2014 ANNUAL REPORT
NGUALLA
RARE EARTH
PROJECT
1
PEAK RESOURCES LTD ANNUAL REPORT 2014
CONTENTS
Chairman’s Letter
Managing Director’s Letter
Tanzania
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes In Equity
Notes To Financial Statements
Directors’ Declaration
Corporate Governance Statement
Tenement Schedule
Additional Shareholder Information
Corporate Directory
6
7
8
9
24
32
33
35
36
37
38
39
64
65
72
72
76
2
PEAK RESOURCES LTD ANNUAL REPORT 2014
Peak continues to make rapid
and positive progress towards
the development the Ngualla Rare
Earth Project in Tanzania into a
low cost, long term producer of
refined rare earth products.
DiRECT DRivE
TECHNOLOGiEs
fOR LARGE NEw
Off-sHORE wiND
TURbiNEs RELy ON
Ndfeb mAGNETs
PERsONAL
ELECTRONiCs mAkE
UsE Of THE smALLER,
LiGHTER RARE
EARTH PERmANENT
mAGNETs
HybRiD
AND ELECTRiC
vEHiCLEs:
15-20% fORECAsT
GROwTH
2012-20
1
1
RARE EARThS:
STRATEGIC
AND CRITICAL
METALS IN
hIGh DEMAND
RARE EARTH
mARkET:
$3 to 5B in 2014,
at 125,000tpa REO
Source: IMOCA, 2014
RARE EARThs ARE A gROUP
Of 15 sPEciALiTy mETALs.
A typical HEv
requires about a kilogram
of neodymium for its
electric motor and
as much as 15 kg of
lanthanum for it’s
battery pack.
Green technology and consumer electronics
continue to strengthen demand for rare
earths - in particular for the magnet metals:
neodymium and praseodymium.
Supply currently falls short of demand for the critical rare earths –
neodymium supply in 2017 is predicted to fall short of demand by 20%.
Source: IMOCA, 2014
RARE EARTh END UsEs
RARE EARTh
INDUSTRY SECTOR
GROWTh DRIVER
Neodymium/
Praseodymium
Permanent magnets
Automotive, wind energy
and personal electronics
mid to heavy
Rare Earths
Phosphors, auto catalysts,
optics, magnets
Lanthanum
Catalysts, batteries, optics
Emissions reductions,
energy efficient lighting,
automotive industry
Energy efficiency, energy
storage, electronics,
petroleum industry
cerium
Polishing powders,
auto catalysts
Glass, personal
electronics
2
PEAK RESOURCES LTD ANNUAL REPORT 2014
CHiNA
Global rare earth markets
are dominated by China,
which controls over 85% of
world production and 70%
of demand.
China is consolidating its rare
earth industry and will reduce
production capacity by 104k
tonnes in 2014. China is also
reducing illegal mining and
may increase resource taxes
for rare earths.
Changes in Chinese
legislation may result
in increased domestic
consumption of rare
earths, thereby reducing
rare earth supply to the
rest of the world, leaving
gaps in the market that will
need to be filled.
Ngualla’s value Drivers
ceO2, 9%
La2O3, 7%
mid-heavies, 9%
Dy2O3, 1%
Tb4O7, 1%
Pr6O11
27%
RARE EARTH mAGNETs
The major magnet metals (neodymium and praseodymium)
comprise 65% of the value of the annual rare earths market.
Use of these magnet metals is forecast to show the highest
growth at 10%pa, driven by increasing demand from the
wind turbine, automobile and personal electronics sectors.
NdFeB magnets have the largest market share at 23,000t in 2013.
Direct drive technologies for large, new offshore wind turbines rely
on NdFeB magnets.
Estimated forecast rare earth demand in the main rare earth industries
mAGNETs: fORECAsT 10%
PER ANNUm GROwTH
Nd-Pr
Cerium
Lanthanum
Mid-heavy
*source: IMCOA
and Peak Resources’
market interpretation
2013
2014
2015
2016
2017
2018
2019
2020
200
150
100
50
0
O
E
R
t
k
75% of Ngualla’s revenue will be
underpinned by the magnet metals.
The bulk of Ngualla’s product value is secured by
the magnet metals, in particular by the high value
neodymium and praseodymium.
Nd2O3
46%
magnet
metals
2017 forecast market value (US$million)
ceO2, 6%, $261m
La2O3, 4%, $193m
mid-heavies, 11%, $531m
Dy2O3, 9%,
$428m
Tb4O7, 5%,
$244m
Pr6O11
21%
$987m
Ngualla’s production profile is well
aligned with the world market.
Ngualla’s main value drivers are those forecast
to be of highest value in 2017 - 2020.
Nd2O3
44%
$2,030m
magnet
metals
3
A FAVOURABLE
COMBINATION OF
FUNDAMENTAL
ChARACTERISTICS
DISTINGUISh NGUALLA
AS ThE WORLD’S
STAND OUT RARE EARTh
DEVELOPMENT PROjECT
GiANT
DEPOsiT
HiGH
GRADE
5.16% REO in first
20 years of mining.
20.7 million tonnes
at 4.54% REO.
(Bastnaesite Zone Ore Reserve)
195 million tonnes
at 2.26% REO.
(Total Ngualla Mineral Resource)
miNERALOGy
miNiNG
/ Simple, bastnaesite
mineralogy.
(no phosphate or monazite).
/ Non-radioactive.
/ The host rock is leached
of carbonates.
/ Enables 3 stage
metallurgical process.
/ Thick blanket of mineral-
isation on top of a hill.
/ 58 years of mill feed at a
production rate of 10,000
tonnes of recovered
REO per annum.
/ 80% free dig open pit,
low LOM strip ratio of 2.23.
4
PEAK RESOURCES LTD ANNUAL REPORT 2014
mETALLURGiCAL
PROCEssiNG
/ A demonstrated and
proven process using
‘tanks, pumps and filters’:
the driver of low capital
and operating costs.
/ A proven ability to
produce high purity,
separated rare earth
products adds significant
value to the project and
allows access to wider
end use markets.
/ No high temperature
acid bake.
RObUsT
PROJECT
ECONOmiCs
US$ 1.005 billion NPV.
(post tax and royalties)
39% IRR.
(post tax and royalties)
Payback in 3rd year.
Low capital cost.
Low operating costs.
ExPLORATiON
UPsiDE
/ A second mineralised zone
– the Northern Zone – also
contains signficant niobium-
tantalum and phosphate
mineralisation and is at an
early stage of evaluation,
giving Peak the potential to
expand it’s commodity base
in future.
DEvELOPmENT
PATHwAy
/ A Definitive Feasibility Study
for Ngualla is planned for
completion in 2016.
/ Metallurgical process test
work to provide further
upside.
/ Beneficiation and acid
leach pilot plants scheduled
for 2015.
/ An Environmental and
Social Impact Assessment
is underway.
The definition of a large Mineral Resource, the development and
demonstration of an initial metallurgical processing flow sheet
and the completion of a PFS and Ore Reserve in 4 ½ years since
discovery is without comparison in the rare earth industry. Peak has
achieved this at a fraction of the cost of other western development
projects. The combination of the project’s unique and favourable
characteristics and the hard work of all of Peak’s team have enabled
this achievement.
5
ChAIRMAN’S LETTER
Dear Shareholder,
Whilst the last year has remained challenging for
the junior resource sector, we have now observed
an improvement in investor sentiment with a number
of companies having been able to undertake capital
raisings of sufficient size to maintain their operations
- though it is also fair to say that market sentiment
remains somewhat fragile.
Peak has continued to maintain its focus on the
Ngualla Rare Earth Project in Tanzania with efforts
being concentrated in three key areas.
Firstly, the completion of our Preliminary
Feasibility Study (PFS) and economic assessment
based on extensive evaluation programs and
metallurgical test work. The results of these are
summarised within the technical section of this
report. It is pleasing for me to report that the PFS
further emphasises that, even in a time of weaker
rare earth prices, the project’s economics remain
extremely robust. This is in large part due to the
favourable mix of rare earths within Ngualla, with
neodymium and praseodymium being two of
the key elements. These metals are critical in the
production of high quality permanent magnets,
which are widely used in a broad range of high
technology products such as in the automotive
industry, wind turbines and personal electronics to
name but a few.
Secondly, metallurgical test work success
is leading to the development of a lower cost
and more efficient pathway to production. Your
Company continues to capitalise on this success
with the current emphasis on ore beneficiation,
which has the potential to further improve the
project’s economics. The metallurgical test work will
feed into the Definitive Feasibility Study (DFS), which
the Company aims to commence prior to the end of
calendar 2014.
6
PEAK RESOURCES LTD ANNUAL REPORT 2014
ALAsTAiR hUNTER
Non-Executive Chairman
Thirdly, the Company was pleased to announce after
the end of the reporting period, on 29th September
2014, an agreement with the Jersey-based Appian
Natural Resources Fund LP (“Appian”) that has
agreed, in principle, to fund the project through the
DFS and into development through a number of
staged investments totalling US $25 million. Appian is
a collaborative mining focused private-equity group
with extensive African experience and plans to work
together with management to realise the full value
of Ngualla. As a cornerstone shareholder Appian’s
long-term approach will enable the growth of the
Company, delivering value for existing shareholders.
This partnership, combined with the excellent
technical advantages of the Ngualla Project, lays the
foundations for Peak to become the next low cost
supplier of rare earth products.
At the beginning of this year, the Company
appointed Mr Darren Townsend as Peak’s new
Managing Director. Darren comes to the Company
well-credentialed and with considerable experience
in the development and management of speciality
metals projects. He oversaw the development and
expansion of the Wodgina tantalum mine located
in the Pilbara region of Western Australia into the
world’s largest producer. Darren additionally has
significant African resource experience through his
previous management of rare earth, niobium and
tantalum projects in Mozambique and Kenya.
Once again I, on behalf of the shareholders,
must thank all the staff for their commitment and
dedication to the Company and the Ngualla Project.
As the Company’s Chairman I look forward to the
second half of this year and, finally, I wish to thank
our shareholders for their continuing support.
MANAGING DIRECTOR’S LETTER
DARREN TOwNsEND
Managing Director
Appian provide long term collaborative capital
that comes with a team that have been involved
in building over 30 mines in Africa and a financial
team that has overseen US$200 billion of mining
advisory and capital raising transactions. The US $25
million funding, together with the project’s robust
economics and Peak’s proven ability to deliver, puts
Peak in a solid position to potentially be the next rare
earth producer.
The coming year will be a crucial one for Peak.
Having received all the funding that we believe is
required to take us to the construction decision
phase, we have accelerated our Definitive Feasibility
Study work program. As a first step, we are building
on the positive foundations of the PFS and have
started to investigate areas that could further
improve the economics of our project.
I would take this opportunity to thank you, our
shareholders, for your continuing support. The team
at Peak are looking forward to a busy year ahead,
but we are better positioned than ever before as
we continue to evolve and build upon the project’s
strong foundations.
Dear Shareholder,
It was with great pleasure that I took up the
role of Managing Director and joined the team at
Peak Resources in February this year. I would like to
commend the Peak Board and Management team
for finding and rapidly advancing Ngualla into a
world class project, as demonstrated by our positive
Preliminary Feasibility Study (Pfs) earlier this year.
We now look towards the future and are excited to
start executing on our well-advanced strategy to
bring our low-cost project into production.
The last couple of years have been tumultuous
for rare earth companies as price volatility and
weakening market conditions have impacted
investor confidence. However, we have started to
see stabilisation in the markets and the renewed
interest of both the financial and industrial
communities. As always, we believe it important to
distinguish between the individual rare earth metals
when assessing the market, each of which have their
own unique, long-term supply/demand drivers.
To that end, we are particularly pleased that our
Ngualla project has a very favourable basket price
with 73% of our revenue driven by the magnet
metals, neodymium and praseodymium. These
metals constitute over 60% of the rare earth market
(by value) and are forecast to have one of the
strongest growth rates of all the rare earths due to
increasing demand for light weight, but powerful
magnets, primarily in the automotive, renewable
energy and electronics industries. Market participants
expect a 10% compound annual demand growth
to 2020 which is unlikely to be filled by current
suppliers.
In September 2014, post the end of the reporting
period, the Company announced an agreement with
a strategic partner - Appian Natural Resources Fund
LP (‘Appian’) – that when completed will fund the
development of the Ngualla Project and Company
through Definitive Feasibility Study to decision to
mine.
7
TANZANIA
Tanzania is a politically stable country
with a democratic government and one
of the best performing economies in
the East African region, with an annual
growth rate of 7%.
it is the fourth largest gold producer in
Africa and as such has an established
mining culture and regulatory system.
A number of Australian and international
corporations have a significant presence and are
operating in the country, including African Barrick,
AngloGold Ashanti Limited, Resolute Mining Limited
and Xstrata Nickel. Recent discoveries of large
natural gas reserves have the potential to transform
Tanzania’s economic future.
Its vast natural resources have been identified by
the government as key to the country’s economic
development and as such there are a number of
policies and incentives in place to ensure the mining
sector’s ongoing and sustained success.
Ngualla is well located in close proximity to the main
north-south trunk road in the west of the country
and to the TAZARA railway in the south connecting
the city of Mbeya 150km south of the site to the
deep water port of Dar es Salaam. Ongoing major
upgrades to the road and rail network are bringing
this region’s infrastructure up to first world standards
and is a major advantage for Ngualla’s logistics and
site access.
Rwanda
Lake Victoria
Kenya
Burundi
• Mwanza
• Shinyanga
• Arusha • Moshi
Lake Victoria
• Tabora
• Singida
• Tanga
• Zanzibar
Bagamoyo
• Morogoro
Dar es Salaam
• Dodoma
• Iringa
Indian Ocean
• Lindi
Mtwara •
Lake Tanganyika
Ngualla Rare Earth Project
Sumbawanga •
Lake Rukwa
Lake Tanganyika
Mbeya
Zambia
Coal
Diamonds
Gold
Nickel
Niobium
Phosphate
Rare Earths
Tanzanite
Uranium
Location of Ngualla Rare Earth Project, Tanzania.
8
PEAK RESOURCES LTD ANNUAL REPORT 2014
Lake Malawi
• Songea
0
300km
• Tunduru
• Masasi
Mozambique
Lake Nyasa
REVIEW OF OPERATIONS
sUmmARy
DAVE hAmmOND
Technical Director
The year saw Peak continue to make rapid and positive progress towards
the development of the Ngualla Rare Earth Project in Tanzania into a low
cost, long term producer of refined rare earth products. major project
development stages successfully completed during the year included:
f
Preliminary feasibility study and
economic assessment (Pfs).
– Robust project economics, low
capital and operating costs and
58 year mine life.
f
maiden Ore Reserve.
– The largest and highest grade of
the new rare earth development
projects.
f
f
Operation of solvent extraction
pilot plant at ANsTO minerals.
– Completed the production of four
separated, high purity (>99%) rare
earth oxide products from a bulk
sample of Ngualla’s mineralisation.
A beneficiation breakthrough
subsequent to the end of the
annual reporting period showed
the ability to produce a high
grade (34.4% REO) mineral
concentrate.
– Offers significant opportunities
and a number of options to further
reduce operating and capital costs.
The year’s technical programs continued
to improve Ngualla’s already low capital
and operating costs and confirm the
project as the stand out new rare earth
development project.
At the end of the annual reporting period
the Ngualla Rare Earth Project remained
on schedule for commissioning and first
production in the first quarter of 2018.
Proposed layout of the mine and plant at Ngualla.
9
NGUALLA RARE EARTH PROJECT
The Ngualla Rare Earth Project in Tanzania
is Peak’s flagship asset. Ngualla is a
virgin discovery made by Peak in 2010.
Development studies are now well advanced:
a low cost processing route for Ngualla’s
unique ore has been developed and
demonstrated, an Ore Reserve established
and robust project economics indicated
by a detailed Preliminary Feasibility Study
completed in March 2014.
As well as containing one of the largest rare
earth deposits in the world, widespread
occurrences of high tenor niobium–tantalum
and phosphate mineralisation are at an early
stage of evaluation and represent the potential
for additional future commodity streams from
the project.
The Ngualla Rare Earth Project is favourably
differentiated from others by a unique
combination of fundamental factors including:
f high REO grades.
f A large, high confidence mineral
Resource – offering opportunities for
long mine life and future expansion.
f A thick blanket of mineralisation at
surface and on a hilltop – amenable to
low cost, open cut mining.
f A favourable combination of rare earth
and gangue mineralogy – enabling low
cost processing.
f high purity, value adding, separated rare
earth oxide products produced from a
bulk sample of Ngualla’s mineralisation
via a processing route developed by Peak.
f The lowest uranium–thorium contents
of any major rare earth deposit –
no radioactivity, transport or
permitting issues.
These factors have enabled Peak to rapidly
progress Ngualla’s development and at a
markedly lower cost in comparison to other
rare earth projects. The Ngualla Project
has the potential to have the lowest capital
and operating costs of any comparable
development project and provide a strong
cash flow over an initial mine life of 58 years.
Peak team members on site at Ngualla, june 2014.
10
REVIEW OF OPERATIONS sEPARATiON PiLOT PLANT
In October 2013 the Company completed the
operation of a solvent extraction pilot plant
at ANSTO Minerals research facility at Lucas
Heights near Sydney.
