2016
Annual Report
Markets are aware of
the increasing demand
forecast for Lithium...
... but do they fully recognise that
the preferred powertrain for electric
and hybrid vehicles is a Rare Earth
permanent magnet motor?
DRIVETRAIN:
PERMANENT MAGNET
RARE EARTH MOTOR
BATTERY SYSTEM:
LITHIUM-ION
Electric and hybrid car technology
is already here and on the brink
of mass market acceptance that
will drive increased demand for
Neodymium and Praseodymium.
There are 75 new models
of electric and hybrid cars
already in design, 90% of these
contain Rare Earth permanent
magnet motors.
Source: www.hyundai.com - For illustrative purposes only.
2
Major global rare earth markets and processing centres
Headquarters,
Washingston
Headquarters,
London
Rare Earth Refinery
Europe
China
Japan
USA
Tanzania
South Korea
Thailand
Australia
Rare Earth Refining Markets & Centres
CONTENTS
4 Chairman’s Letter
5 Managing Director’s Letter
6 Review of Operations
15 Directors’ Report
NGUALLA PROJECT
Mine and multistage
processing plant
Corporate Headquarters,
Perth Western Australia
27 Auditor’s Independence Declaration
28
Independent Auditor’s Report
30 Consolidated Statement of Comprehensive Income
31 Consolidated Statement of Financial Position
32 Consolidated Statement of Cash Flows
33 Consolidated Statement of Changes in Equity
34 Notes to Financial Statements
58 Directors’ Declaration
58 Tenement Schedule
59 Additional Shareholder Information
61 Corporate Directory
61 Corporate Governance Statement
1
The 2016 Peak achievements in numbers*
2016 was another great year of progress for Peak Resources materialising in the following results:
REDUCTION OF CAPEX
-US $37 million
from PFS (10% reduction from PFS).
REDUCTION OF OPEX
-US $21 million
per annum from PFS (18% reduction from PFS).
RESULTING IN A TOTAL CAPEX OF
US $330 million
including 25% ($63 million) contingency.
… AND TOTAL OPEX OF
US $97 million p.a.
for an annual production of 2,300t Nd/Pr oxide
+ 250t Mid + carbonate mix + 5,900t
La/Ce carbonate.
WITH A MINE LIFE OF
31 years
from the Weathered Bastnaesite Zone alone.
… AND TOTAL RESOURCES OF
214.4 million tonnes
at 2.15% REO, for 4,620,000 tonnes
of contained REO.
LOW COST MINING
Low 1.68 strip ratio
Mining rate of only 3.0Mt per year.
High grade of 5.48% REO for first 10 years.
… AND SIMPLER PROCESSING COSTS
95% mass reduction
during beneficiation to produce 27,900t of rare
earth concentrate per annum at a grade of 45%
REO.
REFINERY IN EUROPE
Less than 4 tonnes / hour
treatment rate using weak acid at <1% strength
at 80°C in plastic laminate tanks.
… AND STREAMLINED PRODUCTS
85% of value
is from the high growth magnet metals
Neodymium and Praseodymium.
*See ASX Announcement “Ngualla Study delivers substantial Capex and Opex savings” of 16 March 2016 for details on capital and operating costs, mining inventory and rates and
processing plants and ASX Announcement “Higher grade Resource for Ngualla nearly 1M tonnes REO” of 22 February 2016 for details of Mineral Resource estimate.
2
2
NGUALLA RARE EARTH PROJECT
Enabling green technologies
Peak (or the “Company”) is developing Ngualla to be a low cost Next Generation rare earth project
that is strongly aligned to the high value, expanding high-tech magnet metal market. With a distinctly
different development approach backed by the advantages of a large high quality deposit and
demonstrated process, the Company is well positioned for growth through the expanding demand
for magnet metals in the green technology sector.
The Project is centred on the Ngualla Carbonatite in Tanzania, host to one of the world’s highest
grade and largest rare earth deposits, discovered by Peak in 2010.
Furthermore, our team accomplished significant progress across all disciplines,
which assures the competitiveness and cost leadership of PEAK in the rare earth industry:
f Capital costs include a base case of a European based Refinery to produce high purity
separated products. The Project’s low capital costs and advanced stage of development
position Ngualla in the forefront of potential new rare earth producers.
f Processing flowsheet simplified and derisked through beneficiation and separation pilot plants.
f Introduction of an Alkali Roast process, which allows for the early rejection of the majority of
low value cerium and deleterious iron, leading to a significant reduction in reagent costs and
assuring a top in class total OPEX.
f Focused exposure to high growth rare earth permanent magnet market underpinned by
electrification of automobiles and green energy. E-mobility is on the brink of becoming a
global mass market application and as a consequence we will see substantial changes in
regards to the supply & demand situation.
f The Company has expanded the team to include experienced rare earth operations and
marketing executives for the next stage of project implementation.
