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QMX Gold Corporation2022
Annual
Report
01
Year in review
Bathurst at a glance
2022 key statistics
Chairman and CEO’s report
How is our product used?
Financial and operating overview
People and culture
Sustainability
Our people
Governance
Remuneration report
02
Financial statements
6
7
8
10
12
21
24
49
50
53
Income statement
Statement of comprehensive income
Statement of financial position
59
59
60
Statement of changes in equity 61
62
63
91
94
Statement of cash flows
Notes to the financial statements
Additional information
Independent auditor’s report
03
Shareholder information
Shareholder information
100
04
Resources and reserves
Tenement schedule
Coal resources and reserves
Corporate directory
104
106
114
4 Bathurst Resources Limited Annual Report 2022
01
Year in review
In this section
Bathurst at a glance
2022 key statistics
Chairman and CEO’s report
How is our product used?
Financial and operating overview
People and culture
Sustainability
Our people
Governance
Remuneration report
Section 1: Year in review 5
Bathurst at a glance
Asia-Pacific
Asia-Pacific
Export coking
Export coking
coal sales ≈ 1.1Mt
coal sales ≈ 1.1Mt
New Zealand
New Zealand
Production ≈ 2Mt
Production ≈ 2Mt
Sales ≈ 0.9Mt
Sales ≈ 0.9Mt
“
We also have a strategic investment in a joint venture coking coal
exploration project in British Columbia, Canada that will complement
our current product offerings and customer markets in Asia-Pacific.
Indicative production and sales tonnes are those under Bathurst management.
6 Bathurst Resources Limited Annual Report 2022
2022 key statistics
Operational (BRL & 100% BT Mining)
Other (BRL & 100% BT Mining)
Financial (BRL & 65% BT Mining)
Total coal sales
2.0Mt
-10%
Employees
> 550
Coal used for steelmaking
Contributed to NZ economy
1.5Mt
-4%
Coal used for electricity
0.1Mt
-33%
$313m
35%
Scope 1 & 2 emissions
0.047
Per tonne of coal produced
t CO2e
Coal used for food production and
other local industry
0.4Mt
-20%
Overburden removal
11.7M Bcms
-40%
LTIFR
1.7
Per million hours worked
TRIFR
8.6
Per million hours worked
Revenue
$295m
39%
Revenue from domestic sales
$102m
-12%
Revenue from export sales
$193m
99%
EBITDA
$104m
76%
Net profit
$30m
-54%
Operating cash flows
$91m
110%
Chairman and
CEO’s report
Peter Westerhuis
Chairman
Richard Tacon
Chief Executive Officer
Nau mai and welcome
Resilience has been a byword in our recent annual reports, as we faced and
addressed a wide range of challenges, including the COVID pandemic. This year
we take a step further and celebrate our achievements in future-proofing the
company for further growth, including an exceptional increase in our earnings and
cash levels.
Strong earnings due to high export
coal prices
Record export coal prices resulted in a financially successful
year for us, building on the successful defence in the Supreme
Court last year against a legal action bought against us by L&M
Coal Holdings Ltd. Our improved financial position saw our
consolidated EBITDA rebound from $59.5m in FY21 to $104.4m
in FY22, and our consolidated cash increase from $20.2m to
$76.0m. These events have positively impacted our share price
and our market capitalisation on the ASX.
Valuing our people
Our people are front and centre to our business. Recognising
this we began a people focused programme of work that began
last year with the development of our values. This has led
to a number of tangible workstreams over FY22, including a
programme which steps up personal development plans for our
workforce recognising we need to not only recruit but develop
and retain our people. We are proud to include a solely people
focused section of our annual report this year which delves
further into the exciting work happening in this space, which you
can find later in this annual report.
Growth projects
Ongoing demand from domestic customers requiring quality coal
to supply their steel and energy producing needs has translated
into the commercially structured Waipuna West extension
(“WWE”) to the Rotowaro mine. Subject to resource consent and
final contract approval, the project extends Rotowaro’s life-of-
mine by a further three years based on current production levels.
It will support three of New Zealand’s largest companies, and
provide approximately 175 on-site jobs for locals in the Waikato
region, as well as additional work for contractors.
The terms of the agreement mean the project is structured as a
commercial partnership with the risks and rewards of the project
being shared, and enables access to stable domestic coal supply
to mitigate volatility and logistics risks in the international coal
market. There is no material capital outlay required as the fleet
from the current operations can be utilised.
The WWE project allows for further exploration and investment
for future supply to align with market requirements, as
New Zealand transitions away from coal used for electricity
generation and processing heat purposes.
8 Bathurst Resources Limited Annual Report 2022
How our export coal helps reduce global
CO2 emissions
Via independent verification of an analysis of our export coal, as
detailed in one of our case studies in this annual report, we have
been able to validate that overseas steelmakers using Stockton
coal avoid emitting 315,000 tonnes of CO2 per year because of
the unique properties of our coal.
This is an important result – it means that Stockton is part of
international efforts to curb greenhouse gas emissions, a strong
argument for extending the life-of-mine at this site. Which
in turn is a supporting argument for our wider Buller Plateau
growth project strategy.
Restoring the land
Being responsible caretakers of the land we mine is just as
important during the mining phase, as well as after mine closure.
Stockton provides an example of the former, in which former
waste rock dumps are being turned into natural wetlands, tarns
and indigenous shrubland of species typical of the plateau.
The Canterbury mine which closed last year has been
transformed through earthworks and restorative planting that
have rehabilitated the site into being suitable for its former uses
of pastoral farming and plantation forestry. Further detail of the
exceptional rehabilitation work done here can be found in one of
our case studies, in the sustainability section of this
annual report.
Investor confidence
As a result of responsive financial and operational management
in this and previous years, we are seeing strong investor
confidence in Bathurst, evidenced by debt holders electing to
convert their collective AUD $10m convertible bonds into shares
in May 2022. They turned down the option of a buyout at a five
percent premium in addition to the original face value of the
debt, reflecting the significant rise in our share price since these
instruments were issued back in February 2021.
Canadian coking coal project
Our interest in the Crown Mountain coking coal joint venture
project in British Columbia, Canada, is going from strength
to strength. This year saw submission of the environmental
application following extensive engagement with local
communities and indigenous peoples. All going well, first
production is expected towards the end of 2026.
New opportunities
Last year we communicated that we would consider leveraging
the strong coal mining core of our business to contemplate other
opportunities. This has developed into a more formal programme
of strategic consideration of other potential resource prospects,
both in New Zealand and offshore.
Whilst we are still in the preliminary phase, we did take the
opportunity to secure a minerals prospecting permit for a
tenement in the middle of the North Island of New Zealand
which covers a range of metals, including lithium. Whilst work
has not yet begun on this project, it could provide an additional
avenue for revenue in the future.
We are committed to continuing our search for sustainable and
rewarding opportunities in the near term.
Celebrating excellence
The announcement that we are finalists in three award
categories at the New Zealand Minerals Sector Awards 2022 is
a testament to the quality work being done across a number of
areas in our business.
We have one finalist in the ESG category, covering how the
acid mine drainage prediction and prevention work done at our
Canterbury mine has led to improved mine closure. In health
and safety, our submission detailed how our company wide
occupational hygiene knowledge capacity building programme
is improving the health and safety of our people. Last but not
least, in the innovation category we highlighted our proactive
steps taken to better support our people during widespread
community transmission of COVID.
Looking ahead
Our results over the past few years have proven that we are well
placed to manage the volatility inherent in an industry such as
ours, partly through our strategic divestment of risk through
operating in different coal sectors, but also through the skill of
our management team and the awareness that we always need
to plan ahead.
We begin the new financial year in the strongest financial
position we have ever been in and look forward to delivering
another strong set of results next year.
Section 1: Year in review 9
Peter Westerhuis Richard Tacon Chairman Chief Executive Officer
How is our product used?
Construction
in which most buildings or
structures are made from steel.
Electricity generation
when there isn't enough green
energy supply to meet demand.
Semi-conductors
are an essential component in many
electronic devices such as solar
panels and smartphones.
Transport
Carbon fibre
which has many uses including
sporting equipment.
Infrastructure
Fuelling of
local industries
that make essential
everyday consumables.
10 Bathurst Resources Limited Annual Report 2022
Financial and
operating overview
The key headline for FY22 is a long-awaited recovery in our export coal pricing, with a slight retraction
in our domestic segment.
Consolidated1 EBITDA2
$m
140
120
100
80
60
40
20
0
59.5
2021 EDIT D A
(7.8)
(8.4)
(3.2)
64.3
Export
North Island do m estic
South Island do m estic
Corporate overheads
104.4
2022 EDITDA
1Consolidated in this section means 100 percent of Bathurst and 65 percent equity share of equity accounted joint venture BT Mining
2 EBITDA is a non-GAAP measure and reflects earnings before net finance costs (including interest), tax, depreciation, amortisation, impairment,
non-cash movements on deferred consideration and rehabilitation provisions.
12 Bathurst Resources Limited Annual Report 2022
Strong financial results
Reconciliation of underlying profit to EBITDA
Non-GAAP measures reflect how management monitor the performance of Bathurst’s operations.
Underlying profit (non-GAAP)
Add back
Fair value movement on derivatives
Buller coal project deferred consideration
Impairment
Statutory profit
Add back
Equity share of joint venture results
Depreciation and amortisation
Net finance costs/(income)
Movement in deferred consideration
Fair value movement on derivatives
Impairment
Non-cash movement in rehabilitation provision
Bathurst EBITDA (non-GAAP)
Add back
Equity share of BT Mining EBITDA
Consolidated EBITDA (non-GAAP)
Export segment
Note 2022 2021
43.1
14.7
15 (c)
8
13
6
15 (c)
15 (b)
16
(12.3)
-
(0.3)
30.5
(53.2)
6.0
2.7
(0.4)
12.3
0.3
0.7
(1.1)
105.5
104.4
1.1
73.2
(22.3)
66.7
(13.2)
6.1
(14.1)
(59.4)
(1.1)
22.3
3.0
10.3
49.2
59.5
Stockton is an open cut mine producing low-ash metallurgical coal that is exported overseas for use in steelmaking. Our equity
share is 65 percent via joint venture BT Mining.
Operational metrics (100 percent basis)
Production
Sales
Overburden
Financial metrics (65 percent equity share)
EBITDA
Other metrics
Average HCC benchmark
Financial performance
Unit
kt
kt
Bcm 000
$’000
USD/t
2022
913
1,023
4,446
2021
938
1,088
3,685
83,398
19,112
374
116
The current year results primarily reflect a significant rise in the hard coking coal (“HCC”) pricing benchmark that our export
sales are priced against, from an average USD $116 per tonne FY21 to USD $374 per tonne FY22.
Section 1: Year in review
13
The pricing recovery began in June 2021 as the global economy
began to re-open after COVID related lockdowns, which
increased demand against a tight supply and limited spot cargo
availability. Pricing continued its upwards trend, reaching record
highs in Q2 and into Q3. This was driven by coal supply being
impacted in Australia due to heavy rainfall and COVID impacted
worker availability, and then further disrupted by the war in
Ukraine, against a continued robust demand due to COVID
related stimulation packages.
Partially offsetting increased revenue was an increase in the cost
base, reflecting the national and wider global trend of increasing
inflation, COVID related supply chain disruptions, labour supply
shortages, and macro market impacts from the war in Ukraine
affecting the price of fuel as well as other commodities. The
average rate of inflation increased to 7.3 percent for the 12
months to 30 June, and fuel costs more than doubled since the
beginning of the financial year. These cost pressures impacted
all of our operating segments.
Realised coal price hedging expense also partially offset the
uplift in the HCC benchmark. Actual pricing levels during FY22
significantly exceeded the market consensus of forward pricing
when the hedges were initially set. We are seeing this trend
reverse in FY23 as the export price gradually reduces to more
sustainable levels, which is reflected in a hedging derivative
asset (fair value gain) position at year end.
Despite disruptions to normal coal supply routes due to the
war in Ukraine, which saw cheap Russian coal moving into new
markets, demand for our coal was unaffected.
Operational highlights
Despite multiple flooding events and COVID related disruptions,
Stockton was able to meet its contracted sales for the year,
noting that one shipment slipped into early July due to weather
related delays outside of our control. This reflects a concerted
team effort from all parts of the operation. The high coal prices
also enabled the utilisation of contractors to recover coal on the
margin of the pit that would not have otherwise been economical
to access.
To help future proof the mine against future adverse weather
events, improvements were made to water management,
roading, and the aerial ropeway which transports coal from
the plateau down to the rail loadout facility. Works to the aerial
ropeway included replacement of one of the aerial towers, and
remediation works on one of the main structures.
The main CAPEX project was the McCabe coal fines storage
area, that will replace the A-18 fines storage facility. This is
due for completion in early FY23. Construction of a new water
treatment sump that will treat water from the Mine Creek,
Granity and Miller stream catchments is a key focus for next
year, which will result in water quality improvements in the
Ngakawau estuary.
HCC benchmark outlook
USD/tonne
Monthly USD HCC pricing3
700
600
500
400
300
200
100
0
1
2
0
2
l
i
r
p
A
1
2
0
2
e
n
u
J
1
2
0
2
g
u
A
1
2
0
2
t
c
O
1
2
0
2
c
e
D
2
2
0
2
b
e
F
2
2
0
2
l
i
r
p
A
2
2
0
2
e
n
u
J
2
2
0
2
g
u
A
2
2
0
2
t
c
O
2
2
0
2
c
e
D
3
2
0
2
b
e
F
3
2
0
2
l
i
r
p
A
3
2
0
2
e
n
u
J
3Monthly actual export pricing based on a monthly average of the S&P Global Platts Premium Low Vol daily spot pricing. Forward curve based on 3 October 2022
S&P Global Platts derivatives assessments.
Actual
Forward curve
14 Bathurst Resources Limited Annual Report 2022
After the large spike in pricing through March and April due to
the war in Ukraine alongside the already constrained supply
out of Australia due to COVID and ongoing wet weather, prices
started falling back to more sustainable levels, levelling out at
approximately USD $240 per tonne in July and August. At the
time of finalising this report pricing was averaging USD $255 per
tonne, with the 3 October 2022 S&P Global Platts Premium Hard
Coking Coal forward curve predicting pricing levels around USD
$300 per tonne through to June 2023.
Whilst pricing volatility is likely, the outlook remains positive
due to ongoing tight supply with some met coal shifting to the
buoyant thermal market, and with coal production still lagging
behind previous levels.
Key macro market factors expected to influence future
pricing are:
The permits include Escarpment, which is on care and
maintenance, allowing it to be brought back into operation when
appropriate.
A multi-criteria analysis was completed during the year which
determined what range of possible projects to take forward
for further viability assessment. This included completion of
blending options analysis, to determine the optimal blend of coal
between the different projects.
The focus for FY23 is completion of the Escarpment mine
planning to enable commencement of operations under a
favourable pricing scenario, given the site’s high strip ratio. The
advancement from desktop design to conceptual options for the
Upper Waimangaroa haul road is also to be progressed. The haul
road would connect the Denniston plateau to the infrastructure
at the Stockton mine.
• The war in the Ukraine and associated sanctions which
Stockton organic growth projects (65 percent equity share)
continue to impact the market with coal trade routes shifting
from historical destinations, with increased volumes of
Russian coal moving into India and China.
• The Chinese steel market remains relatively weak with
ongoing COVID lockdowns impacting demand. It is expected
government stimulus will help lift economic activity including
the real estate market which will drive steel demand.
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.
The project is located close to the Stockton mine, with the ability
to synergise with Stockton’s infrastructure assets which include
a coal handling and preparation plant and a rail loadout facility.
The key focus for FY22 was development of the Hope Lyons
block, which progressed well and is ahead of schedule. A small
amount of coal was won in July 2022, which will progressively
increase as development of the pit progresses.
Key project focus areas for FY23 are:
• Drilling and development of water management structures
for the development of the Rockies North pit, which is an
extension of a currently mined area. Coal is expected to be
won from Q2 of FY23 onwards.
• Development of the Cypress South pit, a new pit area. Project
focus will be on the haul road, vegetation stripping, and water
management structure, with coal winning expected in FY24.
Section 1: Year in review
15
Domestic segment
North Island domestic
North Island domestic (“NID”) consists of the Rotowaro and Maramarua mines. Both produce a low-ash, low sulphur thermal coal for local
steelmaking, energy generation, and other food and agricultural industries. Our equity share is 65 percent via joint venture BT Mining.
Operational metrics (100 percent basis)
Production
Sales
Overburden
Financial metrics (65 percent equity share)
Unit
kt
kt
Bcm 000
NID
2022
738
687
5,534
NID
2021
806
768
13,258
EBITDA
$’000
27,383
35,151
Financial performance
The decrease in EBITDA year-on-year is due to a planned
reduction in sales, and an increase in costs. Sales volumes
reduced due to a planned step down in sales to an electricity
generation customer. Costs increased due to a combination of:
• inflation driven cost increases as covered in the export
commentary;
• fuel which increased at rates similar to export;
• labour costs that increased in line with contractual CPI
adjustments and a tight labour market that necessitated
utilisation of contractors at higher rates; and
• the mines moving closer to the end of their mine life, with
costs net of capitalised stripping naturally increasing as there
is a certain level of fixed costs incurred, relevant to production
and overburden stripping volumes. Rotowaro in particular has
a high proportion of fixed costs, notably labour and repairs
and maintenance which represent approximately 60 percent
of total cash costs.
Operational highlights
There were several operational disruptors during the year,
which required a co-ordinated effort to ensure the mines could
continue to meet their sales obligations.
Wetter weather than usual was a consistent issue which
increased operational downtime. Significant rainfall in June
also contributed to an extensive slip in Maramarua’s pit, which
impacted coal supply into August. Favourable coal winning
compared to rates modelled at Rotowaro meant sufficient coal
was won despite overall reduced overburden stripping volumes.
The impact of the slip at Maramarua was reduced due to the
ability to temporarily meet Maramarua sales with Rotowaro coal.
A plan to recover the slip material is in progress and includes an
additional excavator and trucks to allow a third plant group to
move the slip material. Going forward stock on hand levels will
be doubled to increase contingency levels.
COVID related absences also had an impact, although this was
largely mitigated through effective forward planning to identify
critical roles and alternative operating schedules.
16 Bathurst Resources Limited Annual Report 2022
A key CAPEX project was the construction of a stream
diversion to allow access to coal reserve. Progress was delayed
due to COVID, and weather also impacted both operational
hours, as well as the amount of stripped material available
from other parts of the mine to be used for construction. The
project is largely back on track.
In anticipation of the approval of the Waipuna West extension
(“WWE”) at the Rotowaro mine, mine staff were retained and
utilised on other CAPEX/rehabilitation projects. An investment
was also made in training simulators to assist with the health
and safety and onboarding process in preparation for the
increased FTE required for the WWE.
Growth projects
Waipuna West extension (Rotowaro mine)
Detailed planning is well advanced to commence operations,
which will see a three-year extension (based on current
production/sales volumes) to mining operations. The coal is
destined for the same customer base as existing
Rotowaro sales.
Customer negotiations are complete, with contracts ready for
final approval, and final resource consents expected FY23.
M1 pit (Maramarua mine)
Due to the Resource Management (National Environmental
Standards for Freshwater) Regulations Act, the pit design has
been modified to preserve areas identified as inland natural
wetlands. A new resource consent application was submitted,
and iwi and stakeholder consultation is well advanced.
The project is scheduled to start in FY23 on approval of
consents, with the coal destined for the same customers as
current operations.
Rotowaro North (Rotowaro mine)
The Rotowaro North project is a potential extension project
to the current Rotowaro mine operation, located 4 kilometres
north-west of the current mine site.
The project is in the conceptual phase where we have
confirmed the resource tonnes. No major project advances
were made during the year, however mine permit maintenance
activities were completed, and we continue to assess options
for development of this project.
South Island domestic
South Island domestic (“SID”) consists of the Takitimu mine which produces a low sulphur thermal energy coal for local agricultural,
health and other food manufacturing industries.
The Canterbury mine which used to be part of SID ceased operating at the end of June 2021 and was rehabilitated during the year.
Refer to a case study on the rehabilitation works in the sustainability section of this annual report.
Operational metrics
Production
Sales
Overburden
Financial metrics
EBITDA
Unit
kt
kt
Bcm 000
SID
2022
226
248
1,751
SID
2021
303
330
2,624
$’000
9,128
17,493
Financial performance
The decrease in earnings for SID was driven by:
• The closure of the Canterbury mine. This contributed $3m EBITDA in FY21.
• Reduction in earnings from the distribution centre – net freight revenue margins were eroded from the steep increase in fuel costs,
and an increase in government levies.
There was a marginal decrease in earnings at the Takitimu mine year-on-year. Sales volumes increased slightly leading to increased
operational efficiencies which helped to offset the underlying cost input increases, as detailed in the export commentary section. The
Takitimu mine also has a much lower strip ratio and is operationally smaller than the other mines so cost increases do not impact the
mine as much as our other sites.
