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Oshkosh2020 Annual
Report
We’ve gone digital
This is our second year releasing an online digital
version of our annual report. You can check it out at
www.2020annualreport.bathurst.co.nz
01
Year in review
Chairman 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
14
32
34
36
43
43
44
45
46
47
80
83
88
92
94
102
Underlying
profit after
tax* $25.8m
$251m
contributed to
the New Zealand
economy
2020 Highlights
EBITDA*
$76.8m
Three entries
named finalists in
the Minerals Sector
Awards 2020
*EBITDA and underlying profit after tax are both non generally accepted accounting principles ("GAAP") reporting measures.
Refer to page 13 for further information.
2 Bathurst Resources Limited Annual Report 2020
01
Year in review
In this section
Chairman and CEO’s report
Financial and operating overview
Sustainability
Section 1: Year in review 3
4 Bathurst Resources Limited Annual Report 2020
Chairman and
CEO’s report
Welcome to Bathurst’s 2020 Annual Report. Our diversified asset base created
over the last few years has provided us with resilience, which has been tested
this year.
Against the backdrop of the challenges FY20 has brought, being
able to prove that we have a reliable and repeatable business is
no small feat.
FY20: A year of resilience
Leading into FY20, we were prepared for a reduction in export
earnings due to market factors impacting coal pricing, and
expected our domestic earnings to be consistent apart from
planned changes to production levels. For the most part, we
have seen this come to fruition.
The demand for our product has remained relatively stable
despite the impacts of the COVID-19 pandemic, highlighting the
pivotal role that coal continues to play in the global economy. Our
domestic earnings were as anticipated. The pandemic did impact
our export segment, extending the period of lower pricing and
impacting planned shipments. The shutdown of our export mine
for just over four weeks during the New Zealand Government’s
COVID-19 Alert Level 4 – Lockdown (“lockdown”) which restricted
which entities could operate, also had its effects. Despite this the
export segment still achieved a strong profit.
Operating our domestic mines during the lockdown and resuming
operations at our export mine required a fast and effective
response to rapidly evolving conditions. A business continuity
pandemic plan to ensure heightened safety measures was rolled
out in a systematic manner, leaning on the well-established health
and safety protocols already across the business.
Overall the adaptability of our business to meet the challenges
brought by the pandemic underscores the strength of our
people, processes, and key relationships.
The value of our domestic segment
Our export segment since acquisition in 2017 has been the
big cash earner, reaping the benefit of high market pricing for
coking coal. This year earnings from our domestic segment were
equal to export. Whilst we had signalled lower export pricing for
FY20, no-one could have foreseen COVID-19. The importance
of our domestic business and a diversified portfolio has been
vividly highlighted.
Section 1: Year in review 5
Matching operational plans
with customer needs
Being a mining business, we understand the need to look
forward, managing our life of mine plans against secure revenue
streams. Reflecting this approach, a new five-year contract to
supply the major South Island dairy sites has been signed which
is valued at over $100m.
Celebrating excellence
The quality of our mining operations was confirmed with the
placing of three entries as finalists in the New Zealand Minerals
Sector Awards 2020.
We have two finalists in the environment management category;
one regarding the elimination of historic acid mine drainage
at our Canterbury mine, the other covering mine management
practices to enhance indigenous bird populations at the
Stockton mine.
Our finalist in the health and safety category details the company
wide medical assessment health programme. This gave us a better
understanding of the key health risks of our people and how we
could better support them to be fit for work.
Sustainability, environment and society
Essential to our success is our commitment to sustainability
and social performance.
We are in our third year of measuring and reporting progress
in this area against 10 material topics, including factors such
as freshwater and biodiversity, and energy and emissions.
This demonstrates our support for the transition to a net
zero carbon economy by 2050, balanced with supporting
economic prosperity during the transition.
We continue to provide social and economic benefits to the
communities in which we live and work, which includes support
of local community programmes and activities. In terms of
workplace health and safety, our focus is increasingly on
ensuring our people are fit for work, while continuing to
improve on standard indicators such as lost time injuries.
The strength of our customer relationships
Although our domestic mines could operate during the
lockdown, there were obvious impacts on the logistics of our
operations and supply chain which could only be resolved
through close co-operation with our customers. And being
able to shift supply from clients that could not operate to
those who could was also a win-win.
The temporary shutdown of our export mine had obvious
implications for continuity of supply. Likewise our overseas
buyers faced COVID-19 related impacts. The value of goodwill
with our long-term export customers cannot be overstated.
Reducing volatility
Like other businesses that sell a commodity that is traded on a
daily index, we are susceptible to volatility in the pricing received
for our coal that we sell offshore.
Hedging was first put in place to mitigate this in early 2018 not long
after we acquired the Stockton mine, the benefits of which have
been fully realised this year during the period of lower pricing.
Thinking long term
We have long time frames when it comes to obtaining regulatory
approvals, so we need to think ahead. The resource development
role at GM level reflects the increased focus in this space,
recognising the investment required, balanced against
expectations of future returns.
We continue to view offshore coking coal projects as
fundamental to our long-term strategy. Progress is being made
with our Canadian joint venture and we are always looking for
that next opportunity.
Working smarter
With our operations spread across the country, working smarter
is essential.
The roll out of an intranet across Bathurst and BT Mining was
a key achievement this year, serving as a central source of
information to help ensure consistency and clarity across the
two companies.
Other key projects that are already adding value include a
business wide phone and conferencing platform, an automated
invoice processing software solution, and a move to paperless
workstreams.
6 Bathurst Resources Limited Annual Report 2020
Supreme Court hearing
Positioned to meet the challenges ahead
Being granted leave to appeal in the Supreme Court of New
Zealand the Court of Appeal’s judgment which upheld the case
brought against Bathurst by L&M Coal Holdings Ltd (“L&M”),
was a welcome development. We presented our position on the
8 and 9 October 2020 and we now await the Supreme Court’s
judgment which is expected in early 2021.
This year we have proven that our business is positioned to
prosper even in the face of exceptional circumstances. Whilst
the longer-term impacts of the pandemic and the timeline for
a return to economic growth are still yet to be fully understood,
we believe we are well set to face the ongoing uncertainty, and
play our part in the road to recovery.
The recognition of the performance payment payable to L&M had
a significant impact on the FY20 financial results. Despite this,
we believe our core underlying business remains sound, and we
have been and continue to assess a full range of options to meet
this debt, should we be unsuccessful in the Supreme Court. More
information can be found in note 1 of the financial statements.
Section 1: Year in review 7
Toko Kapea Richard Tacon Chairman Chief Executive Officer Financial and
operating overview
Focus
FY20 was about settling into the momentum we have built over the last few years.
Global market uncertainty and the COVID-19 pandemic have had their impacts,
but our results show we have a strong and reliable business.
Bathurst at a glance
Key
Export
Domestic
Care + maintenance
Office
Distribution facility
Note: Stockton, Christchurch, Rotowaro
and Maramarua are 65% equity owned
via BT Mining joint venture.
Maramarua
0.25Mt
Rotowaro
0.52Mt
Stockton
0.95Mt
Buller
Wellington
Canterbury
0.10Mt
Takitimu
0.21Mt
Timaru
Christchurch
Tonnes noted are FY20 production tonnes on a 100 percent basis
8 Bathurst Resources Limited Annual Report 2020
Sales profile
Sales revenue by product use (100 percent basis)
Sales by region (Mtpa) (100 percent basis)
9%
0.3Mt
15%
21%
55%
1.1Mt
0.8Mt
55% Steelmaking (Export)
1.1Mt Export – Stockton
21% Food production and other industry (NZ)
0.8Mt North Island domestic
15% Steelmaking (NZ)
9% Electricity (NZ)
0.3Mt South Island domestic
“
Our sales profile illustrates the importance of stable
cashflows from our domestic segment, which contributed
46 percent of total revenue (an increase of 10 percent),
as export pricing decreased.
Section 1: Year in review 9
Our export business
Looking ahead
EBITDA* $42.6m (FY19: $67.4m) (equity share)
As signalled to the market early on, we were expecting a
reduction in export earnings this year due to global market
factors that were having a downward pressure on pricing. With
the advent of the COVID-19 pandemic, the expected recovery
did not eventuate. This saw our average price received drop
from NZD $212/tonne in FY19 to NZD $163/tonne in FY20.
Despite this, given our low cost base and hedging put in place
for this exact type of scenario, we still achieved a 32 percent
operating profit margin.
Stabilising demand
Our relationships with most of our export customers span over
many years, including two for more than 40 years. For many of
them, our product is a valued and unique ingredient in achieving
the precise coal blend they require.
As a result, our product is not easily substituted, being a small
but key component in the blend for a range of properties. The
long-term aspect of the relationships with our clients, also
provides a much better chance of navigating the logistical
aspects of the disruptions from the COVID-19 pandemic – or any
other event that may cause similar disruptions in the future.
This means that we are potentially less exposed to fluctuations
in demand – and that we can better focus our energies on de-
risking our business from fluctuations in pricing, which is outside
our control.
The FY20 coking coal market
The global pandemic continues to play a meaningful role in
determining the outlook for coking coal prices. While near-term
prices are skewed to the downside, over the long term coal
prices are expected to rally with the need for blast furnace steel
production in a post-COVID world.
We are continuing to look at ways to increase the diversity of our
export sales, trialling new markets in Japan and India, with the
majority of FY21 sales under contract.
We will continue to monitor the situation as it develops over
time. In the short term, we have marginally reduced production
levels to ensure the mine’s ongoing profitability, and will continue
to utilise hedging and cost-cutting strategies.
Our domestic business
EBITDA* $34.1m (FY19: $39.2m)
Included in our domestic EBITDA is:
• North Island domestic (“NID”) operations $32.0m
(equity share) (FY19: $33.4m);
• South Island domestic (“SID”) operations $15.3m
(FY19: $18.8m); and
• Corporate overhead costs (Bathurst and equity share
of BT Mining) -$13.2m (FY19: -$13.0m).
The decrease in earnings for the SID segment was expected, as
sales volumes were reduced from the realignment of production
to better support strategic customers and a resultant loss of a
sales contract.
The HCC index pricing for coking coal dropped from a peak of
USD $236/tonne (“t”) in FY19, to a low of USD $109/t towards the
end of FY20.
A rise in costs at Rotowaro from mechanical issues which
increased repairs and plant hire costs were the cause of the
marginal decrease for the NID segment.
A slowdown in the Indian auto industry market and construction
demand in Japan, combined with uncertainty surrounding import
controls and economic growth in China and other macro factors
caused the initial downward pressure on pricing levels earlier in
the year, with an average benchmark of USD $150/t over the first
half of FY20.
The impact of the COVID-19 pandemic, particularly in China
which continues to be a key influencer on global pricing, saw the
benchmark price drop to an average USD $136/t in the second
half of FY20. This reflects a temporary drop in demand for coal
as countries implemented various pandemic related restrictions
to slow the spread of the disease, which had associated
economic impacts.
As the results show, our domestic segments contribute stable
earnings year-on-year.
An essential service
With the adoption of additional health and safety precautions,
we were able to continue operating safely during the lockdown.
This is because our domestic operations, as well as many of our
customers we supply, were deemed to be essential services.
This reflects the integral role that our product serves in
a functioning New Zealand economy, fuelling many of
New Zealand’s iconic food and agricultural producers,
and supplementing electricity generation to ensure security
of supply.
“
For many of our customers, our product is a valued and unique
ingredient in achieving the exact coal blend they require.
*EBITDA is a non GAAP reporting measure and represents net profit/(loss) before net finance costs (including interest), tax, depreciation, amortisation, impairment,
fair value movements on derivatives and deferred consideration, and movements in rehab provisioning.
10 Bathurst Resources Limited Annual Report 2020
We commenced the construction of a water treatment sump and
lime dosing plant in the latter part of the year. These facilities
will significantly reduce water treatment costs and provide for
future mine expansion.
A key engineering focus for the mine was the de-risking of the
Cypress pit. This saw an increase in high-wall stability costs, and
the opening up of additional coal face areas to ensure continued
access to coal.
We engaged external consultants to identify ways that we could
work smarter, which identified several areas for improvement
and these are being progressively implemented.
Our efforts to protect local indigenous bird populations was
placed as a finalist in the Minerals Sector Awards 2020,
recognising the great work being done to minimise our impacts
on native birdlife including the iconic great spotted kiwi (roroa).
Canterbury (100 percent equity share)
Operating 70 kilometres west of Christchurch, our Canterbury
mine produces low-sulphur coal for local food manufacturing
industries. Our mine is managed against long-term contracts
and is located very close to its major customer.
This year saw solid results, with all operational targets met and
financial targets exceeded, benefiting from coal with a higher
calorific value which translated to a higher price received.
The announcement of our success as a finalist in the Minerals
Sector Awards 2020 in addressing legacy acid mine drainage
(“AMD”) issues and preventing future AMD, is welcome
recognition of longstanding efforts to reduce AMD at the mine.
We have made significant investment over the last five years
in understanding the source of the AMD, and how the waste
materials and landforms unique to the site help contribute to
the occurrence of AMD.
We have had challenges, with infringement notices issued in late
2017 and a prosecution in 2018 relating to sediment discharges
which occurred during heavy rain periods while water control
structures were incomplete, for which we were later convicted
and fined. But we have adapted – changing our mine plans
and practices, and implementing processes to proactively
plan for significant rainfall events by increasing capacity
of water management infrastructure and improving water
treatment facilities.
As a result, we have seen a substantial improvement in water
discharge quality, and the removal of legacy AMD that had been
caused by a previous mine owner.
Operating highlights by site
Rotowaro (65 percent equity share)
Rotowaro is an open cut mine located in the Waikato region
of the North Island. The mine produces a low-ash, low-sulphur
thermal coal for local steelmaking, electricity generation, and
other food and agricultural industries.
Adverse weather presented a major challenge for our operations
at Rotowaro during the first half of FY20, causing downtime
of an average of 40 percent, versus budgeted downtime of
27 percent. Whilst this did not materially impact sales and
production volumes, planned overburden stripping volumes
were significantly affected.
This deficit was unable to be recouped in the second half
of FY20. Being our largest domestic mine site, in order to
operate safely during the lockdown we reduced overburden
volumes to minimum levels required to maintain immediate
coal supply. Mechanical issues experienced in the mobile
plant also affected machine availability and increased plant
hire and maintenance costs.