Ngualla represents one of the best investment
opportunities in the rare earth space
3
CHAIRMAN’S LETTER
TO SHAREHOLDERS
Dear Shareholder,
The past year was a challenging one for all participants in the rare earths business given the
continued and unprecedented weakness in global rare earth prices. We understand that at
current price levels approximately 90% of the world’s rare earth production is loss making
which is clearly an unsustainable situation. We remain confident that rare earth prices will
recover, especially considering the anticipated demand growth for permanent magnets in
electric cars, bikes and wind turbines which contain significant quantities of the rare earths
praseodymium and neodymium that our Ngualla Project will produce. In fact, general industry
consensus is that praseodymium and neodymium demand could double in the next 10 years
which bodes well for Peak, given that approximately 85% of our projected revenue will come
from these two rare earth elements.
With that global market back drop it is vital we complete the Bankable Feasibility Study (BFS) on Ngualla as soon as
possible so that we can move to financing and development of the Project into the anticipated rising price environment.
This will allow us to take full advantage of the unique and superior production mix that Ngualla will have compared to
many other rare earth producers and potential development projects. I am pleased to report that the Peak team has
worked diligently in this regard and that the Study is well advanced, fully funded and now scheduled for completion in
the first half of 2017. In parallel, the permitting process in Tanzania is progressing well and the local community remains
supportive of the Project which will assist in ensuring all the necessary permits are obtained in a timely manner. We have
also made considerable progress on securing a site for our planned European refinery with commercial negotiations
now well advanced on the preferred site.
It has been a tough period for our loyal shareholders many of whom have been long term holders and I thank them
for their ongoing belief in the Ngualla Project. I would like to thank Appian Natural Resources Fund (Appian) and
International Finance Corporation who are co-owners of the Project and investors in the Company for their ongoing
support. They have stepped up to the plate at a difficult time in the rare earth price cycle and demonstrated their
commitment to the Ngualla Project and the Company by taking up their proportional entitlements in the recent share
placement. Appian have also provided the Company with a A$4.1 million medium term loan to allow us to finish the
BFS in a timely manner, which is greatly appreciated. We also welcomed some new shareholders to the register via the
placement and thank them for their interest and investment in the Company.
I would also like to thank Robin Mills, who until recently represented Appian on the board, for his contribution during
his time as a director.
On behalf of the Board and shareholders I acknowledge the hard work and dedication of our Managing Director, Darren
Townsend, his management team and all our employees. We have an excellent team in place that is committed to the
completion of the BFS and the development of the Ngualla Project in the shortest possible time frame.
Yours sincerely
Peter Harold
Chairman
4
MANAGING DIRECTOR’S
LETTER TO SHAREHOLDERS
Dear Shareholder,
This year has been a busy one for Peak with the technical work programs for the Bankable
Feasibility Study (“BFS”) now largely complete. Having spent in excess of $4 million on three
stages of pilot planting using actual planned feed mineralisation from Ngualla we are now
comfortable that the technical route to production has been proven.
In preparation for project execution during the course of this year we have built out the Peak
team with the addition of deep rare earth production and marketing expertise. The valuable
insights we have obtained from these appointments have been fed into the BFS process further
de-risking the project and putting Peak in the unique position of being the only rare earth
development project outside of China that has had extensive pilot planting and technical input
into the BFS by personnel with actual rare earth operating experience.
Although the rare earth markets remain challenging with prices currently at seven year lows we are strong believers in
the upcoming increase in demand for our planned products Neodymium and Praseodymium, which are expected to
produce over 85% of our future revenues.
With over 75 new models of electric or hybrid cars already announced as in the pipeline, Bloomberg are predicting the
cost of production of electric and hybrid vehicles will become less than conventional combustion engine cars by 2022.
At this point we expect the demand for our products to really accelerate. With the excitement this year over lithium
and lithium battery storage (and the close on more than US$10 Billion of investment in Battery plants) at some point
the penny is going to drop with the investment community that 90% of these new 75 models of electric or hybrid cars
are projected to use high performance and light weight, Neodymium and Praseodymium rare earth permanent magnet
electric motors to take the energy from the lithium batteries to the wheels.