The completion of the pilot plant marked an
important milestone in Peak’s technological
development program. It was the last step in
the practical demonstration of the processing
of Ngualla’s mineralisation to high purity
separated rare earth oxide products through
the three major metallurgical stages of
beneficiation, sulphuric acid leach recovery
and solvent extraction.
Commenced in March 2013, the pilot plant
program ran over a period of 8 months.
A 1.3 tonne bulk sample of weathered
Bastnaesite Zone mineralisation from Ngualla
was used to prepare a rare earth chloride
solution via the low cost sulphuric acid
leach recovery process. The preparation of
the chloride solution provided independent
verification of the acid leach recovery
process developed by Peak for Ngualla’s
mineralisation.
Four high purity, separated rare earth oxide
products were successfully produced at
ANSTO (Figure 1). The work provided samples
for evaluation by potential offtake customers
as well as vital engineering design, operating
data and knowledge regarding the processing
of Ngualla’s mineralisation. This data was used
to accurately quantify operating and capital
costs for the solvent extraction portion of the
processing plant in the Preliminary
Feasibility Study.
The successful conclusion of
the Pilot Plant distinguished Peak
as one of the few companies
outside China to have practically
demonstrated the technology to
produce high purity rare earth
oxides from source mineralisation.
Neodymium –
Praeseodymium
Lanthanum
Mid+Heavy RE
Cerium
Top: figure 1: ANSTO Minerals Rare
Earth Separation Facility.
Above: Four high purity, separated
rare earth oxides produced at ANSTO.
11
PEAK RESOURCES LTD ANNUAL REPORT 2014 PRELimiNARy fEAsibiLiTy sTUDy
In March 2014 the Company completed a
detailed Preliminary Feasibility Study and
economic assessment (PFS or the Study).
The focus of the Study was to evaluate the
potential for the development of a mine
and associated beneficiation, recovery and
separation plants at Ngualla to produce
10,000 tonnes of >99% purity, separated rare
earth oxide products.
This production profile is based on Proved
(86%) and Probable (14%) Ore Reserves (see
Table 1 and ASX announcement ‘Ngualla
Project maiden Ore Reserve’ of 19 March
2014, which also includes a detailed summary
of the supporting project assumptions and
data).
The detailed Study is based on extensive
evaluation and metallurgical test work
programs. Data from the high quality Mineral
Resource, detailed mine planning schedule
and Ore Reserve feed into a processing
flow sheet. The flow sheet was developed
from the results of metallurgical test work
completed on Ngualla’s mineralisation at
every stage of the overall extraction process,
from mineralisation through to high purity
separated rare earth products.
Sophisticated engineering simulation and
mass balance modelling of the demonstrated
metallurgical process supports the detailed
capital and operating cost estimates for
the Study.
RObUsT PROJECT ECONOmiCs:
(All $ figures are US$)
f $176 million average annual operating
free cash flow for 58 years
(pre-tax and royalties) and
$116 million a year (post tax and royalties)
f $1.005 Billion Net Present Value
(post tax and royalties)
f 39% internal Rate of Return
(post tax and royalties)
f Three year payback from start-up
Conservative price assumptions were
applied of $29.29/kg for high purity,
separated rare earth oxides, with 84%
of Ngualla’s forecast revenue derived from
the high value, high demand neodymium
– praseodymium and mid+heavy rare earth
products (Figure 2).
Ngualla’s Value Drivers
ceO2, 9%
La2O3, 7%
mid-heavies, 9%
Dy2O3, 1%
Tb4O7, 1%
Pr6O11
27%
Nd2O3
46%
magnet
metals
figure 2: Ngualla production: Rare earth value drivers
12
REVIEW OF OPERATIONS Economic Assessment summary – (Preliminary Feasibility Study, March 2014)
NPv & iRR
IRR (Pre-tax and Royalties)
NPV @ 10% discount rate (Pre-tax and Royalties)
Us$ 1.005 billion
Capital
Expenditure
Capital Cost (excluding contingency)
Pay back from production start up
39%
US$ 367 million
In 3rd Year
Cash Cost
Average (Lom) cash cost (fOB)
(excluding amortisation, depreciation and royalties)
US$ 11.74/ kg
financial kPis
Average Annual Revenue (after Ramp Up)
US$ 295 million
Average Annual Post-Tax and Royalties cashflow
Us$ 121 million
In-Ground Basket Price (FOB)
Average Annual TREO Production
US$ 29.29 / kg
10,069 tonnes
LOw CAPiTAL COsT:
f $367 million capex including 30%
($85 million) contingency.
Ngualla has a substantially lower capital
cost than any comparative rare earth
project. Capital costs include a separation
plant to produce high purity separated
products. The Project’s low capital costs
and advanced stage of development
position Ngualla at the forefront of
potential new rare earth producers.
LOw OPERATiNG COsTs:
f $11.74 per kilogram Opex of high purity
separated rare earth oxide products over
LOm (Life of mine).
The low Opex potentially places Ngualla
as the lowest cost Western producer of
this quality of valued added product.
LONG LifE PROJECT:
f 58 year mine life in the weathered
Bastnaesite Zone alone.
There is clear potential for future expansion
of the base case 10,000t per annum
REO level of production once the initial
operation and markets are established. The
weathered Bastnaesite Zone represents
just 22% of the greater Ngualla Mineral
Resource.
The robust project economics
indicated by the Pfs result from
the combination of favourable
characteristics that together
contribute to lowering costs
at every stage of the operation.
These fundamental advantages distinguish
Ngualla from other rare earth projects.
The first of these is the very large deposit
size that has allowed Peak to target the most
favourable style of mineralisation within the
total Mineral Resource for initial development.
At a 1% REO cut-off grade the Mineral
Resource at Ngualla is:
195mt at 2.26% REO
containing 4.4mt REO
(See Tables A, B & C in the Appendix for resource classification
and individual rare earth distribution)
This makes Ngualla one of the
largest rare earth deposits in
the world outside China.
13
PEAK RESOURCES LTD ANNUAL REPORT 2014 PRELIMINARY
FEASIBILITY STUDY
Research and metallurgical test work has
identified that the high grade, weathered
Bastnaesite Zone mineralisation, which forms
a thick blanket of mineralisation from surface
on Ngualla Hill, is the most favourable for
processing and mining (Figure 3). The Ore
Reserve is sufficient to support the 58 year
mine life.
The Study indicates that the weathered
Bastnaesite Zone mineralisation can be mined
by a simple, modest sized, low cost, low
strip, open pit operation. As a result, mining
represents just 5.3% of total operating costs.
A high grade of 5.16% REO is
processed in the first twenty
years of production contributing to
lowering unit operating costs in the mining,
beneficiation and recovery stages and is
another major advantage over other projects.
Mineralogy distinguishes a quality rare earth
deposit as it is the major factor in the time
required for the development of a viable
extraction process, as well as in determining
the cost of rare earth processing and
extraction.
The natural weathering process at Ngualla
has removed original carbonate minerals and
upgraded the rare earths three-fold compared
to fresh rock. The resulting mineralogy – high
grade rare earths as the single ore mineral
bastnaesite, hosted within a gangue matrix of
barite, iron oxides and quartz – is another key
advantage of the project (Figure 5) as it allows
for a lower cost extraction process compared
to other projects that must use expensive,
energy-intensive, high temperature kilns.
figure 3: A thick blanket of high grade mineralisation at surface allows for simple, low cost open pit mining.
Ngualla hill
150m
t e Z o n e
i
B a s t n a e s
550m
REO %:
A >4%
A 3 to 4%
A 2 to 3%
A 1 to 2%
Pit outline
14
REVIEW OF OPERATIONS
miNERALOGy is
THE kEy TO LOw
Risks AND COsTs
Acid-consuming carbonate minerals have
been completely leached from the weathered
Bastnaesite Zone mineralisation by natural
weathering processes (Figure 4), which also
upgrade the rare earths threefold to
an average of 5% REO.
Unlike many rare earth deposits,
the weathered bastnaesite Zone
mineralisation is non-radioactive,
containing just 14ppm uranium
and 51ppm thorium.
The mineral association allows for an effective
benefication process to produce a high grade
mineral concentrate that leads to lower
production costs. See Figure 6.
main components of typical Ore
Barite
40%
iron Oxides (haematite and Goethite)
35%
15%
6.5%
Quartz
Bastnaesite
mineral Associations
Quartz:
Barite:
fe Ox & Bast:
liberated
liberated
more intimately
associated
Ngualla’s favourable mineralogy
is a key advantage of the project
and underpins low capital and
operating costs.
figure 4: Diamond core NDD006:
figure 5: SEM images of a weathered Bastnaesite
Weathered iron
oxide- barite carbonatite
containing high grade
mineralisation,
3 to 8 % REO.
Amenable to simple
sulphuric acid leach as
majority of carbonate
minerals removed
through weathering.
Sharp karstic surface
contact between
weathered and fresh
carbonatite.
Fresh carbonatite rock
containing primary
mineralisation
1 to 2.5% REO.
15
PEAK RESOURCES LTD ANNUAL REPORT 2014 PRELIMINARY
FEASIBILITY STUDY
The unique mineralogy within the weathered
Bastnaesite Zone has allowed Peak to rapidly
develop an effective and relatively low
cost processing flowsheet for this style of
mineralisation with three main stages
(Figure 7).
The mineral association allows an effective
first stage of beneficiation to produce a high
grade mineral concentrate.
Beneficiation testwork completed for the PFS
Study of March 2014 achieved a 16.9% REO
mineral concentrate through the rejection
of 78% of the original feed mass using wet
magnetic separation and flotation techniques.
The upgrade is important as it lowers costs
by reducing the amount of reagents and size
of equipment required in the initial acid leach
stage of the subsequent acid leach recovery
plant compared to treating ore grade material.
The second stage of the processing route
developed during the Study takes the high
grade mineral concentrate produced by the
beneficiation plant though an acid leach
recovery and purification process (Figure 6).
The initial acid leach stage uses dilute, low
cost sulphuric acid at atmospheric pressure
and a temperature of 90°C. The simple-to-
operate plant consists of plastic tanks, pumps
and filters which will be constructed off
site and transported in modular form and is
thereby expected to avoid the prolonged start
up delays experienced by recent new rare
earth projects.
The acid leach process developed for
Ngualla also avoids the need for expensive,
high temperature, difficult to operate,
energy intensive kilns. The sulphuric acid
is manufactured on site from prill sulphur,
a process which produces excess heat as
steam. The steam will be used to generate
50% of the sites power requirements through
steam turbines and the waste low pressure
steam is then used to heat the leach tanks.
A final solvent extraction stage will provide
an approximately three fold increase in value
to Ngualla’s rare earth production compared
to producing a single mixed rare earth
carbonate. The production of four separated,
high purity rare earth oxides also gains access
to wider end use markets.
The positive outcomes of the study
provide Peak with the support
and a clear path forward for the
development of the project into
the next new and low cost rare
earth producer.
Figure 6: Three stage metallurgical process developed and demonstrated by Peak for the PFS.
1. bENEfiCiATiON
2. RECOvERy
3. sEPARATiON
Mine
Feed
Magnetic Separation
& Flotation
Concentrate
Sulphuric Acid Leach
& Purification
RE
Solution
SX
Separation
4 High
Purity
Products
WET MAGNETIC
SEPARATION
FLOTATION
PUMPS, TANKS & FILTERS
EXTRACTION
16
REVIEW OF OPERATIONS Figure 7: Plant Process Flowsheet
ROM Ore
Feeder
Crushing
Milling
STAGE 1: BENEFICIATION
STAGE 2: RECOVERY
Wet
Magnetics
Separation
Sulphuric
Acid
Non
Magnetics
Flotation
Magnetics
Flotation
To Benefi-
iciation
Tailings
Screening
Residue
Filtration
Waste
Regrind Mill
COMMINUTION
BENEFICIATION
SULPHATION LEACH
Sodium Hydroxide
Solution
Hydrochloric
Acid
Sodium Hydroxide
Solution
Sodium Sulphate
Solution
Filtration
Filtration
Filtration
Filtration
Residue
Filtration
Waste
Residue
Filtration
Waste
To Waste
Neutralisation
To Waste
Neutralisation
PURIFICATION
ACID
DISSOLUTION
CAUSTIC
CONVERSION
DOUBLE SULPHATE
PRECIPITATION
STAGE 3: SEPARATION
Oxalic
Acid
Filtration
Precipitation
To Waste
Neutralisation
SOLVENT EXTRACTION
RARE EARTH PRECIPITATION
CALCINATION
Neodymium – Praeseodymium
Lanthanum
mid+heavy RE
cerium
HIGH PURITY OXIDE PRODUCTS
17
ORE REsERvE
Another major milestone, the maiden
Ore Reserve for the Ngualla Project, was
completed during the year in association with
the PFS. The Ore Reserve is one of the world’s
largest outside of China and is also high
quality with over 86% in the highest JORC
Proved category.
The maiden Ore Reserve estimate for the
Ngualla Project is 20.7 million tonnes at 4.54%
REO (total rare earth oxide plus yttrium) and is
classified as shown in Table 1 below:
The maiden Ore Reserve is reported in
accordance with the JORC Code 2012 and
estimated by independent mining consultants
Orelogy Group Pty Ltd.
The Ore Reserve, including a detailed
summary of the supporting project
assumptions and data (Table 1 as per
JORC 2012 Guidelines), is provided in ASX
announcement ‘Ngualla Rare Earth Project –
Maiden Ore Reserve’, 19th March 2014.
The Ore Reserve accompanied the
announcement of the Preliminary Feasibility
Study (PFS) (see ASX announcement ‘Peak
Resources Delivers Robust PFS for Ngualla,
19th March 2014’). The information and
material assumptions underpinning the Ore
Reserve continue to apply and have not
materially changed.
Table 1: Classification of Ore Reserves for the weathered Batsnaesite Zone at Ngualla
classification
Ore Tonnes (million)
REO %
contained REO tonnes
Proved
Probable
Total
18.0
2.7
20.7
4.53
4.62
4.54
817,000
124,000
941,000
See Table D for breakdown of individual REO’s. A 3.0% REO cut-off grade is applied.
Ngualla – A Giant Deposit. Comparison of Rare Earth Projects Ore Reserves and mining schedules
5%
4%
)
O
E
R
%
(
e
d
a
r
G
3%
2%
1%
0%
= Contained REO Tonnes
= Grade
1,000
)
t
k
(
O
E
R
d
e
n
i
a
t
n
o
C
900
800
700
600
500
400
300
200
100
0
Kipawa
Matamec
Bear Lodge
Rare Element
Resources
Nechalanco
Avalon Rare
Metals
DZP Alkane
Resources
Nora Karr*
Tasman Metals
Strange Lake
Quest Rare
Minerals
Zandkopsdrift*
Frontier Rare
Earths
Ashram*
Commerce
Resources
Nolan’s Bore
Arafura
Resources
Ngualla
Peak
Resources
Ore Reserves (blue) or life of mine mining schedules (grey) from company filings
18
REVIEW OF OPERATIONS
bENEfiCATiON bREAkTHROUGH
In early August 2014, post the end of the
Annual reporting year, Peak was pleased to
announce the results of further beneficiation
test work with the production of a mineral
concentrate grading 34.4% rare earth oxide.
The ability to produce such a high grade,
clean concentrate is an outstanding result that
again sets Ngualla apart from other rare earth
development projects.
The high grade concentrate is a significant
improvement on the Preliminary Feasibility
Study (PFS) assumptions and is expected to
reduce the project’s already low operating
costs further.
The mineral concentrate grade
of 34.4% REO is more than double the
Pfs concentrate grade of 16.9% REO
f The results represent a 6.9 times upgrade
on the feed grade and has been achieved
with a flotation only process.
f Increased mass rejection from ore feed
to mineral concentrate: The mineral
concentrate at PFS comprised 21% of the
ore feed mass. The new concentrate is
7.6% of the ore feed mass (or 92.4% mass
rejection) at an overall recovery of
52% of the rare earths.
Grade, % REO
REO (%)
34.4%
REO
16.3%
REO
5.0%
REO
40%
30%
20%
10%
0
f The high grade concentrate is expected
to require smaller leach tanks and reduce
acid consumption, potentially leading to
even lower capital and operating costs.
f Importantly, the amount of iron in the high
grade (34.4% REO) mineral concentrate
has been reduced to a quarter of that
at PFS. Iron oxide minerals are the main
consumers of acid in the leach recovery
stage. The mineral concentrate in the
PFS contained 29.0% of the total iron from
the ore feed whereas the iron content
of the new mineral concentrate has been
reduced to 6.2% of the feed total. The
improved iron rejection is expected to
further reduce sulphuric acid consumption
in the leaching of the mineral concentrate.
Optimisation of the new beneficiation process
is planned to target improved rare earth
recoveries and concentrate grades as well
as the further removal of iron oxide. Once
the beneficiation test work is complete,
mass balance and economic modelling will
be completed to determine the optimum
concentrate REO grade vs. recovery for
the overall Ngualla mining and processing
operation prior to the commencement of the
Definitive Feasibility Study (DFS).
100%
80%
60%
40%
20%
0
iron Content
fe2O3 in feed (%)
29.0%
6.2%
feed
Pfs min. con.
New min. con.
feed
Pfs min. con.
New min. con.
figure 8: REO upgrade from mineralisation to PFS
mineral concentrate and the new flotation process
test work
figure 9: Reduction of iron from mineralisation to the
PFS concentrate and the latest test work results as a
percentage of total iron in feed mineralisation.
