2019 Annual
Report
We’ve gone digital
We are excited to release a brand new online version
of our digital Annual Report this year. The online
version has been created to be more user friendly,
allowing readers to easily move between areas
of interest, and information to be presented in a
more visually appealing way. We hope you enjoy
the experience – you can check it out at
www.2019annualreport.bathurst.co.nz
01
Year in review
Chairman’s and CEO’s report
Financial and operating overview
Sustainability
Our people
Directors’ report
Remuneration report
02
Financial statements
Income statement
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Additional information
Independent auditor’s report
03
Shareholder information
Shareholder information
04
Resources and reserves
Tenement schedule
Coal resources and reserves
Corporate directory
5
8
13
28
30
32
39
39
40
41
42
43
75
78
84
90
93
104
Record
financial results
NPAT $45.0m
EBITDA
$106.6m
2019 Highlights
Maiden
dividend
AUD $5.1m
(AU 0.3¢ per share)
Excellent
health and safety
standards
2 Bathurst Resources Limited Annual Report 2019
01
Year in review
In this section
Chairman’s and CEO’s report
Financial and operating overview
Sustainability
Section 1: Year in review 3
4 Bathurst Resources Limited Annual Report 2019
Chairman’s and
CEO’s report
Welcome to the 2019 Annual Report for Bathurst. Last year saw an ambitious
change in our operations, and 2019 has seen us consolidate and capitalise on
these bold strategic decisions.
Whilst coal remains an essential part of steelmaking with no
known substitute, and domestic demand for our product to fuel
local industries and supplement renewable energy generation
continues, we will be here to provide it.
In short: business is humming at Bathurst and we are optimistic
about the future.
FY19: a year to be proud of
It’s been another strong year at Bathurst as we continue to
transition and diversify our business. All our operations are
tracking very well, and we are delighted to announce our
first dividend. This will see the return of AUD $5.1m to our
shareholders, whose support has been instrumental in enabling
the significant changes to our business over the past few years.
We continue to see a future in coal and our business is
significantly less risky with our diversification into coking
coal (for steelmaking) in 2017.
Our growth prospects are very strong because of our Buller,
Rotowaro North (Ruawaro) and Crown Mountain projects
– combined, they are forecast to be close to half our total
production tonnage within ten years.
The bottom line is that our business is reliable and repeatable –
we know what we’re doing, we stay very close to our customers,
and we have a unique product. And as we continue using
technology and innovation to reduce our costs, we’ll keep
creating opportunities to improve our margin.
Strength in diversity
Our strategy has changed significantly in the past few years,
opening up a wider range of potential customers and markets for
us. Via acquisitions made in 2017, we’ve transitioned from being
a business selling coal domestically to a company with a strong
export focus as well.
Adaptive management and solid
relationships
In FY19 we continued to maximise returns from our existing
domestic assets. We maintained our share of the domestic coal
sales market where we enjoy excellent relationships with our
large independent food manufacturing, energy generation and
steelmaking customers.
In addition to maximising our existing assets, we limited the risk
of overcapitalisation by only seeking a new mining area where
we already had a strong commercial partnership (and the costs
are shared).
Section 1: Year in review 5
Smarter decisions
Promoting health and safety
Conducting on and off-market share buy-backs helped us to
consolidate our ownership structure and bolster shareholder
value, and this will help us form a stable platform not only for our
business as usual activities, but future expansion as well.
Managing risk – and celebrating success
During the year we undertook a fraud and risk survey
that examined both our risk management and corporate
governance practices.
And we were delighted to receive the Innovation Award at the
New Zealand Minerals Forum held in May 2019. The award
recognised innovation in the life-of-mine planning, productivity
and market improvements at our Canterbury mine.
Sharing solutions
As global citizens, we understand our responsibilities around
climate change and what this means within New Zealand’s
regulatory environment. We’ve continued to work with the
government on a managed transition from coal as we look into
internal operational changes, aiming for a zero carbon future.
Supporting the community
In the communities where we work, we’ve continued to support
various local initiatives such as the Life Education Trust West
Coast which educates and empowers children to embrace
positive choices for a healthy mind and body.
Our community sponsorships and donations also include
support for the Ohai Nightcaps Junior Rugby Club, the Buller
Bay Fishing Competition, and the Hororata Golf Club.
This year we continued to develop our health monitoring
programme. Two-thirds of our workforce have now completed
the initial stage. This programme was also a finalist for the
Health and Safety Initiative Award as part of the recent
New Zealand Minerals Forum 2019.
In addition, our training programme for leadership and
supervision commenced across all sites, targeting key areas for
effectively managing people to bring improvement to our health
and safety results.
Facing ongoing challenges
The L&M Coal Holdings Limited case was heard in the Court
of Appeal in August 2019 and we were pleased with the
proceedings. The judgment is expected in early 2020, and based
on legal advice we continue to believe we have a strong case.
Ready for the road ahead
Every business faces challenges – and in that regard, we’re no
different. But we understand that mineral extraction and moving
coal around the planet requires a unique level of commitment to
environmental protection and remediation.
The Emissions Trading Scheme and Resource Management
Act both have the potential to add complexities to the way that
we are able to operate – but we continue to seek regulatory
certainty, so we understand the environment we’re working in
and can plan accordingly.
Optimistic about the future
FY19 has been a strong and successful year for Bathurst, and
looking ahead to FY20 and beyond, we’ll continue to focus on
innovation, cost control and maintaining margins.
We believe we’re a great business with talented people, and we
are ready to take our business to the next level.
6 Bathurst Resources Limited Annual Report 2019
Toko Kapea Richard Tacon Chairman Chief Executive Officer Section 1: Year in review 7
Financial and
operating overview
Focus
In FY19 we really focused on strengthening and aligning our reporting and
operational processes across the Bathurst and BT Mining businesses – whilst also
ensuring future growth through key investments both domestically and overseas.
Key
Export
Domestic
Care + maintenance
Office
Distribution facility
Note: Stockton, Christchurch, Rotowaro
and Maramarua are 65% equity owned
via BT Mining joint venture.
Maramarua
0.2Mt
Rotowaro
0.7Mt
Stockton
1.1Mt
Buller
Wellington
Canterbury
0.1Mt
Takitimu
0.2Mt
Timaru
Christchurch
Tonnes noted are FY19 production tonnes
8 Bathurst Resources Limited Annual Report 2019
Sales profile
Sales revenue by product use*
Sales revenue by product use (100 percent basis)
Sales by region (Mtpa)*
Sales by region (Mtpa) (100 percent basis)
0.4Mt
64%
1.2Mt
0.9Mt
7%
11%
18%
64% Steelmaking (Export)
18% Food production and other
industry (NZ)
11% Steelmaking (NZ)
7% Electricity (NZ)
1.2Mt Export - Stockton
0.9Mt North Island domestic
0.4Mt South Island domestic
“
Looking forward, the domestic market is stable, and we have
plans in place to weather any volatility in the export coal price.
Section 1: Year in review 9
Our export business
Snapshot – EBITDA* $67.4m
The Stockton export coking coal mine continued to benefit from
strong export prices in FY19, with export pricing at an average
hard coking coal price of USD $204.56.
The long-term relationships acquired as part of the BT Mining
acquisition have continued, with new key customer relationships
being developed in the Asia and Pacific region; the majority of
FY20 sales are already contracted.
To reduce our export sale price exposure, we forward contract
USD foreign exchange rates and coal pricing.
Demand underpinned by diversity
Our export coal is characterised by several unique, distinctive,
and valuable properties. It has very low ash content, very low
phosphorus, and it’s almost all vitrinite – making it an ideal blend
improver in steelmaking.
In addition, we market it on a ‘value-in-use’ basis to maximise
both the sales price and value to customers.
For us, our exports remain firmly underpinned by the key
principle of diversity. We benefit from geographically diverse
markets, customers, industries, end products, pricing structures
– which all helps to reduce business risk.
Current market and outlook
Coking coal prices have softened over the course of the
year, falling below the USD $150 per tonne threshold. This is
largely attributed to domestic policies in China, the world’s
top consumer and importer of coal and iron ore, and largest
manufacturer of steel. Even though we don’t sell into the
Chinese market directly, the global pricing is impacted by these
policy changes.
The expectation is that China’s government will continue to
implement policies that restrict coal imports. This expectation
is subject to substantial uncertainty, with the expected extent
of a Chinese economic slowdown and respondent government
stimulatory measures assumed to add considerable volatility to
the price in the shorter term.
Looking ahead
The outlook for average spot prices of hard coking coal is a
gradual recovery over FY20. India is expected to be the key
source of import growth; combined with growing demand from
emerging Asian economies and high-cost supply exiting the
market, these are predicted to offset the gradual easing of
demand from China.
These positive indicators are expected to be partially dampened
by increased exports from Australia and Russia which are
impacting the seaborne market supply. Australia’s dominance
of this market means weather, logistics, and other disruptions in
Queensland could also potentially drive intermittent price spikes.
Our domestic business
Snapshot – EBITDA $39.2m
North Island domestic operations – which include BT Mining
corporate overheads contributed $29.0m EBITDA during the
year, with the South Island domestic operations contributing
$10.2m EBITDA.
Our domestic business remains steady, reflecting the long-term
co-operative relationships we have with all our key customers.
This is unlikely to change any time soon with no alternative
viable energy source in the South Island; and our North Island
customers relying on our product to produce steel, as a low-cost
energy source, and a necessary supplement to other forms of
electricity generation.
Keeping it simple – while working smarter
We have secured access to good domestic reserves and will
continue to maximise our domestic revenue from this base. Our
long-term, fixed-price contracts will provide stable cash flows.
And we’ll always limit our risk of overcapitalisation by only
going into new mine areas if we have a genuine and trusted
commercial partnership where the costs are shared.
“
With a great product, our export strategy is also underpinned by
diversity – in geography, customers, industries, end products,
and pricing – which all helps us to spread our risk.
*Earnings before net finance costs (including interest), tax, depreciation, amortisation, impairment, fair value movements on derivatives and deferred consideration,
and movements in rehab provisioning.
EBITDA noted above for Stockton and North Island domestic operations is Bathurst’s 65 percent equity share.
10 Bathurst Resources Limited Annual Report 2019
Operating highlights by site
Canterbury (100 percent equity share)
Rotowaro (65 percent equity share via BT Mining)
Rotowaro had a solid FY19 where the partnerships we have in
place continue to work well.
In November 2018 we were pleased to announce the transition
to owner operator and continuation of mining at Rotowaro
for a further four years. This is via the development of a new
resource at Waipuna West which is within Rotowaro’s current
area of operations.
A significant investment (approximately $20m) was made
to purchase the contractor mining fleet with an extensive
maintenance review of this gear also undertaken after
the acquisition.
A key part of this extension project was ensuring we had
commercial partners supporting us; to this end we secured
support from two of our key North Island customers, with major
supply contracts committed for 480ktpa until 2023.
Operating 70 kilometres west of Christchurch, our Canterbury
mine produces low sulphur coal primarily for the dairy and
food processing industries. The proximity of the mine to these
markets offers a real freight advantage and helps us meet the
growing demand.
The receipt of the Innovation Award at the New Zealand
Minerals Forum in May 2019 – recognising innovation in the life-
of-mine planning, productivity and market improvements at our
Canterbury site – was a positive reflection of the talented people
managing this site.
An exploration drilling campaign and a mine plan was tailored for
the Canterbury mine’s steeply dipped, narrow coal seams. This
brought the number of productive seams from three to more
than 30, allowing Bathurst to meet new dairy contracts.
Our innovations at Canterbury have more than quadrupled
output – when we bought Canterbury Coal in 2013, the mine
was producing 30,000 tonnes a year.
Maramarua (65 percent equity share via BT Mining)
Takitimu (100 percent equity share)
Maramarua is an open cut mine located in the Waikato region of
New Zealand producing a low-ash, low sulphur thermal coal for
the domestic market.
Successful production at Maramarua comes from a low strip
ratio and well-equipped infrastructure. The mine’s key customers
are in the energy, steelmaking, and dairy sectors, with stable
long-term contracts in place.
Stockton (65 percent equity share via BT Mining)
Stockton is an open cut mine located on the West Coast
producing a low-ash metallurgical coal for export – it’s a
very high-value resource used as an essential component in
steelmaking.
Sales and production targets were met during the year.
Significant investment was made in yellow goods, which are
better suited to the terrain at the Stockton mine, and form part
of a longer-term strategy of reducing high cost hire machinery.
The long-term mine plan has been set to achieve a steady
production rate of 1.2 Mtpa for the next four years, which includes
both an operational as well as a marketing focus, ensuring that the
coal achieved will have a reliable customer demand.
Located at Nightcaps, north of Invercargill in Southland,
Takitimu produces energy coal which is low in sulphur and ash
– it’s in high demand from the local food processing industries
that it supplies.
A lot of work has gone into making the most of this site. In 2018,
we began working in the Black Diamond pit which contains
numerous historic underground workings. This provided a
number of geophysical, technical and personnel challenges
– and so we responded via:
• developing bespoke procedures and systems;
• acquiring the appropriate tools and equipment to make the
workplace safer;
• improving the health and safety training of our workforce; and
• embedding and maintaining a high safety standard and
positive safety culture.
In short, we have effectively built a new emergency rescue team
(“ERT”) at Takitimu from scratch. The ERT team development
was a finalist in the Health and Safety Initiative award at the
2019 New Zealand Minerals Forum. And we’re proud of what
we’ve achieved in a relatively short space of time.
“
We have a diverse, strong, reliable customer base and we serve
them very well with a valuable and reliable product.
Section 1: Year in review
11
Record financial results*
We achieved another record profit for the year, with net profit
after tax of $45.0m, up from $5.5m in FY18.
This reflects benefits from a full 12 months of BT Mining
operations, stable domestic operations, and a strong export coal
price. The prior period was also negatively impacted by one-off,
non-cash fair value adjustments on our convertible notes.
The uplift in NPAT was reflected in an increase in operating
cashflows to $90.7m, up from $54.6m. And cash levels increased
despite significant investing and financial cashflows during the
year. Notable spend was on:
• Mining equipment replacement at Stockton.
• Investment in Rotowaro operations to extend the life of mine.
• Investment in the Crown Mountain project in Canada.
• Advanced waste stripping.
• On and off-market share buy-backs.
Future growth projects
Buller (100 percent equity share)
The Buller project represents several mine permits on the
Denniston plateau on the West Coast of the South Island of
New Zealand, that being in close proximity to the Stockton
mine infrastructure assets, will enable material synergies.
These include the Escarpment and Cascade mines which
Bathurst previously operated, but which are now on care and
maintenance (allowing them to be brought back into operation
when appropriate).
During the year, drilling programmes were completed in a
number of key areas enabling coal washability testing to further
prove up potential resources. Applications for key exploration
permits were also submitted for the Denniston, Millerton fly
creek and Blackburn permits. Baseline ecological surveys are
also underway for areas along the possible transport corridor to
the Stockton infrastructure assets.
The focus for FY20 is to continue key drilling programmes and
advance baseline studies.
Stockton organic growth project
(65 percent equity share)
This project represents the potential to extend Stockton
operations beyond FY28 at production levels similar to current
levels. The project would include development of open cut pits
within the Upper Waimangaroa permit.
Rotowaro North (65 percent equity share)
The Rotowaro North project is a potential extension project
to the current Rotowaro mine operations. The project is at the
prefeasibility stage, with the satellite pit detailed plan, economic
evaluation, and updated geologic model completed. Key permit
applications, project planning, and baseline report are being
progressed.
Crown Mountain, Canada – Canadian
coking coal growth project
Located in a mature mining region in British Columbia, Canada,
with well-established transport infrastructure, Crown Mountain
is a joint venture with Jameson Resources Limited that allows
us to buy in over three stages (worth CAD $121.5m) to achieve
50:50 ownership.
We have committed to two of the three funding tranches,
equalling a total investment to date of CAD $11.5m.
Highlights
• We now hold a 20 percent equity investment in the Crown
Mountain project, with the final subscription payment in
Tranche One completed in October 2019.
• Coal quality testing confirmed the presence of benchmark
premium hard coking coal in the North pit, with the South pit
confirmed as a low volatile hard coking coal.
• The results from the testing being done as part of the
bankable feasibility study are progressing well.
• Drafting of the Application for Environmental Assessment
continued to make progress with key meetings held with
regulators and stakeholders.
* Financial figures are consolidated 100 percent Bathurst and 65 percent equity share of BT Mining.
12 Bathurst Resources Limited Annual Report 2019
Sustainability
– what does it mean to us?
Sustainable development and responsible resource use are fundamental to all that
we do, spanning all phases of our business from exploration to mine closure.
Basis of preparation
This sustainability section reports on our sustainability
performance as related to our material topics. These are the
same material topics as reported against in last year’s annual
report sustainability supplement.
This years’ reporting is the first complete 12 month data set
for all sites as acquisition of our three largest sites Stockton,
Rotowaro and Maramarua occured in September 2017. For this
reason, and also because the way the data is captured has been
improved, prior year comparative graphs are not included.
In producing this content, the Global Reporting Initiative (“GRI”)
has been used as a guiding framework; however, we make
no claim that this sustainability section has been prepared
in accordance with GRI. Note that the content and numbers
represented in this section have not been externally audited.
We know that resource extraction can be a complicated and
controversial business, and that we will have an impact on the
environment. But it’s how we respond that matters – in the
safest, most respectful, and most sustainable way possible.
That’s why we are driven by a genuine commitment to provide
positive outcomes for our employees, shareholders, local
communities, and importantly the environment that we all share.
The demand for coal
Coking coal is an internationally strategic mineral – at present
there is no known alternative for steel production. And steel is
an integral component that underpins the goods and services
of so many industries: construction, telecommunications,
healthcare, agriculture, transport, utilities (water, power, energy
etc), infrastructure, and more.
Our West Coast coking coal resources are internationally
sought after by steelmakers for their low ash, and high fluidity.
And domestically, our high-quality, thermal-grade coal is used to
help drive the engines of many iconic New Zealand businesses.
Seeking a just transition
While we understand that a move away from thermal coal (for
energy) is part of the future, we wish to see a just transition to
allow a suitable timeframe for customers to transfer to other
viable energy sources.
We will continue to manage our extraction of this finite resource
in a safe and sustainable manner, taking actions to reduce our
operational emissions and minimise our environmental footprint.
Section 1: Year in review
13
Material topics
SOCIO-ECONOMIC
Stakeholder engagement
SOCIO-ECONOMIC
Economic performance and responsibility
Engagement with stakeholders is critical for the continued
success of our Company and licence to operate now and into
the future.
Our focus is to responsibly manage the key processes within
our control – financial oversight, productivity improvements and
cash costs of production.
ENVIRONMENT
Water management
ENVIRONMENT
Land use and biodiversity
We aim to manage our water inputs, use and outputs to inform
our management of water related risks, seeking to minimise the
impact to other water users and the environment.
We strive to avoid and minimise any significant impacts
our operations may have on sensitive species, habitats and
ecosystems. We integrate biodiversity into our business
decision-making and management activities.
GOVERNANCE
Compliance
GOVERNANCE
Mine closure plans
Compliance in the mining sector represents a significant risk to
our business. We are continually focused on achieving positive
and compliant performance outcomes.
We aim to manage closure focusing on supporting the economic
and social transition after mining ends, establishing a self-
sustaining ecosystem and opportunities for a range of potential
post-mining land uses.
14 Bathurst Resources Limited Annual Report 2019
HEALTH AND SAFETY
Health and safety
Our operations are focused on our people, their safety and
wellbeing while mitigating operational risks and maintaining
productivity.
ENVIRONMENT
Energy and emissions
ENVIRONMENT
Overburden management
We continue to find new ways to use energy more efficiently in
our operations. As our assets have grown in size, complexity and
diversity, we recognise that energy efficiency could be measured
better and ultimately improved.
Managing overburden materials to create stable landforms
for rehabilitation is a key focus when developing our mine
plans. This includes focus on implementing controls such as
characterising mineral wastes and managing site storage to limit
environmental effects and minimise closure costs.
GOVERNANCE
Emergency preparedness
We maintain emergency management plans to identify the
potential for emergency situations and to test
our capability to respond.
Section 1: Year in review
15
16 Bathurst Resources Limited Annual Report 2019
Health and safety
material topic
Our commitment to safety is clear: safe hands. Good hearts. And clear minds.
FY19 health snapshot:
• Zero occupational health illness.
• Revised our employee ‘fitness for work’
periodic health assessments (75 percent complete).
• We completed over 3,500 ‘fitness for work’
drug and alcohol tests.
FY19 safety snapshot:
• TRIFR (total recordable injury frequency rate) = 5.0.
• Three lost time injuries.
• Over 3,200 hours of risk management training completed.
Constant improvement and
independent advice
We continually check to ensure our sites operate in a safe
manner – particularly by improving our safety behaviour so
incidents or potential incidents can be reported quickly.
As we added three new mines to the Bathurst Group in FY18, this
year we have also completely reviewed our health monitoring
processes. We engaged an occupational medicine physician to
complete the review. As a result of this, revised occupational
health monitoring and occupational exposure programmes were
successfully rolled out.
• Over 75,000 risk tools used.