Whilst these factors did cause a marginal flow on effect on
planned production, sales targets were achieved by drawing
down on stockpiles.
We engaged contractors to help with stripping levels and
these will continue into FY21 to ensure contracted sales are
met. The majority of overburden stripping is planned in the
Waipuna West pit.
Maramarua (65 percent equity share)
Maramarua is our smaller Waikato mine, producing similar
coal and selling into the same market as Rotowaro.
FY20 was a solid year for Maramarua. All key operational and
financial targets were met, largely unaffected by the lockdown.
This was despite the challenges from geotechnical issues which
required proactive management to ensure operations were not
materially impacted.
In contrast to the Rotowaro operations, downtime caused from
adverse weather was less than expected, enabling operations
to get ahead on overburden stripping volumes. This has left
the mine well positioned heading into the next financial year.
Stockton (65 percent equity share)
Stockton is an open cut mine located on the West Coast of the
South Island, producing a low-ash metallurgical coal that is
exported overseas for use in steelmaking. Our primary markets
are in India, Japan, South Korea and Australia.
The 4.5 week shutdown of the mine across March and April
during the lockdown had an impact on the mine’s operational
and financial targets. Productivity improvements implemented
to help counter these impacts have now been permanently
adopted, and we are well set to meet contracted FY21 sales.
Section 1: Year in review
11
Takitimu (100 percent equity share)
Stockton organic growth project (65 percent equity share)
Located north of Invercargill in Southland, our Takitimu mine
produces thermal energy coal which is highly sought after by local
agricultural, health and other food manufacturing industries.
This project represents the potential to extend Stockton
operations via a natural southern extension into open cut pits
within the Upper Waimangaroa permit area.
With the final coal mined from the Coaldale East pit in November,
operations are now solely focused on the Black Diamond pit
which contains historic multi-seam underground workings.
We have proactively managed and monitored the complexities
specific to this pit, which include underground coal heating,
and potential for minor spontaneous combustions.
Key operational and financial targets were achieved, with
operations proceeding largely as expected.
We continue to look ahead, with drilling programmes completed
during the year to give a better understanding of coal resources.
Future growth projects
Buller (100 percent equity share)
The Buller project encompasses mining and exploration permits
as well as a coal mining licence (Sullivan) on the Denniston
plateau on the West Coast of the South Island of New Zealand.
Being close to the Stockton mine infrastructure assets, which
include the coal handling and preparation plant and a rail
loadout facility, this creates material synergies.
The permits include the Escarpment and Cascade mines.
Escarpment is currently on care and maintenance, allowing for
a ready return to operation when appropriate. We initiated a
significant rehabilitation project at the Cascade mine during
the year, which will include stabilisation earthworks and topsoil
spreading and rehabilitation planting. This work is expected to
be completed in FY21.
During the year concept engineering reports were finalised, hole
drilling was progressed, and a financial assessment of the open
cast resources was completed.
Rotowaro North (65 percent equity share)
The Rotowaro North project is a potential extension project
to the current Rotowaro mine operations. Key progress made
during the year on this project were:
• Completion of a broad-brush risk assessment.
• Drafting of a prefeasibility project plan.
• Progress made on the environmental baseline study.
The focus for FY21 will be to secure mineral and land access
rights. Other coal resources near the existing operation are
being investigated with a shorter timeframe to production.
Crown Mountain, Canada (22 percent equity share)
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. The
agreement allows us to buy in to this project in three stages
(worth CAD $121.5m) to achieve 50:50 ownership, with future
investment at our sole discretion.
We have committed to the first two funding tranches equalling
a total investment of CAD $11.5m. At 30 June 2020 we had also
invested an advance of CAD $2.6m on the final tranche.
Key resource development achievements during the year include:
Highlights
• Progression of drilling programmes.
• Financial assessments and scenarios completed for key
opencast resources.
• Completion of a stakeholder engagement plan.
• Finalisation of the concept Upper Waimangaroa haul road
(the possible transport corridor to the Stockton infrastructure
assets), and completion of associated major environmental
baseline studies.
• Completion of major environmental baseline studies for the
Sullivan mining licence and the haul road corridor.
The focus for FY21 is on advancing the Sullivan project.
• The bankable feasibility study has been completed,
which reaffirmed Crown Mountain as a high-quality
coking coal opportunity for development with a
competitive operating and capital cost structure.
• The environmental assessment is on track for the
application to be submitted in the first quarter of
calendar year 2021.
• We had a 22.2 percent equity share in the project at
30 June 2020, including 2.2 percent held as preference
shares from the final tranche option advance.
12 Bathurst Resources Limited Annual Report 2020
Strong underlying financial results*
Net loss after tax for the year was -$47.4m (FY19: net profit
after tax $45.0m). Excluding the Buller Coal project performance
payment (refer to note 15 (c) in the financial statements), which
is considered a material one-off item, underlying profit was
$25.8m (FY19: $45.0m).
The decrease in underlying profit reflects consistent domestic
segment earnings, and a reduction in export segment earnings
primarily from a weakened export coal price. These same factors
contributed to an EBITDA of $76.8m for FY20 (FY19:$106.6m).
The decrease in earnings flowed through to a reduction in
operating cashflows. However, $66.8m was generated during
the year, which covered several significant investing and
financing activities, notably:
• Continued investment in the Canadian coking coal
joint venture.
• Partial repayment of corporate USD bonds.
• Payment of the FY19 dividend.
• Deferred consideration, the majority paid relating to the
purchase of the BT Mining assets; this liability ceases in FY21.
• Investment in Rotowaro operations to extend the life of mine.
A reconciliation of underlying profit to statutory results after tax
and EBITDA is provided below.
Note
Underlying profit
Add back
Buller Coal project performance payment
15 (c)
Statutory (loss)/profit
Add back
Equity share of joint venture results
Depreciation and amortisation
Net finance costs
Movement in deferred consideration
Impairment
Movement in rehabilitation provision
Bathurst EBITDA
Add back
Equity share of BT Mining EBITDA
Consolidated EBITDA
6
15 (c)
2020
25,804
(73,230)
(47,426)
(30,408)
7,088
14,989
61,686
325
556
6,810
69,965
76,775
2019
44,960
-
44,960
(45,300)
6,910
3,388
(41)
-
278
10,195
96,424
106,619
*Figures are consolidated Bathurst and 65 percent BT Mining. EBITDA is considered the best reflection of the underlying cash generating results of operations, and underlying
profit after tax the best reflection of net profit excluding material one-off items.
Section 1: Year in review
13
Sustainability
– what does it mean to us?
We are committed to economic, social and environmental sustainability; it is
fundamental to our business and operations.
Environmental management
We are noticing increasing scrutiny of environmental
management at our sites. The case study we provide illustrates
our commitment to management of biodiversity and freshwater
at our mines. It tells a story of identifying the impacts of mining
on the environment, and how we are dealing with them to
achieve positive outcomes.
Health and wellbeing
Our area of focus in FY20 was our systems management
approach to health and wellbeing in the workplace. We are
conscious that it’s one thing to reduce the risks around slips,
trips and falls and other hazards at sites; it’s another to deal
with longer-term occupational health issues.
We are taking a hard look at how our people are meeting the
daily challenge of the working day while safeguarding their
health and wellbeing. Bathurst’s employee health management
system is now rolled out across the organisation. More detail
is provided in a case study.
Mining’s importance to the West Coast
We surveyed our workforce in 2018 to understand how people
are employed in mining on the West Coast, their involvement
with the community, and how we collectively contribute to the
region. The report we commissioned was updated with the latest
census data in early 2020.
Topics covered include residency times, level of home ownership,
family ties to the community including schooling, work, voluntary
activities, and spending in the local economy. The study reveals
our workforce is a significant and living part of the West Coast
and its people. Further information is provided in our case study.
Evolving international good-practice on sustainability is raising
the ante on measuring and reporting on the natural, human,
social, financial and physical aspects of wellbeing. Globally, these
living standard indicators are coming under increasing strain,
with the onus on private enterprise to lead positive change. We
are meeting this challenge by drawing on the Global Reporting
Initiative (“GRI”) as our guiding framework for annual reporting.
We have identified ten material topics for the sustainability of
our business. For each, we are defining the level of performance
we want to achieve, and how we measure progress against our
goals and targets.
This is the third year of continually strengthening our sustainability
metrics, and the data we collect. As with 2018 and 2019, this year’s
reporting is against material topics spanning socio-economic,
health and safety, environment and governance categories.
COVID-19 pandemic
The health and safety of our people and the people we interact
with, and compliance with government restrictions during the
COVID-19 pandemic have been our top priority. We are also
actively building the resilience of our business in view of the
related economic downturn that is expected as result of
the pandemic.
Climate change
In New Zealand, climate change and the country’s response
to it loom large in sustainability policy and action. This year
we formalised our position on climate change.
As a coal mining company, we have a key role in ensuring
continued economic prosperity during the transition to a
net zero carbon economy. We will be increasingly focused on
producing coal for steel-making, and working with our industrial
process heat customers to continue their coal supply, while they
contribute towards maintaining New Zealand’s food sovereignty
and their own part in the transition.
We are also exploring what we can do to reduce the CO2
emissions for which we are directly responsible as a business.
14 Bathurst Resources Limited Annual Report 2020
Section 1: Year in review
15
Health and safety
Material topic
Health and safety
Our operations are focused on our people, their safety
and wellbeing while mitigating operational risks and
maintaining productivity.
FY20 health snapshot
• COVID-19 Business Continuity Plan to manage health and
safety protocols.
• Employee health, focusing on “fitness for work” assessments.
• Fundamental occupational hygiene hazard review.
New ways of working
We introduced a number of new standards this year to enhance
the way we operate; key to note are:
• Contractor management – we aim to manage safety, health
and environmental risk in relation to contractors working at
any operation by defining the relationships between parties.
• Hazardous substances – we introduced company wide
hazardous substances management standards during the
year to ensure consistency across our sites.
• Vaping – vaping nicotine in New Zealand is legal, and up
until recently the smoking laws did not cover vaping. We
developed standards to ensure that our people are not
exposed to detrimental effects to their health from vaping
in the workplace.
FY20 safety snapshot
• TRIFR (total recordable injury frequency rate) = 8.6 per
million hours worked.
• LTIFR (lost time injury frequency rate) = 2.9 per million
hours worked.
• More than 1,400 Physical Distancing Safe Work Observations
at operating sites during COVID-19 lockdown.
• Introduction of saliva testing for detection and quantification
of drugs as part of our fitness for work regime after it was
introduced in 2019 by Standards New Zealand.
People first, shared responsibility
We have a robust, people-centric and innovative approach
to workplace health and safety. We do everything we can to
encourage, improve, and enforce the right behaviours, culture,
and processes across every aspect of our operations, starting
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;
• Independent audit of our training standard at operating sites.
• cares about the health and safety of their colleagues; and
• watches for potential safety risks at all times.
16 Bathurst Resources Limited Annual Report 2020
Continuous improvement
During the year, we completed the roll out of our occupational
health monitoring programme across all sites. We expect this
system to be a game changer in how our workforce understands
and responds to their fitness for work status.
We continue to ensure that all incidents or potential incidents
are reported quickly, as a matter of legal compliance. We are
improving the competency of our operational supervisors,
developing their leadership and management skills.
COVID-19 pandemic
As New Zealand started experiencing cases of the COVID-19
coronavirus in early 2020, we worked to understand and
communicate the implications for our people. On 26 March,
New Zealand entered Alert Level 4 – Lockdown. Coal production
for domestic consumption at four of our sites continued as an
essential service, and we implemented strict COVID-19 social
distancing, hygiene and other health and safety related protocols.
The same protocols remained in place for all operating sites
and offices through to the commencement of Alert Level 1, when
reduced protocols were initiated once the risk of community
transmission had decreased from zero community cases
recorded within New Zealand.
Where possible our people worked at home during the 4.5 week
lockdown period. Mining at Stockton ceased during this time
because export coal was not deemed to be an essential service
by the Government. At the time of preparing this report, we
are pleased to say we have not had a single confirmed case
of COVID-19 among our workforce.
The pandemic has had a significant economic impact on our
financial results, primarily from lower export coal prices, but also
the inability to export coal during the lockdown, and a 10 percent
impact on worker productivity in observing COVID-19 protocols.
We have been working with our people to retain them in
employment while benefiting from government wage subsidies
when available, and will continue to do so into the future.
Section 1: Year in review
17
CASE STUDY
OCCUPATIONAL HEALTH MONITORING – ALL OPERATIONS
Safe and well at work
We rolled out health assessments for staff nationwide in a holistic approach to the
health and wellbeing of our people, starting with physical health. This programme
has awakened personal attention on fitness and wellness, at work and in daily life.
Spotlight on obesity
The Body Mass Index (“BMI”) is a measure of the proportion
of body fat to total body weight. In our workforce, 28.5 percent
have a BMI of more than 30, which means they are obese. This
is slightly less than the New Zealand population estimate of
30.9 percent.
We are actively improving obesity rates among our people
with individual mine managers applying their own proactive
measures. These measures vary site to site, and include
providing free fresh fruit and bottled water at work, holding
an annual weight loss challenge, and encouraging worker
participation in local fun runs and mountain biking events.
“
Raising the health awareness
of our people has been truly
life altering.
Over the last two years we have helped some of our workers
identify potentially serious health problems through a fit-for-
purpose mining medical assessment system that we developed.
This was a natural progression from the passing of the Health
and Safety at Work Act in 2015 and its General Risk and
Workplace Management Regulations in 2016.
Early on we realised we held limited data on our employees’
personal health risks such as acute and chronic diseases that
may create safety risks within the workplace. So we created a
health baseline for our workforce, and asked ourselves whether
unmanaged health conditions were bringing safety risks into the
workplace. We developed a risk profile for an ageing workforce,
and a study of how health risks to these people had changed
since they started working at our sites.
We set a vision: people must be fit for their role, especially for
those undertaking tasks where the risk to themselves or others
is higher, should they experience a health issue.
The results
This time last year we had covered 75 percent of the workforce.
We now have key results for the majority of full time and part-
time employees at operational sites as at 30 June 2020. The
fitness for work categories from initial results were:
• A (fit for work) – 56.1 percent.
• B (fit for work with conditions) – 39.2 percent.
• C (temporarily unfit for work) - 4.3 percent.
• D (permanently unfit for work) - 0.4 percent.
Categories B and C have health management agreements drawn
up to support the person’s health. That can include assignment
to light duties until the person has improved their fitness for
work status.
