rights forfeited and 2,720,451 vested.
Changes to capital structure
At the date of this report, the Consolidated Entity had 270,417,381 ordinary shares, nil unlisted options and 308,971 Rights
on issue.
Events after reporting date
On 27 July 2020 the Consolidated Entity announced that it has entered into a marketing services agreement with M
Resources Trading Pty Ltd (M Resources). M Resources will exclusively manage the Consolidated Entity’s global sales
contracts and customer relationships, as well securing additional sales to customers. M Resources will be managing sales
for all of the Consolidated Entity’s coal output, including for the Isaac Downs project.
The key terms of the agreement are:
•
initial contract term is for 3 years with an option to extend for an additional 12 months if agreed by both parties
• the contract is a fixed base fee contract with an additional performance based variable fee linked to agreed
performance-based targets.
36
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020 M Resources is an independent Brisbane based marketing services and trading company supported by an experienced
team with a long track record in market development, technical marketing, sales, processing and logistics management.
M Resources and its owner, Matt Latimore are substantial shareholders of the Consolidated Entity, creating a strategic
alignment towards shareholder goals.
On 27 July 2020, the Consolidated Entity announced a change to its accounting period to align accounting periods with
its parent entity, GEAR. The Consolidated Entity will have a 6-month transitional financial period beginning 1 July 2020 and
ending 31 December 2020. The Consolidated Entity will then revert to a financial year period 1 January to 31 December.
On 31 August 2020, Queensland Treasury, as part of the Financial Provisioning scheme assessed the Initial Risk Category
of the Consolidated Entity’s ability to rehabilitate Isaac Plains and Isaac Plains East as Moderate. This risk classification
allows the Consolidated Entity to form part of the Queensland Treasury State Pool in relation to providing financial security
over its future rehabilitation obligations for Isaac Plains and Isaac Plains East. The Consolidated Entity is required to
contribute 2.75% of its estimated rehabilitation costs to the State Pool for this security.
On 31 August 2020, Mr Craig McCabe the Chief Executive Officer of the Consolidated Entity resigned from his position
effective immediately. Mr Marcelo Matos was appointed Interim Chief Executive Officer and Executive Director from this
date. Details of Mr Matos’ appointment can be found in the accompanying Remuneration Report.
No other events have occurred since 30 June 2020.
Rounding
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 and dated 24 March 2016 and, in
accordance with the instrument, all financial information presented in Australian dollars has been rounded to the nearest
thousand unless otherwise stated.
Dividends paid or recommended
A final franked dividend relating to FY19 of 8 cps was paid on 31 October 2019
An interim fully franked dividend relating to H1 FY20 of 3 cps was paid on 30 April 2020
No further dividend has been declared for FY20.
Environmental issues
The Consolidated Entity is subject to environmental regulation in relation to its operating and exploration activities. There
are no material matters that have arisen in relation to environmental issues up to the date of this report.
Proceedings on behalf of the Consolidated Entity
No person has applied for leave of Court to bring proceedings on behalf of the Consolidated Entity or intervene in
any proceedings to which the Consolidated Entity is a party for the purposes of taking responsibility on behalf of
the Consolidated Entity for all or any part of those proceedings. The Consolidated Entity was not a party to any such
proceedings during the year.
Non-audit services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of non-
audit services during the year is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external
auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do
not adversely affect the integrity and objectivity of the auditor; and
• the nature of the services provided does not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
37
Stanmore Coal Annual Report 2020 The following fees were paid or payable to BDO Services (QLD) Pty Ltd for non-audit services provided during the year
ended 30 June 2020:
Taxation services
$60,225
Corporate Finance (takeover defence)
$101,989
Auditor‘s Independence Declaration
The Auditor’s Independence Declaration forms part of the Directors’ Report and can be found on page 52.
Significant changes and likely developments
Comments on significant changes and likely developments are included in the operating and financial review on
pages 11 to 13.
Competent Person Statement
The information in this report relating to coal reserves for Isaac Downs was announced on 21 August 2020, titled “Mineral
Resources and Coal Reserve update for Isaac Downs” is based on information compiled by Mr James Knowles who is
Principal Geologist and Director of Measured Group and Mr Michael Barker who is an employee of Palaris Australia.
Mr Knowles is a resource geologist with over 20 years’ of mining industry experience. Mr Knowles specialises in technical
management and resource evaluation. Mr Knowles’ technical expertise includes exploration project development and mine
operations support, resource estimation and reporting. Mr Knowles is a Competent Person as defined in the “Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2012 Edition)”.
Mr Michael Barker is the General Manager Feasibility Studies at Palaris Australia. Mr Barker has over 20 years’ experience
in the mining sector, including 10 years in resource consulting. Mr Barker has experience in technical services, including
asset performance and mine design and optimisation. Mr Barker is a Competent Person as defined in the “Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2012 Edition)”.
Corporate governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Stanmore
Coal Limited support and have adhered to the principles of corporate governance. Stanmore Coal Limited’s Corporate
Governance Statement can be found on the Company’s website/ASX platform (http://stanmorecoal.com.au/corporate).
This report is signed in accordance with a resolution of the Directors.
Marcelo Matos
Chief Executive Officer
Director
Brisbane
Date: 30 September 2020
38
DIRECTORS’ REPORT (CONTINUED)Stanmore Coal Annual Report 2020
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF STANMORE COAL LIMITED
As lead auditor of Stanmore Coal Limited for the year ended 30 June 2020, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Stanmore Coal Limited and the entities it controlled during the year.
DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF STANMORE COAL LIMITED
As lead auditor of Stanmore Coal Limited for the year ended 30 June 2020, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
R M Swaby
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Director
This declaration is in respect of Stanmore Coal Limited and the entities it controlled during the year.
BDO Audit Pty Ltd
Brisbane, 30 September 2020
R M Swaby
Director
BDO Audit Pty Ltd
Brisbane, 30 September 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
39
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Stanmore Coal Annual Report 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
Consolidated Statement of Profit or Loss and
For the year ended 30 June 2020
Other Comprehensive Income for the year ended 30 June 2020
STANMORE COAL LIMITED Financial Statements FY20
Revenue
Cost of sales
Gross Profit/(Loss)
Other income
Other expenses
Profit/(loss) before income tax and net finance expenses
Finance income
Financial expenses
Profit/(loss) before income tax expense
Income tax benefit/(expense)
Net profit/(loss) for the year
Other comprehensive income
Total comprehensive profit/(loss) for the year
Profit/(loss) for the year is attributable to:
Note
2020
$’000
2019
$ ‘000
1
2
1
2
1
2
3
364,485
403,059
(267,514)
(238,285)
96,971
5,604
(42,979)
59,596
579
(8,597)
51,578
(16,685)
34,893
-
34,893
164,774
9,937
(36,557)
138,154
476
(10,100)
128,530
(36,932)
91,598
-
91,598
Owners of Stanmore Coal Limited
34,893
91,598
Total comprehensive income profit/(loss) for the year is attributable to:
Owners of Stanmore Coal Limited
34,893
91,598
Earnings/(loss) per share attributable to the owners of
Stanmore Coal Limited:
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
19
19
Cents
13.2
13.2
Cents
35.1
35.6
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
52
40
Stanmore Coal Annual Report 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Consolidated Statement of Financial Position
As at 30 June 2020
Consolidated Statement of Financial Position
as at 30 June 2020
STANMORE COAL LIMITED Financial Statements FY20
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Capitalised development costs
Mine Properties
Exploration and evaluation assets
Intangible assets
Other non-current assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Lease Liability
Onerous contracts provision
Rehabilitation provision
Vendor royalties - contingent consideration
Income Tax Payable
Total current liabilities
NON-CURRENT LIABILITIES
Provision for employee benefit
Interest-bearing loans and borrowings
Lease Liability
Onerous contracts provision
Rehabilitation provision
Vendor royalties - contingent consideration
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Share based payment reserve
Retained earnings
Note
4(a)
6
7
8
9a
9b
10
11
12
13
14
15
16
17
13
14
15
16
17
3
20
Total equity attributable to the owners of Stanmore Coal Limited
2020
$’000
32,244
4,715
78,864
2,867
118,690
62,891
314
24,946
80,970
2,771
6,187
178,079
296,769
33,146
2,218
57
842
3,072
7,617
160
47,112
366
10,251
766
4,520
26,890
15,033
23,248
81,074
128,186
168,583
121,725
2,348
44,510
168,583
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2019
$ ‘000
90,465
20,802
29,631
4,206
145,104
45,592
-
34,808
75,496
3,275
2,313
161,484
306,588
50,756
-
-
867
4,700
7,955
25,309
89,587
254
-
-
5,198
24,256
24,598
5,591
59,897
149,484
157,104
117,613
1,703
37,788
157,104
53
41
Stanmore Coal Annual Report 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
STANMORE COAL LIMITED Financial Statements FY20
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Issued
capital
$ ‘000
Retained
Earnings
$ ‘000
Share based
payment
reserve
$ ‘000
Total
$ ‘000
At 1 July 2018
113,200
(41,190)
1,152
73,162
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Profit/(loss) for the year
Other comprehensive income
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Issue of Shares under DRP
Dividends paid
Share based payments
On market share buy-back
-
-
-
91,598
-
91,598
-
-
-
91,598
-
91,598
4,458
-
-
-
(45)
(12,620)
-
-
-
-
551
-
4,458
(12,620)
551
(45)
At 30 June 2019
117,613
37,788
1,703
157,104
At 1 July 2019
117,613
37,788
1,703
157,104
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Profit/(loss) for the year
Other comprehensive income
-
-
-
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS
Issue of Shares – Note 20
Dividends paid
Share based payments
4,112
-
-
34,893
-
34,893
-
(28,171)
-
-
-
-
-
34,893
-
34,893
4,112
(28,171)
-
645
645
At 30 June 2020
121,725
44,510
2,348
168,583
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
54
42
Stanmore Coal Annual Report 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
Consolidated Statement of Cash Flows
STANMORE COAL LIMITED Financial Statements FY20
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
GST refunds
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Income Tax paid
Net cash (outflow)/inflow from operating activities
5
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for exploration, evaluation assets
Payments for mine properties assets
Net cash (outflow)/inflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Payments for dividends
Payments for vested LTIP Rights
Payments for on-market share buy-back
Payment for financial securities
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash held
Net cash at beginning of year
Net cash at end of year
4(b)
4a
2020
$ ‘000
383,636
33,633
(386,330)
515
(834)
(24,178)
6,442
(26,454)
(9,829)
(9,150)
(45,433)
9,402
-
(24,073)
(852)
-
(3,707)
(19,230)
(58,221)
90,465
32,244
2019
$ ‘000
405,644
22,950
(283,923)
441
(1,709)
(3,360)
140,043
(12,093)
(31,103)
(17,581)
(60,777)
43,263
(43,674)
(8,162)
-
(45)
-
(8,618)
70,648
19,817
90,465
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying note
55
43
Stanmore Coal Annual Report 2020
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Notes to the Financial Statements
STANMORE COAL LIMITED Financial Statements FY20
Notes to the Financial Statements
About this report
The financial statements of Stanmore Coal Limited for the year ended 30 June 2020 covers the Consolidated
Entity consisting of Stanmore Coal Limited and its subsidiaries (“the Consolidated Entity”) as required by the
Corporations Act 2001.
The financial statements are presented in the Australian currency.
Stanmore Coal Limited is a company limited by shares, incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange.
The principal activities of the Consolidated Entity were the exploration, development, production and sale of
metallurgical and thermal coal in Queensland, Australia.
The consolidated general-purpose financial report of the Consolidated Entity for the year ended 30 June 2020 was
authorised for issue in accordance with a resolution of the Directors on 30 September 2020. The Directors have the
power to amend and reissue the financial report. The financial report is a general-purpose financial report which:
• has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board;
•
is presented in Australian dollars with all values rounded to the nearest thousand dollars ($‘000) unless
otherwise stated, in accordance with ASIC Corporations (Rounding in Financial / Director’s Report) Instrument
2016/191;
• adopts all new and amended Accounting Standards, IFRS and Interpretations issued by the AASB that are
relevant to the operations of the Consolidated Entity and effective for reporting periods beginning on or after 1
July 2019. Refer to Note 32 for further details; and
• does not early adopt any Australian Accounting Standards, IFRS and Interpretations that have been issued or
amended but are not yet effective, except for those described in Note 32: Other Accounting Policies.
The financial statements have been prepared on a historical cost basis, except for Vendor Royalties – Contingent
Consideration which has been measured at fair value. The entity is a for-profit entity for the purposes of Australian
Accounting Standards.
Key judgements and estimates
In the process of applying the Consolidated Entity’s accounting policies, management has made a number of
judgements and applied estimates of future events. Judgements and estimates which are material to the financial
report are found in the following notes:
Note 1:
Revenue and other income
Note 9(a): Capitalised development costs
Note 9(b) Mine Properties
Note 10: Exploration and Evaluation
Note 15: Onerous contracts provision
Note 16: Rehabilitation provision
Note 17: Vendor royalties – contingent consideration
Note 30: Share based-payments
44
Page 47
Page 59
Page 60
Page 61
Page 65
Page 66
Page 67
Page 91
56
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
Notes to the financial statements (Cont.)
Going concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of
normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of
business.
Debt Facility
On 18 June 2020, the Consolidated Entity was given formal notice by its current financier that the working capital
and bank guarantee facility would be cancelled from 16 September 2020. This was following the change of control
of the Consolidated Entity, after completion of the on-market takeover by Golden Investments. Effective from this
date, no further drawdowns were available, and the balance drawn under the bank guarantee facility was to be
repaid by the cancellation date. As at 30 June, there were no drawdowns under the working capital facility and the
bank guarantees provided by the Consolidated Entity’s financier were in the process of being replaced with cash
security.
On 26 June 2020, the Consolidated Entity entered into a short-term financing agreement with its parent entity,
GEAR to cover the period up until the US$40 million finance facility is finalised and in place. The key terms of this
short-term facility are:
•
•
Facility is a A$10m facility which expires on the earlier of 31 October 2020, or when the US$40m facility is
finalised
Interest rate is 8.0% per annum on drawn funds
As at 30 June 2020 there have been no draw downs under this facility, but this facility is available if required by
the Consolidated Entity.
COVID-19
These impacts are not significant to the Consolidated Entity and will not negatively impact the financial statements
or trigger any significant uncertainties with respect to events or conditions which may adversely impact the
Consolidated Entity as at the reporting date or subsequently as a result of the Coronavirus (COVID -19) pandemic.
There is no impact on the going concern of the Consolidated Entity as a result of the above.
Basis of consolidation
Subsidiaries are all those entities (including special purpose entities) over which the Company has control. The
Consolidated Entity controls an entity when the Consolidated Entity is exposed, or has the rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Consolidated Entity. They are de-consolidated from the date that control ceases.
All intercompany balances and transactions, including unrealised profits arising from intragroup transactions have
been eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. The financial statements of subsidiaries are prepared for the same reporting period as the
parent, using consistent accounting policies.
Non-controlling interests in the results and consolidated equity of subsidiaries are shown separately in the
consolidated Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position
respectively. Total comprehensive income is attributable to owners of Stanmore Coal Limited and non-controlling
interests even if this results in the non-controlling interests having a debit balance.
Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant to an
understanding of the financial statements are provided throughout the notes to the financial statements.
57
45
Stanmore Coal Annual Report 2020
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
(CONTINUED)
STANMORE COAL LIMITED Financial Statements FY20
Notes to the financial statements (Cont.)
Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date. Foreign exchange differences arising on
translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
The notes to the financial statements
The notes include information which is required to understand the financial statements and is material and
relevant to the operations, financial position and performance of the Consolidated Entity. Information is considered
relevant and material if for example:
•
•
•
•
the amount in question is significant because of its size or nature;
it is important for understanding the results of the Consolidated Entity;
it helps to explain the impact of significant changes in the Consolidated Entity’s business for example,
acquisitions and impairment write-downs; or
it is related to an aspect of the Consolidated Entity’s operations that is important to its future performance.
New standards, interpretations and amendments adopted by the Consolidated Entity
The accounting standards adopted in the preparation of the consolidated financial statements are consistent with
those of the previous financial year. The Consolidated Entity has adopted IFRC23 Uncertainty over Income Tax
Treatments with no impact on the Financial Statements. The Consolidated Entity has adopted AASB 16 Leases
effective from 1 July 2019 using the modified retrospective method, where comparative amounts for the year prior
to first adoption have not been restated.
AASB 16 supersedes AASB 117 and its associated interpretative guidance and provides a new lessee to recognise
assets and liabilities for all leases with a term more than 12 months, unless the underlying asset is of low value.
Under AASB 16, a lessee recognises at the commencement date of the lease, the present value of non-cancellable
lease payments as a lease liability on the statement of financial position, with a corresponding right-of-use asset.
The unwind of the financial charge on the lease liability and the amortisation of the leased asset are recognised in
the Statement of Profit or Loss and Other Comprehensive Income based on the implied interest rate and contract
term.
The operating lease commitments as at 30 June 2019 were $0.158 million. The Consolidated Entity did not
recognise the right-of-use asset and lease liability as the amount was not considered material, and the
Consolidated Entity was in the process of negotiating a new office lease. The new lease entered into has been
recognised in accordance with AASB 16.
46
58
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 1
REVENUE AND OTHER INCOME
REVENUE
Revenue from contracts with customers
Total revenue
OTHER INCOME
Fair value movement - vendor royalty - contingent consideration
Onerous contract re-measurement
Other income
Total other income
FINANCE INCOME
Interest income
Total finance income
Note
17
15
2020
$ ‘000
364,485
364,485
4,387
150
1,067
5,604
579
579
2019
$ ‘000
403,059
403,059
-
9,428
509
9,937
476
476
DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS
The group recognises revenue from the transfers of goods over time and at a point in time in the following major
product lines and geographical regions.