Takitimu – a deep dive
In 2018, our Takitimu site began working through the Black
Diamond historic underground coal mine. This provided a
number of geophysical, technical and personnel challenges
– and so we responded accordingly through:
• Developing bespoke, risk-based health and safety
procedures and systems.
• Acquiring the appropriate tools and equipment to make
the workplace safer.
• Improving the health and safety training of our workforce.
• Embedding and maintaining a high safety standard and
positive safety culture.
People first
We are very proud to have an extremely robust, people-centric
and innovative approach to health and safety.
At Bathurst, we work hard to encourage a genuine health
and safety mindset throughout our workforce. But what does
this mean in practice? Answer: doing everything we can to
encourage, improve, and enforce the right behaviours, culture,
and processes across every aspect of our operations.
It starts with shared responsibility
We ensure that every one of our mine workers:
• is always alert to their own safety;
• focuses on their fitness for work;
• cares about the health and safety of their colleagues; and
• watches for potential safety risks at all times.
Section 1: Year in review
17
Socio-economic
material topics
With growth comes added responsibility
Economic performance and responsibility
We now employ over 570 employees, with over 70 percent of
our revenue coming from steelmaking customers in FY19 – our
business looks very different to how it was five years ago. And
as the Bathurst operations continue to expand, we must respond
and react accordingly.
Our operations contribute to the economic development and
wealth of host communities through a number of channels,
including wages and salaries paid to employees ($56.1m), taxes,
royalties and fees to government ($38.2m), local procurement
of goods and services ($259.0m), and support of community
programmes.
No ‘one size fits all’ approach
Our stakeholder engagement framework identifies stakeholders
at different levels of New Zealand society and the global
community including our employees and contractors; local
communities; industry associations; unions; government; NGOs;
investors; iwi; customers; suppliers and more.
We understand that as our business expands and changes, we
need to find more diverse and inclusive ways to communicate
and consult with different groups – from boardrooms to
classrooms; from pubs to public servants; and from marae to
the media – we’ll continue proactively seeking input and
feedback from New Zealanders who have an interest or
stake in our business.
Stakeholder engagement
In FY19 we have undertaken stakeholder engagement
training for key site and environmental personnel. In FY20
detailed stakeholder engagement plans will be produced and
implemented at all sites. This is part of our commitment to
have transparent communication with external and internal
stakeholders.
Community investment is vital
Our relationship with the communities where we operate is
important to the future success of our operations. We are
committed to operating in a socially responsible manner.
This year our sponsorship programme included sponsorship of
the following organisations:
• Hororata Golf Club.
• Glentunnel Volunteer Fire Brigade.
• Mokihinui Ratepayers Association.
• Buller Bay Fishing Competition.
• Buller Rugby Club.
• Nightcaps Squash Club.
• Ohai Nightcaps Rugby Club.
• Nightcaps Community Development Association.
• Huntly College.
• Huntly Squash Club.
Supporting the industry
We also contribute to the professional development of mining
professionals through key conference sponsorships such as the
New Zealand Minerals Forum and the New Zealand Branch of
Australasian Institute of Mining and Metallurgy.
18 Bathurst Resources Limited Annual Report 2019
CASE STUDY
Supporting the Life
Education Trust
We recently joined with Development West Coast, Rosco Contractors, and Grey
Ford as a major sponsor of the Life Education Trust West Coast.
The Life Education Trust educates and empowers children to embrace positive choices for a healthy mind and body – via a mobile
classroom, equipped with sight and sound equipment to engage young New Zealanders.
On the West Coast the mobile classroom travels from Haast to Karamea (over 5,000km) every year – one of the largest geographical
areas in New Zealand. The classroom visits every primary school and many preschools across the Coast, which is over 3,300 kids.
Section 1: Year in review
19
Environmental
material topics
When comparing energy consumption by operation, there are
significant differences which can be accounted for by the scale
of the operation and the mine life cycle stage. Stockton mine
is the largest consumer of energy and Rotowaro is the second
largest energy consumer.
Comparison of Energy Consumption by Operation FY19
Comparison of energy consumption by operation FY19
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Electricity
Fuel
The above graph excludes Escarpment, Cascade and Sullivan mines where
consumption was zero.
Energy use
Energy consumption remains one of our largest operational
inputs. An energy minimisation project commissioned in FY19
involved feasibility studies on electric trucks and solar energy on
our sites – with our intention for more detailed analyses on these
options in FY20.
In addition, we are supporting a Government-led project
assessing feasibility of a hydro scheme using mine water from
the Stockton mine.
Our total energy consumption is reported in terms of energy
consumed (fuel and electricity) by staff and contractors. A
total energy use of 1,021,490 gigajoules (“GJ”) was used at
our five operational sites and corporate offices in FY19. This is
approximately 33 percent higher than FY18.
A significant part of this increase reflects that our three largest
sites only reported ten months of energy consumption in FY18
from the date of acquisition.
Overall, total waste rock stripping which drives energy
consumption (diesel) increased by 29 percent with an extra
4.5 million bcm waste rock stripped in FY19 compared with
FY18. This increase comes from our Stockton, Rotowaro, and
Maramarua sites where we have completed extensive mine
planning since acquisition to ensure we mine as sustainably as
possible. When Bathurst acquired these mines, they had been
operating under administration for many years, so whilst coal
had been mined, waste stripping had fallen to very low levels.
94 percent of the energy consumed within our sites included fuel
used for onsite transport, operations and power. The remaining
six percent of energy consumed was purchased electricity.
20 Bathurst Resources Limited Annual Report 2019
Greenhouse gas emissions
We participate in the Emissions Trading Scheme (ETS) where
pricing of ETS is passed on to our customers as part of the
product supply – and we assist our customers to source the
best quality energy and the most efficient logistic pathways.
Our mining projects use significant quantities of diesel fuel
to extract and transport coal. Electricity consumption is
required for coal processing, water treatment plants and mine
management systems.
In addition, our coal produced releases GHGs (fugitive
emissions) and these are accounted for in the FY19 production
tonnages in Scope 1 emissions (direct emissions from Bathurst-
owned or controlled sources). We report our GHG emissions with
reference to their source as follows:
GHG emissions intensity FY19
GHG Emissions Intensity FY19 (Scope 1 & 2 Intensity/t of product coal)
l
a
o
c
e
n
n
o
t
/
e
2
O
C
s
e
n
n
o
T
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0
n
o
t
k
c
o
t
S
o
r
a
w
o
t
o
R
a
u
r
a
m
a
r
a
M
y
r
u
b
r
e
t
n
a
C
u
m
i
t
i
k
a
T
Our reporting of Scope 1 and Scope 2 emissions (indirect
emissions from the generation of purchased energy) is
consistent with GRI reporting (the Global Reporting Initiative).
Accordingly, we have included carbon dioxide in our GHG
emissions calculations reported as carbon dioxide equivalents.
We have also accounted for minor losses in SF6 gas from
electricity transformers.
The total GHG emissions for Scope 1 and 2 for FY19 are 120,527
tonnes CO2e as follows:
• 43 percent related to fugitive emissions of production coal.
• 1 percent related to electricity.
• 56 percent related to fuel consumption.
The reported FY19 GHG emissions are approximately 23 percent
greater than in FY18.
Why the change?
Because in FY18 we only reported ten months (from date of
acquisition) of GHG emissions for the Stockton, Rotowaro and
Maramarua mines. And also, our total waste rock stripping
volumes were 29 percent greater at the five operating sites in
FY19 compared with FY18.
Scope 1 emissions
(t/CO 2e)
Scope 2 emissions
(t/CO 2e)
Site
Stockton
Rotowaro
47,525
39,158
Maramarua
12,069
Canterbury
9,283
Takitimu
10,786
Escarpment
Cascade
Sullivan
0
0
0
Corporate
15
1,093
431
128
0
30
0
0
0
8
Total
118,837
1,690
Section 1: Year in review 21
Overburden management
Land use and biodiversity
During this year, the two mine sites that disturbed potentially
acid forming (“PAF”) waste rock were Stockton and Canterbury.
Waste rock (bcm) disturbed in FY19
Waste Rock (bcm) disturbed in FY18
)
m
c
b
(
d
e
b
r
u
t
s
i
d
k
c
o
r
e
t
s
a
W
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
PAF
NAF
n
o
t
k
c
o
t
S
o
r
a
w
o
t
o
R
3,654,772
0
a
u
r
a
m
a
r
a
M
0
y
r
u
b
r
e
t
n
a
C
u
m
i
t
i
k
a
T
477,526
0
671,875
9,076,520
2,625,666
1,295,774
2,213,010
At Stockton in the Cypress pit, we have been adding lime at
rates of 8 kg of lime to each tonne of PAF waste rock to minimise
the production of acid mine drainage. In addition, we’ve also
designed and consented a second calcium oxide dosing plant to
actively treat up to 3,000 tonnes of acid a year in the St Patrick’s
catchment that is predominantly acid generated from historic
mine workings. This plant is planned to be operational in FY20.
Our Canterbury mine actively manages their PAF rock by
selectively placing and compacting the PAF rock in areas of
backfill where it can be safely covered by a minimum of 5 metres
of non-acid forming rock (“NAF”).
This active management plan minimises oxygen and water entry
into the PAF waste rock and ensures no acidic water is produced
from the backfill. Small historic acidic seeps are treated via two
mussel shell reactors. The use of waste mussel shells in acidic
water treatment is a recycling waste initiative which saves the
waste mussel shells being sent to the regional landfill.
Our objective is to rehabilitate our mine sites to ensure a
sustainable ecosystem is established. Currently we have
several active biodiversity offset projects underway. We
work with experts and stakeholders to create suitable
biodiversity solutions.
Our goal is always to minimise our disturbance footprint and
progressively restore disturbed land to meet closure criteria
in the optimal timeframe. Our approach is to avoid, minimise,
mitigate and offset the impacts of our operations.
How do we achieve this?
• Focused mine planning (to minimise the disturbed footprint).
• Soil salvaging.
• Vegetation transfer where possible (which speeds up the
process of ecological restoration).
• Collecting and growing plants using seeds collected at site.
• A robust rehabilitation management plan (to restore the
habitat to close as practical to pre-mining conditions).
Our overall net land disturbance this year reduced by 17
hectares. The Stockton mine has 54 percent of the total
disturbed area of 1,525 hectares. Mining of the Millerton pit area
in the next few years will allow a more established strip mining
operation, which will allow progressive rehabilitation rates to
double from the current rate of 20-25 hectares a year.
Land disturbed at end of FY19 and land rehabilitated in FY19
Land disturbed and rehabilitated FY19
900
800
700
600
500
400
300
200
100
0
)
s
e
r
a
t
c
e
h
(
s
u
t
a
t
s
d
n
a
L
n
o
t
k
c
o
t
S
o
r
a
w
o
t
o
R
a
u
r
a
m
a
r
a
M
y
r
u
b
r
e
t
n
a
C
u
m
i
t
i
k
a
T
e
d
a
c
s
a
C
n
a
v
i
l
l
u
S
t
n
e
m
p
r
a
r
c
s
E
Disturbed land remaining to be rehabilitated
Land rehabilitated
22 Bathurst Resources Limited Annual Report 2019
Water management
Water use intensity
Based on estimates of water use, the water use intensity
(measured as litres of water used per tonne of coal produced) is
shown below. Sites use between 200 and 600 litres of water to
produce a tonne of coal. Significant water use at the sites with
large disturbed areas or close proximity to residences is related
to dust suppression using water carts and sprinklers.
Stockton has the highest intensity of water use which reflects
the intensive use of the coal washery at Stockton (this accounts
for 87 percent of the site water usage). The coal washery water
is treated for acid and sediment load and is returned to the
Mangatini Stream.
Water use intensity at mine sites FY19
Water Use Intensity at Mine Sites FY19
d
e
c
u
d
o
r
p
l
a
o
c
f
o
e
n
n
o
t
/
s
e
r
t
i
L
700
600
500
400
300
200
100
0
n
o
t
k
c
o
t
S
o
r
a
w
o
t
o
R
a
u
r
a
m
a
r
a
M
y
r
u
b
r
e
t
n
a
C
u
m
i
t
i
k
a
T
All our mine site discharges have specific conditions related to
discharge consents to protect aquatic ecology. No downstream
water sources have been adversely impacted by water use at our
sites in FY19. Overall water use in FY19 was 1,078 Ml.
This year we installed water meters at key sites to improve
our quantification of consumptive water use. Stockton water
use increased from FY18 due to more coal being processed
through the washery and with more accurate telemeterised
flow recording.
At Stockton, we also continue to treat acid mine drainage with
Calcium Oxide (lime) at rates of 7,500 tonnes of acid per year to
protect the aquatic ecology in the downstream Ngakawau River.
And it’s proposed to increase the acid mine drainage treatment
with construction of a second lime dosing water treatment plant
in FY20 – this will increase mine site water treatment to greater
than 10,000 tonnes per year of acid.
Operational site
FY19 water use (Ml/yr)
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Escarpment
Cascade
Sullivan
Corporate
TOTAL
644
209
46
56
121
0
0
0
2
1,078
“
We’re always working to achieve industry best
practice in managing the environmental and social
impacts of our mining and processing operations.
Section 1: Year in review 23
CASE STUDY
OPARARA BIRD SANCTUARY – STOCKTON MINE
Protecting our native
birds for the future
We are proud to be funding the management of the 1,000 hectare Oparara Bird
Sanctuary – an environmental offset programme involving the maintenance of 900
predator traps, annual surveys on kiwi and other indigenous birds, and input from
indigenous bird and predator control experts.
An independent bird expert notes the Oparara Sanctuary now
‘bustles with birds’ in a way that few mainland forests do, making
it a testament to the power of effective predator control and a
joy for visitors to experience.
Forest bird abundance
Bird counts were undertaken in 2015 and 2018. The 2015 baseline
counts were taken when year-round ground-based predator
control started, and the 2018 counts were taken three years later.
Nine of the 18 diurnal (non-nocturnal) native bird species
have increased in abundance in the sanctuary since predator
control began.
The increases in the abundance of South Island robins, bellbirds
and tuis, have been spectacular. These three species are
especially vocal and their song is now a noticeable feature
of the sanctuary. The increases in weka, silvereye, kereru,
brown creeper, and fantail have also been significant.
The bird community in the Oparara Sanctuary now rivals
those on predator-free offshore islands, making Oparara one
of the most intact assemblages of native birds on mainland
New Zealand.
“
The increase in the abundance
of South Island robins, bellbirds
and tuis, has been spectacular.
24 Bathurst Resources Limited Annual Report 2019
Great spotted kiwi caught on a motion sensitive camera in the sanctuary.
Kiwi abundance
Kiwi abundance, as measured by call counts in the first two
to three hours of darkness, did not change from 2015 to 2018.
Although it should be noted that these counts index the
abundance of territorial adults and do not detect chicks and
juveniles. Because great spotted kiwi probably take three to five
years to reach maturity, any increase in population size resulting
from predator control won’t be detectable until post 2020.
But the results of the 2018 survey are still encouraging. The
two percent national decline in the species as a whole isn’t present
in the sanctuary population – presumably because pest control
operations both in and near the sanctuary have arrested it.
14 motion-sensitive cameras were established in the Oparara
Sanctuary in late 2017 and these cameras are used to hopefully
identify young kiwis. A population of young kiwi of around 10-15
percent of the total kiwi population would be sustainable.
This work will continue – along with the predator control work
and bird counts to optimise predator control efficiency – for at
least another 15 years.
CASE STUDY
AWAROA STREAM DIVERSION – ROTOWARO MINE
Our fish salvage and
relocation programme
A 440 metre stretch of Awaroa stream was required to be relocated during the
year to allow the development of the Awaroa North West mining extension.
In line with consent requirements and our environmental plans,
we created a suitable fish habitat in the reconstructed stream
section to minimise aquatic ecology losses.
Fish salvage and relocation are standard obligations before and
after the stream diversion. Two separate operations took place
for the Awaroa Northwest diversion:
• the initial eel trapping and relocation; and
• electric fishing and trapping with relocation into the
new diversion.
The work was undertaken by ecologists from Wildlands
Consultants and our staff over four consecutive days.
The fish salvage and relocation programme found significant
populations of eel, fish and koura/crayfish – demonstrating a
stepwise decline over the four consecutive days of trapping.
A high percentage of the fish present in the channel were
recovered – with a total of 289 fish being relocated.
“
We’re proud to have created
a new fish habitat in the
reconstructed Awaroa
Stream to minimise aquatic
ecology losses.
Rehabilitation
Civil works to reinstate the diversion channel involved preparing
a low flow channel with riffle areas, main channel, floodplain and
stopbanks – the maintenance and riparian planting involved
11,000 plants of multiple species being planted over an area of
approximately three hectares.
Waahi Whaanui blessing
An invitation was accepted by Waahi Whaanui Trust to perform
a cultural blessing at the stream diversion when the Awaroa
stream was diverted through the new channel.
Section 1: Year in review 25
26 Bathurst Resources Limited Annual Report 2019
Governance
material topics
What do we mean by governance?
Actions for FY20
As a responsible business we are committed to effective
management in all areas – which means working to achieve
industry best practice in managing the environmental and
social impacts of our mining and processing operations.
Environmental compliance and governance
Throughout our mines’ life cycles, we focus on meeting or
surpassing environmental regulatory requirements to manage:
• air emissions;
• water quality;
• water consumption;
• energy use;
• waste;
• biodiversity; and
• land use.
Our corporate environmental governance is based on
international standards for environmental management. And
our environmental policy and supporting management system
applies to all our employees and contractors.
Effective complaint handling
Complaints about environmental issues are recorded via
complaints registers that are maintained at all sites. They are
investigated via our internal incident investigation system and
are only closed off when resolved.
Mine closure standard
During the year we developed a Decommissioning and
Mine Closure Management (“Standard”) to document the
requirements for the planning and execution of decommissioning
and mine closure.
Our Standard is designed to ensure integration with life-of-mine
planning, address any residual risk issues and leave a positive
legacy once mining has been completed.
The overall objective of the Standard is to outline a clear,
consistent, well-planned and executable process that will
provide the best opportunity for us to deliver an appropriate
and sustainable post-mining land use.
Mine closure plans
In FY20 we will develop mine closure plans for all active
mine sites ensuring that they adhere to the Standard.
In addition, we’ve adapted principles for all our sites from
the ICMM (2019) Integrated Mine Closure: Good Practice
Guideline to address: safety; physical stability; chemical stability;
socio-economic transition; ecological stability; risk limitation;
cost-effectiveness; and long-term care. These principles are
integrated into the decommissioning and closure management
plans for each of our sites.
Environmental management systems audit
and revision
Gap analysis of our Environmental Management Systems (EMS)
at all our sites has been undertaken by external consultants and
rated against standard ISO 14001: Environmental Management
System. This ISO standard has recently been upgraded and
hence Bathurst has commissioned this audit to ensure our
EMS at all sites is upgraded to support optimum environmental
management and performance at our operational sites.
In FY20 we have committed to improving our EMS by:
• Revising the environmental policy.
• Developing the Corporate EMS framework.
• Updating and implementing the Site Environmental
Management Plans at all sites.
• Reviewing existing site environmental risk assessments
and related tasks.
Emergency preparedness management
No matter how prepared we are there’s always a residual risk
of an adverse event occurring. So we’ve developed a crisis
management plan to mitigate the impacts that a significant
event could have on the public, our employees and the
environment. This is integrated with our site emergency
response plans which are maintained and regularly tested
at our mine sites.
This year, we established a new emergency rescue team at
the Takitimu mine and they’ve developed and tested void
management skills, rope rescue, gas monitoring and
compressed air breathing skills.
Section 1: Year in review 27
Our people
Board members
Toko Kapea
Non-executive Chairman
Toko is a Wellington-based commercial lawyer, consultant and
director at Tuia Group Limited. He has worked at Chapman Tripp
and in-house at Meridian Energy, Bank of New Zealand and
ANZ. He currently sits on the board of Ngāti Apa Developments
Limited (Whanghanui-Rangitikei region) and is an independent
committee member of the Banjima Direct Benefits Trust in Perth.
Toko was on the Government Review Panel relating to the Te
Ture Whenua Māori Act 1993 (Māori Land Act) and was also the
lead negotiator for Ngāti Apa ki Rangitikei (North Island) for its
direct negotiation Treaty of Waitangi claims with the Crown.
Richard Tacon
Executive Director & Chief Executive Officer
Richard has worked in almost every role in coal mining since
starting his career in the 1970s. Richard’s first job in the industry
was at Greymouth’s Liverpool State Mine and after working
in Australia for 32 years, Richard returned to Wellington, New
Zealand to take up the position of Chief Operating Officer
at Bathurst in 2012. He was appointed to the role of Chief
Executive Officer in March 2015. Richard is the Chair of the Coal
Association of New Zealand and sits on the board of the New
Zealand Mines Rescue Trust and Straterra. Richard is a director
of BT Mining Limited as a Bathurst representative.
28 Bathurst Resources Limited Annual Report 2019
Russell Middleton
Executive Director & Chief Financial Officer
Russell has over 25 years in the mining and construction
sector with significant experience in mine project evaluations
and the construction of new mines.. Starting his career as
a public accountant, Russell has held senior management
positions in accounting, commercial and planning roles. He
was previously with Shell where he was Commercial Manager
for the construction, development and production of a major
underground mine. Russell is a director of BT Mining Limited as
a Bathurst representative. He is based in Christchurch.