Encouraging people to talk about their health raised awareness of
specific conditions. We know that for some people this was truly
life altering, especially for heart disease cases that were identified.
To date the programme has identified ten people who required
surgery, including several for coronary angioplasty (stents).
Overall, the most common medical conditions among our
employees are heart disease, hypertension, diabetes and
sleep apnoea.
18 Bathurst Resources Limited Annual Report 2020
Section 1: Year in review
19
Socio-economic
Material topic
Stakeholder engagement
Engagement with stakeholders and iwi is critical for
our continued success and licence to operate now and
into the future.
How we engage
We recognise that community and stakeholder engagement
is key to earning our social licence to mine and operate in our
host communities. In FY20, we prepared detailed stakeholder
engagement plans at all of our sites and these are currently
being implemented.
A quarterly progress review of the stakeholder engagement
plans will be undertaken in FY21, and they will be updated to
reflect the current status of mine activities.
Material topic
Economic performance
and responsibility
Our focus is to responsibly manage the key processes
within our control – financial oversight, productivity
improvements and cash costs of production.
Our mining operations are in four regions in New Zealand;
Waikato, Canterbury, the West Coast and Southland. We
recognise that we have a responsibility to support economic
development, wealth and wellbeing in these regions and more
importantly in the local communities that host our mines.
Our contribution across our operations includes wages and
salaries paid to employees ($65.8 million up on $56.1m last year);
taxes, royalties and fees to government ($18.4m, compared
with $38.2m in 2019); local procurement of goods and services
including employee costs ($251m, similar to last year’s $259m);
and support of local community initiatives.
We have commissioned an independent survey of the socio-
economic impacts on the West Coast, via detailed questionnaires
of our workforce on their interactions with their community. Our
purpose was to better understand the socio-economic drivers in
our communities, and how we can have a more positive impact.
20 Bathurst Resources Limited Annual Report 2020
We continue to be a major sponsor of the Life Education Trust
on the West Coast. This is a mobile education classroom that
travels more than 5,000 km every year in the region teaching
more than 3,300 children on subjects of food and nutrition;
human biology; substance abuse; relationships and community;
and identity and resilience. The aim is to provide the children
with the skills and knowledge to make well informed decisions
– now and in the future.
Supporting the industry
We have supported innovation, best practice and professional
development in the mining industry as key conference sponsors
for the New Zealand Minerals Forum, and the New Zealand
Branch of the Australasian Institute of Mining and Metallurgy.
In addition, we are sponsoring the organising of the 14th
Congress of the International Mine Water Association with a
focus on mine water management, which has been delayed
to 2021 because of the COVID-19 pandemic.
Community investment is vital
Our relationship with the communities in which we live and
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:
• Life Education Trust West Coast.
• West Coast Search & Rescue.
• Maramarua Volunteer Rural Fire Brigade – part funding
towards a new training room.
• Volunteer fire brigades – Westport, Coalgate.
• Primary schools – Pukemiro, Takitimu, Glentunnel,
Westport South.
• St John Youth.
• Rugby clubs – Buller, Ohai-Nightcaps.
• Plunket.
• Poutini Waiora.
• Fostering Kids NZ.
• Huntly Heart Kids.
• Huntly Squash Club.
• Buller Bay Fishing Competition.
• Hector Community Swimming Pool.
Section 1: Year in review 21
CASE STUDY
A SOCIAL AND ECONOMIC STUDY – THE WEST COAST
Our contribution to
the West Coast region
We commissioned the AIGIS Group led by socio-economic scientist Dr Mark
Sargent, to investigate and report on our contribution to the social and economic
fabric of the West Coast of the South Island, where our Stockton export mine
is located.
Living in the region
Our people are committed to living on the West Coast, and
are an integral part of the West Coast communities.
As at 2019, 68 percent of our workforce (employees and
contractors) lived in Westport, and 93 percent in the wider
Buller District.
Around one-third of the workforce has lived on the West Coast
for ten years or less, and around half, for more than 20 years.
The mean and median residence times are 25 and 21 years,
respectively.
Around 86 percent of the workforce either fully own, or
own their homes under mortgage, an investment of around
$43 million, based on average regional house prices.
Contractors are more likely to rent accommodation
(29.6 percent) than employees (10.3 percent). Renters contribute
on average $406,000/year in rents into the regional economy.
Ours is a workforce with strong local economic and social ties.
This is also reflected in how the West Coast’s population reacts
to changes in mining activity.
Data from Statistics NZ, Development West Coast and Infometrics
show that in 2013 the region’s population was 32,150, and in 2018,
this figure dropped to 31,550. This followed the rationalisation of
the former Solid Energy assets, the closure of Oceana Gold’s Globe
Progress gold mine, and closure of the Holcim cement works.
Conversely, future expansion of mining would be expected to
see people coming into the region for work.
Family life is important to our employees, with 76.7 percent of
the work force living as couples, or couples with children. Survey
respondents have households totalling 734 people, an average of
2.8 per household, compared to the Buller District average of 2.3.
The study tells a story of people employed in mining on the West
Coast, their involvement with families and communities, and how
we contribute to the region. Mining and miners are a significant
and living part of the West Coast and its people.
The lead for the study, Dr Sargent says “Employment,
qualification and industry of employment data for the West
Coast indicate that the composition of the regional workforce
is strongly influenced by the presence of the mining industry
as a key economic and employment driver.”
The workforce survey in August 2018 produced responses
from 204 employees and 54 permanent contractors, an 88.9
percent response rate, who on average have worked in the
industry for 13.5 years. In the following year we recruited a
net 24 additional employees to work at the Stockton mine,
with further information from them being incorporated into
the survey results.
Other information was sourced from publicly available data
(including updating in 2020 with latest available census data),
and our internal financial and employment data.
Who are our miners?
• Only 13 percent of the people surveyed have worked in
mining for less than six years.
• 36 percent have worked in mining for between six and
ten years, and 33 percent have worked in mining between
11 and 20 years.
• 12 percent have worked in the industry between
21 and 30 years.
Buller District and the West Coast Region have higher
proportions of people employed as machinery operators and
workers (10.1 percent and 9.6 percent, respectively) than the
national average of 6.0 percent, based on 2018 Census data.
This reflects the strong regional industrial base, including
our mining operations.
22 Bathurst Resources Limited Annual Report 2020
Active in the community
Mining and the West Coast
Of the 734 people in the workforce survey respondents’
households, 25.6 percent are at schools or in other education.
Around 36 percent of people in these households are 24 years
or younger, and 20 percent are aged 5–17, with an estimated
160 children attending local schools.
Workforce members play an important part in their communities,
with 161 respondents (62 percent of the survey sample)
providing 248 responses, covering 399 activities, across all
categories of community involvement. They include emergency
services, sports, community, schools, service, recreation and
cultural organisations.
In 2018 mining was the third largest industry on the West Coast,
delivering $107m, or 19 percent of Gross Regional Product for
the region’s main economic drivers, behind tourism (34 percent),
and dairying (36 percent), according to Development West Coast
(“DWC”)/Infometrics data, and mining was ahead of agriculture,
forestry and fishing (11 percent).
Between 2010 and 2018, DWC/Infometrics data show that labour
productivity for mining was on average 2.5 times greater than
that for the regional economy generally. This means mining
is a relatively capital-intensive industry, with workers earning
high wages.
Connected into the West Coast economy
Our workforce spends on average 70 percent of their income
in the regional economy, estimated at $8.6-9.4m per year,
inferred from Statistics NZ data.
87 percent of other members of our employees’ households
either study or work, and of the 87 percent, 48.4 percent are
employed full time, and 12.5 percent part time. These working
residents also spend part of their incomes in the local and
regional economies.
We spent $13.5m across 102 West Coast businesses, averaged
over the 2017–2019 financial years. This included $5.6m spent
with 79 businesses in Buller, and $4.8m with 73 businesses in
Westport. These figures compare with the $96m Bathurst spent
with 397 businesses throughout New Zealand.
Based on a separate survey of West Coast extractives industries
conducted in 2018, each of the above businesses likely have at
least one or two other West Coast businesses among their major
suppliers; i.e. an estimated 153 additional West Coast businesses
benefit from economic activity consequent to our activities.
We directly inject approximately $19m per year into the West
Coast economy. This breaks down to $16.3m and $12.2m per
year for Buller District and Westport, respectively.
Taking total GDP for the West Coast of $1,517 bn as at March
2018, mining’s contribution was 7.1 percent while mining
employment in the region was 2.9 percent. The equivalent
figures for Buller District were 13.8 percent and 6.9 percent.
In 2018 mining on the West Coast produced $227,660 of GDP
per filled job, while dairying in comparison produced $173,061,
other agriculture $81,041, manufacturing (minus dairy) $68,589,
and tourism $59,603.
“
Mining and miners are a
significant and living part
of the West Coast.
Section 1: Year in review 23
Environmental
The Stockton mine was the second largest consumer of energy
at 354,344 GJ. This is consistent with producing and washing
the most coal of the five sites, and reflects the electricity used
in the coal handling and preparation plant, and the Ngakawau
coal loadout facility. To note, the Stockton mine did not operate
during the COVID-19 lockdown period or it would have been the
largest power consuming site.
Comparison of energy consumption by operation FY20
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
)
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The above graph excludes Sullivan where consumption was zero.
Greenhouse gas emissions
We measure greenhouse gas emissions and participate in the
New Zealand Emissions Trading Scheme (“ETS”) in which carbon
pricing is passed on to our customers.
We assist our customers in relation to ETS in terms of the quality
of energy supplied and efficiency in supply logistics. A key
advantage of our Canterbury mine is that it is located within 20
km from its major customer in Darfield, significantly reducing
transport emissions. This recognises that whilst we support a
transition from coal to renewable energies, this will take time –
so we will endeavour to provide coal in a responsible way as long
as our energy customers require it.
If Canterbury’s existing customers were to source coal from
elsewhere in New Zealand, this would require trucking the
resource from either the West Coast (250 km away) or from
Southland (610 km away), significantly increasing the transport
carbon footprint. Alternatively, and as is the case for the Huntly
power station, coal could be imported from overseas suppliers
such as Indonesia, which also has a much higher transport
carbon footprint.
Material topic
Energy and emissions
We continue to find new ways to use energy more
efficiently in our operations, and are improving our
measurement and reporting of energy efficiency.
We aim over time to reduce our carbon footprint,
in terms of carbon dioxide emissions per tonne of
coal produced.
Energy use
This year energy consumption remained one of our largest
operational inputs.
In efforts to reduce our consumption, we have been working with
Mobil Oil New Zealand in assessing trials of Mobil Diesel Efficient
in the performance of two CAT 777 dump trucks at Maramarua.
It is expected that use of this new fuel will reduce consumption
by up to 3 percent, with lower emissions of nitrogen oxides
(up to 10 percent), particulate matter (22 percent), and carbon
dioxide (2.8 percent). In addition, we have been supporting a
project to assess the feasibility of a hydro scheme to generate
24 megawatts of power from the Stockton mine site water runoff,
where over six metres of rain falls each year.
Total energy consumption for FY20 is reported in terms of
energy consumed (fuel and electricity) by employees and
contractors and amounted to 992,267 gigajoules (“GJ”) at
our five operational sites, the Cascade mine rehabilitation
project and corporate offices. This is approximately a 3 percent
decrease on energy use reported in FY19. Overall total waste
rock stripping which is the key determinant of our energy
consumption decreased by 6 percent with 18.86 million banked
cubic metres (M bcm) of waste rock stripped at the five sites in
FY20, compared with 20.02 M bcm in FY19.
94 percent of the energy consumed at our sites includes
fuel used for operations, and power for the Canterbury mine.
The remaining 6 percent of energy consumed was purchased
electricity.
When comparing energy consumption by operation, there are
significant differences reflecting the scale of each operation and
the mine life cycle stage. The Rotowaro mine was the largest
consumer at 366,760 GJ, reflecting the movement of more than
8 M bcm of waste rock in FY20, due to increased stripping ratios
at this mature site.
24 Bathurst Resources Limited Annual Report 2020
Our mining operations use significant quantities of diesel fuel
to extract coal and transport coal within the sites. Electricity is
required for coal processing, water treatment plants and mine
management systems. Our coal also releases its own greenhouse
gases (“GHG”) to the atmosphere (fugitive emissions),
accounted for in the FY20 production tonnages under the
Scope 1 emissions category. We report our GHG emissions with
reference to their source as follows:
GHG emissions intensity
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FY20
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Our reporting of Scope 1 and 2 emissions is consistent with GRI
reporting guidelines. In accordance with GRI, we have reported
carbon dioxide in our GHG emissions calculations as carbon
dioxide equivalent (“CO2e”). This year we have also accounted
for sulphur hexafluoride gas emissions from transformers, and
emissions from the use of ammonium nitrate in blasting.
We work with blast consultants to ensure our blasting practices
optimise the recovery of clean coal. This reduces our GHG
emissions by reducing the tonnages of contaminated coal that
needs to be processed in energy-intensive coal washeries.
Total Scope 1 and 2 emissions for FY20 were 112,548 tonnes of
CO2e, of which:
• 40 percent related to fugitive emissions from coal production;
• 1 percent related to electricity use; and
• 59 percent related to fuel consumption and blast emissions.
The data for FY20 is approximately 7 percent less emissions
than FY19. This is due to a 6 percent decrease in waste rock
stripping (partially due to the COVID-19 lockdown at the
Stockton mine), and reduced CO2e from fugitive emissions as
13.3 percent less saleable coal was produced in FY20 across the
five sites compared with FY19.
In FY20, the highest GHG emissions intensity per tonne of coal
produced was at the Canterbury and Rotowaro mines. Intensity
is high at Canterbury because electricity is supplied from diesel
generators in lieu of access to the national grid, and it has the
lowest production rate of the five mines.
Rotowaro had a higher emission intensity this year because
significant volumes of waste rock were stripped in the Waipuna
West pit which is in the development stage. Also, saleable coal
tonnages decreased due to a planned shift in supply to a key
customer over a longer period.
Overall total GHG emissions intensity across all our operations
were similar to FY19 at approximately 0.05 tonnes CO2e/tonne
coal in both years.