As always we wish to thank the community in and around the Ngwala village for their ongoing support of the Company
and the project. We would also like to thank the Government of Tanzania for their support of the project and we look
forward to working with the Government in finishing off our permitting process in 2017.
We also wish to thank our shareholders for their ongoing support as we focus on completing the permitting of our
planned operations and, subject to a satisfactory recovery in rare earth prices, concluding our discussions on offtake
and strategic investment for construction.
Darren Townsend
Managing Director
5
REVIEW OF OPERATIONS
SUMMARY
A series of successful technical work programs completed during the year have substantially de-risked the Ngualla
Rare Earth Project. A Project Update released in March 2016 summarised major advances in development plans for
the project, as well as improved capital and operating costs that together place Ngualla well ahead of its peers as the
leading rare earth development project.
Ngualla - the leading rare earth development project:
f
f
f
f
f
f
Advanced stage of development
Low Capital Costs
Low Operating costs
Products aligned to market demand
Low risk project
Team with rare earth operational and marketing experience
The Bankable Feasibility Study under the auspices of Lead Engineers AMEC Foster Wheeler is progressing well with many
areas of study and design nearing completion. The BFS is scheduled for completion late first quarter or early second
quarter of 2017. Permitting of the project is also progressing in line with this schedule with base line environmental
surveys completed, strong support for the project received from formal stakeholder meetings and the Environmental
and Social Impact Assessment (ESIA) draft report submitted to the Tanzanian authorities.
PROJECT UPDATE STUDY
Results from the completion of a detailed Project Update completed in March 2016 delivered substantial reductions in
operating and capital costs compared to the Preliminary Feasibility Study. Key improvements included:
f Capital costs were reduced by US$37 million (10%) to US$330 million, including 25% contingency
f Operating cost was reduced by ~18%, or US $21 million per annum
f Process flowsheet simplified and de-risked
f Product profile aligned to the high growth, high value permanent magnet market
f A long life project optimised at 31 years
The successful demonstration of new improved metallurgical flowsheets developed during the year contributed to the
positive outcomes of the study, as did infill drilling in the higher grade areas of the deposit.
The study and capital and operating cost estimates contemplate a mine and multi-stage processing plant on site at
Ngualla in Tanzania, together with a rare earth refinery to produce high purity separated rare earth products located in
Europe.
The Study base-case scenario envisages production of approximately:
f
f
f
2,300 tonnes per annum of Neodymium and Praseodymium rare earth oxide
250 tonnes per annum of mixed Samarium, Europium and Gadolinium rare earth carbonate (equivalent
to 180tpa of contained REO) and
5,900 tonnes per annum of Cerium/Lanthanum carbonate (equivalent to 4,240tpa of contained REO).
6
REVIEW OF OPERATIONS
Production forecasts are based on the weathered Bastnaesite Zone Mineral resource estimate at a 1% Rare Earth Oxide
(REO) lower grade cut (Measured and Indicated portions only, see Appendix for category breakdown) summarised in
ASX Announcement “Higher grade Mineral Resource contains nearly 1 million tonnes rare earth oxide” of 22 February
2016, together with the mining and processing assumptions contained within the Project Update ASX release “Ngualla
Project Study delivers substantial Capex and Opex savings” of 16 March 2016.
LOW CAPITAL COST
LOW OPERATING COST
f
f
Reduced by US$37 million
(or 10% compared to PFS)
Now US$330 million
including 25% contingency
Low Development Risk
f
Reduced by US$21 million pa
(or 18% compared to PFS)
f Now US$97 million pa
f
Higher value product focussed
on magnet metal market
Peak is confident that the technical development risk of the Ngualla Project remains low. This is primarily
due to the following:
f
f
f
f
f
f
f
f
f
High confidence Mineral Resource (89% of the Bastnaesite Zone +1% REO Mineral Resource is classified
in the highest JORC 2012 Measured category)
Low cost low strip ratio open pit mining
Conventional multistage processing plant on site at Ngualla to produce high grade rare earth
concentrate
Location of refinery in Europe
Peak team have extensive experience in commissioning and operating rare earth projects
Low capex/opex requirement
Non radioactive
Proven and demonstrated extraction process
Advanced stage of development studies
PROCESS FLOWSHEET DEVELOPMENT AND PILOT PLANTS
Intensive metallurgical work programs at laboratories and test facilities around Australia are now largely complete. Two
of the three stages of the metallurgical process had been successfully piloted by year end with the final Leach Recovery
stage pilot plant at an advanced stage and performing well.