Peter Westerhuis
Non-executive Director
Peter is a professional engineer with post-graduate business
qualifications and over 30 years of Australian and international
resources experience in the iron ore, gold and coal industries;
the last ten years at CEO and MD level. He has successfully
developed and managed large mining and processing operations
including overseeing the transition from explorer to producer,
and has undertaken many complex commercial negotiations.
Senior leadership team
Fiona Bartier
General Manager, Health, Safety, Environment and Community
Sam Johnstone
General Manager, Marketing and Logistics
Fiona is an environmental and resource scientist who has worked
in management roles for government, industry groups, and
mining companies. With over 20 years experience, Fiona joined
Bathurst in 2012 to manage our HSEC portfolio.
Alison Brown
General Counsel
Alison holds a Master of Laws with Honours and has over 35
years’ legal experience. She specialises in mining, environmental
and climate change law and has worked for Simpson Grierson,
Minter Ellison Rudd Watts and the Minister of Foreign Affairs and
Trade. Alison was previously General Counsel for Solid Energy.
Carmen Dunick
Group Manager, Human Resources
Carmen joined Bathurst in April 2017 to manage the human
resources (“HR”) function. She holds a Bachelor of Social
Sciences and is a member of HRINZ. Carmen has worked in all
areas of HR, with over 15 years’ experience in both the public
and private sectors.
Ian Harvey
General Manager, Export Operations
A mining engineer with over 30 years’ industry experience. Ian
has held senior management and operations leadership roles,
specialising in metallurgical coal market planning and resource
optimisation, and mine planning and design. Ian is a member of
the Australasian Institute of Mining and Metallurgy (“AusIMM”).
Sam brings a wealth of experience in marketing New Zealand’s
unique coal internationally, and since our investment in BT
Mining in 2017, has continued to manage and add value to
our domestic and export customer contracts. Sam holds a
Postgraduate Master of Science majoring in Geography.
Craig Pilcher
General Manager, Domestic Operations
Craig has over 30 years’ experience which includes a
background in engineering and owner of a coal supply business.
Craig joined Bathurst in 2013, working as GM Operations and GM
of Marketing and Sales, briefly leaving Bathurst before returning
to manage the domestic operations in July this year. He is also a
director of BT Mining Limited.
Damian Spring
General Manager, Resource Development
A mining engineer with over 25 years’ experience locally and
offshore, Damian consulted to Bathurst from 2010 before
joining the company in 2017 as the General Manager, Domestic
Operations. In 2019, Damian moved into the newly created
Resource Development position, providing key focus on growth
projects. Damian is a member of AusIMM.
Section 1: Year in review 29
Directors’ report
Your directors present their report on the consolidated entity (“the Group”)
consisting of Bathurst Resources Limited (“Bathurst”) and the entities it controlled
at the end of, or during, the year ended 30 June 2019.
Directors
The following persons were directors of Bathurst Resources
Limited as at 30 June 2019.
Toko Kapea
Non-executive Chairman
Richard Tacon
Executive Director
Russell Middleton
Executive Director
Peter Westerhuis
Non-executive Director
Principal activities
During the year the principal continuing activities of the Group
consisted of:
• the production of coal in New Zealand, and
• the exploration and development of coal mining assets
in New Zealand.
Dividends
A maiden dividend was declared on the 27 August 2019 and paid
on the 23 October 2019, at a rate of AU 0.3¢ per share.
Environmental regulation
Our exploration and mining activities are subject to a range
of environmental controls which govern how we carry out our
business. These are set out below.
Mine development/mining activities
Mining activities are regulated by the following:
• Resource consents granted by the relevant district and
regional territorial authorities, after following the processes
set out in the Resource Management Act 1991.
• Mining licences granted originally under the Coal Mines Act
1979 and now regulated under the Crown Minerals Act 1991.
• Mining permits issued under the Crown Minerals Act 1991
by the Minister of Energy and Resources, required to mine
Crown coal.
• Access arrangements or profit à prendre granted by owners of
private (i.e. non-Crown owned) coal.
• Access arrangements granted by relevant landowners and
occupiers granted under the Crown Minerals Act 1991.
For Crown-owned land managed by the Department of
Conservation, these access arrangements are granted either
by the Minister of Conservation or, for significant projects,
jointly by the Minister of Conservation and the Minister of
Energy and Resources.
• Concession agreements under the Conservation Act 1987
for land outside a permit area but owned by the Crown and
managed by the Department of Conservation.
• Wildlife authorities issued under the Wildlife Act 1953 granted
by the Minister of Conservation.
Controls around water and air discharges that result from mining
operations are governed by the conditions of the resource
consents that the particular mining operation is operating under.
Our mining operations are inspected on a regular basis.
A discharge occurred at the Canterbury mine in January 2018
and the Canterbury Regional Council laid charges in respect of
this incident. The Company applied for this matter to be dealt
with through the Council’s alternative environmental justice
(“AEJ”) processes and was accepted by the Council and agreed
remediation was completed by the Company in June this year.
However, the Domestic Court has raised issues over the validity
of the AEJ process and the Company has pleaded guilty to
one representative charge. Sentencing is to take place on 27
November 2019, with the Company seeking a discharge without
conviction.
30 Bathurst Resources Limited Annual Report 2019
Other than as disclosed, to the best of the directors’ knowledge,
all mining activities have been undertaken in compliance with
the requirements of the Resource Management Act 1991, Crown
Minerals Act 1991, Conservation Act 1987 and Wildlife Act 1953.
Exploration activities
To carry out exploration, we need to hold a relevant exploration
permit (where the coal is Crown owned) or consent from the
mineral owner where the coal is privately owned, relevant
resource consents to permit exploration, access arrangements
with the relevant landowner and occupier and where wildlife is
impacted a wildlife authority.
To the best of the directors’ knowledge, all exploration activities
have been undertaken in compliance with the requirements of
the Resource Management Act 1991, Crown Minerals Act 1991,
Conservation Act 1987 and Wildlife Act 1953..
Hazardous substances
Mining activities involve the storage and use of hazardous
substances, including fuel. We must comply with the Hazardous
Substances and New Organisms Act 1996 and Health and
Safety at Work (Hazardous Substances) Regulations 2017 when
handling hazardous materials. To the best of the directors’
knowledge, no instances of non-compliance have been noted.
Emissions Trading Scheme
The New Zealand Emissions Trading Scheme (“NZ ETS”) came
into effect from 1 July 2010, which essentially makes us liable for
greenhouse gas emissions associated with the coal we mine and
sell in New Zealand and for the fugitive emissions of methane
associated with that mined coal. Liability is based on the type
and quantity of coal tonnes sold, with the cost of such being
passed on to customers. Bathurst’s Emissions Trading Policy can
be found on our website.
Corporate governance
Bathurst’s Corporate Governance Statement is available on the
Company’s website www: http://bathurst.co.nz/our-company/
corporate-governance/
Donations
The company made donations totalling $34,054 to several local
groups during the year including scholarships.
Directors’ and officers’ liability insurance
The company and its subsidiaries have arranged policies of
directors’ and officers’ liability insurance, which, together with a
deed of indemnity, seek to ensure to the extent permitted by law
that directors and officers will incur no monetary loss as a result
of actions legitimately taken by them as directors and officers.
Other information on directors
Directors’ securities interests
Director
Mr T Kapea
Ordinary
shares
Performance
rights
3,657,409
250,000
Mr R Middleton
11,528,309
2,636,364
Mr P Westerhuis
3,268,636
250,000
Mr R Tacon
14,948,027
4,009,545
The increase in ordinary shares held by directors arose from the
exercise of previously issued performance rights that vested on
the 1 January 2019. For further information refer to note 18 in the
financial statements.
Other current directorships of listed companies
No directors hold other current directorships in listed companies.
Former directorships of listed companies in last
three years
Russell Middleton was a non-executive director of Tiger
Resources Limited from July 2016 to October 2016. No other
directors held former directorships of listed companies in the
last three years.
Section 1: Year in review 31
Remuneration report
Role of the Remuneration and
Nomination committee
The Remuneration and Nomination committee (“R&N
committee”) is a subcommittee of the Bathurst Board of
Directors (“Board”). The R&N committee is responsible for
making recommendations to the Board on remuneration matters
such as non-executive director fees, remuneration for directors
and other senior executives, and the over-arching executive
remuneration policy and incentive schemes. All its members are
non-executive directors.
The objective of the R&N committee is to ensure that the
Company’s remuneration policies are fair and competitive, and
aligned with the long-term interests of the Company and its
shareholders. The R&N committee draws on its own experience
in remuneration matters and seeks advice from independent
remuneration consultants where appropriate.
In FY19, the Company adopted a new Long-Term Incentive Plan
(“LTIP”) (refer to the long-term incentives section for further
information). This was adopted as part of a wider remuneration
review which was undertaken by an external consultant, to
ensure that the fixed, short-term, and long-term remuneration
incentives offered to directors and senior executives were
appropriate and within market expectations. There were no
other material changes to the remuneration framework during
the year.
The corporate governance section of our website provides
further information on the role of the R&N committee.
Remuneration framework
Non-executive directors’ fees
Non-executive directors’ fees reflect the role’s level of
responsibility and the demands which are made on the directors’
time and are reviewed annually by the R&N committee. Fees paid
to the chairman are determined independently to the fees of
other non-executive directors.
Executive remuneration
The objective of the Group’s executive reward framework is
to ensure reward for performance is competitive, appropriate,
promotes retention of employees, and aligns with the Company’s
strategic objectives and shareholder interests.
The framework provides a mix of fixed and variable short- and
long-term incentives, that are measured against internal and
external financial and operational metrics. This enables the
ability to recognise individual achievements and results, attract
and retain high calibre people, and with the focus on the long-
term, align with shareholder’s interest of sustainable growth.
As executives gain seniority with the Group, the balance of this
mix shifts to a higher proportion of ‘at risk’ rewards.
The framework has three components:
• Fixed remuneration, including superannuation.
• Short-term incentives.
• Long-term incentives.
32 Bathurst Resources Limited Annual Report 2019
Fixed remuneration
The Company offers a competitive fixed remuneration that is
based on the responsibilities of the role, individual performance
and experience, and current market data. External consultants
provide advice to ensure the fixed remuneration component
is set within market benchmarks for a comparable role. Fixed
remuneration is reviewed annually, and on promotion.
There are no guaranteed increases to fixed remuneration.
Short-term incentives
Short-term incentives (“STI”) are an at-risk component of senior
executive and executive director remuneration, payable in cash
on achievement of performance targets that align with the
strategic pillars of the Company’s strategy. Key performance
indicators are a mix of financial and operational measures. These
are reviewed, and if approved, paid annually as recommended to
the Board by the R&N committee.
Long-term incentives (“LTI”)
Bathurst’s updated LTIP was approved by shareholders at the
2018 AGM, the details of which can be found on the Company’s
website. The purpose of the plan is to encourage senior
executives and executive directors to share in the ownership of
the Company, promoting the long-term success of the Company
and alignment with shareholder interests.
A number of awards may be made under the plan, consisting of:
• Performance rights: these are rights to acquire shares in
the Company subject to satisfying performance and service
conditions. The rights are issued for a nil exercise price.
• Options: options are a right to acquire shares in the Company
for the payment of an exercise price determined at the grant
date and subject to performance and service conditions.
• Service rights: these rights to acquire shares in the company
are subject to satisfying service conditions only. The rights
are issued for a nil exercise price.
• Deferred share awards: these are shares in the company
granted in lieu of remuneration or incentives and may be
subject to performance and/or service conditions.
• Cash rights: these are rights to receive a cash payment on
achievement of performance and/or service conditions.
• Stock appreciation rights: these are rights to receive shares
in the Company to the value of any share price appreciation
from the grant date to the vesting date, subject to satisfying
performance and/or service conditions.
In FY19, the only awards given under the LTIP were performance
rights to executive directors; refer to note 18 in the financial
statements for further information.
Section 1: Year in review 33
Directors’ remuneration
The total remuneration and other benefits to directors for services in all capacities during the year ended 30 June 2019 was:
Director
Mr T Kapea
Mr R Middleton
Mr P Westerhuis
Mr R Tacon
Directors’ fees
Fixed remuneration
and STI
LTI – performance
rights
$120,000
-
$63,964
-
-
$536,115
-
$694,935
$48,161
$228,406
$40,320
$299,372
Total
$168,161
$764,521
$104,284
$994,306
Fixed remuneration and STI for both Mr Tacon and Mr Middleton are in their capacity as Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”) respectively. Increases in the fixed remuneration and STI relate to the STI component, based on the
performance of the Company.
Employee remuneration
During the year ended 30 June 2019, 29 employees (excluding the CEO and CFO) received individual remuneration over $100,000.
Range
100,001 – 110,000
110,001 – 120,000
120,001 – 130,000
130,001 – 140,000
150,001 – 160,000
160,001 – 170,000
170,001 – 180,000
180,001 – 190,000
220,001 – 230,000
230,001 – 240,000
260,001 – 270,000
320,001 – 330,000
330,001 – 340,000
340,001 – 350,000
# of employees
7
3
2
4
1
2
2
1
1
2
1
1
1
1
34 Bathurst Resources Limited Annual Report 2019
Section 1: Year in review 35
36 Bathurst Resources Limited Annual Report 2019
Section 2: Financial statements 37
Financial statementsIn this sectionIncome statementStatement of comprehensive incomeBalance sheetStatement of changes in equityStatement of cash flowsNotes to the financial statementsAdditional informationIndependent auditor’s report02 Contents
Income statement.............................................................................................................................................................................................................................. 39
Statement of comprehensive income ................................................................................................................................................................................... 39
Balance sheet ....................................................................................................................................................................................................................................... 40
Statement of changes in equity ................................................................................................................................................................................................ 41
Statement of cash flows ................................................................................................................................................................................................................ 42
Notes to the financial statements ........................................................................................................................................................................................... 43
Additional information ..................................................................................................................................................................................................................... 75
Independent auditor’s report ......................................................................................................................................................................................................78
Page
Authorised for and on behalf of the Board of Directors:
Toko Kapea
Chairman
26 August 2019
Russell Middleton
Executive director
26 August 2019
Bathurst Resources Limited | Financial statements
38 Bathurst Resources Limited Annual Report 2019
2
Income Statement
For the year ended 30 June 2019
Revenue from contracts with customers
Cost of sales
Gross profit
Equity accounted profit
Other income
Depreciation
Administrative and other expenses
Fair value gain on deferred consideration
Gain/(loss) on disposal of fixed assets
Impairment losses
Operating profit before tax
Fair value movement on derivatives
Fair value movement on borrowings
Finance cost
Finance income
Profit before income tax
Income tax benefit
Profit after tax
Earnings per share:
Basic profit per share
Diluted profit per share
Notes
3
4
2019
$’000
52,744
2018
$’000
47,817
(38,655)
(33,487)
14,089
14,330
13
45,300
42,961
38
213
10
5
15 (c)
8
6
6
7
19
19
(2,624)
(8,499)
41
3
-
(2,431)
(8,517)
102
(21)
(1,630)
48,348
45,007
-
-
(27,687)
(4,434)
(3,545)
(7,487)
157
149
44,960
5,548
-
-
44,960
5,548
Cents
Cents
2.83
2.57
0.40
0.40
Statement of comprehensive income
For the year ended 30 June 2019
Profit after tax
Other comprehensive income (“OCI”)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Share of BT Mining FX hedging through OCI
Comprehensive income
44,960
5,548
79
(513)
13
5
-
44,526
5,553
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 39
3
Balance sheet
As at 30 June 2019
Cash and cash equivalents
Restricted short-term deposits
Trade and other receivables
Inventories
New Zealand emission units
Other financial assets
Total current assets
Property, plant and equipment
Mining assets
Interest in joint ventures
Crown indemnity
Other financial assets
Total non-current assets
TOTAL ASSETS
Trade and other payables
Borrowings
Deferred consideration
Rehabilitation provisions
Total current liabilities
Borrowings
Deferred consideration
Rehabilitation provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Contributed equity
Debt instruments equity component
Reserves
Accumulated losses
EQUITY
For and on behalf of the Board of Directors:
Notes
9 (a)
10
11
13
16
15 (a)
15 (b)
15 (c)
16
15 (b)
15 (c)
16
17
17
18
2019
$’000
20,005
4,030
4,018
1,560
1,428
-
31,041
17,239
29,783
80,828
371
139
2018
$’000
20,179
4,037
3,903
1,226
396
25
29,766
17,521
26,307
45,436
351
114
128,360
89,729
159,401
119,495
7,079
14,214
1,035
1,328
5,735
1,895
1,258
1,160
23,656
10,048
9,297
5,774
4,347
27,883
6,350
4,768
19,418
39,001
43,074
49,049
116,327
286,277
70,446
263,179
22,824
43,788
(33,050)
(31,837)
(159,724)
(204,684)
116,327
70,446
Toko Kapea
Chairman
26 August 2019
Russell Middleton
Executive Director
26 August 2019
40 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
4
Statement of changes in equity
For the year ended 30 June 2019
Contributed
equity
$’000
249,092
-
1 July 2017
Comprehensive profit
Contributions of equity
14,087
Share-based payments
30 June 2018
Comprehensive profit
-
263,179
-
Debt
instruments
equity
component
$’000
-
-
43,788
-
43,788
-
Contributions of equity
25,780
(20,964)
Share-based payments
Share buy-backs
Vesting of performance
rights
-
(4,225)
1,543
-
-
-
Share-
based
payments
Foreign
exchange/
hedging
Retained
earnings
Reorganisation
reserve
Total
equity
$’000
$’000
$’000
$’000
$’000
278
(154)
(210,232)
(32,760)
6,224
-
-
794
1,072
-
-
764
-
(1,543)
5
-
-
5,548
-
-
-
-
-
5,553
57,875
794
(149) (204,684)
(32,760) 70,446
(434)
44,960
-
-
-
-
-
-
-
-
-
-
-
-
-
44,526
4,816
764
(4,225)
-
30 June 2019
286,277
22,824
293
(583)
(159,724)
(32,760) 116,327
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 41
5
Statement of cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Dividend from BT Mining
Net cash inflow from operating activities
Cash flows from investing activities
Exploration and consenting expenditure
Mining assets (including capitalised waste moved in advance)
Property, plant and equipment purchases
Proceeds from disposal of property, plant and equipment
Deferred consideration
Investment in BT Mining
BT Mining repayment of loan to BRL
Investment in NWP Coal Canada Limited
Other
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Interest received
Interest on finance leases and other finance costs paid
Repayment of finance leases
Interest on debt instruments
Share buy-backs
Net cash outflow from financing activities
Net decrease in cash
Cash and cash equivalents at the beginning of the year
Restricted short-term deposits at the beginning of the year
Total cash at the end of the year
Notes
2019
$’000
2018
$’000
52,741
47,934
(41,944)
(39,726)
13
20
19,500
30,297
13,000
21,208
13
13
13
(370)
(8,307)
(2,342)
3
(292)
(8,581)
(3,382)
-
(1,161)
(903)
-
-
(21,044)
9,084
(10,105)
22
-
58
(22,260)
(25,060)
-
130
(264)
(1,721)
(2,138)
(4,225)
732
195
(283)
(2,240)
(3,036)
-
(8,218)
(4,632)
(181)
(8,484)
20,179
4,037
28,892
3,808
24,035
24,216
42 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
6
Notes to the financial statements
For the year ended 30 June 2019
1. About our financial statements
General information
Bathurst Resources Limited (“Company” or “Parent” or “BRL”) is a company incorporated and domiciled in New Zealand, registered under
the Companies Act 1993 and listed on the Australian Securities Exchange (“ASX”). These financial statements have been prepared in
accordance with the ASX listing rules.
The financial statements presented as at and for the year ended 30 June 2019 comprise the Company and its subsidiaries (together
referred to as the “Group”).
The Group is principally engaged in the exploration, development and production of coal.
In 2019, the content and structure of the financial statements was reviewed. This review has resulted in the following changes:
•
•
information about significant accounting policies and key judgements and estimates have been relocated to sit within the relevant
notes to the financial statements; and
removal of immaterial disclosures.
These financial statements have been approved for issue by the Board of Directors on 26 August 2019.
Basis of preparation
These Group financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ
GAAP). The Group is a for-profit entity for the purposes of complying with NZ GAAP. The consolidated financial statements comply with
New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply NZ IFRS. The financial statements also comply with International Financial
Reporting Standards (IFRS).
These financial statements are presented in New Zealand dollars, which is the Company’s functional and presentation currency.
References in these financial statements to ‘$’ and ‘NZ$’ are to New Zealand dollars.
All financial information has been rounded to the nearest thousand unless otherwise stated.
Measurement basis
These financial statements have been prepared on a going concern basis under the historical cost convention, except for certain financial
assets and liabilities which are measured at fair value through profit or loss.