19
PEAK RESOURCES LTD ANNUAL REPORT 2014 sOCiAL AND ENviRONmENTAL REsPONsibiLiTy
Peak’s previous community projects
have included:
f construction and refurbishment of
classrooms for the Ngwala Primary school
f Donation and construction of new school
desks for schools in the Ngwala ward
f Donation of beds, mattresses, textbooks,
school stationary and sports equipment
f construction of two teacher’s houses
f Assistance with water supply, road and
airstrip maintenance
The Community projects further benefit the
community through the involvement of many
local contractors, labourers and suppliers.
Peak is committed to assisting the
communities in which it operates whilst
maintaining best practise environmental
management and health and safety standards.
The Company values the excellent
relationship maintained with local village,
district authorities and individuals, and
recognises that the development of the
Ngualla Project must provide benefits for
both Community and Company. Through
provisions of employment opportunities,
training, purchase of local products and
funding for local building projects, win-win
relationships have been established with the
local community.
In 2013 the Ngwala community indicated that
a lack of housing was continuing to lead to a
shortage of teachers for the primary school.
Construction of an additional two teachers
houses are now nearing completion and will
add to the two houses already completed and
handed over by Peak in June 2013.
Above: New teachers houses for Ngwala Primary
Above: Two new classrooms constructed and
School under construction in june 2014 and adjacent
equipped by Peak at Ngwala Primary School.
to houses completed by Peak in june 2013.
20
REVIEW OF OPERATIONS
PROJECT DEvELOPmENT PATHwAy
Major milestones including the completion
of the Environmental and Social Impact
Assessment and the application for mining
approvals are also scheduled for 2014 and
2015. With these milestones complete and
construction funding in place, the Company
will be on target to commence the execution
phase of detailed design and construction
in 2016 and 2017 with ramp up and first
production to commence in the first quarter
of 2018 (Figure 10).
The robust project economics indicated by
the PFS, continued metallurgical success
during the year and the securing of a strategic
partner just after the end of the 2013-2014
period has the Company well placed to
rapidly advance the development of the
Ngualla Project into the next long term, low
cost producer of quality rare earth products.
Metallurgical process optimisation programs
that have the potential to further reduce
operating costs through enhanced
beneficiation, acid leach optimisation and acid
recycling will precede the commencement
of the DFS before the end of calendar 2014.
Beneficiation and acid leach recovery pilot
plants will further optimise and de-risk the
project during the DFS and provide important
operating data for detailed engineering design.
Figure 10: Ngualla Project Summary Development Schedule
TAsk
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2014
2015
2016
2017
2018
Process Plant Optimisation
EsiA
mining Approvals
Pilot Plants
Definitive feasibility study
Project funding & Decision to Proceed
Engineering, Design & Long Lead Procurement
construction
commissioning/Production
21
PEAK RESOURCES LTD ANNUAL REPORT 2014 APPENDix
Table A: Classification of Mineral Resources for the Ngualla Rare Earth Project at a 1.0% cut-off grade.
Lower cut – off
grade
JORc Resource
category
Tonnage
(mt)
1.0% REO
Measured
Indicated
Inferred
Total
81
94
20
195
REO
(%)*
2.66
2.02
1.83
2.26
contained
REO tonnes
2,100,000
1,900,000
380,000
4,400,000
* REO (%) includes all the lanthanide elements plus yttrium oxides. See Table C for breakdown of individual REO’s. Figures above may not sum precisely due
to rounding. The number of significant figures does not imply an added level of precision. Reported according to the jORC 2004 Code and Guidelines.
Table B: Classification of Mineral Resources for the Bastnaesite Zone weathered mineralisation at a 3.0% cut off grade.
Lower cut – off
grade
JORc Resource
category
Tonnage
(mt)
REO
(%)*
contained
REO tonnes
3.0% REO
Measured
Indicated
Inferred
Total
19
2.9
0.11
21.6
4.53
4.62
4.10
4.54
840,000
140,000
4,000
982,000
* REO (%) includes all the lanthanide elements plus yttrium oxides. The weathered Bastnaesite Zone mineral resource is contained within and is a subset of the
Total Ngualla Project Mineral Resource at a 1% REO cut-off grade in Table A above’
Table c: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total
REO for the weathered Bastnaesite Zone +3% REO and Total Ngualla +1% REO Mineral Resources.
Oxide
Bastnaesite Zone
mineral Resource
at 3.0% cut
%
Ngualla total
mineral Resource
at 1.0% cut
%
Lanthanum
cerium
Praseodymium
Neodymium
samarium
Europium
gadolinium
Terbium
Dysprosium
holmium
Erbium
Thulium
ytterbium
Lutetium
yttrium
22
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
Total %
27.6
48.2
4.73
16.6
1.60
0.30
0.61
0.05
0.08
0.01
0.03
0.00
0.01
0.00
0.20
100
27.1
48.2
4.81
16.3
1.67
0.35
0.76
0.07
0.16
0.02
0.06
0.00
0.02
0.00
0.48
100
REVIEW OF OPERATIONS Table D: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total
REO for the Ngualla Project Ore Reserve summarised in Table 1.
Oxide
% of Total REO
individual REO grade %
Lanthanum
cerium
Praseodymium
Neodymium
samarium
Europium
gadolinium
Terbium
Dysprosium
holmium
Erbium
Thulium
ytterbium
Lutetium
yttrium
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
Total %:
Figures may not sum due to rounding to 0.01%
27.6
48.2
4.74
16.6
1.60
0.30
0.62
0.05
0.08
0.01
0.03
0.00
0.01
0.00
0.20
100
1.25
2.19
0.21
0.75
0.07
0.01
0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
4.54
The information in this report that relates to Exploration Results is based on information compiled and/or reviewed by Dave Hammond
who is a Member of The Australasian Institute of Mining and Metallurgy. Dave Hammond is the Technical Director of the Company. He
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Dave Hammond consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Robert Spiers, who is a member
of The Australasian Institute of Geoscientists. Robert Spiers is an employee of geological consultants H&S Consultants Pty Ltd. Robert
Spiers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Robert Spiers consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
The information in the announcement that related to Ore Reserves and estimated mine operating costs was based on information
compiled by Mr Ryan Locke, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Locke is a
Principal Planner and is employed by Orelogy Pty Ltd, an independent consultant to Peak Resources. Mr Locke has sufficient experience
that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as
a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Ryan Locke consents to the inclusion in the report of the maters based on his information in the form and context
in which it appears.
The information in this report that relates to Metallurgical Test Work Results based on information compiled and / or reviewed by Gavin
Beer who is a Member of The Australasian Institute of Mining and Metallurgy and a Chartered Professional. Gavin Beer is a Consulting
Metallurgist with sufficient experience relevant to the activity which he is undertaking to be recognized as competent to compile and
report such information. Gavin Beer consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
The information in this report that relates to infrastructure, project execution and cost estimating is based on information compiled
and / or reviewed by Lucas Stanfield who is a Member of the Australian Institute of Mining and Metallurgy. Lucas Stanfield is the Chief
Development Officer for Peak Resources Limited and is a Mining Engineer with sufficient experience relevant to the activity which he is
undertaking to be recognized as competent to compile and report.
23
PEAK RESOURCES LTD ANNUAL REPORT 2014
DIRECTORS’ REPORT
The directors of Peak Resources Limited submit herewith the financial statements of the company for the financial year ended
30 June 2014. in order to comply with the provisions of the corporations Act 2001, the Directors Report as follows:
DiREcTORs
The names and details of the Company’s directors in office during and since the financial year end until the date of the report
are as follows. Directors were in office for the entire period unless otherwise stated.
mr Darren Townsend – Managing Director (Appointed 3 February 2014)
mr Alastair hunter
– Non-Executive Chairman
mr Dave hammond – Technical Director
mr Jonathan murray – Non-Executive Director
iNfORmATiON ON DiREcTORs
mr Darren Townsend
Managing Director – appointed 3 February 2014
Darren is a mining engineer with extensive mining and corporate experience. Previously Darren has worked at De Grey Mining
Ltd where he held the position of Managing Director from May 2006 to December 2007. Prior to that he was General Manager
of Operations at Sons of Gwalia’s (now Tailson) Wodgina Tantalum operations and over a period of 5 years, led and managed the
development of the mine to become the world’s largest hard rock Tantalum operations.
Most recently over a period of 6 years Darren has been President & CEO of TSXV listed Pacific Wildcat Resources Corp where
he was responsible for building a tantalum mine in Mozambique and completing the acquisition and resource drill out of a large
rare earth and niobium project in Kenya.
mr Alastair hunter
Non-Executive Chairman
Mr hunter has in excess of forty years’ experience in exploration and management of resource companies. During this period,
he has played a significant role in a number of base metal, gold and uranium discoveries. Mr hunter was formerly a director of
Peninsula Minerals NL, Matlock Mining NL and Anglo Australian Resources NL. his experience extends to working throughout
Australia, Africa as well as North America.
mr David hammond MSc in Mineral Exploration, BSc (hons), MAusIMM
Technical Director
Mr David hammond has 26 years technical and management experience. Mr hammond was previously the Exploration
Manager with De Grey Mining Limited working on projects in the Pilbara and new project acquisitions globally. his previous
experience also includes Exploration Manager for Sons of Gwalia in NE Goldfields in Western Australia and Project Geologist
with Billiton/Gencor in South Africa and Zambia in a range of commodities and geological deposit styles.
mr Jonathan murray Bachelor Laws and Commerce
Non-Executive Director
Mr Murray is a partner at independent corporate law firm Steinepreis Paganin, based in Perth, Western Australia. he specialises
in equity capital raisings, all forms of acquisitions and divestments, governance and corporate compliance.
Mr Murray graduated from Murdoch University in 1996 with a Bachelor of Laws and Commerce (majoring in Accounting). he is
also a member of FINSIA (formerly the Securities Institute of Australia). Mr Murray is a director of hannans Reward Ltd.
24
PEAK RESOURCES LTD ANNUAL REPORT 2014
cOmPANy sEcRETARy
The following person(s) has held the position of company secretary during or at the end of the financial year:
Jeffrey Dawkins
Company Secretary
Mr Dawkins is an Australian Chartered Accountant with more than 20 years’ experience in professional and corporate roles in
Perth, London and Singapore. Mr Dawkins holds a Bachelor of Business Degree from Curtin University and a Graduate Diploma
in Applied Finance and Investment. he has a strong background in mining and has worked with various mining Companies
involved with gold, copper, rare earth and iron ore.
his previous appointment was as Chief Financial Officer of Archipelago Resources Plc (“Archipelago”) from November 2006
until February 2012. Mr. Dawkins has also worked for Deloitte and has held senior finance roles with listed resource companies
including Marengo Mining Ltd, Lynas Corporation, Schlumberger and Weatherford.
PRiNciPAL AcTiViTiEs
During the year, the principal activities of the Company consisted of:
(a) Mineral processing technological evaluations;
(b) Mining and associated infrastructure, pre-feasibility evaluations; and
(c) Mineral exploration, definition and development.
OPERATiNg REsULTs
The loss of the Group after providing for income tax amounted to $3,148,903 (2013: loss $2,867,384).
The basic and diluted loss per share for the Group for the year was 1.05 cents (2013: 1.15 cents)
fiNANciAL POsiTiON
The net assets of the Group have increased from $36,102,609 at 30 june 2013 to $36,145,291 at 30 june 2014.
The Group’s working capital, being current assets less current liabilities, was $2,113,434 at 30 june 2014 (2013: $3,437,359).
DiViDENDs PAiD OR REcOmmENDED
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to
the date of this report.
REViEw Of OPERATiONs
The group is developing the Ngualla Rare Earth Project. The review of the group’s operations is included in pages 9 through 23
of this report.
sigNificANT chANgEs iN sTATE Of AffAiRs
Other than detailed in the Review of Operations above there were no significant changes in the state of affairs of the Company,
during the financial year.
AfTER BALANcE DATE EVENTs
On the 1st july 2014 the Company announced that at a shareholders meeting on that same date, a resolution was passed for
the adoption of a Employee Option Plan and Employee Performance Rights Plan and for the issue of options and performance
rights to the directors under those plans.
On 29th September 2014 the Company announced that it had entered into a financing agreement with Appian Natural
Resource Fund, a UK Based private equity investor, to provide funding and technical expertise to, subject to final documentation
and meeting certain conditions, complete a Bankable feasibility study.
25
PEAK RESOURCES LTD ANNUAL REPORT 2014
mEETiNgs Of DiREcTORs
The number of meetings attended by each Director of the Company during the financial year was:
Darren Townsend
Alastair hunter
David hammond
jonathan Murray
Board meetings
Remuneration committee meetings
Number held and
entitled to attend
Number attended
Number held and
entitled to attend
Number attended
3
8
8
8
3
8
8
8
-
-
-
-
-
-
-
-
Note – no Audit Committee Meetings were held during the year as the function of the audit committee was dealt with by the full Board.
EQUiTy hOLDiNg Of DiREcTORs
As at the date of this report, the Directors’ interest in the Company were:
Mr Alastair hunter
Mr David hammond
Mr jonathan Murray
Equity shares
10,858,790
70,590
1,140,000
Equity options
1,809,799
11,765
190,000
No options were granted during the financial year or since the end of the financial year to the Directors or other key
management personnel. An allocation of options and performance rights to the Director’s has been approved by shareholders
on 1 july 2014.
fUTURE DEVELOPmENTs
Likely future developments in the operations of the Group are referred to elsewhere in the Annual Report. Other than as referred
to in this report, further information as to likely developments in the operations of the Group and expected results of those
operations would, in the opinion of the Directors, be speculative.
ENViRONmENTAL issUEs
The Company is aware of its environmental obligations with regards to its exploration activities and ensures that it complies
with all regulations when carrying out any exploration work. The directors of the Company are not aware of any breach of
environmental regulations for the year under review.
The Directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduced a
single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions,
greenhouse gas projects, and energy use and production of corporations which exceed specified thresholds. At the current
stage of development, the Directors have determined that the NGER Act has no effect on the Company for the current or
subsequent financial year. The Directors will reassess this position as and when the need arises.
REmUNERATiON REPORT (AUDiTED)
The remuneration report outlines the director and executive remuneration arrangements for the Group in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
Remuneration Policy
The remuneration policy of the Company has been designed to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates
and offering specific long-term incentives based on key performance areas affecting the Company’s financial results.
26
PEAK RESOURCES LTD ANNUAL REPORT 2014
DIRECTORS’ REPORT The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors
and executives to run and manage the Company.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the
Company is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed by the Board. All executives receive a base salary (which is based on factors such as length of service and experience)
and superannuation. The Board reviews executive packages annually by reference to the Company’s performance, executive
performance and comparable information from industry sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is to attract the highest
calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.
Executives and employees are also entitled to participate in the employee share and option arrangements.
The executive directors receive a superannuation guarantee contribution required by the government, which is currently 9.5%,
and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Shares given to
directors and executives are valued as the difference between the market price of those shares and the amount paid by the
director or executive. Options are valued using the Black-Scholes method. Shares have been given to directors as part of their
remuneration. Shares and options provided to directors are detailed in the remuneration report.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment
and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually,
based on market practice, duties and accountability. Independent external advice is sought when required. Fees for non-
executive directors are not linked to the performance of the Company. however, to align directors’ interests with shareholder
interests, the directors are encouraged to hold shares in the Company and are able to participate in the employee option
plan.
Non-executive director remuneration
The remuneration of non-executive directors has been set at a maximum of $150,000 as approved by shareholders at the 2006
annual general meeting.
Performance based remuneration
The Company is in the process of including a performance based remuneration component built into director and executive
remuneration packages.
company performance, shareholder wealth and director’s and executive’s remuneration
Summary of group’s performance and movements in Peak Resources Limited’s share price over the last five years:
2014
$
2013
$
2012
$
2011
$
2010
$
Revenue and other income
54,134
2,503,930
582,143
558,722
162,084
Net loss before tax
Net loss after tax
(3,148,903)
(2,867,384)
(5,297,738)
(2,241,059)
(1,397,445)
(3,148,903)
(2,867,384)
(5,297,738)
(2,241,059)
(1,397,445)
Closing share price at end of year
Basic loss per share (cents)
Dividends per share
$0.06
1.05
-
$0.13
1.15
-
$0.22
3.01
-
$0.51
1.71
-
$0.10
1.42
-
The remuneration policy has been tailored to increase goal congruence between shareholders and directors and executives.
Currently, this is facilitated through a policy to issue options to the majority of directors and executives to encourage the
alignment of personal and shareholder interests. The Company believes the policy will be effective in increasing shareholder
wealth. For details of directors and executives interests in options at year end, refer note 15 of the financial statements.