2020
Sales - thermal coal
Sales - semi soft coking coal
Coal sales - Subtotal
Toll loading revenue
TOTAL
2019
Sales - thermal coal
Sales - semi soft coking coal
Coal sales - Subtotal
Toll loading revenue
TOTAL
Timing of
revenue
recognition
At point in time
FOB contract
At point in time
FOB contract
Asia
A$ ‘000
Europe
A$ ‘000
Australia
A$ ‘000
Total
A$ ‘000
1,832
-
-
1,832
331,612
25,222
5,819
362,653
333,444
25,222
5,819
364,485
At a point in time
-
-
-
-
333,444
25,222
5,819
364,485
At point in time
FOB contract
At point in time
FOB contract
39,218
-
350,205
13,613
389,423
13,613
-
-
-
39,218
363,818
403,036
At a point in time
-
-
23
23
389,423
13,613
23
403,059
RECOGNITION AND MEASUREMENT
Revenue is recognised when the control of the goods is passed to the customer. The amount of revenue
recognised is the consideration the Consolidated Entity is entitled to receive in exchange for transferred goods to
the customer.
59
47
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 1
REVENUE AND OTHER INCOME (CONT.)
Contracts with customers – coal sales
General recognition
Revenue from the sale of coal is recognised in the profit or loss when control of the coal has been transferred from
the Consolidated Entity to the customer. Typically, the transfer of control and the recognition of a sale occurs
when the coal passes the ship rail when loading at the port, unless the sale is made on stockpile at which point the
transfer of control will occur when the sales agreement is exercised. All coal is shipped through the Dalrymple Bay
Coal Terminal and most coal sold during the financial year ending 30 June 2020 was on a contracted ‘free on
board’ basis.
As is customary with ‘free on board’ contracts, parameters such as coal quality and mass are tested using
independent experts and weightometers as the vessel is being loaded. The bill of lading is only issued upon
verification and confirmation from several parties involved with the logistic and handling process. Once confirmed,
the measured parameters form the basis for calculation of final price on the commercial invoice. All customer
contracts specify a known price and tolerance range for quality parameters prior to the Consolidated Entity
committing to the supply of coal to the customer.
Payment terms for coal customers range from letter of credit basis to up to 45 days, with the majority being settled
in 20 days or less from issuance of the commercial invoice. There were no breaches of payment terms noted during
the financial year and contracts recognised as fulfilled and therefore receivable at 30 June 2020 have
subsequently been receipted without issue.
Semi Soft Quarterly Index Linked Price Contracts recognition
Semi Soft Sales contracts with Stanmore Coal customers generally contain quarterly pricing provisions as is
customary in the semi soft coal markets. Sales contracts with regular customers are linked to the Hunter Valley
Semi Soft coking coal index with index adjustments based on the term agreements/relationship, Isaac Plains Semi
Soft variations to the index benchmark, or other contractual reasons.
When the quarterly benchmark prices have not been settled sales invoices are issued and paid based on the
provisional prices from the prior quarters agreed index price. These provisional prices are then adjusted when the
final quarterly benchmark prices are settled.
Where sales volumes have not been fulfilled within the scope of the contract for the previous quarters, the coal
sales are at the prior quarters price. At the end of the annual contract period full year carry over tonnes are
discussed between the parties and the supply of tonnes can be cancelled or carried over to the next annual
contract.
Key Judgements
Due to the volatility in the Hunter Valley Semi Soft coal price index, management review the index price at the end
of the quarter. Coal sales are then adjusted, based on the final index price, which has been agreed with customers.
If the price has not yet been signed off on all contracts, management will make judgements on the risks associated
with the customer and adjust the provisional price based on the contract. This risk weighted price would then be
used rather than the quarterly index price which has not yet been agreed with the customer.
Thermal Coal Contract sales
Thermal coal sales are not customarily index linked and are settled based on contract prices as agreed and
adjusted by the contract terms. Generally, price and adjustments are finalised and final invoiced within a short
period of time after the coal is ‘free on board’.
Key Judgements
Where prices are not finalised at the end of a period due to the timing of contractual adjustments, management will
make assessments on the adjustments and provide for the expected impact of the contract adjustments. Price
adjustments are minimal in comparison to the total invoice and are generally not material in nature.
48
60
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 2
COST OF SALES AND OTHER EXPENSES
Note
2020
$ ‘000
2019
$ ‘000
COST OF SALES
Mining costs
Processing costs
Transport and logistics
State royalties
Private royalties
Production overheads
Other production costs
Sub-total cost of sales
Toll loading costs
Total cost of sales
OTHER EXPENSES
Other expenses1
17
16
15,16,17
14
Fair value movement - vendor royalty - contingent
consideration
Movement in rehabilitation provision
Write-off non-current inventory
Total other expenses
1 Refer to next page for details of Other expenses
FINANCIAL EXPENSES
Interest paid – external parties
Interest amortisation unwinding
Interest charge – lease liability
Movement in foreign currency
Borrowing costs
Total financial expenses
RECOGNITION AND MEASUREMENT
Production costs
137,729
106,208
37,519
34,260
31,602
4,955
15,002
6,447
35,241
36,747
36,825
6,832
14,203
2,203
267,514
238,259
-
26
267,514
238,285
41,903
22,914
-
1,076
-
6,145
3,134
4,364
42,979
36,557
1,313
4,112
11
824
2,337
8,597
1,709
4,549
-
(35)
3,877
10,100
Production costs are costs incurred directly or indirectly relating to the mining and preparation of coal for sale to
third party customers. Costs have been recognised on an accruals basis at the time the sale is recognised, in line
with movements through inventory and survey information from site. Refer to Inventory in Note 7.
61
49
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 2
COST OF SALES AND OTHER EXPENSES (CONT.)
Other expenses
Other expenses include the following specific items:
Depreciation and amortisation
Depreciation - plant and equipment
Depreciation – right of use asset
Amortisation - mine properties
Amortisation - intangibles
Sub-total depreciation and amortisation
EMPLOYEE EXPENSES
Employee - salaries and wages
Employee superannuation
Share-based payments (rights)
Sub-total employee expenses
Other overhead expenses
Takeover costs
Short term lease payments
Sub-total other expenses
Total other expenses
Note
8
8
9b
11
2020
$ ‘000
10,832
24
15,556
504
26,916
5,251
312
1,662
7,225
3,134
4,419
209
7,762
2019
$ ‘000
2,945
-
7,935
503
11,383
6,010
340
551
6,901
3,329
1,143
158
4,630
41,903
22,914
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave, long service leave and
accumulating sick leave expected to be wholly settled within 12 months of the end of the reporting period are
recognised in respect of employees’ services rendered up to the end of the reporting period. They are measured at
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when leave is taken and measured at the actual rates paid or payable.
Leases
The leases recognised in Other Expenses relate to short term lease obligations where the entity has adopted the
recognition exemption. Lease payments for short term leases are charged to profit or loss on a straight-line basis
over the term of the lease, net of any incentives.
50
62
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 3
INCOME TAX EXPENSE
RECONCILIATION
Current income tax benefit
Deferred income tax expense
Income tax expense/(benefit)
RECONCILIATION THROUGH EQUITY
Opening balance
Income tax expense/(benefit) – equity
2020
$ ‘000
(972)
17,657
16,685
(1,129)
(1,129)
2019
$ ‘000
28,669
8,263
36,932
(1,129)
(1,129)
The prima facie income tax on the profit/(loss) is reconciled to the income tax expense as follows:
Prima facie tax expense (30%) on profit/(loss) before income tax
15,473
38,559
Add tax effect of:
- Non-deductible expenses
- Other assessable income
- Prior period deferred taxes over/(under) recognised
Income tax expense/(benefit)
RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
DEFERRED TAX ASSETS
Deductible temporary differences
Sub-total deferred tax assets
DEFERRED TAX LIABILITIES
Assessable temporary differences
Sub-total deferred tax liabilities
Deferred tax
431
-
781
16,685
22,209
22,209
(45,457)
(45,457)
(23,248)
51
225
(1,903)
36,932
25,123
25,123
(30,714)
(30,714)
(5,591)
Deferred tax assets will only be recognised when;
•
•
•
the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable
the losses to be realised;
the Consolidated Entity continues to comply with the conditions for deductibility imposed by the law
no changes in tax legislation adversely affect the Consolidated Entity in realising the losses.
RECOGNITION AND MEASUREMENT
The income tax expense for the year is the tax payable on the current year’s taxable income based on the national
income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused
tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences at the tax rates expected to apply
when the assets are recovered, or liabilities settled, based on those tax rates which are enacted or substantively
enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of
an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the
transaction did not affect either accounting profit or taxable profit.
63
51
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 3
INCOME TAX EXPENSE (CONT.)
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and
tax bases of investments in subsidiaries, associates and interests in joint ventures where the parent entity is able
to control the timing of the reversal of the temporary differences and it is probable that the differences will not
reverse in the foreseeable future.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income and
equity are also recognised directly in other comprehensive income and equity, respectively.
Opening
balance
Recognised in
profit or loss
Closing
balance
Deferred
tax asset
Deferred
tax liability
2020
Provision for rehabilitation
Provision for onerous contracts
Property plant and equipment
Vendor private royalty
Exploration and development costs
Unrealised FX
Other
Vendor receivable
Provision for impairment - exploration and
development
Rail loop benefit
Overburden in advance
Prior year tax losses
TOTAL
2019
Provision for rehabilitation
Provision for onerous contracts
Property, plant and Equipment
Vendor private royalty
Exploration and development costs
Unrealised FX
Other
Vendor receivable
Provision for impairment exploration
and development
Rail loop benefit
Overburden in advance
Prior year tax losses
TOTAL
Tax Consolidation
8,687
1,820
(4,407)
9,766
(17,514)
97
1,006
(2,753)
3,631
(983)
(4,941)
-
302
(211)
(1,063)
(2,971)
(1,015)
329
(3,632)
1,469
-
151
8,989
1,609
(5,470)
6,795
(18,529)
426
(2,626)
(1,284)
3,631
(832)
(11,016)
(15,957)
-
-
8,989
1,609
-
-
-
(5,470)
6,795
-
-
(18,529)
426
759
-
3,631
-
-
-
-
(3,385)
(1,284)
-
(832)
(15,957)
-
(5,591)
(17,657)
(23,248)
22,209
(45,457)
5,575
4,921
(7,060)
9,808
(16,860)
36
946
3,112
(3,101)
2,653
(42)
(654)
61
60
(4,207)
1,454
3,632
(1,134)
(4,601)
11,616
2,672
(1)
151
(340)
(11,616)
(8,263)
8,687
1,820
(4,407)
9,766
(17,514)
97
1,006
(2,753)
3,631
(983)
(4,941)
-
8,687
1,820
-
-
-
(4,407)
9,766
-
97
1,122
-
3,631
-
-
-
-
(17,514)
-
(116)
(2,753)
-
(983)
(4,941)
-
(5,591)
25,123
(30,714)
Stanmore Coal Limited and its wholly owned subsidiaries have formed a tax consolidated group and are taxed as a
single entity. Stanmore Coal Limited is the head entity of the tax consolidated group. The stand-alone
taxpayer/separate taxpayer within a group approach has been used to allocate current income tax expense and
deferred tax expense to wholly owned subsidiaries that form part of the tax consolidated group. Stanmore Coal
Limited has assumed all the current tax liabilities and the deferred tax assets arising from unused tax losses for the
tax consolidated group via intercompany receivables and payables as a tax funding arrangement is in place.
64
52
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 4 (a)
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
2020
$ ‘000
32,244
2019
$ ‘000
90,465
Cash at bank bear floating and fixed interest rates between 0.0% and 1.25% (2019: 0.85% and 2.23%).
RECONCILIATION OF CASH
The above figures are reconciled to the consolidated statement of cash flows as follows:
Balances as above
Balances per consolidated statement of cash flows
32,244
32,244
90,465
90,465
RECOGNITION AND MEASUREMENT
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash on hand
and at bank, deposits held at call with financial institutions, other short term, highly liquid investments with original
maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value and bank overdrafts.
NOTE 4 (b) RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Opening
2019
$ ‘000
Cash
Inflows
Cash
Outflows
Non cash
changes
Chattel Mortgage
Lease Liability
-
-
10,994
(1,592)
-
-
3,067
823
Opening
2018
$ ‘000
Cash
Inflows
Cash
Outflows
Non cash
changes
Borrowings
-
43,263
(43,263)
-
Closing
2020
$ ‘000
12,469
823
Closing
2019
$ ‘000
-
65
53
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 5
CASH FLOW INFORMATION
Reconciliation of profit/(loss) after income tax to net cash flow from operating activities
Profit/(Loss) for the year
Adjust for non-cash items:
2020
$ ‘000
2019
$ ‘000
34,893
91,598
Depreciation, amortisation and disposal of fixed assets
26,916
11,383
Write-off non-current inventory
Unrealised gains/loss on foreign exchange
Non cash movement in provisions
Share-based payments expense
Change in operating assets and liabilities:
- (Increase)/Decrease in trade and other receivables
- (Increase)/Decrease in inventory
- (Increase)/Decrease in other assets
- Increase/(Decrease) in trade and other payables
- Increase/(Decrease) in current tax payable
- Increase/(Decrease) in deferred taxes
- Increase/(Decrease) in provisions
- Increase/(Decrease) in provisions for onerous contracts
- Increase/(Decrease) in rehabilitation provisions
- Increase/(Decrease) in contingent consideration
Net cash flow from operating activities
-
1,592
5,142
1,662
16,117
(49,233)
(2,656)
(5,869)
(25,149)
17,657
112
(866)
(4,896)
(8,980)
6,442
4,364
411
4,400
551
2,484
(8,664)
(2,561)
18,728
25,309
8,263
34
(1,849)
(4,848)
(9,560)
140,043
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST components of
cash flows arising from investing and financing activities are classified as operating cash flows.
Non-cash investing and financing activities disclosed in other notes are:
• Recognition of rehabilitation asset of $4.491m (FY19 $11.752m)
• Dividends satisfied by the issue of shares under the DRP – Note 18
•
Interest bearing loans and borrowings – Note 13
54
66
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 6
TRADE AND OTHER RECEIVABLES
CURRENT
GST receivable
Trade receivables
Other receivables
Total current trade and other receivables
RECOGNITION AND MEASUREMENT
2020
$ ‘000
2,558
1,867
290
4,715
2019
$ ‘000
2,529
18,076
197
20,802
Trade and other receivables are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign
exchange gains and losses. Impairment losses are presented as separate line item in the Statement of Profit or
Loss and Comprehensive Income.
Impairment
The Consolidated Entity assesses on a forward-looking basis the expected credit loss associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there
has been a significant increase in credit risk.
For trade receivables the group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. Management has determined that
assessment of expected credit loss associated with trade receivables is immaterial.
NOTE 7
INVENTORIES
CURRENT
ROM coal stocks
Product coal stocks
Sub-total coal stock
Overburden in advance
Total inventories
2020
$ ‘000
3,236
22,438
25,674
53,190
78,864
2019
$ ‘000
3,703
9,459
13,162
16,469
29,631
RECOGNITION AND MEASUREMENT
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimate selling
price in the ordinary course of business, less the estimate costs of completion and selling expenses.
The cost of coal inventories is determined using a direct costing basis. Costs include blasting, overburden removal,
coal mining, processing, labour, transport and other costs which are directly related to mining activities at site.
Inventories are classified as follows:
• Overburden in advance material extracted through the pre-strip mining process and includes blasting
•
•
activities.
run of mine material extracted through the mining process and awaiting processing at the coal handling
and preparation plant.
product coal which has been processed into final saleable form. Product coal may be held at the site or at
port shared stockpile facilities awaiting delivery to customers.
INTERPRETATION 20 – STRIPPING COSTS IN THE PRODUCTION PHASE OF A SURFACE MINE
Interpretation 20, effective 1 January 2013 allows overburden in advance to be capitalised separately as Inventory
under AASB 102 to the extent the benefit from the stripping activity is realised in Inventory. This means that coal
mining and stripping no longer maintain a timing nexus. As a result of this the stripping process, costs of
overburden removal will be capitalised separately as Inventory under AASB 102 as directed under Interpretation 20.
67
55
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 8
PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Sub-total plant and equipment
Buildings and improvements
At cost
Accumulated depreciation
Sub-total buildings and improvements
Furniture and office equipment
At cost
Accumulated depreciation
Sub-total furniture and office equipment
Right-of-use asset
At cost
Accumulated depreciation
Sub-total right-of-use asset
Capital work in progress
At cost
Accumulated Depreciation
Sub-total capital work in progress
Total property plant and equipment
RECOGNITION AND MEASUREMENT
2020
$ ‘000
77,556
(22,580)
54,976
2,077
(494)
1,583
137
(122)
15
812
(24)
788
5,529
-
5,529
62,891
2019
$ ‘000
45,747
(11,227)
34,520
1,671
(414)
1,257
137
(119)
18
-
-
-
9,797
-
9,797
45,592
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses, if any.
The cost of fixed assets constructed within the Consolidated Entity includes the cost of materials, direct labour,
borrowing costs and an appropriate portion of fixed and variable costs.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, only when it is
probable that future economic benefits associated with the item will flow to the Consolidated Entity and the cost
of the item can be measured reliably.
56
68
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
0
2
Y
F
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
D
E
T
I
M
I
L
L
A
O
C
E
R
O
M
N
A
T
S
)
d
e
u
n
i
t
n
o
c
(
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
I
)
.