Operational highlights
2022 was another successful year for the Takitimu mine from an operations perspective. COVID did have an impact, however despite
this the mine’s key operational targets were largely to plan.
Progress was made on rehabilitating the historic overheight overburden area; this is due for completion early 2023.
Growth projects
New Brighton project
The New Brighton permit is located 4 kilometres west of the current Takitimu operations. Drilling was completed in August 2021.
Baseline studies and assessment of the environmental affects have been finalised ahead of submitting the resource consent
application.
Corporate
Corporate overhead costs included in the total group consolidated EBITDA increased year-on-year, $15.5m versus $12.3m. This reflects
an increase in Bathurst overhead expenses:
• Overhead salary costs increased from short term performance incentives.
• Legal fees incurred in defending Bathurst against claims brought by L&M (refer note 23 of the financial statements).
Crown Mountain, Canada - coking coal
growth project
Highlights
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 (“JAL”).
Project buy-in is over three stages (worth CAD $121.5m) to
achieve 50:50 ownership, with future investment at our sole
discretion.
Our equity share of the project is 22.1 percent. This includes 20
percent from completion of the first two funding tranches of
CAD $11.5m, and 2.1 percent from the advance of CAD $4.0m
on the final tranche in exchange for a mix of preference and
ordinary shares.
• The environmental application was submitted in May
2022. Assuming all critical path items are executed
on schedule, with funding available as required,
production is expected to commence late 2026.
• Key findings of the bankable feasibility study
released in July 2020 by JAL reaffirmed the project
as a high-quality coking coal opportunity with a
competitive operating and capital cost structure.
• Results of a yield optimisation study released in
August 2021 by JAL has confirmed the potential for
increased production and considerably improved
economic outcomes of the project.
Elk Valley, British Columbia, Canada.
18 Bathurst Resources Limited Annual Report 2022
Consolidated cash flows
g
n
i
t
a
r
e
p
O
g
n
i
t
s
e
v
n
I
g
n
i
c
n
a
n
F
i
Opening cash
EBITDA
Working capital
Canterbury rehabilitation
Corporation tax paid
Deferred consideration
Crown Mountain (environmental assessment application)
PPE net of disposals
Mining assets including capitalised stripping
Finance leases
Interest repayment on AUD convertible bonds
Borrowings repayments
Financing costs/other
Closing cash
2022
$m
20.2
104.4
(4.9)
(3.8)
(4.5)
(2.3)
(0.8)
(8.1)
(11.7)
(8.5)
(1.3)
(2.6)
(0.1)
76.0
2021
$m
26.0
59.5
1.8
-
(18.2)
(4.6)
(0.8)
(6.3)
(20.5)
(9.9)
(2.2)
(4.2)
(0.4)
20.2
Canterbury rehabilitation
Crown Mountain
The mine was closed at the end of June 2021, with rehabilitation
due to be complete Q1 FY23.
Funds paid were on a proportional project equity ownership
basis and were used to submit the environmental application.
Corporation tax paid
Mining development including capitalised stripping
FY21 tax paid in FY22. FY22 tax was paid post year end in July
2022.
Deferred consideration
Payments for the year consisted of royalties on Takitimu
mine sales, and a final payment in November relating to the
acquisition of the BT Mining assets.
Spend has decreased from the prior year comparative period
due to the Rotowaro mine’s strip ratio decreasing as the mine
moves into the mature end of its Waipuna West pit.
Borrowing repayments
The final repayment of funding received in advance from
customers for stripping activities for the Waipuna West pit
(Rotowaro mine).
People and culture
For the first time this year, we are including a section in our annual report that is
dedicated to highlighting the steps we are taking to help make us an employer of
choice, and ensure we continue to recruit, retain and reward a workforce that is
integral to the long term success of our business.
Put simply, we are our people. The following pages outline some of the recent key
people focused initiatives completed and underway.
COVID response
The wellbeing of our people continued to be our priority as we
navigated the impacts of COVID on our workforce. Since the
pandemic began, we have:
• ensured our sites had the information they needed to keep
operating;
• brought in additional measures to keep our people safe from
COVID exposure while at work;
• kept our people up-to-date, providing daily updates at our
pre-shift meetings and via email;
• provided paid time off work for people who wished to be
vaccinated; and
• we partnered with the West Coast District Health Board to
run a vaccination weekend drive in Westport, as part of our
community support.
In February 2022 as New Zealand experienced its first
widespread community transmission of COVID, we introduced
COVID leave for all employees which granted up to 10 days of
additional paid leave if our staff were required to isolate due
to the virus. This allowed our people to focus on getting well
and/or supporting their whanau. Early notification to payroll
provided ongoing financial support, as well as critical oversight
of employees affected so that we could deploy resources
and modify operations to enable as smooth continuation of
operations as possible.
As part of the COVID leave system, our people were able to
access immediate support and real-time leave advice during
isolation. We created a robust process for people returning to
work, making sure employees were fit and able to carry out
their respective duties.
Impact of COVID on our people
The chart below shows the aggregate impact of COVID across
all Bathurst and BT Mining offices and sites, per month, as a
percentage of full time employees.
The data highlights the dramatic impact COVID has had on all
our sites, since February 2022 when widespread transmission of
the virus in New Zealand began.
The challenge has been proactively met by our mine managers
and senior leadership team, who implemented mitigation
strategies aimed at reducing the risk to our people and our
business, while keeping our mines operating.
We are pleased report that to date, no sites have needed to
close due to the impact of COVID.
835 days
Of COVID leave paid out to
impacted employees
6.6 days
Average time away from
workdue to COVID
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March
April
May
June
% of total workforce
No of affected employees
3%
15
23%
128
22%
123
19%
104
12%
66
Section 1: Year in review 21
Our people strategy
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Our success is ...
Financial efficiency &
stability, & future focussed
business interests
Enhanced external
stakeholder relationships
Effective & efficient
workforce planning
Engaged, fit for
purpose workforce
Which comes through delivering to our vison
High performance culture
Future focused knowledge & skills
Employee experience focus
Which is based on managing and enchancing operational excellence through
Operational delegations &
accountability - increased
transparency of throughput
& quality
Stakeholder relationship
management - skills &
knowledge development
Brand & reputation
management - refreshed
brand & developing cultural
awareness
Leadership
Excellence
Enhanced people policies &
practices. Future focused
capabilities & resourcing
Total rewards programme
as foundation for employee
experience
And as ‘people’ are the building blocks of Bathurst, we focus on
Creating the conditions
for our workforce to be
supported by strong
leadership skills
Workforce planning - right
skills in the right place at
the right time
Culture of high performance &
accountability - more rigorous
attention to people
systems, reporting & metrics
We launched our people strategy to highlight where we can have
the greatest positive impact on our employees’ experience at
work, as well as their operational effectiveness and efficiency.
The strategy also supports our strategic objectives, recognising
that we do not have a business if we do not have our people.
The strategy has a particular focus on succession planning and
managing staff turnover. This recognises a growing shortage of
local skills and talent which was exacerbated by
New Zealand’s strict COVID related border closures. It also
recognises that issues such as sustainability, climate change and
ESG (environmental, social, and governance) continue to impact
our ability to attract new talent from our local market.
Given the recent easing of the New Zealand border controls,
we are focused more than ever on attracting much-needed
talent from offshore. We have successfully met the updated
requirement for retaining our Employer Accreditation status
with Immigration New Zealand. And we are working closely with
industry recruitment experts, having established new processes
aimed at attracting talent to fill our vacancies.
The key pillars of our people strategy focus on employee
experience, enhancing our high performance culture, and future-
focused knowledge and skills.
Our values
Be
safe
Be
a team
Be
accountable
Be
real
We established our values in 2021, and subsequently we have
started to integrate our values into our every day. Design
elements in our communications build a unique reference point
for each value, to embed them across all people-related policies,
processes and initiatives, including our development programme.
A critical part of this is bringing our people on board with us as
we do this to ensure people can relate to and live our values.
We see our values as fundamental to us achieving our company
vision, and over time, will become core to our ways of working.
My development programme
Future-focused development of our people’s skills and
knowledge is a key area of our people strategy. Among
the initiatives launched was the introduction of an online
professional development programme. This helps formalise
development conversations between staff and their managers,
and provide a pathway forward to ensure our employees are
getting the professional development they aspire to.
22 Bathurst Resources Limited Annual Report 2022
Technology as an enabler
To further promote people focused initiatives, the people and
culture team procured and developed a digital platform which
hosts many of our people-related processes. Future priorities
include:
• improving transparency across workforce management;
• mitigating critical person/role risks through ensuring
appropriate backfill and succession planning; and
• enabling better reporting to assess improvements and
success against reliable metrics.
Diversity and inclusion
We recognise the importance of ensuring our entire workforce
experiences fairness and equity. To set the stage for the future,
we recently amended our Diversity and Inclusion policy and have
developed meaningful targets which have been adopted by
the Board.
We know that diversity covers a broad range of characteristics,
and as part of our assessment we have looked at the age
demographics of our workforce, many of whom are nearing
retirement. At our Stockton mine, nearly a third of our people are
over 60. Recognising the irreplaceable knowledge these people
have, we have created flexible rosters for this demographic,
such as job sharing and part-time/casual opportunities for roles
that were historically full time so that we can better support a
gradual transition into retirement. This comes with the added
benefit that we continue to benefit from their mentoring of the
less experienced members of the team.
We also recognise and appreciate that given the diverse nature
of our workforce, a standard working day doesn’t work for
everybody. We allow greater flexibility where the role allows,
including alternative work locations and hours to be agreed with
their managers. This in turn leads to a more engaged workforce
and broadens the scope of the talent pool we can recruit from,
which is critical given the tight labour market. We are really
pleased to report a four percent increase in our female workforce
over the past year, which tells us our flexible approach to working
is making a positive impact.
We also recognise that inclusion is just as important as diversity.
Our updated policy that was adopted by the Board last year
incorporates the importance of inclusion, which is defined as
“creating a work environment in which all individual differences
are valued, and people are treated fairly and respectfully, have
equal access to opportunities and resources, and can contribute
fully to our success”.
Sustainability
Environmental, social and corporate governance is integral to being a responsible
business operator, and is core to our operations.
Our people are fundamental to our success as a company, a
strong theme in this annual report. Also prominent is further
improving the resilience of our business, levering off record high
export coal prices. This is translating into operating mine life
extensions and active pursuit of other resource opportunities.
Our focus on climate change action continues.
People and culture
This year we have introduced a new section into our annual
report titled people and culture. This highlights an in-
progress work programme focused on making us a sought-
after employer. It covers our newly refreshed set of values, a
development programme for salaried staff, more flexible working
arrangements, and new measures to support our people affected
by COVID. A case study on field leadership is also included in
this annual report, that underscores the importance we place on
empowering our people to manage their safety.
At the former operational Canterbury mine, we have returned
the area to pastoral farming and plantation forestry. Refer to our
case study for a more in depth look at the world class work done
to restore the land to its pre-mined condition.
Lower emissions coal
Worldwide, more resources will be needed to produce the
materials required for a global transition to a lower-emissions
market. And for now, coal is an essential part of this journey as it
is an integral input into steelmaking. We add value by supplying
overseas customers with premium-quality coal that has been
independently verified as reducing CO2 emissions from the
steelmaking process. Refer to our case study “Our coal helps
reduce global CO2 emissions” for more detail.
Supporting our people to support our
communities
The once in 100-year flooding event in the township where
the majority of our Stockton mine employees live in July last
year really bought home to us how much the wellbeing of
the communities we operate in is indistinguishable from the
wellbeing of our people and our operations.
Ceasing operations at the mine so that our people could direct
their efforts to the response and recovery effort was a critical
part of showing our appreciation for the local West Coast
community that we operate in.
Refer to our case study for more information on how our people’s
efforts were an essential contribution to the overall response
and flood recovery effort.
COVID workplace response
As widespread COVID community transmission emerged for
the first time in New Zealand in early 2022, at its peak we had
23 percent of our total workforce non-operational. We were
able to meet all coal supply commitments to customers despite
the COVID related absenteeism, and whilst operating under
our enhanced COVID related health and safety measures. This
was possible due to an early assessment that identified critical
roles with multiple backups, resulting in minimal interruption to
delivery of critical tasks, for which we greatly thank our people
and their support of one another.
The focus on coal winning has however had the consequence
of rationalising some of our site rehabilitation programmes. We
monitored the health and wellbeing of people returning to work
to manage any instances of fatigue, or other health issues. The
success of our COVID related operating measures is shown
by very limited instances of COVID transmission on-site. We
also provided an extra ten days of COVID-specific annual leave
entitlement for employees to encourage our staff to remain
home if unwell.
Sustainable business growth
The recently negotiated extention to the Rotowaro mine, which
is on track for resource consent and final contract approval,
has been predicated under a strategic principal that the risk
of the project is shared between us and our customers. We
adopt this approach for any new mine areas that we enter into
in New Zealand that do not solely supply customers in the
steelmaking market. This reflects balancing our commitment to
providing energy security to our processing heat customers as
they gradually switch to alternative energy sources, against a
sustainable growth business model that provides stability for our
stakeholders.
Leveraging off our strong coal business, we are also actively
exploring opportunities in other minerals, such as lithium, used in
the batteries of electric vehicles, and bauxite, used in aluminium.
Returning land to nature
Mining inevitably disturbs land, and with that comes an
obligation to return the land to its former use. We need to ensure
that the recontouring of land and replanting deliver the ground
cover we committed to achieving.
At the Stockton mine, a 17-year-old engineered landform is now
covered in natural wetlands, tarns, and indigenous shrubland,
including mosses and lichens. This is part of a long-term plan of
leaving a net positive legacy at all of our sites.
Section 1: Year in review 25
CASE STUDY
EMISSIONS SAVINGS
Our coal helps reduce
global CO2 emissions
Overseas steelmakers using Stockton coal avoid emitting 315,000 tonnes of
CO2 per year because of the unique properties of our coal, a new independently
verified study shows.
So for now, coal remains an essential input into the steel
industry. The International Energy Agency projects demand for
steel to increase by a third by 2050¹. And we play our part in
supplying coal that is suitable for this purpose in New Zealand,
and to our overseas customers, who can now quantify their
emissions reductions from using our coal.
Steel is also a major requirement in providing alternative
technology solutions to reduce CO2 emissions. For example, a
five-megawatt wind turbine requires on average 900 tonnes
of steel, and the average electric vehicle contains 0.9 tonnes
of steel. Further, finished steel is infinitely recyclable via the
Electric Arc Furnace with few extra emissions, meaning it is a
green product over its lifetime.
Lowering coal related emissions in
New Zealand
New Zealand consumes annually around 2.5Mt of coal, primarily
in steelmaking, electricity generation, and food processing and
other primary production-related industries. The demand for
coal for steelmaking is expected to continue in the longer term,
and electricity generation in the near term to supplement
renewable energy.
Whilst other users of coal are examining how to switch to lower-
emissions energy alternatives, we believe there is work to do
to ensure a robust solution that achieves emission reductions.
For example, our studies show substituting wood waste that
has 50 percent moisture will emit ~40 percent more CO2 than
combusting coal. Available research indicates these additional
emissions may take up to 30 years to be captured through
regrowth of trees. Further, New Zealand may simply lack the
biomass in some regions to substitute coal.
Given the continued need for coal, the question must be, is
it preferable to mine for essential coal requirements in New
Zealand, or to import the coal?
It is well established that the high vitrinite and low ash
properties in our Stockton coal offer fuel savings to our
customers when compared with other seaborne coking coals,
and therefore lower carbon dioxide emissions per unit of steel
they produce. The question up to now has been, by how much?
Over the last year we have been able to quantify the emission
savings by using one of our iron and steel manufacturing
customers in India as a case study. They opt to blend our coal
with Australian and Indian coals, precisely because our low ash
and high vitrinite content reduces their fuel use, the rate of slag
formation in the furnace, and it also improves the coke strength
in the furnace. In reducing fuel use, they also save on costs.
Our analysis confirmed that at this single plant alone, the
benefits of using our coal amounts to an annual reduction in CO2
emissions of 145,000 tonnes (“tCO2”). This reflects a reduction in
the blast furnace fuel rate of 14.24 kilograms of coal per tonne of
hot metal produced, at an annual plant production of 3.6 million
tonnes (“Mt”) of hot metal.
We then extrapolated this result to our total export coal business
of around 1.1Mt per year, which equates to an average 315,000
tCO2 emissions avoided each year. Importantly, we obtained
independent verification of these results from SGS Laboratories
Limited. The report states “the derived emissions reductions are
fairly calculated for the Alpine blend”, which refers to our export
coal specification.
What this means for climate change action
The global steel industry contributes an estimated 7 to 11
percent of world greenhouse gas emissions. Several alternative,
lower-emissions technologies are being investigated, including
replacing coal with hydrogen to reduce iron ore. While the early
signs show some promise, the technology is many years away
from being able to be used commercially and at scale. This
also reflects that even when the alternatives become readily
available, it will take decades to convert the world’s existing iron
and steel plants to the new technologies.
¹ https://www.iea.org/reports/iron-and-steel-technology-roadmap
26 Bathurst Resources Limited Annual Report 2022
Let’s look at our Southland domestic mine as an example, that
supplies to food processing and other primary production-related
industries. We have modelled the impacts of extending our
Southland operations which would allow us to supply coal from
the proposed New Brighton extension. The benefits of supplying
locally are:
• The new pit would deliver a slight increase in coal rank and
lower total moisture compared with the current coal, delivering
an expected small improvement in combustion efficiency for
users, and a consequent reduction in CO2 emissions.
• The alternative would be to import similar rank coal from
Indonesia. CO2 emissions would increase, partly due to reduced
combustion efficiency because the imported coal would likely
have a higher moisture content, and also from transport
emissions of approximately 54kg per tonne of coal.
Takitimu currently produces around 220,000 tonnes of coal
per year, so using our coal instead of replacing it with imported
product would amount to approximately 17,000 tCO2 emissions
savings per year.
Concluding remarks
Our aim is to support a just transition for coal for non-
steelmaking use in New Zealand. We achieve that by continuing
to supply our customers with coal for as long as they need it.
Importantly, acknowledging the demand for coal is not going to
disappear, there are two key advantages to continuing to allow
coal mining in New Zealand:
• our export coal reduces emissions for our overseas
steelmaking customers; and
• our domestic coal reduces transport related emissions, as
otherwise coal or other non-renewable energy sources are
imported from overseas.
Section 1: Year in review 27
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.
The health, safety and wellbeing of our people and the
communities in which we live and work is paramount to the
delivery of safe, sustainable production.
During FY22 we invested heavily into health, safety and
wellbeing initiatives, including the:
• introduction of the field leadership programme;
• development of a robust COVID Pandemic Response and
updated COVID Business Continuity Plan;
• embedment of our Occupational Health and Hygiene
monitoring programme;
• Health Management Agreements for management of worker’s
acute or chronic health conditions; and
• implementation of the Bathurst Contractor Management
Standard and associated processes.
The success of these and other initiatives are shown in the
improvement of the following health and safety statistics:
• TRIFR (total recordable injury frequency rate) = 8.6 per million
hours worked (FY21: 9.3)
• LTIFR (lost time injury frequency rate) = 1.7 per million hours
worked (FY21: 6.2).
Renewed focus on safety
Over the last two years we reported a consistent and concerning
rise in our TRIFR and LTIFR.
Ensuring our people are safe is crucial, and we committed to
reversing this trend. One of the strategies that we developed
was our field leadership programme. The programme is a leader-
led initiative designed to be a key driver of improvement in
areas of safety culture, and the health and safety of our people.
It involves engagement with and coaching of workers in the
identification of at-risk conditions and/or behaviours which have
the potential to result in a serious injury or accident.
Since the introduction of the programme, we have seen a
significant improvement of both our TRIFR and LTIFR. Through
analysis of early data, we are encouraged that the programme
has directly contributed to this result. This has been achieved
by putting our leaders out in the field with our workers and
having those necessary safety conversations on a daily basis.
For a more detailed write-up on the programme, refer to our case
study on field leadership.
COVID pandemic response
FY22 provided some unique health and safety challenges, with
the ongoing impacts of the COVID pandemic being foremost.
The challenges included travel restrictions imposed by the
New Zealand government, availability of personal protective
equipment and test kits, access to occupational medicals, and
personal health impacts to all our workers.
Despite the challenges that ensued, we saw an opportunity to
proactively support our people with up-to-date information
and support tools for use both at home and at work. This was
achieved through strong leadership, and actively planning and
preparing for any foreseeable health or economic impacts to our
workers. Our strategy required ongoing review in consultation
with our operational sites for how we could best support our
people through potentially unsettling times.
In Q4, the effects of COVID on worker absenteeism started to
become evident. By the end of June 2022, 45% of our workers
had contracted the virus.
28 Bathurst Resources Limited Annual Report 2022
The programme has now delivered sufficient data for us to
do a statistical analysis of worker exposure to airborne dust
and fumes, noise, and vibration, and how we manage those
occupational hazards such as respirable crystalline silica, and
the risk from worker exposure to it of silicosis.