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the GST incurred on a
purchase of goods and services is not recoverable from the taxation authorities, in which case the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense item as applicable. Receivables and payables in the balance sheet are
shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
balance sheet. Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Key judgements and estimates
In the process of applying the Group’s accounting policies, management have made a number of judgements and applied estimates and
assumptions about future events. These are noted below and/or detailed within the following relevant notes to the financial statements:
• Note 8 Impairment
• Note 11 Mining assets
• Note 15 (c) Deferred consideration
• Note 16 Rehabilitation provisions
• Note 17 Equity
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 43
7
Notes to the financial statements
For the year ended 30 June 2019
1. About our financial statements continued
Key judgements and estimates continued
Reserves and resources
Reserves and resources are based on information compiled by a Competent Person as defined in accordance with the Australasian Code
of Mineral Resources and Ore Reserves of 2012 (the JORC Code). There are numerous uncertainties inherent in estimating reserves and
assumptions that are valid at the time of estimation but that may change significantly when new information becomes available. Changes
in forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status and may,
ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset
carrying values, provisions for rehabilitation, and deferred consideration.
Foreign currency translation
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
•
income and expenses for each income statement and statement of comprehensive income are translated at monthly average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions), and
• all resulting exchange differences are recognised in other comprehensive income.
New accounting standards not yet effective
At the date of authorisation of the financial statements, NZ IFRS 16 Leases was on issue but not yet effective. The standard eliminates the
distinction between operating and finance leases. A formal impact assessment is yet to be undertaken however this standard is not
expected to have a material impact. The Group does not intend to apply this standard until its effective date which is the financial year
ending 30 June 2020.
Standards and interpretations adopted during the year
The financial information presented for the year ended 30 June 2019 has been prepared using accounting policies consistent with those
applied in the 30 June 2018 financial statements, except for the application of two new accounting standards, as detailed below. These
were adopted with effect from 1 July 2018 without restatement, and in accordance with the transition requirements.
NZ IFRS 9 (“NZ IFRS 9”) – Financial Instruments
This standard replaces NZ IAS 39 Financial Instruments: Recognition and Measurement. It introduces a forward-looking expected
credit loss impairment model, changes to the classification and measurement of financial assets, as well as how hedge accounting can be
applied.
The only impact on the Group on adoption of this standard was a change in classification terminology on its financial assets and some
increased disclosures. There was no financial impact.
NZ IFRS 15 (“NZ IFRS 15”) – Revenue from contracts with customers
This standard details a comprehensive principles based approach on how to recognise revenue from contracts with customers. The
Group reviewed its contracts with customers regarding the sale of coal and freight and ash disposal services and determined that there
was no financial impact on the adoption of this standard. Increased disclosures are required, refer note 3.
44 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
8
Notes to the financial statements
For the year ended 30 June 2019
2. Segment information
The operating segments reported on are:
• Export – 100 percent of BT Mining’s export mine (Stockton).
• Domestic - BRL’s eastern South Island domestic operations and 100 percent of the BT Mining North Island domestic mines.
• Corporate – BRL corporate overheads and Buller Coal Project, and 100 percent of BT Mining corporate overheads.
A reconciliation to profit after tax per BRL’s Income Statement is provided via the elimination of BT Mining column. Total assets and total
liabilities are reported on a group basis, as with tax expense.
Three BRL customers met the reporting threshold of 10 percent of BRL’s operating revenue in the year to 30 June 2019, contributing
$18.8m, $8.2m and $6.6m (2018: three customers, $17.8m, $6.4m and $6.3m).
Year ended 30 June 2019
$’000
$’000
$’000
$’000
Export
Domestic
Corporate
Total
Eliminate
BT Mining
$’000
Total
BRL1
$’000
Revenue from contracts with customers
265,858
146,986
-
412,844
(360,100)
52,744
EBITDA2
Equity accounted profit
103,647
70,245
(15,352)
158,540
(148,345)
10,195
-
-
-
-
-
45,300
Operating profit before tax
78,412
47,060
(15,340)
110,132
(107,084) 48,348
Fair value on derivatives
Net finance costs
Income tax expense
Comprehensive income
Depreciation & amortisation
Year ended 30 June 2018
-
-
(3,439)
(672)
(616)
(4,965)
(3,439)
(6,253)
3,439
2,865
-
-
(31,088)
(31,088)
31,088
-
(3,388)
-
77,740
46,444
(55,266)
68,918
(69,692)
44,526
11,827
22,575
301
34,703
(27,794)
6,909
Revenue from contracts with customers
218,579
122,588
467
341,634
(293,455)
48,179
EBITDA
Equity accounted profit
105,001
50,865
(16,217)
139,649
(131,190)
-
-
-
-
-
8,459
42,961
Operating profit before tax
98,437
38,718
(26,033)
111,122
(109,076)
45,007
Fair value movements
Net finance costs
Income tax expense
Comprehensive income
Depreciation & amortisation
Accounting policy
-
-
(32,121)
(32,121)
(782)
(1,416)
(13,159)
(15,357)
-
-
(35,281)
(35,281)
-
8,019
35,281
97,655
37,302
(106,271)
28,686
(66,094)
6,083
10,678
130
16,891
(12,006)
(32,121)
(7,338)
-
5,553
4,885
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
1 Total BRL operating profit and comprehensive income does not equal the sum of Total BRL minus elimination of BT Mining, as the Company’s 65 percent
of BT Mining’s profit is added back.
2 Earnings before net finance costs (including interest), tax, depreciation, amortisation, impairment, fair value movement on deferred consideration and
rehabilitation provisions.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 45
9
Notes to the financial statements
For the year ended 30 June 2019
3. Revenue from contracts with customers
Coal sales
Freight and ash disposal revenue
Sales revenue from contracts with customers
2019
$’000
38,186
14,558
2018
$’000
35,831
11,986
52,744
47,817
Accounting policy
Revenue from contracts with customers is recognised at a point in time, when satisfaction of the performance
obligation(s) in a signed customer contract is achieved, signifying when control has passed to the customer.
Performance obligations
The Group has one key performance obligation across all customer contracts – that to supply (and deliver where relevant)
coal. Because of when control transfers to the customer (on delivery if freight is included as a service, on arrival at the
collection point if not), freight forms part of the same performance obligation as the supply of coal. Satisfaction of the
performance obligation is assumed at the time of delivery or arrival at the collection point, whichever is relevant. There are
no unsatisfied performance obligations.
Determination of the transaction price
The value at which revenue is recorded is the stand alone selling price for the good/service provided. Each contract notes
a separate price for coal, and freight delivery/ash disposal where relevant. Some customer contracts allow for limited
remediations in the instance of the Company providing non-specification coal (either at the option of the customer or
BRL). These instances are very rare and in almost all cases are rectified in the month that the non-specification occurs. As
such the best estimate of the final consideration to be received is the invoiced amount as based on the transaction prices
in the customer contract.
4. Cost of sales
Raw materials, mining costs and consumables used
Freight costs
Mine labour costs
Amortisation expenses
Changes in inventories of finished goods and work in progress
Total cost of sales
9,739
14,186
10,647
4,285
(202)
7,939
12,494
9,729
2,454
871
38,655
33,487
46 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
10
Notes to the financial statements
For the year ended 30 June 2019
5. Administrative and other expenses
Administrative and other expenses include the following items:
Remuneration of auditors
Directors fees
Legal fees
Consultants
Employee benefit expense
Rent
Share-based payments
6. Net finance costs
Interest income
Total finance income
Success fee
Interest expense
Interest expense on debt instruments
Realised foreign exchange loss
Unrealised foreign exchange loss on debt instruments
Rehabilitation provisions unwinding of discount
Deferred consideration unwinding of discount
Total finance costs
Total net finance costs
Notes
2019
$’000
2018
$’000
176
208
1,213
841
2,181
366
764
157
157
-
(359)
163
196
2,131
933
1,650
287
794
149
149
(854)
(458)
(2,094)
(3,396)
(42)
(62)
(365)
(623)
(87)
(1,764)
(255)
(673)
(3,545)
(7,487)
(3,388)
(7,338)
16
15 (c)
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 47
11
Notes to the financial statements
For the year ended 30 June 2019
7.
Income tax benefit
(a) Income tax benefit
Current tax
Deferred tax
Income tax benefit
Reconciliation of income tax benefit to tax payable
Profit before income tax
Tax at the standard New Zealand rate of 28 percent
Tax effects of amounts not assessable in calculating taxable income:
Share of BT Mining profit
Dividend from BT Mining
Fair value movement on derivatives and borrowings
Other permanent adjustments
Tax losses not recognised
Other deferred tax movements
Income tax benefit
Further information relating to deferred tax is set out in note 14.
(b) Imputation credits
Opening balance imputation credit account
Imputation credits attached to dividends and other items
Imputation credits available for use in future periods
2019
$’000
2018
$’000
(2,594)
(2,108)
2,594
2,108
-
-
44,960
12,589
5,548
1,554
(12,684)
(12,029)
7,583
-
7,243
-
5,056
8,994
1,717
13
(245)
(5,305)
-
5,055
7,607
12,662
-
-
5,055
5,055
Accounting policy
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate for New Zealand adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company's subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
48 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
12
Notes to the financial statements
For the year ended 30 June 2019
8.
Impairment
Impairment of exploration and evaluation assets
Impairment of mining assets
Total impairment losses
Notes
2019
$’000
11
11
-
-
-
2018
$’000
630
1,000
1,630
Management has assessed the cash-generating units (“CGU”) for the Group as follows:
• Bathurst domestic coal, as the Timaru coal yard cannot generate its own cash flows independent of the mines. This includes the
Canterbury mine, Takitimu mine and the Timaru coal yard.
• Buller Coal project, as there is a large amount of shared infrastructure between the proposed mines, necessary blending of the pit
products at the same site, and the similar geographical location of the pits.
• Cascade mine, as the mine when in operation had established domestic markets which allowed a profitable operation without relying
on infrastructure to be built for the Buller Coal project.
Management assessed each CGU for indicators of impairment, or indicators that previously recognised impairment losses may no longer
be relevant, where appropriate.
Bathurst domestic coal
It was considered whether there is any operating, regulatory, or market factors that indicate impairment of this CGU. This CGU continues
to be profitable and operate as expected. It was concluded that there were no indicators of impairment present at 30 June 2019.
Buller Coal project
The Buller Coal project was previously fully impaired in the year ended 30 June 2015. The Buller Coal project has remained on care and
maintenance and management has no immediate plans to reinstate the project. The CGU remains fully impaired at 30 June 2019.
Cascade mine
The Cascade mine was placed on care and maintenance during the year ended 30 June 2016 and remains on care and maintenance at
30 June 2019.
Accounting policy
For non-financial assets, the recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating
units). Exploration and evaluation and mining assets, as well as property, plant and equipment are assessed for impairment
collectively as part of their respective cash- generating units.
Non-financial assets that have been previously impaired are reviewed for possible reversal of the impairment at the end of
each reporting period.
Key judgements and estimates
The future recoverability of the non-financial assets recorded by the Group is dependent upon a number of factors,
including whether the Group decides to exploit its mine property itself or, if not, whether it successfully recovers the related
asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes,
costs of drilling and production, production rates, future legal and regulatory changes, and changes to commodity prices
and foreign exchange rates. These factors impact both an assessment of whether impairment should be recognised, as well
as if there are indicators that previously recognised impairment should be reversed.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 49
13
Notes to the financial statements
For the year ended 30 June 2019
9. Financial assets
(a) Trade and other receivables
Trade receivables from contracts with customers
Less: provision on receivable from joint venture Bathurst Industrial Coal Limited
Receivable from BT Mining
Other receivables and prepayments
Total trade and other receivables
2019
$’000
3,384
2018
$’000
3,926
(500)
(500)
714
420
250
227
4,018
3,903
Trade receivables from contracts with customers (“trade receivables”) are amounts due from customers for goods sold or services
performed in the ordinary course of business. Trade receivables are generally due for settlement within 20 to 30 days and as such
classified as current. There are no contract assets (accrued revenue) relating to contracts with customers.
Accounting policy
Initial recognition and measurement
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables for which the
Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs. Trade receivables for which the Group has applied
the practical expedient are measured at the transaction price determined under NZ IFRS 15. A financial asset is recognised
when the Group becomes party to the contractual provisions of the instrument.
Subsequent measurement
Financial assets under NZ IFRS 9 are subsequently classified to reflect the business model in which assets are managed and
their contractual cash flow characteristics, as follows:
• Amortised cost: where the business model is to hold the financial assets in order to collect contractual cash flows and
those cash flows represent solely payments of principal and interest.
• Fair value through other comprehensive income: where the business model is to both collect contractual cash flows and
sell financial assets and the cash flows represent solely payments of principal and interest.
• Fair value through profit or loss: if the asset is held for trading or if the cash flows of the asset do not solely represent
payments of principal and interest.
Financial assets at amortised cost
This is the only relevant financial asset category for the Group. The Group’s financial assets subsequently measured at
amortised cost consist of:
• Cash and cash equivalents and restricted short-term deposits.
• Trade receivables from contracts with customers and related party receivables (within trade and other receivables).
• Other financial assets.
• Crown indemnity (refer note 16 for further information).
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to
impairment. For information on credit risk and impairment, refer to note 21. Gains and losses are recognised in profit or loss
when the asset is derecognised, modified or impaired.
Derecognition
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial asset expire or if the
Group transfers the financial asset to another party without retaining control of the asset.
Cash and cash equivalents and restricted short-term deposits
•
Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with an original maturity of
three months or less. Restricted cash deposits are sureties held backing provisions for rehabilitation.
50 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
14
Notes to the financial statements
For the year ended 30 June 2019
10. Property, plant and equipment
Freehold
land
Buildings
Mine
infrastructure
Plant &
machinery
$’000
$’000
Year ended 30 June 2019
Opening net book value
$’000
2,328
Additions
Transfers
Depreciation
-
-
-
Closing net book value
2,328
688
95
345
(217)
911
Furniture
and
fittings
$’000
435
47
218
(111)
589
Work in
progress
Total
$’000
$’000
628
17,521
1,870
2,342
(2,013)
-
-
(2,624)
485
17,239
$’000
13,176
330
1,333
266
-
117
(244)
(2,052)
139
12,787
As at 30 June 2019
Cost
Accumulated depreciation and
impairment
15,785
6,417
2,913
29,617
2,868
12,609
70,209
(13,457)
(5,506)
(2,774)
(16,830)
(2,279)
(12,124)
(52,970)
Closing net book value
2,328
911
139
12,787
589
485
17,239
Year ended 30 June 2018
Opening net book value
Additions
Transfers
Depreciation
Disposals
1,928
400
-
-
-
Closing net book value
2,328
756
40
6
(110)
(4)
688
180
5
102
(21)
-
10,496
4,447
444
(2,180)
(31)
266
13,176
185
172
200
(120)
(2)
435
780
640
(752)
14,325
5,704
-
-
(2,431)
(40)
(77)
628
17,521
As at 30 June 2018
Cost
Accumulated depreciation and
impairment
15,785
5,977
2,796
27,954
2,603
12,752
67,867
(13,457)
(5,289)
(2,530)
(14,778)
(2,168)
(12,124)
(50,346)
Closing net book value
2,328
688
266
13,176
435
628
17,521
Included in plant and machinery above are the following amounts where the Group is a lessee under a finance lease:
Cost
Accumulated depreciation
Net book value
2019
$’000
8,133
2018
$’000
7,934
(3,211)
(2,094)
4,922
5,840
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 51
15
Notes to the financial statements
For the year ended 30 June 2019
10. Property, plant and equipment continued
Accounting policy
Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
Finance leases, those under which a significant portion of the risks and rewards of ownership are transferred to the
Company, are capitalised at the lease’s inception at the fair value of the leased property, or, if lower, the present value of the
minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and
long-term payables.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if
there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease
term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease
payments between rental expense and reduction of the liability.
Property, plant and equipment
All property, plant and equipment are measured at cost less depreciation and accumulated impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the expenditure will flow to the Group. The carrying amount of
any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
Depreciation is recognised in profit or loss over the estimated useful lives of each item of property, plant and equipment.
Leasehold improvements and certain leased plant and equipment are depreciated over the shorter of the lease term and
their useful lives.
The estimated useful lives for significant items of property, plant and equipment are as follows:
– Buildings
– Mine infrastructure
– Plant and machinery
– Plant and machinery leased
– Furniture, fittings and equipment
10 - 25 years
3 – 8 years
2 – 25 years
Units of use
3 – 8 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
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.
Any gain or loss on disposals of an item of property, plant and equipment (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
52 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
16
Notes to the financial statements
For the year ended 30 June 2019
11. Mining assets
Exploration and evaluation assets
Opening balance
Expenditure capitalised
Impairment recognised
Transfer to mining licences and property assets
Total exploration and evaluation assets
Mining licences/permits and property assets
Opening balance
Expenditure capitalised
Transfer from exploration and evaluation assets
Amortisation
Impairment recognised
Abandonment provision movement
Waste moved in advance capitalised
Total mining licences/permits and property assets
Total mining assets
Accounting policy
Exploration and evaluation
2019
$’000
312
368
-
-
2018
$’000
2,022
295
(630)
(1,375)
680
312
25,995
18,592
1,209
-
301
1,375
(4,285)
(2,426)
-
(1,000)
(915)
7,099
876
8,277
29,103
25,995
29,783
26,307
Exploration and evaluation expenditure incurred is capitalised to the extent that the expenditure is expected to be
recovered through the successful development and exploitation of the area of interest, or the exploration and evaluation
activities in the area of interest have not yet reached a point where such an assessment can be made. All other exploration
and evaluation expenditure is expensed as incurred.
Capitalised costs are accumulated in respect of each identifiable area of interest. Costs are only carried forward to the
extent that tenure is current and they are expected to be recouped through the successful development of the area (or,
alternatively by its sale) or where activities in the area have not yet reached a stage which permits reasonable assessment
of the existence of economically recoverable reserves and operations in relation to the area are continuing.
Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which the decision
to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area
according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 53
17
Notes to the financial statements
For the year ended 30 June 2019
11. Mining assets continued
Accounting policy continued
Mining licences/permits and properties
Mining licences/permits and development properties include the cost of acquiring and developing mining properties,
licences, mineral rights and exploration, evaluation and development expenditure carried forward relating to areas where
production has commenced.
These assets are amortised using the unit of production basis over the proven and probable reserves. Amortisation starts
from the date when commercial production commences. 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.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the item can be
measured reliably.
Waste moved in advance
Waste removed in advance costs incurred in the development of a mine are capitalised as parts of the costs of constructing
the mine and subsequently amortised over life of the relevant area of interest or life of mine if appropriate.
Waste removal normally continues through the life of the mine. The Group defers waste removal costs incurred during the
production stage of its operations and discloses them within the cost of constructing the mine.
The amount of waste removal costs deferred is based on the ratio obtained by dividing the volume of waste removed by the
tonnage of coal mined. Waste removal costs incurred in the period are deferred to the extent that the current period ratio
exceeds the life of mine ratio. Costs above the life of ore component strip ratio are deferred to waste removed in advance.
The stripping activity asset is amortised on a units of production basis. The life of mine ratio is based on proven and
probable reserves of the operation.
Waste moved in advance costs form part of the total investment in the relevant cash-generating unit, which is reviewed for
impairment if events or changes in circumstances indicate that the carrying value may not be recoverable.
Changes to the life of mine stripping ratio are accounted for prospectively.
Key judgements and estimates
Waste moved in advance is calculated with reference to the stripping ratio (waste moved over coal extracted) of the area of
interest and the excess of this ratio over the estimated stripping ratio for the area of interest expected to incur over its life.
Management estimates this life of mine ratio based on geological and survey models as well as reserve information for the
areas of interest.
54 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
18
Notes to the financial statements
For the year ended 30 June 2019
12. Investment in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of entity
BR Coal Pty Limited
Bathurst New Zealand Limited
Bathurst Coal Holdings Limited
Buller Coal Limited
Bathurst Coal Limited
New Brighton Collieries Limited
Bathurst Resources (Canada) Limited
Equity holding
Country of
incorporation
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Canada
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2019
%
100
100
100
100
100
100
100
2018
%
100
100
100
100
100
100
100
All subsidiary companies have a balance date of 30 June, and are involved in the coal industry. All subsidiaries have a functional currency
of New Zealand dollars except for BR Coal Pty Ltd (Australian dollars) and Bathurst Resources (Canada) Limited (Canadian dollars).
Bathurst Resources (Canada) Limited was incorporated in June 2018 and is the entity via which the Company invests in joint venture
NWP Coal Canada Limited – for further information refer to note 13.
Accounting policy
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the Company and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-
related costs are expensed as incurred.
Contingent consideration (deferred consideration) to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a financial asset
or financial liability are recognised in accordance with NZ IAS 39 in profit or loss as ‘fair value (loss)/gain on deferred
consideration’.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is
recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held
interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase,
the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 55
19
Notes to the financial statements
For the year ended 30 June 2019
13. Interest in joint ventures
Interest in BT Mining Limited (“BT Mining”)
Interest in NWP Coal Canada Limited (“NWP”)
Total interest in joint ventures
BT Mining Limited (“BT Mining”)
(a) Balances held in BT Mining
Equity investment
Share of retained earnings net of dividends received
Total interest in BT Mining
Opening balance
Increase in loan to BT Mining
Receipt of loan repayment
Receipt of dividend
Share of BT Mining profit
Share of BT Mining FX hedging through OCI
Closing balance
2019
$’000
70,723
10,105
2018
$’000
45,436
-
80,828
45,436
16,250
54,473
16,250
29,186
70,723
45,436
45,436
-
-
3,515
21,044
(9,084)
(19,500)
(13,000)
45,300
42,961
(513)
-
70,723
45,436
BRL holds a 65 percent shareholding in BT Mining, which owns the mining permits and licences as well as the mining assets at the
following mine sites:
• Buller Plateau operating assets of the Stockton mine in the South Island; and
• Rotowaro mine, Maramarua mine and certain assets at Huntly West mine located in the North Island.