T
N
O
C
(
T
N
E
M
P
U
Q
E
D
N
A
T
N
A
L
P
,
Y
T
R
E
P
O
R
P
8
E
T
O
N
s
t
n
u
o
m
a
g
n
y
r
r
a
c
n
i
i
s
t
n
e
m
e
v
o
M
L
A
T
O
T
0
0
0
‘
$
2
9
5
,
5
4
2
6
8
,
8
2
-
)
9
2
(
)
8
7
6
(
)
6
5
8
,
0
1
(
1
9
8
,
2
6
-
-
4
4
4
,
6
3
3
9
0
,
2
1
)
5
4
9
,
2
(
2
9
5
,
5
4
9
6
0
0
0
’
$
7
9
7
9
,
0
5
0
8
2
,
)
8
1
3
2
3
(
,
-
-
-
9
2
5
,
5
7
4
2
3
,
0
6
9
1
1
,
)
0
1
4
5
(
,
-
-
7
9
7
,
9
s
s
e
r
g
o
r
p
n
i
k
r
o
w
l
a
t
i
p
a
C
-
2
1
8
-
-
-
)
4
2
(
8
8
7
0
0
0
’
$
f
o
t
h
g
i
R
t
e
s
s
a
e
s
u
-
-
-
-
)
3
(
5
1
-
-
-
0
2
)
2
(
8
1
8
1
0
0
0
‘
$
&
e
r
u
t
i
n
r
u
F
i
p
u
q
e
e
c
i
f
f
o
&
s
g
n
d
i
l
i
u
B
0
0
0
‘
$
7
5
2
1
,
-
9
4
4
)
9
2
(
)
3
1
(
)
1
8
(
3
8
5
,
1
4
8
8
2
-
)
1
7
(
6
3
0
1
,
7
5
2
,
1
s
t
n
e
m
e
v
o
r
p
m
i
0
0
0
‘
$
0
2
5
4
3
,
-
-
)
5
6
6
(
9
6
8
1
3
,
)
8
4
7
0
1
(
,
6
7
9
,
4
5
d
n
a
t
n
a
P
l
t
n
e
m
p
u
q
e
i
1
4
1
2
3
,
9
2
1
2
2
1
5
,
-
)
2
7
8
2
(
,
0
2
5
,
4
3
i
e
s
r
u
o
c
y
r
a
n
d
r
o
h
g
u
o
r
h
t
–
s
n
o
i
t
i
d
d
A
s
r
e
f
s
n
a
r
t
P
W
I
l
a
t
i
p
a
C
s
l
a
s
o
p
s
i
d
t
e
N
i
1
e
s
r
u
o
c
y
r
a
n
d
r
o
h
g
u
o
r
h
t
–
s
r
e
f
s
n
a
r
T
e
s
n
e
p
x
e
n
o
i
t
a
i
c
e
r
p
e
D
r
a
e
y
e
h
t
f
o
d
n
e
e
h
t
t
a
t
n
u
o
m
a
g
n
i
y
r
r
a
C
r
a
e
y
e
h
t
i
f
o
g
n
n
n
g
e
b
e
h
t
i
t
a
e
c
n
a
a
B
l
0
2
0
2
i
e
s
r
u
o
c
y
r
a
n
d
r
o
h
g
u
o
r
h
t
–
s
n
o
i
t
i
d
d
A
s
r
e
f
s
n
a
r
t
P
W
I
l
a
t
i
p
a
C
s
l
a
s
o
p
s
i
d
t
e
N
e
s
n
e
p
x
e
n
o
i
t
a
i
c
e
r
p
e
D
r
a
e
y
e
h
t
f
o
d
n
e
e
h
t
t
a
t
n
u
o
m
a
g
n
i
y
r
r
a
C
r
a
e
y
e
h
t
i
f
o
g
n
n
n
g
e
b
e
h
t
i
t
a
e
c
n
a
a
B
l
9
1
0
2
s
e
i
t
r
e
p
o
r
P
e
n
M
o
t
i
t
e
s
s
a
n
a
f
o
r
e
f
s
n
a
r
t
a
o
t
d
e
t
a
e
r
l
i
t
n
e
m
p
u
q
e
d
n
a
t
n
a
p
m
o
r
f
l
r
e
f
s
n
a
r
t
e
h
T
1
57
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 8
PROPERTY, PLANT AND EQUIPMENT (CONT.)
Depreciation
The carrying amount of all non-mining property fixed assets, except land is depreciated over their useful
life from the time the asset is held ready for use. Mining property fixed assets are depreciated on a units of
production basis over the life of the economically recoverable resources. The base for the units of
production is drawn from the assets principal use. Items that are specific to open cut operations are
depreciated over the run of mine open cut coal reserves. Surface infrastructure that is not specific to a
mining method such as the wash plant and loadout facilities utilise the Economically Recoverable
Resources of the Isaac Plains Complex, which includes an estimate of recoverable underground coal
reserves.
The depreciation rates used for each class of assets are:
Class of fixed asset
Plant and equipment
Furniture and office equipment
Buildings and improvements
Right-of-use asset
Depreciation rate
5-25% straight line/units of production
5-25% straight line
5-10% straight line
18% straight line
Property, plant and equipment are measured on the cost basis and therefore carried at cost less
accumulated depreciation and any accumulated impairment. In the event the carrying amount of property,
plant and equipment is greater than the estimated recoverable amount, the carrying amount is written
down immediately to the estimated recoverable amount and impairment losses are recognised. A formal
assessment of recoverable amount is made when impairment indicators are present. The carrying amount
of property, plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected
net cash flows are discounted to their present values in determining recoverable amounts.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are recognised in profit or loss in the period in which they arise.
Right-of-use asset
At the inception of a contract, the Consolidated Entity assesses whether a contract contains a lease based
on whether the contract conveys the right to use or control the use of an identified asset for a period of
time in exchange for consideration.
At the commencement date of the lease, the Consolidated Entity recognises a lease liability and a
corresponding right-of-use asset. The lease liability is initially recognised at present value of the non-
cancellable lease payments, which are discounted using the interest rate determined using the
Consolidated Entities incremental borrowing rate. The right-of-use asset is initially measured at cost which
includes any direct costs.
The right-of-use asset is depreciated to the earlier of the useful life of the asset or the lease term using the
straight line method and is recognised in the Statement of Profit or Loss and Comprehensive Income in
Depreciation and Amortisation.
The unwind of the financial charge on the lease liability is recognised in the Statement of Profit or Loss and
Comprehensive Income in financial expenses based on the Consolidated Entity’s incremental borrowing
rate.
70
58
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 9 (a)
CAPITALISED DEVELOPMENT COSTS
NON-CURRENT
Capitalised development costs
Recoverability of the carrying amount of development
assets is dependent on the successful completion of
development activities, or alternatively, sale of the
respective areas of interest.
MOVEMENTS IN CARRYING AMOUNTS
Balance at the beginning of the year
Transfers to Mine Properties
Other additions
Sub-total capitalised cost
Carrying amount at the end of the year
MOVEMENTS IN PROVISION FOR IMPAIRMENT AMOUNTS
Balance at the beginning of the year
Provision transferred to exploration and evaluation
Provision for impairment at the end of the year
2020
$ ‘000
2019
$ ‘000
314
-
-
-
314
314
314
-
-
-
13,410
(13,410)
-
-
-
(5,371)
5,371
-
RECOGNITION AND MEASUREMENT
Capitalised Development expenditure includes costs transferred from Exploration and Evaluation when the
Consolidated Entity can demonstrate:
the technical feasibility of completing the intangible asset so that it will be available for use or sale.
its intention to complete and its ability to use or sell the asset.
•
•
• how the asset will generate future economic benefits.
the availability of resources to complete the asset.
•
•
the ability to measure reliability the expenditure during development.
Following recognition, the asset is carried at cost less any accumulated impairment losses. Once the
development phase is complete and production begin, the costs are transferred from Capitalised
Development Costs to Mine Properties where they are amortised over the life of the development project.
Key judgements – capitalisation and impairment assessment of development costs
Initial capitalisation of costs is based on management’s judgement that technical and economic feasibility is
confirmed. In determining the amounts to be capitalised, management makes assumptions regarding the
expected future cash generating potential of the Project, discount rates to be applied and the expected
period of which cash flows are expected to be received. As at 30 June 2020, the carrying amount of
capitalised developments costs was $0.314 million (2019: $0). This balance relates to the Isaac Plains East
extension which a mining extension from the Isaac Plains East pit. The Isaac Plains East extension is still
awaiting final approvals from the State Government and will be transferred to Mine Properties once approvals
are granted and mining commences.
71
59
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 9 (b)
MINE PROPERTIES
NON-CURRENT
Mine Properties
MOVEMENTS IN CARRYING AMOUNTS
Balance at the beginning of the year
Transfers from capitalised development costs
Transfer from Property, Plant and Equipment
Other additions
Sub-total Mine Properties
ACCUMULATED DEPRECIATION
Balance at the beginning of the year
Amortisation charge for the year
Sub-total accumulated amortisation
2020
$ ‘000
2019
$ ‘000
24,946
34,808
42,743
-
679
5,015
48,437
(7,935)
(15,556)
(23,491)
-
13,410
-
29,333
42,743
-
(7,935)
(7,935)
Carrying amount at the end of the year
24,946
34,808
RECOGNITION AND MEASUREMENT
Mining property assets include costs transferred from Capitalised Development following the start of
production. Following transfer from Capitalised Development all development subsequent development
costs are capitalised to the extent that commercial viability conditions continue to be satisfied.
The costs associated with mine properties are amortised based on a units of production method.
Key judgements – capitalisation and impairment assessment of mine properties
The Consolidated Entity assesses at the end of each period whether there are any impairment indicators in
relation to Mine Property assets.
As a result of this impairment assessment, no impairment indicators were noted.
60
72
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 10
EXPLORATION AND EVALUATION ASSETS
NON-CURRENT
Exploration and evaluation expenditure capitalised
- exploration and evaluation phases
80,970
75,496
2020
$ ‘000
2019
$ ‘000
Recoverability of the carrying amount of exploration
and evaluation assets is dependent on the successful
development and commercial exploitation of coal, or
alternatively, sale of the respective areas of interest.
MOVEMENTS IN CARRYING AMOUNTS
Balance at the beginning of the year
Additions and transfers from work in progress
Transferred to capitalised development
Acquisition costs
Transferred from capitalised development
Sub-total capitalised cost
Provision for impairment
87,601
5,474
-
-
-
93,075
(12,105)
51,498
5,042
-
31,061
-
87,601
(12,105)
Carrying amount at the end of the year
80,970
75,496
MOVEMENTS IN PROVISION FOR IMPAIRMENT AMOUNTS
Balance at the beginning of the year
(12,105)
(12,105)
Provision for impairment at the end of the year
(12,105)
(12,105)
RECOGNITION AND MEASUREMENT
Exploration and evaluation expenditure incurred is capitalised on an area of interest basis. Such
expenditures comprise net direct costs and an appropriate portion of related overhead expenditure. These
costs are carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage which permits
reasonable assessment of the existence of Economically Recoverable Resources and active or significant
operations in relation to the area are continuing.
A regular review is undertaken on each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area
are written off against profit in the year in which the decision to abandon the area is made. Where an
uncertainty exists for further exploration of the area, a provision is raised for the costs of exploration.
When the technical feasibility and commercial viability is demonstrated, the accumulated costs for the
relevant area of interest are transferred to capitalised development costs.
Key judgements – exploration and evaluation assets
The Consolidated Entity performs impairment testing on specific exploration assets as required in AASB 6
para 20. During FY20 no impairment indicator was noted. The total impairment on these exploration and
evaluation assets is now $12.1million. No specific event has occurred relating to other exploration and
evaluation assets recognised on the Consolidated Statement of Financial Position. At the end of the
reporting year the balance of Exploration and Evaluation Assets is $80.9 million (2019: $75.4 million).
The main increase in this balance relates to Isaac Downs, including the acquisition cost.
73
61
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 11
INTANGIBLE ASSETS
INFRASTRUCTURE INTANGIBLE ASSET
At cost
Accumulated amortisation
Carrying amount at the end of the year
MOVEMENTS IN CARRYING AMOUNTS
Balance at the beginning of the year
Amortisation expense
Carrying amount at the end of the year
Impairment of intangible assets
2020
$ ‘000
2019
$ ‘000
4,800
4,800
(2,029)
(1,525)
2,771
3,275
3,275
(504)
2,771
3,778
(503)
3,275
At the end of each reporting year the Consolidated Entity assesses whether there is any indication that
individual assets are impaired. Where impairment indicators exist, recoverable amount is determined, and
impairment losses are recognised in profit or loss where the asset’s carrying value exceeds its recoverable
amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purpose of assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. Where it is not possible to estimate recoverable amount for an individual asset,
the Consolidated Entity estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
Intangible assets
The intangible asset relates to future rebates on the cost of coal railings based on an agreement with the
below rail infrastructure owner. Receipts of coal railing rebates are recognised in profit or loss as a credit
against the cost incurred. The estimated useful life of the asset is aligned with the term of the contractual
agreement and is amortised on a straight-line basis over the life in accordance with the anticipated profile
of benefits received.
NOTE 12
TRADE AND OTHER PAYABLES
Current
Trade and Other payables
Accrued expenses
Employee benefits
Total Current Trade and other payables
RECOGNITION AND MEASUREMENT
2020
$ ‘000
2019
$ ‘000
32,524
49,903
-
622
24
829
33,146
50,756
Trade and other payables represent liabilities for goods and services provided to the Consolidated Entity prior
to the year end and which are unpaid. They are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method. No assets of the Consolidated Entity have been
pledged as security for the trade and other payables.
74
62
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 13
INTEREST BEARING LOANS AND BORROWINGS
2020
$ ‘000
2019
$ ‘000
2020
US$ ‘000
2019
US$ ‘000
TOTAL FACILITIES
Facility A - bank guarantee facility
Total available facility
15,568
41,352
10,685
29,000
Facility utilised
Available facility
Facility B - working capital facility
Total available facility
Facility utilised
Available facility
Facility C – Chattel Mortgage
Total loan amount
Loan balance outstanding
Comprised of:
Current liability
Non-current liability
Total facility
Facility D – Short-term facility
Total available facility
Facility utilised
Available facility
(15,568)
(15,310)
(10,685)
(10,737)
-
-
-
-
18,263
22,000
-
22,000
-
-
-
-
26,042
31,370
-
31,370
13,684
12,469
2,218
10,251
12,469
10,000
-
10,000
RECOGNITION AND MEASUREMENT
Interest bearing liabilities are initially recognised at fair value, net of any transaction costs incurred. They are
subsequently measured at amortised cost using the effective interest method.
The Consolidated Entity pays a 2% pa facility fee for all undrawn funds in both the working capital and bank
guarantee facilities, once utilised the funds attract an 8% fixed interest rate. The current working capital
facility is denominated in US$ and therefore when drawn exposes the group to US$ fluctuations these
fluctuations are accounted for as outlined in Note 21.
On 2 July 2019, the Consolidated Entity entered into a binding agreement with Hasting Deering (Australia)
Limited to acquire a 600-tonne excavator (CAT 6060) for the Isaac Plains East mine. The CAT 6060 will join
the current operations at Isaac Plains East and will be supported by a trucking fleet supplied by the existing
contractor, Golding (ASX: NWH). The purchase of the CAT 6060 was financed through an equipment loan
facility with Caterpillar Financial Australia Limited, who are a lender associated with Hasting Deering. The
term of the loan facility is 5 years.
75
63
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 13
INTEREST BEARING LOANS AND BORROWINGS (CONT.)
The Consolidated Entity pays 4.46% pa fixed interest rate on the Chattel Mortgage facility to Caterpillar
Financial Australia Limited. The Chattel Mortgage facility is denominated in A$.
On 18 June 2020, the Consolidated Entity was given formal notice by its current financier that the working
capital and bank guarantee facility would be cancelled from 16 September 2020. This was following the
change of control of the Consolidated Entity, after completion of the on-market takeover by Golden
Investments. Effective from 18 June 2020, no further drawdowns were available, and the balance drawn
under the bank guarantee facility was to be repaid by the cancellation date. As at 30 June 2020, there were
no drawdowns under the working capital facility and the bank guarantees provided by the Consolidated
Entity’s financier were in the process of being replaced.
On 26 June 2020, the Consolidated Entity entered into a short-term Financing Agreement with its parent
entity, GEAR. The key terms of this short-term facility are:
•
•
Facility is an A$10m facility which expires on the earlier of 31 October 2020, or when the US$40m
facility is finalised
Interest rate is 8.0% per annum on drawn funds
As at 30 June 2020, there were no draw downs under this facility.
NOTE 14
LEASE LIABILITY
CURRENT
Current lease liability
NON-CURRENT
Non-current lease liability
Total Lease liability
RECONCILIATION OF MOVEMENTS
Opening balance
Depletions through settlement
Unwinding of discount
Closing balance
RECOGNITION AND MEASUREMENT
The lease liability recognised is the result of adopting AASB 16 Leases. Refer to Note 8 for the recognition
and measurement policy for lease liabilities.
64
2020
$ ‘000
2019
$ ‘000
57
766
823
812
-
11
823
-
-
-
-
-
-
-
76
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 15
ONEROUS CONTRACTS PROVISION
CURRENT
Current onerous contract provision
842
867
2020
$ ‘000
2019
$ ‘000
NON-CURRENT
Non-current onerous contract provision
Total onerous contracts provision
RECONCILIATION OF MOVEMENTS
Opening balance
Depletions through settlement
Adjustment - through re-measurement
Unwinding of discount – via profit and loss
Closing balance
RECOGNITION AND MEASUREMENT
4,520
5,362
5,198
6,065
6,065
16,402
(866)
(150)
313
5,362
(1,849)
(9,428)
940
6,065
The provision for onerous contracts relates to the transaction to acquire the Isaac Plains Coal Mine which
completed in November 2015. The Consolidated Entity acquired various long-term contracts necessary for
mining activities at Isaac Plains including rail haulage, port allocations, water supply, electricity supply and
accommodation. Based on the initial Isaac Plains mine plan, a portion of these contracts were estimated to
be underutilised and the fixed charges incurred above the deemed requirement was recognised as an
onerous contract liability. The fair value of onerous contracts at acquisition was estimated by calculating
the present value of expected future cash outflows for the onerous portion of each contract, discounted at
a rate reflecting the risk profile of each contract. Excluding the assessed onerous portion of the contracts
already recognised in the consolidated statement of financial position, the minimum payments required
under the identified contracts is approximately $9.2 million (undiscounted) (2019: $27.7 million
(undiscounted)). These payments are expected to be met as part of normal operational expenditure at Isaac
Plains complex in the coming years.