Site
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Cascade
Corporate
Total
FY20 Scope 1
emissions (t/CO 2 e)
FY19 Scope 1
emissions (t/CO 2 e)
FY20 Scope 2
emissions (t/CO 2 e)
FY19 Scope 2
emissions (t/CO 2 e)
43,545
36,553
13,740
6,286
10,626
302
15
47,525
39,158
12,069
9,283
10,786
-
15
1,084
278
75
-
29
-
15
1,093
431
128
-
30
-
8
111,067
118,837
1,481
1,690
Scope 1 includes emissions from fuel and fugitive emissions from coal; Scope 2 are emissions related to electricity usage. The emissions are
calculated following the procedures in the New Zealand Ministry for the Environment May 2019 report ME1414 titled “Measuring emissions:
A guide for organisations – 2019 detailed guide”. Emissions for Escarpment and Sullivan were nil.
Section 1: Year in review 25
Following procedures in our Acid Mine Drainage management
plan, in the Cypress pit at the Stockton mine we have been
applying up to 16 kg of lime per tonne of PAF waste rock to
minimise AMD production. At Stockton we have also constructed
a second calcium oxide dosing plant to actively treat up to 3,000
tonnes of AMD per year in the St Patrick’s stream catchment.
This plant started treating AMD in July 2020.
The Canterbury site actively manages PAF rock by selectively
placing and compacting this material in areas of backfill where
it can be safely covered by a minimum five-metre thickness
of non-acid forming (“NAF”) rock. This minimises oxygen and
water entry into PAF waste rock, ensuring minimal acidic water
is produced from the backfill. Legacy AMD issues inherited from
the mine’s previous owner have been managed by excavating
an entire old overburden area that was the dominant origin of
legacy high acidic seeps. This historic PAF material was placed
into a new engineered landform and encapsulated, compacted
and covered with a five-metre thick NAF cover.
Small historic acidic seeps from former underground mines
in the Canterbury area are treated via two mussel shell bio-
reactors. The waste mussel shells neutralise acidic water and
this is also a way of recycling the shells instead of disposal
to landfill.
Material topic
Overburden management
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.
The two mine sites that disturbed potentially acid forming
(“PAF”) waste rock were Stockton and Canterbury.
PAF waste rock disturbed decreased by 2 percent compared
with FY19, as overall waste rock disturbance reduced by 1.16 M
bcm. The total amount of waste rock per tonne of saleable coal
across all sites increased from 8.6 bcm/t in FY19 to 9.3 bcm/t,
predominantly due to increased stripping ratios at Rotowaro
and Stockton mines and the effects of the COVID-19 pandemic
reducing coal output at Stockton.
Waste rock (bcm) disturbed in FY20
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
)
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289,974
8,080,299
3,318,569
705,440
2,258,454
PAF
NAF
26 Bathurst Resources Limited Annual Report 2020
Material topic
Land use and biodiversity
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.
Our objective is to rehabilitate mine sites to ensure self
sustaining indigenous ecoystems are established or re-
established. Where the post mining land use preference is
pasture by the landowner, we focus on enhancing the chemical,
physical and biological aspects of the soil before carefully
selecting climate adapted pasture species.
Currently we have several active biodiversity offset projects
underway that involve thousands of hectares of pest control
management (defined by consent conditions) on Department
of Conservation administered land. We are also working with
experts and stakeholders to deliver biodiversity outcomes in
the context of current or future mine closures. That includes
minimising our land disturbance footprint and progressively
restoring disturbed land.
Soil is salvaged and where appropriate vegetation direct transfer
(“VDT”) is undertaken to speed up and improve the quality of
indigenous ecological restoration. VDT is a method in which the
sods of intact plants and soils are moved intact from stripped
areas, usually in six cubic metre chunks. This method avoids
new plantings, boosts ecosystem recovery, maintains biological
activity within the soil and enhances erosion control.
Overall net total land disturbance over all sites in FY20
increased by 18 hectares (“ha”). The Stockton mine accounts for
53 percent of the total disturbed area. Mining of the Millerton
pit area at Stockton over the next few years will provide for a
more established strip mining operation, in which progressive
rehabilitation rates are projected to reach double the current
Stockton mine rehabilitation rate of approximately 20 ha per
year. Our budgeted rehabilitation area for FY21 is 72 ha across all
sites. It is noted that Maramarua is in a development stage, so no
areas will be available for rehabilitation during FY21.
Rehabilitation budget table
Site
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Rehabilitation budget FY21 (ha)
19.3
16
0
7.7
15
Escarpment-Cascade
11.7
Huntly West
Total
2.3
72
No rehabilitation was undertaken at the Escarpment or Sullivan
mines in FY20 as these mines are in care and maintenance, and
no rehabilitation was undertaken at Maramarua as it is in
development mode.
Land disturbed and rehabilitated
900
800
700
600
500
400
300
200
100
0
)
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Disturbed land remaining to be rehabilitated
Land rehabilitated in FY20
A rehabilitation project commenced at Cascade mine this year,
however as no final stage rehabilitation areas were completed by
the 30 June there are no hectares shown in the graph above.
Section 1: Year in review 27
Material topic
Water management
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.
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 FY20.
Overall water use this year was 927 million litres, a reduction
of 8.2 percent in water use compared with that of FY19. A
significant proportion of this reduction is due to approximately
200,000 less tonnes of coal being washed through the Stockton
mine coal washery as the mine was not authorised to operate
under the COVID-19 lockdown.
Success for freshwater ecology at the Takitimu mine has been
confirmed by a fish survey undertaken in May 2020 in the
diverted tributary stream of the Wairio stream, which reveals
a healthy population (juvenile and adult size ranges) of 111
nationally vulnerable Gollum galaxias fish (rare whitebait
species).
Consumptive water use
FY20 Consumptive
water use (Ml/yr)
FY19 Consumptive
water use (Ml/yr)
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Corporate
592
195
49
54
35
2
644
209
46
56
53
2
TOTAL
927
1,010
Note that the Takitimu mine water usage was incorrectly reported in the
FY19 annual report as 121 Ml/yr.
Water use intensity
Based on estimates of consumption, water use intensity
(measured as litres of water used per tonne of coal produced) is
shown below. This year sites used between 169 to 621 litres of
water to produce a tonne of coal. Significant water use at sites
with a large disturbed area or close proximity to residences is
related to dust suppression using water carts and sprinklers.
The Canterbury mine had a particularly high water use intensity
due to an unusual, very dry summer period.
Stockton has the highest intensity of water use, which reflects
the intensive use of the coal handling and preparation plant,
accounting for 86 percent of the site water usage. It is noted
that the coal washery water is treated for acid and sediment load
and is returned to the Mangatini Stream.
The Takitimu mine had a 34 percent reduction in water use
due to significantly more rainfall during the summer months,
requiring less water use for dust suppression.
Water use intensity at mine sites FY20
700
600
500
400
300
200
100
0
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
S
t
o
c
k
t
o
n
R
o
t
o
w
a
r
o
M
a
r
a
m
a
r
u
a
C
a
n
t
e
r
b
u
r
y
T
a
k
i
t
i
m
u
FY20
FY19
28 Bathurst Resources Limited Annual Report 2020
CASE STUDY
CANTERBURY MUDFISH / KŌWARO CONSERVATION – CANTERBURY MINE
Protecting a
regional treasure
We have stepped in to help protect the critically-endangered Canterbury mudfish /
kōwaro. Lack of fencing of livestock from streams, riverside willows and other
weeds, few native plantings, sediment and nutrient run-off into streams are major
threats to its conservation.
The Waianiwaniwa valley in inland Canterbury is a major habitat
for the endemic kōwaro. The streams here become disconnected
from rivers in the lower Selwyn catchment due to seasonal
drying of the streams as they enter the Canterbury plains,
creating an environment free of predator fish species such as
eel (tuna). This catchment however, like much of Canterbury,
is dedicated to rural land use and is relatively unprotected for
the kōwaro.
On gaining access in May 2020 to a purchased 31-hectare block
of rural land, we committed to fencing 1,100 metres of the Bush
Gully Stream from livestock. We are also spraying weeds and
planting riparian native species along this stream. This is part
of a programme to protect and enhance kōwaro habitat in the
Bush Gully Stream which runs to the north of the Canterbury
mine and later joins the Waianiwaniwa River.
Other actions are to remove two stands of crack willow as part of
a wetland restoration project. We manage run-off into freshwater
from the mine, making improvements to fish passage. The intent
is to covenant 20 metres on either side of the mid-point of Bush
Gully Stream for 1,100 metres, over an area totalling 44,000 m2 or
4.4 hectares.
Improving the science
We supported a survey of kōwaro populations in the Bush Gully
Stream via a University of Canterbury master’s thesis, and more
widely, the Waianiwaniwa and Hororata catchments. This work
builds on other aquatic surveys on kōwaro carried out in Bush
Gully Stream since 2006.
A further issue is uncontrolled drainages into the Bush Gully
Stream from historical underground mines dating from the
1900–1970s. We are analysing water quality and quantity
in these flows to understand how these drainages can be
managed to improve stream water quality.
A holistic issue
Nature conservation can rarely be done in isolation to be
effective. This is especially true of the kōwaro and its stream
habitat, almost all of which is degraded. This is a call for
action on landowners, farmers and foresters, mine and quarry
operators, government, iwi and local communities. We are
proud to be playing our part in this kaupapa or cause.
Canterbury galaxias (lower), Canterbury Mudfish (upper).
Bush Gully Stream fish survey 2019.
“
We are proud to be playing our
part in this kaupapa to protect
the kōwaro.
Section 1: Year in review 29
Governance
Material topic
Compliance
Compliance in the mining sector represents a
significant risk to our business. We are continually
focused on achieving positive and compliant
performance outcomes.
What do we mean by governance?
Governance is ensuring we have the policies, procedures,
systems and suitably trained employees in place to achieve
industry good practice in managing workplace health and safety,
and the environmental and socio-economic impacts of our
mining, processing and transport operations.
The COVID-19 pandemic and associated restrictions have
imposed a particular duty of care on us. Under the banner of
Health, Safety, Environment and Community all of our people
have been responsible for implementing our COVID-19 protocols
and procedures.
Environmental compliance and governance
Our corporate environmental governance is based on current
international standards for environmental management. For
example, we follow the principles under the International Council
on Mining & Metals (2019) Integrated Mine Closure: Good
Practice Guideline for all of our mine site closure plans.
In mine stages from exploration, development and mining to
closure and after-care, we focus on meeting or surpassing
environmental regulatory requirements to manage:
• water quality and water use;
• energy use;
• air emissions;
• waste;
• land reclamation and post-mining land use; and
• biodiversity including offset projects.
Effective complaint handling
Our reputation for honesty and integrity is important for the
success of our business. We aim for our business practices to
be compatible with, and sensitive to, the economic and social
priorities of each location and community in which we live
and operate.
We have revised and trained the workforce on our whistle-blower
policy and established a whistle-blower hotline, in partnership
with EAP Services (an independent service provider). This
hotline, directly overseen by our Audit and Risk Committee,
enables employees to confidentially and anonymously report
either by telephone or electronically any concerns or misconduct
in any aspect of our business.
Internal and external complaints on environmental issues
are recorded via complaints registers maintained at all sites.
Environmental and community complaints are investigated via
our internal incident investigation system and are only closed off
by senior management when resolved.
Environmental management systems
(“EMS”)
An accredited, external international environmental management
consultant firm IEMA has documented improvement actions to
our EMS and discussed these in training workshops with our
site personnel.
In FY21, we have committed to improving our EMS by:
• An audit of mine closure costs, schedule and tasks will
be undertaken by a mine closure expert at all sites.
• Preparation of biodiversity action plans for all of our sites.
• Review, update and implement Site Environmental
Management Plans.
• Review of site operational and closure risk assessments,
and to prepare and implement a schedule for environmental
risk reduction/minimisation.
30 Bathurst Resources Limited Annual Report 2020
Material topic
Mine closure standard
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.
We are implementing an internally developed Decommissioning
and Mine Closure Management Standard, which draws on
international experts. This has been tested at our largest
and most complex site, the Stockton mine.
Material topic
Emergency preparedness
management
We maintain emergency management plans to
identify the potential for emergency situations
and we regularly test our capability to respond.
COVID-19 is a reminder that there is always a risk of an adverse
event occurring. Hence, we have crisis management plans in
place to minimise 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, major incident response exercises in collaboration
with emergency services were undertaken at the Canterbury,
Takitimu and Stockton mines.
Section 1: Year in review 31
Our people
Board members
Toko Kapea
Non-executive Chairman
Russell Middleton
Executive Director & Chief Financial Officer
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 Television New Zealand
(state owned broadcaster) and Duke Exploration Limited, an
exploration company with tenements in Queensland and New
South Wales. He is also Chair of Bathurst’s Audit Committee.
Russell has over 30 years in the mining and construction
sector with significant experience in mine project evaluations
and construction of new mines. Starting his career as a public
accountant, Russell has held senior management positions in
commercial and planning roles with BHP and Anglo American.
Russell is a director of joint venture entities BT Mining Limited
and NWP Coal Canada Limited as a Bathurst representative.
Richard Tacon
Executive Director & Chief Executive Officer
Peter Westerhuis
Non-executive Director
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.
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 12 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.
Richard is the Chair of the Coal Association of New Zealand
and sits on the boards of the New Zealand Mines Rescue Trust
and Straterra. Richard is a director of BT Mining Limited as a
Bathurst representative.
32 Bathurst Resources Limited Annual Report 2020
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 40 years’
legal experience specialising in mining, environmental and
climate change law. She spent the first 20 years of her career
in leading law firms and at the Ministry of Foreign Affairs and
Trade. For the past 20 years she has worked at senior levels in
the coal industry.
Carmen Dunick
Group Manager, Human Resources
Carmen joined Bathurst in 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 domestically and internationally, and since our
investment in BT Mining, 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 2019. 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. Since 2019 Damian has led Bathurst’s resource
development, focusing on growth projects. Damian is a chartered
professional member of AusIMM.
Section 1: Year in review 33
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 2020.
Directors
The following persons were directors of Bathurst Resources
Limited as at 30 June 2020.
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
No dividend was declared relating to the 30 June 2020 financial
year. A dividend was paid on the 23 October 2019 relating to the
30 June 2019 financial year, at 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 (“Council”) laid charges in
respect of this incident. Whilst the matter was initially resolved
through the Council’s alternative environmental justice (“AEJ”)
processes, the District Court had issues around the validity
of the AEJ process as a whole. Bathurst pled guilty to one
representative charge and was convicted and fined $18,000 in
November 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.