27
PEAK RESOURCES LTD ANNUAL REPORT 2014 Details of remuneration
The relevant Key Management Personnel (KMP) of the group for the 2014 financial year were:
mr. Darren Townsend – Managing Director (appointed 3 February 2014)
mr. Alastair hunter – Non-Executive Chairman
mr. David hammond – Technical Director
mr. Jonathan murray – Non-Executive Director
mr. Jeffrey Dawkins – Chief Financial Officer
Total remuneration for the year was:
Salary and fees
Superannuation
Share based payments
Remuneration of individual KMP’s were:
2014
$
863,592
66,469
-
930,061
2013
$
1,083,874
65,883
169,739
1,319,496
30 June 2014
DiREcTORs
Mr. Darren Townsend
Mr. Alastair hunter
Mr. David hammond
Mr. jonathan Murray
EXEcUTiVEs
Mr. jeffrey Dawkins
Total remuneration
30 June 2013
DiREcTORs
Mr. Alastair hunter
Mr. Richard Beazley
Mr. David hammond
Mr. jonathan Murray
EXEcUTiVEs
Ms. Linda Paini
Mr. jeffrey Dawkins
short-Term
Benefits
Post
Employ-
ment
share-Based
Payment
Total
salary &
fees
Non-
monetary
super-
annuation
shares
Options
$
$
$
$
$
$
123,590
133,333
300,000
36,668
593,592
270,000
270,000
863,592
$
$
61,583
463,087(1)
300,000
40,049
864,719
25,655
212,104
219,155
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,411
12,333
27,750
-
41,494
24,975
24,975
66,469
$
$
1,500
16,470
27,000
-
44,970
2,309
18,604
20,913
65,883
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
125,002
145,667
327,750
36,668
635,086
294,975
294,975
930,061
63,083
479,557
169,739(2)
496,739
-
40,049
169,739
1,079,428
-
-
27,964
212,104
240,068
Equity
compen-
sation
proportion
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
34%
0%
16%
0%
0%
$
%
Total remuneration
1,083,874
169,739
1,319,496
13%
(1) Richard Beazley resigned on 5 April 2013 and his salary includes a termination payment of $175,000, representing a payout of 6 months’ salary in
accordance with his service agreement.
(2) The share based payment amounts provided to Mr Hammond in 2012 and 2013 relate to the expensing of options issued in 2011.
28
PEAK RESOURCES LTD ANNUAL REPORT 2014
DIRECTORS’ REPORT
compensation shares granted during the year ended 30 June 2014
No shares have been granted to directors or executive during the financial year.
Shareholdings of KMP’s
30 June 2014
DiREcTORs
Mr. Alastair hunter
Mr. Darren Townsend
Mr. David hammond
Mr. jonathan Murray
EXEcUTiVEs
Mr. jeffrey Dawkins
Opening
balance
granted as
remuneration
Exercise of
options
cancelled
shares
purchased on
market
closing
balance
$
$
$
$
$
$
9,048,991
-
58,825
950,000
10,057,816
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,809,798
10,858,789
-
-
11,765
70,590
190,000
1,140,000
2,011,563
12,069,379
83,334
83,334
108,334
108,334
2,094,897
12,094,379
Total remuneration
10,082,816
Option holdings of KMP’s
Opening
balance
granted as
remuneration
cancelled
Exercise /
expiry of
options
market
transactions
closing
balance
Vested at
30 June
$
$
$
$
$
$
$
30 June 2014
DiREcTORs
Mr. Alastair hunter
272,597
Mr. Darren Townsend*
-
Mr. David hammond
Mr. jonathan Murray
EXEcUTiVEs
Mr. jeffrey Dawkins
58,825
136,298
467,720
-
-
Total remuneration
467,720
*Mr Townsend was appointed on 3 February 2014
All options held by KMP are exercisable.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,809,799
2,082,396
2,082,396
-
-
-
11,765
70,590
70,590
190,000
326,298
326,298
2,011,564
2,479,284
2,479,284
83,334
83,334
83,334
83,334
83,334
83,334
2,094,898
2,562,618
2,562,618
Performance income as a proportion of total income
No performance based bonuses have been paid to directors or executives during the financial year.
Options granted during the year ended 30 June 2014
During the financial year ended 30 june 2014, the Company did not grant options to either directors or executives. They
received options as part of their participation in a non-renounceable entitlement issue in january 2014.
Options vested/ elapsed during the year ended 30 June 2014
During the financial year ended 30 june 2014, nil options vested and nil options elapsed.
29
PEAK RESOURCES LTD ANNUAL REPORT 2014
year Ended 30 June 2013
During the financial year ended 30 june 2013, the Company did not grant options to either directors or executives.
On the 13 May 2013 the Company announced that 2,250,000 unlisted Employee Options were cancelled by mutual agreement
between the Company and a Director, David hammond. These options are disclosed below:
750,000 options at $0.60 exercisable 16 May 2015 vesting 16 May 2013
750,000 options at $0.90 exercisable 16 May 2015 vesting 16 May 2013
750,000 options at $1.20 exercisable 16 May 2015 vesting 16 May 2013
Share based payment expense of Nil (2013: $169,739) have been recognised in relation to these options.
service agreements:
The key terms of the service agreements with the KMP’s are:
Darren Townsend
Darren Townsend was appointed Managing Director of the Company by contract dated 3 February 2014. Mr Townsend’s annual
salary is $400,000 plus superannuation, expenses, discretionary bonuses, options and performance rights. The Executive is
entitled to leave in accordance with the relevant legislation. Mr Townsend’s engagement has no fixed term but is subject to a six
month notice period on his resignation.
Alastair Hunter
Mr hunter was employed as Executive Director for the period of 1 july 2013 – 31 january 2014. During this time Mr hunter
received a salary of $131,666. As Non-Executive Director for the remainder of 2014, Mr hunter received a further $16,667 in
director’s fees.
Jonathan Murray
jonathan Murray is employed by Peak as Non-Executive Director with an on-going contract dated 22 March 2011. Mr Murray’s
engagement has no fixed term but ceases on his resignation or removal as a director in accordance with the Corporations
Act. Mr Murray receives directors’ fees of $40,000 per annum. As a non-executive director, Mr Murray is not entitled to leave
entitlements or superannuation.
Dave Hammond
Dave hammond is employed by Peak as Technical Director with a three year contract dated 28 October 2010. Mr hammond’s
base annual salary is $300,000, exclusive of superannuation, plus expenses and discretionary equity issues and bonuses. The
Executive is entitled to leave in accordance with the relevant legislation. Mr hammond’s engagement is subject to a six month
notice period on his resignation. Any options issued as remuneration not exercised before or on the date of termination will
lapse.
Jeffrey Dawkins
jeffrey Dawkins is employed by Peak as Chief Financial Officer (CFO) and Company Secretary by contract dated 15 October
2012. Mr Dawkins annual salary is $270,000, exclusive of superannuation plus expenses and discretionary equity issues and
bonuses. The Executive is entitled to leave in accordance with the relevant legislation. Mr Dawkins engagement has no fixed
term but ceases on his resignation.
OPTiONs
At the date of this report unissued ordinary shares of the Company under option to service providers only are:
Expiry Date
20 February 2017
03 March 2018
05 june 2017
Exercise Price
Number under option
$0.55
$0.55
$0.15
6,250,000
150,000
5,000,000
No ordinary shares were issued as a result of the exercise of options during or since the financial year ended 30 june 2014.
During the year, no options have been granted to directors or employees.
30
PEAK RESOURCES LTD ANNUAL REPORT 2014
DIRECTORS’ REPORT
iNDEmNifyiNg OfficERs OR AUDiTOR
During the financial year, the company paid a premium in respect of a contract insuring the directors and officers of the
Company and related body corporates against a liability incurred as such a director, secretary or executive officer to the extent
permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
The company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability
incurred as such an officer or auditor.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its
audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has
been made to indemnify Ernst & Young during or since the financial year.
PROcEEDiNgs ON BEhALf Of cOmPANy
No person has applied to the court under legislation such as section 237 of the Corporations Act of Australia for leave to bring
proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose
of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or
intervened in on behalf of the consolidated entity with leave of the court under such legislation.
AUDiTOR’s iNDEPENDENcE DEcLARATiON
The lead auditor’s independence declaration for the year ended 30 june 2014 has been received and can be found immediately
following this Directors’ report.
Details of amounts paid or payable to the auditor for non-audit services are set out in Note 3 to the Financial Statements.
The Board of Directors is satisfied that the provision of non-audit services performed during the year by the Company’s auditors
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are
satisfied that the services did not compromise the external auditor’s independence for the following reason:
•
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
•
The nature of the services provided does not compromise the general principles relating to auditors independence as set
out in the APES 110 (Code of Ethics for Professional Accountants).
The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act
2001.
On behalf of the Directors,
Alastair hunter Non-executive Chairman
Perth, 30 September 2014
31
PEAK RESOURCES LTD ANNUAL REPORT 2014 AUDiTOR’s iNDEPENDENcE DEcLARATiON
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Peak Resources
Limited
In relation to our audit of the financial report of Peak Resources Limited for the financial year ended
30 June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
R J Curtin
Partner
Perth
30 September 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:PEAK RESOURCES:009
32
PEAK RESOURCES LTD ANNUAL REPORT 2014
iNDEPENDENT AUDiTOR’s REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Peak Resources Limited
Report on the financial report
We have audited the accompanying financial report of Peak Resources Limited, which comprises the
consolidated statement of financial position as at 30 June 2014, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:PEAK RESOURCES:058
33
PEAK RESOURCES LTD ANNUAL REPORT 2014
INDEPENDENT AUDITOR’S REPORT
Opinion
In our opinion:
a.
the financial report of Peak Resources Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the consolidated entity's financial position as at 30 June 2014
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2.
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2014. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Peak Resources Limited for the year ended 30 June 2014,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
R J Curtin
Partner
Perth
30 September 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:PEAK RESOURCES:058
34
PEAK RESOURCES LTD ANNUAL REPORT 2014
cONsOLiDATED sTATEmENT Of PROfiT OR LOss
AND OThER cOmPREhENsiVE iNcOmE
For the Year Ended 30 june 2014
Finance income
Other income
Total income
Employee benefits expenses
Share based payments expenses
Impairment of capitalised exploration costs
Impairment of available for sale financial assets
Depreciation expenses
Finance costs
Administrative and other costs
Loss before income tax
Income tax benefit
Loss after income tax
Other comprehensive (loss)/income, net of tax
Items that could be transferred to profit or loss in future:
Exchange difference on translation of foreign operations
Total comprehensive loss for the year
Note
2014
$
2013
$
48,959
116,959
3
5,175
2,386,971
54,134
2,503,930
(1,455,033)
(1,993,118)
-
(122,671)
(100,000)
(45,423)
-
(169,739)
(628,742)
(96,000)
(60,663)
(20,733)
(1,479,910)
(2,402,319)
(3,148,903)
(2,867,384)
6
-
-
(3,148,903)
(2,867,384)
(182,191)
547,414
(3,331,094)
(2,319,970)
Loss per share (in cents)
Basic and Diluted loss per share
5
(1.05)
(1.15)
The statement should be read in conjunction with the accompanying notes
35
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 30 June 2014
AssETs
current assets
Cash and cash equivalents
Trade and other receivables
Other Financial Assets
Prepayments
Total current assets
Non-current assets
Property plant and equipment
Capitalised exploration and evaluation costs
Investments
Total non-current assets
Total assets
LiABiLiTiEs
current liabilities
Trade and other payables
Provisions
Short term loans
Total current liabilities
Total liabilities
Net assets
EQUiTy
Contributed equity
Reserves
Accumulated losses
Total equity
The statement should be read in conjunction with the accompanying notes
36
PEAK RESOURCES LTD ANNUAL REPORT 2014
Note
2014
$
2013
$
7
8
9
10
11
12
13
14
1,889,470
2,463,309
729,149
104,000
145,004
2,501,329
-
139,739
2,867,623
5,104,377
91,624
121,315
33,936,233
32,439,935
4,000
104,000
34,031,857
32,665,250
36,899,480
37,769,627
666,127
88,062
-
754,189
754,189
1,277,209
74,809
315,000
1,667,018
1,667,018
36,145,291
36,102,609
16
15
54,911,664
51,537,888
1,397,976
1,580,167
(20,164,349)
(17,015,446)
36,145,291
36,102,609
CONSOLIDATED STATEMENT
OF CASh FLOWS
for the year Ended 30 June 2014
OPERATiNg AcTiViTiEs
Payments to suppliers and employees
Interest received
Finance costs paid
R&D Tax Refund received
cash used in operating activities
iNVEsTiNg AcTiViTiEs
Acquisition of property, plant and equipment
Proceeds from sale of non-current assets
Payment for exploration and evaluation costs
cash used in investing activities
fiNANciNg AcTiViTiEs
Proceeds from issue of equity shares
Payment for term deposit
Costs of issuing equity shares
(Repayment of) /Proceeds from borrowings
Cost of borrowings
Note
2014
$
2013
$
(2,782,218)
(4,634,975)
48,959
-
1,690,381
116,959
(20,733)
-
7
(1,042,878)
(4,538,749)
(31,460)
2,381
(53,880)
-
(2,434,328)
(6,832,157)
(2,463,407)
(6,886,037)
3,520,335
10,602,072
(104,000)
(146,559)
(315,000)
(19,875)
-
(604,204)
315,000
(15,750)
cash generated from financing activities
2,934,901
10,312,868
Net decrease in cash and cash equivalents
Balance at the beginning of the year
Effect of foreign currency translation
Balance at the end of the year
(571,384)
(1,111,918)
2,463,309
3,562,868
(2,451)
12,360
7
1,889,470
2,463,309
The statement should be read in conjunction with the accompanying notes
37
CONSOLIDATED STATEMENT
OF ChANGES IN EQUITY
for the year Ended 30 June 2014
contributed
Equity
share based
payment
reserve
foreign
currency
translation
reserve
Accumulated
losses
Total equity
$
$
$
$
$
At 30 June 2012
41,740,020
697,127
(34,113)
(14,148,062)
28,254,972
Loss for the year 2013
Other comprehensive income
Total comprehensive income for the year
-
-
-
Equity issued
10,602,073
-
-
-
-
Equity based payments
Transaction costs
(804,204)
369,738
-
-
(2,867,384)
(2,867,384)
547,414
-
547,414
547,414
(2,867,384)
(2,319,970)
-
-
-
-
-
-
10,602,073
369,738
(804,204)
At 30 June 2013
51,537,888
1,066,866
513,301
(17,015,446)
36,102,609
Loss for the year 2014
Other comprehensive income
Total comprehensive income for the year
Equity issued
Equity based payments
Transaction costs
-
-
-
3,520,335
(146,559)
-
-
-
-
-
-
-
(3,148,903)
(3,148,903)
(182,191)
-
(182,191)
(182,191)
(3,148,902)
(3,331,094)
-
-
-
-
-
-
3,520,335
-
(146,559)
At 30 June 2014
54,911,664
1,066,866
331,110
(20,164,349)
36,145,291
The statement should be read in conjunction with the accompanying notes
38
PEAK RESOURCES LTD ANNUAL REPORT 2014
NOTES TO FINANCIAL STATEMENTS
1. cORPORATE iNfORmATiON
The financial report of Peak Resources Limited for the year ended 30 june 2014 was authorised for issue in accordance with a
resolution of the directors on 30 September 2014.
Peak Resources Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on
the Australian Securities Exchange (ASX). The address of its registered office and principal place of business is disclosed in the
introduction to the Annual Report.
The principal activity of the Group during the year was exploration and evaluation of mineral licences.
2. sigNificANT AccOUNTiNg POLiciEs
a) Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for AFS Investments which are
measured at fair value. All amounts are presented in Australian Dollars unless otherwise noted.
The functional and presentation currency is Australian Dollars.
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act
2001, Accounting Standards and Interpretations, and complies with other requirements of the law.
Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with
International Financial Reporting Standards (IFRS).
going concern
The Directors are satisfied the company will continue as a going concern and thus it is appropriate to prepare the financial
statements on this basis. The company had a closing cash balance at 30 june 2014 of $1,889,470 (2013: $2,463,309) and a net
current asset position of $2,113,434 (2013: $3,437,359).
On 29 September 2014 the Company announced that it had entered into a binding agreement with Appian Natural Resource
Fund, a UK Based private equity investor, to provide funding and technical expertise to complete a Bankable feasibility study.
b) Adoption of new or revised accounting standards
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The following new and revised Standards and Interpretations have been adopted in the current year. The adoption of these
Standards and Interpretations have not had a material impact on the amounts report.
Reference
AAsB 10
Title
consolidated financial statements
AASB 10 establishes a new control model that applies to all entities. It replaces
parts of AASB 127 Consolidated and Separate Financial Statements dealing with
the accounting for consolidated financial statements and UIG-112 Consolidation -
Special Purpose Entities.
The new control model broadens the situations when an entity is considered to be
controlled by another entity and includes new guidance for applying the model to
specific situations, including when acting as a manager may give control, the impact
of potential voting rights and when holding less than a majority voting rights may give
control.
Consequential amendments were also made to this and other standards via AASB
2011-7 and AASB 2012-10.
39
Reference
AAsB 11
Title
Joint Arrangements
AASB 11 replaces AASB 131 Interests in joint Ventures and UIG-113 jointly- controlled
Entities - Non-monetary Contributions by Ventures.
AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore
the determination of whether joint control exists may change. In addition it removes
the option to account for jointly controlled entities (jCEs) using proportionate
consolidation. Instead, accounting for a joint arrangement is dependent on the nature
of the rights and obligations arising from the arrangement. joint operations that give
the venturers a right to the underlying assets and obligations themselves is accounted
for by recognising the share of those assets and obligations. joint ventures that give
the venturers a right to the net assets is accounted for using the equity method.
Consequential amendments were also made to this and other standards via AASB
2011-7, AASB 2010-10 and amendments to AASB 128. Amendments made by the IASB
in May 2014 add guidance on how to account for the acquisition of an interest in a
joint operation that constitutes a business*****.