Moving into the third year of our journey on occupational
hygiene, we will be revising our similar exposure groups and
carrying out further risk assessments at our operational sites
including identifying additional controls and reviewing their
effectiveness.
Health Management Agreements
Health Management Agreements (“HMA”) were first introduced
to assist workers, their supervisors, and the site health team in
the proactive management of a worker’s injury (non-work related
or work related) and/or health related condition.
The HMA aims to ensure that all parties are aware of any
conditions or restrictions related to the worker’s health, and
what actions, if any must be taken to ensure that the worker
is provided with a safe working environment in terms of duties
and support. In addition, it is agreed that we are provided with
all relevant medical or health information, which in turn informs
decisions about a worker’s duties during the period of time
under which they are working within the HMA.
Compliance for each site to have up to date HMAs for all
identified workers is tracked through the monthly reporting
processes.
Contractor management
Our Contractor Management Standard and associated process
requirements was updated to manage the safety, health and
environmental risks associated with contractors throughout the
lifecycle of the contracted activities for which they are engaged
at any of our operational sites.
Training for senior leaders, contract managers and task
coordinators for implementation occurred in Q2, with sites
working throughout Q3 and Q4 to ensure that all contractors are
captured within the Contractor Management System (“CMS”).
Initial implementation audits for each site’s CMS will be
conducted in FY23 with ongoing regularity to ensure compliance
with the revised standard.
In response we developed:
• A robust communication process to ensure that workers were
provided with up to date, current information about COVID,
including the government and our response though various
alert levels.
• A strategy for those workers who identified as having
underlying health issues or who may have been more
vulnerable to health impacts should they contract COVID, and
who may need to work remotely or isolated from site during
periods of higher health alert levels. These workers were
identified through our employee medical assessment process.
• Protocols for separation and distancing, personal hygiene
and infrastructure/vehicle cleaning regimes based on risk
management processes and medical advice.
• Support tools (checklists, questionnaires, information sheets,
etc) covering site access, personal health questionnaires,
cleaning protocols, working from home, preparing for COVID
at home.
• Protocols for testing facilities, testing staff and COVID
coordinators at all our operational sites.
• A simplistic reporting platform where workers could notify
in real time that they had been impacted by COVID. This
would trigger actions by our site support network of COVID
coordinators to better assist the worker to manage their
wellbeing during this time of personal uncertainty.
• Introduction of special COVID paid leave.
• A structured return to work and self-assessment process to
ensure that the worker’s health and wellbeing were foremost
in all decision making in their return to normal duties.
In addition, we bulk purchased test kits to ensure availability
across all our operational sites and business offices in a time of
worldwide shortage of supply.
Planning work completed in Q1 to identify critical roles and
additional back up resources, resulted in minimal disruption to
delivery of critical tasks. Our workers must be commended for
their flexible approach to supporting critical tasks completion
and of their support of each other during this period.
The result has been a transparent, effective response in a very
dynamic environment.
Occupational hygiene
After an innovative revision of the scope and reporting
requirements for our occupational hygiene programme in 2021,
further monitoring has continued, providing us with important
information on the effectiveness of managing worker health
exposure hazards. All operating sites participated with individual
investigations completed where a result indicated an exposure
exceedance to a worker.
Section 1: Year in review 29
CASE STUDY
PROACTIVE HEALTH AND SAFETY
Field leadership
programme
"We all want to go home safely every day, we owe that to ourselves and our families".
What is the field leadership programme?
Our journey
The field leadership programme is a leader-led initiative
designed to drive improvement in the areas of safety culture,
overall health and safety, and positive proactive environmental
outcomes.
We started our field leadership journey in September 2020 when
we presented the concept to our directors for their approval. By
30 June 2022 we had completed 12 months of tracking the
roll-out of the field leadership programme at sites.
Specifically, it:
• involves engagement with and coaching of workers in the
There are four tools that managers can use in their interactions
with staff:
identification of at-risk conditions and/or behaviours which
have the potential to result in a serious injury or accident; and
• provides tools which support discussions, with the intent of
identifying at risk conditions and behaviours which have the
potential to result in injury or environmental damage before
an event occurs.
For us, it’s about having those critical safety conversations,
reinforcing safe practices and behaviours, and maintaining a
healthy, safe, and environmental focus in everything that we do.
Why is it important?
Understanding the challenges we face in our daily work will
help us to improve systems, actively coach each other and
demonstrate genuine care and interest in everyone’s welfare.
Similar programmes are used all around the world and have been
proven to support major improvements in workplace culture,
improve health and safety, and environment outcomes through
visible, engaged leaders.
We recognise the importance of visible, ‘felt’ leadership and how
it provides many benefits.
• Safe work observations are face to face discussions between
an observer and the workers in the area. They are generic
and suited to any engagement for any task being performed.
These are conducted in the field.
• Targeted task observations are undertaken on targeted
task. They are designed to work with team members to
improve work design and execution of specific tasks to
ensure controls are understood and are effective. These are
conducted in the field with some desktop verification.
• Material risk critical control verifications are a verification
process for the management of critical controls for our
material risks. These are conducted in the field with some
desktop verification with the intent to verify the effectiveness
of our fatal risk controls.
• Principal hazard critical control verifications are a
verification process for the management of critical controls
for Principal Hazard Management Plans and Principal Control
Plans with the intent of verifying the effectiveness of the
controls to prevent our multiple fatality risks.
30 Bathurst Resources Limited Annual Report 2022
The results
We have commenced tracking field leadership activities across
all sites. The implementation results were impacted significantly
by COVID related workplace restrictions that limited people
interactions and movement, and extreme weather events
experienced by all our operational sites. As a result, the effects
of the introduction of the programme on our health and safety
statistics was not initially evident. However, as the programme
has become further embedded, our TRIFR and LTIFR indicators
have markedly improved.
Over the period we also documented a fall in notifications of
high potential incidents; falling from 20 in FY20, to 17 in FY21,
and 10 in FY22.
The field leadership programme is a developing concept for us
and is continually being reviewed for improvement opportunities
with feedback from our workers.
Lag performance indicators
14
12
10
8
6
4
2
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1
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LTIFR
TRIFR
Section 1: Year in review 31
Socio-economic
Material topic
Economic performance
Our focus is to responsibly manage the key processes within our control – financial oversight, productivity
improvements and cash costs of production.
We have proven in the past that through proactive financial oversight, and a focus on cost control and productivity improvements, our
business can continue to generate positive economic value even during periods of historically low export pricing. We recognise that a
steady economic performance is critical to providing an enduring contribution to our employees and communities.
From an economic performance perspective, FY22 saw a significant uplift in key financial performance metrics as the business
benefited from an increase in the sales price on coal sales from our export mine. In periods of high pricing such as this year, we can
re-build our cash and net asset positions.
Recognising that movements in the export coal price is outside of our control, we mitigate our exposure to lower pricing through coal
price and foreign exchange hedging on our export sales, which are priced in USD.
We also proactively monitor our cost base, which is to a larger extent within our control, when mitigating the risks of exposure to
a fluctuating export coal price. This year saw a significant jump in core cost inputs across the business, notably in fuel, freight,
equipment hire, and plant maintenance. These price increases are not unique to our business, with most industries and countries
experiencing varying degrees of price inflation. Whilst we ultimately have to wear the majority of these cost increases, this does not
mean that we continue with business as usual. Including cost pressures and the impact they will have on future cash flows is a critical
part of our annual and periodic budgeting and forecasting process. This enables management to make responsible decisions over the
longer term.
Reporting 100 percent of Bathurst and BT Mining, the economic value generated and retained over the last three financial years were:
Economic value
FY22
$m
FY21
$m
FY20
$m
Generated
Coal sales, realised hedging, and other revenue
417.1
287.5
322.1
Disbursed
Wages and salaries paid to employees
Taxes, royalties, and fees to government
Local procurement of goods and services
Capital purchases including leases
Support of local community initiatives
Net economic value retained
66.9
37.7
208.8
20.1
0.2
83.6
63.5
12.3
153.5
13.4
0.5
44.8
65.8
18.4
180.1
22.5
0.2
35.4
32 Bathurst Resources Limited Annual Report 2022
We are also delighted to have completed our eleventh year
of supporting the Bathurst Buller High School Scholarship
programme. The $8,000 scholarship supports a student to
attend university in areas of science technology, engineering
and maths.
Other organisations we also contributed to include:
• West Coast Search & Rescue.
• Life Education Trust West Coast.
• Buller Community Trust Fund.
• North Waikato Cricket Club.
• Te Hā o Kawatiri.
• West Coast ROA Mining Rescue Helicopter Service.
• Nightcaps Clay Target Club.
Supporting the industry
We supported the Minerals West Coast Forum held in June at
Reefton, a small town on the West Coast of the South Island of
New Zealand, not far from our Stockton (export) mine. Minerals
West Coast is a body that represents the collective voice of West
Coast mining, with the forum providing excellent collaboration
opportunities for its attendees and furthering its advocacy to
champion the region’s mining industry. Our CEO Richard Tacon
welcomed the honour of becoming Chair of the Minerals West
Coast in June 2022.
Several of our people are also active participants in key industry
bodies such as:
• New Zealand Mines Rescue Service;
• Straterra (collective voice for the New Zealand minerals and
mining industry);
• MinEx (the national Health and Safety Council for New
Zealand’s extractive sector); and
• New Zealand Mining Board of Examiners and New Zealand
Mining Panel of Examiners.
Material topic
Local communities
Engagement with stakeholders and iwi is critical for
our continued success and licence to operate now and
into the future.
Engagement with local stakeholders and iwi is critical for our
continued success and licence to operate now and into the
future. We endeavour to be a welcomed and valued member
of the communities in which we operate. We acknowledge the
important role our employees play as our ambassadors with
the community, and are proud of their level of engagement
throughout varied volunteer organisations.
In person stakeholder engagement was constrained in FY22 due
to government and socially enforced COVID related limits on
gatherings. As we move into FY23, we will be regularly reviewing
our engagement approach.
Community investment is vital
Actively supporting our local communities is an important part
of recognising that more than simply providing crucial jobs in
the regional areas that we operate, we can also contribute to
the overall wellbeing of the wider societal framework that our
employees, contractors, and suppliers live in.
This year our sponsorship programme across Bathurst and our
joint venture BT Mining included total sponsorship incurred and
committed to of $415,000.
We were pleased to contribute to the development of a new
computer lab to enhance student learning outcomes at the
Maramarua School, a primary school local to our Maramarua
mine. The lab will be used by students of the school as well
as surrounding schools. There is universal agreement that
computer skills will play a vital part of any child’s future, and we
are proud to support Maramarua school’s vision for
their students.
Section 1: Year in review 33
CASE STUDY
COMMUNITY FOCUSED
Westport flooding event:
putting community first
An extreme rain event from 15 to 18 July 2021 brought more than 690mm of rain
to the Buller River catchment, resulting in New Zealand’s largest flood flows in
almost 100 years. Our people were an integral part of the initial response as well
as ongoing support to Westport, the local township of our Stockton export mine
affected by the flood.
Our people continued to work at the EOC around the clock
planning, coordinating, and facilitating the flood response efforts.
Approximately 40 Westport based staff trained in New Zealand's
emergency response management sytem (Coordinated Incident
Management System – CIMS) filled key EOC roles. Supporting
this effort, a large number of our workforce helped with:
• cutting and removing sodden carpet and flood-affected
content from homes;
• delivering food parcels to affected people;
• manning evacuation centres;
• working with the National Emergency Management Agency to
undertake flood assessments of homes;
• providing transport for displaced residents; and
• providing dewatering pumps and piping for clean up.
Buller River Bridge – Westport (Source: C McLachlan)
The usually idyllic Buller River has an annual mean flow of
454m³/second, however during the flood event measurements
showed flows of 7,640m³/second – the largest direct
measurement of flow ever reported in New Zealand. This
flood event put Westport on the map both nationally and
internationally and threatened to severely impact many local
homes and businesses.
Our response was immediate and ongoing. As rising floodwaters
in the town progressed from recommended to mandatory
evacuations, general manager of the Stockton mine Ian Harvey
ceased operations and instructed all staff to return home and
ensure the safety of their own families, and if appropriate assist
in the community response.
Our immediate response included:
• assigning multiple staff in vans and troop carriers to help
residents evacuate flooded homes;
• engaging with local company Outwest Tours to evacuate
people from significant imminent flooding danger using
unimogs;
• providing staff to work at the 24 hour Emergency Operations
Centre (“EOC”);
• providing groups to work at the evacuation centres set up for
displaced people; and
• releasing trained staff to work for other local agencies such as
LandSAR, Westport Fire Brigade, Waimangaroa Fire Brigade,
St John’s Ambulance, Buller Electricity, and the Red Cross.
As the impact and extent of the flood damage became apparent,
the decision was made to close the Stockton mine for a week, to
allow staff to continue to assist in the community.
34 Bathurst Resources Limited Annual Report 2022
Typical post flood street scene in Westport (Source: C McLachlan)
Our contribution to the emergency response received
widespread public acclaim. In excess of 16,000 lost-time-injury
free hours of workforce time, and logistical assistance was given
with some employees continuing to donate their time towards
flood response efforts more than three weeks after the initial
clean up.
Ian Harvey sums up the contribution of our people to the
response, saying: “On reflection, I couldn’t be prouder of the way
our staff volunteeered their assistance, and went out of their way
to help out people they both knew, and also had never met, in
the community we live and work in when it desperately
needed them.”
Bathurst vehicle on the job (Source: C McLachlan)
As a follow up to the July 2021 event, Westport also had another
significant yet smaller flooding event in February 2022. Once
again the EOC was established and our people immediately
volunteered and manned the EOC throughout the duration of
the response. On this occasion the Stockton mine recorded more
than 746mm of rainfall in a 48-hour period, a new and
unwanted record.
Flood protection embankment planning and mitigation
strategies to protect Westport from future flood events are well
underway. In addition to being committed to help during the
disaster, we have also contributed $155,000 funding to fast track
an advanced flood warning hydrological telemeterised system
for Westport to ensure the township is better prepared for any
future potential flood responses.
Section 1: Year in review 35
Environmental
Ninety percent of the energy consumed includes fuel used for
operations, and power for the Canterbury site. The remaining 10
percent of energy consumed was purchased electricity.
When comparing energy consumption by operation, there
are significant differences accounted for by the scale of each
operation and the mine life cycle stage. The Stockton mine was
the largest consumer of energy this year at 365,923 GJ, which
is consistent with producing and washing the most coal of the
four sites, and reflects the electricity used in the coal handling
and preparation plant, and the Ngakawau coal loadout facility.
The Rotowaro mine was the second largest energy consumer at
262,613 GJ, reflecting the movement of 5.53 M bcm of waste rock
during the year.
Comparison of energy consumption by operation FY22
)
J
G
(
n
o
i
t
p
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s
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o
c
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g
r
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n
E
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
S
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Fuel
Electricity
C
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-
C
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e
The above graph excludes Sullivan where consumption was zero.
Greenhouse gas emissions
We are committed to finding new ways of using energy more
efficiently, which includes monitoring our energy consumption to
better understand how we consume it.
Noting that most of the electricity consumed at our sites is
generated from renewable energy sources, we see reducing fuel
related emissions as the biggest opportunity to reducing energy
consumption related emissions. In last year’s annual report we
noted a concept study of electric trucks that would see the
replacement of three 100-tonne diesel fueled trucks with two
electric battery trucks. We are still assessing the viability of this
project and hope to be able to provide an update in next
year’s report.
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 saving projects
As with previous years, energy consumption continues to be
one of our largest operational inputs and is an area in which we
continue to actively seek reductions.
In FY22 we consistently used a more local, secondary supplier
for calcium oxide (“CaO”), used to treat acid mine drainage at
the Stockton mine water treatment plants, which reduced annual
transport emissions by 78 tonnes per year of carbon dioxide
equivalent (“CO2e”), via reduced diesel use of 29,143 litres per
year. Next year we will assist the CaO producer in trialling wood
waste as a heat source instead of coal to assess the potential for
further reduced emissions.
After noting the successful trial of the Esso Diesel Efficient fuel
in last year’s annual report, we made the transition to using
this fuel at all BT Mining sites. This resulted in approximately
443,000 litres less diesel use for FY22, and corresponding
reduced CO2e emissions of 1,200 tonnes per year.
Energy use
Total energy use¹ amounted to 786,604 gigajoules (“GJ”) at
our four operational sites, the Canterbury mine which was
rehabilitated during the year, the Cascade mine rehabilitation
project, and corporate offices. This is an approximate 24 percent
decrease on energy use reported in FY21.
The decrease was primarily driven by a 40 percent reduction
in waste rock removal (overburden stripping), which dominates
energy consumption. The primary driver was a reduced strip
ratio at the Rotowaro mine as it moves into the mature end
of its current operational pit, and to a lesser extent reduced
operations at the Canterbury mine as it progressed through
rehabilitation. In total 11.73 million banked cubic metres (“M
bcm”) of waste rock were stripped in FY22 compared with
19.57 M bcm in FY21.
¹Total energy consumption is reported in terms of energy consumed (fuel and electricity) by employees and contractors.
36 Bathurst Resources Limited Annual Report 2022
We also measure greenhouse gas emissions and participate in the New Zealand Emissions Trading Scheme (“ETS”) in which
we pass on carbon pricing to our customers. We assist our customers in mitigating ETS requirements, via the quality of energy and
efficiency in supply logistics.
Whilst there remains a demand for coal in New Zealand, we highlight the emission reduction benefits from using local coal. In FY22 we
submitted consent applications to mine an additional ~250,000 tonnes per year at our existing Maramarua mine. We have estimated that
with our coal replacing imported coal from Indonesia, annual CO2e emissions would reduce by 9,712 tonnes of CO2e emissions per year;
4,382 CO2e tonnes from coal used for steelmaking, and 5,330 CO2e tonnes from coal used for energy generation and processing heat.
Our mining operations currently rely on diesel fuel to extract and transport coal. Electricity is required for coal processing, water
treatment plants and mine management systems. Additionally, our coal produces greenhouse gases (“GHG”) which are released to the
atmosphere (fugitive emissions). These are accounted for in the production tonnages under the Scope 1 emissions category. We report
our GHG emissions with reference to their source as follows:
Site
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Escarpment
Cascade
Sullivan
Corporate
Total
FY22 Scope 1 emissions
(t/CO2 e)
FY21 Scope 1 emissions
(t/CO2 e)
FY22 Scope 2 emissions
(t/CO2 e)
FY21 Scope 2 emissions
(t/CO2 e)
47,843
26,777
10,136
1,136
10,042
0
29
0
15
50,080
41,168
13,680
5,518
10,594
0
16
0
15
1,127
1,065
50
0
22
0
0
0
8
1,032
387
81
0
31
0
0
0
17
95,978
121,071
2,271
1,548
Scope 1 includes emissions from fuel, and fugitive emissions from coal; Scope 2 are emissions related to national grid electricity usage. The emissions
are calculated following the procedures in Ministry for the Environment (May 2022) report titled “Measuring emissions: A guide for organisations”.
Our reporting of Scope 1 and 2 emissions is consistent with Global
Reporting Initiative (“GRI”) guidelines. In accordance with GRI, we
have reported carbon dioxide in our GHG emissions calculations as
CO2e. We 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 FY22 were 98,249 tonnes of
CO2e, of which:
• 46 percent related to fugitive emissions from coal production;
• 2 percent related to electricity use; and
• 52 percent related to fuel consumption and blast emissions.
The above reflects approximately 20 percent less emissions than
that for FY21. This is due to 40 percent less waste rock removal,
and decreased CO2e from fugitive emissions as 10 percent less
coal was produced, primarily due to the closure of the Canterbury
mine.
In FY22 the highest GHG emissions intensity was at the
Canterbury Coal mine, with 0.33 CO2e per tonne of coal produced.
This is due to the site being in closure and final rehabilitation
mode, hence only a limited amount of coal (3,484 tonnes) was won
as a byproduct of final rehabilitation earthworks.
Overall total GHG emissions intensity across all operations was 10
percent less than the prior year, at 0.047 tonnes CO2e per tonne
of coal produced. Reducing the emissions rate as remaining coal
becomes more difficult to access with higher overburden stripping
ratios at our mature mines is a good result, and a credit to the mine
planning and development teams.
GHG emissions intensity
FY22
FY21
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Note that the Canterbury mine is not displayed above as it was in closure phase in FY22
Section 1: Year in review 37
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.
During the year, the two mine sites that disturbed potentially
acid forming (“PAF”) waste rock were Stockton and Canterbury.
PAF waste rock disturbed increased by 7 percent compared with
FY21, due to increased stripping volumes at the Stockton mine.
Total waste rock disturbance across all sites was 7.9 M bcm less
than the prior year.
The total amount of waste rock per tonne of saleable coal across
all sites decreased from 8.2 bcm per tonne to 6.2 bcm per tonne,
predominantly due to 40 percent less overburden stripped.