34 Bathurst Resources Limited Annual Report 2020
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 our website
www.bathurst.co.nz/our-company/corporate-governance
Donations
Bathurst made donations totalling $44,557 to several local
groups during the year including scholarships. Further
information of donation recipients can be found in the socio-
economic material topic of our sustainability section of the
annual report.
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
3,907,409
-
Mr R Middleton
12,528,309
3,451,264
Mr P Westerhuis
3,518,636
-
Mr R Tacon
16,003,027
5,979,379
The increase in ordinary shares held by directors arose from the
exercise of previously issued performance rights that vested
on the 31 December 2019. Additional performance rights were
granted during the year to executive directors. 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
or have done so in the last three years.
Other entries in the interests register
Other than transactions relating to performance rights as noted
above, other entries in the interests register during the year
consisted of:
• Russell Middleton accepting a non-executive director position
and 10 percent ownership in Penguin Risk Solutions who
provide insurance in Australia. There is no intent to change
Bathurst’s insurance providers and as such this appointment
does not represent a conflict of interest.
• Toko Kapea accepted appointment as member of the advisory
committee member of Finistere Ventures LLC (USA) for its
New Zealand operations. No conflict of interest was reported
in respect of this appointment.
• Toko Kapea came off the board of Ngaitakoto Custodian
Trustee Limited.
Audit fees
Other than as disclosed in note 5, fees payable to Bathurst’s
auditors for agreed upon procedures services required under a
Deed of Royalty total $4k plus disbursements.
Section 1: Year in review 35
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 (“NED”) fees, remuneration for
directors and other senior executives, and the over-arching
executive remuneration policy and incentive schemes. All its
members are NEDs.
The objective of the R&N committee is to ensure that Bathurst’s
remuneration policies are fair and competitive, and aligned with
the long-term interests of Bathurst and its shareholders. The
R&N committee draws on its own experience in remuneration
matters and seeks advice from independent remuneration
consultants where appropriate.
There have been no 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.
NED remuneration framework
NED fees reflect the 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.
An external benchmark report was prepared by independent
remuneration consultants as part of the annual review process.
This assessed current remuneration and structure for members
of the Board. Increases to NED fees including the Chairman of
the Board were made during the year to bring fees in line with
market expectations for an ASX company of similar size and
complexity.
Executive remuneration
The objective of Bathurst’s executive reward framework is to
ensure reward for performance is competitive, appropriate,
promotes retention of employees, and aligns with Bathurst’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, 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.
36 Bathurst Resources Limited Annual Report 2020
Fixed remuneration
Bathurst 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 Bathurst’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 LTI plan (“LTIP”) was updated and 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.
Relating to the FY20 period, the following LTI awards were
issued on recommendation of the R&N committee:
• Performance rights were granted to executive directors, refer
to note 18 in the financial statements for further information.
• Performance rights were granted to members of the senior
leadership team in August 2020. These have the same terms
as those granted to executive directors, but a different
grant date.
Section 1: Year in review 37
Directors’ remuneration
The total remuneration and other benefits to directors for services in all capacities during the year ended 30 June 2020 was:
Director
Mr T Kapea
Mr P Westerhuis
Mr R Tacon
Mr R Middleton
Directors’ fees
Fixed remuneration
and STI
LTI – performance
rights
142,500
71,188
-
-
-
-
735,970
566,810
16,318
16,318
223,035
152,328
Total
158,818
87,506
959,005
719,138
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.
Employee remuneration
During the year ended 30 June 2020, 24 employees (excluding the CEO and CFO) received individual remuneration over $100,000.
Range
# of employees
100,001–110,000
3
110,001–120,000
2
120,001–130,000
3
130,001–140,000
1
140,001–150,000
3
150,001–160,000
1
160,001–170,000
1
170,001–180,000
1
180,001–190,000
1
200,001–210,000
2
230,001–240,000
1
260,001–270,000
1
300,001–310,000
1
310,001–320,000
1
370,001–380,000
1
390,001–400,000
1
38 Bathurst Resources Limited Annual Report 2020
Section 1: Year in review 39
40 Bathurst Resources Limited Annual Report 2020
Section 2: Financial statements 41
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
Contents
2
Income statement................................................................................................................................................................................................................................. 3
Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Statement of comprehensive income ...................................................................................................................................................................................... 3
Statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Balance sheet .......................................................................................................................................................................................................................................... 4
Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Statement of changes in equity .................................................................................................................................................................................................. 5
Statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Statement of cash flows ................................................................................................................................................................................................................... 6
Notes to the financial statements .............................................................................................................................................................................................. 7
Statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Additional information .................................................................................................................................................................................................................... 40
Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Independent auditor’s report ..................................................................................................................................................................................................... 43
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
Independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
Authorised for and on behalf of the Board of Directors:
Toko Kapea
Chairman
28 August 2020
Russell Middleton
Executive director
28 August 2020
Bathurst Resources Limited | Financial statements
42 Bathurst Resources Limited Annual Report 2020
2
Income statement
For the year ended 30 June 2020
Revenue from contracts with customers
Cost of sales
Gross profit
Equity accounted profit
Other income
Depreciation
Administrative and other expenses
Movement in deferred consideration
(Loss)/gain on disposal of fixed assets
Impairment losses
Operating (loss)/profit before tax
Finance cost
Finance income
(Loss)/profit before income tax
Income tax benefit
(Loss)/profit after tax
Earnings per share:
Basic (loss)/profit per share
Diluted (loss)/profit per share
Notes
3
4
2020
$’000
47,011
2019
$’000
52,744
(36,238)
(38,655)
10,773
14,089
13
30,408
45,300
127
38
10
5
(3,618)
(2,624)
(8,103)
(8,499)
15 (c)
(61,686)
(13)
(325)
41
3
-
8
6
6
7
19
19
(32,437)
48,348
(15,011)
(3,545)
22
157
(47,426)
44,960
-
-
(47,426)
44,960
Cents
Cents
(2.78)
(2.78)
2.83
2.57
Statement of comprehensive income
For the year ended 30 June 2020
(Loss)/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 (loss)/income
(47,426)
44,960
(274)
1,805
79
(513)
13
(45,895)
44,526
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 43
3
Balance sheet
As at 30 June 2020
Cash and cash equivalents
Restricted short-term deposits
Trade and other receivables
Inventories
New Zealand emission units
Crown indemnity
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)
16
10
11
13
16
2020
$’000
2019
$’000
4,495
20,005
4,193
4,012
1,407
1,011
291
15,409
17,987
34,518
105,844
582
117
4,030
4,018
1,560
1,428
-
31,041
17,239
29,783
80,828
371
139
159,048
128,360
174,457
159,401
15 (a)
15 (b)
6,716
13,881
15 (c)
74,361
16
1,145
7,079
14,214
1,035
1,328
96,103
23,656
15 (b)
15 (c)
16
1,758
4,956
4,721
9,297
5,774
4,347
11,435
19,418
107,538
43,074
66,919
116,327
293,107
286,277
17,622
22,824
(31,455)
(33,050)
(212,355)
(159,724)
66,919
116,327
17
17
18
Toko Kapea
Chairman
28 August 2020
Russell Middleton
Executive Director
28 August 2020
44 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
4
Statement of changes in equity
For the year ended 30 June 2020
Note Contributed
equity
$’000
Debt
instruments
equity
component
$’000
263,179
43,788
-
-
25,780
(20,964)
-
(4,225)
1,543
-
-
-
Share-
based
payments
Foreign
exchange/
hedging
Retained
earnings
Reorganisation
reserve
Total
equity
$’000
1,072
-
-
764
-
(1,543)
$’000
$’000
$’000
$’000
(149) (204,684)
(32,760) 70,446
(434)
44,960
-
-
-
-
-
-
-
-
-
-
-
-
-
44,526
4,816
764
(4,225)
-
286,277
22,824
293
(583)
(159,724)
(32,760) 116,327
-
-
-
-
6,486
(5,202)
-
344
-
-
-
-
-
-
-
408
(344)
-
1,531
(47,426)
-
-
-
-
-
315
-
-
-
(5,520)
1
17
17
- (45,895)
-
-
315
1,284
-
408
-
-
-
(5,520)
293,107
17,622
357
948
(212,355)
(32,760)
66,919
1 July 2018
Comprehensive
profit
Contributions of
equity
Share-based
payments
Share buy-backs
Vesting of rights
30 June 2019
Comprehensive loss
NZ IFRS 16
Contributions of
equity
Share-based
payments
Vesting of rights
Dividend
30 June 2020
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 45
5
Statement of cash flows
For the year ended 30 June 2020
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 NWP Coal Canada Limited
Other
Net cash outflow from investing activities
Cash flows from financing activities
Dividend
Interest received
Other finance costs paid
Interest on leases
Repayment of leases
Drawdown on leases
Interest on debt instruments
Debt instrument principal repayment
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
2020
$’000
2019
$’000
47,361
52,741
(40,231)
(41,944)
13
20
13,000
19,500
20,130
30,297
(1,189)
(7,030)
(2,697)
-
(370)
(8,307)
(2,342)
3
(950)
(1,161)
(6,146)
(10,105)
(178)
22
(18,190)
(22,260)
(5,520)
57
(383)
(242)
(2,641)
208
(2,395)
(6,371)
-
130
-
(264)
(1,721)
-
(2,138)
-
-
(4,225)
(17,287)
(8,218)
(15,347)
20,005
4,030
8,688
(181)
20,179
4,037
24,035
15 (b)
46 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
6
Notes to the financial statements
For the year ended 30 June 2020
1. About our financial statements
General information
Bathurst Resources Limited (“Company” or “Parent” or “BRL”) is a company incorporated and domiciled in New Zealand, registered under
the Companies Act 1993 and listed on the Australian Securities Exchange (“ASX”). These financial statements have been prepared in
accordance with the ASX listing rules.
The financial statements presented as at and for the year ended 30 June 2020 comprise the Company and its subsidiaries (together
referred to as the “Group”).
The Group is principally engaged in the exploration, development and production of coal.
These financial statements have been approved for issue by the Board of Directors on 28 August 2020.
Basis of preparation
These Group financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (“NZ
GAAP”). The Group is a for-profit entity for the purposes of complying with NZ GAAP. The consolidated financial statements comply
with New Zealand Equivalents to International Financial Reporting Standards (“NZ IFRS”), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply NZ IFRS. The financial statements also comply with International Financial
Reporting Standards (“IFRS”).
These financial statements are presented in New Zealand dollars, which is the Company’s functional and presentation currency.
References in these financial statements to ‘$’ and ‘NZ$’ are to New Zealand dollars. All financial information has been rounded to the
nearest thousand unless otherwise stated.
Material uncertainty related to going concern
As at 30 June 2020, the Group’s current liabilities exceeded its current assets by $80.7m. This gap is primarily made up of:
• A performance payment payable to L&M Coal Holdings Limited (“L&M”) as a consequence of a judgment in the High Court of New
Zealand of $73.2m (refer note 15 (c) for further information).
• Borrowings in the form of USD subordinated bonds and convertible notes in the amount of $12.4m, which were previously issued to
fund the investment in BT Mining Limited (refer note 15 (b) for further information).
Operating activities including receipt of dividends from BT Mining have previously contributed positive operating cashflows, and directors
expect the same for future years as modelled in the Group’s forecasts. The directors expect to be able to meet BRL’s obligations from the
normal course of business with regards to the USD subordinated bonds. If the convertible notes are not converted to shares by the note
holders, directors believe there is sufficient flexibility to manage the repayment of these from the ordinary course of business also.
There is currently a material uncertainty as to whether and how BRL will be able to fulfil its obligations to L&M, due to the quantum of the
debt owed per the judgment. BRL has been granted leave to appeal the outcome of the judgment in the Supreme Court of New Zealand
and this is scheduled to be heard in early October 2020. If L&M were to demand payment of the debt before this hearing BRL could seek
a stay from the Supreme Court. If BRL is successful in having the judgment overturned, the debt will be no longer payable.
If BRL is not successful in its appeal, the directors will continue to pursue other courses of action to meet this debt. The directors have
been and are continuing to assess a full range of options, including seeking to resolve this debt through a negotiated settlement
(including payment terms) with L&M, bank financing and raising capital through debt and/or equity. Whilst the directors are confident
that this debt can be satisfactorily resolved through the above proposals, there cannot be certainty of this nor of L&M allowing BRL
sufficient time to realise these proposals, at the date of approving these financial statements. This casts significant doubt on the Group’s
ability to continue as a going concern and therefore, the Group may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Notwithstanding the material uncertainty noted above, directors believe that the financial statements can be prepared on the going
concern assumption for the following reasons:
• The assets of BRL exceed its liabilities and as such the delay in resolving this matter with L&M does not prejudice BRL’s creditors.
• Discussions with L&M up to the date of signing these financial statements have been co-operative and remain ongoing.
• Preliminary work has been well progressed in relation to potential alternative solutions if BRL is not successful in its appeal at the
Supreme Court of New Zealand. The directors believe BRL is well set to progress with these workstreams if necessary.
• BRL has received legal advice that has led the directors to believe that there is a reasonable prospect of success in the appeal to
the Supreme Court of New Zealand.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 47
7
Notes to the financial statements
For the year ended 30 June 2020
1. About our financial statements continued
Measurement basis
These financial statements have been prepared 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. The impact of the new leasing standard (detailed on page 9) has been excluded from the cash flow statement so that
transactions relating to capital purchases reflect the real underlying cash value.
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
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
There are no new accounting standards issued but not yet effective, that will have an impact on the Group.
Standards and interpretations adopted during the year
The financial information presented for the year ended 30 June 2020 has been prepared using accounting policies consistent with those
applied in the 30 June 2019 financial statements, except for the application of a new leasing standard as detailed below.
48 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
8
Notes to the financial statements
For the year ended 30 June 2020
1. About our financial statements continued
Standards and interpretations adopted during the year continued
New Zealand equivalent to International Financial Reporting Standard 16 (“NZ IFRS 16”) – Leases
This standard replaces NZ IAS 17 Leases and removes the distinction between operating and finance leases for lessees. This means the
Group now recognises most leases (where the Group is a lessee) on the balance sheet, similar to the previous finance lease model. This
has resulted in the recognition of right-of-use (“ROU”) assets and related lease liability balances. Rental payments for leases previously
classified as operating leases, primarily corporate property and yellow goods hire, have moved from being included in operating expenses
to depreciation and finance interest expenses.