In the period from acquisition through to 30 June 2020, a number of onerous contracts have been settled
through the ordinary course of business. The onerous provision at 30 June 2020 has been re-measured for
all contracts having regard to the latest Economically Recoverable Resources of the Isaac Plains Complex
which includes an estimate of recoverable underground and Isaac Downs reserves. During the year, a
contract was entered into with a third party to supply them with some water from our existing long-term
contract. This allocation has been included in the calculation of the onerous contract to reduce total
onerous contract obligation.
Key estimates – Onerous Contracts
The Consolidated Entity assesses onerous contracts at each reporting date by evaluating conditions
specific to each contract and the then current business plan. Where a contract provides capacity above
that required to meet the business plan or for a longer period than the current extent of the business plan,
the contract is deemed onerous and the onerous portion of the contract is recognised as a liability using an
estimate of future onerous cash flows discounted to a net present value. Any re-measurement of the
assessed level of onerous contracts is taken through profit or loss in the period in which the assessment is
made. During the FY20 year a total of $0.866 million of onerous contracts were settled through payment,
with the unwinding of the discount being $0.313 million and $0.150 million taken through consolidated
Statement of Profit or Loss and Other Comprehensive Income for re-measurement.
77
65
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 16
REHABILITIATION PROVISION
CURRENT
Current rehabilitation provision
NON-CURRENT
Non-current rehabilitation provision
Total rehabilitation liability
RECONCILIATION OF MOVEMENTS
Opening balance
Additions – current year disturbance
Depletion - rehabilitation works completed
Depletion - re-measurement
Unwinding of discount – via profit and loss
2020
$ ‘000
2019
$ ‘000
3,072
4,700
26,890
29,962
28,956
4,491
(4,896)
1,076
335
24,256
28,956
18,583
11,752
(4,848)
3,134
335
Closing balance
29,962
28,956
RECOGNITION AND MEASUREMENT
The provision for rehabilitation closure costs relates to areas disturbed during operation of the mine up to
reporting date and not yet rehabilitated. Provision has been made to rehabilitate all areas of disturbance
including surface infrastructure, contouring, topsoiling and revegetation, using internal and external expert
assessment of each aspect to calculate an anticipated cash outflow discounted to a net present value. At
each reporting date, the rehabilitation liability is re-measured in line with the then-current level of
disturbances, cost estimates and other key inputs. The amount of provision relating to rehabilitation of
areas caused by mining disturbance is recognised in profit or loss as incurred.
Key estimates – rehabilitation provision
The Consolidated Entity assesses rehabilitation liabilities at each reporting date as there are numerous
factors that may affect the ultimate liability payable. This includes the extent and nature of rehabilitation
activity to be undertaken, changes in technology and techniques, changes in discount rates and regulatory
impacts. There may be differences between the future actual expenditure and the assessment made at the
balance date. The provisions at balance date represent management’s best estimate of the present value of
rehabilitation cost to completely rehabilitate the site.
In FY20 a decrease in the rehabilitation provision of $4.8 million was recognised due to the rehabilitation
works completed at Isaac Plains. In addition, a rehabilitation liability was recognised with regard to
disturbance of Isaac Plains East. Clearing has continued in line with mining operations of $4.4 million. A
corresponding asset is recognised in Mine Properties.
The continued extension of the mine life due to mine plan expansions at Isaac Plains East also contribute to
a reduction in the rehabilitation provision due to the value of future discounted cash outflows.
66
78
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 17
VENDOR ROYALTIES – CONTINGENT CONSIDERATION
2020
$ ‘000
2019
$ ‘000
CURRENT
Current vendor royalties - contingent consideration
7,617
7,955
NON-CURRENT
Non-current vendor royalties - contingent consideration
15,033
24,598
Total vendor private royalty
22,650
32,553
RECONCILIATION OF MOVEMENTS
Opening balance - vendor royalties - contingent consideration at fair value
Fair value adjustments taken to profit and loss in other expenses
Depletions through settlement
Unwinding of discount – via profit and loss
32,553
(4,387)
(8,980)
3,464
32,694
6,145
(9,560)
3,274
Total vendor royalties - contingent consideration at fair value
22,650
32,553
Key judgement and estimates – vendor royalties
During the business combination of Isaac Plains in 2015, AASB 3 Business Combinations required the
recognition of Contingent Consideration. The Contingent Consideration relates to a royalty stream payable
to the vendors of Isaac Plains in the event that benchmark Hard Coking Coal prices are above an Australian
Dollar equivalent of 160 (adjusted for CPI) and coal is produced and sold from either Isaac Plains or Isaac
Plains East. Each royalty is capped at predetermined amounts for each vendor. Once the price threshold
and production requirements are met, the royalty is payable at $2 per product tonne (2015 dollars) to each
of the two vendors of Isaac Plains. Royalties were paid during FY20 to the vendors and as a result the
remaining cap is $21.2 million (2020 dollars).
During FY19, Stanmore completed the acquisition of Isaac Downs (formerly Wotonga South). This
transaction included a royalty stream payable to the vendor at $1 per tonne of product coal when the
premium hard coking coal benchmark is over A$170 per tonne (indexed for CPI) capped at $10.0m. The fair
value of this royalty has been recognised during FY19 and carried forward into FY20 and recognised as a
non-current liability.
This valuation has been performed using a discounted cash flow methodology which was consistent with
that used in FY19. The method used is classed as a level 3 valuation under AASB 13 the following key
unobservable inputs are used in its calculation:
• Hard Coking Coal forward price curve based on a compilation of short term (12 months) prices from Isaac
Plains coal marketing consultants Square Trading Pty Ltd and long-term estimates completed by Wood
McKenzie
• A$/US$ Foreign exchange forward curve estimates are based on market consensus curves
• Coal sales based on the current mining plans of the Isaac Plains Complex, including the Isaac Plains
mine, the Isaac Plains East Mine (commenced July 2018), the Isaac Downs Mine (unapproved) and the
Isaac Plains Underground (unapproved).
As considered in AASB 13 para 93(h)(i) the following unobservable inputs contain sensitivities that would
result in significant changes to the market valuation. There interactions between the sensitivities in the
coking coal price and the US$/A$ foreign exchange rate. As the coal commodity is currently traded in US$
the interaction between the index price and the FX rate could both magnify and mitigate each other
depending on the timing and direction of movements of both indexes.
79
67
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 17
VENDOR ROYALTIES – CONTINGENT CONSIDERATION (CONT.)
A matrix is shown below of changes in the Hard Coking Coal index and the A$/US$ exchange rate. The
numbers are shown in millions and the highlighted number in blue is the current valuation.
Hard Coking Coal Index curve
+10%
+5%
Current
(5%)
(10%)
22.650
21.506
19.893
12.089
11.441
+10%
e
v
r
u
c
x
e
d
n
I
X
F
+5%
24.057
22.650
21.506
19.893
12.089
Current
24.057
24.057
22.650
21.506
19.893
(5%)
24.057
24.057
24.057
22.650
21.506
(10%)
24.057
24.057
24.057
24.057
22.650
The below shows the above matrix as a percentage change in value
Hard Coking Coal Index curve
+10%
+5%
Current
(5%)
(10%)
-
-
-
-
-
(5.1%)
(12.2%)
(46.6%)
(49.5%)
-
-
-
-
(5.1%)
(12.2%)
(46.6%)
-
-
-
(5.1%)
(12.2%)
-
-
(5.1%)
-
+10%
e
v
r
u
c
x
e
d
n
I
X
F
+5%
Current
-5%
-10%
The below shows changes in Valuation due to changes to Isaac Plains coal sales volume relating to a non-
operating future mine not being approved for any reason:
Change
Isaac Plains Underground (not approved)
Isaac Downs (not approved)
Remaining Isaac Plains complex reduced by 20% product
Remaining Isaac Plains complex increased by 20% product
Valuation
$M
22.379
15.828
21.044
24.136
Valuation
change
$M
(0.271)
(6.822)
(1.606)
1.486
%
Change
(1.2%)
(30.1%)
(7.1%)
6.6%
As at 30 June 2020 the fair value was assessed at $22.650 million; this calculation reaches the cap of the
agreements relating to Isaac Plains East and Isaac Downs.
80
68
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 18
DIVIDENDS AND FRANKING CREDITS
ORDINARY SHARES
Final franked dividend for the year ended 30 June 2019 of 8 cps
2020
$ ‘000
2019
$ ‘000
(30 June 2018 of 2 cps unfranked)
20,488
5,037
Interim fully franked dividend for the half year ended 31 December 2019
of 3 cps (31 December 2018 3 cps fully franked)
Total dividends provided for or paid
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan were as follows:
Paid in cash
Satisfied by issue of shares
Total dividends provided for or paid
DIVIDENDS NOT RECOGNISED AT THE END OF THE REPORTING PERIOD
No dividend proposed for 30 June 2020
(30 June 2019 8 cps fully franked)
Proposed dividends on ordinary shares
Franking credits available for subsequent reporting periods based on a tax
rate of 30% (2019 - 30%)
7,683
7,583
28,171
12,620
24,073
4,098
8,162
4,458
28,171
12,620
-
-
20,488
20,488
7,539
25,419
7,539
25,419
81
69
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 19
EARNINGS PER SHARE
Profit/(Loss) attributable to owners of Stanmore Coal Limited
used to calculate basic and diluted earnings per share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
Weighted average number of ordinary shares and
potential ordinary shares used as the denominator in
calculating diluted earnings per share
RECONCILIATION OF MOVEMENTS
Opening balance
Bonus share issue
Weighted average of issued shares (DRP)
Weighted average of issued shares (LTIP)
Weighted average of employee shares issued
Weighted average shares purchased on-market
Weighted average number of ordinary shares used in
calculating basic earnings per share
2020
$ ‘000
34,893
2020
Number
‘000
2019
$ ‘000
91,598
2019
Number
‘000
265,053
260,748
265,322
265,337
2020
$ ‘000
2019
$ ‘000
256,094
251,801
7,789
720
444
6
-
7,789
1,168
-
-
(10)
265,053
260,748
Weighted average number of Long-term Incentive Rights issued
269
4,589
Weighted average number of ordinary shares and potential
ordinary shares issued used to calculate diluted earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
BASIC EARNINGS PER SHARE
265,322
265,337
13.2
13.2
35.1
35.6
Basic earnings per share is calculated by dividing the profit attributable to owners of Stanmore Coal Limited
by the weighted average number of ordinary shares outstanding during the financial year.
DILUTED EARNINGS PER SHARE
Earnings used to calculate diluted earnings per share are calculated by adjusting the amount used in
determining basic earnings per share by the after-tax effect of dividends and interest associated with
dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive
potential ordinary shares.
70
82
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 20
ISSUED CAPITAL
270,417,381 fully paid ordinary shares (2019: 256,094,238)
Share issue costs
Deferred tax recognised through equity
Total issued capital
2020
$ ‘000
2019
$ ‘000
125,072
120,960
(4,476)
(4,476)
1,129
1,129
121,725
117,613
A. ORDINARY SHARES
ORDINARY SHARES
2020
Number
2019
Number
2020
$ ‘000
2019
$ ‘000
At the beginning of the year
256,094,238
251,800,978
117,613
113,200
Issue of Shares under DRP
4,325,518
4,332,625
4,098
4,458
LTIP Rights vested
Bonus share issue
Employee shares issued
On market share buy-back
2,193,969
7,788,662
14,994
-
-
-
-
(39,365)
-
-
14
-
-
-
-
(45)
At reporting date
270,417,381
256,094,238
121,725
117,613
Ordinary shares participate in dividends and the proceeds on winding up of the Consolidated Entity in
proportion to the number of shares held. At shareholders’ meetings, each ordinary share is entitled to one
vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
Ordinary shares have no par value and Stanmore Coal Limited does not have a limited amount of authorised
capital.
The shares issued as part of the Employee shares issued are subject to a trading lock of 3 years, or until such
time as the employee resigns from the Consolidated Entity, these are referred to as deferred shares. As at 30
June 2020, 13,248 deferred shares were still subject to trading lock. Excluding the 13,248 deferred shares,
there are 270,404,133 tradable shares. The difference between the original issued shares under the Employee
shares relates to employees that have left the Consolidated Entity and had the holding lock removed from
their shares.
83
71
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 20
ISSUED CAPITAL (CONT.)
B. OPTIONS AND RIGHTS
As at 30 June 2020 no options were held by or issued to employees of the Consolidated Entity (FY19 nil).
All Rights on issue at 30 June 2020 were as follows:
Number
of Rights
Exercise
Price
End of
measurement
period
Conditions
219,066
89,905
Nil
Nil
30 June 2021
30 June 2022
Share price targets based on Absolute Shareholder
Total Return Compound Annual Growth Rates in
FY20, if no vesting occurs at FY 21 then retested in
FY22 see Note 30 for further details
Share price targets based on Absolute Shareholder
Total Return Compound Annual Growth Rates in
FY21, if no vesting occurs at FY 22 then retested in
FY23 see Note 30 for further details
C. CAPITAL MANAGEMENT
The capital of the Consolidated Entity is managed to provide capital growth to shareholders and ensure the
Consolidated Entity can fund its operations and continue as a going concern.
The Consolidated Entity’s capital comprises equity as shown in the Consolidated Statement of Financial
Position. There are no externally imposed capital requirements.
Management oversees the Consolidated Entity’s capital by assessing the financial risks and adjusting its
capital structure in response to changes in these risks and the market. These responses include the
management of share issues and debt.
There have been no changes in the strategy adopted by management to control the capital of the
Consolidated Entity since the prior year.
D. RECOGNITION AND MEASUREMENT
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are
shown as a deduction from the equity proceeds, net of any income tax benefit.
72
84
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 21
FINANCIAL RISK MANAGEMENT
GENERAL OBJECTIVES, POLICIES AND PROCESSES
In common with all other businesses, the Consolidated Entity is exposed to risks that arise from its use of
financial instruments. This note describes the Consolidated Entity’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in respect
of these risks is presented throughout these financial statements
There have been no substantive changes in the Consolidated Entity’s exposure to financial instrument risks.
The Consolidated Entity’s financial instruments consist mainly of deposits with banks, trade and other
receivables, security deposits, trade and other payables, borrowings and Vendor Royalty – Contingent
Consideration.
The Board has overall responsibility for the determination of the Consolidated Entity’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority
for designing and operating processes that ensure the effective implementation of the objectives and
policies to the Consolidated Entity’s finance function. The Consolidated Entity’s risk management policies
and objectives are therefore designed to minimise the potential impacts of these risks on the results of the
Consolidated Entity where such impacts may be material.
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly
affecting the Consolidated Entity’s competitiveness and flexibility. Further details regarding these policies
are set out below:
A. CREDIT RISK
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation
resulting in the Consolidated Entity incurring a financial loss. This usually occurs when debtors fail to settle
their obligations owing to the Consolidated Entity. The Consolidated Entity’s objective is to minimise the risk
of loss from credit risk exposure.
The Consolidated Entity’s maximum exposure to credit risk at the end of the reporting year, without taking
into account the value of any collateral or other security, in the event other parties fail to perform their
obligations under financial instruments in relation to each class of recognised financial asset at reporting
date, is as follows:
Cash and cash equivalents
Restricted cash
Receivables
Security deposits and debt service reserve
Note
4a
6
2020
$ ‘000
32,244
407
4,715
3,833
2019
$ ‘000
90,465
245
20,803
113
Credit risk exposure
41,199
111,626
Credit risk is reviewed regularly by the Board and the Audit and Risk Management Committee.
The Consolidated Entity’s credit risk exposure is influenced mainly by the individual characteristics of each
customer. Given the Consolidated Entity trades predominately with recognised, credit worthy third parties,
the credit risk is determined to be low. There is no expected credit loss on outstanding receivables. Bank
deposits are held with National Australia Bank Limited. National Australia Bank have a long-term credit
rating with rating agency S&P of AA-.
85
73
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 21
FINANCIAL RISK MANAGEMENT (CONT.)
B. LIQUIDITY RISK
Liquidity risk is the risk that the Consolidated Entity may encounter difficulties raising funds to meet
financial obligations as they fall due. The object of managing liquidity risk is to ensure that the Consolidated
Entity will always have sufficient liquidity to meets its liabilities when they fall due, under both normal and
stressed conditions. Liquidity risk is reviewed regularly by the Board and the Audit and Risk Management
Committee.
The Consolidated Entity manages liquidity risk by monitoring forecast cash flows and liquidity ratios such as
working capital. The Consolidated Entity’s working capital, being current assets less current liabilities has
increased from $55.517 million in 2019 to $71.578 million in 2020.
MATURITY ANALYSIS – CONSOLIDATED – FINANCIAL LIABILITIES
2020
Financial Liabilities
- Trade payables
- Equipment finance loan
- Vendor Royalties Payable
- Lease Liability
- Other payables
Carrying
amount
$ ‘000
Contractual
cash flows
$ ‘000
<6 months
$ ‘000
6 – 12
months
$ ‘000
1 – 3 years
$ ‘000
>3 years
$ ‘000
32,524
12,469
22,650
823
622
32,524
13,934
24,593
937
622
32,524
1,365
2,750
28
622
-
1,365
5,366
85
-
-
8,419
4,852
554
-
-
2,785
11,625
270
-
69,088
72,610
37,289
6,816
13,825
14,680
2019
Financial Liabilities
- Trade payables
50,307
50,307
50,307
-
-
-
- Vendor Royalties Payable
32,553
41,276
5,653
4,434
19,628
11,561
- Other payables
853
853
853
-
-
-
83,713
92,436
56,813
4,434
19,628
11,561
Further information regarding commitments is included in Note 23.
74
86
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
N0TE 21
FINANCIAL RISK MANAGEMENT (CONT.)
C. CURRENCY RISK
The Australian dollar (A$) is the functional currency of the Consolidated Entity and as a result, currency
exposure arises from transactions and balances in currencies other than the A$.