Waste rock (bcm) disturbed in FY22
)
m
c
b
(
k
c
o
r
e
t
s
a
W
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
S
t
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t
o
n
3,928,594
R
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0
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83,414
T
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0
517,095
4,263,434
1,270,192
253,206
1,414,713
PAF
NAF
*PAF = Potential Acid Forming waste rock; NAF = Non-Acid Forming waste rock
At the Stockton mine, the calcium oxide used to neutralise
acid mine drainage decreased by 5 percent year-on-year,
following refined and tested waste rock placement methods and
compaction techniques to reduce water and oxygen ingress into
waste rock, besides lime addition to reduce acid production. Our
two active dosing plants at Stockton successfully treated more
than 7,000 tonnes of acid during the year in the Mangatini and
St Patrick’s catchments.
The Canterbury mine team constructed an engineered mussel
shell reactor as part of the rehabilitation works, which is treating
mine drainage during the final rehabilitation phase and will
ensure good water quality over the longer term.
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. In situations where the landowner’s post-mining
land use preference is pasture, we focus on enhancing the
chemical, physical and biological aspects of the soil before
carefully selecting climate-adapted pasture species.
In FY22 we planted over 60,000 indigenous plants at Stockton
and Cascade, which were propogated from seeds collected at
our sites. At the Stockton mine we plant at a density of 9,000
plants per hectare.
We use a rehabilitation technique called vegetation direct
transfer. A digger lifts the vegetation and immediate subsoil
in one intact layer and transfers it to another site, resulting
in immediate cover. Additional seeding and planting is then
undertaken to boost the overall recovery of the transferred
shrubs and plants. This technique has been used extensively at
the Stockton mine with excellent results in the rehabilitation of
indigenous bush in high-altitude plateau environments. We have
successfully rehabilitated 49 hectares using this technique.
Our riparian planting programme with local school children at
the Takitimu mine, one of our case studies in last year’s annual
report, had to be paused due to company wide procedures
limiting visitors to sites due to COVID related protection
measures. We hope to be able to reinstate and expand the
programme in FY23, to allow a better understanding of mining
environmental management including land rehabilitation
techniques once again.
After the successful expansion of our West Coast based plant
nursery last year (one of our case studies in the 2021 annual
report), the past 12 months have proved challenging with
two significant flood events, and additionally three very high
wind events, all of which caused minor damage and hampered
growing conditions for the nursery seedlings. Despite this,
we have successfully grown over 65,000 plants for use in
rehabilitation at our Cascade, Stockton, and Canterbury sites.
We were also delighted to contribute 730 plants and nursery
staff time to assist with the planting of the riverside bunds at
the recently constructed Toki Poutangata bridge that connects
Westport township to the Buller River and the Kawatiri
Coast trail.
38 Bathurst Resources Limited Annual Report 2022
Total net total land disturbance over all sites decreased by 20
hectares (“ha”). The Stockton mine accounts for 54 percent of
the total disturbed area of 1,509 ha. Mining of the Millerton pit
area at Stockton over the next few years will provide for a more
established opencast mining operation, in which progressive
rehabilitation rates are projected to reach 80 to 100 ha per year.
Our budgeted rehabilitation area for FY23 is 77 ha
across all sites.
Site
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Escarpment & Cascade
Huntly West
TOTAL
Rehabilitation budget
FY23 (ha)
17
22
5
3
21
1
8
77
In 2017 when we purchased the Solid Energy mine sites of
Stockton, Rotowaro and Maramarua there were significant
large areas of disturbed land to rehabiltate. We have crown
indemnities to cover the cost of rehabilitation that relates
to land disturbed pre-acquisition. We acknowledge that this
rehabilitation needs to be progressive and accelerated. In
FY22 49 hectares were rehabiltated across these sites, and the
remaining disturbed footprint to rehabilitate reduced to 1,554
hectares. Next year over 77 hectares will be rehabilitated and the
average annual rehabilitation will increase to over 150 hectares a
year in the next five years as certain sites enter closure stages.
Land disturbed and rehabilitated
900
800
700
600
500
400
300
200
100
0
)
s
e
r
a
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(
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Disturbed land remaining to be rehabilitated
Land rehabilitated in FY22
No rehabilitation was undertaken at the Escarpment or Sullivan sites
as they are in care-and-maintenance.
Water use intensity
Based on estimates of consumption, water use intensity
(measured as litres of water used per tonne of coal (“l/t”)
produced) is shown below. Sites that were actively winning coal
in FY22 used between 166 to 786 litres of water to produce a
tonne of coal. Average water usage across all sites to produce
a tonne of coal increased by 24 percent, from 463 l/t to 574 l/t.
This primarily reflects increased water usage at the Stockton
coal washery, and partially at Rotowaro due to dust suppression
via water carts and sprinklers.
Stockton has the highest intensity of water use, reflecting the
intensive use of the coal washery (793,429 tonnes washed in
FY22) and the use of water at the new water treatment plant,
accounting for 91 percent of the site’s water usage. It is noted
that we treat the coal washery water for acid and sediment load,
and then return it to the Mangatini Stream.
Water use intensity by mine site
900
800
700
600
500
400
300
200
100
0
d
e
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d
o
r
p
l
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FY22
FY21
M
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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 under
discharge consents to protect aquatic ecology. No downstream
water sources have been adversely impacted by water use at our
sites in FY22.
Overall water use was 1,191 million litres (“ML”). This is an
increase of 8 percent in water use compared with the prior year.
A significant proportion of this increase stems from washing
approximately 800,000 tonnes of coal through the Stockton
mine coal washery and extra water use in a new Stockton water
treatment plant.
Operating a second acid mine drainage water treatment plant
at the Stockton mine for the full year significantly improved
downstream water quality in St Patrick’s stream. At our ecology
consent site, this result in turn improved the health of aquatic
ecology, reflected in an encouraging macroinvertebrate
community index score and abundant kōura.
Consumptive water use
Operational
Site
Stockton
Rotowaro
Maramarua
Canterbury
Takitimu
Escarpment &
Cascade
Sullivan
Corporate
TOTAL
Consumptive water
use (ML/yr)
FY22
Consumptive water
use (ML/yr)
FY21
871
235
39
7
37
0
0
2
758
193
54
56
40
0
0
2
1,191
1,103
40 Bathurst Resources Limited Annual Report 2022
CASE STUDY
RESTORATIVE REHABILITATION
Reducing legacy acid
mine drainage at the
Canterbury mine
Being a responsible operator of our Canterbury mine post closure in 2021 meant
ensuring we returned the land in a better condition than we acquired it. A core
part of this has been solving a water contamination issue from historical poor
management of waste rock.
In 2015 we began addressing the underlying problem. Accurate
prediction of AMD is critical to determining how to best manage
it. So, we began by tracing the source of most of the AMD
entering the surface water system, which we were able to link
back to a historic waste rock stack.
We took samples of surface water around the site showing a pH
as low as 3.5, most of it related to a specific coal seam called the
Main Seam, and underlying sedimentary rocks at the footwall of
the open pit. We also detected elevated levels of dissolved boron
in overburden seepage.
We drilled 600 samples of core through the stratigraphic
sequence of the coal deposit to understand the acid-forming
potential of the overburden rocks, which dip steeply at the mine.
We then classified each type of rock into acid neutralising,
non-acid forming, low risk, and potentially acid forming.
Coal mining in the area started in 1872, and coal has been
produced from more than 80 different operations, most of them
underground. The most recent activity dates from the early
2000s with a small-scale open pit operation, in which we became
the operators in 2013. Our goal was to expand production to
supply nearby dairy processing plants, with the benefit of
reducing carbon miles from trucking coal from further afield, and
reducing the transport load on roads.
A pivotal issue for us was acid and metalliferous drainage
(“AMD”). We detected signs of AMD early on, and as we
continued into post-closure management of the 59-hectare site,
final resolution of residual AMD has been a core focus of the
mine closure plan.
Scoping the AMD issue
Previous operators had disturbed a lot of ground with little
attention to the acid-forming properties of waste rock, or to its
management when storing it in overburden sites. Occasionally
settling ponds would be dosed with lime to neutralise the pH
before discharge. However, this arrangement was inadequate,
with limited ability to cope with high rainfall events which occur
frequently in the area.
Hydroseeding at Canterbury mine
RESTORATIVE REHABILITATION
Reducing legacy acid
mine drainage at the
Canterbury mine
Canterbury mine in full production
Canterbury mine how it looks today
Taking initial steps to solve the problem
To prevent acid-forming rock producing AMD, the oxidisation
of sulphide minerals in that rock must be prevented. Limiting
access of water and oxygen to such minerals works well, and we
achieved that by placing the acid-forming rock within a surround
of non-acid forming rock and compacting that material to reduce
the potential for air and water ingress.
The result is an engineered landform (“ELF”), on which we place
topsoil and planted pasture species and plantation forestry
seedlings.
Between 2017 and 2019 we constructed the North ELF following
our ELF construction and AMD management plans, and
the result so far is no AMD treatment requirement in water
seepage from this ELF. We also removed the legacy issues of
the historical waste rock stack and placed the material into a
former pit underneath a newly constructed ELF. Runoff from this
ELF now enters the treatment pond at a neutral pH. Only minor
periodic dosing of this water with lime is undertaken to raise the
pH to 7.5 to 8.0, levels which force the removal of any residual
dissolved zinc.
Section 1: Year in review 43
Engineered landform (ELF ) in progress at Canterbury mine
Looking for more AMD
By mid-2018 we were recording greatly improved pH levels, however, we had not fully eliminated AMD from the site. Improvement was
a priority for us, with known habitat for the endangered Canterbury mudfish/kōwaro further downstream (see case study in our FY20
annual report).
Mine closure risk assessments held in 2021 identified two areas of the mine for further management. We found that the Green ELF
underdrain flow, which collects drainage from the Green ELF and is also sourced from historic underground workings, was elevated in
aluminium, boron, iron, manganese, nickel and zinc. These elements originate from the sedimentary sequences of the coal measures
and are found in coal combustion residuals which were placed within the final ELFs as part of the AMD management plan. We also
identified that the North 02 pit pond might also have residual AMD risk during low rainfall periods.
As a result, we commissioned a passive mussel shell reactor to remove dissolved metals from the Green ELF underdrain flows. Trigger
action response plans following an adaptive management framework have been developed to utilise performance monitoring to
ensure the North 02 pit pond and underdrain discharges continue to meet compliance levels.
A mussel shell reactor takes AMD laden water in at the top of the reactor and allows the water to permeate through a permeable bed
of alkaline mussel shells. The alkalinity lifts the pH of the water and leads to certain metallic contaminants such as aluminium, iron,
and zinc to drop out of solution. Additionally, the bed acts as a filter which aid removal by filtering out colloidal precipitates at the top
of the mussel shell bed.
Reactor
Mussel shells
Drainage
Network
Freeboard
Riser
Oxic
Cascade
Figure 1 Simple diagram of a down flow mussel shell reactor
44 Bathurst Resources Limited Annual Report 2022
Treating boron
Leaving a positive legacy
Boron is a common contaminant related to coal deposits. Boron
is a light element and is ecotoxic if levels are too high. The
treatment methods described do not reduce boron levels. The
Green ELF underdrain feeding into the mussel shell reactor
contains elevated concentrations of boron, but the flow rates
are very low. We solved the problem by adding potable water
during the active closure stage to dilute the mussel shell reactor
outflow. Our long-term plan is to utilise water sourced from the
final North 02 pit pond that will flow to Tara stream to dilute
dissolved boron to below maximum acceptable levels after a
study period confirms adequate and reliable water quality within
the pond.
Today mine discharge water has risen from a pH range of 3
to 4 when we took over the site to pH 6 to 8, which supports
instream ecosystems. We have reduced dissolved iron, nickel
and zinc and acid levels by 98 percent coming from the Green
ELF underdrain discharge.
Monitoring of the system and the site generally for performance
is still intensive, and this will tail off over time as the
effectiveness of our closure management continues to be
demonstrated.
9
8
7
6
5
4
3
2
1
H
p
e
g
r
a
h
c
s
i
d
a
r
a
T
Stage 2
Stage 3
Stage 1 response
R
S
M
l
e
r
u
s
o
C
e
n
M
i
1/ 0 5/2 0 13
1/ 0 5/2 0 14
1/ 0 5/2 0 15
1/ 0 5/2 0 16
1/ 0 5/17
1/ 0 5/2 0 18
1/ 0 5/2 0 19
1/ 0 5/2 0
1/ 0 5/2 0 21
1/ 0 5/2 2
Figure 2 Tara Stream discharge (CC02_tele) pH. Timeframes shown for each stage
Section 1: Year in review 45
Governance
material topics
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.
We are proud to report that we had no
significant compliance events relating to
environment, community and health and
safety during the year.
Environmental compliance and governance
We have a consistent approach to environmental management
across all our operations, and we think innovatively to minimise
our environmental impact. Our corporate environmental
governance framework is based on current international and
national standards for environmental management, including
working generally in accordance with ISO 14001 Environmental
Management Systems.
Our governance framework ensures sites are prepared to
comply with new environmental policies and standards. This
year we saw significant changes to water management policy
via the introduction of New Zealand’s National Policy Statement
for Freshwater Management. We will continue to enhance our
site water management activities to support the new policy
objectives.
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.
Environmental management systems
During the year we worked hard to maintain environment
compliance during the New Zealand government enforced stay
at home requirements, which resulted in less personnel being
allowed to work onsite. This meant smaller onsite operations and
environment teams had to collaborate with those working from
home to use our environmental management systems to ensure
we continued to manage our environment risks with effective
controls in place.
Key aspects of our environmental management programme in
FY22 included:
• Ongoing, progressive rehabilitation of previously mined areas.
• Focus on water and energy efficiencies and sustainability.
• Proactive reporting and managing of environmental hazards
and incidents.
• Environmental training and awareness.
• Ensuring compliance with statutory guidelines.
• Pest predator and weed control activities.
• Community and stakeholder consultation.
46 Bathurst Resources Limited Annual Report 2022
Effective complaint handling
An integral part of being responsible operators is listening to
our stakeholders when we don’t get things quite right. Taking
external feedback seriously, and ensuring it is escalated to and
managed at the right levels, is critical if we want to maintain the
support of those around us.
Internal and external complaints on environmental issues are
recorded via complaints registers maintained at all sites. All
community inquiries and community complaints are investigated
via our internal incident investigation system and are only closed
off by senior management when resolved.
During FY22 there were two community complaints received.
The first was from a neighbour located outside of a blast
exclusion zone at the Stockton mine. No damage to people
or infrastructure occurred from the blast. As an outcome of
our investigation into this event, we have extended the blast
exclusion zone to include the neighbour in our future blast
notifications.
The second community complaint related to dust during
a significant windy drought period at the Rotowaro mine.
Corrective actions included an additional water truck, and
imposing a speed limit to reduce dust generation.
Next year, we will be revisiting our environment incident
investigation techniques and provide refresher incident training
to our environment and community team. We proactively
manage environment risks that could create a community
complaint with identification and implementation of preventative
controls. This includes championing a positive workplace
knowledge and culture towards actioning effective environment
controls. We recognise the critical role our employees play in our
success for minimising environmental harm.
Section 1: Year in review 47
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.
The COVID pandemic 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.
Using our knowledge of our principal hazards per site, we have
worked with New Zealand Mines Rescue Service (“NZMRS”) to
prepare a company-wide skills training needs analysis (“TNA”)
and have tested these skills via NZMRS supported emergency
scenarios. In planning for our FY23 scenario training events,
we have elaborated on the TNA to ensure our site emergency
rescues team are adequately training and testing for our highest
critical risk situations.
Last year we reported that the emergency management skills
of our workforce were tested during a flooding incident at
Westport township where most of our Stockton mine employees
live. Two further state of emergency flood events occurred in
February and August 2022. This again required the assistance
of our 40 trained workers in the New Zealand Coordinated
Incident Management System, as well as provision of specialised
equipment for flood response and recovery.
We are proud that the majority of our workforce actively
participated in the two events to support the needs of the
community. See our case study on flood emergency support for
further information on how we got involved in the recovery effort.
Next year, we have committed to working with the West Coast
Civil Defence Emergency Management Group to further align our
trained workforce and local logistics knowledge for any
future events.
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.
Although mining and processing activities extend over decades,
we recognise they are temporary, and that other activities and
land use will follow.
We are committed to minimising the legacy impacts on the
environment post-closure of our operational activities. We adopt
a life-of-asset approach to closure planning which includes
technical assessment, forecasting, and consulting with relevant
stakeholders.
The content and level of detail in our closure plans depends
on the timeframe to closure and decommissioning of the asset.
We focus our business resources on assets within five years
of expected closure. We also aim to manage the impacts of
mine closure on employees, host communities and economic
development through our workforce transition strategies.
During the year we commenced closure activities at the
Canterbury mine, which allowed us to implement the closure
phase of our internal Decommissioning and Mine Closure
Management Standard for the first time. When we are working to
relinquish operations such as our Canterbury mine, it is with the
goal of delivering a positive legacy, both from an environmental
as well as a stakeholder perspective.
As the rehabilitation of the mine progresses, the workforce
is being released in stages; for example, stage one was when
major bulk earthworks were completed. We have supported
the workforce in transitioning to other employment such as
redeployment opportunities to other Bathurst sites, provision
of introductions to other Canterbury region extractive sites,
and through offering outplacement services support. For more
information on our successful approach to mine closure planning,
see our case study on rehabilitation at the Canterbury mine.
Annually, we engage an internationally recognised mine bond
assessor to prepare bond review assessment reports for seven
of our operating and care and maintenance sites. The reports
detail the required activities and costs to rehabilitate the land
in a sudden closure scenario. These reports are reviewed and
approved by regulators and an annual bond amount is lodged
with regulators to ensure funds are available to complete mine
rehabilitation to a recognised standard.
Our three BT Mining mines have a historical Crown liability
associated with them. We work with New Zealand
Treasury - Te Tai Ōhanga to manage the rehabilitation
processes of historic areas on their behalf.
48 Bathurst Resources Limited Annual Report 2022
Our people
1.
3.
5.
7.
Board members
1. Peter Westerhuis
Non-executive Chairman
2. Richard Tacon
Executive Director & Chief
Executive Officer
3. Russell Middleton
Executive Director & Chief
Financial Officer
4. Francois Tumahai
Non-executive Director
2.
4.
Senior leadership
5. Fiona Bartier
General Manager, Health, Safety,
Environment and Community
6.
6. Carmen Dunick
Group Manager, People and Culture
7. Ian Harvey
General Manager, Export Operations
8. Sam Johnstone
General Manager, Marketing
and Logistics
8.
9. Craig Pilcher
General Manager, Domestic Operations
10. Damian Spring
General Manager, Resource Development
9.
10.
More information
For more information about our
people visit: www.bathurst.co.nz/
our-company/our-people/
Section 1: Year in review 49
Governance
Our corporate governance statement issued in line with the 4th edition of the
ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations provides an in-depth overview of our corporate governance
framework and is available on our website at https://www.bathurst.co.nz/
our-company/corporate-governance/
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.
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.
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.
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; and
• 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. Our Emissions Trading Policy can be
found on our website.
50 Bathurst Resources Limited Annual Report 2022
“We recognise the importance of identifying and managing
material exposure to environmental and social risks to ensure
the long-term sustainability of our business.”
Environmental and social risks
We recognise the importance of identifying and managing
material exposure to environmental and social risks to ensure
the long-term sustainability of our business.
We view the risk of significant regulatory change and a decrease
in demand with regards to coal for steelmaking as less likely in
the medium term. We view us in the longer term as a resource
company specialising in coal primarily for steelmaking, and other
resource commodities crucial to the global economy.
Donations
Bathurst made donations totalling $21,947 to several local
groups during the year including scholarships. Further
information of recipients as well as total donations made
including those made by joint venture BT Mining can be found
within the socio-economic part of the sustainability section of
this annual report.
As part of our commitment to transparency on these issues
we have selected ten material topics that we believe represent
the greatest areas of environmental and social risk to us, as
included in the sustainability section of this annual report. These
disclosures are made on a voluntary basis, and primarily reflect
the unique complexities that arise from being a mining company.
The topics revolve around the importance of maintaining our
licence to operate, and fall into four key areas:
• Health and Safety: ensuring our people are safe.
• Socio-economic: ensuring we operate responsibly when it
comes to our shareholders, people, and the local communities
we operate in.
• Governance: ensuring that we comply with regulations and
achieve best practice mine rehabilitation standards and
emergency preparedness plans.
• Environment: ensuring we are aware of our environmental
impacts and that we reduce these as much as possible.
The other material risk to the long-term outlook of our business
is the global move towards a low carbon emissions future. We
acknowledge that the production and consumption of coal
contributes to greenhouse gas emissions. We also understand
the conflict between emission reduction aspirations, and the
requirement for steel and energy to achieve global economic and
social development ambitions, and provide the infrastructure
needed for a lower carbon economy.