AAsB 12
Disclosure of interests in Other Entities
AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries,
joint arrangements, associates and structured entities. New disclosures have been
introduced about the judgments made by management to determine whether
control exists, and to require summarised information about joint arrangements,
associates, structured entities and subsidiaries with non-controlling interests.
AAsB 13
fair Value measurement
AASB 13 establishes a single source of guidance for determining the fair value of
assets and liabilities. AASB 13 does not change when an entity is required to use fair
value, but rather, provides guidance on how to determine fair value when fair value is
required or permitted. Application of this definition may result in different fair values
being determined for the relevant assets.
AASB 13 also expands the disclosure requirements for all assets or liabilities carried at
fair value. This includes information about the assumptions made and the qualitative
impact of those assumptions on the fair value determined.
Consequential amendments were also made to other standards via AASB 2011-8.
AAsB 119
Employee Benefits
The revised standard changes the definition of short-term employee benefits. The
distinction between short-term and other long-term employee benefits is now based
on whether the benefits are expected to be settled wholly within 12 months after the
reporting date.
Consequential amendments were also made to other standards via AASB 2011-10.
interpretation 20
stripping costs in the Production Phase of a surface mine
This interpretation applies to stripping costs incurred during the production phase
of a surface mine. Production stripping costs are to be capitalised as part of an
asset. If an entity can demonstrate that it is probable future economic benefits
will be realised, the costs can be reliably measured and the entity can identify the
component of an ore body for which access has been improved. This asset is to be
called the “stripping activity asset”.
The stripping activity asset shall be depreciated or amortised on a systematic basis,
over the expected useful life of the identified component of the ore body that
becomes more accessible as a result of the stripping activity. The units of production
method shall be applied unless another method is more appropriate.
Consequential amendments were also made to other standards via AASB 2011-12.
40
NOTES TO FINANCIAL STATEMENTS Reference
AAsB 2012-2
Title
Amendments to Australian Accounting standards - Disclosures - Offsetting financial
Assets and financial Liabilities
AASB 2012-2 principally amends AASB 7 Financial Instruments: Disclosures to require
disclosure of the effect or potential effect of netting arrangements, including rights
of set-off associated with the entity’s recognised financial assets and recognised
financial liabilities, on the entity’s financial position, when all the offsetting criteria of
AASB 132 are not met.
AAsB 2012-5
Amendments to Australian Accounting standards arising from Annual improvements
2009-2011 cycle
AASB 2012-5 makes amendments resulting from the 2009-2011 Annual
Improvements Cycle. The standard addresses a range of improvements, including the
following:
– Repeat application of AASB 1 is permitted (AASB 1)
– Clarification of the comparative information requirements when an entity provides
a third balance sheet (AASB 101 Presentation of Financial Statements)
AAsB 1053
Application of Tiers of Australian Accounting standards
This standard establishes a differential financial reporting framework consisting of two
tiers of reporting requirements for preparing general purpose financial statements:
a. Tier 1: Australian Accounting Standards
b. Tier 2: Australian Accounting Standards - Reduced Disclosure Requirements
Tier 2 comprises the recognition, measurement and presentation requirements of
Tier 1 and substantially reduced disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing general purpose financial
statements:
a.
For-profit entities in the private sector that have public accountability (as defined
in this standard)
b. The Australian Government and State, Territory and Local governments
The following entities apply either Tier 2 or Tier 1 requirements in preparing general
purpose financial statements:
a. For-profit private sector entities that do not have public accountability
b. All not-for-profit private sector entities
c.
Public sector entities other than the Australian Government and State, Territory
and Local governments.
Consequential amendments to other standards to implement the regime were
introduced by AASB 2010-2, 2011-2, 2011-6, 2011-11, 2012-1, 2012-7 and 2012 11.
AAsB 2011-4
Amendments to Australian Accounting standards to Remove Individual Key
Management Personnel Disclosure Requirements [AAsB 124]
This amendment deletes from AASB 124 individual key management personnel
disclosure requirements for disclosing entities that are not companies. It also
removes the individual KMP disclosure requirements for all disclosing entities in
relation to equity holdings, loans and other related party transactions.
41
PEAK RESOURCES LTD ANNUAL REPORT 2014 Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet
effective. Those Standards and Interpretations which have an application date of 1 july 2014 are not expected to have a material
impact on the financial report. The impacts of those amendments for future years have not yet been assessed by management.
Application
date of
standard*
Application
date for
group*
1 january
2014
1 july
2014
1 january
2018
1 july
2018
Reference
Title
summary
AASB
2012-3
Amendments
to Australian
Accounting
Standards -
Offsetting Financial
Assets and Financial
Liabilities
AASB 2012-3 adds application guidance to AASB
132 Financial Instruments: Presentation to address
inconsistencies identified in applying some of the
offsetting criteria of AASB 132, including clarifying the
meaning of "currently has a legally enforceable right of
set-off" and that some gross settlement systems may
be considered equivalent to net settlement.
AASB
9/IFRS 9
Financial
Instruments
42
On 24 july 2014 The IASB issued the final version of
IFRS 9 which replaces IAS 39 and includes a logical
model for classification and measurement, a single,
forward-looking ‘expected loss’ impairment model
and a substantially-reformed approach to hedge
accounting.
IFRS 9 is effective for annual periods beginning on
or after 1 january 2018. however, the Standard is
available for early application. The own credit changes
can be early applied in isolation without otherwise
changing the accounting for financial instruments.
The final version of IFRS 9 introduces a new expected-
loss impairment model that will require more timely
recognition of expected credit losses. Specifically, the
new Standard requires entities to account for expected
credit losses from when financial instruments are first
recognised and to recognise full lifetime expected
losses on a more timely basis.
The AASB is yet to issue the final version of AASB 9. A
revised version of AASB 9 (AASB 2013-9) was issued
in December 2013 which included the new hedge
accounting requirements, including changes to hedge
effectiveness testing, treatment of hedging costs, risk
components that can be hedged and disclosures.
AASB 9 includes requirements for a simplified
approach for classification and measurement of
financial assets compared with the requirements of
AASB 139.
The main changes are described below.
a.
b.
Financial assets that are debt instruments will be
classified based on (1) the objective of the entity’s
business model for managing the financial assets;
(2) the characteristics of the contractual cash flows.
Allows an irrevocable election on initial recognition
to present gains and losses on investments in
equity instruments that are not held for trading
in other comprehensive income. Dividends in
respect of these investments that are a return on
investment can be recognised in profit or loss and
there is no impairment or recycling on disposal of
the instrument.
NOTES TO FINANCIAL STATEMENTS Application
date of
standard*
Application
date for
group*
1 january
2018
1 july
2018
Reference
Title
summary
AASB
9/IFRS 9
Financial
Instruments
(continued)
c.
Financial assets can be designated and measured
at fair value through profit or loss at initial
recognition if doing so eliminates or significantly
reduces a measurement or recognition
inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and
losses on them, on different bases.
d.
Where the fair value option is used for financial
liabilities the change in fair value is to be
accounted for as follows:
– The change attributable to changes in credit risk
are presented in other comprehensive income
(OCI)
– The remaining change is presented in profit
or loss
AASB 9 also removes the volatility in profit or loss
that was caused by changes in the credit risk of
liabilities elected to be measured at fair value. This
change in accounting means that gains caused by the
deterioration of an entity’s own credit risk on such
liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB
2009-11 and superseded by AASB 2010-7, AASB 2010-
10 and AASB 2014-1 – Part E.
AASB 2013-3
AASB 2013-4
Amendments
to AASB 136 –
Recoverable
Amount Disclosures
for Non-Financial
Assets
AASB 2013-3 amends the disclosure requirements
in AASB 136 Impairment of Assets. The amendments
include the requirement to disclose additional
information about the fair value measurement when
the recoverable amount of impaired assets is based on
fair value less costs of disposal.
AASB 2013-4 amends AASB 139 to permit the
continuation of hedge accounting in specified
circumstances where a derivative, which has been
designated as a hedging instrument, is novated from
one counterparty to a central counterparty as a
consequence of laws or regulations.
Amendments
to Australian
Accounting
Standards –
Novation of
Derivatives and
Continuation of
hedge Accounting
[AASB 139]
1 january
2014
1 july
2014
1 january
2014
1 july
2014
43
PEAK RESOURCES LTD ANNUAL REPORT 2014 Application
date of
standard*
Application
date for
group*
1 july
2014
1 july
2014
Reference
Title
summary
AASB 2014-1
Part A -Annual
Improvements
2010–2012
Cycle
Amendments
to Australian
Accounting
Standards - Part A
Annual
Improvements to
IFRSs 2010–2012
Cycle
AASB 2014-1 Part A: This standard sets out
amendments to Australian Accounting Standards
arising from the issuance by the International
Accounting Standards Board (IASB) of International
Financial Reporting Standards (IFRSs) Annual
Improvements to IFRSs 2010–2012 Cycle and Annual
Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle
addresses the following items:
• AASB 2 - Clarifies the definition of ‘vesting
conditions’ and ‘market condition’ and introduces
the definition of ‘performance condition’ and
‘service condition’.
• AASB 3 - Clarifies the classification requirements for
contingent consideration in a business combination
by removing all references to AASB 137.
• AASB 8 - Requires entities to disclose factors used
to identify the entity’s reportable segments when
operating segments have been aggregated. An
entity is also required to provide a reconciliation of
total reportable segments’ asset to the entity’s total
assets.
• AASB 116 & AASB 138 - Clarifies that the
determination of accumulated depreciation does
not depend on the selection of the valuation
technique and that it is calculated as the difference
between the gross and net carrying amounts.
• AASB 124 - Defines a management entity providing
KMP services as a related party of the reporting
entity. The amendments added an exemption
from the detailed disclosure requirements in
paragraph 17 of AASB 124 for KMP services provided
by a management entity. Payments made to a
management entity in respect of KMP services
should be separately disclosed.
AASB 2014-1
Part A -Annual
Improvements
2011–2013
Cycle
Amendments
to Australian
Accounting
Standards - Part A
Annual
Improvements to
IFRSs 2011–2013
Cycle
Annual Improvements to IFRSs 2011–2013 Cycle
addresses the following items:
1 july
2014
1 july
2014
• AASB 13 - Clarifies that the portfolio exception in
paragraph 52 of AASB 13 applies to all contracts
within the scope of AASB 139 or AASB 9, regardless
of whether they meet the definitions of financial
assets or financial liabilities as defined in AASB 132.
• AASB 140 - Clarifies that judgment is needed to
determine whether an acquisition of investment
property is solely the acquisition of an investment
property or whether it is the acquisition of a group
of assets or a business combination in the scope of
AASB 3 that includes an investment property. That
judgment is based on guidance in AASB 3.
44
NOTES TO FINANCIAL STATEMENTS Application
date of
standard*
Application
date for
group*
1 january
2014
1 july
2014
^^
^^
1 january
2016
1 july
2016
Reference
Title
summary
AASB 1031
Materiality
AASB 2013-9
Amendments
to Australian
Accounting
Standards –
Conceptual
Framework,
Materiality
and Financial
Instruments
Amendments
to IAS 16 and
IAS 38*****
Clarification of
Acceptable Methods
of Depreciation
and Amortisation
(Amendments to
IAS 16 and IAS 38)
The revised AASB 1031 is an interim standard
that cross-references to other Standards and the
Framework (issued December 2013) that contain
guidance on materiality.
AASB 1031 will be withdrawn when references to AASB
1031 in all Standards and Interpretations have been
removed.
AASB 2014-1 Part C issued in june 2014 makes
amendments to eight Australian Accounting Standards
to delete their references to AASB 1031.
The amendments are effective from 1 july 2014*.
The Standard contains three main parts and
makes amendments to a number Standards and
Interpretations.
Part A of AASB 2013-9 makes consequential
amendments arising from the issuance of AASB CF
2013-1.
Part B makes amendments to particular Australian
Accounting Standards to delete references to AASB
1031 and also makes minor editorial amendments to
various other standards.
Part C makes amendments to a number of Australian
Accounting Standards, including incorporating
Chapter 6 Hedge Accounting into AASB 9 Financial
Instruments.
IAS 16 and IAS 38 both establish the principle for
the basis of depreciation and amortisation as being
the expected pattern of consumption of the future
economic benefits of an asset.
The IASB has clarified that the use of revenue-based
methods to calculate the depreciation of an asset is
not appropriate because revenue generated by an
activity that includes the use of an asset generally
reflects factors other than the consumption of the
economic benefits embodied in the asset.
The IASB also clarified that revenue is generally
presumed to be an inappropriate basis for measuring
the consumption of the economic benefits embodied
in an intangible asset. This presumption, however, can
be rebutted in certain limited circumstances.
45
PEAK RESOURCES LTD ANNUAL REPORT 2014 Application
date of
standard*
Application
date for
group*
1 january
2017
1 july
2017
Reference
Title
summary
IFRS 15
*****
Revenue from
Contracts with
Customers
In May 2014, the IASB issued IFRS 15 Revenue
from Contracts with Customers, which replaces
IAS 11 Construction Contracts, IAS 18 Revenue
and related Interpretations (IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate, IFRIC 18 Transfers of
Assets from Customers and SIC-31 Revenue—Barter
Transactions Involving Advertising Services)
The core principle of IFRS 15 is that an entity
recognises revenue to depict the transfer of promised
goods or services to customers in an amount that
reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services.
An entity recognises revenue in accordance with that
core principle by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the
contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the
performance obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation
Early application of this standard is permitted.
c) Basis of consolidation
The consolidated financial statements of Peak Resources Limited comprise the financial statements of the Group and its
subsidiaries as at 30 june 2014. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
- Exposure, or rights, to variable returns from its involvement with the investee, and
- The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including
- The contractual arrangement with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses,
have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure
consistencies with those policies applied by the parent entity. All controlled entities have a june financial year-end.
Where controlled entities have entered or left the economic entity during the year, their operating results have been included/
excluded from the date control was obtained or until the date control ceased through an equity transaction.
46
NOTES TO FINANCIAL STATEMENTS d) foreign currency Translation
The financial statements have been presented in Australian Dollars.
Translation of foreign operations
As at the reporting date the assets and liabilities of foreign operations are translated at the rate of exchange ruling at the
reporting date and the statement of comprehensive income, statement cash flows and statement of changes in equity are
translated at the weighted average exchange rates for the year.
The exchange differences arising on translation are recognised in other comprehensive income and accumulated balances are
carried forward as a separate component of equity.
On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in the profit or loss.
foreign currency transactions
In preparing the financial statements of each individual group entity, transactions in foreign currencies are initially recorded in
the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated
in foreign currencies are retranslated at the rate of exchange ruling at the reporting date, and gain or loss in exchange rate
movements are recognised in profit or loss.
e) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be
reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised by reference to the stage of completion at rates agreed between the
parties.
interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial
asset on initial recognition).
Debt forgiveness
Debt forgiveness is being recognised as income in profit or loss in the year in which the debt is forgiven or when the
debtholders right of claim over the debt is fully exhausted.
R&D rebate grant
Government grants are recognised when there is reasonable assurance that the grant will be received and all conditions will be
complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to match the
grant on a systematic basis to the costs that it is intended to compensate. When the grant relates to an asset, it is deducted from
the asset to which it relates, the net value of which is amortised over its expected useful life.
The Group is treating its receipt of the R&D rebate as government grant.
f) Employee benefits
Employee benefits such as salary and wages are measured at the rate at which the entity expects to settle the liability; and
recognised during the period over which the employee services are being rendered.
Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid
when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the
present value of the estimated future cash outflows to be made for those benefits.
superannuation entitlements
Contributions are made by the company to employee superannuation funds and are charged as expenses when incurred.
g) Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as
expenses on a straight line basis over the lease term.
47
PEAK RESOURCES LTD ANNUAL REPORT 2014 h) income tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities
and their carrying amounts for the financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
-
Where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except:
-
Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
-
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit or loss
i) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST/VAT except:
When the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case
the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
Receivables and payables, which are stated with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position.
GST/VAT component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority, is classified as part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the taxation
authority.
j) Earnings per share
a. Basic earnings per share
Basic earnings per share is determined by dividing the group operating result after income tax attributable to members by
weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
b. Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share by taking into account
amounts paid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options
outstanding during the financial year.
48
NOTES TO FINANCIAL STATEMENTS k) financial instruments
Financial instruments are recognised when the Group becomes party to the contractual provisions of the instrument. The
derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the
financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument
are passed through to an independent third party.
The financial instruments of the Group are (i) cash and cash equivalents; (ii) trade and other receivables; (iii) trade and other
payables, (iv) available for sale investments and (v) short term loans.
l) cash and cash Equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short term deposits
with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
m) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently at amortised
cost, less an allowance for impairment. Collectability of trade receivables is reviewed on an ongoing basis at an operating unit
level. Individual debts that are known to be uncollectible are written off when identified. An impairment provision is recognised
when there is objective evidence that the Group will not be able to collect the receivable.
n) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
The useful life of the assets have been set at the following levels to determine the depreciation rates:
Leasehold improvements: 2 years
Plant and equipment: 2 to 5 years
Other assets: 2 to 5 years
The carrying amount of the property, plant and equipment are reviewed by the management to determine the adequacy of the
depreciation charged at the end of each reporting period. Any excess or shortfall in depreciation charged is being adjusted in
the statement of comprehensive income in the year in which such adjustments are being made as a reversal of the depreciation
expense.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the item) is included in the profit or loss in the period the item is derecognised.
impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being
estimated when events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses, if any,
are recognised in the profit or loss.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
49
PEAK RESOURCES LTD ANNUAL REPORT 2014 o) Deferred exploration and evaluation costs
Exploration and evaluation expenditure in relation to each separate area of interest is recognised as an exploration and
evaluation asset in the year in which they are incurred where the following conditions are satisfied:
the rights to tenure of the area of interest are current; and at least one of the following conditions is also met:
•
the exploration and evaluation expenditures are expected to be recouped through successful development and
exploration of the area of interest, or alternatively, by its sale; or
•
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory
drilling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation
activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where
they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount
of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and
evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest)
is estimated to determine the extent of the impairment loss (if any).