The Consolidated Entity’s potential currency exposures comprise:
COAL SALES DENOMINATED IN US$
Coal sales for export coal are denominated in US$. The Consolidated Entity is therefore exposed to volatility
in the US$: A$ exchange rates. Historically, due to the stability in the exchange rate it remains the
Consolidated Entity’s policy not to hedge Foreign exchange risk relating to coal sales. This may change in
the future if the Consolidated Entity believe there may be a benefit to hedge foreign currency risk in relation
to its coal sales.
The Consolidated Entity generally aligns all Semi Soft Coking Coal prices to relevant Newcastle Semi Soft
indexes. While Thermal coal sales are generally sold on the spot market via negotiation with relevant
counter parties. The Consolidated Entity does not use any derivative products to mitigate fluctuations in
the relevant coal price indexes.
BANK GUARANTEE LINE OF CREDIT FACILITIES DENOMINATED IN US$
The line of credit facility utilised by the Group is issued back to back with an Australian Institution. This
means that while utilised as a Financial Guarantee only facility there is no exchange risk and the US$
amount varies while the A$ amount is fixed to the value of the guarantees issued. While this facility limits
US$ exposure in the event of default on a bank guarantee on issue of the funds by the respective banks the
US$ loan would crystallise, and a US$ exposure would eventuate. It is considered the risk of such an event
is limited in the current environment. If these loans did crystallise the US$ currency risk would be assessed
at that time. As noted in below loans in US$ currency supply a natural hedge to the US$ denominated coal
sales.
As this facility is provided by the Consolidated Entity’s existing financier, once this facility has been
cancelled and the bank guarantees replaced by the Consolidated Entity with cash deposits, this risk will no
longer be present.
WORKING CAPITAL FACILITY
The current working capital facility which will be cancelled on 16 September 2020 can no longer be utilised
by the Consolidated Entity therefore there is no longer an exposure to foreign currency fluctuations.
The short term finance facility currently in place is denominated in A$ and available to the Consolidated
Entity with 5 days-notice required for draw downs. See Note 13 for details of the short term facility.
Derivative products are therefore currently not deemed necessary to reduce foreign exchange risk in
relation to the working capital facilities.
EXPENSES DENOMINATED IN CURRENCIES OTHER THAN A$
Currently the exposure to such expenses is minimal, but it is noted that equipment purchases, equipment
parts and other mine related expenditure can be in various foreign currencies. When entering major
transactions in foreign currencies it is the policy of the Consolidated Entity to assess the currency risk of
the transaction and review derivative products or other methods to offset this risk. Where appropriate these
products would be used, but no such transactions occurred in the 30 June 2020 or 30 June 2019 financial
years.
87
75
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
N0TE 21
FINANCIAL RISK MANAGEMENT (CONT.)
D. MARKET RISK
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is
a risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (another
price risk). The Consolidated Entity does not have any material exposure to market risk.
At 30 June 2020, the effect on profit as a result of changes in the FX rate would be:
Increase
in FX rate
by 5%
Profit
or loss
$ ‘000
396
120
(155)
361
Profit
or loss
$ ‘000
1,439
606
(614)
1,431
Decrease
in FX rate
by 5%
Profit
or loss
$ ‘000
(396)
(120)
155
(361)
Profit
or loss
$ ‘000
(1,439)
(606)
614
(1,431)
Carrying
amount
$ ‘000
7,915
2,403
-
-
Carrying amount
$ ‘000
28,790
12,123
-
-
2020
Cash and cash equivalents - US$
Trade receivables - US$
Tax charge of 30%
After tax increase/ (decrease)
2019
Cash and cash equivalents - US$
Trade receivables - US$
Tax charge of 30%
After tax increase/ (decrease)
76
88
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 21
FINANCIAL RISK MANAGEMENT (CONT.)
INTEREST RATE RISK
Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk
management is to manage and control interest rate risk exposures within acceptable parameters while
optimising the return.
Interest rate risk is managed with a mixture of fixed and floating rate investments. For further details on
interest rate risk refer to the tables below:
Total carrying
amount as
per the
consolidated
statement of
financial
position
$‘000
Fixed
interest
rate
$‘000
Non-
interest
bearing
$‘000
-
407
-
-
-
-
4,714
115
4,829
-
32,524
12,469
-
823
-
-
22,650
-
622
32,244
407
4,714
115
37,480
32,524
12,469
22,650
823
622
13,292
55,796
69,088
Total financial assets
32,244
407
2020
FINANCIAL ASSETS
Cash and cash equivalents
Restricted cash
Receivables
Security deposits
Floating
interest
rate
$ ‘000
32,244
-
-
-
FINANCIAL LIABILITIES
Trade payables
Equipment finance lease
Vendor Royalties Payable
Lease Liability
Other payables
Total financial liabilities
2019
FINANCIAL ASSETS
-
-
-
-
-
-
Cash and cash equivalents
90,465
Restricted cash
Receivables
Security deposits
-
-
-
-
245
-
-
-
-
20,803
113
90,465
245
20,803
113
Total financial assets
90,465
245
20,916
111,626
Weighted
average
effective
interest rate
%
0.25%
0.82%
4.47%
8.0%
1.13%
2.23%
FINANCIAL LIABILITIES
Trade payables
Working Capital Facility
Vendor Royalties Payable
Other payables
Total financial liabilities
-
-
-
-
-
-
-
-
-
-
50,307
50,307
-
32,553
853
83,713
-
10.00%
32,553
853
83,713
89
77
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 21
FINANCIAL RISK MANAGEMENT (CONT.)
The Consolidated Entity has performed a sensitivity analysis relating to its exposure to interest rate risk.
This sensitivity demonstrates the effect on the current year results and equity which could result from a
change in these risks.
At 30 June 2020, the effect on profit and equity as a result of changes in the interest rate would be as
follows:
Increase
in interest rate
by 1%
Profit
or loss
Equity
$ ‘000
$ ‘000
322
(97)
225
322
(97)
225
Decrease
in interest rate
by 1%
Profit
or loss
$ ‘000
Equity
$
(322)
(322)
97
97
(225)
(225)
Carrying
Amount
$ ‘000
32,244
-
-
2020
Cash and cash equivalents
Tax charge of 30%
After tax increase/ (decrease)
2019
Cash and cash equivalents
90,465
905
905
(905)
(905)
Tax charge of 30%
After tax increase/ (decrease)
-
-
(271)
(271)
271
271
634
634
(634)
(634)
FAIR VALUES
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes. The Consolidated Entity has adopted the amendment to AASB 9
Financial Instruments: Disclosures which requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
a)
b)
c)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
The Consolidated Entity completed a level 3 valuation on contingent consideration (Note 17). The carrying
value of a significant portion of all financial assets and financial liabilities approximate their fair values due
to their short-term nature. There were no transfers between the levels during the year.
78
90
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 21
FINANCIAL RISK MANAGEMENT (CONT.)
Financial Liabilities
2020
Vendor royalties contingent consideration held at fair value
through profit or loss
Total Financial Liabilities
2019
Vendor royalties contingent consideration held at fair value
through profit or loss
Total Financial Liabilities
Level 1
Level 2
$ ‘000
$ ‘000
-
-
-
-
-
-
-
-
Level 3
$ ‘000
22,650
22,650
32,553
32,553
There were no other financial assets or liabilities carried at fair value in FY20.
91
79
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 22
INTERESTS IN OTHER ENTITIES
Subsidiaries
The Consolidated Entity’s principal subsidiaries at 30 June 2020 are set out below. Unless otherwise stated,
they have share capital consisting solely of ordinary shares that are held directly by the group, and the
proportion of ownership interests held equals the voting rights held by the group. The country of
incorporation or registration is also their principal place of business.
Name of entity
Principle
activities
Country of
incorporation
Class of
shares
Percentage
owned
2020
2019
Mackenzie Coal Pty Limited
Coal exploration
Australia
Ordinary
100%
100%
Comet Coal & Coke Pty Limited
Coal exploration
Australia
Ordinary
100%
100%
Belview Coal Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Belview Expansion Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Stanmore Coal Custodians
Pty Ltd1
Trustee of Stanmore
Employee Share Trust
Australia
Ordinary
100%
100%
Emerald Coal Pty Ltd
New Cambria Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Coal exploration
Australia
Ordinary
100%
100%
Kerlong Coking Coal Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Stanmore Surat Coal Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Theresa Creek Coal Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Stanmore Wotonga Pty Ltd
Coal exploration
and mining
Australia
Ordinary
100%
100%
Stanmore IP Coal Pty Ltd
Coal mining
Australia
Ordinary
100%
100%
Stanmore IP South Pty Ltd
Coal exploration
Australia
Ordinary
100%
100%
Stanmore Bowen Coal Pty Ltd
Isaac Plains Coal Management
Pty Ltd
Isaac Plains Sales & Marketing
Pty Ltd
1
previously Brown River Coal Pty Ltd
Details of farm in arrangements
Coal exploration
and mining
Coal exploration
and mining
Coal exploration
and mining
Australia
Ordinary
100%
100%
Australia
Ordinary
Australia
Ordinary
100%
100%
100%
100%
Set out below are the significant farm in arrangements of the group as at 30 June 2020. The proportion of
ownership interest is the same as the proportion of voting rights held.
Name of entity
Principle
activities
Place of
business/Country
of incorporation
Nature of
relationship
Percentage interest
2020
2019
Clifford Joint Venture
Coal exploration
Australia
Farm in arrangement
Lilyvale Joint Venture
Coal exploration
Australia
Farm in arrangement
Mackenzie Joint Venture
Coal exploration
Australia
Farm in arrangement
60%
85%
95%
60%
85%
95%
92
80
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 23
COMMITMENTS
EXPLORATION AND MINING
The commitments to be undertaken are as follows:
Payable
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
2020
$ ‘000
2019
$ ‘000
652
1,675
474
2,801
1,191
2,066
474
3,731
The Consolidated Entity has certain obligations to expend minimum amounts on exploration and mining
tenement areas. These obligations are expected to be fulfilled in the normal course of operations.
SHORT TERM LEASES
The commitments to be undertaken are as follows:
Payable
- not later than 12 months
- between 12 months and 5 years
2020
$ ‘000
2019
$ ‘000
3
17
20
130
52
182
The Consolidated Entity has a short term lease commitment in relation to the leased office equipment. The
commercial office lease commitment is recognised in Note 14 following the adoption of AASB 16 Leases.
CAPITAL COMMITMENTS
The commitments to be undertaken are as follows:
Payable
- not later than 12 months
- between 12 months and 5 years
2020
$ ‘000
2019
$ ‘000
780
3,700
7,675
3,700
4,480
11,375
93
81
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 23
COMMITMENTS (CONT.)
Land acquisitions
On 7 April 2011, the Consolidated Entity announced that it had completed an agreement for the right to
purchase The Range thermal Coal Project in the Surat Basin. Variations to this agreement have been
negotiated such that final payment and transfer of title is due 30 days after the Mining Lease is granted by
the Department of Natural Resources, Mines and Energy, or an earlier date by agreement. The final
payment is indexed to land valuation movements with reference to comparable properties, with a reference
price of $3.7 million based at 2014. The agreement gives the Group access to undertake evaluation and
development work as the Project moves through the approval process and ultimate development and
production. The terms of the acquisition are within normal market expectations.
Isaac Plains Complex Royalty
On 26 November 2015 the Consolidated Entity established a finance facility with Taurus to fund the
acquisition of and re-start of mining at the Isaac Plains Complex and agreed to a 0.8% royalty payable on:
•
the saleable value of all product coal owned by the Group at that time and processed through the Isaac
Plains infrastructure.
• any processing or handing fees arising from the treatment of 3rd party coal processed through the Isaac
Plains infrastructure.
On the 8 June 2018, the Consolidated Entity extended its financing facilities through Taurus on the
completion of this extension it was agreed to increase the royalty from 0.8% to 1% on all future sales that
meet the above criteria.
This Royalty stream will stay on foot following cancellation of the finance facility.
Isaac Plains East landholder agreement
On 20 July 2017 the Consolidated Entity completed a land holder compensation agreement for access to MLA
70016, MLA 70017, MLA 70018, and MLA 70019. The compensation agreement includes the following
contingent consideration item:
• A royalty of $0.60/product tonne sold (increasing by 2.5% p.a.) from July 2018 when the published Hard
Coking Coal Price for any quarter is greater than US$200/t (increasing by 2.5% p.a.) from July 2017.
82
94
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 24
CONTINGENT ASSETS AND LIABILITIES
CONTINGENT ASSETS
WICET Loan
In the 2014 financial year the Consolidated Entity impaired the full balance of the loan provided to third
party infrastructure providers. The loan related to the WEXP1 project in Gladstone and the Group’s
participation in the Capacity Commitment Deed (CCD) which provided certain future access rights in return
for a funding commitment from the Consolidated Entity. The Consolidated Entity provided $8m in loans
which were used to fund studies and complete initial dredging activities in respect of a future expansion to
the port site. The CCD expired on 31 August 2014. The Group retains only those rights which relate to
recoupment of loaned amounts as a result of a future port expansion, which may or may not occur. Based
on a range of factors, a new expansion proponent who achieves financial close prior to 31 December 2020
will be required to reimburse the Group for a portion of the loaned amount which, in the opinion of an
expert, provides a benefit to the proponents of that expansion. Until the timing of that future financing
event is known, it is difficult to reliably estimate what portion of the Consolidated Entity’s $8m loan would
be repaid.
CONTINGENT LIABILITIES
Debt finance facility
In November 2015 (extended in June 2019), the Consolidated Entity signed a Finance Facility which provides
credit support for certain bank guarantees issued to third parties related to the Isaac Plains Coal Mine, to
support major infrastructure and transport contracts. Given the structure of the arrangement the facility is
backed-to-back with a major financial institution which provides credit support on the Consolidated Entity’s
behalf. This arrangement, amongst other things, avoids foreign currency translation risk as the guarantees
issued to third parties are denominated in Australian dollars. The letters of credit arrangement are off-
consolidated statement of financial position except in circumstances where the Consolidated Entity is in
default under the facility agreement or the underlying infrastructure contract. If a default were to occur, then
the debt would convert into a US dollar loan which would result in Consolidated Statement of Financial
Position recognition. At the date of these financial statements there is no default occurring or subsisting.
Through this facility, the following bank guarantees are provided to third parties:
Rail capacity providers
Port capacity providers
Electricity network access supplier
Other
2020
$’000
6,222
4,335
-
3,661
2019
$’000
6,222
4,335
1,247
3,506
14,218
15,310
During FY20, this Finance Facility provided to the Consolidated Entity was cancelled as a result of the
change of control of the Consolidated Entity. The Consolidated Entity is in the process of replacing the bank
guarantees provided under the current Finance Facility and will have all the bank guarantees replaced by
the cancellation date of the facility. See Note 13 for more details about the current and proposed finance
facilities.
95
83
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 24
CONTINGENT ASSETS AND LIABILITIES (CONT.)
Surety Bond facility
On June 2019 the Consolidated Entity signed a Surety Bond Facility which provides performance bonds. The
surety bonds are off-consolidated statement of financial position except in circumstances where the
Consolidated Entity is in default under the facility letter. If a default were to occur, then the debt would be
realised which would result in Consolidated Statement of Financial Position recognition. At the date of these
financial statements there is no default occurring or subsisting.
Through this facility, the following surety is provided to a third party:
Government departments as a condition of mining licences
2020
$’000
2019
$’000
17,480
17,480
17,480
17,480
Given the Queensland Government changes to the provision of financial security for mining rehabilitation
obligations, the Consolidated Entity is reviewing its options in relation to this Surety Bond Facility. If there is
opportunity for the Consolidated Entity to join the Queensland Government State pool in relation to its
current rehabilitation obligations this may be considered.
As at 30 June 2020 this Surety Bond Facility is still required, and the Consolidated Entity had not yet been
approved to be part of the State pool.
84
96
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 25
EVENTS AFTER REPORTING DATE
On 27 July 2020 the Consolidated Entity announced that it has entered into a marketing services
agreement with M Resources Trading Pty Ltd (M Resources).
M Resources will exclusively manage the Consolidated Entity’s global sales contracts and customer
relationships, as well securing additional sales to customers. M Resources will be managing sales for all of
the Consolidated Entity’s coal output, including for the Isaac Downs project.
The key terms of the agreement are;
•
•
initial contract term is for 3 years with an option to extend for an additional 12 months if agreed
by both parties
the contract is a fixed base fee contract with an additional performance based variable fee
linked to agreed performance-based targets
M Resources is an independent Brisbane based marketing services and trading company supported by an
experienced team with a long track record in market development, technical marketing, sales, processing
and logistics management. M Resources and its owner, Matt Latimore are substantial shareholders of the
Consolidated Entity, creating a strategic alignment towards shareholder goals.
On 27 July 2020, the Consolidated Entity announced a change to its accounting period to align accounting
periods with its parent entity, GEAR. The Consolidated Entity will have a 6-month transitional financial
period beginning 1 July 2020 and ending 31 December 2020. The Consolidated Entity will then revert to a
financial year period 1 January to 31 December.
On 31 August 2020, Queensland Treasury, as part of the Financial Provisioning scheme assessed the Initial
Risk Category of the Consolidated Entity’s ability to rehabilitate Isaac Plains and Isaac Plains East as
Moderate. This risk classification allows the Consolidated Entity to form part of the Queensland Treasury
State Pool in relation to providing financial security over its future rehabilitation obligations for Isaac Plains
and Isaac Plains East. The Consolidated Entity is required to contribute 2.75% of its estimated rehabilitation
costs to the State Pool for this security.
No other events or circumstances have arisen since the end of the financial year.