The greatest risk to the longevity of our current business
model sits within our domestic segment, which provides
coal domestically in New Zealand for steelmaking, electricity
generation, and energy processing heat purposes. New Zealand
has a net zero emissions by 2050 goal enshrined in law, and
pressure is building to move to a fully renewable source energy
generation model. To mitigate our risk of over-capitalisation in
redundant assets that hold coal not destined for steelmaking, we
only commit to entering new mine areas with binding commercial
partnerships in place.
Section 1: Year in review 51
Directors’ and officers’ liability insurance
Other current directorships of listed companies
In accordance with section 162 of the Companies Act 1993 and
the constitution of Bathurst, Bathurst has provided insurance for,
and indemnities to, directors and officers of the Group and its
subsidiaries for losses from actions undertaken in the course of
their legitimate duties. The insurance includes indemnity costs
and expenses incurred to defend an action.
No directors hold current directorships in other listed companies
or have done so in the last three years.
Other entries in the interests register
Other changes to the interest register during the year were the
lapsing and issue of performance rights to Richard Tacon and
Russell Middleton.
Audit fees
Other than as disclosed in note 5, fees payable to Bathurst’s
independent external auditors for agreed upon procedures
services required under a Deed of Royalty total $10k plus
disbursements.
Directors
The following persons were directors of Bathurst as at
30 June 2022:
Peter Westerhuis Non-executive Chairman
Francois Tumahai Non-executive Director
Richard Tacon
Executive Director
Russell Middleton Executive Director
Directors’ securities interests
Director
Ordinary shares
Peter Westerhuis
Francois Tumahai
Richard Tacon
Russell Middleton
351,863
-
1,600,302
1,252,830
Performance
rights
-
-
581,153
464,923
For details of changes in performance rights refer to note 18
of the financial statements.
52 Bathurst Resources Limited Annual Report 2022
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
executive directors and the senior leadership team (“SLT”), and
the over-arching remuneration policy. 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.
The corporate governance section of our website provides
further information on the role of the R&N committee.
There have been no material changes to the remuneration
framework during the year.
Remuneration philosophy
The objective of our remuneration framework is to ensure reward
for performance is competitive, appropriate, promotes retention
of employees, and aligns with Bathurst’s strategic objectives and
shareholder interests.
Non-executive director fees
Remuneration is paid to NEDs in the form of directors’ fees,
which cover the demands made on their time in their capacity
as director as well as member of any committees. Bathurst also
meets reasonable travel and other costs associated with NEDs
performing their role.
NED fees are reviewed periodically. Independent remuneration
consultants are used in this process to ensure impartiality in
setting NED fees, and to ensure fees are in line with market
expectations for an Australian Stock Exchange listed company
of a similar size and complexity.
A NED remuneration review was undertaken by an independent
remuneration consultant during the year. This resulted in a
recommendation to the Board to increase NED fees, which the
Board approved. The review included the assessment of NED
fees against external benchmarking data and aimed to set NED
fees at a competitive level, acknowledging a competitive labour
market particularly when recruiting and retaining in the
mining industry.
Executive director and employee
remuneration
The remuneration framework provides for a mix of fixed and
variable (short- and long-term) incentives. 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.
The framework has three components:
• Fixed remuneration, including the KiwiSaver
superannuation scheme.
• Short-term incentives.
• Long-term incentives.
Section 1: Year in review 53
Fixed remuneration
Bathurst offers competitive fixed remuneration that is based
on the responsibilities of the role, individual performance and
experience, and current market data.
External consultants are engaged to ensure the fixed
remuneration component for executive directors and SLT
is set within market benchmarks for a comparable role. The
R&N committee reviews executive director and SLT fixed
remuneration periodically.
External benchmarking reports and labour market conditions are
used as a guide when setting salaries for all other employees.
Fixed remuneration on an individual basis is reviewed
periodically, and on promotion. Fixed remuneration on a
collective basis is reviewed annually by People and Culture, with
increases in the consumer price index used as a benchmark, with
any recommended changes submitted to the R&N committee for
approval.
There are no guaranteed increases to fixed remuneration.
Salaried and waged staff were provided an increase to their
base salaries during the year as part of the annual remuneration
review and collective negotiations.
Short-term incentives
Short-term incentives (“STI”) are an at-risk component of
remuneration.
STIs are a contractual component of executive director and
SLT pay packages and can be up to a maximum of between 25
percent to 50 percent of fixed remuneration. These are payable
in cash on achievement of key performance targets that align
with Bathurst’s strategic pillars, with performance measures in
areas of:
• environment, social and governance (24 percent weighting);
• people including their health and safety (26 percent
weighting);
• markets (10 percent weighting);
• financial performance (20 percent weighting); and
• sustainable development (20 percent weighting).
The R&N Committee is responsible for reviewing and approving
any STI payments to executive directors and SLT.
Discretionary one-off payments may also be made for other
select employees up to 10 percent of their fixed annual
remuneration. The Chief Executive Officer (“CEO”) in conjunction
with People and Culture recommend discretionary one-off
payments to the Board for approval. These are dependent on the
financial performance of Bathurst.
STIs for FY21 were paid out during the year without any discount
applied, adjusted for individual performance levels.
Long-term incentives
Bathurst’s long-term incentive plan (“LTIP”) was updated and
approved by shareholders at the 2018 AGM, the details of which
can be found on our website in the governance section.
The purpose of the plan is to encourage senior executives
and executive directors to share in the ownership of Bathurst,
promoting its long-term success 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 Bathurst 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 Bathurst 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 Bathurst are
subject to satisfying service conditions only. The rights are
issued for a nil exercise price.
• Deferred share awards: these are shares in Bathurst 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 Bathurst to the value of any share price appreciation from
the grant date to the vesting date, subject to satisfying
performance and/or service conditions.
Two issues of performance rights occurred during FY22, one to
executive directors and one to SLT. Further information can be
found in note 18 of the financial statements.
Health and other insurance
Bathurst provides health insurance to all permanent employees.
Insurance is currently supplied by UniMed.
Superannuation
All employees are eligible to participate in the KiwiSaver
superannuation scheme. The company contributes three percent
of each employee’s paid remuneration
54 Bathurst Resources Limited Annual Report 2022
Directors’ remuneration
The total remuneration and other benefits to directors for services in all capacities during the year ended 30 June 2022 was:
Director
Peter Westerhuis
Francois Tumahai
Richard Tacon
Russell Middleton
Total
Director fees
Fixed remuneration
and STI
LTI performance
rights
177,471
92,500
-
-
-
-
1,061,641
895,189
-
-
80,463
64,370
Total
FY22
177,471
92,500
1,142,104
959,559
Total
FY21
90,300
15,000
698,445
515,430
269,971
1,956,830
144,833
2,371,634
1,476,675
Fixed remuneration and STI for both Richard Tacon and Russell Middleton are in their capacity as CEO and Chief Financial Officer
(“CFO”) respectively. LTI performance rights is the share-based payment expense of the performance rights.
The increase in fees to Peter Westerhuis reflects his appointment as Chairman of the Board effective 1 July 2021, as well as an
underlying increase in Chairman fees, as disclosed under the non-executive director fees segment of this section of the annual report.
The increase in fees for Francois Tumahai primarily reflect a full year as non-executive director (two months in FY21).
The increase in fixed remuneration and STI to Richard Tacon and Russell Middleton reflect:
• STIs paid at the full rate (discounted by 80 percent in FY21); and
• an additional discretionary payment in recognition of their vital contribution to the successful defence of a substantial legal claim
that was ruled in Bathurst’s favour in July 2021 (refer note 23 of the financial statements for further information).
Employee remuneration
During the year ended 30 June 2022, 26 Bathurst (and its subsidiaries) employees, excluding
the CEO and CFO, received individual remuneration over $100,000.
Range
100,001 – 110,000
110,001 – 120,000
120,001 – 130,000
130,001 – 140,000
140,001 – 150,000
150,001 – 160,000
160,001 – 170,000
170,001 – 180,000
180,001 – 190,000
190,001 – 200,000
220,001 – 230,000
230,001 – 240,000
270,001 – 280,000
380,001 – 390,000
400,001 – 410,000
430,001 – 440,000
# of employees
3
2
3
2
2
2
1
1
1
1
3
1
1
1
1
1
Section 1: Year in review 55
56 Bathurst Resources Limited Annual Report 2022
Section 2: Financial statements 57
Financial statementsIn this sectionIncome statementStatement of comprehensive incomeStatement of financial position Statement of changes in equityStatement of cash flowsNotes to the financial statementsAdditional informationIndependent auditor’s report02 Contents
Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94
58 Bathurst Resources Limited Annual Report 2022
Bathurst Resources Limited | Financial statements 2 Contents Income statement................................................................................................................................................................................................................................. 9Statement of comprehensive income ...................................................................................................................................................................................... 9Statement of financial position .................................................................................................................................................................................................. 10Statement of changes in equity ................................................................................................................................................................................................. 11Statement of cash flows ................................................................................................................................................................................................................. 12Notes to the financial statements ............................................................................................................................................................................................ 13Additional information ..................................................................................................................................................................................................................... 41Independent auditor’s report ..................................................................................................................................................................................................... 44Authorised for and on behalf of the Board of Directors: Peter Westerhuis Chairman 29 August 2022 Russell Middleton Executive director 29 August 2022 Income statement
For the year ended 30 June 2022
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 profit before tax
Notes
3
4
2022
$’000
2021
$’000
39,587
48,167
(34,325)
(38,141)
5,262
10,026
13
53,196
13,235
167
671
10
5
(2,385)
(2,935)
(10,089)
(6,771)
15 (c)
356
59,391
(681)
375
8
(309)
(22,455)
45,517
51,537
Fair value movement on convertible bond derivative
15 (b)
(12,334)
1,124
Finance cost
Finance income
Profit before income tax
Income tax benefit
Profit after tax
Earnings per share:
Basic profit per share
Diluted profit per share
6
6
7
19
19
(2,705)
(2,565)
20
16,625
30,498
66,721
-
-
30,498
66,721
Cents
Cents
17.55
17.36
39.03
35.53
Statement of comprehensive income
For the year ended 30 June 2022
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 hedging through OCI
Comprehensive income
30,498
66,721
1,520
8,750
280
(5,108)
13
40,768
61,893
Bathurst Resources Limited | Financial statements
Section 2: Financial statements 59
9
60 Bathurst Resources Limited Annual Report 2022
Bathurst Resources Limited | Financial statements 10 Statement of financial position As at 30 June 2022 Notes 2022 $’000 2021 $’000 Cash and cash equivalents 4,765 4,395 Restricted short-term deposits 4,508 4,247 Trade and other receivables 9 4,357 4,286 Inventories 1,495 1,219 New Zealand emission units 309 1,493 Crown indemnity 52 - Total current assets 15,486 15,640 Property, plant and equipment 10 9,720 12,518 Mining assets 11 14,490 15,690 Interest in joint ventures 13 169,560 114,236 Crown indemnity 16 729 764 Other financial assets 220 1,020 Total non-current assets 194,719 144,228 TOTAL ASSETS 210,205 159,868 Trade and other payables 15 (a) 8,368 6,762 Borrowings 15 (b) 260 983 Deferred consideration 15 (c) 920 998 Rehabilitation provisions 16 1,172 3,798 Convertible bond derivative 15 (b) - 772 Total current liabilities 10,720 13,313 Borrowings 15 (b) 508 10,358 Deferred consideration 15 (c) 1,544 2,517 Rehabilitation provisions 16 4,100 4,914 Total non-current liabilities 6,152 17,789 TOTAL LIABILITIES 16,872 31,102 NET ASSETS 193,333 128,766 Contributed equity 17 316,970 293,107 Reserves 18 (26,123) (36,329) Accumulated losses (97,514) (128,012) EQUITY 193,333 128,766 For and on behalf of the Board of Directors: Peter Westerhuis Chairman 29 August 2022 Russell Middleton Executive Director 29 August 2022 Statement of changes in equity
For the year ended 30 June 2022
Note Contributed
equity
$’000
Debt
instruments
equity
component
$’000
Share-
based
payments
Foreign
exchange/
hedging
Retained
earnings
Re-
organisation
reserve
Total
equity
$’000
$’000
$’000
$’000
$’000
293,107
17,622
357
948
(212,355)
(32,760)
66,919
-
-
-
293,107
-
-
17
23,863
-
-
(46)
(17,622)
-
-
(4,828)
66,721
-
61,893
-
-
-
17,622
-
-
(46)
-
-
-
-
-
311
(3,880)
(128,012)
(32,760) 128,766
-
10,270
30,498
(64)
-
-
-
-
-
-
-
40,768
(64)
-
23,863
316,970
-
247
6,390
(97,514)
(32,760) 193,333
1 July 2020
Income
Share-based
payments
Maturity of debt
instruments
30 June 2021
Income
Share-based
payments
Maturity of debt
instruments
30 June 2022
Bathurst Resources Limited | Financial statements
11
Section 2: Financial statements 61
Bathurst Resources Limited | Financial statements 10 Statement of financial position As at 30 June 2022 Notes 2022 $’000 2021 $’000 Cash and cash equivalents 4,765 4,395 Restricted short-term deposits 4,508 4,247 Trade and other receivables 9 4,357 4,286 Inventories 1,495 1,219 New Zealand emission units 309 1,493 Crown indemnity 52 - Total current assets 15,486 15,640 Property, plant and equipment 10 9,720 12,518 Mining assets 11 14,490 15,690 Interest in joint ventures 13 169,560 114,236 Crown indemnity 16 729 764 Other financial assets 220 1,020 Total non-current assets 194,719 144,228 TOTAL ASSETS 210,205 159,868 Trade and other payables 15 (a) 8,368 6,762 Borrowings 15 (b) 260 983 Deferred consideration 15 (c) 920 998 Rehabilitation provisions 16 1,172 3,798 Convertible bond derivative 15 (b) - 772 Total current liabilities 10,720 13,313 Borrowings 15 (b) 508 10,358 Deferred consideration 15 (c) 1,544 2,517 Rehabilitation provisions 16 4,100 4,914 Total non-current liabilities 6,152 17,789 TOTAL LIABILITIES 16,872 31,102 NET ASSETS 193,333 128,766 Contributed equity 17 316,970 293,107 Reserves 18 (26,123) (36,329) Accumulated losses (97,514) (128,012) EQUITY 193,333 128,766 For and on behalf of the Board of Directors: Peter Westerhuis Chairman 29 August 2022 Russell Middleton Executive Director 29 August 2022
Statement of cash flows
For the year ended 30 June 2022
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 net of disposals
Deferred consideration
NWP Coal Canada Limited
Other
Net cash outflow from investing activities
Cash flows from financing activities
Interest received
Other finance costs paid
Interest on leases
Repayment of leases
Interest on debt instruments
Issue of AUD convertible bonds
Debt instrument principal repayment
Net cash outflow from financing activities
Net increase/(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
2022
$’000
2021
$’000
39,493
48,134
(41,214)
(38,611)
9,750
-
21
8,029
9,523
13 (b)
(388)
(208)
(2,375)
(4,589)
(262)
(982)
(809)
(32)
1,039
(1,173)
(793)
(182)
(4,848)
(5,906)
5
(2)
(82)
(1,220)
(1,251)
27
(158)
(143)
(1,231)
(830)
-
-
10,638
(11,966)
(2,550)
(3,663)
631
4,395
4,247
9,273
(46)
4,495
4,193
8,642
Bathurst Resources Limited | Financial statements
62 Bathurst Resources Limited Annual Report 2022
12
Statement of cash flows
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
Mining assets (including capitalised waste moved in advance)
Property, plant and equipment purchases net of disposals
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
Deferred consideration
NWP Coal Canada Limited
Other
Net cash outflow from investing activities
Cash flows from financing activities
Interest received
Other finance costs paid
Interest on leases
Repayment of leases
Interest on debt instruments
Issue of AUD convertible bonds
Debt instrument principal repayment
Net cash outflow from financing activities
Net increase/(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
2022
$’000
2021
$’000
39,493
48,134
(41,214)
(38,611)
9,750
-
21
8,029
9,523
(388)
(208)
(2,375)
(4,589)
13 (b)
(4,848)
(5,906)
(262)
(982)
(809)
(32)
5
(2)
(82)
(1,220)
(1,251)
1,039
(1,173)
(793)
(182)
27
(158)
(143)
(1,231)
(830)
-
-
10,638
(11,966)
(2,550)
(3,663)
631
4,395
4,247
9,273
(46)
4,495
4,193
8,642
1. About our financial statements
General information
Bathurst Resources Limited (“Company” or “Parent” or “BRL” or “Bathurst”) is a company incorporated and domiciled in New Zealand,
registered under the Companies Act 1993 and listed on the Australian Securities Exchange (“ASX”). These financial statements have
been prepared in accordance with the ASX listing rules.
The financial statements presented as at and for the year ended 30 June 2022 comprise the Company and its subsidiaries (together
referred to as the “Group”).
The Group is principally engaged in the exploration, development and production of coal.
These financial statements have been approved for issue by the Board of Directors on 29 August 2022.
Basis of preparation
These Group financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (“NZ
GAAP”). The Group is a for-profit entity for the purposes of complying with NZ GAAP. The consolidated financial statements comply
with New Zealand Equivalents to International Financial Reporting Standards (“NZ IFRS”), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply NZ IFRS. The financial statements also comply with International Financial
Reporting Standards (“IFRS”).
These financial statements have been prepared on the going concern basis, and are presented in New Zealand dollars, which is the
Company’s functional and presentation currency. References in these financial statements to ‘$’ and ‘NZ$’ are to New Zealand dollars. All
financial information has been rounded to the nearest thousand unless otherwise stated.
Measurement basis
These financial statements have been prepared 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.
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.
Intangible assets – New Zealand emissions units
Emissions trading units are acquired to satisfy its obligations under the New Zealand Emissions Trading Scheme. These units have a
finite useful life but are not amortised because they are expected to be utilised to offset the Group's obligation under the Emissions
Trading Scheme within 12 months of balance date. The units are recognised at cost.
Bathurst Resources Limited | Financial statements
12
Bathurst Resources Limited | Financial statements
13
Section 2: Financial statements 63
Notes to the financial statements
For the year ended 30 June 2022
1. About our financial statements continued
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 15 (b) Conversion option of convertible bond
• Note 16 Rehabilitation provisions
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.
Standards and interpretations adopted during the year
The financial information presented for the year ended 30 June 2022 has been prepared using accounting policies consistent with those
applied in the 30 June 2021 financial statements. There are no new accounting standards issued but not yet effective, that will have an
impact on the Group.
2. Segment information
The operating segments reported on are:
• Export – 100 percent of BT Mining’s export mine (Stockton).
• Domestic - BRL’s eastern South Island domestic operations and 100 percent of the BT Mining North Island domestic mines.
• Corporate – BRL corporate overheads and Buller Coal Project, and 100 percent of BT Mining corporate overheads.
A reconciliation to profit after tax per BRL’s Income Statement is provided via the elimination of BT Mining column. Total assets and total
liabilities are reported on a group basis, as with tax expense.
One BRL customer met the reporting threshold of 10 percent of BRL’s operating revenue in the year to 30 June 2022, contributing
$23.5m (2021: two customers, $22.9m and $8.9m).
Year ended 30 June 2022
Revenue from contracts with customers
$’000
387,386
$’000
135,537
$’000
-
$’000
522,923
Export
Domestic
Corporate
Total
Eliminate
BT Mining
$’000
(483,336)
Operating profit before tax 3
107,103
20,120
(18,933)
108,290
(116,017)
Net finance costs
(1,597)
(279)
(3,019)
(4,895)
2,210
Total
BRL
$’000
39,587
45,517
(2,685)
Fair value movement on derivatives
Income tax
Movements in OCI
-
-
-
-
-
-
(12,334)
(12,334)
-
(12,334)
(31,893)
(31,893)
14,982
14,982
31,893
(4,712)
-
10,270
Comprehensive income after tax3
105,506
19,841
(51,197)
74,150
(86,626)
40,768
Depreciation, amortisation & impairment
(17,590)
(30,138)
(694)
(48,422)
42,384
EBITDA4
128,304
51,256
(18,303)
161,257
(162,346)
(6,038)
(1,089)
3 Total BRL operating profit and comprehensive income does not equal the sum of Total BRL minus elimination of BT Mining, as BRL’s 65 percent equity
share of BT Mining’s profit is added back.
4 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
64 Bathurst Resources Limited Annual Report 2022
14
Notes to the financial statements
For the year ended 30 June 2022
1. About our financial statements continued
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 15 (b) Conversion option of convertible bond
• Note 16 Rehabilitation provisions
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.
Standards and interpretations adopted during the year
The financial information presented for the year ended 30 June 2022 has been prepared using accounting policies consistent with those
applied in the 30 June 2021 financial statements. There are no new accounting standards issued but not yet effective, that will have an
impact on the Group.
2. Segment information
The operating segments reported on are:
• Export – 100 percent of BT Mining’s export mine (Stockton).
• Domestic - BRL’s eastern South Island domestic operations and 100 percent of the BT Mining North Island domestic mines.