The recoverable amount of exploration and evaluation assets is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount.
The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in
profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to production assets.
p) Trade and Other Payables
Trade payables and other payables are initially recognised at fair value, then carried at amortised.. They represent liabilities for
goods and services provided to the Group prior to the end of the financial year that are unpaid and arising when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured
and are usually paid within 30 days of recognition.
q) Provisions
Provisions are recognised when the entity has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at
a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to
the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
r) share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
50
NOTES TO FINANCIAL STATEMENTS The current plan in place to provide these benefits is the Employee Share Option Plan (ESOP), which provides benefits to
directors and senior executives; and
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an external party using a Black-Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the
price of the shares of Peak Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
•
•
the extent to which the vesting period has expired and
the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the determination
of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. however, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per
share.
s) critical accounting judgements and estimates
In the application of Australian Accounting Standards, management is required to make judgments about applying accounting
policies and estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
impairment of deferred exploration and evaluation costs
The future recoverability of deferred exploration and evaluation costs are dependent on a number of factors, including the level
of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future
legal changes (including changes to environment restoration obligations) and changes to commodity prices.
To the extent that deferred exploration and evaluation costs is determined not to be recoverable in the future, this will reduce
profits and net assets in the period in which this determination is made.
share based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined by using the most appropriate valuation model, which is dependent on
the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation
model including the expected life of the share option, volatility and dividend yield and making assumptions about them.
51
PEAK RESOURCES LTD ANNUAL REPORT 2014 3.
iNcOmE AND EXPENDiTURE iTEms
included in loss for the year are:
Interest received
Gain on sale of non-current assets
Debt forgiveness (1)
Australian R&D rebate receivable
Occupancy costs
Consultants fees
Travel & accommodation
Auditors’ remuneration
Amounts received or due and receivable by Ernst and young for:
Audit and review of financial statements
Taxation services
Subsidiaries audit and review of financial statements
Subsidiaries taxation services
Amounts received or due and receivable by Ernst and young for:
Audit and review of financial statements
Taxation services
Subsidiaries audit and review of financial statements
Subsidiaries taxation services
2014
$
2013
$
48,959
116,959
2,381
197,058
-
502,326
2,794
1,687,587
(209,859)
(221,544)
(98,725)
(432,382)
(198,331)
(408,318)
24,032
-
-
-
24,032
10,802
-
-
-
-
10,802
-
-
-
-
-
-
-
44,000
-
44,000
17,541
-
17,541
(1) Relates to debts due to Zari Resources Plc, which has been de-recognised as the debt is time barred by statute of limitation.
52
NOTES TO FINANCIAL STATEMENTS
4.
OPERATiNg sEgmENTs
Information reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment
performance focuses on the exploration activities of the Group. The Group’s reportable segments under AASB 8 are as follows:
Exploration – Group’s exploration activities carried in Tanzania; and
Unallocated - to manage the corporate affairs of the group.
The segments have applied the same accounting policies as applied to the Group and disclosed in the notes 1 and 2 to these
financial statements.
30 June 2014
30 June 2013
Tanzania
$
Unallocated
$
Total
$
Tanzania
$
Unallocated
$
Total
$
Finance income
Other income
Total income
-
-
-
48,959
48,959
-
116,959
116,959
5,175
5,175
502,326
1,884,645
2,386,971
54,134
54,134
502,326
2,001,604
2,503,930
Depreciation and amortisation
(15,606)
(29,817)
(45,423)
(4,717)
(55,946)
(60,663)
Impairment of exploration and
evaluation costs
Impairment of Investments
Share based payment expenses
Other expenses
Income Tax
segment results
segment assets
(122,671)
-
(122,671)
(628,742)
-
(628,742)
-
-
(100,000)
(100,000)
-
-
-
-
(96,000)
(96,000)
(169,739)
(169,739)
(451,985)
(2,419,159)
(2,934,561)
(632,623)
(3,783,547)
(4,416,170)
-
-
-
-
-
-
(590,262)
(2,558,641)
(3,148,903)
(763,756)
(1,933,889)
(2,867,384)
34,738,063
2,161,417
36,899,480
33,207,260
4,562,367
37,769,627
segment liabilities
(53,689)
(700,500)
(754,189)
777,142
895,877
1,667,018
Additions to non-current assets
Plant and equipment
26,941
4,519
31,460
29,984
24,790
54,774
Capitalised exploration &
evaluation costs
1,618,969
-
1,618,969
6,832,157
-
6,832,157
1,645,910
4,519
1,650, 429
6,862,141
24,790
6,886,931
5.
LOss PER shARE
The following reflects the income and share data used in the total operations basic and dilutive earnings per share
computations:
Basic and diluted loss per share
2014
cents
(1.05)
Nos.
2013
cents
(1.15)
Nos.
Weighted average number of ordinary shares used in calculating
299,990,260
248,857,510
Basic & Diluted loss per share
Anti-dilutive options over ordinary shares excluded from the weighted
83,404,010
59,600,918
average number of shares
53
PEAK RESOURCES LTD ANNUAL REPORT 2014
6.
iNcOmE TAX
a. The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
b. The prima facie tax benefit on loss from ordinary activities before income tax is
reconciled to the income tax as follows:
Prima facie tax benefit on loss from ordinary activities before income tax
at 30% (2013: 30%)
Add tax effect of:
– Revenue losses not recognised
– Equity based payments
– Other deferred tax balances not recognised
– Other non-allowable items
Less tax effect of:
– Australian R&D rebate
– Other deferred tax balances not recognised
Income tax expense reported in statement of comprehensive income
c. Deferred tax recognised:
Deferred tax liabilities:
Accrued interest
Other
Deferred tax assets:
Carry forward revenue losses
Net deferred tax
d. Unrecognised deferred tax assets:
Carry forward revenue losses
Carry forward capital losses
Capital raising costs
Provisions and accruals
Other
2014
$
2013
$
-
-
-
-
-
-
(939,692)
(860,215)
787,780
-
-
203,257
51,345
838
50,507
-
(1,204)
(4,059)
5,263
-
796,078
50,923
74,413
445,077
506,276
506,276
-
-
(1,885)
(655)
2,540
-
4,342,360
3,563,628
73,303
572,763
95,329
-
86,424
599,025
71,633
3,973
5,083,755
4,324,683
The tax benefits of the above deferred tax assets will only be obtained if:
(a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
(b) the company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the company in utilising the benefits.
Tax consolidation
For the purpose of income taxation, the Company and its 100% controlled entities have elected to form a tax consolidated
group effective from 1 july 2012. At 30 june 2014, there was no recognised deferred tax liabilities for taxes that would be
payable on the earning of certain of the Group’s subsidiaries. The Group has determined that the undistributed profits of its
subsidiaries will not be distributed in the foreseeable future.
54
NOTES TO FINANCIAL STATEMENTS
7.
cAsh AND cAsh EQUiVALENTs
Reconciliation of cash and cash equivalent
for the purpose of the cash flow statement, cash and cash equivalents
comprise the following:
Cash at bank and in hand
Short term deposits
Reconciliation of operating loss to operating cash flows
Loss for the year
Adjustments for non-cash items:
Gain on sale of non-current assets
Debt forgiveness
Share based payments expenses
Impairment of capitalised exploration costs
Impairment on available for sale financial assets
Depreciation expenses
Movement in working capital items:
2014
$
2013
$
889,470
459,309
1,100,000
2,004,000
1,889,470
2,463,309
(3,148,902)
(2,867,384)
2,381
-
-
122,671
100,000
45,423
(197,058)
(502,326)
169,739
628,742
96,000
60,663
(Increase) / decrease in trade and other receivables
1,772,180
(2,069,676)
(Increase) / decrease in prepayments
Increase / (decrease) in trade and other payables
Increase in provisions
(5,265)
60,143
13,253
39,327
93,687
9,537
(1,042,878)
(4,538,749)
material non-cash transactions:
2014: No material non-cash transactions occurred during the year.
2013: During 2013, the Group sold its exploration tenements in Australia and this transaction was settled through the issue of
equity shares of the buyer valued at $200,000. These investments have been recognised in the Statement of Financial Position
as available for sale financial assets.
8. OThER fiNANciAL AssETs
Bank Term Deposit
2014
$
2013
$
104,000
104,000
-
-
A deposit of $104,000 of which $50,000 has been secured against guarantee issued by the bank against the group’s tenements
and $45,000 secured as a rental deposit. These cash balances are not available for withdrawal till such guarantees are
withdrawn. The $50,000 was released against the group’s tenements in August 2014.
55
PEAK RESOURCES LTD ANNUAL REPORT 2014
9. TRADE AND OThER REcEiVABLEs
GST / VAT receivable
Australian R&D rebate receivable
Other receivable
Ageing of receivables
Recoverable within 3 months
Beyond 3 months
Receivables are non-interest bearing, unsecured
10.
PROPERTy, PLANT AND EQUiPmENT
Plant and equipment
At cost
Accumulated depreciation
movement in net carrying amount
Balance at the beginning of the year
Additions
Disposals
Depreciation for the year
Balance at the end of the year
11. cAPiTALisED EXPLORATiON AND EVALUATiON cOsTs
movement in net carrying amount:
Balance at the beginning of the year
Expenditure capitalised during the year
Impairment recognised during the year (a)
Balance at the end of the year
Balance at the end of the year
capitalised areas of interest:
Ngualla Rare Earths Project, Tanzania
56
2014
$
2013
$
724,198
-
4,951
781,294
1,687,587
32,448
729,149
2,501,329
52,023
677,126
729,149
1,838,851
662,478
2,501,329
2013
$
2012
$
216,253
(124,629)
91,624
121,315
31,460
(15,728)
(45,423)
91,624
254,537
(133,222)
121,315
128,098
54,774
(894)
(60,663)
121,315
2014
$
2013
$
32,439,935
25,704,407
1,618,969
(122,671)
7,364,270
(628,742)
33,936,233
32,439,935
32,439,935
25,704,407
33,936,233
32,439,935
33,936,233
32,439,935
NOTES TO FINANCIAL STATEMENTS
(a) During the financial year, the directors have reviewed the projects of the Group and have decided to continue with the
development of the Ngualla Rare Earths Project. The directors have decided to abandon the other projects of the Group
and accordingly the carrying amount of $122,671 has been impaired at the reporting date.
The carrying amount of the abandoned projects have been written down to NIL value as the Group’s right to tenure the
exploration areas have expired.
(b) The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on successful
development and commercial exploitation or sale of the respective exploration areas.
Deferred exploration and evaluation expenditure is assessed for impairment by the directors when facts and circumstances
suggest that the carrying amount exceeds the future economic benefits that may be recovered from the asset. This
assessment is performed when the above circumstances occur and at every reporting date.
12.
AVAiLABLE fOR sALE fiNANciAL AssETs
Investment in listed shares – at fair value
13.
TRADE AND OThER PAyABLEs
Trade and other payables
Ageing of payables
Payable within 3 months
Beyond 3 months
Payables are non-interest bearing, unsecured and are generally payable in 30-90 days
14.
PROVisiONs
Employee benefits - leave entitlements
15.
REsERVEs
2014
$
2013
$
4,000
4,000
104,000
104,000
2013
$
2012
$
666,127
666,127
1,277,209
1,277,209
666,127
1,277,209
-
-
666,127
1,277,209
2014
$
2013
$
88,062
88,062
74,809
74,809
share based
payment reserve
foreign currency
translation reserve
$
$
Total
$
At 30 June 2013
Exchange difference on translation of foreign operations
At 30 June 2014
1,066,866
513,301
1,580,167
-
1,066,866
(182,192)
330,790
(182,192)
1,397,975
Share based payment reserve – the reserve is used to recognise the value of equity benefits provided to employees and
directors as part of their remuneration, and other parties as part of their compensation for supply of goods and services.
Foreign currency translation reserve – the reserve is used to recognise exchange differences arising from translation
of foreign operations to the Australian dollar.
57
PEAK RESOURCES LTD ANNUAL REPORT 2014
16. cONTRiBUTED EQUiTy
Balance at 30 June 2013
Placement at $0.06 per share
Equity issue costs
Balance at 30 June 2014
Nos.
$
275,556,886
51,537,888
30-jan-14
58,672,247
3,520,335
(146,559)
334,229,133
54,911,664
Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Company, to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon on shares held. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Options over ordinary shares
Balance at 30 June 2013
Placement at $0.06 per share
Issued as share based payment
Options lapsed
Balance at 30 June 2014
30-jan-14
6-june-14
Nos.
59,600,918
58,672,247
5,000,000
(1,541,667)
121,731,498
During the financial year ended 30 june 2014, options issued over ordinary shares were:
• 58,672,247 exercisable at $0.10 cents on 30 June 2015 attached as a free option
• 5,000,000 exercisable at $0.15 cents on 5 June 2017, vesting upon service conditions being achieved.
During the financial year, 1,541,667 unlisted options lapsed in accordance with the terms of options.
At the end of the reporting period, there were 121,731,498 options over unissued shares as follows:
Type
Date of Expiry
Exercise Price
Number under Option
Vested/Unvested
Listed Options
Listed Options
Unlisted Options
Unlisted Options
Unlisted Options
30-june-15
31-july-14
5-june-17
20-Feb-17
3-Mar-18
$0.10
$0.25
$0.15
$0.55
$0.55
58,672,247
51,659,251
5,000,000
6,250,000
150,000
Vested
Vested
Unvested
Vested
Vested
No ordinary shares were issued as a result of the exercise of options during the financial year ended 30 june 2014.
Weighted average exercise price of options outstanding were $0.19; and the average time to expiry was 1.9 years.
capital management Policy
The group’s policy is to effectively manage its capital structure so that it would continue to operate as a going concern. The
group manages its contributed equity and reserves as part of its capital. The group is not subject to any externally imposed
capital requirements.
As is similar with many other exploration companies, the operational requirements of the group are funded through equity and
debt raised in various tranches. The overall capital management policy of the group remains unchanged and is consistent with
prior years.
58
NOTES TO FINANCIAL STATEMENTS
17.
shARE BAsED PAymENTs
Employee share option plan
The Group has an employee share options plan (ESOP) for the granting of non-transferable options to directors, executives and
employees.
year ended 30 June 2014
During the financial year ended 30 june 2014, the Company did not grant any option to a director or employee.
year ended 30 June 2013
During the financial year ended 30 june 2013, the Company did not grant any option to a director or employee.
4,000,000 listed options granted in relation to equity issue costs (a)
Unlisted options granted in 2011 and recognised over the vesting period( b)
2014
$
2013
$
-
-
-
200,000
218,138
282,974
(a) 4,000,000 listed options were granted to brokers in relation to the equity raising undertaken during the 2013 financial year.
These options have were granted on 21 May 2013 and have been fair valued at $0.05 based on the quoted market price on
that date. These options have been vested at grant date.
The key terms of the options issue are:
- Exercise price:
$0.25 per share
- Expiry date:
31 july 2014
None of the options were exercised during the financial year (2013: Nil)
(b) During 2011 financial year, the Group granted the three lots of 750,000 options each to Mr. David hammond, Director in
consideration for his services. The options had the following terms:
750,000 options at $0.60 exercisable 16 May 2015 vesting 16 May 2013
750,000 options at $0.90 exercisable 16 May 2015 vesting 16 May 2013
750,000 options at $1.20 exercisable 16 May 2015 vesting 16 May 2013
Share based payment expense of $169,739 have been recognised in relation to these options during the year ended june 2013.
On the 13 May 2013 the Company announced that 2,250,000 unlisted Employee Options were cancelled by mutual agreement
between the Company and Mr. David hammond.
18.
cONTiNgENciEs AND cOmmiTmENTs
Lease commitments
The company has committed to a non-cancellable office lease of $105,300 per annum to 31 january 2015.
Up to 1 year
1 to 5 years
Beyond 5 years
2014
$
2013
$
80,467
133,511
-
-
80,467
-
80,467
213,978
59
PEAK RESOURCES LTD ANNUAL REPORT 2014
Tenement commitments
The Group has prospecting licences located in Tanzania which have a requirement for a certain level of expenditure each and
every year in addition to annual rental payments for the tenements. Additional detail on the tenements is available in Additional
Information in the Annual Report.
At 30 june 2014 minimum annual expenditure commitments in respect of exploration assets amounted to $96,511
(2013 $117,745). These mineral commitments are subject to provisions of legislation governing the granting of mineral
exploration licences. Commitments may be varied in accordance with the provisions of governing regulations or obligations
may be farmed out under agreements with third parties.
capital commitments
At 30 june 2014, the Group has no capital commitments. (2013: Nil)
contingencies
At 30 june 2014, the Group had no contingencies (2013: Nil).