97
85
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 26
KEY MANAGEMENT PERSONNEL
Total key management personnel compensation
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
NOTE 27
AUDITOR’S REMUNERATION
AUDIT SERVICES
Amounts paid/payable to BDO Audit Pty Ltd for audit or
review of the financial statements for the entity or any
entity in the Consolidated Entity
TAXATION SERVICES
Amounts paid/payable to related entities of BDO Audit
Pty Ltd for non-audit taxation services performed for the
entity or any entity in the Consolidated Entity
CORPORATE FINANCE SERVICES
Amounts paid/payable to related entities of BDO Audit
Pty Ltd for the non-audit takeover defence services
performed for the entity or any entity in the Consolidated
Entity
86
2020
$
2019
$
2,700,511
2,601,810
130,803
105,264
15,957
-
1,661,954
549,700
4,509,225
3,256,774
2020
$
2019
$
181,863
149,800
60,225
106,449
101,989
135,202
344,077
391,451
98
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 28
PARENT ENTITY INFORMATION
The Corporations Act 2001 requirement to prepare parent entity financial statements where consolidated
financial statements are prepared has been removed and replaced by the new regulation 2M.3.01 which
requires the following limited disclosure in regard to the parent entity (Stanmore Coal Limited). The
consolidated financial statements incorporate the assets, liabilities and results of the parent entity in
accordance with the Consolidated Entity’s accounting policy. The financial information for the parent entity,
Stanmore Coal Limited, has been prepared on the same basis as the consolidated financial statements,
except as follows:
Investments in subsidiaries, associates and joint ventures are accounted for at cost.
Parent Entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Share Based Payment Reserve
Accumulated losses
Total shareholder’s equity
Profit / (loss) for the year
Total comprehensive income for the year
GUARANTEES
2020
$ ‘000
15,290
73,931
89,221
2,185
23,815
26,000
63,221
121,725
2,348
2019
$ ‘000
4,705
92,916
97,621
27,124
5,845
32,969
64,652
117,613
1,703
(60,852)
(54,664)
63,221
21,983
21,983
64,652
16,185
16,185
Under the terms of the Secured Financing Facility entered in November 2015, Stanmore Coal Limited has
provided certain guarantees in relation to the arrangements between the Financier and the borrowing
entity (Stanmore IP Coal Pty Ltd). These guarantees relate primarily to payment performance and
maintaining the tenure of the Isaac Plains Coal Mine in good standing.
CONTINGENT LIABILITIES
The parent entity has no contingent liabilities.
CAPITAL COMMITMENTS
The parent entity has no capital commitments.
99
87
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 29
OPERATING SEGMENTS
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed
and used by the Board of Directors (chief operating decision makers, “CODM”) in assessing performance and
determining the allocation of resources. The Consolidated Entity is managed primarily on a producing asset
versus non-producing asset basis. Operating segments are determined on the basis of financial information
reported to the Board which is at the Consolidated Entity level. All segments are located within Australia.
Accordingly, management currently identifies the Consolidated Entity as having two reportable segments,
the first being the operation of the Isaac Plains Coal Mine (including the Isaac Plains East project) and the
second being all other exploration and development coal assets and corporate.
Accounting policies adopted
Unless otherwise stated, all amounts reported to the Board of Directors, being the CODM with respect to
operating segments, are determined in accordance with accounting policies that are consistent with those
adopted in the annual financial statements of the Consolidated Entity.
Segment assets
Where an asset is used across multiple segments the asset is allocated to the segment that receives most
of the economic value from the assets. In most instances, segment assets are clearly identifiable based on
their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the liability and the operations
of the segment. Borrowings and tax liabilities are generally considered to relate to the whole Consolidated
Entity and are not allocated. Segment liabilities include trade and other payables and certain direct
borrowings.
Unallocated items
Coal trading, corporate, marketing and infrastructure functions which are managed on a group basis are not
allocated to an operating segment.
The Consolidated Entity’s financing (including finance costs and finance income), depreciation and income
taxes are managed on a group basis and are not allocated to reportable segments.
Major customers
The Consolidated Entity has several customers to whom it sells export grade coal. The Consolidated Entity
supplies one such external customer who accounts for 29% of revenue. The next most significant customer
accounts for 15% of revenue.
RECOGNITION AND MEASUREMENT
The Consolidated Entity applies AASB 8 Operating Segments which requires a management approach under
which segment information is presented on the same basis as that used for internal reporting purposes.
Operating segments are reported in a manner that is consistent with the internal reporting to the chief
operating decision maker (CODM), which has been identified by the Consolidated Entity as the Managing
Director and other members of the Board of Directors.
88
100
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 29
OPERATING SEGMENTS (CONT.)
Segment performance
2020
SEGMENT REVENUE
External sales
Total segment revenue
Total revenue per consolidated
Statement of Profit or Loss and other
Comprehensive Income
RESULT
Segment result
Depreciation and amortisation
Income tax expense
Net finance expense
Net profit after tax per consolidation
Statement of Profit or Loss and other
Comprehensive Income
Total Assets
Total Liabilities
2019
SEGMENT REVENUE
External sales
Total segment revenue
Total revenue per consolidated
Statement of Profit or Loss and other
Comprehensive Income
RESULT
Segment result
Depreciation and amortisation
Income tax expense
Net finance expense
Net profit after tax per consolidation
Statement of Profit or Loss and other
Comprehensive Income
Isaac
Plains
Complex
$ ‘000s
Exploration
&
Development
Unallocated
Operations
Adjustments
&
Eliminations
TOTAL
$ ‘000s
$ ‘000s
$ ‘000s
$ ‘000s
-
-
-
-
364,485
364,485
364,485
364,485
95,291
-
-
-
-
-
-
-
-
-
(8,779)
-
-
-
-
-
-
-
-
137,408
80,970
66,521
11,870
18,971
23,058
63,775
22,382
403,059
403,059
148,317
-
-
-
-
-
-
-
-
-
-
-
1,220
-
-
-
-
-
-
-
-
-
364,485
86,512
(26,916)
(16,685)
(8,018)
34,893
296,769
128,186
403,059
403,059
403,059
149,537
(11,383)
(36,932)
(9,624)
91,598
306,992
149,888
101
89
Total Assets
273,491
75,496
4,963
(46,958)
Total Liabilities
149,808
5,597
30,900
(36,417)
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 30
SHARE-BASED PAYMENTS
The following share-based payment arrangements existed at 30 June 2020.
Share-based payments to Directors, executives and employees.
SHARES
During the year ended 30 June 2020, shares were granted to eligible employees up to the value of $1,000
per employee. At a total cost to the Consolidated Entity of $14,000.
OPTIONS
During the year ended 30 June 2020, no options were granted to KMP as share-based payments.
RIGHTS
The amount recognised as share-based payment expense in the consolidated Statement of Profit or Loss
and other Comprehensive Income is as follows:
Employee benefits expense
2020
$ ‘000
1,662
1,662
2019
$ ‘000
551
551
These amounts have been recognised in equity in the Consolidated Statement of Financial Position as
follows:
Share Based Payment Reserve
2020
$ ‘000
(645)
(645)
2019
$ ‘000
(551)
(551)
RECOGNITION AND MEASUREMENT
The fair value of shares, options or rights granted to employees and consultants are recognised as an
expense with a corresponding increase in equity. The fair value is measured at grant date and recognised
over the period during which the employees or consultants become unconditionally entitled to the
instruments. In determining fair value, no account is taken of any performance conditions other than those
related to the share price of Stanmore Coal Limited (market conditions). The cumulative expense
recognised between grant date and vesting date is adjusted to reflect the Directors’ best estimate of the
number of instruments that will ultimately vest because of internal conditions of the instruments, such as
the employees having to remain with the Consolidated Entity until vesting date, or such that employees are
required to meet internal sales targets.
During the year ended 30 June 2020, Rights were granted to employees as long-term incentive as outlined
in the Remuneration report, 509,192 Rights were granted. The terms and conditions of the grant are as
follows:
90
102
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 30
SHARE-BASED PAYMENTS (CONT.)
Tranche
Grant date
Measurement
date
Exercise
price
Balance
at start
of year
Granted
in year
Exercised
in year
Lapsed
during
year
Balance
at end
of year
12 Oct 2012
30 Jun 2020
$0.00
100,000
14 Nov 2016
30 Jun 2019(a)
$0.00
94,985
29 Nov 2017
30 Jun 2019(a)
$0.00
531,497
29 Nov 2017
30 Jun 2020(b)
$0.00
2,611,508
5 Nov 2018
30 Jun 2021(c)
$0.00
1,251,497
-
-
-
-
-
100,000
94,985
531,497
-
-
-
1,506,488
1,105,020
-
-
-
-
332,884
699,547
219,066
24 Oct 2019
30 Jun 2022(d)
$0.00
-
509,192
254,596
164,691
89,905
4,589,487
509,192
2,820,450
1,969,258
308,971
1
1
2
3
4
TOTAL
(a) Vested on 31 July 2019 as determined by the Board and cash settled
(b) These Rights were modified and vested on 2 April 2020, refer to ‘Modification of performance rights’ on page 91
(c) These Rights were modified and vested on 2 April 2020, refer to ‘Modification of performance rights’ on page 91
(d) These Rights were modified and vested on 2 April 2020, refer to ‘Modification of performance rights’ on page 91
Performance rights pricing model
The fair value of performance Rights granted under the LTI program is based on the Absolute Shareholder
Total Return (ASTR) is measured using a Monte Carlo Simulation model incorporating the probability of the
performance hurdles being met. The following table lists the inputs to the models used for the years ended
30 June 2020, 30 June 2019 and 30 June 2018, prior to the modification following the change of control:
Tranche 2
(issued in FY2018)
Tranche 3
(issued in FY2019)
Tranche 4
(issued in FY2020)
Performance hurdle
Grant date
Vesting date
ASTR
29 Nov 2017
31 Jul 2020
Fair value at grant date
$0.32- $0.38 (SDR1)
Share price
Exercise price
Dividend yield
Expected measurement period
Risk free interest rate
Expected volatility
1
Specified Disposal Restriction
Modification of Rights
$0.60
$0.00
0%
30 Jun 2020
30 Jun 2021
2.40%
75%
ASTR
5 Nov 2018
31 Jul 2021
$0.45
$0.94
$0.00
0%
30 Jun 2021
30 Jun 2022
2.09%
60%
ASTR
24 Oct 2019
31 Jul 2022
$0.37
$1.13
$0.00
4.47%
30 Jun 2022
30 Jun 2023
0.73%
50%
As a result of the Board exercising its discretion in relation to the Rights outstanding on 1 April 2020, the
day immediately before the change of control, a modification under AASB 2 Share Based Payments was
triggered. This modification required the Rights that vested as a result of the change in control to be
revalued immediately before the change of control and any value increase between the revalued amount
and the share price on the day of modification be recognised in the Statement of Profit or Loss and other
Comprehensive Income. The below is the impact on the Statement of Profit or Loss and other
Comprehensive Income:
103
91
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 30
SHARE-BASED PAYMENTS (CONT.)
Tranche Exercise
Vesting
Price
No. of
rights
Modification
Fair
Value1
Share
price2
Impact
on profit
and loss
FY18
$0.00
2-Apr-20
1,506,4883 100% of the rights vested
0.28
0.96
1,024,412
FY19
$0.00
2-Apr-20
332,8843
50% of the rights vested
0.15
0.96
269,636
FY19
$0.00
31-Jul-21
332,883
50% of the Rights did not
vest and continue on
original terms
N/A
N/A
-
FY20
$0.00
2-Apr-20
254,5963
50% of the rights vested
0.13
0.96
211,315
FY20
$0.00
-
127,298
25% of the rights lapsed
N/A
N/A
FY20
$0.00
31-Jul-22
127,298
25% of the Rights that did
not vest and continue on
original terms
N/A
N/A
-
-
2,681,447
1,505,363
1
2
3
The fair value is the accounting valuation of the Rights on the day immediately before change of control occurred
The closing share price following change of control
The additional expense recognised as a result of vesting earlier than original conditions in line with the modification was $0.262m.
The Fair Value of the performance Rights granted under the LTI program which vested on 2 April 2020 was
based on the existing performance conditions, see page 93 for details. These conditions are measured using
a Monte Carlo Simulation model incorporating the probability of the performance hurdles being met. The
following table lists the inputs to the models used for the years ended 30 June 2020, 30 June 2019 and 30
June 2018 following the modification:
Performance hurdle
Grant date
Vesting date
Tranche 2
(issued in FY2018)
Tranche 3
(issued in FY2019)
Tranche 4
(issued in FY2020)
ASTR
1 April 2020
31 Jul 2020
ASTR
ASTR
1 April 2020
1 April 2020
31 Jul 2021
31 Jul 2022
Fair value at grant date
$0.23- $0.28 (SDR1)
Share price
Exercise price
Dividend yield
Expected measurement period
Risk free interest rate
Expected volatility
1
Specified Disposal Restriction
$0.80
$0.00
5.0%
30 Jun 2020
30 Jun 2021
0.21%
50%
$0.15
$0.80
$0.00
7.5%
$0.13
$0.80
$0.00
10.7%
30 Jun 2021
30 Jun 2022
30 Jun 2022
30 Jun 2023
0.21%
50%
0.29%
50%
104
92
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 30
SHARE-BASED PAYMENTS (CONT.)
Below is a summary of the performance conditions for vesting for Tranche 2 (FY18 rights) granted:
Performance Level
ATSR (a) of SMR (b)
CAGR (c)
% of
Stretch/Maximum
Vesting
Jun 20
Share Price
for vesting
Stretch
52.86%
100.00%
Between Target and stretch
>39.49%<52.86%
Pro-rata
Target
39.49%
50.00%
Between Threshold and Target
>22.92% <39.49%
Pro-Rata
Threshold
Below Threshold(d)
(a) Absolute Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY21 at CAGR
22.92%
<22.92%
0%
0%
$1.25
Pro-Rata
$0.95
Pro-Rata
$0.65
$0.00
Below is a summary of the performance conditions of vesting for Tranche 3 (FY19 rights) granted:
Performance Level
Stretch
ATSR (a) of SMR (b)
CAGR (c)
% of
Stretch/Maximum
Vesting
36.24%
100.00%
Between Target and stretch
>26.23%<36.24%
Pro-rata
Target
26.23%
50.00%
Jun 21
Share Price
for vesting
$2.20
Pro-Rata
$1.75
Between Threshold and Target
>14.33% <26.23%
Pro-Rata
Pro-Rata
Threshold
Below Threshold(d)
(a) Absolute Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY22 at CAGR
14.33%
<14.33%
0%
0%
$1.30
$0.00
Below is a summary of the performance conditions for vesting for Tranche 4 (FY20) Rights granted:
Performance Level
ATSR (a) of
SMR (b)
CAGR (c)
% of
Stretch/Maximum
Vesting
Jun 22
Share Price
for vesting
Stretch
20.00%
100.00%
Between Target and stretch
>15.00%<20.00%
Pro-rata
Target
15.00%
50.00%
Between Threshold and Target
>10.00%<15.00%
Pro-Rata
Threshold
Below Threshold(d)
(a) Absolute Shareholder Return
(b) Stanmore Coal Limited
(c) Compound Annual Growth Rate (CAGR)
(d) Subject to Retest in FY23 at CAGR
10.00%
<10.00%
0%
0%
$2.46
Pro-Rata
$2.17
Pro-Rata
$1.90
$0.00
105
93
Stanmore Coal Annual Report 2020
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 30
SHARE-BASED PAYMENTS (CONT.)
In relation to the Rights, one retest is available 12 months after the end of the measurement period only if
no vesting occurred in relation to the first test following the completion of the measurement period.
The Consolidated Entity does not intend to issue more than an aggregate of 5% of its share capital, from
time to time, under the LTI plans.
It is a condition of the rights that the KMP must remain employed by Stanmore Coal for the Rights to vest.
Key estimates – share-based payments
The Consolidated Entity uses estimates to determine the fair value of equity instruments issued to
Directors, executives and employees. The estimates include volatility, risk free rates and consideration of
satisfaction of performance criteria for recipients of equity instruments. During the year, no shares or
options were issued. Rights were issued as outlined above and the cost of these rights represents the
valuation completed by an independent valuer. As a result of the change of control that occurred on 2 April
2020, there was a modification to the valuation immediately prior to the change of control. See details on
page 91 for information on the modification and the impact to the Profit and Loss.
94
106
Stanmore Coal Annual Report 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Financial Statements (continued)
STANMORE COAL LIMITED Financial Statements FY20
NOTE 31
RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
PARENT ENTITY
The parent entity is Stanmore Coal Limited, a company incorporated in Australia. The ultimate parent
company of the Consolidated Entity is PT Sinarindo Gerbangmas.
SUBSIDIARIES
Interests in subsidiaries are disclosed in Note 22.
KEY MANAGEMENT PERSONNEL
Disclosures relating to KMP are set out in Note 26.
OTHER RELATED PARTY TRANSACTIONS
On 18 June, the Consolidated Entity has also signed a non-binding term sheet with its parent entity, Golden
Energy and Resources Limited (GEAR) in respect to a new financing facility. The terms of this facility are similar
to the terms provided by the previous financier. The Consolidated Entity is progressing this facility.
The key terms of the proposed facility are:
Facility will be a US$40m facility until 30 June 2022
Upfront commitment fee of 2.0%
Interest rate on drawn funds of 8.0% per annum
Interest rate on undrawn funds 2.0% per annum
On 26 June, the Consolidated Entity entered into a Short-term Financing Agreement with its parent entity, GEAR
to cover the period up until the US$40 million finance facility is finalised and in place. The key terms of this short-
term facility are:
Facility is an A$10m facility which expires on the earlier of 31 October 2020, or when the US$40m facility
is finalised
Interest rate is 8.0% per annum on draw funds
NOTE 32
OTHER ACCOUNTING POLICIES
A. PROVISIONS
Provisions for legal claims, service warranties and make good obligations are recognised when the
Consolidated Entity has a present legal or constructive obligation as a result of a past event, it is
probable that that an outflow of economic resources will be required to settle the obligation and the
amount can be reliably estimated.
B. NEW AND AMENDED STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
New Accounting Standards and Interpretations not yet mandatory or early adopted Australian
Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Consolidated Entity for the annual reporting
year ended 30 June 2020.
There are no such statements or interpretations that are expected to have a material impact on the
Consolidated Entity.