• Corporate – BRL corporate overheads and Buller Coal Project, and 100 percent of BT Mining corporate overheads.
A reconciliation to profit after tax per BRL’s Income Statement is provided via the elimination of BT Mining column. Total assets and total
liabilities are reported on a group basis, as with tax expense.
One BRL customer met the reporting threshold of 10 percent of BRL’s operating revenue in the year to 30 June 2022, contributing
$23.5m (2021: two customers, $22.9m and $8.9m).
Export
Domestic
Corporate
Total
Eliminate
BT Mining
$’000
Total
BRL
$’000
Year ended 30 June 2022
$’000
$’000
$’000
$’000
Revenue from contracts with customers
387,386
135,537
-
522,923
(483,336)
39,587
Operating profit before tax 3
107,103
20,120
(18,933)
108,290
(116,017)
Net finance costs
(1,597)
(279)
(3,019)
(4,895)
2,210
45,517
(2,685)
Fair value movement on derivatives
Income tax
Movements in OCI
-
-
-
-
-
-
(12,334)
(12,334)
-
(12,334)
(31,893)
(31,893)
14,982
14,982
31,893
(4,712)
-
10,270
Comprehensive income after tax3
105,506
19,841
(51,197)
74,150
(86,626)
40,768
Depreciation, amortisation & impairment
(17,590)
(30,138)
(694)
(48,422)
42,384
EBITDA4
128,304
51,256
(18,303)
161,257
(162,346)
(6,038)
(1,089)
3 Total BRL operating profit and comprehensive income does not equal the sum of Total BRL minus elimination of BT Mining, as BRL’s 65 percent equity
4 Earnings before net finance costs (including interest), tax, depreciation, amortisation, impairment, fair value movement on deferred consideration and
share of BT Mining’s profit is added back.
rehabilitation provisions.
Bathurst Resources Limited | Financial statements
Notes to the financial statements
For the year ended 30 June 2022
2. Segment information continued
Year ended 30 June 2021
$’000
$’000
$’000
$’000
Export
Domestic
Corporate
Total
Eliminate
BT Mining
$’000
Revenue from contracts with customers
141,214
151,627
-
292,841
(244,674)
Total
BRL
$’000
48,167
Operating profit before tax
11,556
28,157
29,431
69,144
(30,890)
51,537
Net finance income
Income tax expense
(1,845)
(515)
12,323
9,963
4,097
14,060
-
-
(6,357)
(6,357)
6,357
-
Comprehensive income after tax
9,711
27,642
23,834
61,187
(12,577)
61,893
Depreciation, amortisation & impairment
21,329
54,925
803
77,057
(48,538)
28,519
EBITDA
29,403
71,572
(15,011)
85,964
(75,647)
10,317
Accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who 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
Coal sales
Freight and ash disposal revenue
Sales revenue from contracts with customers
Accounting policy
2022
$’000
2021
$’000
24,754
33,247
14,833
14,920
39,587
48,167
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.
14
Bathurst Resources Limited | Financial statements
15
Section 2: Financial statements 65
Notes to the financial statements
For the year ended 30 June 2022
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
Note
2022
$’000
2021
$’000
9,356
12,557
13,889
12,207
7,691
10,012
3,653
(264)
3,129
236
34,325
38,141
195
270
3,935
563
3,140
63
(64)
205
255
1,585
1,050
2,113
84
(46)
18
Included in remuneration of auditors is $71k relating to the half year review with the remainder for end of year audit fees.
6. Net finance costs
Interest income
Reversal of accrued interest on deferred consideration
Foreign exchange movement on deferred consideration
Unrealised foreign exchange gain on debt instruments
Realised foreign exchange
Total finance income
Interest expense on finance leases
Interest expense on debt instruments
Unrealised foreign exchange loss
Rehabilitation provisions unwinding of discount
Deferred consideration unwinding of discount
Other finance costs
Total finance costs
Total net finance (cost)/income
5
-
-
-
15
18
10,983
5,086
538
-
20
(82)
16,625
(153)
(1,947)
(1,596)
(312)
(61)
(286)
(17)
(1)
(38)
(626)
(151)
(2,705)
(2,565)
(2,685)
14,060
16
15 (c)
Bathurst Resources Limited | Financial statements
66 Bathurst Resources Limited Annual Report 2022
16
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
4. Cost of sales
Raw materials, mining costs and consumables used
Changes in inventories of finished goods and work in progress
5. Administrative and other expenses
Administrative and other expenses include the following items:
Freight costs
Mine labour costs
Amortisation expenses
Total cost of sales
Remuneration of auditors
Directors’ fees
Legal fees
Consultants
Employee benefit expense
Rent
Share-based payments
6. Net finance costs
Interest income
Reversal of accrued interest on deferred consideration
Foreign exchange movement on deferred consideration
Unrealised foreign exchange gain on debt instruments
Realised foreign exchange
Total finance income
Interest expense on finance leases
Interest expense on debt instruments
Unrealised foreign exchange loss
Rehabilitation provisions unwinding of discount
Deferred consideration unwinding of discount
Other finance costs
Total finance costs
Total net finance (cost)/income
Note
2022
$’000
2021
$’000
9,356
12,557
13,889
12,207
7,691
10,012
3,653
(264)
3,129
236
34,325
38,141
195
270
3,935
563
3,140
63
(64)
205
255
1,585
1,050
2,113
84
(46)
18
5
-
-
-
15
18
10,983
5,086
538
-
20
(82)
16,625
(153)
(1,947)
(1,596)
(312)
(61)
(286)
(17)
(1)
(38)
(626)
(151)
(2,705)
(2,565)
(2,685)
14,060
16
15 (c)
7.
Income tax benefit
(a) Income tax benefit
Current tax
Deferred tax
Income tax benefit
Reconciliation of income tax benefit to tax payable
Profit before income tax
Tax at the standard New Zealand rate of 28 percent
Tax effects of amounts not assessable in calculating taxable income:
Share of joint venture equity profit
Taxable temporary differences not recognised
Non-taxable adjustments including movement on deferred consideration
Current year losses not recognised as a deferred tax asset
Income tax benefit
(b) Imputation credits
Opening balance imputation credit account
Imputation credits attached to dividends received and other items
2022
$’000
-
-
-
2021
$’000
6,328
(6,328)
-
30,498
8,539
66,721
18,682
(14,895)
(3,705)
(1,605)
-
3,464
4,497
-
15,578
3,792
(19,876)
4,899
-
15,577
1
Imputation credits available for use in future periods
19,370
15,578
Included in remuneration of auditors is $71k relating to the half year review with the remainder for end of year audit fees.
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.
Bathurst Resources Limited | Financial statements
16
Bathurst Resources Limited | Financial statements
17
Section 2: Financial statements 67
Notes to the financial statements
For the year ended 30 June 2022
8.
Impairment
Impairment of historical exploration and evaluation expenditure
Impairment of New Brighton historical acquisition value
Impairment of Canterbury mining and property, plant and equipment assets
Impairment losses
Note
11
10 & 11
2022
$’000
309
-
-
2021
$’000
-
12,810
9,645
309
22,455
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
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.
There is a third CGU that is assessed for impairment in note 13. The assets that this CGU represents are only 65 percent owned and due
to a joint venture ownership structure not consolidated in the Group results.
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 2022.
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. There was $0.7m in capitalised exploration and
evaluation expenditure relating to this CGU at 30 June 2021. During the year $0.3m was written back as these balances related to
historical items that could no longer be supported. Apart from $0.4m of capitalised exploration and evaluation expenditure, the CGU
remains impaired at 30 June 2022.
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.
Bathurst Resources Limited | Financial statements
68 Bathurst Resources Limited Annual Report 2022
18
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
8.
Impairment
Impairment of historical exploration and evaluation expenditure
Impairment of New Brighton historical acquisition value
Impairment of Canterbury mining and property, plant and equipment assets
Impairment losses
Note
11
10 & 11
2022
$’000
309
-
-
2021
$’000
-
12,810
9,645
309
22,455
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
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.
There is a third CGU that is assessed for impairment in note 13. The assets that this CGU represents are only 65 percent owned and due
to a joint venture ownership structure not consolidated in the Group results.
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 2022.
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. There was $0.7m in capitalised exploration and
evaluation expenditure relating to this CGU at 30 June 2021. During the year $0.3m was written back as these balances related to
historical items that could no longer be supported. Apart from $0.4m of capitalised exploration and evaluation expenditure, the CGU
Bathurst domestic coal
Buller Coal project
remains impaired at 30 June 2022.
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.
9. Financial assets
Trade and other receivables
Trade receivables from contracts with customers
Receivable from BT Mining
Other receivables and prepayments
Total trade and other receivables
Note
13
2022
$’000
3,636
478
243
2021
$’000
3,518
90
678
4,357
4,286
Trade receivables from contracts with customers (“trade receivables”) are amounts due from customers for goods sold or services
performed in the ordinary course of business. Trade receivables are generally due for settlement within 20 to 30 days and as such
classified as current. There are no contract assets (accrued revenue) relating to contracts with customers.
Accounting policy
Initial recognition and measurement
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. 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.
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 20. Gains and losses are recognised in profit or loss
when the asset is derecognised, modified or impaired.
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.
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.
Bathurst Resources Limited | Financial statements
18
Bathurst Resources Limited | Financial statements
19
Section 2: Financial statements 69
Notes to the financial statements
For the year ended 30 June 2022
10. Property, plant and equipment
Freehold
land
Buildings
Mine
infrastructure
Plant &
machinery
Year ended 30 June 2022
Opening net book value
$’000
2,026
Additions including NZ IFRS 16
Transfers
Disposals
-
-
-
$’000
1,530
-
47
(540)
Depreciation including NZ IFRS 16
(27)
(63)
Closing net book value
1,999
974
$’000
95
-
-
(10)
(10)
75
Furniture
and
fittings
$’000
22
515
9
Work in
progress
Total
$’000
$’000
413
12,518
1,420
1,962
(1,323)
-
$’000
8,432
27
1,267
(1,698)
(208)
81
(2,375)
(2,007)
(278)
-
(2,385)
6,021
60
591
9,720
Cost
15,522
6,823
2,899
26,722
3,138
13,755
68,859
Accumulated write-downs
(13,523)
(5,849)
(2,824)
(20,701)
(3,078)
(13,164)
(59,139)
Closing net book value
1,999
974
75
6,021
60
591
9,720
Year ended 30 June 2021
Opening net book value
2,709
1,689
125
12,354
Additions
Transfers
94
-
-
-
-
-
-
1,067
512
48
44
598
17,987
926
1,068
(1,111)
-
Depreciation & other adjustments
(777)
(159)
(30)
(4,989)
(582)
-
(6,537)
Closing net book value
2,026
1,530
95
8,432
22
413
12,518
Cost
15,522
7,368
2,913
30,691
3,035
12,753
72,282
Accumulated write-downs
(13,496)
(5,838)
(2,818)
(22,259)
(3,013)
(12,340)
(59,764)
Closing net book value
2,026
1,530
95
8,432
22
413
12,518
The value of right-of-use (leased) assets included in property, plant and equipment are noted below:
Year ended 30 June 2022
Opening net book value
Additions
Disposals
Depreciation
Closing net book value
Freehold
land
Buildings
Plant &
machinery
$’000
$’000
143
307
12
-
(204)
-
-
(27)
116
$’000
3,883
-
(462)
(811)
115
2,610
Furniture
and
fittings
$’000
48
-
-
(24)
24
Total
$’000
4,381
12
(462)
(1,066)
2,865
Bathurst Resources Limited | Financial statements
70 Bathurst Resources Limited Annual Report 2022
20
Notes to the financial statements
For the year ended 30 June 2022
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 3.44 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 percent to 6.51 percent 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.
Accumulated write-downs
(13,496)
(5,838)
(2,818)
(22,259)
(3,013)
(12,340)
(59,764)
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:
Notes to the financial statements
For the year ended 30 June 2022
10. Property, plant and equipment
Year ended 30 June 2022
Opening net book value
Additions including NZ IFRS 16
Transfers
Disposals
land
$’000
2,026
-
-
-
$’000
1,530
-
47
(540)
Freehold
Buildings
Mine
Plant &
Furniture
infrastructure
machinery
Work in
progress
Total
and
fittings
$’000
22
515
9
$’000
8,432
27
1,267
$’000
$’000
413
12,518
1,420
1,962
(1,323)
-
(1,698)
(208)
81
(2,375)
$’000
95
-
-
(10)
(10)
75
Depreciation including NZ IFRS 16
(27)
(63)
(2,007)
(278)
-
(2,385)
Closing net book value
1,999
974
6,021
60
591
9,720
Cost
15,522
6,823
2,899
26,722
3,138
13,755
68,859
Accumulated write-downs
(13,523)
(5,849)
(2,824)
(20,701)
(3,078)
(13,164)
(59,139)
Closing net book value
1,999
974
75
6,021
60
591
9,720
Year ended 30 June 2021
Opening net book value
2,709
1,689
125
12,354
Additions
Transfers
94
-
-
-
-
-
-
1,067
512
48
44
598
17,987
926
1,068
(1,111)
-
Depreciation & other adjustments
(777)
(159)
(30)
(4,989)
(582)
-
(6,537)
Closing net book value
2,026
1,530
95
8,432
22
413
12,518
Cost
15,522
7,368
2,913
30,691
3,035
12,753
72,282
Closing net book value
2,026
1,530
95
8,432
22
413
12,518
The value of right-of-use (leased) assets included in property, plant and equipment are noted below:
Year ended 30 June 2022
Opening net book value
Additions
Disposals
Depreciation
Freehold
Buildings
Plant &
Furniture
Total
land
machinery
$’000
$’000
143
307
12
-
(204)
-
-
(27)
116
$’000
3,883
-
(462)
(811)
and
fittings
$’000
48
-
-
(24)
24
$’000
4,381
12
(462)
(1,066)
2,865
Closing net book value
115
2,610
• Buildings
• Mine infrastructure
• Plant and machinery
• Leased land 7 – 8 years
• Furniture, fittings and equipment
2 – 12 years
6 - 50 years (3 – 5 years for ROU assets)
3 – 20 years
2 – 20 years
Bathurst Resources Limited | Financial statements
20
Bathurst Resources Limited | Financial statements
21
Section 2: Financial statements 71
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.
Notes to the financial statements
For the year ended 30 June 2022
11. Mining assets
Exploration and evaluation assets
Opening balance
Expenditure capitalised
Impairment of Canterbury mine assets
Note
2022
$’000
1,790
697
-
Impairment of historical balances in Buller Coal project
8
(309)
2021
$’000
1,869
150
(229)
-
Total exploration and evaluation assets
2,178
1,790
Mining licences/permits and capitalised waste moved in advance
Opening balance
Expenditure capitalised
Amortisation
Impairment of Canterbury mine assets
Impairment of New Brighton historical acquisition value
Waste moved in advance capitalised
Total mining licences/permits and capitalised waste moved in advance
Total mining assets
Accounting policy
Exploration and evaluation
13,900
32,649
105
312
(3,653)
(3,129)
-
-
(7,359)
(12,810)
1,960
4,237
12,312
13,900
14,490
15,690
Exploration and evaluation expenditure incurred is capitalised to the extent that the expenditure is expected to be
recovered through the successful development and exploitation of the area of interest, or the exploration and evaluation
activities in the area of interest have not yet reached a point where such an assessment can be made. All other exploration
and evaluation expenditure is expensed as incurred.
Capitalised costs are accumulated in respect of each identifiable area of interest. Costs are only carried forward to the
extent that tenure is current and they are expected to be recouped through the successful development of the area (or,
alternatively by its sale) or where activities in the area have not yet reached a stage which permits reasonable assessment
of the existence of economically recoverable reserves and operations in relation to the area are continuing.
Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which the decision
to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area
according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Bathurst Resources Limited | Financial statements
72 Bathurst Resources Limited Annual Report 2022
22
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
Impairment of historical balances in Buller Coal project
8
(309)
Total exploration and evaluation assets
2,178
1,790
11. Mining assets
Exploration and evaluation assets
Opening balance
Expenditure capitalised
Impairment of Canterbury mine assets
Mining licences/permits and capitalised waste moved in advance
Opening balance
Expenditure capitalised
Amortisation
Impairment of Canterbury mine assets
Impairment of New Brighton historical acquisition value
Waste moved in advance capitalised
Total mining licences/permits and capitalised waste moved in advance
Total mining assets
Accounting policy
Exploration and evaluation
Note
2022
$’000
1,790
697
-
2021
$’000
1,869
150
(229)
-
13,900
32,649
105
312
(3,653)
(3,129)
-
-
(7,359)
(12,810)
1,960
4,237
12,312
13,900
14,490
15,690
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.
11. Mining assets continued
Accounting policy continued
Mining licences/permits
Mining licences/permits 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
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.
Recoverability of mining assets/impairment
The future recoverability of the non-financial assets recorded by the Group is dependent upon a number of factors,
including whether the Group decides to exploit its mine property itself or, if not, whether it successfully recovers the related
asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes,
costs of drilling and production, production rates, future legal and regulatory changes, and changes to commodity prices
and foreign exchange rates. These factors impact both an assessment of whether impairment should be recognised, as well
as if there are indicators that previously recognised impairment should be reversed.
Bathurst Resources Limited | Financial statements
22
Bathurst Resources Limited | Financial statements
23
Section 2: Financial statements 73
Notes to the financial statements
For the year ended 30 June 2022
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 Minerals Limited
Bathurst Resources (Canada) Limited
Equity holding
Country of
incorporation
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Canada
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2022
%
100
100
100
100
100
100
100
100
2021
%
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). Bathurst
Minerals Limited which was incorporated in 2022 is at present a dormant entity.
Accounting policy
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the Company and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-
related costs are expensed as incurred.
Contingent consideration (deferred consideration) to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a financial asset
or financial liability are recognised in accordance with NZ IAS 39 in profit or loss as ‘fair value (loss)/gain on deferred
consideration’.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is
recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held
interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase,
the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated.
Bathurst Resources Limited | Financial statements
74 Bathurst Resources Limited Annual Report 2022
24
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
12. Investment in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
13. Interest in joint ventures
Interest in BT Mining Limited (“BT Mining”)
Interest in NWP Coal Canada Limited (“NWP”)
Total interest in joint ventures
(a) 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
Closing balance
2022
$’000
149,962
19,598
2021
$’000
97,718
16,518
169,560
114,236
16,250
16,250
133,712
81,468
149,962
97,718
97,718
89,543
(9,750)
-
53,244
13,283
8,750
(5,108)
149,962
97,718
Bathurst 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.
Bathurst 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.
BT Mining’s statement of financial position is shown in note 13 (a) (b), and a summarised income statement for BT Mining is shown in
note 2 in the eliminate BT Mining column, of which Bathurst’s interest is 65 percent. An unaudited proportionate consolidation of Bathurst
and BT Mining is located after the notes to the financial statements.
Impairment assessment
BT Mining is viewed as a single CGU for impairment assessment purposes, comprised of two CGUs within the CGU. In assessing the
recoverability of the Stockton mine (Buller Plateau) CGU the value in use future cash flows were calculated with reference to:
•
•
forecast sales of estimated recoverable reserves over the life of the individual mining permits which expire by 2029;
forecast hard coking coal prices decreasing from USD $331 to a longer-term average of USD $170 per tonne, and the long-term
relativity of soft coking coal prices to be 68 percent of hard coking coal prices adjusted by management to reflect a price consistent
with the historical blended coal quality;
• NZD/USD foreign exchange rate of 0.66; and 0.67 thereafter; and
• a post-tax discount rate of 9.8 percent, pre-tax 13.5%.
In assessing the recoverability of the North Island CGU the value in use future cash flows were calculated with reference to:
the sale of the estimated recoverable reserves over the life of the individual mining permits between three to eight years;
•
• assumption that mining permit resource consents can be renewed post FY23;
• assumption that future coal prices are consistent with current contracted prices; and
• a post-tax discount rate of 9.8 percent, pre-tax 13.5%.
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 Minerals Limited
Bathurst Resources (Canada) Limited
Equity holding
Country of
incorporation
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Canada
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2022
%
100
100
100
100
100
100
100
100
2021
%
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). Bathurst
Minerals Limited which was incorporated in 2022 is at present a dormant entity.
Accounting policy
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the Company and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-
related costs are expensed as incurred.
Contingent consideration (deferred consideration) to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a financial asset
or financial liability are recognised in accordance with NZ IAS 39 in profit or loss as ‘fair value (loss)/gain on deferred
consideration’.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is
recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held
interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase,
the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated.
Bathurst Resources Limited | Financial statements
24
Bathurst Resources Limited | Financial statements
25
Section 2: Financial statements 75
Notes to the financial statements
For the year ended 30 June 2022
13. Interest in joint ventures continued
(a) BT Mining continued
Related party transactions
Salaries for employees who work across both Bathurst and BT Mining are recharged so that staff costs are recorded appropriately. For
the year ended 30 June 2022 $2.6m of salaries were recharged from Bathurst to BT Mining (2021: $2.4m) and $0.9m recharged from BT
Mining to Bathurst (2021: $0.7m). There was a receivable balance due from BT Mining to Bathurst of $0.5m (2021: $0.1m).