19.
kEy mANAgEmENT PERsONNEL DiscLOsURE
Salary and fees – short term benefits
Superannuation
Share based payments
2014
$
2013
$
863,592
1,083,874
66,469
65,883
-
169,739
930,061
1,319,496
Loans to kmP’s
No loans were made to KMP’s during the financial year (2013: $Nil)
Other transaction and balances with kmP’s
During the year Steinepreis Paganin Lawyers and Consultants a legal practice associated with Mr jonathan Murray received
$98,075.29 (2013: $135,937.96) as fees for the provision of legal advice. Balance outstanding at 30 june 2014 and included in
trade creditors $27,657.91.
These costs have not been included in directors’ remuneration as these fees were not paid to individual directors in relation to
the management of the affairs of the Company. All transactions were entered into on normal commercial terms.
60
NOTES TO FINANCIAL STATEMENTS
20. gROUP sTRUcTURE
Parent and subsidiaries
The parent and the ultimate parent entity of the Group is Peak Resources Limited, a company listed on the Australian Securities
Exchange.
The components of the Group are:
Accounting Parent
Peak Resources Limited
controlled entities
PRL Pty Ltd
Peak hill Gold Mines Pty Ltd
Redpalm Pty Ltd
Pan African Exploration Limited
PR Ng Minerals Limited (Formerly Zari Exploration Limited)
Peak Resources Tanzania Limited
Peak African Minerals Limited
incorporation
2014
2013
Extent of control
Australia
100%
100%
Australia
Australia
Australia
Australia
Tanzania
Tanzania
Mauritius
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
There are no restrictions on the ability of the Group to transfer cash or other assets, guarantees or dividends between the parent
and subsidiaries.
21. fiNANciAL iNsTRUmENTs
The financial instruments of the group comprise of (i) cash and cash equivalents; (ii) trade and other receivables; (iii) trade and
other payables; (iv) AFS investments; and (v) short term loans
The Group’s principal financial instruments are cash and short term deposits. The main purpose of these financial instruments is
to finance the Group’s operations. It is, and has been throughout the period under review, the Group’s policy that no trading in
financial instruments shall be undertaken.
The financial instruments expose the group to certain risks. The nature and extent of such risks, and the management’s risk
management strategy are noted below.
fair value of financial instruments
Cash and cash equivalents
Trade and other receivables
Other financial assets
AFS Investment
Trade and other payables
Short term loans
2014
$
2013
$
1,889,470
2,463,309
729,149
2,501,329
104,000
4,000
-
104,000
(666,127)
(1,277,209)
-
315,000
The carrying amount of financial instruments closely approximate their fair value on account of short maturity cycle.
61
PEAK RESOURCES LTD ANNUAL REPORT 2014
credit Risk
The group’s credit risks arise from potential default of trade and other receivables, cash and cash equivalents and other
financial assets. The maximum credit exposure is limited to the carrying amount of trade and other receivables $729,149 (2013:
$2,501,329) at reporting dates.
As at 30 june 2014, the receivable balances consist primarily of GST/VAT credits. Management does not consider the GST/VAT
receivable to be at risk of default as these are receivable from the Government agencies. Management has received assurances
from its tax advisors that the amounts will be received in due course.
Credit risk from balances with banks and financial instruments is mitigated by holding balances with banks with a high credit
rating. The maximum exposure for cash and cash equivalents is shown below.
There were no significant concentration of credit risks.
Liquidity risk
The group’s liquidity risks arise from potential inability of the group to meet its financial obligations as and when they fall due,
generally due to shortage of cleared funds. The group is exposed to liquidity risk on account of trade and other payables. The
group manages its liquidity risk through continuously monitoring the cleared funds position; and by utilising short term cash
budgets.
The contractual maturity analysis of the group’s financial instruments are noted below:
2014
2013
Up to 3 months
> 3 months
$
$
Total
$
Up to 3 months
> 3 months
Total
$
$
$
financial liabilities
Trade and other payables
(666,127)
Short term loans
-
Total financial liabilities
(666,127)
financial assets
Cash and cash equivalents
1,889,470
-
-
-
-
(666,127)
(1,277,209)
-
(315,000)
-
-
(1,277,209)
(315,000)
(666,127)
(1,592,209)
-
(1, 592,209)
Other financial assets
Investments
-
-
104,000
104,000
4,000
-
-
-
1,889,470
2,463,309
-
-
2,463,309
-
104,000
104,000
Trade and other receivables
52,023
677,126
729,149
1,720,035
781,294
2,501,329
Total financial assets
2,045,493
785,126
2,830,619
4,183,344
885,294
5,068,638
interest rate risk
Interest rate risk is the risk that fair values and cash flows of the Group’s financial instruments will be affected by changes in the
market interest rates.
The Group’s cash and cash equivalents are impacted by interest rate risks. Other receivables and payables have short maturities
and are non-interest bearing. Management believes that the risk of interest rate movement would not have a material impact of
the Group’s operations.
Management does not closely monitor the interest rates offered on cash and cash equivalents as the Group’s primary objective
is exploration of resources rather than earning interest income. The cash balances are invested at the prevailing short term
market interest rates with credit worthy financial institutions.
The sensitivity of the interest bearing financial instruments to a 1% change in market interest rate are noted below:
Cash and cash equivalents
Impact on profit and equity: +1% movement
Impact on profit and equity: -1% movement
62
2014
$
2013
$
1,889,470
2,463,309
18,895
24,633
(18,895)
(24,633)
NOTES TO FINANCIAL STATEMENTS
foreign currency risk
The Group’s exposure to foreign currency price risk is minimal at this stage of the operations. The Group will transfer cash and
cash equivalents into foreign currency to meet short term expenditure obligations.
The Group’s expenditure obligations in Tanzania are primarily in US dollars as a result the Group is exposed to fluctuations in the
US dollar to Australian currency. These exposures are not subject to a hedging programme. The Board and management from
time to time having regard to likely forward commitments review this policy.
commodity price risk
The Group’s exposure to commodity price risk is minimal at this stage of the operation.
22. sUBsEQUENT EVENTs
There were no subsequent events to 30 june 2014 that have a material impact on the financial statements at present other than
as follows:
On the 1st july the Company announced that at a shareholders meeting on that same date, a resolution was passed for the
adoption of a Employee Option Plan and Employee Performance Rights Plan and for the issue of options and performance
rights to the directors under those plans.
On 29th September 2014 the Company announced that it had entered into a financing agreement with Appian Natural
Resource Fund, a UK Based private equity investor, to provide funding and technical expertise to, subject to final documentation
and meeting certain conditions, complete a Bankable feasibility study.
23. PARENT ENTiTy DiscLOsURE
The following details information related to the parent entity, Peak Resources Limited, at 30 june 2014. The information
presented here has been prepared using consistent accounting policies as presented in Note 2.
financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payment reserve
Accumulated losses
Total equity
financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2014
$
2013
$
2,089,862
3,996,403
37,769,705
33,542,351
39,859,567
37,538,754
653,510
1,436,145
-
-
653,510
1,436,145
36,206,057
36,102,609
55,227,417
51,853,642
1,130,351
960,611
(17,151,711)
(16,711,644)
39,206,057
36,102,609
(2,563,816)
(4,855,873)
-
-
(2,563,816)
(4,855,873)
No guarantees have been entered into by Peak Resources Limited in relation to the debts of its subsidiaries.
Peak Resources Limited had no commitments to purchase property, plant and equipment or contingent liabilities at year end.
63
PEAK RESOURCES LTD ANNUAL REPORT 2014
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Peak Resources Limited, I state that:
In the opinion of the Directors:
(a) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable;
(b) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note
2 to the financial statements;
(c) the attached financial statements and notes thereto for the financial year ended 30 june 2014 are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial
position as at 30 june 2014 and performance of the consolidated entity for the year ended on that date;
(d) The Directors have been given the declarations required by section 295A of the Corporations Act 2001
Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001.
On behalf of the Directors
Alastair hunter Non-executive Chairman
Perth, 30 September 2014
64
PEAK RESOURCES LTD ANNUAL REPORT 2014
CORPORATE GOVERNANCE STATEMENT
Peak is committed to implementing the highest standards of corporate governance. In determining what those high standards
should involve Peak has turned to the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best
Practice Recommendations. Peak is pleased to advise that Peak’s practices are largely consistent with those ASX guidelines.
As consistency with the guidelines has been a gradual process, where Peak did not have certain policies or committees
recommended by the ASX Corporate Governance Council (the Council) in place during the reporting period, we have identified
such policies or committees.
Where Peak’s corporate governance practices do not correlate with the practices recommended by the Council, Peak is
working towards compliance however it does not consider that all the practices are appropriate for Peak due to the size and
scale of Company operations.
To illustrate where Peak has addressed each of the Council’s recommendations, a checklist is set out at the end of this
report. The table does not provide the full text of each recommendation but rather the topic covered. Details of all of the
recommendations can be found on the ASX Corporate Governance Council’s website at http://www.asxgroup.com.au/media/
PDFs/08_asx_corp_governance_principles_recommendations.pdf
1.
BOARD Of DiREcTORs
1.1
Role of the Board
The Board’s role is to govern Peak rather than to manage it. In governing Peak, the Directors must act in the best
interests of Peak as a whole. It is the role of senior management to manage Peak in accordance with the direction and
delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out
these delegated duties.
In carrying out its governance role, the main task of the Board is to drive the performance of Peak. The Board must
also ensure that Peak complies with all of its contractual, statutory and any other legal obligations, including the
requirements of any regulatory body. The Board has the final responsibility for the successful operations of Peak.
To assist the Board carry its functions, it has developed a Code of Conduct to guide the Directors, the Chief Financial
Officer or its equivalent and other key executives in the performance of their roles.
1.2 composition of the Board
To add value to Peak the Board has been formed so that it has effective composition, size and commitment to
adequately discharge its responsibilities and duties given its current size and scale of operations. Directors are appointed
based on the specific skills required by Peak and on their decision-making and judgment skills.
Peak recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive
Directors can offer. Mr. jonathan Murray is a Non-Executive Director and as an independent Director he meets the
following criteria for independence adopted by Peak:
• An Independent Director is a Non-Executive Director and:
•
is not a substantial shareholder of Peak or an officer of, or otherwise associated directly with, a substantial
shareholder of Peak;
•
within the last three years has not been employed in an executive capacity by Peak or another group member, or
been a Director after ceasing to hold any such employment;
•
has no material contractual relationship with Peak or other group member other than as a Director of Peak; has
not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the
Director’s ability to act in the best interests of Peak; and
•
is free from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the Director’s ability to act in the best interests of Peak.
Mr. Alastair hunter is the Non-executive Chairman of Peak and does not meet Peak’s criteria for independence. Mr.
Darren Townsend is the Managing Director of Peak and meets Peak’s criteria for independence. Mr. David hammond is
an Executive Director and does not meet Peak’s criteria for independence. The Board considers that its current structure
is appropriate given the Company’s stage of development and given the size, nature and scope of the Company’s
activities. The Company considers industry experience and specific expertise to be important attributes of its Board
members and therefore believes that the composition of the Board is appropriate given the size and development of the
Company at the present time.
65
1.3
Responsibilities of the Board
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices,
management and operations of Peak. It is required to do all things that may be necessary to be done in order to carry
out the objectives of Peak.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include
the following.
• Leadership of the Organisation: overseeing Peak and establishing codes that reflect the values of Peak and guide the
conduct of the Board.
• Strategy Formulation: to set and review the overall strategy and goals for Peak and ensuring that there are policies in
place to govern the operation of Peak.
• Overseeing Planning Activities: the development of Peak’s strategic plan.
• Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications
policy and promoting participation at general meetings of Peak.
• Monitoring, Compliance and Risk Management: the development of Peak’s risk management, compliance, control
and accountability systems and monitoring and directing the financial and operational performance of Peak.
• Company Finances: approving expenses and approving and monitoring acquisitions, divestitures and financial and
other reporting.
• Human Resources: appointing, and, where appropriate, removing the Executive Chairman and Executive Director
and Chief Financial Officer (CFO) as well as reviewing the performance of the Directors and monitoring the
performance of senior management in their implementation of Peak’s strategy.
• Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team,
developing, overseeing and reviewing the effectiveness of Peak’s occupational health and safety systems to ensure
the well-being of all employees.
• Delegation of Authority: delegating appropriate powers to the Executive Chairman to ensure the effective day-to-
day management of Peak and establishing and determining the powers and functions of the Committees of the
Board.
Full details of the Board’s role and responsibilities are contained in the Board Charter, a copy of which is available for
inspection at Peak’s registered office.
1.4
Board Policies
1.4.1 conflicts of interest
Directors must:
• disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist
between the interests of the Director and the interests of any other parties in carrying out the activities of Peak; and
•
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and
reasonable steps to remove any conflict of interest.
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act,
absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict
relates.
1.4.2 commitments
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a
Director of Peak.
1.4.3 confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and key executives of Peak have agreed
to keep confidential, information received in the course of the exercise of their duties and will not disclose non-public
information except where disclosure is authorised or legally mandated.
66
CORPORATE GOVERNANCE STATEMENT 1.4.4 continuous Disclosure
The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure
of information to the ASX as well as communicating with the ASX. In accordance with the ASX Listing Rules Peak
immediately notifies the ASX of information:
• concerning Peak that a reasonable person would expect to have a material effect on the price or value of Peak’s
securities; and
•
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to
acquire or dispose of Peak’s securities.
1.4.5 Education and induction
It is the policy of Peak that a new Director undergoes an induction process in which they are given a full briefing on
Peak. Where possible this includes meetings with key executives, tour of the premises, an induction package and
presentations. Information conveyed to new Directors includes:
• details of the roles and responsibilities of a Director;
•
formal policies on Director appointment as well as conduct and contribution expectations;
• access to a copy of the Board Charter;
• guidelines on how the Board processes function;
• details of past, recent and likely future developments relating to the Board;
• background information on and contact information for key people in the organisation;
• an analysis of Peak;
• a synopsis of the current strategic direction of Peak; and
• a copy of the Constitution of Peak.
In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual
professional development. Specifically, Directors are provided with the resources and training to address skills gaps
where they are identified.
1.4.6
independent Professional Advice
The Board collectively and each Director has the right to seek independent professional advice at Peak’s expense, up to
specified limits, to assist them to carry out their responsibilities.
1.4.7 Related Party Transactions
Related party transactions include any financial transaction between a Director and Peak. Unless there is an exemption
under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the
Board cannot approve the transaction.
1.4.8 shareholder communication
Peak respects the rights of its shareholders and to facilitate the effective exercise of those rights Peak is committed to:
• communicating effectively with shareholders through releases to the market via ASX, information mailed to
shareholders, information posted on Peak’s website and the general meetings of Peak;
• giving shareholders ready access to balanced and understandable information about Peak and corporate proposals;
• making it easy for shareholders to participate in general meetings of Peak; and
•
requesting the external auditor to attend the annual general meeting and be available to answer shareholder
questions about the conduct of the audit and the preparation and content of the auditor’s report.
Peak also makes available a telephone number and email address for shareholders to make enquiries of Peak.
1.4.9 Trading in company shares
The share trading policy sets out Peak’s policy regarding the trading in Company securities, which includes shares,
options, warrants, debentures and any other security on issue from time to time. This policy is separate from and
additional to the legal constraints imposed by the common law, the Corporations Act and ASX Listing Rules.
This policy applies to all Directors and employees of Peak and their associates (including spouses, children, family trusts
and family companies) as well as contractors, consultants, advisers and auditors of Peak (“designated officers”).
1.4.10 Performance Review/Evaluation
It is the policy of the Board to conduct evaluation of its performance and that of its senior executives. The objective of
this evaluation will be to provide best practice corporate governance to Peak.
67
PEAK RESOURCES LTD ANNUAL REPORT 2014 1.4.11 Attestations Executive chairman and cfO
It is the Board’s policy that the Executive Chairman and the CFO or its equivalent to make the attestations recommended
by the ASX Corporate Governance Council as to Peak financial condition prior to the Board signing the Annual Report.
The Board will also require the Executive Chairman and CFO or its equivalent to attest to the implementation and
compliance to Peak’s internal control and risk management strategies and to ensure that these policies are being
managed effectively.
2.
BOARD cOmmiTTEEs
2.1
Audit committee
Due to the size and scale of operations of Peak the full Board undertakes the role of the Audit Committee. Below is a
summary of the role and responsibilities of an Audit Committee.
2.1.1 Role
The Audit Committee is responsible for reviewing the integrity of Peak’s financial reporting and overseeing the
independence of the external auditors.
As the whole Board only consists of four (4) members, Peak does not have an audit committee because it would not be
a more efficient mechanism than the full Board for focusing Peak on specific issues and an audit committee cannot be
justified based on a cost-benefit analysis. however, in accordance with the ASX Listing Rules, Peak is moving towards
establishing an audit committee consisting primarily of Independent Directors.
In the absence of an audit committee, the Board sets aside time to deal with issues and responsibilities usually delegated
to the audit committee to ensure the integrity of the financial statements of Peak and the independence of the external
auditor.
2.1.2 Responsibilities
The Audit Committee, or as at the date of this report the full Board of Peak, reviews the audited annual and half-yearly
financial statements and any reports which accompany published financial statements and recommends their approval
to the members.
The Audit Committee, or as at the date of this report the full Board of Peak, each year reviews the appointment of the
external auditor, their independence, the audit fee, and any questions of resignation or dismissal.
The Audit Committee, or as at the date of this report the full Board of Peak, is also responsible for establishing policies
on risk oversight and management.