BRL considers BT Mining to be a joint venture. This is because unanimous approval is required on activities that significantly affect BT
Mining’s operations. As such the investment in BT Mining is accounted for using the equity method.
For an unaudited proportionate consolidation presentation of BRL and BT Mining, refer to the additional information section of these
financial statements, after the notes to the financial statements.
56 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
20
Notes to the financial statements
For the year ended 30 June 2019
13. Interest in joint ventures continued
BT Mining continued
(b) BT Mining balance sheet
Cash
Trade and other receivables
Inventories
New Zealand emission units
Current assets
Property, plant and equipment
Mining assets
Crown indemnity
Other financial assets
Deferred tax asset
Non-current assets
TOTAL ASSETS
Trade and other payables
Tax payable
Borrowings
Derivative liabilities
Deferred consideration
Provisions
Current liabilities
Borrowings
Deferred consideration
Provisions
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Share capital
Reserves
Retained earnings net of dividends paid
EQUITY
Reconciliation to BRL’s interest in BT Mining
Share of share capital
Share of retained earnings net of dividends paid
BRL’s interest in BT Mining
2019
$’000
22,283
46,749
32,694
2,975
2018
$’000
7,780
48,176
35,348
1,243
104,701
92,547
72,976
41,961
53,993
742
2,041
41,454
27,273
53,399
-
1,646
171,713
123,772
276,414
216,319
26,854
24,894
2,970
789
12,932
6,447
28,526
19,048
-
3,348
11,900
882
74,886
63,704
6,876
12,806
73,042
-
15,100
67,614
92,724
82,714
167,610
146,418
108,804
25,000
69,901
25,000
(789)
-
84,593
44,901
108,804
69,901
16,250
54,473
16,250
29,186
70,723
45,436
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 57
21
Notes to the financial statements
For the year ended 30 June 2019
13. Interest in joint ventures continued
NWP
On 12 July 2018 BRL secured a joint venture agreement with Jameson Resources Limited (“Jameson”), investing in Jameson’s Canadian
subsidiary, NWP. The investment was done via a wholly owned subsidiary of BRL set up for this purpose (Bathurst Resources (Canada)
Limited) which is incorporated in Canada and has a functional currency of CAD.
NWP’s key asset is the Crown Mountain coking coal project (“Crown Mountain”). The Crown Mountain project consists of coal tenure
licences located in the Elk Valley coal field in south eastern British Columbia, Canada.
The joint venture agreement structures BRL’s investment in NWP into stages. Further investments are at the sole discretion of BRL.
Investment
Initial investment
Tranche one
Tranche two
Total
Amount
Ownership
Use of proceeds
CAD $4.0m
CAD $7.5m
CAD $110.m
CAD $121.5m
8%
12%
30%
50%
Exploration programme
Bankable feasibility study
Construction
As above
Status
Complete
In progress
Not started
The total amount of NZD $10.1m (CAD $8.9m) invested at 30 June 2019 represents the initial investment (CAD $4.0m) issued in
exchange for common ordinary shares in NWP, as well as a further CAD $4.9m as part of tranche one, issued in exchange for preference
shares in NWP.
The CAD $4.9m investment in exchange for preference shares is done on a cash call basis at the request of NWP. If BRL exercises the
tranche one option, further investment required will equal CAD $7.5m minus funds invested in the preference shares, when the
preference shares will automatically convert to ordinary shares on a 1:1 basis.
The preference shares have the same rights as ordinary shares and are issued at the same value as the ordinary shares, with the sole
difference that they have a liquidity preference ranking above ordinary shares. Because the preference shares are in substance the same
as ordinary shares, giving BRL access to the returns associated with the joint venture, these have been accounted for in the same way as
the ordinary shares.
BRL considers NWP to be a joint venture with Jameson. This is because unanimous approval is required on activities that significantly
affect NWP’s operations. As such the investment in NWP is accounted for using the equity method.
(a) NWP summarised financial information
Cash
Other current assets
Exploration and evaluation assets
Other non-current assets
TOTAL ASSETS
Current liabilities
Non-current financial liabilities
TOTAL LIABILITIES
Issued capital
Accumulated losses
TOTAL EQUITY
2019
$’000
1,054
286
23,270
1,270
25,880
352
1,941
2,293
25,604
(2,017)
23,587
Bathurst Industrial Coal Limited
The Company holds a 50 percent shareholding in Bathurst Industrial Coal Limited. This venture has ceased to operate and it is intended
that this entity will be wound up.
58 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
22
Notes to the financial statements
For the year ended 30 June 2019
13. Interest in joint ventures continued
Accounting policy
Joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and
obligations of each investor. The Company has assessed the nature of its joint arrangements and determined them to be
joint ventures. Joint ventures are accounted for using the equity method.
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to
recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When
the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any long-
term interests that, in substance, form part of the Group’s net investment in the joint venture), the Group does not
recognise further losses, except to the extent that the Group has an obligation or has made payments on behalf of the
investee.
14. Deferred tax
Temporary differences attributable to:
Tax losses
Employee benefits
Provisions
Mining licences
Exploration and evaluation expenditure
Property, plant and equipment
Waste moved in advance
Other
Total deferred tax assets
Waste moved in advance
Other
Total deferred tax liabilities
Net deferred tax asset not recognised
Net deferred tax asset
2019
$’000
12,449
285
1,772
2018
$’000
13,819
257
803
16,695
16,984
2,656
6,624
2,027
436
548
8,086
-
-
42,944
40,497
-
(3)
(3)
(787)
-
(787)
(42,941)
(39,710)
-
-
The Group has not recognised a net deferred tax asset on the basis that it is not probable these losses will be utilised in the near future.
Accounting policy
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting or taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 59
23
Notes to the financial statements
For the year ended 30 June 2019
15. Financial liabilities
(a) Trade and other payables
Current
Trade payables
Accruals
Employee benefit payable
Interest payable
Other payables
Total trade and other payables
2019
$’000
2018
$’000
2,316
2,688
1,183
723
169
1,566
1,703
1,238
922
306
7,079
5,735
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of trade and other payables are
considered to be the same as their fair values, due to their short-term nature.
(b) Borrowings
Current
Secured
Lease liabilities
Subordinated bonds
Bank borrowings backing property, plant and equipment
Unsecured
Convertible notes
Total current borrowings
Non-current
Secured
Lease liabilities
Bank borrowings backing property, plant and equipment
Subordinated bonds
Unsecured
Convertible notes
Total non-current borrowings
Total borrowings
1,418
11,790
287
1,654
-
241
719
-
14,214
1,895
2,470
-
-
3,714
287
11,689
6,827
12,193
9,297
27,883
23,511
29,778
60 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
24
Notes to the financial statements
For the year ended 30 June 2019
15. Financial liabilities continued
(b) Borrowings continued
A summary of key details of the Company’s debt instruments (excluding lease liabilities) is as follows:
Instrument
Convertible notes
Convertible notes
Subordinated bonds
Denomination
currency
Face value
Coupon rate
Issue date Maturity date
NZD
NZD
USD
$m
$0.7m
$7.0m
$7.9m
%
8%
8%
10%
22/07/2016
22/07/2019
1/02/2017
1/02/2017
1/02/2021
1/02/2020
Per note
conversion
# shares
45,455
26,667
n/a
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the
event of default.
During the year, 2,857 of the July 2016 convertible notes issue (face value $3.3m), and 1,400 of the February 2017 convertible notes issue
(face value $1.6m), were converted to shares at the election of the note holders. For further details refer to note 17.
Convertible notes
Conversion
• July 2016 issue - can be converted into ordinary shares at the election of the holder any time until 10 days prior to maturity date.
• February 2017 issue - can be converted into ordinary shares at the election of the holder any time until 10 days before maturity date.
Ranking
The convertible notes rank equally with all other present and future unsecured obligations except for obligations accorded preference by
mandatory provisions of applicable law. Any shares issued on conversion will rank equally with all other ordinary shares.
Subordinated bonds
Redemption
The Company is entitled to elect early redemption at any time after the sale and purchase agreement of BT Mining becoming
unconditional and after the 1 February 2019. If the bonds are redeemed early the Company must pay 104 percent of the issue price.
Ranking
The bonds rank equally with existing and future bonds and without priority or preference amongst themselves. The bonds are formally
secured by the Company’s share ownership in BT Mining.
Technical breach
There was a technical breach to the bond terms during the year. The required majority approval by the bond holders for the share buy-
backs scheme that commenced in October 2018 was received retrospectively at the AGM in November 2018. This means a majority of
bond holders can elect these bonds to be repaid before the maturity date.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 61
25
Notes to the financial statements
For the year ended 30 June 2019
15. Financial liabilities continued
(c) Deferred consideration
Current
Acquisition of subsidiary
Non-current
Acquisition of subsidiary
Total deferred consideration
Opening balance
Unwinding of discount
Fair value adjustment
Consideration paid during the year
Closing balance
2019
$’000
2018
$’000
1,035
1,258
5,774
6,809
7,608
623
(41)
(1,381)
6,350
7,608
7,928
673
(102)
(891)
6,809
7,608
Buller Coal project
BRL acquired Buller Coal Limited (formerly L&M Coal Limited) in November 2010 and the sale and purchase agreement contained an
element of deferred consideration. The deferred consideration comprised cash consideration and/or royalties on coal sold and the issue
of performance shares.
The deferred cash consideration is made up of two payments of USD $40m (performance payments). The first being payable upon
25,000 tonnes of coal being shipped from the Buller Coal project, the second payable upon 1 million tonnes of coal being shipped from
the Buller Coal project.
BRL has the option to defer cash payment of the performance payments and elect to submit a higher royalty on coal sold from the
respective permit areas until such time the performance payments are made. The option to pay a higher royalty rate has been assumed
in the valuation and recognition of deferred consideration.
Bathurst has and will continue to remit royalty payments to L&M Coal Holdings (the vendor) on all Escarpment coal sold as required by
the Royalty Deed and this includes ongoing sales from stockpiles. Further information is included in note 23 (d).
Canterbury Coal Limited
The acquisition of Canterbury Coal Limited in November 2013 contained a royalty agreement. The amounts that are payable in the
future under this royalty agreement are required to be recognised as part of the consideration paid for Canterbury Coal Limited. The fair
value of the future royalty payments is estimated using a discount rate based upon the Group’s weighted average cost of capital
(“WACC”) and production profile at a set rate per tonne of coal produced. Sensitivity analysis on impact to profit based on changes to key
inputs to the estimation of the deferrred consideration liability is as follows:
Key input
Discount rate
Production levels
Change in input
2 percent
5 percent
2019
2018
Increase
in estimate
$’m
Decrease
in estimate
$’m
Increase
in estimate
$’m
Decrease
in estimate
$’m
0.1
0.0
(0.2)
0.0
0.1
(0.1)
(0.1)
0.1
62 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
26
Notes to the financial statements
For the year ended 30 June 2019
15. Financial liabilities continued
(c) Deferred consideration continued
New Brighton Collieries Limited
The Company completed the acquisition of New Brighton Collieries Limited on 10 March 2015. The balance due on settlement is to be
satisfied by an ongoing royalty based on mine gate sales revenue. The fair value of the future royalty payments is estimated using a
discount rate based upon the Group’s WACC, projected production profile, and forecast domestic coal prices. These are based on the
Group’s forecasts which are approved by the Board of Directors. Sensitivity analysis on impact to profit based on changes to key inputs
to the estimation of the deferrred consideration liability is as follows:
Key input
Discount rate
Production levels
Coal prices
Change in input
2 percent
5 percent
$5 per tonne
2019
2018
Increase
in estimate
$’m
Decrease
in estimate
$’m
Increase
in estimate
$’m
Decrease
in estimate
$’m
0.4
(0.2)
(0.2)
(0.4)
0.2
0.2
0.5
(0.3)
(0.3)
(0.5)
0.3
0.3
Security
Pursuant to a deed of guarantee and security the deferred consideration is secured by way of a first-ranking security interest in all of
New Brighton Collieries Limited’s present and future assets (and present and future rights, title and interest in any assets).
(d) Fair value measurements
The fair value of the Group’s debt instruments is noted below:
Instrument
Subordinated bonds
Convertible notes
2019
2018
Fair value
$’000
Carrying value
$’000
Fair value
$’000
Carrying value
$’000
12,309
7,858
11,790
7,546
12,175
12,652
11,689
12,193
All other financial assets and liabilities (except where specifically noted) have a carrying value that is equivalent to their fair value.
Accounting policy
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of borrowings and trade and other payables, net of
directly attributable transaction costs.
Subsequent measurement
Subsequent measurement of financial liabilities under NZ IFRS 9 is at amortised cost, unless eligible to opt to designate a
financial liability at fair value through profit or loss, or other specific exceptions apply.
The Group’s financial liabilities fall within two measurement categories: trade and other payables and borrowings at amortised
cost, and deferred consideration at fair value through profit or loss.
Financial liabilities at amortised cost
Trade and other payables and borrowings are subsequently measured at amortised cost using the effective interest rate
method (“EIR”). Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Borrowings denominated in foreign currency are re-translated at each reporting period to account for unrealised foreign
exchange movements.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 63
27
Notes to the financial statements
For the year ended 30 June 2019
15. Financial liabilities continued
Accounting policy continued
Financial liabilities at amortised cost
The fair value of the liability portion of the convertible notes was determined using a market interest rate for an equivalent
non-convertible bond at the issue date. The remainder of the proceeds was allocated to the conversion option and
recognised in equity as debt instruments equity component, and is not subsequently remeasured. Refer to note 17.
Fair value through profit or loss
Deferred consideration is subsequently measured at fair value through profit or loss, as IFRS 9 denotes the measurement
requirements of IFRS 3 Business combinations applies. The fair value of deferred consideration payments is determined at
acquisition date. Subsequent changes to the fair value of the deferred consideration are recognised through the income
statement. The portion of the fair value adjustment due to the time value of money (unwinding of discount) is recognised as
a finance cost.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
statement of profit or loss.
Fair value
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in a transaction between
active market participants or in its absence, the most advantageous market to which the Group has access to at the
reporting date. The fair value of a financial liability reflects its non-performance risk.
When available, fair value is measured using the quoted price in an active market. A market is active if transactions take
place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in
an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and
minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market
participants would take into account in pricing a transaction.
The following fair value hierarchy, as set out in NZ IFRS 13: Fair Value Measurement, has been used to categorise the inputs
to valuation techniques used to measure the financial assets and financial liabilities which are carried at fair value:
a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
b) 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
c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
The Group’s only financial asset or liability measured at fair value is deferred consideration which is valued at a fair value
hierarchy of level 3. The fair value of debt instruments disclosed has been valued at a fair value hierarchy of level 2.
Key judgements and estimates
In valuing the deferred consideration payable under business acquisitions management uses estimates and assumptions.
These include future coal prices, discount rates, coal production, and the timing of payments. The amounts of deferred
consideration are reviewed at each balance date and updated based on best available estimates and assumptions at that
time.
64 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
28
Notes to the financial statements
For the year ended 30 June 2019
16. Rehabilitation provisions
Current
Non-current
Total provisions
Rehabilitation provision movement:
Opening balance
Change recognised in the mining and property asset
Unwinding of discount
Recognition/movement in Crown indemnity on Sullivan permit
Movement in provision recognised in the income statement
2019
$’000
1,328
4,347
5,675
5,928
(915)
365
20
277
2018
$’000
1,160
4,768
5,928
3,985
905
255
351
432
Closing balance
5,675
5,928
Accounting policy
Provisions are made for site rehabilitation costs relating to areas disturbed during the mine’s operation up to reporting date
but not yet rehabilitated. The provision is based on management’s best estimate of future costs of rehabilitation. When the
provision is recognised, the corresponding rehabilitation costs are recognised as part of mining property and development
assets. At each reporting date, the rehabilitation liability is re-measured in line with changes in the timing or amount of the
costs to be incurred. Changes in the liability relating to rehabilitation of mine infrastructure and dismantling obligations are
added to or deducted from the related asset.
If the change in the liability results in a decrease in the liability that exceeds the carrying amount of the asset, the asset is
written down to nil and the excess is recognised immediately in the income statement. If the change in the liability results in
an addition to the cost of the asset, the recoverability of the new carrying value is considered. Where there is an indication
that the new carrying amount is not fully recoverable, an impairment test is performed with the write down recognised in
the income statement in the period in which it occurs.
The net present value of the provision is calculated using an appropriate discount rate, the unwinding of the discount
applied in calculating the net present value of the provision is charged to the income statement in each reporting period
and is classified as a finance cost.
A reasonable change in discount rate assumptions would not have a material impact on the provision.
Key judgements and estimates
In calculating the estimated future costs of rehabilitating and restoring areas disturbed in the mining process certain
estimates and assumptions have been made. The amount the Group is expected to incur to settle these future obligations
includes estimates in relation to the appropriate discount rate to apply to the cash flow profile, expected mine life,
application of the relevant requirements for rehabilitation, and the future expected costs of rehabilitation.
Changes in the estimates and assumptions used could have a material impact on the carrying value of the rehabilitation
provision. The provision is reviewed at each reporting date and updated based on the best available estimates and
assumptions at that time.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 65
29
Notes to the financial statements
For the year ended 30 June 2019
17. Equity
(a) Ordinary fully paid shares
Opening balance
Issue of shares from conversion of convertible notes
Issue of shares from vesting of performance rights
18
Cancellation of shares from buy-backs
Issue of shares from conversion of RCPS
Closing balance
Note
2019
Number of shares
’000
2018
Number of shares
’000
1,513,164
167,198
16,131
(31,316)
-
1,665,177
986,028
13,318
-
-
513,818
1,513,164
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held. Every ordinary share is entitled to one vote.
Convertible notes conversions
During the year, 2,857 of the July 2016 issue of convertible notes were converted to shares at the option of the note holder, at $1,150 per
note and 2.53¢ per share (June 2018: 293 notes). 1,400 of the February 2017 convertible notes issue were also converted at the request
of the note holder, at $1,150 per note and 4.3125¢ per share.
Share buy-backs
There were two share buy-back schemes implemented during the year. The first was an on-market share buy-back facility, allowing the
Company to purchase up to 75m of its own shares. At 30 June 2019, 30.5m shares had been bought back at an average price of AU 12.8¢
per share.
An off-market minimum holding buyback facility was also offered to shareholders who held unmarketable parcels of shares as defined by
the Australian Stock Exchange, which is a shareholder who has a holding valued at less than AUD $500. Of the 757 eligible shareholders,
555 participated in the facility, with the Company buying back 0.8m shares at a price of AU 14.5¢ per share.
(b) Contributed equity
Opening balance
Issue of shares from conversion of convertible notes
Issue of shares from conversion of RCPS
Issue of shares from vesting of performance rights
Share buy-backs
Closing balance
$’000
263,179
25,780
-
1,543
(4,225)
$’000
249,092
1,982
12,105
-
-
286,277
263,179
The value transferred to equity on conversion of the convertible notes was the proportional value of the amortised cost of the underlying
borrowings and the fair value of the conversion option (debt instruments equity component).
(c) Debt instruments equity component
Opening balance
Conversion option of convertible notes recognised as equity
Transfer to contributed equity on conversion of convertible notes
Closing balance
43,788
-
(20,964)
22,824
-
43,788
-
43,788
66 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
30
Notes to the financial statements
For the year ended 30 June 2019
17. Equity continued
Accounting policy
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration
received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as
a reduction of the share proceeds received.
Key judgements and estimates
The Group has made a judgement that the conversion feature of the convertible notes should be classified as equity. This
judgement was made on the basis that the conversion feature satisfies the equity classification test of converting a fixed
amount of debt principal to a fixed quantity of the Group’s own shares (the ‘fixed for fixed’ test). Because of this
classification the value attributed to the conversion feature is not subsequently remeasured after initial recognition
through profit or loss.
The value recognised was independently determined using a Black Scholes Model for the convertible notes that takes into
account the exercise price, the term of the conversion option, the current share price and expected price volatility of the
underlying share, the expected dividend yield, and the risk free interest rate for the term of the conversion option.
18. Reserves
Share-based payment reserve
Foreign exchange translation reserve
Share of BT Mining FX hedging through OCI
Reorganisation reserve
Total reserves
Nature and purpose of reserves
2019
$’000
293
(70)
(513)
(32,760)
(33,050)
2018
$’000
1,072
(149)
-
(32,760)
(31,837)
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of performance rights issued. Some performance rights vested
during the year with shares issued; the value pertaining to these performance rights were transferred to contributed equity.
Foreign exchange translation reserve
Exchange differences arising on translation of companies within the Group with a different functional currency to New Zealand dollars are
taken to the foreign currency translation reserve. The reserve is recognised in the income statement when the investment is disposed of.