The impact on net earnings before income tax of an individual lease over its term remains the same, however, the new standard results in
a higher interest expense in the early years of a lease and lower in the later years, compared with the previous straight-line expense
profile of an operating lease.
NZ IFRS 16 was adopted with effect from 1 July 2019. The Group elected to transition to NZ IFRS 16 under the modified retrospective
approach, with the cumulative effect of initially applying the standard recognised at the date of initial application. This means that there
has been no restatement of comparative information. Instead, the Group has recognised the cumulative effect of initially applying this
standard as an adjustment to the opening balance of retained earnings at the date of initial application.
The Group also elected to apply the following practical expedients and exemptions on adoption of the standard:
•
•
the recognition exemption for short-term leases (leases with a lease term of up to one year) and leases of low-value assets where
appropriate; and
the practical expedient that states that an entity is not required to reassess whether a contract is, or contains, a lease at the date of
initial application. This practical expedient is applied to all contracts entered into before the date of initial application.
A summary of the financial impacts on the Group at 1 July 2019 from the transitional adjustments including equitable share of the impact
in BT Mining, and at 30 June 2020 (BRL Group only) are as follows:
Income statement
Cost of sales (decrease)
Depreciation expense (increase)
Administrative and other expenses (decrease)
Finance costs (increase)
Increase in expenses
Balance sheet
Investment in BT Mining (decrease)
Property, plant and equipment increase/(decrease)
Current lease liabilities (increase)
Non-current lease liabilities (increase)/decrease
Increase/(decrease) in retained earnings
2. Segment information
The operating segments reported on are:
2019
$’000
2020
$’000
Total
$’000
-
-
-
-
-
(82)
2,296
-
(1,899)
315
630
(945)
245
(84)
(154)
-
(737)
(407)
990
(154)
630
(945)
245
(84)
(154)
(82)
1,559
(407)
(909)
161
• 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.
Two BRL customers met the reporting threshold of 10 percent of BRL’s operating revenue in the year to 30 June 2020, contributing
$20.2m and $9.2m (2019: three customers, $18.8m, $8.2m and $6.6m).
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 49
9
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
2. Segment information continued
For the year ended 30 June 2020
Export
Domestic
Corporate
Total
Year ended 30 June 2020
2. Segment information continued
Revenue from contracts with customers
$’000
$’000
Operating (loss)/profit before tax
Year ended 30 June 2020
Net finance costs
Revenue from contracts with customers
Income tax expense
Operating (loss)/profit before tax
Comprehensive (loss)/income after tax
Net finance costs
Depreciation & amortisation
Income tax expense
EBITDA2
Comprehensive (loss)/income after tax
Depreciation & amortisation
Year ended 30 June 2019
EBITDA2
Revenue from contracts with customers
Operating profit before tax
Year ended 30 June 2019
Fair value movements
Revenue from contracts with customers
Net finance costs
Operating profit before tax
Income tax expense
Fair value movements
Comprehensive income after tax
Net finance costs
Depreciation & amortisation
Income tax expense
EBITDA
Comprehensive income after tax
Depreciation & amortisation
Accounting policy
175,307
Export
44,679
$’000
(2,034)
175,307
-
44,679
40,840
(2,034)
19,453
-
65,579
40,840
146,479
Domestic
41,179
$’000
(682)
146,479
-
41,179
39,006
(682)
22,830
-
64,519
39,006
$’000
$’000
-
Corporate
(81,505)
$’000
(20,562)
-
(12,295)
(81,505)
(106,758)
(20,562)
779
(12,295)
(15,650)
(106,758)
321,786
Total
4,353
$’000
(23,278)
321,786
(12,295)
4,353
(26,912)
(23,278)
43,062
(12,295)
114,448
(26,912)
Eliminate
BT Mining
$’000
(274,775)
Eliminate
(66,887)
BT Mining
$’000
8,289
(274,775)
12,295
(66,887)
(49,080)
8,289
(35,975)
12,295
(107,638)
(49,080)
Total
BRL
$’000
47,011
Total
(32,437)1
BRL
$’000
(14,989)
47,011
-
(32,437)1
(45,895)1
(14,989)
7,087
-
6,810
(45,895)1
19,453
22,830
779
43,062
(35,975)
7,087
65,579
265,858
64,519
152,542
(15,650)
-
114,448
418,400
(107,638)
(365,656)
6,810
52,744
78,412
47,060
(15,340)
110,132
(107,084)
48,3481
-
265,858
(672)
78,412
-
-
77,740
(672)
11,827
-
103,647
77,740
-
152,542
(616)
47,060
-
-
46,444
(616)
22,575
-
70,245
46,444
(3,439)
-
(4,965)
(15,340)
(31,088)
(3,439)
(55,266)
(4,965)
301
(31,088)
(15,352)
(55,266)
(3,439)
418,400
(6,253)
110,132
(31,088)
(3,439)
68,918
(6,253)
34,703
(31,088)
158,540
68,918
3,439
(365,656)
2,865
(107,084)
31,088
3,439
(69,692)
2,865
(27,794)
31,088
(148,345)
(69,692)
-
52,744
(3,388)
48,3481
-
-
44,5261
(3,388)
6,909
-
10,195
44,5261
11,827
22,575
301
34,703
(27,794)
6,909
EBITDA
10,195
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.
Accounting policy
(148,345)
(15,352)
158,540
103,647
70,245
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.
3. Revenue from contracts with customers
3. Revenue from contracts with customers
Coal sales
Freight and ash disposal revenue
Sales revenue from contracts with customers
Coal sales
Freight and ash disposal revenue
Sales revenue from contracts with customers
2020
$’000
33,454
13,557
2020
$’000
47,011
33,454
2019
$’000
38,186
14,558
2019
$’000
52,744
38,186
13,557
14,558
47,011
52,744
1 Total BRL operating loss and comprehensive loss 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
1 Total BRL operating loss and comprehensive loss does not equal the sum of Total BRL minus elimination of BT Mining, as the Company’s 65 percent of BT
10
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.
50 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
10
Notes to the financial statements
For the year ended 30 June 2020
3. Revenue from contracts with customers continued
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
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
2020
$’000
10,082
12,052
10,416
3,469
2019
$’000
9,739
14,186
10,647
4,285
219
(202)
36,238
38,655
220
238
1,397
916
2,238
70
408
176
208
1,213
841
2,181
366
764
Included in remuneration of auditors is $40k relating to the half year review and $180k to end of year audit fees.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 51
11
Notes to the financial statements
For the year ended 30 June 2020
6. Net finance costs
Interest income
Total finance income
Interest on deferred consideration
Interest expense on finance leases
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
Other finance costs
Total finance costs
Total net finance costs
7.
Income tax benefit
(a) Income tax benefit
Current tax
Deferred tax
Income tax benefit
Reconciliation of income tax benefit to tax payable
(Loss)/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 joint venture equity profit
Dividend from BT Mining
Other permanent adjustments including movement on deferred consideration
Other deferred tax movements
Income tax benefit
(b) Imputation credits
Opening balance imputation credit account
Imputation credits attached to dividends received and other items
Imputation credits used on dividend paid to shareholders
Imputation credits available for use in future periods
2020
$’000
22
22
15 (c)
(10,983)
2019
$’000
157
157
-
(242)
(265)
(1,978)
(2,094)
(63)
(716)
(72)
(785)
(172)
(42)
(62)
(365)
(623)
(94)
(15,011)
(3,545)
(14,989)
(3,388)
16
15 (c)
784
(784)
-
(2,594)
2,594
-
(47,426)
44,960
(13,279)
12,589
(8,516)
(12,684)
5,056
17,553
7,583
7,243
(814)
(245)
-
-
12,662
5,033
(2,118)
5,055
7,607
-
15,577
12,662
52 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
12
Notes to the financial statements
For the year ended 30 June 2020
7.
Income tax benefit continued
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.
8.
Impairment
Bad-debt write-off
Impairment of property, plant and equipment
Impairment losses
Note
9
10
2020
$’000
(109)
(216)
(325)
2019
$’000
-
-
-
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 2020. The
impairment of property, plant and equipment relates to the write-down of an individual land purchase to its expected recoverable value
and does not indicate a wider impairment issue on the CGU as a whole.
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 have no immediate plans to reinstate the project. The CGU remains fully impaired at 30 June 2020.
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 2020.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 53
13
Notes to the financial statements
For the year ended 30 June 2020
8.
Impairment continued
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.
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
2020
$’000
2,893
-
293
826
2019
$’000
3,384
(500)
714
420
4,012
4,018
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.
The Bathurst Industrial Coal Limited debtors balance and associated provision was reversed during the year, leading to the bad-debt
write off showing in note 8.
54 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
14
Notes to the financial statements
For the year ended 30 June 2020
9. Financial assets continued
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. 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. 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.
Crown indemnity receivable
The crown indemnity receivable is carried at the lower of the indemnity escrow limit and the rehabilitation provision limit on
a ‘mine by mine’ basis.
The net present value of the receivable is calculated using a risk free 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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 55
15
Notes to the financial statements
For the year ended 30 June 2020
10. Property, plant and equipment
Freehold
land
Buildings
Mine
infrastructure
Plant &
machinery
Furniture
and
fittings
$’000
Work in
progress
Total
$’000
$’000
Year ended 30 June 2020
Opening net book value
Additions including NZ IFRS 16
Transfers
Disposals
Depreciation including NZ IFRS 16
NZ IFRS 16 transitional adjustment
Impairment
$’000
2,328
88
305
-
(12)
-
-
$’000
$’000
$’000
911
701
342
-
(265)
-
-
139
12,787
589
485
17,239
-
-
-
1,360
1,029
(83)
(14)
(3,136)
-
-
397
-
49
114
(49)
(191)
-
-
2,221
4,419
(1,790)
-
(102)
(234)
-
-
(3,618)
397
(216)
(216)
Closing net book value
2,709
1,689
125
12,354
512
598
17,987
As at 30 June 2020
Cost
16,178
7,460
2,913
31,917
2,982
12,938
74,388
Accumulated write-downs
(13,469)
(5,771)
(2,788)
(19,563)
(2,470)
(12,340)
(56,401)
Closing net book value
2,709
1,689
125
12,354
512
598
17,987
Year ended 30 June 2019
Opening net book value
2,328
Additions
Transfers
Depreciation
-
-
-
Closing net book value
2,328
688
95
345
(217)
911
266
13,176
-
117
330
1,333
(244)
(2,052)
139
12,787
435
47
218
(111)
589
628
17,521
1,870
2,342
(2,013)
-
-
(2,624)
485
17,239
As at 30 June 2019
Cost
15,785
6,417
2,913
29,617
2,868
12,609
70,209
Accumulated write-downs
(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
The value of right-of-use (leased) assets included in property, plant and equipment are noted below:
Year ended 30 June 2020
Opening net book value
Additions
Depreciation
Transitional adjustment from NZ IFRS 16
Closing net book value
56 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
Freehold
land
Buildings
Plant &
machinery
$’000
$’000
$’000
4,922
1,272
(1,648)
-
701
(197)
-
397
504
4,943
-
88
(12)
-
76
Furniture
and
fittings
$’000
-
46
(17)
-
29
Total
$’000
4,922
2,107
(1,874)
397
5,552
16
Notes to the financial statements
For the year ended 30 June 2020
10. Property, plant and equipment continued
Accounting policy
Leases
The Group assess whether a contract is or contains a lease at inception of a contract. The Group recognises a right-of-use
(“ROU”) asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for
short-term leases (lease terms of 12 months or less) and leases valued at less than $10k. Lease payments associated with
these leases are recognised as an expense on a straight-line basis. ROU assets for the Group primarily consist of corporate
property and yellow goods hire and have an average term of 3.35 years.
The determination of whether an arrangement is, or contains, a lease is based on whether the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. The Group must also have the right
to obtain substantially all of the economic benefits from use of the asset and have the right to direct the use of the asset.
The Group recognises a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The ROU asset is
initially measured at cost, which comprises the initial amount of the lease liability plus any initial direct costs incurred and
an estimate of costs to dismantle or remove or restore the asset. ROU assets are subsequently measured at cost less
accumulated depreciation and impairment losses, being depreciated over the shorter of the estimated useful life of the
asset or the lease term.
The corresponding lease liability is initially measured at the present value of the future lease payments, discounted using
the interest rate implicit in the lease, or if that rate cannot be readily determined, the Group’s incremental borrowing rate
which ranges from 4.46% to 6.51% dependent on what type of asset the lease relates to and the life of the asset.
Subsequently, the lease liability is adjusted to reflect interest on the lease liability (using the effective interest method) and
lease payments made.
The Group applies IAS 36 Impairment of Assets to determine whether a ROU asset is impaired.
Estimated useful lives for ROU assets are the same as other assets noted below, unless noted otherwise.
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
• Leased land 7 – 8 years
• Furniture, fittings and equipment
2 – 12 years
6 - 25 years (3 – 5 years for ROU assets)
3 – 20 years
2 – 25 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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 57
17
Notes to the financial statements
For the year ended 30 June 2020
11. Mining assets
Exploration and evaluation assets
Opening balance
Expenditure capitalised
Total exploration and evaluation assets
Mining licences/permits and property assets
Opening balance
Expenditure capitalised
Amortisation
Abandonment provision movement
Waste moved in advance capitalised
Total mining licences/permits and property assets
Total mining assets
Accounting policy
Exploration and evaluation
2020
$’000
680
1,189
1,869
2019
$’000
312
368
680
29,103
25,995
1,159
1,209
(3,469)
(4,285)
-
(915)
5,856
7,099
32,649
29,103
34,518
29,783
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.
58 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
18
Notes to the financial statements
For the year ended 30 June 2020
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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 59
19
Notes to the financial statements
For the year ended 30 June 2020
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
2020
%
100
100
100
100
100
100
100
2019
%
100
100
100
100
100
100
100
All subsidiary companies have a balance date of 30 June and are 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).
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.
60 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
20
Notes to the financial statements
For the year ended 30 June 2020
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
(a) Balances held in BT Mining
Equity investment
Share of retained earnings net of dividends received
Total interest in BT Mining
Opening balance
Receipt of dividend
Share of BT Mining profit
Share of BT Mining FX hedging through OCI
Share of adjustment to retained earnings on adoption of NZ IFRS 16
Closing balance
2020
$’000
89,543
16,301
2019
$’000
70,723
10,105
105,844
80,828
16,250
16,250
73,293
54,473
89,543
70,723
70,723
45,436
(13,000)
(19,500)
30,097
45,300
1,805
(82)
(513)
-
89,543
70,723
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.