107
95
Stanmore Coal Annual Report 2020
DECLARATION BY DIRECTORS
96
Stanmore Coal Annual Report 2020 INDEPENDENT AUDITOR’S REPORT
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Stanmore Coal Limited
Report on the Audit of the Financial Report
INDEPENDENT AUDITOR'S REPORT
Opinion
We have audited the financial report of Stanmore Coal Limited (the Company) and its subsidiaries (the
To the members of Stanmore Coal Limited
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
Report on the Audit of the Financial Report
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
Opinion
declaration.
We have audited the financial report of Stanmore Coal Limited (the Company) and its subsidiaries (the
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
Act 2001, including:
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
(i)
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Basis for opinion
Act 2001, including:
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
financial performance for the year ended on that date; and
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
(ii)
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
Basis for opinion
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 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
We confirm that the independence declaration required by the Corporations Act 2001, which has been
Report section of our report. We are independent of the Group in accordance with the Corporations
given to the directors of the Company, would be in the same terms if given to the directors as at the
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
time of this auditor’s report.
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
for our opinion.
ethical responsibilities in accordance with the Code.
Key audit matters
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
Key audit matters are those matters that, in our professional judgement, were of most significance in
time of this auditor’s report.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
a separate opinion on these matters.
for our opinion.
Key audit matters
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
Key audit matters are those matters that, in our professional judgement, were of most significance in
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
97
Stanmore Coal Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
Carrying value of exploration and evaluation assets
Carrying value of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
Key audit matter
Refer to note 10 in the financial report.
Carrying value of exploration and evaluation assets
How the matter was addressed in our audit
Our procedures included, but were not limited to the
Refer to note 10 in the financial report.
The Group carries exploration and evaluation assets as
Key audit matter
at 30 June 2020 in relation to the application of the
The Group carries exploration and evaluation assets as
Group’s accounting policy for exploration and
at 30 June 2020 in relation to the application of the
Refer to note 10 in the financial report.
evaluation assets.
Group’s accounting policy for exploration and
The Group carries exploration and evaluation assets as
evaluation assets.
The recoverability of exploration and evaluation asset
at 30 June 2020 in relation to the application of the
is a key audit matter due to the significance of the
The recoverability of exploration and evaluation asset
Group’s accounting policy for exploration and
total balance and the level of procedures undertaken
is a key audit matter due to the significance of the
evaluation assets.
to evaluate management’s application of the
total balance and the level of procedures undertaken
The recoverability of exploration and evaluation asset
requirements of AASB 6 Exploration for and Evaluation
to evaluate management’s application of the
is a key audit matter due to the significance of the
of Mineral Resources in light of any indicators of
requirements of AASB 6 Exploration for and Evaluation
total balance and the level of procedures undertaken
impairment that may be present.
of Mineral Resources in light of any indicators of
to evaluate management’s application of the
impairment that may be present.
requirements of AASB 6 Exploration for and Evaluation
of Mineral Resources in light of any indicators of
impairment that may be present.
Vendor Royalty – Contingent consideration
Vendor Royalty – Contingent consideration
Key audit matter
following:
Our procedures included, but were not limited to the
How the matter was addressed in our audit
following:
Obtaining evidence that the Group has valid
following:
rights to explore in the areas represented by the
Obtaining evidence that the Group has valid
Our procedures included, but were not limited to the
capitalised exploration and evaluation
rights to explore in the areas represented by the
expenditure by obtaining supporting
capitalised exploration and evaluation
documentation such as license agreements and
expenditure by obtaining supporting
Obtaining evidence that the Group has valid
also considering whether the Group maintains the
documentation such as license agreements and
rights to explore in the areas represented by the
tenements in good standing
also considering whether the Group maintains the
capitalised exploration and evaluation
Making enquires of management with respect to
tenements in good standing
expenditure by obtaining supporting
the status of ongoing exploration programs in the
Making enquires of management with respect to
documentation such as license agreements and
respective areas of interest
the status of ongoing exploration programs in the
also considering whether the Group maintains the
Enquiring of management, reviewing ASX
respective areas of interest
tenements in good standing
announcements and reviewing Directors’ minutes
Enquiring of management, reviewing ASX
Making enquires of management with respect to
to ensure that the Group had not decided to
announcements and reviewing Directors’ minutes
the status of ongoing exploration programs in the
discontinue activities in any applicable areas of
to ensure that the Group had not decided to
respective areas of interest
interest and to assess whether there are any
discontinue activities in any applicable areas of
Enquiring of management, reviewing ASX
other facts or circumstances that existed to
interest and to assess whether there are any
announcements and reviewing Directors’ minutes
indicate impairment.
other facts or circumstances that existed to
to ensure that the Group had not decided to
indicate impairment.
discontinue activities in any applicable areas of
interest and to assess whether there are any
other facts or circumstances that existed to
indicate impairment.
How the matter was addressed in our audit
Vendor Royalty – Contingent consideration
The contingent consideration relates to:
Key audit matter
Refer to Note 17 in the financial report.
Refer to Note 17 in the financial report.
The company has recognised a liability for contingent
consideration as at 30 June 2020.
Key audit matter
The company has recognised a liability for contingent
consideration as at 30 June 2020.
The contingent consideration relates to:
Refer to Note 17 in the financial report.
The acquisition of the Isaac Plains mine and
The contingent consideration relates to:
requires payment of a royalty to each of the
The company has recognised a liability for contingent
The acquisition of the Isaac Plains mine and
consideration as at 30 June 2020.
vendors should the benchmark Hard Coking Coal
requires payment of a royalty to each of the
price exceed certain levels. The amount payable is
vendors should the benchmark Hard Coking Coal
capped at the level of cash received from each of
price exceed certain levels. The amount payable is
The acquisition of the Isaac Plains mine and
the vendors under the sale and purchase
capped at the level of cash received from each of
requires payment of a royalty to each of the
agreement
the vendors under the sale and purchase
vendors should the benchmark Hard Coking Coal
The acquisition of Isaac Downs in the prior year
agreement
price exceed certain levels. The amount payable is
contained a royalty agreement benchmarked
The acquisition of Isaac Downs in the prior year
capped at the level of cash received from each of
against the Hard Coking Coal prices exceeding
contained a royalty agreement benchmarked
the vendors under the sale and purchase
certain levels. The amount payable is capped at a
against the Hard Coking Coal prices exceeding
agreement
fixed amount over the life of the mine.
certain levels. The amount payable is capped at a
The acquisition of Isaac Downs in the prior year
fixed amount over the life of the mine.
The contingent consideration was a key audit matter
contained a royalty agreement benchmarked
due to the size of this liability and the judgement
against the Hard Coking Coal prices exceeding
The contingent consideration was a key audit matter
involved in estimating expected selling prices in future
certain levels. The amount payable is capped at a
due to the size of this liability and the judgement
periods with the uncertainty of impact of COVID-19.
fixed amount over the life of the mine.
involved in estimating expected selling prices in future
periods with the uncertainty of impact of COVID-19.
The contingent consideration was a key audit matter
due to the size of this liability and the judgement
involved in estimating expected selling prices in future
periods with the uncertainty of impact of COVID-19.
How the matter was addressed in our audit
The valuation of the contingent consideration is based
on forecasts and assumptions within a model
The valuation of the contingent consideration is based
developed by management.
on forecasts and assumptions within a model
How the matter was addressed in our audit
developed by management.
We evaluated and tested key assumptions in this
model by performing, amongst others, the following
The valuation of the contingent consideration is based
We evaluated and tested key assumptions in this
procedures:
on forecasts and assumptions within a model
model by performing, amongst others, the following
developed by management.
Providing the model to our auditor experts to
procedures:
assess the reasonableness of the methodology
We evaluated and tested key assumptions in this
Providing the model to our auditor experts to
and assumptions applied in the model in
assess the reasonableness of the methodology
model by performing, amongst others, the following
particular long term hard coking coal price
and assumptions applied in the model in
procedures:
forecasts and evaluating the results of their work
particular long term hard coking coal price
Providing the model to our auditor experts to
Checking the mathematical accuracy of the
forecasts and evaluating the results of their work
assess the reasonableness of the methodology
model and agreeing the underlying inputs used
Checking the mathematical accuracy of the
and assumptions applied in the model in
within the model to external market data were
model and agreeing the underlying inputs used
particular long term hard coking coal price
available
within the model to external market data were
forecasts and evaluating the results of their work
Examining the cash flow and coal production
available
Checking the mathematical accuracy of the
forecasts provided by management and
Examining the cash flow and coal production
model and agreeing the underlying inputs used
challenging the assumptions therein by ensuring
forecasts provided by management and
within the model to external market data were
consistency with the stated business and
challenging the assumptions therein by ensuring
available
operational objectives
consistency with the stated business and
Examining the cash flow and coal production
operational objectives
forecasts provided by management and
challenging the assumptions therein by ensuring
consistency with the stated business and
operational objectives
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
98
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Stanmore Coal Annual Report 2020 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Carrying value of exploration and evaluation assets Key audit matter How the matter was addressed in our audit Refer to note 10 in the financial report. The Group carries exploration and evaluation assets as at 30 June 2020 in relation to the application of the Group’s accounting policy for exploration and evaluation assets. The recoverability of exploration and evaluation asset is a key audit matter due to the significance of the total balance and the level of procedures undertaken to evaluate management’s application of the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources in light of any indicators of impairment that may be present. Our procedures included, but were not limited to the following: Obtaining evidence that the Group has valid rights to explore in the areas represented by the capitalised exploration and evaluation expenditure by obtaining supporting documentation such as license agreements and also considering whether the Group maintains the tenements in good standing Making enquires of management with respect to the status of ongoing exploration programs in the respective areas of interest Enquiring of management, reviewing ASX announcements and reviewing Directors’ minutes to ensure that the Group had not decided to discontinue activities in any applicable areas of interest and to assess whether there are any other facts or circumstances that existed to indicate impairment. Vendor Royalty – Contingent consideration Key audit matter How the matter was addressed in our audit Refer to Note 17 in the financial report. The company has recognised a liability for contingent consideration as at 30 June 2020. The contingent consideration relates to: The acquisition of the Isaac Plains mine and requires payment of a royalty to each of the vendors should the benchmark Hard Coking Coal price exceed certain levels. The amount payable is capped at the level of cash received from each of the vendors under the sale and purchase agreement The acquisition of Isaac Downs in the prior year contained a royalty agreement benchmarked against the Hard Coking Coal prices exceeding certain levels. The amount payable is capped at a fixed amount over the life of the mine. The contingent consideration was a key audit matter due to the size of this liability and the judgement involved in estimating expected selling prices in future periods with the uncertainty of impact of COVID-19. The valuation of the contingent consideration is based on forecasts and assumptions within a model developed by management. We evaluated and tested key assumptions in this model by performing, amongst others, the following procedures: Providing the model to our auditor experts to assess the reasonableness of the methodology and assumptions applied in the model in particular long term hard coking coal price forecasts and evaluating the results of their work Checking the mathematical accuracy of the model and agreeing the underlying inputs used within the model to external market data were available Examining the cash flow and coal production forecasts provided by management and challenging the assumptions therein by ensuring consistency with the stated business and operational objectives
Completeness and measurement of provision for rehabilitation
Key audit matter
How the matter was addressed in our audit
Completeness and measurement of provision for rehabilitation
Refer to Note 16 in the financial report.
Key audit matter
The company has recognised a provision for
rehabilitation as at 30 June 2020.
Refer to Note 16 in the financial report.
The provision for rehabilitation relates to:
The company has recognised a provision for
rehabilitation as at 30 June 2020.
Rehabilitation and rectification of remaining
historical disturbance at Isaac Plains
The provision for rehabilitation relates to:
Rehabilitation and rectification of disturbance
occurring during this financial year at Isaac Plains
Rehabilitation and rectification of remaining
East
historical disturbance at Isaac Plains
Rehabilitation and rectification of disturbance
The provision for rehabilitation was a key audit matter
occurring during this financial year at Isaac Plains
due to the size of this provision and the judgement
East
involved in estimating expected timing and costs to
rehabilitate disturbed areas in future periods.
The provision for rehabilitation was a key audit matter
due to the size of this provision and the judgement
involved in estimating expected timing and costs to
rehabilitate disturbed areas in future periods.
Other information
The valuation of the provision for rehabilitation is
How the matter was addressed in our audit
based on forecasts and assumptions within a model
developed by management.
The valuation of the provision for rehabilitation is
We evaluated and tested key assumptions in this
based on forecasts and assumptions within a model
model by performing, amongst others, the following
developed by management.
procedures:
We evaluated and tested key assumptions in this
Assessing the reasonableness of the methodology
model by performing, amongst others, the following
and assumptions applied in the model in
procedures:
particular the extent of disturbed areas as at 30
June 2020, and the expected timing of
Assessing the reasonableness of the methodology
rehabilitation works
and assumptions applied in the model in
Checking the mathematical accuracy of the
particular the extent of disturbed areas as at 30
model and agreeing the underlying inputs used
June 2020, and the expected timing of
within the model to external market data were
rehabilitation works
available
Checking the mathematical accuracy of the
Examining the cash flow forecasts provided by
model and agreeing the underlying inputs used
management and challenging the assumptions
within the model to external market data were
therein by ensuring consistency with the stated
available
business and operational objectives
Examining the cash flow forecasts provided by
management and challenging the assumptions
therein by ensuring consistency with the stated
business and operational objectives
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
Other information
financial report and the auditor’s report thereon.
The directors are responsible for the other information. The other information comprises the
Our opinion on the financial report does not cover the other information and we do not express any
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
form of assurance conclusion thereon.
financial report and the auditor’s report thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
Our opinion on the financial report does not cover the other information and we do not express any
and, in doing so, consider whether the other information is materially inconsistent with the financial
form of assurance conclusion thereon.
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
In connection with our audit of the financial report, our responsibility is to read the other information
If, based on the work we have performed, we conclude that there is a material misstatement of this
and, in doing so, consider whether the other information is materially inconsistent with the financial
other information, we are required to report that fact. We have nothing to report in this regard.
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Responsibilities of the directors for the Financial Report
If, based on the work we have performed, we conclude that there is a material misstatement of this
The directors of the Company are responsible for the preparation of the financial report that gives a
other information, we are required to report that fact. We have nothing to report in this regard.
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
Responsibilities of the directors for the Financial Report
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
The directors of the Company are responsible for the preparation of the financial report that gives a
fraud or error.
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
In preparing the financial report, the directors are responsible for assessing the ability of the group to
financial report that gives a true and fair view and is free from material misstatement, whether due to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
fraud or error.
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
operations, or has no realistic alternative but to do so.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
99
Stanmore Coal Annual Report 2020 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Completeness and measurement of provision for rehabilitation Key audit matter How the matter was addressed in our audit Refer to Note 16 in the financial report. The company has recognised a provision for rehabilitation as at 30 June 2020. The provision for rehabilitation relates to: Rehabilitation and rectification of remaining historical disturbance at Isaac Plains Rehabilitation and rectification of disturbance occurring during this financial year at Isaac Plains East The provision for rehabilitation was a key audit matter due to the size of this provision and the judgement involved in estimating expected timing and costs to rehabilitate disturbed areas in future periods. The valuation of the provision for rehabilitation is based on forecasts and assumptions within a model developed by management. We evaluated and tested key assumptions in this model by performing, amongst others, the following procedures: Assessing the reasonableness of the methodology and assumptions applied in the model in particular the extent of disturbed areas as at 30 June 2020, and the expected timing of rehabilitation works Checking the mathematical accuracy of the model and agreeing the underlying inputs used within the model to external market data were available Examining the cash flow forecasts provided by management and challenging the assumptions therein by ensuring consistency with the stated business and operational objectives Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
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
Auditor’s responsibilities for the audit of the Financial Report
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
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
audit conducted in accordance with the Australian Auditing Standards will always detect a material
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
Auditor’s responsibilities for the audit of the Financial Report
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
if, individually or in the aggregate, they could reasonably be expected to influence the economic
audit conducted in accordance with the Australian Auditing Standards will always detect a material
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
decisions of users taken on the basis of this financial report.
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
if, individually or in the aggregate, they could reasonably be expected to influence the economic
A further description of our responsibilities for the audit of the financial report is located at the
audit conducted in accordance with the Australian Auditing Standards will always detect a material
decisions of users taken on the basis of this financial report.
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
A further description of our responsibilities for the audit of the financial report is located at the
if, individually or in the aggregate, they could reasonably be expected to influence the economic
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
decisions of users taken on the basis of this financial report.
This description forms part of our auditor’s report.
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
A further description of our responsibilities for the audit of the financial report is located at the
This description forms part of our auditor’s report.
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
Report on the Remuneration Report
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
Opinion on the Remuneration Report
This description forms part of our auditor’s report.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 36 of the directors’ report for the
Opinion on the Remuneration Report
year ended 30 June 2020.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 36 of the directors’ report for the
In our opinion, the Remuneration Report of Stanmore Coal Limited, for the year ended 30 June 2020,
year ended 30 June 2020.
Opinion on the Remuneration Report
complies with section 300A of the Corporations Act 2001.
In our opinion, the Remuneration Report of Stanmore Coal Limited, for the year ended 30 June 2020,
We have audited the Remuneration Report included in pages 22 to 36 of the directors’ report for the
Responsibilities
complies with section 300A of the Corporations Act 2001.
year ended 30 June 2020.
The directors of the Company are responsible for the preparation and presentation of the
Responsibilities
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
In our opinion, the Remuneration Report of Stanmore Coal Limited, for the year ended 30 June 2020,
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
complies with section 300A of the Corporations Act 2001.
The directors of the Company are responsible for the preparation and presentation of the
Australian Auditing Standards.
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
Responsibilities
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
The directors of the Company are responsible for the preparation and presentation of the
Australian Auditing Standards.
BDO Audit Pty Ltd
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.
BDO Audit Pty Ltd
BDO Audit Pty Ltd
R M Swaby
Director
R M Swaby
Brisbane, 30 September 2020
Director
Brisbane, 30 September 2020
R M Swaby
Director
Brisbane, 30 September 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
100
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Stanmore Coal Annual Report 2020
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not shown elsewhere in
this report is as follows. The information is current as at 10 September 2020.