Share of BT Mining FX hedging through OCI
The value booked represents 65 percent equity share of the fair value movement on FX hedging in BT Mining that is put through other
comprehensive income.
Reorganisation reserve
Bathurst Resources Limited was incorporated on 27 March 2013. A scheme of arrangement between Bathurst Resources Limited and its
shareholders resulted in Bathurst Resources (New Zealand) Limited becoming the new ultimate parent company of the Group on
28 June 2013. A reorganisation reserve was created, which reflects the previous retained losses of subsidiaries.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 67
31
Notes to the financial statements
For the year ended 30 June 2019
18. Reserves continued
Details on share-based payments
Grant date
Vesting date
Transaction Performance Rights
Opening
balance
000s
Issued
Vested
000s
000s
Closing
balance
000s
6 February 17
31 December 18
11,500
Completion performance rights
21 December 17
31 December 18
1,981
Retention performance rights
3 April 18
31 December 18
2,650
Director performance rights
20 December 2018
31 March 2020
LTIP performance rights
28 December 2018
30 January 2022
-
-
16,131
-
-
-
2,555
4,591
7,146
(11,500)
(1,981)
(2,650)
-
-
(16,131)
-
-
-
2,555
4,591
7,146
The transaction, completion and retention performance rights were converted to shares for nil consideration on the 30 January 2019,
with the closing market rate of BRL shares on this date at AU 0.12¢ per share.
Transaction performance rights
Transaction performance rights were issued to certain key executives during the year, conditional on the successful signing of a sale and
purchase agreement for the acquisition of certain Solid Energy mine site assets via the Company’s joint venture vehicle, BT Mining.
These form part of the Group’s overall retention strategy, and recognises their instrumental roles in relation to the negotiation and
signing of the contract. These were approved by shareholders at the 2016 AGM.
Completion performance rights
Completion performance rights were issued to executive directors in recognition of the completion of the sale and purchase agreement
for the acquisition of certain assets from Solid Energy, and the close and transition of those assets. These form part of the Group’s overall
retention strategy and recognises their instrumental roles in relation to the successful completion of the acquisition. These were
approved by shareholders at the 2017 AGM.
Retention performance rights
Retention performance rights were issued to senior executives in recognition of the successful close and transition of certain assets from
Solid Energy to the Company. These form part of the Group’s overall retention strategy and were approved by the Board.
Director performance rights
Director performance rights were issued to directors in recognition of past performance of the Company, in particular a 67 percent
increase in the Company’s share price in FY18. These were approved by shareholders at the 2018 AGM.
These have a nil issue and exercise price and are convertible into fully paid ordinary shares on a 1:1 basis. Vesting is dependent on the
holders remaining in employment until the vesting date.
68 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
32
Notes to the financial statements
For the year ended 30 June 2019
18. Reserves continued
Details on share-based payments continued
Long term incentive plan (“LTIP”) performance rights
LTIP performance rights were issued to executive directors as part of the new LTIP approved at the 2018 AGM. These rights were issued
as an incentive for the future performance of these directors. The rights were approved at the 2018 AGM.
These have a nil issue and exercise price and are convertible into fully paid ordinary shares on a 1:1 basis. Performance requirements
include continuous employment with BRL until 15 October 2021, and BRL achieving a total shareholder return compound annual growth
rate for the period 1 July 2018 to and including 30 June 2021 of between 10 percent to 15 percent.
Accounting policy
Share-based compensation benefits are provided to employees via the Bathurst Resources Limited LTIP.
The fair value of performance rights granted under the Bathurst Resources Limited LTIP is recognised as an employee
benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to
the fair value of the rights granted, which includes any market performance conditions and the impact of any non-vesting
conditions but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of rights that are expected
to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of rights that
are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Performance rights granted carry no dividend or voting rights. When exercised each performance right converts into one
fully paid ordinary share. The exercise price of all performance rights is nil.
19. Earnings per share
(a) Earnings per share (“EPS”)
Basic EPS
Diluted EPS
(b) Reconciliation of earnings used in calculation
Earnings used to calculate basic EPS – net profit after tax
Interest expense on convertible notes
Earnings used in calculation of diluted EPS
(c) Weighted average number of shares
Weighted average shares used in calculation of basic EPS
Dilutive potential ordinary shares (performance rights and convertible notes)
Weighted average shares used in calculation of diluted EPS
2019
Cents
2.83
2.57
$’000
44,960
926
45,886
2018
Cents
0.40
0.40
$’000
5,548
-
5,548
Number of
shares
000s
1,587,049
198,267
1,785,316
Number of
shares
000s
1,399,047
-
1,399,047
At 30 June 2018, basic and diluted EPS were the same as the potential ordinary shares from the convertible notes and performance
rights were anti-dilutive.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 69
33
Notes to the financial statements
For the year ended 30 June 2019
19. Earnings per share continued
Accounting policy
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
20. Reconciliation of profit to operating cash flows
Profit before income tax
Dividend received from BT Mining
Non-cash items:
Unrealised FX movements
Depreciation and amortisation
Share of BT Mining profit
Rehab provision movement and discount unwinds
Fair value movements on derivatives
Fair value movements on borrowings
Unwinding of discount rate and fair value adjustment on deferred consideration
Share-based payment expense
Impairment
Other
Non-operating items:
(Gain)/loss on sale of property, plant and equipment
Interest on debt instruments
Other
Movement in working capital
Cash flow from operating activities
2019
$’000
44,960
19,500
13
6,909
2018
$’000
5,548
13,000
1,767
4,885
(45,300)
(42,961)
563
-
-
582
764
-
-
(3)
2,096
146
67
741
27,687
4,434
571
794
1,630
75
21
3,396
111
(491)
30,297
21,208
70 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
34
Notes to the financial statements
For the year ended 30 June 2019
21. Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, and interest rate risk), credit risk and
liquidity risk.
The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in
the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk.
Risk management is carried out by the management team under policies approved by the Board of Directors. Management identifies and
evaluates financial risks on a regular basis.
Market risk
Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is
not New Zealand dollars. The risk is measured using sensitivity analysis.
The Group had minimal operating exposure to foreign currency risk at the end of the reporting period. The Group assesses potential
foreign currency exposures by assessing the impact of movement in the FX rate on profit, as follows:
Debt instrument
Currency and face value
Subordinated bonds
USD $7.9m
2019
+3%
$’000
344
2018
+3%
$’000
341
2019
-3%
$’000
(365)
2018
-3%
$’000
(362)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. A
material risk of credit risk arises from cash and cash equivalents, restricted short-term deposits, trade receivables from contracts with
customers, and related party receivables.
Risk management
The Group has adopted a policy of only dealing with credit worthy counterparties and obtaining sufficient collateral where appropriate as
a means of minimising the risk of financial defaults.
The credit risk on cash and cash equivalents and restricted short-term deposits is limited because the Group only banks with
counterparties that have credit ratings of AA- or higher.
The Group’s maximum exposure to credit risk for trade receivables from contracts with customers and loans to related parties is their
carrying value. The Group has long standing relationships with all its key customers and historically has experienced very low to nil
defaults on its trade receivables.
Impairment
The Group’s financial assets are subject to having their impairment assessed against the IFRS 9 forward looking expected credit loss
model. The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the
loss if there is a default) and the exposure at default.
The group applies the NZ IFRS 9 simplified approach to measuring expected credit losses for trade receivables on contracts with
customers, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due. The assessment of the probability of default and loss given default is
based on historical data adjusted by forward-looking information.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group
may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full. A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
The assessed impairment loss for all financial assets was immaterial at 30 June 2019. There were no indicators that credit risk on financial
assets had increased significantly since initial recognition, nor does the Group hold any financial assets that are considered to be credit-
impaired (excluding a historical intercompany receivable which has been specifically provided for).
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 71
35
Notes to the financial statements
For the year ended 30 June 2019
21. Financial risk management continued
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an
ongoing basis.
Maturities of financial liabilities
The tables below analyse the Group's non-derivative financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances.
30 June 2019
Trade and other payables
Borrowings
Finance leases
Deferred consideration
Total
30 June 2018
Trade and other payables
Borrowings
Finance leases
Deferred consideration
Total
Less than
6 months
6 - 12
months
Between
1 – 2 years
Between
2 – 5 years
Over 5
years
$’000
7,079
854
1,332
503
9,768
5,803
1,100
1,057
636
8,596
$’000
$’000
$’000
$’000
-
12,561
1,077
503
14,141
-
1,082
1,057
636
2,775
-
6,745
1,207
952
8,904
-
17,130
2,345
1,226
-
-
943
3,026
3,969
-
9,033
1,906
3,775
20,701
14,714
-
-
-
4,282
4,282
-
-
-
4,786
4,786
Total
contractual
flows
$’000
7,079
20,160
4,559
9,266
41,064
5,803
28,345
6,365
11,059
51,572
Borrowings in the above table represent the underlying contractual commitments on the USD denominated Subordinated Bonds and
NZD convertible notes. The convertible notes have the option to convert to equity, so future principal repayments may not occur. The
subsequent to balance sheet date conversions of convertible notes disclosed in note 24 have been excluded from the above.
Total contractual cash flows on finance leases equal minimum lease payments plus interest.
Capital management
The Group’s capital includes contributed equity, reserves, and retained earnings. The Board’s policy is to maintain a strong capital base
to maintain investor, creditor, and market confidence and to sustain the future development of the business. There were no changes to
the Company’s approach to capital management during the year.
72 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
36
Notes to the financial statements
For the year ended 30 June 2019
21. Financial risk management continued
Financial instruments by category
Financial assets
Amortised cost
Cash and cash equivalents
Restricted short-term deposits
Trade and other receivables
Other financial assets
Crown Indemnity
Total financial assets
Financial liabilities
Amortised cost
Trade and other payables
Borrowings
Fair Value
Deferred consideration
Total financial liabilities
22. Key management personnel
Key management personnel are the senior leadership team and directors (executive and non-executive) of the Group.
Key management personnel compensation
30 June 2019
Management
Non-executive directors
Total
30 June 2018
Management
Non-executive directors
Total
Short-term
benefits
$’000
Share-based
payments
$’000
2,387
184
2,571
2,172
196
2,368
676
88
764
684
110
794
2019
$’000
20,005
4,030
4,018
139
371
2018
$’000
20,179
4,037
3,903
139
351
28,563
28,609
7,079
23,511
6,809
37,399
5,803
29,778
7,608
43,189
Total
$’000
3,063
272
3,335
2,856
306
3,162
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 73
37
Notes to the financial statements
For the year ended 30 June 2019
23. Commitments and contingent liabilities
(a) Capital commitments
There was no capital expenditure contracted for at the reporting date but not recognised as a liability (2018: nil).
(b) Lease commitments
Non-cancellable operating leases
The Group leases various offices, accommodations, and equipment under non-cancellable operating leases expiring within one to five
years. The leases have varying terms, escalation clauses and renewal rights. Commitments for non-cancellable minimum lease payments
are payable as follows:
Within one year
Later than one year but not later than five years
Total lease commitments
2019
$’000
270
367
637
2018
$’000
287
608
895
Finance leases
The Group leases various plant and equipment expiring within one to five years. Refer to note 21 for further information.
(c) Exploration expenditure commitments
To maintain the various permits in which the Group is involved the Group has ongoing operational expenditure as part of its normal
operations. The actual costs will be dependent on a number of factors including final scope and timing of operations.
(d) Contingent assets and liabilities
On 23 December 2016 BRL announced that L&M Coal Holdings Limited had filed legal proceedings in the High Court of New Zealand in
relation to an alleged breach of the first USD $40m performance payment described in note 15 (c). On 20 August 2018 BRL advised that
it received an unfavourable judgment from the High Court on this matter.
The High Court held that the first performance payment had been triggered as royalties were not being paid on a reasonable level
(undefined by the Court) of production. BRL lodged an appeal to the Court of Appeal against this decision, which was heard in court on
21 to 23 August 2019. BRL continues to believe that it is more likely than not that it will be successful in the Court of Appeal. A judgment
is expected from the Court of Appeal in early 2020. Notwithstanding this, should BRL ultimately be unsuccessful, directors have
considered options to fund payment and are of the view that BRL would be able to do so.
24. Events after the reporting period
Other than as disclosed there are no other material events that occurred subsequent to reporting date, that require recognition of, or
additional disclosure in these financial statements.
Conversion of convertible notes
The remaining July 2016 issue of convertible notes matured on the 22 July 2019 (original maturity date). It was requested by the note
holder that these were converted to shares, resulting in the issue of 28.5m shares. The remaining balance sitting in borrowings and debt
instrument equity component relating to this notes issue has subsequently been transferred to contributed equity. 13.3m shares were
also issued on 12 August 2019 on the conversion of 500 of the February 2017 issue of convertible notes (face value of debt $0.6m), at the
request of the note holder.
Dividend
The Board approved a dividend on 26 August 2019, which will be payable on 23 October 2019. The dividend is payable at AU 0.3¢ per share,
amounting to a total dividend payment of AUD $5.1m based on current issued shares. These financial statements do not reflect this dividend,
the dividend will be accounted for in equity as an adjustment to retained earnings in the financial year ending 30 June 2020.
Share buy-backs
The Board approved a 12-month extension to the on-market share buy-back facility which was originally announced on 28 August 2018.
The facility will now end on the 28 August 2020; no other details have changed. At the date of these financial statements, there were
44.5m shares able to be bought back.
Bathurst Resources Limited | Financial statements
38
74 Bathurst Resources Limited Annual Report 2019
Additional information
For the year ended 30 June 2019
Unaudited proportionate consolidation of Bathurst and BT Mining operations
The following income statement, balance sheet and cash flow represent 100 percent of Bathurst operations, and 65 percent of BT Mining
operations. This presentation does not reflect reporting under NZ GAAP or NZ IFRS, but is intended to show a combined operating view
of the two businesses for information purposes only.
Prior period comparatives only include ten months of operations, as BT Mining began operating on 1 September 2017.
Consolidated income statement
Revenue from contracts with customers
Realised FX and coal price hedging
Less: cost of sales
Gross profit
Other income
Depreciation
Administrative and other expenses
Fair value on deferred consideration
Gain on disposal of fixed assets
Impairment losses
Operating profit before tax
Fair value movement on derivatives
Fair value movement on borrowings
Finance cost
Finance income
Profit before income tax
Income tax expense
Profit after tax
2019
$’000
2018
$’000
286,809
237,083
(5,303)
-
(173,509)
(133,981)
107,997
103,102
254
(9,838)
(19,180)
(6,584)
3
-
72,652
(2,235)
-
(5,704)
454
1,486
(6,545)
(17,855)
(5,684)
71
(1,630)
72,945
(27,687)
(4,434)
(12,699)
356
65,167
28,481
(20,207)
(22,933)
44,960
5,548
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 75
39
Additional information
For the year ended 30 June 2019
Consolidated balance sheet
Cash and cash equivalents
Restricted short-term deposits
Trade and other receivables
Inventories
New Zealand emission units
Other financial assets
Total current assets
Property, plant and equipment (“PPE”)
Mining assets
Crown indemnity
Deferred tax asset
Interest in joint ventures
Other financial assets
Total non-current assets
TOTAL ASSETS
Trade and other payables
Tax payable
Borrowings
Derivative liabilities
Deferred consideration
Provisions
Total current liabilities
Borrowings
Deferred consideration
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Contributed equity
Debt instruments equity component
Reserves
Retained earnings net of dividends
EQUITY
2019
$’000
34,489
4,030
34,405
22,812
3,362
-
99,098
64,673
57,058
35,466
1,327
10,105
621
2018
$’000
25,236
4,037
35,217
24,203
1,204
25
89,922
44,466
44,034
35,060
1,070
-
114
169,250
268,348
124,744
214,666
24,534
16,181
16,145
513
9,441
5,519
72,333
13,766
14,098
51,824
79,688
24,277
12,381
1,895
2,176
8,993
1,733
51,455
27,883
16,165
48,717
92,765
152,021
144,220
116,327
286,277
22,824
70,446
263,179
43,788
(33,050)
(31,837)
(159,724)
(204,684)
116,327
70,446
76 Bathurst Resources Limited Annual Report 2019
Bathurst Resources Limited | Financial statements
40
Additional information
For the year ended 30 June 2019
Consolidated cash flow
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Taxes paid
Net inflow from operating activities
Cash flows from investing activities
Exploration and evaluation expenditure
Mining assets (incl. elevated stripping)
PPE purchases
Proceeds from disposal of PPE
Payment of deferred consideration
BT Mining repayment of loan to BRL
Investment in NWP
Other
Net outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Interest on debt instruments
Interest received
Interest paid
Finance facility fees
Share buy-backs
Net outflow from financing activities
Net increase in cash and cash equivalents
Opening cash and cash equivalents including restricted short-term deposits
Closing cash and cash equivalents
2019
$’000
2018
$’000
286,293
209,945
(178,992)
(143,755)
(16,597)
(11,621)
90,704
54,569
(703)
(337)
(28,517)
(21,696)
(30,046)
(30,666)
186
(9,863)
-
(10,105)
22
92
(5,159)
4,290
-
57
(79,026)
(53,419)
6,955
(2,670)
(2,138)
427
(697)
(84)
(4,225)
(2,432)
9,246
29,273
38,519
20,070
(21,578)
(3,036)
402
(555)
(150)
-
(4,847)
(3,697)
32,970
29,273
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 77
41
78 Bathurst Resources Limited Annual Report 2019
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Independent auditor’s report To the shareholders of Bathurst Resources Limited Report on the audit of the consolidated financial statements Opinion In our opinion, the accompanying consolidated financial statements of Bathurst Resources Limited (the ’Company’) and its subsidiaries (the 'Group') on pages 39 to 74: i.present fairly in all material respects the Group’sfinancial position as at 30 June 2019 and its financial performance and cash flows for the year ended on that date; and ii.comply with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards. We have audited the accompanying consolidated financial statements which comprise: — the consolidated statement of financial position as at 30 June 2019; — the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended; and — notes, including a summary of significant accounting policies and other explanatory information. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities for the audit of the consolidated financial statements section of our report. Other than in our capacity as auditor we have no relationship with, or interests in, the Group. Emphasis of matter – Contingent liabilities We draw attention to Note 23(d) to the consolidated financial statements which discloses the unfavourable judgment received in relation to legal proceedings in the High Court of New Zealand filed by L&M Coal Holdings Limited. The Group had its appeal heard in the Court of Appeal during the week ending 23 August 2019 and the decision remains outstanding. No liability has been recognised as at 30 June 2019 based on legal advice that it is more likely than not that the Group will be successful in the Court of Appeal. Section 2: Financial statements 79
Materiality The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the consolidated financial statements as a whole. The materiality for the consolidated financial statements as a whole was set at $2,000,000 determined with reference to a benchmark of the Group’s profit before tax from continuing operations. We chose the benchmark because, in our view, this is a key measure of the Group’s performance. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements in the current period. We summarise below those matters and our key audit procedures to address those matters in order that the shareholders as a body may better understand the process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not express discrete opinions on separate elements of the consolidated financial statements The key audit matter How the matter was addressed in our audit Deferred consideration Refer to Note 15(c) to the financial statements. The fair value of the deferred consideration in respect of previous mine acquisitions was $6.8 million as at 30 June 2019. The equity accounted joint venture BT Mining Limited includes deferred consideration of $25.7 million. Significant judgement is applied by in relation to key inputs into the discounted cash flow models (models) to estimate the fair value of deferred consideration. Key inputs include estimated coal production levels, future coal prices, the timing of cash flows and a discount rate based on the risk free rate plus a mine-specific risk premium to reflect the risk that is not incorporated into the estimated cash flows. This was an area of audit focus because of the estimation uncertainties and significant judgements applied by management in estimating future coal prices, production levels and timing of cash flows and the sensitivities to be disclosed. Our audit procedures over management’s calculation of its estimate of the future deferred consideration payable included the following: — Sighting the sale and purchase agreements and agreeing the terms of the deferred consideration obligations related to each mine. — Testing the mathematical accuracy of the models used by Management to calculate the estimated future deferred consideration payable. — Comparing the forecasted coal production to operational data and reserve estimates prepared by the Group’s internal reserve engineering experts. — Assessing management’s production forecasting accuracy by comparing forecast results to actual results. — Comparing the forecast coal price assumption with current prices charged to the Company’s largest customers and a growth rate based on historic growth rates and external forecast coal prices. — Performing sensitivity analysis on the key estimates and assumptions, including the forecast coal price and estimated production. — Assessing whether the Group’s disclosures in relation to deferred consideration and the sensitivities of key assumptions were appropriate in the financial statements. 80 Bathurst Resources Limited Annual Report 2019
The key audit matter How the matter was addressed in our audit Revenue recognition Refer to Note 3 to the financial statements For the year ended 30 June 2019 the Group has adopted NZ IFRS 15 Revenue from Contracts with Customers (‘NZ IFRS 15’). The adoption of this accounting standard could have impacted how the Group recognises revenue. Our focus has been on ensuring that the treatment of each product offering under the agreements are appropriately accounted for and disclosed within the financial statements. The other area of focus was on the treatment of revenue across a range of customers as each customer has an individual contract. This was an area of audit focus as the application of a new standard requires judgement as does the process to conclude on the treatment of each contact. Our audit procedures over management’s assessment of the impact of NZ IFRS 15 included: — Understanding and assessing management’s process for identifying revenue streams and contracts that require assessment. — Verifying a sample of contracts that management completed an assessment of and assessing if we concurred with management’s conclusion. — Verifying a sample of contracts that management had not tested and assessing that their treatment should be consistent with the contracts management did test. Other information The Directors, on behalf of the Group, are responsible for the other information included in the entity’s annual report. Other information included in the annual report includes the Chairman’s and Chief Executive’s report, and operational and financial reviews. Our opinion on the consolidated financial statements does not cover any other information and we do not express any form of assurance conclusion thereon. The annual report is expected to be made available to us after the date of this independent auditor’s report. Our responsibility is to read the annual report when it becomes available and consider whether the other information it contains is materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit, or otherwise appear misstated. If so, we are required to report such matters to the Directors. Use of this independent auditor’s report This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been undertaken so that we might state to the shareholders those matters we are required to state to them in the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the shareholders as a body for our audit work, this independent auditor’s report, or any of the opinions we have formed. Section 2: Financial statements 81
Responsibilities of the Directors for the consolidated financial statements The Directors, on behalf of the Group, are responsible for: — the preparation and fair presentation of the consolidated financial statements in accordance with generally accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial Reporting Standards) and International Financial Reporting Standards; — implementing necessary internal control to enable the preparation of a consolidated set of financial statements that is fairly presented and free from material misstatement, whether due to fraud or error; and — assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the consolidated financial statements Our objective is: — to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error; and — to issue an independent auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. A further description of our responsibilities for the audit of these consolidated financial statements is located at the External Reporting Board (XRB) website at: http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/ This description forms part of our independent auditor’s report. The engagement partner on the audit resulting in this independent auditor's report is David Gates. For and on behalf of KPMG Wellington 26 August 2019 82 Bathurst Resources Limited Annual Report 2019
Section 3: Shareholder information 83
Shareholder informationIn this sectionShareholder information03 Shareholder information
Additional information required by the Australian Securities Exchange and not
shown elsewhere in the annual report, current as at 30 September 2019.