Salaries for employees who work across both BRL and BT Mining are recharged between the two companies so that staff costs are
recorded appropriately. For the year ended 30 June 2020 $2.7m of salaries were recharged from BRL to BT Mining (2019: $2.1m) and
$0.7m recharged from BT Mining to BRL (2019: $0.6m).
Coal sales are made to BRL’s BT Mining joint venture partner Talleys Energy Limited and/or associated companies of Talleys Energy
Limited on an arm’s length basis and normal commercial terms. Total sales for the year ended 30 June 2020 were $4.2m (2019: $3.5m)
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 61
21
Notes to the financial statements
For the year ended 30 June 2020
13. Interest in joint ventures continued
BT Mining continued
(b) BT Mining balance sheet
Cash
Restricted short-term deposits
Trade and other receivables
Crown indemnity
Inventories
New Zealand emission units
Derivative assets
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
2020
$’000
24,427
2,133
2019
$’000
22,283
-
35,611
46,749
4,178
39,689
1,166
3,068
-
32,694
2,975
-
110,272
104,701
107,511
62,998
56,881
761
6,819
72,976
41,961
53,993
742
2,041
234,970
171,713
345,242
276,414
30,323
28,684
16,830
-
4,485
4,003
26,854
24,894
2,970
789
12,932
6,447
84,325
74,886
36,289
3,634
83,236
6,876
12,806
73,042
123,159
92,724
207,484
167,610
137,758
108,804
25,000
25,000
1,988
(789)
110,770
84,593
137,758
108,804
62 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
22
Notes to the financial statements
For the year ended 30 June 2020
Interest in joint ventures continued
13.
NWP
Balances held in NWP
Equity investment
Equitable share of profit
Total interest in NWP
2020
$’000
16,063
238
2019
$’000
10,105
-
16,301
10,105
The investment in NWP is 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 three tranches. 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
Complete
In progress
The balance invested at 30 June 2020 represents the NZD equivalent of the initial investment (CAD $4.0m) and tranche one (CAD
$7.5m) issued in exchange for common ordinary shares in NWP, as well as an advance of CAD $2.6m as part of tranche two, issued in
exchange for preference shares in NWP.
The investment in exchange for preference shares is done on a cash call basis at the request of NWP. If BRL exercises the tranche two
option, further investment required will equal CAD $110.0m minus funds invested in the preference shares, at which point the preference
shares will automatically convert to ordinary shares on a 1:1 basis.
Preference shares have the same rights and are issued at the same value as ordinary shares, with the key 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 ordinary shares.
BRL considers NWP to be a joint venture. 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.
NWP summarised financial information - unaudited
Cash
Other current assets
Exploration and evaluation assets
Other non-current assets
TOTAL ASSETS
Current liabilities
Non-current financial liabilities
TOTAL LIABILITIES
NET ASSETS
1,349
129
1,054
286
30,037
23,270
1,264
1,270
32,779
25,880
461
1,219
352
1,941
1,680
2,293
31,099
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 will be wound
up.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 63
23
Notes to the financial statements
For the year ended 30 June 2020
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
Other
Total deferred tax liabilities
Net deferred tax asset not recognised
Net deferred tax asset
2020
$’000
16,443
355
1,651
2019
$’000
12,449
285
1,772
16,744
16,695
812
2,936
2,027
100
2,656
6,624
2,027
436
41,068
42,944
(35)
(35)
(3)
(3)
(41,033)
(42,941)
-
-
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.
64 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
24
Notes to the financial statements
For the year ended 30 June 2020
15. Financial liabilities
(a) Trade and other payables
Trade payables
Accruals
Employee benefit payable
Interest payable
Other payables
2020
$’000
2,236
2,496
1,611
204
169
2019
$’000
2,316
2,688
1,183
723
169
Total trade and other payables
6,716
7,079
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
Unsecured
Convertible notes
Total non-current borrowings
Total borrowings
1,460
6,023
23
1,418
11,790
287
6,375
719
13,881
14,214
1,758
2,470
-
1,758
15,639
6,827
9,297
23,511
A summary of key details of the Company’s debt instruments (excluding lease liabilities) is as follows:
Denomination
currency
Face value
Coupon rate
Issue date Maturity date
Instrument
Convertible notes
Subordinated bonds
Material transactions
NZD
USD
$m
$6.4m
$3.95m
%
8%
10%
Per note
conversion
# shares
1/02/2017
1/02/2017
1/02/2021
1/02/2021
26,667
n/a
During the year, 626 of the July 2016 issue of convertible notes were converted to shares on the maturity of the notes at the option of the
note holder, at $1,150 per note and 2.53¢ per share (June 2019: 2,857 notes). 500 of the February 2017 convertible notes issue (face value
$0.6m) were converted to shares at the election of the note holder, at $1,150 per note and 4.3125¢ per share (June 2019: 1,400 notes).
The subordinated bonds were partially repaid during the year, with USD $3.95m principal and associated accrued interest paid. The
maturity on the subordinated bonds was also extended by one year, agreed to by all bond holders.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 65
25
Notes to the financial statements
For the year ended 30 June 2020
15. Financial liabilities continued
(b) Borrowings continued
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.
Convertible notes
Conversion
The convertible notes 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, with 60 days’ notice to bondholders required.
Ranking
The bonds rank equally with existing and future bonds and without priority or preference amongst themselves. There is a general
security deed in favour of bond holders, with certain asset and security exclusions.
Covenant breach
There was a technical breach to the bond terms during the year, in the form of distributions made to shareholders without prior written
consent of the majority of the bond holders. The Company’s financial results are also in breach of the financial covenants under the bond
terms. This means a majority of bond holders could elect these bonds to be repaid before the maturity date.
(c) Deferred consideration
Current
Acquisition of subsidiary
Non-current
Acquisition of subsidiary
Total deferred consideration
Opening balance
Unwinding of discount
Fair value adjustment – Canterbury Coal and New Brighton
Recognition of Buller coal project performance payment
Accrued interest on Buller coal project
Consideration paid during the year
Closing balance
2020
$’000
2019
$’000
74,361
1,035
4,956
79,317
6,809
785
(561)
62,247
10,983
5,774
6,809
7,608
623
(41)
-
-
(946)
(1,381)
79,317
6,809
66 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
26
Notes to the financial statements
For the year ended 30 June 2020
15. Financial liabilities continued
(c) Deferred consideration continued
Buller Coal project
BRL acquired Buller Coal Limited (formerly L&M Coal Limited) (“Buller Coal”) from L&M Coal Holdings Limited (“L&M”) in November
2010. The sale and purchase agreement between BRL and L&M dated 10 June 2010 (“SPA”), which primarily concerned the purchase of
the Escarpment mine through the acquisition of Buller Coal, contained an element of deferred consideration. The deferred consideration
comprised cash consideration and/or royalties on coal sold and the potential 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 area, the second payable upon 1 million tonnes of coal being shipped from the Buller Coal
project area or where a change in control of Bathurst is deemed to have occurred (refer to note 23 (c) for further information).
On 23 December 2016, BRL announced that L&M had filed legal proceedings in the High Court of New Zealand in relation to an alleged
breach of the SPA arising from a failure to pay the first USD $40m performance payment, which the High Court of New Zealand held to
be payable. After pursuing this matter through the Court of Appeal of New Zealand, on 24 April 2020, the Court of Appeal upheld the
High Court’s judgment. BRL has been granted leave to appeal to the Supreme Court of New Zealand and this matter is now set to be
heard by the Supreme Court on 8 and 9 October 2020.
As BRL’s success at the Supreme Court cannot be reliably confirmed to be more likely than not, a liability has been recognised regarding
L&M’s claim for the first performance payment. The liability accrued reflects the amount noted in the SPA pertaining to the first
performance payment of USD $40m, plus accrued interest based on the rate set by the High Court. Avenues being pursued to fund the
payment are described in note 1. Bathurst has and will continue to remit royalty payments to L&M on all Escarpment coal sold as
required by the Royalty Deed between the parties and this includes ongoing sales from stockpiles.
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 for the Canterbury mine 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
2020
2019
Increase
in estimate
$’m
Decrease
in estimate
$’m
Increase
in estimate
$’m
Decrease
in estimate
$’m
0.1
(0.1)
(0.2)
0.0
0.1
0.0
(0.2)
0.0
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 based on activity at the Takitimu mine 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
2020
2019
Increase
in estimate
$’m
Decrease
in estimate
$’m
Increase
in estimate
$’m
Decrease
in estimate
$’m
0.2
(0.3)
(0.2)
(0.3)
0.2
0.3
0.4
(0.2)
(0.2)
(0.4)
0.2
0.2
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).
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 67
27
Notes to the financial statements
For the year ended 30 June 2020
15. Financial liabilities continued
(d) Fair value measurements
The fair value of the Group’s debt instruments is noted below:
Instrument
Subordinated bonds
Convertible notes
2020
2019
Fair value
$’000
Carrying value
$’000
Fair value
$’000
Carrying value
$’000
6,470
6,644
6,023
6,375
12,309
7,858
11,790
7,546
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.
68 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
28
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2020
For the year ended 30 June 2020
15. Financial liabilities continued
15. Financial liabilities continued
Accounting policy continued
Accounting policy continued
Financial liabilities at amortised cost
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
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
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.
recognised in equity as debt instruments equity component, and is not subsequently remeasured. Refer to note 17.
Fair value through profit or loss
Fair value through profit or loss
Deferred consideration is subsequently measured at fair value through profit or loss, as IFRS 9 denotes the measurement
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
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
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
statement. The portion of the fair value adjustment due to the time value of money (unwinding of discount) is recognised as
a finance cost.
a finance cost.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
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.
liability for at least 12 months after the reporting period.
Derecognition
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
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 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
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
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
statement of profit or loss.
statement of profit or loss.
Fair value
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
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
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.
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
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
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
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
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.
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
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:
to valuation techniques used to measure the financial assets and financial liabilities which are carried at fair value:
a)
a)
b)
b)
c)
c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
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
prices) or indirectly (derived from prices) (level 2), and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
(level 3).
The Group’s only financial asset or liability measured at fair value is deferred consideration which is valued at a fair value
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.
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
Key judgements and estimates
In valuing the deferred consideration payable under business acquisitions management uses estimates and assumptions.
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
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
consideration are reviewed at each balance date and updated based on best available estimates and assumptions at that
time.
time.
Bathurst Resources Limited | Financial statements
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 69
29
29
Notes to the financial statements
For the year ended 30 June 2020
16. Rehabilitation provisions
Current
Non-current
Total provisions
Rehabilitation provision movement:
Opening balance
Change recognised in the mining and property asset
Unwinding of discount
Movement in Crown indemnity on acid mine drainage for Sullivan permit
Movement in provision net of expenditure incurred
Closing balance
2020
$’000
1,145
4,721
5,866
5,675
(15)
72
211
(77)
2019
$’000
1,328
4,347
5,675
5,928
(930)
365
20
292
5,866
5,675
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 obligation to rehabilitate arises at the commencement of the mining project; at this point a provision is recognised as a
liability with a corresponding asset 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 with a
corresponding change in the cost of the associated 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 amount of the provision relating to rehabilitation of environmental disturbance caused by on-going production and
extraction activities is recognised in the income statement as incurred.
The net present value of the provision is calculated using an appropriate discount rate, based on management’s best
estimate of future costs of rehabilitation. 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.
70 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
30
Notes to the financial statements
For the year ended 30 June 2020
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
Cancellation of shares from buy-backs
Closing balance
Note
2020
Number
of shares
’000
2019
Number
of shares
’000
1,665,177
1,513,164
41,788
167,198
18
2,555
16,131
-
(31,316)
1,709,520
1,665,177
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.
Dividends
BRL paid a dividend to its shareholders on the 23 October 2019, relating to the 30 June 2019 financial reporting period. The rate per
share was AU 0.3¢ and came to a total cost of NZD $5.5m.
Convertible notes conversions
During the year, 626 of the July 2016 issue of convertible notes were converted to shares on the maturity of the notes at the option of the
note holder, at $1,150 per note and 2.53¢ per share (June 2019: 2,857 notes). 500 of the February 2017 convertible notes issue (face value
$0.6m) were converted to shares at the election of the note holder, at $1,150 per note and 4.3125¢ per share (June 2019: 1,400 notes).
(b) Contributed equity
Opening balance
Issue of shares from conversion of convertible notes
Issue of shares from vesting of performance rights
Share buy-backs
Closing balance
$’000
$’000
286,277
263,179
6,486
25,780
344
1,543
-
(4,225)
293,107
286,277
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
Transfer to contributed equity on conversion of convertible notes
Closing balance
22,824
43,788
(5,202)
(20,964)
17,622
22,824
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 71
31
Notes to the financial statements
For the year ended 30 June 2020
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
2020
$’000
357
(344)
1,292
2019
$’000
293
(70)
(513)
(32,760)
(32,760)
(31,455)
(33,050)
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.
72 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
32
Notes to the financial statements
For the year ended 30 June 2020
18. Reserves continued
Details on share-based payments
Grant date
Vesting date
Director performance rights
Opening
balance
000s
Issued
Vested
000s
000s
Closing
balance
000s
December 2018
31 December 2019
2,555
LTIP performance rights 2018
December 2018
15 October 2021
4,591
-
-
LTIP performance rights 2019
January 2020
15 October 2022
-
7,146
4,840
4,840
(2,555)
-
-
-
(2,555)
4,591
4,840
9,431
The director performance rights were converted to shares for nil consideration on the 17 January 2020, with the closing market rate of
BRL shares on this date at AU 0.115¢ per share.
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 were converted into fully paid ordinary shares on a 1:1 basis. Vesting was dependent on the
holders remaining in employment until the vesting date.
Long term incentive plan (“LTIP”) performance rights 2018 and 2019
LTIP performance rights were issued to executive directors as part of the LTIP which was approved at the 2018 AGM. These rights were
issued as an incentive for the future performance. Rights granted to directors were approved at the 2018 AGM and 2019 AGM
respectively.
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 for the 2018 issue, 15 October 2022 for the 2019 issue. The Company also
has to achieve 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 for the 2018 issue; 1 July 2019 to and including 30 June 2022 for the 2019 issue.