Coal sales are made to Bathurst’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 2022 were $4.2m (2021: $4.5m).
(b) Statement of financial position
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
Finance leases
Derivative liabilities
Provisions
Current liabilities
Borrowings
Finance leases
Provisions
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Share capital
Reserves
Retained earnings net of dividends paid
EQUITY
Bathurst Resources Limited | Financial statements
76 Bathurst Resources Limited Annual Report 2022
2022
$’000
2021
$’000
87,976
15,670
14,620
2,133
36,161
37,337
1,797
52,900
1,910
10,850
1,781
31,312
1,078
-
206,214
89,311
93,781
103,314
54,355
59,529
47,300
56,746
114
755
6,507
9,864
202,057
230,208
408,271
319,519
33,612
25,973
33,877
279
8,061
7,101
5,675
8,766
-
7,848
17,459
6,991
93,288
62,354
-
723
20,290
26,720
63,983
79,388
84,273
106,831
177,561
169,185
230,710
150,334
25,000
25,000
7,591
(5,871)
198,119
131,205
230,710
150,334
26
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
13. Interest in joint ventures continued
(a) BT Mining continued
Related party transactions
13. Interest in joint ventures continued
(b) NWP
Salaries for employees who work across both Bathurst and BT Mining are recharged so that staff costs are recorded appropriately. For
the year ended 30 June 2022 $2.6m of salaries were recharged from Bathurst to BT Mining (2021: $2.4m) and $0.9m recharged from BT
Mining to Bathurst (2021: $0.7m). There was a receivable balance due from BT Mining to Bathurst of $0.5m (2021: $0.1m).
Coal sales are made to Bathurst’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 2022 were $4.2m (2021: $4.5m).
Balances held in NWP
Equity investment
Equitable share of profit
Total interest in NWP
2022
$’000
19,362
236
2021
$’000
16,253
265
19,598
16,518
(b) Statement of financial position
Cash
Restricted short-term deposits
Trade and other receivables
New Zealand emission units
Crown indemnity
Inventories
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
Finance leases
Derivative liabilities
Provisions
Current liabilities
Borrowings
Finance leases
Provisions
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Share capital
Reserves
EQUITY
Retained earnings net of dividends paid
2022
$’000
2021
$’000
87,976
15,670
14,620
2,133
36,161
37,337
1,797
52,900
1,910
10,850
1,781
31,312
1,078
-
206,214
89,311
93,781
103,314
54,355
59,529
47,300
56,746
114
755
6,507
9,864
202,057
230,208
408,271
319,519
33,612
25,973
33,877
279
8,061
7,101
5,675
8,766
-
7,848
17,459
6,991
93,288
62,354
-
723
20,290
26,720
63,983
79,388
84,273
106,831
177,561
169,185
230,710
150,334
25,000
25,000
7,591
(5,871)
198,119
131,205
230,710
150,334
The investment in NWP is via a wholly owned subsidiary Bathurst Resources (Canada) Limited. 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
Equity funds invested to date equal 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 $4.0m as part of tranche two. The advance to tranche two
consists of $2.6m issued in exchange for preference shares, and $1.4m issued in exchange for ordinary shares. BRL holds a 22.1 percent
equity holding in NWP including the preference shares. Payment of the balance of tranche two is not expected in the next twelve months.
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 unaudited financials of which Bathurst holds 22.1 percent
Cash
Other current assets
Exploration and evaluation assets
Other non-current assets
TOTAL ASSETS
Current liabilities
Non-current financial liabilities
TOTAL LIABILITIES
NET ASSETS
241
47
275
178
41,677
35,336
1,825
1,274
43,790
37,063
163
528
1,266
5,292
1,429
5,820
42,361
31,243
Bathurst Resources Limited | Financial statements
26
Bathurst Resources Limited | Financial statements
27
Section 2: Financial statements 77
Notes to the financial statements
For the year ended 30 June 2022
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 equal 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
2022
$’000
19,919
270
1,257
2021
$’000
13,892
273
2,225
21,001
21,001
812
3,548
3,418
69
812
3,741
3,418
87
50,294
45,449
-
-
-
-
(50,294)
(45,449)
-
-
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.
Included in the tax losses balance above is an amount of $1.95m in relation to a prior period adjustment which was made to reflect the
available tax losses as per the final tax return.
Accounting policy
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting or taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Bathurst Resources Limited | Financial statements
78 Bathurst Resources Limited Annual Report 2022
28
Notes to the financial statements
For the year ended 30 June 2022
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 equal 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.
21,001
21,001
2022
$’000
19,919
270
1,257
812
3,548
3,418
69
-
-
-
2021
$’000
13,892
273
2,225
812
3,741
3,418
87
-
-
-
(50,294)
(45,449)
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
Other
Total deferred tax liabilities
Net deferred tax asset not recognised
Net deferred tax asset
Total deferred tax assets
50,294
45,449
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.
Included in the tax losses balance above is an amount of $1.95m in relation to a prior period adjustment which was made to reflect the
available tax losses as per the final tax return.
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.
Notes to the financial statements
For the year ended 30 June 2022
15. Financial liabilities
(a) Trade and other payables
Trade payables
Accruals
Employee benefit payable
Interest payable
Other payables
Total trade and other payables
2022
$’000
2,292
4,797
1,279
-
-
2021
$’000
1,321
3,536
1,465
397
43
8,368
6,762
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
Total current borrowings
Non-current
Secured
Lease liabilities
Convertible bonds
Total non-current borrowings
Total borrowings
Conversion of convertible bonds
260
260
508
-
508
768
983
983
1,005
9,353
10,358
11,341
The convertible bonds issued on 1 February 2021 with an original maturity date of 1 August 2022 were converted to ordinary share capital
in BRL at the election of the note holders on the 11 May 2022 in accordance with the terms of the subscription agreement. 20.4m shares
were issued at a strike price of AUD 0.49.
On the initial recognition of the bonds, the conversion feature (the ability to convert the instrument into shares) was classified as a
derivative as it did not meet the ‘fixed for fixed’ test due to the denomination of the bonds being different to BRL’s functional currency.
The value recognised in equity on the conversion of the debt to share capital equals the fair value of the conversion feature on the
conversion date, plus the amortised amount of principal debt on the conversion date using the effective interest rate method.
The fair value of the conversion option on maturity of the convertible bonds (representing $13.1m of the value recognised in equity) was
determined using a Black Scholes Model that considers the:
term of the conversion option;
• exercise price (AUD 0.49) and volume weighted average share price at the conversion date (AUD 1.066);
•
• expected price volatility of the underlying share (97.4 percent) which is based on historical volatility; and
• expected dividend yield.
Bathurst Resources Limited | Financial statements
28
Bathurst Resources Limited | Financial statements
29
Section 2: Financial statements 79
Notes to the financial statements
For the year ended 30 June 2022
15. Financial liabilities continued
(b) Borrowings continued
Lease liabilities
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.
(c) Deferred consideration
Current - acquisition of subsidiary
Non-current - acquisition of subsidiary
Total deferred consideration
Opening balance
Unwinding of discount
Fair value adjustment – New Brighton
Reversal of fair value of Buller coal project performance payment
Foreign exchange movement on Buller coal performance payment
Accrued interest on Buller coal project
Consideration paid net of movements in accruals during the year
Closing balance
Buller Coal project
2022
$’000
920
1,544
2,464
3,515
286
2021
$’000
998
2,517
3,515
79,317
626
(356)
(2,232)
-
-
-
(981)
2,464
(57,159)
(5,086)
(10,983)
(968)
3,515
Bathurst acquired Buller Coal Limited (formerly L&M Coal Limited) (“Buller Coal”) from L&M Coal Holdings Limited (“L&M”) in
November 2010. The agreement for sale and purchase (“ASP”), 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 royalties
on coal sold, two contingent “performance payments” of USD $40m each, and the contingent issue of performance shares. The first
performance payment is prima facie payable upon 25,000 tonnes of coal being shipped from the Buller Coal project area, and 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 both payments are triggered.
Bathurst has the option to defer cash payment of the performance payments and elect to submit a higher royalty on coal sold from the
respective permit areas until such time the performance payments are made. The option to pay a higher royalty rate has been
assumed in the valuation and recognition of deferred consideration.
Bathurst has and will continue to remit royalty payments to L&M on all Escarpment coal sold as required by the Royalty Deed and this
includes ongoing sales from stockpiles. Further information is included in note 23.
New Brighton Collieries Limited
Acquisition was completed on 10 March 2015. The balance due on settlement is satisfied by an ongoing royalty based on sales revenue.
The fair value of the future royalty payments is estimated using a discount rate based upon the Group’s WACC (9.2%), projected
production profile based on activity at the Takitimu mine (581kt) and forecast domestic coal prices ($93 per tonne, inflation adjusted).
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
Bathurst Resources Limited | Financial statements
80 Bathurst Resources Limited Annual Report 2022
2022
2021
Increase
in estimate
$’m
Decrease
in estimate
$’m
Increase
in estimate
$’m
Decrease
in estimate
$’m
0.1
(0.1)
(0.1)
(0.1)
0.2
0.1
0.1
(0.2)
(0.2)
(0.2)
0.2
0.2
30
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the
2022
$’000
920
1,544
2,464
3,515
286
-
-
-
(981)
2,464
2021
$’000
998
2,517
3,515
79,317
626
(57,159)
(5,086)
(10,983)
(968)
3,515
15. Financial liabilities continued
(b) Borrowings continued
Lease liabilities
event of default.
(c) Deferred consideration
Current - acquisition of subsidiary
Non-current - acquisition of subsidiary
Total deferred consideration
Opening balance
Unwinding of discount
Reversal of fair value of Buller coal project performance payment
Foreign exchange movement on Buller coal performance payment
Accrued interest on Buller coal project
Consideration paid net of movements in accruals during the year
Closing balance
Buller Coal project
Fair value adjustment – New Brighton
(356)
(2,232)
Bathurst acquired Buller Coal Limited (formerly L&M Coal Limited) (“Buller Coal”) from L&M Coal Holdings Limited (“L&M”) in
November 2010. The agreement for sale and purchase (“ASP”), 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 royalties
on coal sold, two contingent “performance payments” of USD $40m each, and the contingent issue of performance shares. The first
performance payment is prima facie payable upon 25,000 tonnes of coal being shipped from the Buller Coal project area, and 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 both payments are triggered.
Bathurst has the option to defer cash payment of the performance payments and elect to submit a higher royalty on coal sold from the
respective permit areas until such time the performance payments are made. The option to pay a higher royalty rate has been
assumed in the valuation and recognition of deferred consideration.
Bathurst has and will continue to remit royalty payments to L&M on all Escarpment coal sold as required by the Royalty Deed and this
includes ongoing sales from stockpiles. Further information is included in note 23.
New Brighton Collieries Limited
Acquisition was completed on 10 March 2015. The balance due on settlement is satisfied by an ongoing royalty based on sales revenue.
The fair value of the future royalty payments is estimated using a discount rate based upon the Group’s WACC (9.2%), projected
production profile based on activity at the Takitimu mine (581kt) and forecast domestic coal prices ($93 per tonne, inflation adjusted).
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
2022
2021
Increase
in estimate
Decrease
in estimate
Increase
in estimate
Decrease
in estimate
$’m
0.1
(0.1)
(0.1)
$’m
(0.1)
0.2
0.1
$’m
0.1
(0.2)
(0.2)
$’m
(0.2)
0.2
0.2
15. Financial liabilities continued
(c) Deferred consideration continued
New Brighton Collieries Limited continued
Security
Pursuant to a deed of guarantee and security the deferred consideration is secured by way of a first-ranking security interest in all of
New Brighton Collieries Limited’s present and future assets (and present and future rights, title and interest in any assets).
(d) Fair value measurements
All 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 and convertible bond derivative at fair value through profit or loss.
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.
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.
The fair value of the liability portion of the convertible bonds recognised on issue date was the difference between cash
received and the fair value of the conversion option. The liability is amortised to its face value on maturity through the EIR
method.
Fair value through profit or loss
Deferred consideration is subsequently measured at fair value through profit or loss, as IFRS 9 denotes the measurement
requirements of IFRS 3 Business combinations applies. The fair value of deferred consideration payments is determined at
acquisition date. Subsequent changes to the fair value of the deferred consideration are recognised through the income
statement. The portion of the fair value adjustment due to the time value of money (unwinding of discount) is recognised as a
finance cost.
The convertible bond derivative is the conversion option of the convertible bonds and is measured at fair value through profit
or loss at each reporting date. The value recognised is determined using a Black Scholes Model for the convertible bonds that
includes 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.
Bathurst Resources Limited | Financial statements
30
Bathurst Resources Limited | Financial statements
31
Section 2: Financial statements 81
Notes to the financial statements
For the year ended 30 June 2022
15. Financial liabilities continued
Accounting policy continued
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
statement of profit or loss.
Fair value
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in a transaction between
active market participants or in its absence, the most advantageous market to which the Group has access to at the
reporting date. The fair value of a financial liability reflects its non-performance risk.
When available, fair value is measured using the quoted price in an active market. A market is active if transactions take
place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in
an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and
minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market
participants would take into account in pricing a transaction.
The following fair value hierarchy, as set out in NZ IFRS 13: Fair Value Measurement, has been used to categorise the inputs
to valuation techniques used to measure the financial assets and financial liabilities which are carried at fair value:
a)
b)
c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (level 2), and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
Deferred consideration is valued at a fair value hierarchy of level 3, with the convertible bond derivative valued at a fair
value hierarchy of level 2. The fair value of debt instruments disclosed has been valued at a fair value hierarchy of level 2.
Key judgements and estimates
Deferred consideration
In valuing the deferred consideration payable under business acquisitions management uses estimates and assumptions.
These include future coal prices, discount rates, coal production, and the timing of payments. The amounts of deferred
consideration are reviewed at each balance date and updated based on best available estimates and assumptions at that
time.
Conversion option of Convertible Bonds
The Group has made a judgement that the conversion feature of the convertible bonds should be classified as a derivative
liability. This judgement was made on the basis that the conversion feature does not satisfy 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 remeasured after initial recognition through profit or
loss.
The value recognised was determined using a Black Scholes Model for the convertible bonds that includes 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.
Bathurst Resources Limited | Financial statements
82 Bathurst Resources Limited Annual Report 2022
32
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
15. Financial liabilities continued
16. Rehabilitation provisions
Accounting policy continued
Derecognition
statement of profit or loss.
Fair value
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in a transaction between
active market participants or in its absence, the most advantageous market to which the Group has access to at the
reporting date. The fair value of a financial liability reflects its non-performance risk.
When available, fair value is measured using the quoted price in an active market. A market is active if transactions take
place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in
an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and
minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market
participants would take into account in pricing a transaction.
The following fair value hierarchy, as set out in NZ IFRS 13: Fair Value Measurement, has been used to categorise the inputs
to valuation techniques used to measure the financial assets and financial liabilities which are carried at fair value:
a)
b)
c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (level 2), and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
Deferred consideration is valued at a fair value hierarchy of level 3, with the convertible bond derivative valued at a fair
value hierarchy of level 2. The fair value of debt instruments disclosed has been valued at a fair value hierarchy of level 2.
Key judgements and estimates
Deferred consideration
In valuing the deferred consideration payable under business acquisitions management uses estimates and assumptions.
These include future coal prices, discount rates, coal production, and the timing of payments. The amounts of deferred
consideration are reviewed at each balance date and updated based on best available estimates and assumptions at that
Conversion option of Convertible Bonds
The Group has made a judgement that the conversion feature of the convertible bonds should be classified as a derivative
liability. This judgement was made on the basis that the conversion feature does not satisfy 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 remeasured after initial recognition through profit or
time.
loss.
The value recognised was determined using a Black Scholes Model for the convertible bonds that includes 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.
Current
Non-current
Total provisions
Rehabilitation provision movement:
Opening balance
Unwinding of discount
Movement in Crown indemnity on acid mine drainage for Sullivan permit
Movement in provision net of expenditure incurred
Closing balance
2022
$’000
1,172
4,100
5,272
2021
$’000
3,798
4,914
8,712
8,712
5,866
61
16
(3,517)
5,272
38
182
2,626
8,712
The decrease in the provision is due to rehabilitation works completed at the Canterbury mine. Bonds totalling $4.5m as shown on the
face of the statement of financial position (30 June 2021: $4.2m) are provided to various local councils in respect to future rehabilitation
obligations.
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.
Bathurst Resources Limited | Financial statements
32
Bathurst Resources Limited | Financial statements
33
Section 2: Financial statements 83
Notes to the financial statements
For the year ended 30 June 2022
17. Equity
(a) Ordinary fully paid shares
Opening balance
Issue of shares from conversion of convertible bonds
Share consolidation
Closing balance
2022
Number
of shares
’000
2021
Number
of shares
’000
170,952
1,709,520
20,408
-
-
(1,538,568)
191,360
170,952
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.
Share issue
20.4m shares were issued on conversion of the convertible bonds on 11 May 2022. Refer note 15 (b) for further information.
Dividends
There were no dividends paid or declared during the year.
(b) Contributed equity
Opening balance
Issue of shares from conversion of convertible bonds
Closing balance
$’000
$’000
293,107
293,107
23,863
-
316,970
293,107
The value recognised in equity from the conversion of the convertible bonds equals the fair value of the conversion option and the
amortised balance of the underlying principal debt value at maturity date. Refer note 15 (b) for further information.
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.
18. Reserves
Share-based payment reserve
Foreign exchange translation reserve
Share of BT Mining FX hedging through OCI
Reorganisation reserve
Total reserves
2022
$’000
247
1,456
4,934
2021
$’000
311
(64)
(3,816)
(32,760)
(32,760)
(26,123)
(36,329)
Bathurst Resources Limited | Financial statements
84 Bathurst Resources Limited Annual Report 2022
34
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
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.
20.4m shares were issued on conversion of the convertible bonds on 11 May 2022. Refer note 15 (b) for further information.
The value recognised in equity from the conversion of the convertible bonds equals the fair value of the conversion option and the
amortised balance of the underlying principal debt value at maturity date. Refer note 15 (b) for further information.
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.
(a) Ordinary fully paid shares
Opening balance
Issue of shares from conversion of convertible bonds
17. Equity
Share consolidation
Closing balance
Ordinary shares
Share issue
Dividends
There were no dividends paid or declared during the year.
(b) Contributed equity
Opening balance
Issue of shares from conversion of convertible bonds
Closing balance
18. Reserves
Share-based payment reserve
Foreign exchange translation reserve
Share of BT Mining FX hedging through OCI
Reorganisation reserve
Total reserves
2022
Number
of shares
’000
2021
Number
of shares
’000
170,952
1,709,520
20,408
-
-
(1,538,568)
191,360
170,952
$’000
$’000
293,107
293,107
23,863
-
316,970
293,107
2022
$’000
247
1,456
4,934
2021
$’000
311
(64)
(3,816)
(32,760)
(32,760)
(26,123)
(36,329)
18. Reserves continued
Nature and purpose of reserves
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of performance rights issued. Fair value for the rights on issue was
calculated using the Black Scholes valuation method as they contain market performance conditions (as detailed below). The fair value
for the executive director performance rights was determined to be AU $0.6982, for the SLT performance rights AU $0.7642. Key inputs
used for the valuations were exercise price (nil), risk free rate (Exec: 0.92%, SLT: 1.48%), weighted average share price (Exec: AU $0.72,
SLT: AU $0.79), dividend yield (nil), as well as expected volatility in the share price which is based on historical actual volatility (Exec:
80.47%, SLT: 80.39%).
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 and coal price hedging through OCI
The value booked represents 65 percent equity share of the fair value movement on FX and coal price 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.
Details on share-based payments
Grant date
Vesting date
Executive director performance rights
15 October 2022
SLT performance rights
15 October 2022
Executive director performance rights
1 December 2024
SLT performance rights
1 December 2024
Opening
balance
000s
460
484
-
-
944
Issued
Lapsed
000s
-
-
1,046
935
1,981
000s
(460)
(484)
-
-
(944)
Closing
balance
000s
-
-
1,046
935
1,981
Performance rights
LTIP performance rights are issued to executive directors and members of the senior leadership team (“SLT”) 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 during
the year were approved at the 2021 annual general meeting.
Rights 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 1 December 2024 for both the performance rights on issue at year end. BRL also has to
achieve a minimum total shareholder return compound annual growth rate for the period 1 July 2021 to and including 30 June 2024 for
both issues. Rights lapsed during the year as the total shareholder return compound annual growth rate was not achieved.