Stock exchange quotation
Shares are quoted on the ASX under the code “BRL”.
Classes of securities
The following equity securities are on issue:
Quoted
Ordinary shares, each fully paid
1,706,964,431
2,677
Number on issue
Number of holders
Unquoted
Convertible notes of NZD $1,150 converting to 26,667
shares per note, maturing 1 February 2021
Director performance rights exercisable at $nil, vesting 31
March 2020
LTIP performance rights exercisable at $nil, vesting 30
January 2022
5,600
2,555,000
4,590,909
8
4
2
Voting rights
Only holders of ordinary shares have voting rights. These are set out in Clause 21.5 of the Company’s constitution and are summarised
as follows:
• Where voting is by show of hands or by voice, every shareholder present in person of by proxy or representative has one vote.
• On a poll every shareholder present in person or by representative has, in respect of each fully paid share held by that shareholder,
one vote.
Holders of convertible notes and performance rights have no voting rights until the instruments are converted/exercised into
ordinary shares.
84 Bathurst Resources Limited Annual Report 2019
Restricted securities
There are no restricted securities or securities subject to voluntary escrow.
On-market share buy-backs
An on-market share buy-back was announced on 28 August 2018, approving the buy-back of up to 75.0 million shares, representing
approximately 4.70 percent of the shares on issue at that date. The duration of the buy-back was extended on the 27 August 2019
for a further 12 months, now ending on 28 August 2020. Up to and including 30 September 2019, 30.5 million shares had been
bought back.
Distribution of quoted equity securities
Holding range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
Total shareholders
Ordinary shares
169
287
476
1,253
492
2,677
14,075
1,228,408
3,980,177
50,248,068
1,651,493,703
1,706,964,431
There are 478 shareholders holding less than a marketable parcel of ordinary shares as determined by the ASX (parcels valued at AUD
$500 or less) based on the closing price of AU 9.5¢ per share.
Substantial holders
The Company’s record of substantial shareholdings (5 percent or more) based on notices from shareholders:
Republic Investment Management Pte Limited (“RIM”)
Talley’s Group Limited
Asian Dragon Acquisitions Limited
Number held
400,578,041
206,593,060
106,716,841
Percentage of
issued shares
23.5%
12.1%
6.3%
Approval was given by shareholders at the November 2018 AGM with specific respect to the Takeovers Code (New Zealand) for RIM
to hold more than 20 percent of the Company’s shares, as a result of the on-market share buy-back and the conversion of convertible
notes held by RIM. RIM at the date of this report still hold 500 of the convertible notes disclosed on the previous page, which if
converted will convert into 13,333,333 ordinary shares. This would give RIM a maximum holding of 24.1 percent of the voting rights,
based on current issued shares.
Section 3: Shareholder information 85
Corporate governance statement
The Corporate Governance Statement is available on the Company’s website at www.bathurst.co.nz
Top 20 shareholders
Shareholding name
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
JP Morgan Nominees Australia Limited
Chng Seng Chye
BNP Paribas Nominees Pty Limited
Teo Peng Kwang
Armada Trading Pty Ltd
AFE Investments Pty Limited
Ang Poon Liat
National Nominees Limited
John McCallum
Karamjit Singh Narula
Richard Tacon
Rich Trend Ventures Limited
BNP Paribas Noms Pty Ltd
DBS Vickers Securities (Singapore) Pte Ltd
San Tiong Ng
Chow Shook Lin
Invia Custodian Pty Limited
Treadstone Resource Partners Pty Ltd
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Total top 20 shareholders
Total remaining shareholders
Number of
shares held
519,392,413
279,331,950
118,202,936
91,878,788
78,976,185
38,932,124
29,114,272
27,888,773
22,002,727
21,070,259
20,392,966
18,181,818
14,948,027
13,333,333
12,993,384
11,363,636
10,000,000
9,090,909
9,045,454
7,272,727
1,353,412,681
353,551,750
Percentage of
issued shares
30.43
16.36
6.92
5.38
4.63
2.28
1.71
1.63
1.29
1.23
1.19
1.07
0.88
0.78
0.76
0.67
0.59
0.53
0.53
0.43
79.29
20.71
86 Bathurst Resources Limited Annual Report 2019
Section 3: Shareholder information 87
88 Bathurst Resources Limited Annual Report 2019
Section 4: Resources and reserves 89
Resources and reservesIn this sectionTenement scheduleCoal resources and reserves04 Tenement schedule
At 30 June 2019
Permit ID
Location (region)
Minerals
Permit type
Permit operator
Bathurst interest
60194
60146
56233
56220
54846
53614
52937
51279
51260
41821
41810
41456
41455
41372
41332
41274
40698
40628
Canterbury
Waikato
West Coast
Waikato
Canterbury
Southland
West Coast
West Coast
Southland
Waikato
West Coast
West Coast
West Coast
Canterbury
West Coast
West Coast
Waikato
West Coast
40625
Southland
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Exploration Permit
Bathurst Coal Limited
Exploration Permit
BT Mining Limited
Mining Permit
Buller Coal Limited
Exploration Permit
BT Mining Limited
Exploration Permit
Bathurst Coal Limited
Mining Permit
Bathurst Coal Limited
Mining Permit
BT Mining Limited
Mining Permit
Buller Coal Limited
Exploration Permit
Bathurst Coal Limited
Mining Permit
BT Mining Limited
Mining Permit
BT Mining Limited
Mining Permit
Buller Coal Limited
Mining Permit
Bathurst Coal Limited
Mining Permit
Bathurst Coal Limited
Mining Permit
Buller Coal Limited
Mining Permit
Buller Coal Limited
Exploration Permit
BT Mining Limited
Exploration Permit
Buller Coal Limited
Exploration Permit
New Brighton Collieries
Limited
100%
65%
100%
65%
100%
100%
65%
100%
100%
65%
65%
100%
100%
100%
100%
100%
65%
100%
100%
90 Bathurst Resources Limited Annual Report 2019
Permit ID
Location (region)
Minerals
Permit type
Permit operator
Bathurst interest
40591
37161
West Coast
West Coast
3716101
West Coast
3716102
West Coast
3716103
West Coast
3716104
West Coast
37155
Waikato
3715501
Waikato
37153
Waikato
3715301
Waikato
37150
West Coast
3715002
West Coast
3715003
West Coast
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Exploration Permit
Bathurst Coal Limited
Coal Mining Licence
Bathurst Coal Limited
Ancillary Coal Mining
Licence
Ancillary Coal Mining
Licence
Ancillary Coal Mining
Licence
Ancillary Coal Mining
Licence
Bathurst Coal Limited
Bathurst Coal Limited
100%
Bathurst Coal Limited
100%
Bathurst Coal Limited
100%
Coal Mining Licence
BT Mining Limited
Ancillary Coal Mining
Licence
BT Mining Limited
Coal Mining Licence
BT Mining Limited
Ancillary Coal Mining
Licence
BT Mining Limited
Coal Mining Licence
BT Mining Limited
Ancillary Coal Mining
Licence
Ancillary Coal Mining
Licence
BT Mining Limited
BT Mining Limited
100%
100%
100%
65%
65%
65%
65%
65%
65%
65%
100%
65%
60321
60422
West Coast
Minerals
Exploration Permit
Bathurst Coal Limited
Waikato
Coal
Coal Mining Permit
BT Mining Limited
Section 4: Resources and reserves 91
Bathurst Resources permitting changes 1 July 2018 – 30 June 2019
Permit applications in past twelve months
Permit ID
Permit type
Operator
Location
(region)
Applied date
Permit name
Bathurst
interest
56233
Mining Permit
Buller Coal Limited
West Coast
13/12/2018
Coal Creek
100%
60520
Exploration Permit
Buller Coal Limited
West Coast
15/2/2019
Denniston
100%
60521
Exploration Permit
Buller Coal Limited
West Coast
15/2/2019
Millerton-Fly
Creek
100%
60522
Exploration Permit
Buller Coal Limited
West Coast
15/2/2019
Blackburn
100%
Permits granted in past 12 months
Permit ID
Permit type
Operator
Location
(region)
Applied date
Permit name
Bathurst
interest
60422
Mining Permit
BT Mining Limited
Waikato
4/7/2018
Awaroa West
65%
60321
Exploration Permit
Bathurst Coal Limited
West Coast
7/10/2018
Denniston Gold
100%
Full Surrender
Permit ID
Permit type
Operator
Location (region)
Permit name
Bathurst interest
Exploration Permit
Bathurst Coal Limited
Wellington
West Coast
Mining Permit
Buller Coal Limited
Rapid Stream
West Coast
100%
100%
60047
55401
Expired
None
92 Bathurst Resources Limited Annual Report 2019
Coal resources
and reserves
Resources
Table 1 – Resource tonnes
l
a
r
e
n
m
i
t
s
r
u
h
t
a
B
p
i
h
s
r
e
n
w
o
d
e
r
u
s
a
e
M
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
r
u
s
a
e
M
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
d
e
t
a
c
i
d
n
I
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
t
a
c
i
d
n
I
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
d
e
r
r
e
f
n
I
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
r
r
e
f
n
I
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
)
t
M
(
e
c
r
u
o
s
e
r
l
a
t
o
T
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
l
a
t
o
T
8
1
0
2
)
t
M
(
e
g
n
a
h
C
100%
3.4
3.4
0.0
2.2
2.2
0.0
1.1
1.1
0.0
6.7
6.7
0.0
100%
0.5
0.5
0.0
0.6
0.6
0.0
0.3
0.3
0.0
1.4
1.4
0.0
100%
6.2
6.2
0.0
3.1
3.1
0.0
1.6
1.6
0.0
10.9
10.9
0.0
100%
0.0
0.0
0.0
3.4
3.4
0.0
4.7
4.7
0.0
8.1
8.1
0.0
100%
7.9
7.9
0.0
11.2
11.2
0.0
4.8
4.8
0.0
23.9
23.9
0.0
100%
2.7
2.7
0.0
5.1
5.1
0.0
4.1
4.1
0.0
11.9
11.9
0.0
100%
20.7
20.7
0.0
25.6
25.6
0.0
16.6
16.6
0.0
62.9
62.9
0.0
65%
1.0
0.9
0.1
9.7
10.2
(0.5)
7.3
7.5
(0.2)
18.0
18.6
(0.6)
65%
0.8
0.5
0.3
12.9
13.2
(0.3)
32.8
33.4
(0.6)
46.5
47.1
(0.6)
65%
0.1
0.1
0.0
1.2
1.0
0.2
1.3
1.4
(0.1)
2.6
2.5
0.1
Area
Escarpment
(1)
Cascade
(1)
Deep Creek
(1 & 3)
Coalbrookdale
(1)
Whareatea West
(1)
Sullivan
(1)
South Buller
Totals
(6)
Stockton
(2, 4 & 5)
Upper
Waimangaroa
(Met)
(2, 4 & 5)
Upper
Waimangaroa
(Thermal)
(2, 4 & 5)
Stockton Totals
65%
1.9
1.5
0.4
23.8
24.4
(0.6)
41.4
42.3
(0.9)
67.1
68.2
(1.1)
Section 4: Resources and reserves 93
Resources (continued)
Table 1 – Resource tonnes continued
l
a
r
e
n
m
i
t
s
r
u
h
t
a
B
p
i
h
s
r
e
n
w
O
d
e
r
u
s
a
e
M
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
r
u
s
a
e
M
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
d
e
t
a
c
i
d
n
I
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
t
a
c
i
d
n
I
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
d
e
r
r
e
f
n
I
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
d
e
r
r
e
f
n
I
8
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
)
t
M
(
e
g
n
a
h
C
)
t
M
(
e
c
r
u
o
s
e
r
l
a
t
o
T
9
1
0
2
)
t
M
(
e
c
r
u
o
s
e
r
l
a
t
o
T
8
1
0
2
)
t
M
(
e
g
n
a
h
C
100%
0.0
0.0
0.0
1.9
1.9
0.0
3.6
3.6
0.0
5.5
5.5
0.0
100%
2.4
2.4
0.0
7.3
7.3
0.0
10.9
10.9
0.0
20.6
20.6
0.0
100%
0.0
0.0
0.0
5.8
5.8
0.0
14.1
14.1
0.0
19.9
19.9
0.0
100%
2.4
2.4
0.0
15.0
15.0
0.0
28.6
28.6
0.0
46.0
46.0
0.0
25.0
24.6
0.4
64.4
65.0
(0.6)
86.6
87.5
(0.9)
176.0
177.1
(1.1)
100%
0.3
0.9
(0.6)
2.1
1.6
0.5
0.3
0.2
0.1
2.7
2.7
(0.0)
100%
0.2
0.2
0.0
0.2
0.4
(0.2)
0.2
1.3
(1.1)
0.6
1.9
(1.3)
100%
0.0
0.0
0.0
0.7
0.7
0.0
0.1
0.1
0.0
0.8
0.8
0.0
100%
1.0
1.4
(0.4)
1.3
2.5
(1.2)
1.0
3.2
(2.2)
3.3
7.1
(3.8)
100%
1.5
2.5
(1.0)
4.3
5.2
(0.9)
1.6
4.8
(3.2)
7.4
12.5
(5.1)
65%
0.6
2.4
(1.8)
1.8
5.0
(3.2)
0.4
1.5
(1.1)
2.8
8.9
(6.1)
65%
0.5
0.0
0.5
3.8
0.0
3.8
0.1
0.0
0.1
4.4
0.0
4.4
65%
2.4
1.7
0.7
0.2
1.5
(1.3)
0.0
0.0
0.0
2.6
3.2
(0.6)
65%
3.5
4.1
(0.6)
5.8
6.5
(0.7)
0.5
1.5
(1.0)
9.8
12.1
(2.3)
Area
Millerton North
(1 & 3)
North Buller
(1 & 3)
Blackburn
(1 & 3)
North Buller
Totals
(6)
Buller Coal
Project Totals
Takitimu
(1 & 4)
New Brighton
(1 & 8)
Albury
(1 & 10)
Canterbury Coal
(1, 4, 9 & 11)
Southland/
Canterbury
Totals
(6)
Rotowaro
(2, 4, 5 & 11)
Rotowaro North
(7)
Maramarua
(4, 5, 8 & 12)
North Island (6)
Totals
Total
30.0
31.2
(1.2)
74.5
76.7
(2.2)
88.7
93.8
(5.1)
193.2
201.7
(8.5)
All resources and reserves quoted in this release are reported in terms as defined in the 2004 and 2012 Editions of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’ as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia (“JORC”).
The measured and indicated mineral resources are inclusive of those mineral reserves modified to produce the ore reserves. Rounding of tonnes as required by reporting
guidelines may result in summation differences between tonnes and coal quality. All resources quoted are reported as of 30 June 2019.
1 Resource tonnages have been calculated using a density value calculated using approximated in-ground moisture values (Preston and Sanders method) and as such
tonnages quoted in this report are wet tonnes (unless stipulated otherwise). All coal qualities quoted are on an Air-Dried Basis.
2 Stockton, Upper Waimangaroa and Maramarua density values are based on air-dried ash density regressions. Stockton, Upper Waimangaroa, Rotowaro and Maramarua are
reported on an air-dried basis.
94 Bathurst Resources Limited Annual Report 2019
Table 1 – Resource tonnes continued
3 No additional work has been undertaken on the coal resources for Deep Creek, Millerton North and Blackburn since originally reported. This information was prepared and
first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed
since it was last reported.
4 Resources were depleted by mining.
5 Stockton, Upper Waimangaroa, Rotowaro, Rotowaro North and Maramarua are owned by BT Mining Limited with Bathurst holding a 65 percent equity share.
6 South Buller, North Buller, Sullivan, Southland and Canterbury resources are 100 percent Bathurst Resources Limited ownership.
7 New resource.
8 Significant updates to geological model combined with a review of potential economic recovery.
9 Changes are due to an updated geology model (with updated historic extraction factors), mining depletion, and a review of potentially recoverable resources.
10 Mining depletion and a review of coal available with reasonable prospects of eventual economic extraction.
11 Mining depletion and back filling against previously mined highwalls has required the review of potentially recoverable resources.
12 Density is based on a fixed 1.3 tonnes per cubic metre due to insufficient data to support air dried ash density regression.