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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 73
33
Notes to the financial statements
For the year ended 30 June 2020
19. Earnings per share
(a) Earnings per share (“EPS”)
Basic EPS
Diluted EPS
(b) Reconciliation of earnings used in calculation
(Loss)/earnings used to calculate basic EPS – net profit after tax
Interest expense on convertible notes
(Loss)/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
2020
Cents
(2.78)
(2.78)
2019
Cents
2.83
2.57
$’000
$’000
(47,426)
44,960
-
926
(47,426)
45,886
Number
shares
000s
Number
shares
000s
1,704,839
1,587,049
-
198,267
1,704,839
1,785,316
At 30 June 2020, basic and diluted EPS were the same as potential ordinary shares from the convertible notes and performance rights
were anti-dilutive.
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.
74 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
34
Notes to the financial statements
For the year ended 30 June 2020
20. Reconciliation of profit to operating cash flows
(Loss)/profit before income tax
Dividend received from BT Mining
Non-cash items:
Depreciation and amortisation
Share-based payments
Share of joint venture equity share of profit
Movement on rehabilitation provision & discount unwind
Non-operating
Movement on deferred consideration & discount unwind
Interest on deferred consideration
Interest on debt instruments and finance leases
Other
Unrealised FX
Bad debts/impairments
Loss/(gain) on sale of PPE
Movement in working capital
2020
$’000
2019
$’000
(47,426)
44,960
13,000
19,500
7,088
6,909
408
764
(30,408)
(45,300)
628
563
62,476
10,983
582
-
2,095
2,096
228
716
325
13
4
146
13
-
(3)
67
Cash flow from operating activities
20,130
30,297
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 75
35
Notes to the financial statements
For the year ended 30 June 2020
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 assesses potential foreign currency exposures by assessing the impact of movement in the FX rate on profit, as follows:
Liability
Subordinated bonds
Face value
USD $3.95m
USD deferred consideration
USD $40m
2020
+3%
$’000
179
2,133
2019
+3%
$’000
344
-
2020
-3%
$’000
(190)
(2,265)
2019
-3%
$’000
(365)
-
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 2020. 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.
76 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
36
Notes to the financial statements
For the year ended 30 June 2020
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 2020
Trade and other payables
Borrowings
Leases
Deferred consideration
Total
30 June 2019
Trade and other payables
Borrowings
Leases
Deferred consideration
Total
Less than
6 months
6 - 12
months
Between
1 – 2 years
Between
2 – 5 years
Over 5
years
$’000
6,716
291
977
598
8,582
7,079
854
1,332
503
9,768
$’000
$’000
$’000
$’000
-
13,358
977
73,828
88,163
-
12,561
1,077
503
14,141
-
-
1,017
1,203
2,220
-
6,745
1,207
952
8,904
-
-
1,122
3,735
4,857
-
-
943
3,026
3,969
-
-
-
3,029
3,029
-
-
-
4,282
4,282
Total
contractual
flows
$’000
6,716
13,649
4,093
82,393
106,851
7,079
20,160
4,559
9,266
41,064
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.
Included in deferred consideration is the amount owing to L&M Coal Holdings Limited which is denominated in USD. The cashflows
represented above were translated at the USD:NZD exchange rate at 30 June 2020; actual variances may occur from changes in the
realised exchange rate. The above representation also assumes payment of balances owing at 30 June 2020; any additional interest
accrued will be in addition to that noted above.
Total contractual cash flows on 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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 77
37
Notes to the financial statements
For the year ended 30 June 2020
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
2020
$’000
2019
$’000
4,495
20,005
4,193
4,012
117
873
4,030
4,018
139
371
13,690
28,563
6,716
15,639
7,079
23,511
79,317
6,809
101,672
37,399
22. Key management personnel compensation
Key management personnel are the senior leadership team and directors (executive and non-executive) of the Group.
Key management personnel compensation
30 June 2020
Management
Non-executive directors
Total
30 June 2019
Management
Non-executive directors
Total
Short-term
benefits
$’000
Share-based
payments
$’000
2,965
214
3,179
2,387
184
2,571
374
34
408
676
88
764
Total
$’000
3,339
248
3,587
3,063
272
3,335
78 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
38
Notes to the financial statements
For the year ended 30 June 2020
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 (2019: nil).
(b) 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.
(c) Contingent liabilities
On 4 May 2020 BRL announced that L&M had given BRL notice that L&M intended to pursue further legal action under the terms of the
SPA. L&M asserted in its notice of request for arbitration that its entitlement to the second performance payment of USD $40m arises
because there has been a change in control in Bathurst, arising from an aggregation of current and historical shareholders acting
together as undisclosed associates, and that this is the equivalent to a third party acquiring more than 50 percent of BRL’s shares. And as
a second assertion that a grouping of shareholders through a concerted course of action has acquired effective control of BRL and
therefore has the ability to control the composition of the board of Bathurst New Zealand Ltd.
The Board and its financial and legal advisors have reviewed the current and historical shareholdings, considered the allegations of
association, and consider both aspects of the notice to be without merit.
Based on legal advice received, the directors believe that it is more than likely that this second claim by L&M would be unsuccessful.
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.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 79
39
Additional information
For the year ended 30 June 2020
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.
Consolidated income statement
Revenue from contracts with customers
Realised FX and coal price hedging
Less: cost of sales
Gross profit
Other income
Equity accounted profit
Depreciation
Administrative and other expenses
Fair value on deferred consideration
(Loss)/gain on disposal of fixed assets
Impairment losses
Operating (loss)/profit before tax
Fair value movement on derivatives
Finance cost
Finance income
(Loss)/profit before income tax
Income tax expense
(Loss)/profit after tax
2020
$’000
2019
$’000
225,615
290,420
7,061
(5,303)
(155,101)
(177,120)
77,575
107,997
1,072
311
254
-
(17,783)
(9,838)
(19,672)
(19,180)
(60,045)
(6,584)
(13)
(502)
3
-
(19,057)
72,652
-
(2,235)
(20,519)
(5,704)
142
454
(39,434)
65,167
(7,992)
(20,207)
(47,426)
44,960
80 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
40
Additional information
For the year ended 30 June 2020
Consolidated balance sheet
Cash and cash equivalents
Restricted short-term deposits
Trade and other receivables
Crown indemnity
Inventories
New Zealand emission units
Derivative assets
Total current assets
Property, plant and equipment (“PPE”)
Mining assets
Crown indemnity
Interest in joint ventures
Deferred tax asset
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
2020
$’000
2019
$’000
20,373
34,489
5,579
4,030
27,159
34,405
3,007
27,205
1,769
1,994
-
22,812
3,362
-
87,086
99,098
87,869
64,673
75,467
57,058
37,555
35,466
16,301
10,105
4,432
612
1,327
621
222,236
169,250
309,322
268,348
26,426
24,534
18,645
24,821
-
77,276
3,747
16,181
16,145
513
9,441
5,519
150,915
72,333
25,346
13,766
7,318
14,098
58,824
51,824
91,488
79,688
242,403
152,021
66,919
116,327
293,107
286,277
17,622
22,824
(31,455)
(33,050)
(212,355)
(159,724)
66,919
116,327
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 81
41
Additional information
For the year ended 30 June 2020
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
Investment in NWP
Other
Net outflow from investing activities
Cash flows from financing activities
Drawdown on leases
Repayment of leases
Interest on leases
Interest on debt instruments
Debt instrument repayment
Drawdown on borrowings
Interest on borrowings
Dividend paid
Interest received
Other finance costs
Share buy-backs
Net outflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Opening cash and cash equivalents including restricted short-term deposits
Closing cash and cash equivalents
2020
$’000
2019
$’000
240,696
286,293
(164,620)
(178,992)
(9,304)
(16,597)
66,772
90,704
(1,620)
(703)
(29,686)
(28,517)
(14,410)
(30,046)
-
186
(10,849)
(9,863)
(6,146)
(10,105)
(178)
22
(62,889)
(79,026)
4,335
6,955
(8,584)
(2,670)
(1,712)
(697)
(2,395)
(2,138)
(6,371)
4,764
(672)
(5,520)
177
(472)
-
-
-
-
427
(84)
-
(4,225)
(16,450)
(2,432)
(12,567)
38,519
9,246
29,273
25,952
38,519
82 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
42
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 43 to 79:
i.
ii.
present fairly in all material respects the consolidated
financial position as at 30 June 2020 and its financial
performance and cash flows for the year ended on that
date; and
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 2020;
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 Company and Group in accordance with Professional and Ethical Standard 1 International Code of Ethics for
Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (including International Independence Standards) (“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.
Our firm has also provided other services to the Group in relation to agreed upon procedures services required under a Deed of Royalty.
Subject to certain restrictions, partners and employees of our firm may also deal with the Group on normal terms within the ordinary
course of trading activities of the business of the Group. These matters have not impaired our independence as auditor of the Group. The
firm has no other relationship with, or interest in, the Group.
Material uncertainty related to going concern
We draw attention to note 1 in the consolidated financial statements, which indicates that the Group’s current liabilities exceed its current
assets by $81 million. As stated in note 1, the working capital position along with other matters, indicate that a material uncertainty exists
that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this
matter.
Emphasis of matter – contingent liabilities
We draw attention to note 23(c) to the consolidated financial statements which discloses that L&M Coal Holdings Limited has given
notice to the Company that it intends to pursue further legal action under the terms of the Buller Coal project sale and purchase
agreement.
No liability has been recognised as at 30 June 2020 based on legal advice that it is more likely than not that the Company will
successfully defend any claim.
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 $1,800,000 determined with reference to a
benchmark of consolidated profit before tax. We chose the benchmark because, in our view, this is a key measure of the consolidated
performance.
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 83
43
Independent auditor’s report
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. Except for the matter described in the material uncertainty related to going concern, 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.
COVID-19
The COVID-19 pandemic has created additional risks across a number of areas of the business. All forward-looking assumptions are
inherently more uncertain during these unprecedented times. While the key audit matter "Revenue recognition" detailed below, is
unchanged from last year, the underlying audit risk has increased which impacted the extent and nature of audit evidence that we had to
gather.
The key audit matter
How the matter was addressed in our audit
The recognition of a provision for the performance payment due to L&M Coal Holdings Limited
Refer to note 15(c) of the financial
statements which discloses the provision of
$73 million recognised in respect to the
performance payment due to L&M Coal
Holdings Limited as a result of the
unfavourable judgments received in relation
to legal proceedings in the High Court and
Court of Appeal of New Zealand.
Our focus has been on ensuring that the
provision has been calculated in accordance
with the terms of the payment of the High
Court reflecting the current best estimate
and the terms of the payment are disclosed
within the financial statements.
This was an area of audit focus due to the
significance of the provision to the financial
statements as a whole.
Revenue recognition
Our audit procedures included:
•
•
•
•
Reading the Court of Appeal decision and understanding the terms of the
payment set out in the decision.
Reviewing the recent legal advice supporting the decision to appeal the Court of
Appeal decision to the Supreme Court.
Obtaining a copy of the Notice of Hearing granted to the Company by the
Supreme Court.
Recalculating the provision based on the terms of the High Court decision to
ensure that the provision recognised included the performance payment, accrued
interest based on the rate set by the High Court and was translated into New
Zealand dollars at the US dollar exchange rate at balance date.
We reviewed the disclosures in note 15(c) of the financial statements to ensure they are
consistent with the terms set out by the Court of Appeal.
Refer to note 3 of the financial statements.
Our audit procedures included:
Our focus has been on ensuring that the
treatment of each product offered under the
agreements with customers 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 revenue
recognition requires judgement as does the
process to conclude on the treatment of
each contract.
Comparing a sample of contracts to the relevant accounting standard to
determine if the correct accounting treatment has been applied.
Agreeing a sample of contracts to the Company’s existing revenue recognition
policies.
Testing a sample of revenue transactions prior and post balance date to ensure
that the revenue has been recognised in the correct period in accordance with
delivery terms.
84 Bathurst Resources Limited Annual Report 2020
Bathurst Resources Limited | Financial statements
44
Independent auditor’s report
Other information
The directors, on behalf of the Company and Group, are responsible for the other information included in the Company’s annual report.
Other information included in annual report includes the Chairman and CEO’s report, and the operational and financial review. 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.
Responsiblities of the directors for the consolidated financial statements
The directors, on behalf of the Company, 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
28 August 2020
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 85
45
86 Bathurst Resources Limited Annual Report 2020
Section 3: Shareholder information 87
Shareholder informationIn this sectionShareholder information03 Shareholder information
Additional information required by the Australian Securities Exchange current as at 30 September
2020.
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 fully paid shares
Unquoted
Financial statement
note reference
Number on issue
Number of
holders
1,709,519,431
2,934
Convertible notes 15 (b)
LTIP performance rights 2018 18
LTIP performance rights 2019 18
SLT performance rights exercisable at $nil, vesting 15 October 2022
5,600
4,590,909
4,839,734
4,603,268
8
2
2
7
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.
Restricted securities
There are no restricted securities or securities subject to voluntary escrow.
On-market share buy-backs
The 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 buy-back ended on 28 August 2020.
No shares were bought under the scheme during the year ended 30 June 2020 and up to the 28 August 2020. A total of 30.5 million
shares were bought back during the previous financial year.
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
Number
shareholders
Number ordinary
shares
Percentage of
ordinary shares
183
268
561
1,455
467
2,934
15,908
1,138,690
4,748,033
56,454,625
1,647,162,175
1,709,519,431
0.0%
0.1%
0.3%
3.3%
96.3%
100%
There were 1,138 shareholders holding less than a marketable parcel of ordinary shares as determined by the ASX (parcels valued at less
than AUD $500) based on the closing price of AU 3.9¢ per share.
Bathurst Resources Limited | Shareholder information
88 Bathurst Resources Limited Annual Report 2020
1
Shareholder information
Substantial holders
BRL’s record of substantial shareholdings (5 percent or more) based on notices from shareholders:
Republic Investment Management Pte Limited (“RIM”)
Talley’s Group Limited
Crocodile Capital
Chng Seng Chye
Number of
shares held
394,701,816
206,593,060
122,370,827
111,330,160
Percentage of
issued shares
23.1
12.1
7.2
6.5
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 BRL’s shares, as a result of an on-market share buy-back and the conversion of convertible notes held by
RIM.
Corporate governance statement
The corporate governance statement is available on BRL’s website at www.bathurst.co.nz.
Top 20 shareholders
Based on the shareholder register.
# Holding range
1
2
3
4
5
6
7
8
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
JP MORGAN NOMINEES AUSTRALIA LIMITED
BNP PARIBAS NOMINEES PTY LTD
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