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
34
Bathurst Resources Limited | Financial statements
35
Section 2: Financial statements 85
Notes to the financial statements
For the year ended 30 June 2022
19. Earnings per share
(a) Earnings per share (“EPS”)
Basic EPS
Diluted EPS
(b) Reconciliation of earnings used in calculation
Earnings used to calculate basic EPS
2022
Cents
17.55
17.36
2021
Cents
39.03
35.53
$’000
$’000
30,498
66,721
Interest expense on convertible instruments & movement on convertible bond derivative
-
100
Earnings used in calculation of diluted EPS
30,498
66,821
(c) Weighted average number of shares
Weighted average shares used in calculation of basic EPS
Dilutive potential ordinary shares (average weighted convertible notes and bonds)
Dilutive potential ordinary shares (performance rights)
Weighted average shares used in calculation of diluted EPS
Shares
000s
Shares
000s
173,747
170,952
-
17,127
1,981
-
175,728
188,079
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.
Bathurst Resources Limited | Financial statements
86 Bathurst Resources Limited Annual Report 2022
36
Notes to the financial statements
For the year ended 30 June 2022
Notes to the financial statements
For the year ended 30 June 2022
19. Earnings per share
(a) Earnings per share (“EPS”)
Basic EPS
Diluted EPS
(b) Reconciliation of earnings used in calculation
Earnings used to calculate basic EPS
2022
Cents
17.55
17.36
2021
Cents
39.03
35.53
$’000
$’000
30,498
66,721
Shares
000s
Shares
000s
173,747
170,952
-
17,127
1,981
-
175,728
188,079
Interest expense on convertible instruments & movement on convertible bond derivative
-
100
Earnings used in calculation of diluted EPS
30,498
66,821
(c) Weighted average number of shares
Weighted average shares used in calculation of basic EPS
Dilutive potential ordinary shares (average weighted convertible notes and bonds)
Dilutive potential ordinary shares (performance rights)
Weighted average shares used in calculation of diluted EPS
Accounting policy
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
20. 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 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.
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 2022. 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.
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.
Less than
6 months
6 - 12
months
Between
1 – 2 years
Between
2 – 5 years
Over 5
years
Total
contractual
flows
$’000
30 June 2022
Trade and other payables
Leases
Deferred consideration
Total
$’000
7,402
147
492
8,041
$’000
$’000
$’000
$’000
-
147
492
639
-
181
973
-
371
927
1,154
1,298
-
7
-
7
7,402
853
2,884
11,139
Bathurst Resources Limited | Financial statements
36
Bathurst Resources Limited | Financial statements
37
Section 2: Financial statements 87
Notes to the financial statements
For the year ended 30 June 2022
20. Financial risk management continued
Liquidity risk continued
Less than
6 months
6 - 12
months
Between
1 – 2 years
Between
2 – 5 years
Over 5
years
30 June 2021
Trade and other payables
Borrowings
Leases
Deferred consideration
$’000
5,831
573
531
519
$’000
$’000
$’000
$’000
-
-
582
531
519
12,128
525
979
-
-
453
2,079
2,532
-
-
106
-
106
Total
7,454
1,632
13,632
Total contractual cash flows on leases equal minimum lease payments plus interest.
Total
contractual
flows
$’000
5,831
13,283
2,146
4,096
25,356
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.
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
2022
$’000
2021
$’000
4,765
4,508
4,357
220
781
4,395
4,247
4,286
1,020
764
14,631
14,712
8,368
768
6,762
11,341
2,464
3,515
11,600
21,618
Bathurst Resources Limited | Financial statements
88 Bathurst Resources Limited Annual Report 2022
38
Notes to the financial statements
For the year ended 30 June 2022
20. Financial risk management continued
Liquidity risk continued
30 June 2021
Trade and other payables
Borrowings
Leases
Deferred consideration
Less than
6 months
6 - 12
months
Between
1 – 2 years
Between
2 – 5 years
Over 5
years
Total
contractual
$’000
5,831
573
531
519
$’000
$’000
$’000
$’000
-
-
582
531
519
12,128
525
979
-
-
453
2,079
2,532
-
-
106
-
106
flows
$’000
5,831
13,283
2,146
4,096
25,356
Total
7,454
1,632
13,632
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.
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
2022
$’000
2021
$’000
4,765
4,508
4,357
220
781
4,395
4,247
4,286
1,020
764
14,631
14,712
8,368
768
6,762
11,341
2,464
3,515
11,600
21,618
Notes to the financial statements
For the year ended 30 June 2022
21. Reconciliation of profit to operating cash flows
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
Non-operating:
Movement on rehabilitation provision & discount unwind
Movement on deferred consideration & discount unwind
Interest on deferred consideration
Interest on debt instruments and finance leases
Other
Unrealised FX including movement on deferred consideration
Impairments
Loss/(gain) on sale of PPE
Movement in convertible instrument derivatives
Movement in working capital
Cash flow from operating activities
2022
$’000
2021
$’000
30,498
66,721
9,750
-
6,038
6,064
(64)
(46)
(53,196)
(13,235)
(3,438)
3,124
(70)
(58,765)
-
(10,983)
2,029
1,748
(5)
134
297
309
681
(5,620)
22,455
(375)
12,334
(1,124)
2,866
(575)
8,029
9,523
22. Key management personnel compensation
Key management personnel are the senior leadership team and directors (executive and non-executive) of the Group.
30 June 2022
Management
Non-executive directors
Total
30 June 2021
Management
Non-executive directors
Total
Short-term
benefits
$’000
Share-based
payments
$’000
3,901
270
4,171
2,443
256
2,699
248
-
248
241
-
241
Total
$’000
4,149
270
4,419
2,684
256
2,940
Share based payments shown above do not match what is showing in the income statement in note 5. This is because the reversal of
share-based payments expense relating to the performance rights issue that lapsed (refer note 18) was excluded for the purposes of this
disclosure.
Bathurst Resources Limited | Financial statements
38
Bathurst Resources Limited | Financial statements
39
Section 2: Financial statements 89
Notes to the financial statements
For the year ended 30 June 2022
23. Contingent liabilities
The Supreme Court judgment on the first Performance Payment (and subsequent action against guarantor)
On 23 December 2016 Bathurst announced that L&M Coal Holdings Limited (“L&M”) had filed legal proceedings in the High Court of New
Zealand in relation to an alleged breach of the first USD $40m Performance Payment described in note 15 (c). After pursuit of this matter
through the courts of New Zealand, on 14 July 2021 the Supreme Court upheld Bathurst and Buller Coal’s appeal, setting aside earlier
unfavourable judgments given against them by the High Court and Court of Appeal.
The Supreme Court held that, under the terms of the subject share sale contract, the level of royalty payments required to be made in
order to enjoy the benefit of an agreed suspension of the Performance Payments (clause 3.10 of the Agreement for Sale and Purchase
(“ASP”)) should not be interpreted as royalty payments equal to those arising from a level of mining consistent with that occurring when
the relevant shipping volume had been reached. This meant that for so long as Bathurst and Buller Coal were continuing to pay the
relevant royalty payments actually due under the terms of the related Royalty Deed (and even if that royalty sum was zero), they were
entitled to delay payment of the Performance Payment.
On 22 September 2021 L&M served Bathurst and its subsidiary Buller Coal, with further proceedings. Despite the Supreme Court’s
judgment of 14 July 2021, L&M’s new action seeks declarations that would permit it to assert that there has been an event of default by
the subsidiary Buller Coal (although not by Bathurst) under a related Deed of Guarantee and Security between the parties. L&M pursues
two arguments:
• Primarily, L&M asserts that even though the Supreme Court has held that the first Performance Payment is not a debt that is
presently due and payable by Bathurst, the same first Performance Payment is still due and payable by Buller (as guarantor of
Bathurst); and
• As a fallback argument, it also asserts that Buller failed to provide sufficient response to an information request it made of Buller on
6 November 2019.
Bathurst and Buller, based on legal advice, consider this latest legal action by L&M to be without merit. The Supreme Court is the highest
court in New Zealand, and there are no further rights of appeal from its judgment. A hearing on the merits of L&M’s new action under the
Deed of Guarantee and Security was held in June 2022. BRL expects a judgment later this year.
Change in control arbitration – the first and second performance payments
On 4 May 2020 Bathurst announced that L&M had given Bathurst notice that L&M intended to pursue further legal action under the
terms of the ASP.
L&M asserted in its notice of request for arbitration that its entitlement to the second Performance Payment of USD $40m (and the issue
to it of performance shares) 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 has led to a third party acquiring a relevant interest (as
that concept is understood under Australian law) in more than 50 percent of Bathurst’s shares. And as a second assertion that a grouping
of shareholders through a concerted course of action has acquired effective control of Bathurst and therefore has the ability to control
the composition of the board of Bathurst New Zealand Ltd (“BNZ”) or may cast, or control the casting of, more than one half of the
maximum number of votes that might be cast at a general meeting of BNZ.
Based on legal advice received, the directors believe that it is more than likely that this second claim by L&M would be unsuccessful.
Further, the effect of the Supreme Court judgment above is that it is also more than likely that, even if the change in control provision has
been triggered – which Bathurst denies – payment of the first and second Performance Payments remains suspended by clause 3.10 of
the ASP. The arbitration commenced in July 2022 and owing to scheduling difficulties will not likely conclude until October 2022. BRL
expects a judgment in late 2022 or early 2023.
24. Events after the reporting period
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
90 Bathurst Resources Limited Annual Report 2022
40
Notes to the financial statements
For the year ended 30 June 2022
Additional information
For the year ended 30 June 2022
23. Contingent liabilities
The Supreme Court judgment on the first Performance Payment (and subsequent action against guarantor)
On 23 December 2016 Bathurst announced that L&M Coal Holdings Limited (“L&M”) had filed legal proceedings in the High Court of New
Zealand in relation to an alleged breach of the first USD $40m Performance Payment described in note 15 (c). After pursuit of this matter
through the courts of New Zealand, on 14 July 2021 the Supreme Court upheld Bathurst and Buller Coal’s appeal, setting aside earlier
unfavourable judgments given against them by the High Court and Court of Appeal.
The Supreme Court held that, under the terms of the subject share sale contract, the level of royalty payments required to be made in
order to enjoy the benefit of an agreed suspension of the Performance Payments (clause 3.10 of the Agreement for Sale and Purchase
(“ASP”)) should not be interpreted as royalty payments equal to those arising from a level of mining consistent with that occurring when
the relevant shipping volume had been reached. This meant that for so long as Bathurst and Buller Coal were continuing to pay the
relevant royalty payments actually due under the terms of the related Royalty Deed (and even if that royalty sum was zero), they were
entitled to delay payment of the Performance Payment.
On 22 September 2021 L&M served Bathurst and its subsidiary Buller Coal, with further proceedings. Despite the Supreme Court’s
judgment of 14 July 2021, L&M’s new action seeks declarations that would permit it to assert that there has been an event of default by
the subsidiary Buller Coal (although not by Bathurst) under a related Deed of Guarantee and Security between the parties. L&M pursues
two arguments:
Bathurst); and
6 November 2019.
• Primarily, L&M asserts that even though the Supreme Court has held that the first Performance Payment is not a debt that is
presently due and payable by Bathurst, the same first Performance Payment is still due and payable by Buller (as guarantor of
• As a fallback argument, it also asserts that Buller failed to provide sufficient response to an information request it made of Buller on
Bathurst and Buller, based on legal advice, consider this latest legal action by L&M to be without merit. The Supreme Court is the highest
court in New Zealand, and there are no further rights of appeal from its judgment. A hearing on the merits of L&M’s new action under the
Deed of Guarantee and Security was held in June 2022. BRL expects a judgment later this year.
Change in control arbitration – the first and second performance payments
On 4 May 2020 Bathurst announced that L&M had given Bathurst notice that L&M intended to pursue further legal action under the
terms of the ASP.
L&M asserted in its notice of request for arbitration that its entitlement to the second Performance Payment of USD $40m (and the issue
to it of performance shares) 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 has led to a third party acquiring a relevant interest (as
that concept is understood under Australian law) in more than 50 percent of Bathurst’s shares. And as a second assertion that a grouping
of shareholders through a concerted course of action has acquired effective control of Bathurst and therefore has the ability to control
the composition of the board of Bathurst New Zealand Ltd (“BNZ”) or may cast, or control the casting of, more than one half of the
maximum number of votes that might be cast at a general meeting of BNZ.
Based on legal advice received, the directors believe that it is more than likely that this second claim by L&M would be unsuccessful.
Further, the effect of the Supreme Court judgment above is that it is also more than likely that, even if the change in control provision has
been triggered – which Bathurst denies – payment of the first and second Performance Payments remains suspended by clause 3.10 of
the ASP. The arbitration commenced in July 2022 and owing to scheduling difficulties will not likely conclude until October 2022. BRL
expects a judgment in late 2022 or early 2023.
24. Events after the reporting period
There are no other material events that occurred subsequent to reporting date, that require recognition of, or additional disclosure in
these financial statements.
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 loss
Depreciation
Administrative and other expenses
Fair value movement on deferred consideration
(Loss)/gain on disposal of fixed assets
Impairment losses
Operating profit before tax
Fair value movement on convertible bond derivative
Finance cost
Finance income
Profit before income tax
Income tax expense
Profit after income tax
2022
$’000
2021
$’000
353,757
207,204
(58,559)
5,422
(187,678)
(159,553)
107,519
53,073
710
(48)
889
(48)
(17,560)
(17,782)
(22,280)
(18,511)
356
62,791
(705)
375
(309)
(22,455)
67,683
58,332
(12,334)
1,124
(4,634)
(5,297)
512
16,694
51,227
70,853
(20,730)
(4,132)
30,498
66,721
Bathurst Resources Limited | Financial statements
40
Bathurst Resources Limited | Financial statements
41
Section 2: Financial statements 91
Additional information
For the year ended 30 June 2022
Consolidated statement of financial position
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
Finance leases
Borrowings
Derivative liabilities
Deferred consideration
Provisions
Total current liabilities
Borrowings
Finance leases
Deferred consideration
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Contributed equity
Reserves
Retained earnings net of dividends
EQUITY
2022
$’000
2021
$’000
61,949
14,581
14,011
5,633
27,861
28,554
1,220
1,158
35,880
21,572
1,551
7,053
2,194
-
149,525
73,692
70,678
79,672
49,821
54,384
31,474
37,649
19,598
16,518
4,230
294
6,412
1,511
176,095
196,146
325,620
269,838
30,216
23,644
22,020
5,500
181
-
920
4,616
6,681
4,672
5,873
998
12,520
8,342
71,357
53,843
-
9,823
13,697
18,373
1,544
2,517
45,689
56,516
60,930
87,229
132,287
141,072
193,333
128,766
316,970
293,107
(26,123)
(36,329)
(97,514)
(128,012)
193,333
128,766
Bathurst Resources Limited | Financial statements
92 Bathurst Resources Limited Annual Report 2022
42
Additional information
For the year ended 30 June 2022
Additional information
For the year ended 30 June 2022
Consolidated statement of financial position
Consolidated cash flow
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
Finance leases
Borrowings
Derivative liabilities
Deferred consideration
Provisions
Total current liabilities
Borrowings
Finance leases
Deferred consideration
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Contributed equity
Retained earnings net of dividends
Reserves
EQUITY
2022
$’000
2021
$’000
61,949
14,581
14,011
5,633
27,861
28,554
1,220
1,158
35,880
21,572
1,551
7,053
2,194
-
149,525
73,692
70,678
79,672
49,821
54,384
31,474
37,649
19,598
16,518
4,230
294
6,412
1,511
176,095
196,146
325,620
269,838
30,216
23,644
22,020
5,500
181
-
920
4,616
6,681
4,672
5,873
998
12,520
8,342
71,357
53,843
-
9,823
13,697
18,373
1,544
2,517
45,689
56,516
60,930
87,229
132,287
141,072
193,333
128,766
316,970
293,107
(26,123)
(36,329)
(97,514)
(128,012)
193,333
128,766
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 net of disposals
Payment of deferred consideration
Investment in NWP
Other
Net outflow from investing activities
Cash flows from financing activities
Repayment of leases net of drawdowns
Interest on leases
Interest on BRL borrowings
USD bond and convertible note repayment
Issue of AUD convertible bonds
Repayment of borrowings net of drawdowns
Interest on borrowings
Interest received
Other finance costs
Net outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents including restricted short-term deposits
Closing cash and cash equivalents
2022
$’000
2021
$’000
293,497
218,422
(198,057)
(157,001)
(4,547)
(18,151)
90,893
43,270
(735)
(212)
(11,040)
(20,332)
(8,067)
(6,225)
(2,261)
(4,629)
(809)
(42)
(793)
(182)
(22,954)
(32,373)
(7,062)
(8,487)
(1,207)
(1,448)
(1,251)
(830)
-
(11,966)
-
10,638
(2,191)
(3,879)
(369)
(358)
117
40
(230)
(345)
(12,193)
(16,635)
55,746
(5,738)
20,214
25,952
75,960
20,214
Bathurst Resources Limited | Financial statements
42
Bathurst Resources Limited | Financial statements
43
Section 2: Financial statements 93
59 to 90:
;
94 Bathurst Resources Limited Annual Report 2022
Bathurst Resources Limited | Financial statements 44 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 9 to 40: i. present fairly in all material respects the consolidated financial position as at 30 June 2022 and its financial performance and cashflows for the year ended on that date in accordance 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 2022; • the consolidated income statement, statements of comprehensive income, changes in equity and cash flows for the year then ended; and • notes, including a summary of significant accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Group in accordance with Professional and Ethical Standard 1 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. 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 $1,600,000 determined with reference to a benchmark of normalised Group operating profit before tax. We chose the benchmark because, in our view, this is a key measure of the Group’s performance. Section 2: Financial statements 95
Bathurst Resources Limited | Financial statements 45 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. We summarise below those matters and our key audit procedures to address those matters in order that the shareholders as a body may better understand the process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not express discrete opinions on separate elements of the consolidated financial statements. The key audit matter How the matter was addressed in our audit Assessment of recoverability of cash-generating unit assets Refer to note 8 and note 13 of the financial statements. The recoverability of cash-generating unit assets is a key audit matter due to the judgement involved in assessing the recoverable value of the mining assets. Key judgements include: • future coal prices; • available coal reserves supporting future production levels; • mining permit and resource consent conditions; • future operating and capital costs; and • discount rate. Government policies have led to increased uncertainty for the industry, and key judgements are inherently subjective and inherently more uncertain during times of economic uncertainty. The procedures performed to assess the reasonableness of the recoverable value of the cash-generating unit assets included: • verifying mining permit and resource consent conditions; • comparing future coal price assumptions with third party contracts and publicly available forward price curves; • comparing the forecasted production profiles to the JORC reserve reports prepared by management experts; • challenging the discount rate used by performing sensitivity analysis to consider the impact on the recoverable value assessments; • verifying the accuracy and completeness of the assets to be written-off where impairments were identified; and • assessing the disclosures in the consolidated financial statements using our understanding of the issue obtained from our testing and against the requirements of the accounting standards. As an overall test we compared the Group’s net assets as at 30 June 2022 of $193 million to the Group’s market capitalisation of NZ$228 million based on the share price at 30 June 2022 and noted an implied headroom of $34 million. Revenue recognition Refer to note 3 of the financial statements. 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. Our audit procedures included: • Testing of revenue related key financial controls. • 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. 96 Bathurst Resources Limited Annual Report 2022
Bathurst Resources Limited | Financial statements 46 Independent auditor’s report Other information The directors, on behalf of the Company and Group, are responsible for the other information included in the entity’s annual report. Other information included in the 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 29 August 2022 Bathurst Resources Limited | Financial statements 46 Independent auditor’s report Other information The directors, on behalf of the Company and Group, are responsible for the other information included in the entity’s annual report. Other information included in the 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 29 August 2022 98 Bathurst Resources Limited Annual Report 2022
Section 3: Shareholder information 99
Shareholder informationIn this sectionShareholder information03 Shareholder information
Reported as at 30 September 2022 unless otherwise noted.
Stock exchange quotation
Shares are quoted on the Australian Stock Exchange 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
191,359,780
2,297
Executive director performance rights 18
SLT performance rights 18
1,046,076
935,083
2
6
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 or by 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 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.
Share buy-backs
There were no share buy-backs during the year and there is no current on-market buy-back.
Dividends
There were no dividends paid or declared relating to the year ended 30 June 2022.
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
809
857
267
292
72
491,357
2,195,275
2,131,458
9,131,287
177,410,403
2,297
191,359,780
0.26%
1.15%
1.11%
4.77%
92.71%
100%
There were 384 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 91¢ per share.
Corporate governance statement
The corporate governance statement is available at www.bathurst.co.nz/our-company/corporate-governance/
Shareholder information
Substantial holders
BRL’s record of substantial shareholdings (5 percent or more) based on notices from shareholders either directly or via a third party who
collect this information on our behalf as at 23 September 2022:
Number of
shares held
Percentage of
issued shares
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
Republic Investment Management Pte Limited (“RIM”)
Talley’s Group Limited
Crocodile Capital Partners GmbH
Chng Seng Chye
RIM.
Top 20 shareholders
Based on the shareholder register.
# Holding range
1
2
3
4
5
6
7
8
9
11
12
13
15
16
17
18
19
BNP PARIBAS NOMS PTY LTD
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