Table 2 – Average coal quality – measured
p
i
h
s
r
e
n
w
O
t
s
r
u
h
t
a
B
l
a
r
e
n
m
i
d
e
r
u
s
a
e
M
e
c
r
u
o
s
e
r
)
t
M
(
%
h
s
A
)
D
A
(
%
r
u
h
p
l
u
S
)
D
A
(
%
r
e
t
t
a
m
e
l
i
t
a
l
o
V
)
D
A
(
%
n
o
b
r
a
c
d
e
x
i
F
)
D
A
(
t
n
e
r
e
h
n
I
e
r
u
t
s
i
o
m
e
r
u
t
s
i
o
m
u
t
i
s
n
I
Area
Escarpment
Cascade
Deep Creek
Coalbrookdale
100%
100%
100%
100%
Whareatea West
100%
Sullivan
Stockton
Upper
Waimangaroa
(Met)
Upper
Waimangaroa
(Thermal)
Millerton North
North Buller
Blackburn
Takitimu
New Brighton
Albury
100%
65%
65%
65%
100%
100%
100%
100%
100%
100%
Canterbury Coal
100%
Rotowaro
Rotowaro North
Maramarua
65%
65%
65%
3.4
0.5
6.2
0.0
7.9
2.7
1.0
0.8
0.1
0.0
2.4
0.0
0.3
0.2
0.0
1.0
0.6
0.5
2.4
16.8
15.5
11.0
-
24.9
13.8
7.9
4.3
10.8
-
8.6
-
12.5
10.3
-
9.6
4.5
7.2
5.9
0.7
1.7
2.5
-
0.8
1.1
2.5
2.0
1.8
-
4.7
-
0.3
0.4
-
0.9
0.3
0.3
0.2
33.0
39.3
32.9
-
24.0
32.1
30.9
49.3
42.6
53.9
-
50.4
52.9
60.2
39.0
53.4
N
S
C
7.0
4.5
-
-
7.0
7.0
7.6
5.2
36.9
48.1
3.5
-
-
43.1
45.4
-
35.5
35.0
-
35.0
35.0
36.2
37.5
-
37.2
41.2
-
37.2
46.1
43.5
38.8
-
4.5
-
N/A
N/A
-
N/A
N/A
N/A
N/A
1.0
2.6
2.2
-
0.6
1.2
1.0
3.4
4.1
-
2.9
-
14.8
13.5
-
18.2
14.4
13.1
17.8
)
D
A
(
e
u
l
a
v
c
i
f
i
r
o
l
a
C
28.6
30.8
29.7
-
26.5
29.7
32.6
30.7
29.2
-
5.6
7.6
5.2
-
6.3
6.6
-
-
-
-
11.4
29.7
-
24.8
20.6
-
26.7
-
-
-
-
20.8
22.6
-
21.1
22.7
23.9
22.3
Section 4: Resources and reserves 95
%
r
u
h
p
l
u
S
)
D
A
(
%
r
e
t
t
a
m
e
l
i
t
a
l
o
V
)
D
A
(
%
n
o
b
r
a
c
d
e
x
i
F
)
D
A
(
34.9
38.3
34.7
35.9
22.3
30.6
36.4
51.4
44.5
53.6
50.4
48.5
53.0
56.2
39.0
53.4
N
S
C
7.5
4.0
-
5.0
6.0
7.0
7.9
5.2
37.7
50.0
1.8
36.9
42.6
42.1
35.2
35.0
30.9
35.1
35.5
35.9
37.0
52.4
46.3
51.8
37.8
39.7
24.5
37.4
44.9
45.5
36.1
10.0
5.0
6.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.2
1.8
2.7
1.8
1.1
1.2
3.4
2.0
3.1
4.9
5.1
4.3
0.3
0.4
1.0
0.9
0.3
0.2
0.2
t
n
e
r
e
h
n
I
e
r
u
t
s
i
o
m
e
r
u
t
s
i
o
m
u
t
i
s
n
I
)
D
A
(
e
u
l
a
v
c
i
f
i
r
o
l
a
C
1.2
2.4
2.0
1.7
0.7
1.2
1.2
3.4
4.0
1.0
2.3
2.2
15.8
14.7
37.4
18.1
14.4
12.2
18.0
5.5
8.0
4.8
5.6
6.3
6.6
-
-
-
6.1
9.4
10.1
25.4
21.3
41.2
26.7
-
-
-
30.0
29.3
30.3
29.8
25.0
29.3
33.2
30.7
28.6
31.1
30.0
30.4
21.0
22.4
15.6
21.2
23.4
24.3
21.8
Resources (continued)
Table 3 – Average coal quality – indicated
t
s
r
u
h
t
a
B
l
a
r
e
n
m
i
p
i
h
s
r
e
n
w
o
d
e
t
a
c
i
d
n
I
e
c
r
u
o
s
e
r
)
t
M
(
100%
100%
100%
100%
100%
100%
65%
2.2
0.6
3.1
3.4
11.2
5.1
9.7
%
h
s
A
)
D
A
(
12.6
14.8
9.7
12.0
28.5
15.3
6.1
65%
12.9
4.3
65%
100%
100%
100%
100%
100%
100%
100%
65%
65%
65%
1.2
1.9
7.3
5.8
2.1
0.2
0.7
1.3
1.8
3.8
0.2
8.3
9.7
8.8
3.9
11.2
10.6
7.2
9.4
5.2
6.4
8.8
Area
Escarpment
Cascade
Deep Creek
Coalbrookdale
Whareatea West
Sullivan
Stockton
Upper
Waimangaroa
(Met)
Upper
Waimangaroa
(Thermal)
Millerton North
North Buller
Blackburn
Takitimu
New Brighton
Albury
Canterbury Coal
Rotowaro
Rotowaro North
Maramarua
96 Bathurst Resources Limited Annual Report 2019
Table 4 – Average coal quality – inferred
t
s
r
u
h
t
a
B
l
a
r
e
n
m
i
p
i
h
s
r
e
n
w
o
d
e
r
r
e
f
n
I
e
c
r
u
o
s
e
r
)
t
M
(
100%
100%
100%
100%
100%
100%
65%
1.1
0.3
1.6
4.7
4.8
4.1
7.3
%
h
s
A
)
D
A
(
12.5
16.5
10.1
12.7
29.5
16.0
5.4
65%
32.8
5.8
65%
1.3
6.8
100%
100%
100%
100%
100%
100%
100%
65%
65%
65%
3.6
10.9
14.1
0.3
0.2
0.1
1.0
0.4
0.1
0.0
12.0
9.9
6.4
13.5
10.7
7.3
9.9
5.4
6.0
-
Area
Escarpment
Cascade
Deep Creek
Coalbrookdale
Whareatea West
Sullivan
Stockton
Upper
Waimangaroa
(Met)
Upper
Waimangaroa
(Thermal)
Millerton North
North Buller
Blackburn
Takitimu
New Brighton
Albury
Canterbury Coal
Rotowaro
Rotowaro North
Maramarua
%
r
u
h
p
l
u
S
)
D
A
(
%
r
e
t
t
a
m
e
l
i
t
a
l
o
V
)
D
A
(
%
n
o
b
r
a
c
d
e
x
i
F
)
D
A
(
35.2
36.7
29.7
35.7
22.0
30.5
35.6
51.0
44.7
57.8
49.8
47.8
52.3
57.7
38.7
52.4
N
S
C
7.0
4.0
-
5.0
6.0
6.5
7.5
4.6
35.2
50.1
2.8
35.3
45.6
41.8
36.4
34.5
30.2
35.1
35.2
35.8
-
51.6
42.3
49.5
34.5
40.3
23.4
37.3
44.6
46.4
-
9.0
5.0
6.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.6
2.2
2.4
1.8
0.9
1.1
3.4
2.0
1.7
5.5
5.1
4.8
0.3
0.4
0.8
1.0
0.3
0.2
-
t
n
e
r
e
h
n
I
e
r
u
t
s
i
o
m
e
r
u
t
s
i
o
m
u
t
i
S
n
I
)
D
A
(
e
u
l
a
v
c
i
f
i
r
o
l
a
C
1.3
2.1
2.4
1.8
0.7
1.2
1.3
3.6
5.8
1.1
2.2
2.3
15.6
14.5
39.1
17.7
14.7
11.7
-
5.4
6.7
7.1
5.7
6.4
6.5
-
-
-
7.2
9.6
11.2
25.3
21.2
43.1
26.6
-
-
-
29.9
27.6
29.7
29.5
24.5
29.1
33.4
30.4
27.9
30.2
29.5
30.1
20.6
22.4
15.6
21.2
22.6
24.5
-
Section 4: Resources and reserves 97
Reserves
Table 5 – Coal reserves (ROM) tonnes
ROM coal
area
Escarpment
Domestic
(A, C, F & I)
Escarpment
Export
(A, C, F & I)
Whareatea
West
(A, C, F & I)
Stockton
(B, C, E & H)
Upper
Waimangaroa
(Met)
(B, C, E & H)
Takitimu
(A, C, F, G & I)
Canterbury
Coal
(A, C, F, H & I)
Rotowaro
(B, C, E & H)
Maramarua
(B, C, E & J)
Total
Bathurst
mineral
ownership
Proved (Mt)
Probable (Mt)
Total (Mt)
2019
2018
Change
2019
2018
Change
2019
2018
Change
100%
0.2
0.2
0.0
0.1
0.1
0.0
0.3
0.3
0.0
100%
2.3
2.3
0.0
0.5
0.5
0.0
2.8
2.8
0.0
100%
0.0
0.0
0.0
15.8
15.8
0.0
15.8
15.8
0.0
65%
0.7
0.7
0.0
5.9
7.2
(1.3)
6.6
7.9
(1.3)
65%
0.8
0.5
0.3
2.5
2.8
(0.3)
3.3
3.3
0.0
100%
0.1
0.4
(0.3)
1.2
1.1
0.1
1.3
1.5
(0.2)
100%
0.6
0.6
0.0
0.7
0.8
(0.1)
1.3
1.4
(0.1)
65%
65%
0.5
0.6
(0.1)
1.4
1.9
(0.5)
1.9
2.5
(0.6)
2.4
7.6
1.5
6.8
0.9
0.8
0.1
1.4
(1.3)
2.5
2.9
(0.4)
28.2
31.6
(3.4)
35.8
38.4
(2.6)
98 Bathurst Resources Limited Annual Report 2019
Table 6 – Marketable coal reserves tonnes
Product coal
area
Bathurst
mineral
ownership
Proved (Mt)
Probable (Mt)
Total (Mt)
2019
2018
Change
2019
2018
Change
2019
2018
Change
Escarpment
Domestic
(A, C, F & I)
Escarpment
Export
(A, C, F & I)
Whareatea
West
(A, C, F & I)
Stockton
(B, C, E & H)
Upper
Waimangaroa
(Met)
(B, C, E & H)
Takitimu
(C, D, F, G & K)
Canterbury
Coal
(C, D, F, H & K)
Rotowaro
(B, C, D, E & K)
Maramarua
(B, C, D, E, J & K)
Total
100%
0.2
0.2
0.0
0.1
0.1
0.0
0.3
0.3
0.0
100%
1.9
1.9
0.0
0.4
0.4
0.0
2.3
2.3
0.0
100%
0.0
0.0
0.0
9.9
9.9
0.0
9.9
9.9
0.0
65%
0.6
0.6
0.0
4.6
5.7
(1.1)
5.2
6.2
(1.0)
65%
0.7
0.5
0.2
2.3
2.6
(0.3)
3.0
3.1
(0.1)
100%
0.1
0.3
(0.2)
1.1
1.0
0.1
1.2
1.3
(0.1)
100%
0.6
0.6
0.0
0.6
0.7
(0.1)
1.2
1.3
(0.1)
65%
65%
0.4
0.6
(0.2)
1.3
1.7
(0.4)
1.7
2.3
(0.6)
2.3
6.8
1.4
6.1
0.9
0.7
0.1
1.3
(1.2)
2.4
2.8
(0.4)
20.4
23.4
(3.0)
27.2
29.5
(2.3)
Section 4: Resources and reserves 99
Reserves (continued)
Table 7 – Marketable coal reserves – proved and probable average quality
Proved marketable
Probable marketable
Bathurst
mineral
ownership
)
t
M
(
)
%
(
h
s
A
)
%
(
r
u
h
p
l
u
S
)
%
(
M
V
N
S
C
)
g
K
/
J
M
(
V
C
)
%
(
h
s
A
)
t
M
(
)
%
(
r
u
h
p
l
u
S
)
%
(
M
V
N
S
C
)
g
K
/
J
M
(
V
C
100%
0.2
12.9
1.9
35.0
6.8
28.9
0.1
14.5
1.5
34.0
6.1
28.4
Deposit
Escarpment
Domestic
(A, C, F & I)
Escarpment Export
(A, C, F & I)
100%
1.9
8.9
0.5
35.1
8.5
31.3
0.4
7.1
0.6
36.4
8.5
32.0
Whareatea West
(A, C, F & I)
Stockton
(B, C, E & H)
Upper
Waimangaroa
(Met)
(B, C, E & H)
Takitimu
(C, D, F, G & K)
Canterbury Coal
(C, D, F, H &K)
Rotowaro
(B, C, D, E & K)
Maramarua
(B, C, D, E, J & K)
100%
-
-
-
-
-
-
9.9
12.1
0.9
26.0
9.5
31.9
65%
0.6
4.8
2.3
31.0
8.0
33.8
4.6
3.8
3.1
36.0
8.0
34.2
65%
0.7
3.1
0.9
38.0
4.5
31.1
2.3
2.7
1.3
37.9
4.5
31.3
100%
0.1
7.9
0.3
36.1
N/A
21.9
1.1
6.2
0.2
36.4
N/A
22.3
100%
0.6
9.5
0.8
35.2
N/A
21.3
0.6
9.2
0.9
35.4
N/A
21.4
65%
65%
0.4
5.1
0.3
34.7
N/A
24.0
1.3
5.6
0.3
35.4
N/A
23.9
2.3
5.9
0.2
37.5
N/A
22.3
0.1
8.3
0.2
37.4
N/A
21.6
100 Bathurst Resources Limited Annual Report 2019
Table 8 – Marketable coal reserve – total average quality
Deposit
Bathurst
mineral
ownership
Escarpment Domestic
(A, C, F & I)
100%
Escarpment Export
(A, C, F & I)
Whareatea West
(A, C, F & I)
Stockton
(B, C, E & H)
Upper Waimangaroa
(Met)
(B, C, E & H)
Takitimu
(A, C, F, G & I)
Canterbury Coal
(A, C, F, H 7 I)
Rotowaro
(B, C, E & H)
Maramarua
(B, C, E & J)
100%
100%
65%
65%
100%
100%
65%
65%
Coal type
Mining
method
)
t
M
(
Total marketable
)
%
(
h
s
A
r
u
h
p
l
u
S
)
%
(
)
%
(
M
V
N
S
C
V
C
Thermal
Open Pit
0.3
13.4
1.8
34.7
6.6
28.7
Met
Met
Met
Met
Open Pit
2.3
8.6
0.5
35.3
8.5
31.4
Open Pit
9.9
12.1
0.9
26.0
9.5
31.9
Open Pit
5.2
3.9
3.0
35.5
8.0
34.1
Open Pit
3.0
2.8
1.2
37.9
4.5
31.2
Thermal
Open Pit
1.2
6.4
0.2
36.3
N/A
22.3
Thermal
Open Pit
1.2
9.3
0.8
35.3
N/A
21.4
Thermal
Open Pit
1.7
5.5
0.3
35.2
N/A
23.9
Thermal
Open Pit
2.4
6.0
0.2
37.5
N/A
22.3
All reserves quoted in this release are reported in terms as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’ as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals
Council of Australia (“JORC”).
The measured and indicated mineral resources are inclusive of ore reserves. Rounding of tonnes as required by reporting guidelines may result in summation differences
between tonnes and coal quality. All ore reserves quoted are reported as of 30 June 2019.
A Reserve tonnages have been calculated using a density value calculated using approximated in-ground moisture values (Preston and Sanders method) and as such reserve
tonnages quoted in this report are wet tonnes.
B Stockton, Upper Waimangaroa, Rotowaro and Maramarua density values are based on air-dried ash density regressions.
C Coal reserve (Run of Mine (ROM) tonnes), include consideration of standard mining factors (JORC Code 2012).
D ROM coal reserves are reported at a moisture content that is based on long-term average coal production data and as such all tonnages quoted in this report are wet tonnes.
E Stockton, Upper Waimangaroa, Rotowaro and Maramarua are owned by BT Mining Limited in which Bathurst has a 65% equity share.
F Escarpment Domestic reserves, Escarpment Export reserves, Whareatea West reserves, Takitimu reserves and Canterbury Coal reserves are 100 percent Bathurst Resources
Limited ownership.
G Decrease in coal reserves due to mining depletion offset against increased tonnage from a revised geological model.
H Decrease in coal reserves due to mining depletion.
I Marketable reserves are based on geologic modelling of the anticipated yield from ROM reserves. Total marketable coal reserves are reported at a product specific moisture
content (10 – 12 percent for Escarpment Export and Whareatea West, 5 – 8 percent at Escarpment Domestic) for sale after the beneficiation of the total coal reserves,
converted using ASTM D3180 ISO 1170. Reserve tonnages have been calculated using a density value calculated using approximated in-ground moisture values (Preston and
Sanders method) and as such all tonnages quoted in this report are wet tonnes. All coal qualities quoted are on an Air-Dried Basis.
J Decrease in coal reserves due to mining depletion and reduction in underlying resources.
K Marketable reserves are based on reconciled yields from ROM reserves. Marketable coal reserves are reported at a product specific moisture content based on tong term
average coal production data and as such all tonnages quoted in this report are wet tonnes.
Section 4: Resources and reserves
101
Resource quality
The Company is not aware of any information to indicate that
the quality of the identified resources will fall outside the range
of specifications for reserves as indicated in the above tables.
Further resource and reserve information can be found on the
Company’s website at www.bathurst.co.nz
Mineral resource and ore reserves
governance and estimation process
Resources and reserves are estimated by internal and external
personnel, suitably qualified as Competent Persons under the
Australasian Institute of Mining and Metallurgy, reporting in
accordance with the requirements of the JORC code, industry
standards and internal guidelines.
All resource estimates and supporting documentation are
reviewed by a Competent Person either employed directly by
Bathurst or employed as an external consultant. If there is a
material change in an estimate of a resource, or if the estimate is
an inaugural resource, the estimate and all relevant supporting
documentation is further reviewed by an external suitably
qualified Competent Person.
All reserve estimates are prepared in conjunction with
pre-feasibility, feasibility and life of mine studies which
consider all material factors.
All resource and reserve estimates are then further reviewed
by suitably qualified internal management.
The resources and reserves statements included in Bathurst’s
2019 Annual Report have been reviewed by qualified internal and
external Competent Persons, and internal management, prior to
their inclusion.
102 Bathurst Resources Limited Annual Report 2019
Competent person statements
The information on this report that relates to mineral resources
for Deep Creek and the mineral reserves for Escarpment
Export, Stockton, Upper Waimangaroa and Whareatea West
is based on information compiled by Sue Bonham-Carter, who
is a full time employee of Golder Associates (NZ) Ltd and is
a Chartered Professional and member of the Australasian
Institute of Mining and Metallurgy and member of Professional
Engineers and Geoscientists of British Columbia, Canada. Ms
Bonham-Carter has a BSc Engineering (Mining) (Hons) from the
Queen’s University, Canada. Ms Bonham-Carter has sufficient
experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which
she is undertaking to qualify as a Competent Person as defined
in the 2004 Edition and 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Ms Bonham-Carter consents to the inclusion in this
report of the matters based on her information in the form and
context in which it appears above.
The information in this report that relates to exploration
results and mineral resources for Escarpment Domestic,
Escarpment Export, Cascade, Albury, Coalbrookdale, Whareatea
West, Millerton North, North Buller, Blackburn, Takitimu,
Canterbury Coal, New Brighton, Rotowaro, Rotowaro North,
Sullivan and Maramarua is based on information compiled by
Hamish McLauchlan as a Competent Person who is a full time
employee of Bathurst Resources Limited and is a member
of the Australasian Institute of Mining and Metallurgy. Mr
McLauchlan has a BSc and MSc (Hons) majoring in geology
from the University of Canterbury. Mr McLauchlan 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 a Competent Person as defined
in the 2004 Edition and 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Mr McLauchlan consents to the inclusion in this
report of the matters based on his information in the form and
context in which it appears above.
The information in this report that relates to exploration results
and mineral resources for Stockton and Upper Waimangaroa is
based on information compiled by Mark Lionnet as a Competent
Person who is a full time employee of BT Mining Limited
and is a member of the Australasian Institute of Mining and
Metallurgy. Mr Lionnet has a BSc (Hons) majoring in geology
from the University of Witwatersrand. Mr Lionnet 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 a Competent Person as defined
in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
Mr Lionnet consents to the inclusion in this report of the matters
based on his information in the form and context in which it
appears above.
The information on this report that relates to mineral reserves
for Escarpment Domestic, Takitimu, Canterbury and Maramarua
is based on information compiled by Terry Moynihan who is a full
time employee of Bathurst Resources Limited and is a member
of the Australasian Institute of Mining and Metallurgy. Mr.
Moynihan has a Bachelor of Technology (Mining) from the Otago
School of Mines. Mr. Moynihan 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 a Competent Person as defined in the 2012 Edition
of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Moynihan consents
to the inclusion in this report of the matters based on his
information in the form and context in which it appears above.
The information on this report that relates to mineral reserves
at Rotowaro is based on information compiled by Martin
Bourke who is a full time employee of BT Mining Limited
and is a member of the Australasian Institute of Mining and
Metallurgy. Mr Bourke has a Bachelor of Engineering (Mining)
from University of Auckland and BSc (Chemistry) from Massey
University. Mr Bourke 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 a Competent Person as defined in the 2012 Edition
of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Bourke consents to the
inclusion in this report of the matters based on his information in
the form and context in which it appears above.
Section 4: Resources and reserves
103
Corporate directory
Directors
Toko Kapea
Non–executive Chairman
Peter Westerhuis
Non-executive Director
Richard Tacon
Executive Director and Chief Executive Officer
Russell Middleton
Executive Director and Chief Financial Officer
Company secretary
Bill Lyne
New Zealand company number
4382538
New Zealand business number
9429030288560
Australian registered business number
164 306 905
Registered office
Level 12, 1 Willeston Street
Wellington 6011
New Zealand
Phone: +64 4 499 6830
Australian registered office
23A Marney Street,
Chapel Hill,
Queensland 4069
Australia
Phone: +61 4 1887 4175
104 Bathurst Resources Limited Annual Report 2019
Share registry
Computershare Investor Services Limited
159 Hurstmere Road
Takapuna Central 0622
New Zealand
Phone: +64 9 488 8700
60 Carrington Street
Sydney NSW 2000
Phone: +61 3 9415 4000
Auditor
KPMG
10 Customhouse Quay
PO Box 996
Wellington 6140
New Zealand
Solicitor
Minter Ellison Rudd Watts Lawyers
125 The Terrace
Wellington 6011
New Zealand
Lane Neave
141 Cambridge Terrace
Christchurch 8013
New Zealand
Banker
ANZ Bank New Zealand Limited
Stock exchange listing
Bathurst Resources Limited shares are listed on the Australian
Securities Exchange (ASX) under the code BRL
Website address
www.bathurst.co.nz
Disclaimer
This report has been prepared by Bathurst Resources Limited. Information contained in this report is current as at 30 June 2019 or
as otherwise noted in the report. This report is provided for information purposes only and has been prepared without taking account
of any particular reader's financial situation or objectives. Nothing contained in this report constitutes investment, tax, legal or other
advice. Accordingly, readers should, before acting on any information in this report, consider its appropriateness, having regard to
their objectives, financial situation and needs, and seek the assurance of their financial advisor or other licensed professional before
making any investment decision. This report does not constitute an offer, invitation, solicitation or recommendation with respect to
the subscription for purchase or sale of any security, nor does it form the basis of any contract or commitment.
Bathurst Resources Limited
Level 12, 1 Willeston Street
Wellington 6011
New Zealand
+64 4 499 6830
www.bathurst.co.nz
106 Bathurst Resources Limited Annual Report 2019