DISTRIBUTION OF EQUITY SECURITIES
The number of Ordinary Shares by size of holding is:
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
% No. of holders
Securities
264,517,968
4,273,217
929,403
616,349
68,300
97.82
1.58
0.34
0.23
0.02
270,405,237
100.00
23
177
129
249
264
842
The number of shareholders holding less than a marketable parcel is 224 (35,226 ordinary shares).
The number of Unlisted rights by size of holding is:
Range
100,001 and Over
50,001 to 100,000
10,001 to 50,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
% No. of holders
308,971
100.00
–
–
–
–
–
–
–
–
–
–
308,971
100.00
3
–
–
–
–
–
3
%
2.73
21.02
15.32
29.57
31.36
100.00
%
100.00
–
–
–
–
–
100.00
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders are shown in shareholder notices received by Stanmore Coal Limited as at 10 September 2020 are:
Name of shareholder
Golden Investments (Australia) Pte Ltd
M Resources Pty Ltd and Matt Latimore
Old Forrester Pty Ltd
RESTRICTED SECURITIES
There are 12,144 restricted shares on issue.
Number of shares
203,695,433
38,866,531
12,714,779
101
Stanmore Coal Annual Report 2020
SHAREHOLDER INFORMATION
(CONTINUED)
20 LARGEST HOLDERS
The names of the 20 largest holders, in each class of quoted security are:
ORDINARY SHARES:
Name of shareholder
GOLDEN INVESTMENTS (AUSTRALIA) PTE LTD
M RESOURCES PTY LTD AND LATIMORE FAMILY PTY LTD
OLD FORRESTER PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
CHENGDU DI’AO INTERNATIONAL INVESTMENT PTY LTD
CITICORP NOMINEES PTY LIMITED
MRS APIANG WOONG
ZERO NOMINEES PTY LTD
MR C.I. WALLIN & MS F.K. MCLOUGHLIN & MRS S.F. BHATIA
MORRIS EQUITY INVESTMENTS PTY LTD
PRINEAS SUPER PTY LTD
SIR RONALD ALFRED BRIERLEY
MR ROBERT HAMILTON FRITH
MR PHILIP LANGDON SPRING
MR ANDREW PAULINSKI
MRS CHRISTINE JOY TANKEY & MR JAMES ADRIAN TANKEY
WONFAIR INVESTMENTS PTY LTD
CS THIRD NOMINEES PTY LIMITED
TOTAL OF 20 LARGEST HOLDERS
TOTAL ORDINARY SHARES
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
Options and performance rights do not carry voting rights.
Number of shares
% of total shares
203,696,265
38,866,531
12,714,779
981,791
819,593
719,342
672,788
551,007
515,152
500,000
500,000
400,000
400,000
338,779
258,000
231,727
210,607
206,061
171,876
124,138
75.33
14.37
4.70
0.36
0.30
0.27
0.25
0.20
0.19
0.18
0.18
0.15
0.15
0.13
0.10
0.09
0.08
0.08
0.06
0.05
262,878,436
270,405,237
97.22
100.00
102
Stanmore Coal Annual Report 2020 RESERVES AND RESOURCES
Stanmore Coal Reserves as at end June 2020
Project Name
Tenement
Proved Probable
Total
Proved Probable
Total
Competent
Person
Report
Date
Coal Reserves
Marketable Coal Reserve
ML 70342,
ML 700016,
ML700017,
ML700018,
ML700019
ML 70342,
ML 700018,
ML 700019
MDL 137,
EPC 755,
EPC728
EPC 1112,
EPC 2030
Isaac Plains
Opencut
Isaac Plains
East Opencut
Isaac Plains
Underground
Isaac Downs
Isaac Plains
Complex
The Range
Total Coal
Reserves
1.0
8.3
0.1
1.1
1.9
10.2
0.7
6.4
0.0
1.4
0.7
7.8
H Aug-20
H Aug-20
12.9
12.9
9.4
9.4
F
Apr-18
22.3
3.6
25.9
15.8
2.1
17.9
I
Jul-20
31.6
18.5
50.1
22.8
13.0
35.8
116.6
116.6
94.2
94.2
G
Jul-11
31.6
135.1
166.7
22.8
107.2
130.0
Coal Type Ratio - Coking:Thermal
(% of Marketable Coal Reserve)
Isaac Plains OC
69%:31%
Isaac Plains East OC
99%:1%
Isaac Plains Underground 88%:12%
Isaac Downs
The Range
97%:3%
100% Thermal
Competnent Person
F - Mr Mark McKew - Geostudy
H - Mr Tony O’Connel - Optimal/Measured
G - Mr Richard Hoskings - Minserve
I - Mr Michael Barker - Palaris Australia
Note 1:
Note 2:
Note 3:
All Coal Resources are reported under The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(‘the JORC Code’) applicable at the time each report was published. Reports dated 2012, and earlier, used the JORC 2004 version, reports dated after
2012 reported against the requirements of the 2012 JORC Code.
Totals may not be exact due to significant figure rounding.
The Reserves quoted for The Range project were established in 2011 under the relevant JORC Code at the time and used a coal price forecast
of A$120/tonne for benchmark NEWC thermal coal equivalent. These Reserves were supported by a Feasibility Study that assumed the
completion of the Surat Basin rail to connect the mine to the Port of Gladstone.
Note 4: All Coal Reserves are reported on a 100% basis, and Stanmore Coal’s economic interest in the tenure above is 100%.
103
Stanmore Coal Annual Report 2020 RESERVES AND RESOURCES
(CONTINUED)
Stanmore Coal Resources as at end June 2020
Isaac Downs MDL 137,
C, PCI
EPC 728
Isaac South
EPC 755
C, T
24.7
11.9
71.6
11.5
14.5
50.0
Project
Name
Isaac Plains
Isaac Plains
East
Tenement
ML 70342,
ML 700018,
ML 700019
ML 700016,
ML700017,
ML700018,
ML700019
Isaac Plains
Complex
Clifford
The Range
Surat Basin
Complex
Sub Total
EPC 1274,
EPC 1276
EPC 1112,
EPC 2030
Sub Total
Mackenzie
EPC 2081
EPC 1114,
EPC 1186,
EPC 1798
EPC 1168,
EPC 1580
EPC 1687,
EPC 2157
Belview
Tennyson
Lilyvale
Total Coal
Resources
Coal
Type*
Measured
Resources
Indicated
Resources
Inferred
Resources
Total
Resources
Competent
Person
Report
Date
C,T
25.2
16.0
C
9.8
8.0
5
4
0
25
34
46
22
A
Jun-20
E
Jun-20
36.2
B
Jun-20
52
156
630
286
916
143
330
139
33
C
Jun-18
D
A
A
A
A
A
Aug-16
Oct-12
Nov-11
Mar-15
Dec-12
Feb-14
T
T
C, T
C, PCI
T
C
0
200.0
430
18.1
187.0
18.1
387
0
0
0
0
25.7
50.0
0.0
0
81
511
117
280
139
33
89.7
512.7
1114
1717
*Coal Types Potential Legend
C - Coking Coal, semi-soft or greater potential
Competent Person
A - Mr Troy Turner - Xenith Consulting
PCI - Pulverised Coal Injection
TH - Export Thermal grade
B - Mr James Knowles - Measured Group
C - Mr Mal Blaik - JB Mining
D - Mr Oystein Naess - Xenith Consulting
E - Dr Bronwyn Leonard - Stanmore Coal
Note 1:
Note 2:
Note 3:
All Coal Resources are reported under The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC
Code’) applicable at the time each report was published. Reports dated 2012, and earlier, used the JORC 2004 version, reports dated after 2012 are
reported against the requirements of the 2012 JORC Code.
Rounding to the nearest significant figure is applied to Total Resource Tonnes in the Inferred Category. This is deemed conservative and reflective of
the Inferred Resource category confidence level and accounts for the minor differences in the overall total reported resources.
All Coal Resources are reported on a 100% basis; Stanmore Coal’s economic interest in Clifford is 60%, Mackenzie is 95%, and Lilyvale is 85%, all other
tenure is 100% owned by Stanmore Coal.
104
Stanmore Coal Annual Report 2020 OTHER INFORMATION
Resources and reserves note
The company has chosen to report Measured and
Indicated Resources inclusive of Mineral Resources
modified to produce Coal Reserves. The summary tables
have been provided in this report.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcements made on 21 August 2020
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 21 August 2020 continue to apply and have not
materially changed.
Competent persons statement
The information in this report relating to coal reserves
for the Isaac Plains and Isaac Plains East was announced
on 21 August 2020, titled “Mineral Resources and Coal
Reserve update for Isaac Plains mine and Isaac Plains
East mine”, and is based on information compiled by Mr
Tony O’Connell, an employee of Optimal Mining Solutions
and Principle Mining Consultant with Measured Group. Mr
O’Connell is a qualified Mining Engineer (Bachelor Degree
in Engineering (Mining), University of Queensland), and a
member of Australian Institute of Mining and Metallurgy
and has the relevant experience (21+ years) in relation to
the mineralisation being reported to qualify as a Competent
Person as defined in the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves
(The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on
21 August 2020 and that all material assumptions and
technical parameters underpinning the estimates in the
announcement made on 21 August 2020 continue to
apply and have not materially changed.
The information in this report relating to coal reserves for
the Isaac Downs Project was announced on 21 August
2020, titled “Mineral Resources and Coal Reserve update
for Isaac Downs” and is based on information compiled
by Mr Michael Barker, an employee of Palaris Australia as
General Manager Feasibility Studies. Mr Barker is a Member
of Australian Institute of Mining and Metallurgy and has the
relevant experience (23+ years) in relation to the relevant
style of mineralisation being reported to qualify as a
Competent Person as defined in the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any
new information or data that materially affects the
information included in the announcement made on
21 August 2020 and that all material assumptions and
technical parameters underpinning the estimates in the
announcement made on 21 August 2020 continue to apply
and have not materially changed.
The information in this report relating to coal reserves
for the Isaac Plains Underground was announced on
21 August 2020, titled “Mineral Resources and Coal
Reserve update for Isaac Plains mine and Isaac Plains East
mine” and is based on information compiled by Mr Mark
McKew who is an employee of Geostudy Pty Ltd. Mr McKew
is a qualified mining engineer and has sufficient experience
which is relevant to the style of mineralization and type of
deposit under consideration and to the activity which he is
undertaking, to qualify as Competent Person as defined in
the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code
2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on 21 August 2020
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 21 August 2020 continue to apply and have not
materially changed.
The information in this report relating to coal reserves
for the Range was announced on 21 August 2020, titled
“2020 Annual Coal Resource & Reserves Summary”, and
is based on information compiled by Mr Richard Hoskings
who is a Director of Minserve. Mr Hoskings is a qualified
mining engineer and has sufficient experience which is
relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is
undertaking, to qualify as Competent Person as defined in
the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code
2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on 30 August 2019
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 30 August 2019 continue to apply and have not
materially changed.
The information in this report relating to coal resources
for Isaac Plains, including Isaac Plains Underground was
announced on 21 August 2020, titled “Mineral Resources
and Coal Reserve update for Isaac Plains mine and Isaac
Plains East mine”, and is based on information prepared
by consultants under the guidance of Mr Troy Turner who
is a member of the Australasian Institute of Mining and
Metallurgy and is a full-time employee and Managing
Director of Xenith Consulting Pty Ltd.
105
Stanmore Coal Annual Report 2020 OTHER INFORMATION
(CONTINUED)
Mr Turner is a qualified Geologist (BAppSc(Geology),
University of Queensland) and has sufficient experience
(25+ years) which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity
which he is undertaking, to qualify as Competent Person
as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The information in this report relating to coal resources for
Isaac Plains East was announced on 21 August 2020, titled
“Mineral Resources and Coal Reserve update for Isaac
Plains mine and Isaac Plains East mine”, and is based on
information prepared by Dr Bronwyn Leonard who is a full
time employee of Stanmore Coal and holds the position
of Superintendent Mine Geology. Dr Leonard is qualified
Geologist with a degree from University of Canterbury,
a PhD from James Cook University majoring in Geology/
Earth Sciences, and is a member of the Australasian
Institute of Mining and Metallurgy (AusIMM). Dr Leonard has
over 15 years of experience in the style of mineralization
and type of deposit under consideration and to the activity
which is undertaken, to qualify as Competent Person as
defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on 21 August 2020
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 21 August 2020 continue to apply and have not
materially changed.
The information in this report relating to coal resources for
the Isaac Downs was announced on 21 August 2020, titled
“Mineral Resources and Coal Reserve update for Isaac
Downs” and is based on information prepared by a team
of consultants under the guidance of Mr Toby Prior who
is a Principle Geologist with Measured Group Pty Ltd. Mr
Prior is a qualified Geologist (BAppSc(Geology) University
of Southern Queensland) and has sufficient experience
(20+ years) which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity
which he is undertaking, to qualify as Competent Person
as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on 21 August 2020
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 21 August 2020 continue to apply and have not
materially changed.
The information in this report relating to coal resources for
the Isaac South was announced on 21 August 2020, titled
“2020 Annual Coal Resource & Reserves Summary”, and is
based on information compiled by Mr Mal Blaik. Mr Blaik is
Principal Geologist at JB Mining Services Pty Ltd. Mr Blaik
has over 30 years experience which is relevant to the style of
mineralisation and type of deposit under consideration and to
the activity which he is undertaking, to qualify as Competent
Person as defined in the 2012 Edition of the “Australasian
Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcement made on 21 August 2020
and that all material assumptions and technical parameters
underpinning the estimates in the announcement made
on 21 August 2020 continue to apply and have not
materially changed.
The information in this report relating to the Clifford
Project exploration results and coal resources is based
on information compiled by Mr Oystein Naess who is a
member of the Australian Institute of Mining and Metallurgy
and was a full-time employee of Xenith Consulting Pty
Ltd. Mr Naess is a qualified geologist and has sufficient
experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity
which he is undertaking, to qualify as Competent Person
as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcements and that all material
assumptions and technical parameters underpinning the
estimates in the announcements continue to apply and
have not materially changed.
The information in this report relating to coal resources
for all other projects was announced on the dates noted
in the table within the Directors’ Report, and is based on
information compiled by Mr Troy Turner who is a full-time
employee and Managing Director of Xenith Consulting
Pty Ltd. Mr Turner is a qualified geologist and a member of
the Australian Institute of Mining and Metallurgy (AusIMM)
and has sufficient experience in relation to the style of
mineralisation and type of deposits being reported to qualify
as a Competent Person as defined in the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code 2012 Edition)”.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the announcements and that all material
assumptions and technical parameters underpinning the
estimates in the announcements continue to apply and
have not materially changed.
106
Stanmore Coal Annual Report 2020 STANMORE’S FIVE-YEAR
FINANCIAL HISTORY
All figures in $M unless shown otherwise
FY20
FY19
FY18
FY17
FY16
Summarised financial statements
Sales revenue
Operating profit before depreciation and amortisation,
finance costs and income tax
364,485
403,059
208,081
137,846
12,700
89,512
149,537
24,033
19,075
(15,658)
Underlying EBITDA (non-IFRS measure)
0
154,895
45,548
26,756
(22,219)
Depreciation and amortisation
(29,916)
(11,383)
(5,207)
(3,332)
(1,306)
EBIT
Net Finance costs
59,596
138,154
18,826
15,743
(16,964)
(8,018)
(9,624)
(8,786)
(9,325)
(2,782)
Income tax (expense)/benefit
(16,685)
(36,932)
(4,074)
5,617
0
Operating profit after income tax attributable to members of
Stanmore Coal Limited
34,893
91,598
5,966
12,035
(19,746)
Capital and dividends
Ordinary shares on issue (number) 000’s as at 30 June
270,417
256,094
251,801
251,801
222,497
Paid up ordinary capital as at 30 June
121,725
117,613
113,200
113,200
97,368
Dividend per ordinary share declared (cents)
–
11
2
–
–
Financial performance
Share price at year end ($/sh)
Earnings per share (weighted average) (cents)
Return on average ordinary shareholders’ equity
Financial position as at 30 June
Total assets
Total liabilities
Net assets
0.78
13.2
21%
1.425
0.87
35.1
80%
2.4
9%
0.34
5.1
23%
0.28
(8.9)
(40%)
296,769
306,992
168,089
163,103
112,274
128,186
149,888
94,927
96,285
73,189
168,583
157,104
73,162
66,818
39,085
Net tangible asset backing per ordinary share
$0.31
$0.31
$0.12
$0.14
$0.05
Net debt/(cash) to equity
Total liabilities/total assets
(12%)
43%
(58%)
49%
(27%)
56%
(18%)
59%
(31%)
65%
Stock market capitalisation as at 30 June
210,925
364,934
219,067
85,612
62,299
107
Stanmore Coal Annual Report 2020 STANMORE COAL ASSETS
108
Stanmore Coal Annual Report 2020 CORPORATE INFORMATION
DIRECTORS
Dwi Suseno
Jimmy Lim
Marcelo Matos
Mark Trevan
Mary Carroll
Richard Majlinder
COMPANY
SECRETARY
Tristan Garthe
REGISTERED
OFFICE AND PRINCIPAL
BUSINESS OFFICE
Level 15, 133 Mary Street
Brisbane Qld 4000
Phone: + 61 7 3238 1000
COUNTRY OF
INCORPORATION
Australia
SHARE REGISTRY
Link Market Services
Level 21, 10 Eagle St
Brisbane Qld 4000
Phone: 1300 554 474
AUDITOR
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane Qld 4000
Phone: 1 300 928 603
www.bdo.com.au
STOCK EXCHANGE
LISTING
Australian Securities Exchange
ASX Code: SMR
INTERNET ADDRESS
www.stanmorecoal.com.au
AUSTRALIAN
BUSINESS NUMBER
ABN 27 131 920 968
Level 15, 133 Mary Street
Brisbane Qld 4000
Phone: + 61 7 3238 1000
stanmorecoal.com.au
110
Stanmore Coal Annual Report 2020