2.1.3 Risk management Policies
The Board’s Charter clearly establishes that it is responsible for ensuring there is a sound system for overseeing
and managing risk. As the whole Board only consists of four (4) members, Peak does not have a Risk Management
Committee because it would not be a more efficient mechanism than the full Board for focusing Peak on specific issues.
2.2
Remuneration committee
2.2.1 Role
The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing
appropriate remuneration levels and incentive policies for employees.
As the whole Board only consists of four (4) members, Peak does not have a remuneration committee because it would
not be a more efficient mechanism than the full Board for focusing Peak on specific issues.
2.2.2 Responsibilities
The responsibilities of a Remuneration Committee, or the full Board, include setting policies for senior officers’
remuneration, setting the terms and conditions of employment for the Executive Chairman and Director, reviewing and
making recommendations to the Board on Peak’s incentive schemes and superannuation arrangements, reviewing the
remuneration of both Executive and Non-Executive Directors and making recommendations on any proposed changes
and undertaking reviews of the Executive Chairman and Directors performance, including, setting goals and reviewing
progress in achieving those goals.
68
CORPORATE GOVERNANCE STATEMENT 2.2.3 Remuneration Policy
Directors’ Remuneration for the majority of directors was approved at a Board meeting held in August 2006. Directors’
remuneration is also reviewed on an annual basis.
2.2.3.1 senior Executive Remuneration Policy
Peak is committed to remunerating its senior executives in a manner that is market-competitive and consistent with best
practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive Remuneration
Policy the remuneration of senior executive may be comprised of the following:
• fixed salary that is determined from a review of the market and reflects core performance requirements and
expectations;
• a performance bonus designed to reward actual achievement by the individual of performance objectives and for
materially improved Company performance;
• participation in any share/option scheme with thresholds approved by shareholders;
•
statutory superannuation.
By remunerating senior executives through performance and long-term incentive plans in addition to their fixed
remuneration Peak aims to align the interests of senior executives with those of shareholders and increase Company
performance.
The value of shares and options were they to be granted to senior executives would be calculated using the Black and
Scholes method.
The objective behind using this remuneration structure is to drive improved Company performance and thereby increase
shareholder value as well as aligning the interests of executives and shareholders.
The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.
2.2.3.2 Non-Executive Director Remuneration Policy
Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for
the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses,
however they do participate in equity schemes of Peak.
Non-Executive Directors are not paid superannuation.
2.2.4.2 current Director Remuneration
Full details regarding the remuneration of Directors, is included in the Directors’ Report.
2.3 Nomination committee
2.3.1 Role
The role of a Nomination Committee is to help achieve a structured Board that adds value to Peak by ensuring an
appropriate mix of skills are present in Directors on the Board at all times.
As the whole Board only consists of four (4) members, Peak does not have a nomination committee because it would
not be a more efficient mechanism than the full Board for focusing Peak on specific issues.
2.3.2 Responsibilities
The responsibilities of a Nomination Committee would include devising criteria for Board membership, regularly
reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination
as Directors for review by the Board. The Nomination Committee would also oversee management succession plans
including the Non-Executive Chairman and his/her direct reports and evaluate the Board’s performance and make
recommendations for the appointment and removal of Directors. Currently the Board as a whole performs this role.
2.3.3 criteria for selection of Directors
Directors are appointed based on the specific governance skills required by Peak. Given the size of Peak and the
business that it operates, Peak aims at all times to have at least two Directors with experience appropriate to Peak’s
target market. In addition, Directors should have the relevant blend of personal experience in accounting and financial
management and Director-level business experience.
69
PEAK RESOURCES LTD ANNUAL REPORT 2014 3.
cOmPANy cODE Of cONDUcT
The Board has adopted a Code of Conduct which applies to all directors and officers of Peak. It sets out Peak’s commitment to
successfully conducting the business in accordance with all applicable laws and regulations while demonstrating and promoting
the highest ethical standards.
4.
DiVERsiTy POLicy
The board is primarily responsible for setting achievable objectives on gender diversity and monitoring the progress of Peak
towards them on an annual basis. Due to the size and scale of operations of Peak, the board has determined that a long term
gender diversity objective is more appropriate.
Peak does not currently have any women holding positions at board level.
The checklist below summarizes Peak’s compliance with the Recommendations.
Principles
Recommendations
compliance
Reference and
yes/No
Explanation
Pr 1
LAy sOLiD fOUNDATiONs fOR mANAGEmENT AND OvERsiGHT
Rec 1.1
Rec 1.2
Rec 1.3
Companies should establish the functions reserved to the board and
those delegated to senior executives and disclose the functions.
Companies should disclose the process for evaluation the performance of
senior executives.
Companies should provide the information indicated in the Guide to
reporting to Principle 1.
Pr 2
sTRUCTURE THE bOARD TO ADD vALUE
Rec 2.1
A majority of the board should be independent directors.
Rec 2.2
The Chairman should be an independent director.
Rec 2.3
The roles of chairman and chief executive officer should not be exercised
by the same individual.
Rec 2.4
The board should establish a nomination committee
Rec 2.5
Rec 2.6
Companies should disclose the process of evaluating the performance of
the board, its committees and individual directors.
Companies should provide the information indicated in the Guide to
reporting to Principle 2
Pr 3
PROmOTE ETHiCAL AND REsPONsibLE DECisiON mAkiNG
Companies should establish a code of conduct and disclose the code or a
summary of the code as to:
• the practices necessary to maintain confidence in Peak’s integrity
• the practices necessary to take account of their legal obligations and
reasonable expectations of their stakeholders; and
• the responsibility and accountability of individuals for reporting and
investigating reports of unethical practices.
Companies should establish a policy concerning diversity and disclose
the policy or a summary of that policy. The policy should include
requirements for the board to establish measureable objectives for
achieving gender diversity and for the board to assess annually both the
objectives and progress in achieving them.
Companies should disclose in each annual report the measurable
objectives for achieving gender diversity set by the board in accordance
with the diversity policy and progress towards achieving them.
Companies should disclose in each annual report the proportion of
women employees in the whole organisation, women in senior executive
positions and women on the board.
Companies should provide the information indicated in the Guide to
reporting on Principle 3.
Rec 3.1
Rec 3.2
Rec 3.3
Rec 3.4
Rec 3.5
70
Yes
Yes
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
1.1
1.4.5 and 1.4.10
1.1
1.2
1.2
1.2
2.3.1
1.4.10
1.2, 1.4.10 and
2.3.1
3
4
4.1
4.1
3 and 4
CORPORATE GOVERNANCE STATEMENT Principles
Recommendations
compliance
Reference and
yes/No
Explanation
Pr 4
sAfEGUARD iNTEGRiTy iN fiNANCiAL REPORTiNG
Rec 4.1
The board should establish an audit committee.
The audit committee should be structured so that it:
• consists only of non-executive directors;
• consists of a majority of independent directors;
• is chaired by an independent chair, who is not the chair of the board;
Rec 4.2
and
• has at least three members.
Rec 4.3
The audit committee should have a formal charter.
Rec 4.4
Companies should provide the information indicated in the Guide to
reporting on Principle 4.
Pr 5
mAkE TimELy AND bALANCED DisCLOsURE
Rec 5.1
Rec 5.2
Companies should establish written policies designed to ensure
compliance with ASX Listing Rule disclosure requirements and to ensure
accountability at a senior level for that compliance and disclose those
policies or a summary of those policies.
Companies should provide the information indicated in the Guide to
reporting on Principle 5.
Pr 6
REsPECT THE RiGHTs Of sHAREHOLDERs
Rec 6.1
Rec 6.2
Companies should design a communications policy for promoting
effective communication with shareholders and encouraging their
participation at general meetings and disclose their policy or a summary
of that policy.
Company should provide the information indicated in the Guide to
reporting on Principle 6.
Pr 7
RECOGNiZE AND mANAGE Risk
Rec 7.1
Rec 7.2
Rec 7.3
Rec 7.4
Companies should establish policies for the oversight and management
of material business risks and disclose a summary of those policies.
The board should require management to design and implement the
risk management and internal control system to manage Peak’s material
business risks and report to it on whether those risks are being managed
effectively. The board should disclose that management has reported to it
as to the effectiveness of Peak’s management of its material business risks.
The board should disclose whether it has received assurance from the
executive chairman (or equivalent) and the chief financial officer (or
equivalent) that the declaration provided in accordance with section
295A of the Corporations Act is founded on a sound system of risk
management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting risks.
Companies should provide the information indicated in the Guide to
reporting on Principle 7.
Pr 8
REmUNERATiON fAiRLy AND REsPONsibLy
Rec 8.1
The board should establish a remuneration committee.
Rec 8.2
Rec 8.2
Rec 8.3
The remuneration committee should be structured so that it:
• consists of a majority of independent directors
• is chaired by an independent director
• has at least three members
Companies should clearly distinguish the structure of non-executive
directors’ remuneration from that of executive directors and senior
executives.
Companies should provide the information indicated in the Guide to
reporting on Principle 8.
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
2.1
2.1
2.1
2.1
1.4.4
1.4.4
1.4.8
1.4.8
2.1.3
2.1.3
Yes
1.4.11
Yes
1.4.11 and 2.1.3
No
No
Yes
Yes
2.2.1
2.2.3.1 and
2.2.3.2
2.2.3.1 and
2.2.3.2
2.2 and 2.2.3
71
PEAK RESOURCES LTD ANNUAL REPORT 2014 TENEMENT SChEDULE
Project
Tenement
%
status
Arrangement/comment
Tanzanian Projects
Ngualla
Ngualla
PL 6079/2009
100
Granted
held by 100% Tanzanian subsidiary PR NG Minerals Ltd
PL 9157/2013
100
Granted
held by 100% Tanzanian subsidiary PR NG Minerals Ltd
ADDITIONAL ShAREhOLDER INFORMATION
Quoted security distribution
The distribution of members and their holdings of quoted equity securities in the company as at 29 September 2014 were as
follows:
Number held as at 29 september 2014
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
holders of less than a marketable parcel:- fully paid shares 633
Number held as at 29 september 2014
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
holders of less than a marketable parcel:- PEKOA 405
72
PEAK RESOURCES LTD ANNUAL REPORT 2014
class of Equity securities
fully Paid Ordinary shares
155
396
398
1,383
468
2,800
class of Equity securities
PEkOA
102
266
86
139
54
647
substantial security holders
Substantial shareholders listed in the Company’s register as at 29 September 2014 were:
holder
Number of shares
Percentage of issued capital
jP MORGAN NOMINEES AUSTRALIA LIMITED
20,773,584
6.22%
Substantial PEKOA option holders listed in the Company’s register as at 29 September 2014 were:
holder
Number of options
Percentage of PEkO on issue
CRX INVESTMENTS PTY LIMITED
UBS NOMINEES PTY LTD
Unquoted securities
class of Equity security
$0.55 options expiring 20 February 2017
$0.55 options expiring 3 March 2018
$0.15 options expiring 5 june 2017
5,000,000
4,992,464
Number
6,250,000
150,000
5,000,000
8.52%
8.51%
Number of security holders
1
1
1
Names of persons holding greater than 20% of a class of unquoted securities:
class of Equity security
Number
holder
$0.55 options expiring 20 February 2017
$0.55 options expiring 3 March 2018
$0.15 options expiring 5 june 2017
6,250,000
150,000
5,000,000
Citicorp Nominees Pty Ltd
Mzhci LLC
Argonaut Securities
Voting Rights
Ordinary shares
In accordance with the Company’s Constitution, on a show of hands every member present in person or by proxy or attorney
or duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly
authorised representative has one vote for every fully paid ordinary share held.
Restricted securities
As at 30 june 2014, there were no restricted securities.
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PEAK RESOURCES LTD ANNUAL REPORT 2014
Twenty largest security holders
The names of the twenty largest ordinary fully paid shareholders as at 29 September 2014 are as follows:
Name
jP MORGAN NOMINEES AUSTRALIA LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
WISEVEST PTY LTD
CRX INVESTMENTS PTY LIMITED
hOTLAKE PTY LTD
AShABIA PTY LTD
YARANDI INVESTMENTS PTY LTD
BUELL PTY LTD
SCOTTISh CALEDONIAN PTY LTD
CITICORP NOMINEES PTY LIMITED
RASK PTY LTD
MIChAEL BUShELL
FORTh-CLYDE INVESTMENTS PTY LTD
hSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
WAPIMALA PTY LIMITED
UBS WEALTh MANAGEMENT AUSTRALIA NOMINEES PTY LTD
RASK PTY LTD
PAN AUSTRALIAN NOMINEES PTY LIMITED
SUVALE NOMINEES PTY LTD
TOTAL
Number held of Ordinary
fully Paid shares
% held of issued Ordinary
capital
20,773,584
12,492,332
9,985,258
8,273,000
7,883,333
7,635,000
6,915,000
5,013,282
3,929,397
3,929,393
3,811,249
3,783,332
3,288,889
3,000,000
2,896,852
2,881,764
2,834,000
2,754,382
2,357,000
2,350,000
6.22%
3.74%
2.99%
2.48%
2.36%
2.28%
2.07%
1.50%
1.18%
1.18%
1.14%
1.13%
0.98%
0.90%
0.87%
0.86%
0.85%
0.82%
0.71%
0.70%
116,787,047
34.94%
Note: Information in the above schedule is based on data recorded in the Company’s Share Register on the date noted. A listed
holder may hold shareholdings or hold an associated shareholding in addition to those listed above. The data provided is solely
attributable to a HIN or SRN particular to that holding and as such may not necessarily represent the total of all holdings of the
shareholder noted or their associates.
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ADDITIONAL ShAREhOLDER INFORMATION Twenty largest option holders
The names of the twenty largest PEKOA option holders as at 29 September 2014 are as follows:
Name
CRX INVESTMENTS PTY LIMITED
UBS NOMINEES PTY LTD
YARANDI INVESTMENTS PTY LTD
WISEVEST PTY LTD
WAPIMALA PTY LIMITED
AShABIA PTY LTD
DIRDOT PTY LIMITED
ChIFLEY PORTFOLIOS PTY LIMITED
RASK PTY LTD
DAVIES NOMINEES PTY LTD
EASTERN UNION INVESTMENTS PTY LTD
ELINORA INVESTMENTS PTY LTD
ELINORA INVESTMENTS PTY LIMITED
MR ChRISTOPhER jOhN MURRAY
BUELL PTY LTD
SCOTTISh CALEDONIAN PTY LTD
ThE STEPhENS GROUP PTY LTD
COMSERV (226) PTY LIMITED
TOWNS CORPORATION PTY LTD
PASAGEAN PTY LIMITED
RASK PTY LTD
jOhN MAjOR ENTERPRISES PTY LTD
MRS jO-ANNE WEBER
MRS jENNY LEE BUShELL
MR MIChAEL BUShELL
RYLEBLEND PTY LTD
MIChAEL BUShELL
BUShELL NOMINEES PTY LTD
FORTh-CLYDE INVESTMENTS PTY LTD
UBS WEALTh MANAGEMENT AUSTRALIA NOMINEES PTY LTD
Number held of PEkO
options
% held of issued PEkO
options
5,000,000
4,992,464
1,668,881
1,600,000
1,230,294
1,219,000
1,191,647
1,100,000
1,000,000
1,000,000
860,000
800,000
800,000
697,728
654,900
654,899
630,000
600,000
600,000
600,000
570,000
540,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
420,000
8.52%
8.51%
2.84%
2.73%
2.10%
2.08%
2.03%
1.87%
1.70%
1.70%
1.47%
1.36%
1.36%
1.19%
1.12%
1.12%
1.07%
1.02%
1.02%
1.02%
0.97%
0.92%
0.85%
0.85%
0.85%
0.85%
0.85%
0.85%
0.85%
0.72%
TOTAL
31,929,813
54.42%
Note: Information in the above schedule is based on data recorded in the Company’s Register on the date noted. A listed
holder may hold shareholdings or hold an associated shareholding in addition to those listed above. The data provided is solely
attributable to a HIN or SRN particular to that holding and as such may not necessarily represent the total of all holdings of the
75
shareholder noted or their associates.
PEAK RESOURCES LTD ANNUAL REPORT 2014 CORPORATE DIRECTORY
DiREcTORs
shARE REgisTRy
Darren Townsend Managing Director
Link market services Limited
Alastair hunter
Non-Executive Chairman
David hammond
Technical Director
Jonathan murray Non-Executive Director
Level 12,
680 George Street
Sydney NSW 2000
cONTAcT DETAiLs
website:
Email:
Telephone:
facsimile:
www.peakresources.com.au
info@peakresources.com.au
(08) 9200 5360
(08) 9226 3831
sTOck EXchANgE LisTiNg
Australian securities Exchange Limited
home Exchange: Perth, Western Australia
code: PEK
cOmPANy sEcRETARy
Jeffrey Dawkins
REgisTERED OfficE
Level 2
46 Ord Street
West Perth WA 6005
sOLiciTORs
steinepreis Paganin (Australia)
The Read Building
Level 4, 16 Milligan Street
Perth WA 6000
Ako Law (Tanzania)
11th Floor, jubilee Towers
Ohio Street
Dar es Salaam
Tanzania
AUDiTORs
Ernst and young
11 Mounts Bay Road
Perth WA 6000
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PEAK RESOURCES LTD ANNUAL REPORT 2014
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PEAK RESOURCES LTD ANNUAL REPORT 2014