Piloted
Pilot Underway
Piloted
Run
of mine
ore
Beneficiation
Leach Recovery
Separation
Three stage process developed by Peak for Ngualla’s rare earth mineralisation and pilot plant status.
Rare Earth
Oxide and
Carbonate
Products
7
The beneficiation Pilot Plant was successfully completed in December 2015 at ALS test facility in Perth, with concentrate
grade / recovery curve exceeding target expectations. The ability to produce a high grade (45% REO) concentrate on
site at Ngualla has significant benefits to downstream processes and is a distinguishing advantage to the project.
BENEFITS OF A HIGHER GRADE RARE EARTH CONCENTRATE
REDUCTIONS IN:
3 Concentrate transport costs
3 Leach recovery plant size
3 Leach plant capital costs
3 Acid consumption
3 Leach plant operating costs
The piloting of the second stage process – Leach Recovery – was in progress at ANSTO Minerals piloting facility near
Sydney at reporting year end, and on track for completion in Q3 2016. The demonstration of the selective leach process
for Ngualla’s high grade mineral concentrate will complete the metallurgical development programs and provide the
engineering data for the BFS.
The year saw two major pilot plant programs. The beneficiation pilot plant at ALS test facility in Perth (left) and the leach recovery pilot plant
at ANSTO Minerals near Sydney (right).
Advantages of the new leach recovery flowsheet compared to PFS:
f
f
f
f
f
f
f
f
Significant reduction in processing stages
Reduced plant capital cost through a smaller plant of modular designed polymer plastic tanks for leach
and purification
A single acid is used in a low strength, selective leach
Lower operating costs due to reduced reagent consumption
Early rejection of the majority of low value cerium and deleterious iron without consuming
additional acid
Cerium rejection reduces the size and operating cost of the downstream separation plant
Focus on the extraction and recovery of the high value magnetic metals neodymium and praseodymium
Minimises the extraction of deleterious elements thereby simplifying the purification stage
8
REVIEW OF OPERATIONS
BFS ENGINEERING
Detailed engineering studies for the Ngualla Rare Earth Project BFS are now well advanced and on track for completion
late first quarter or early second quarter of 2017.
Appointed Lead Engineer AMEC Foster Wheeler is leading the studies, together with a group of other Tier One specialist
international consultants. The engineering design follows the metallurgical flow sheet improvements and pilot plant
work summarised in the Project Update of March 2016.
Field surveys and programs, including drilling for engineering purposes, water exploration and Mineral Resource infill
were successfully completed in the first half of the year.
Knight Piésold Consulting have completed the geotechnical surveys and studies for the Ngualla site with no issues
identified. The design of the tailings storage facility and water supply hydrogeology studies, also under the auspices of
Knight Piésold, are nearing completion.
Open pit geotechnical and hydrogeological studies have been successfully completed by Golder and Associates.
AMEC Foster Wheeler are advancing the design of the processing plants with South African based subsidiary MDM
Engineering, who are also leading the site infrastructure planning at Ngualla.
Tanzania based engineering company COWI Tanzania Ltd have completed route selection in association with Peak for
the Ngualla site access road.
PROJECT PERMITTING
The project development area is free of any habitation, farming or grazing and there are no Reserves of any kind over
the area. The Company is on track to complete the permitting for the Ngualla Rare Earth Project late first quarter or
early second quarter of 2017.
An Environmental Certificate will allow the Company to complete the application for a mining licence for the Ngualla
Project. Solid progress was made with the Environmental and Social Impact Assessment process, which is required for
an Environmental Certificate. The project was registered with National Environment Management Council (NEMC), the
Tanzanian regulatory authorities and the Scoping stage completed together with initial stakeholder meetings where
strong support for the project was received.
The completion of the BFS and project permitting in late first quarter or early second quarter
of 2017 will position Ngualla as one of the very few ‘ready to go’ rare earth projects able to
meet the predicted surge in magnet metal demand from electric vehicles and green energy.
TEAM BUILD OUT
Now that the technical de-risking of the project is complete, the Company has positioned itself for the next stage
of project implementation and operations by expanding the team in areas of rare earth operations and marketing.
The Company was pleased to welcome two high calibre and experienced rare earth senior executives.
Mr Rocky Smith, Chief Operating Officer – Development, has a unique set of skills and experience from his 6 years to
August 2015 as Managing Director of Molycorp’s Mountain Pass rare earth complex. He has over 35 year’s operations
and senior management experience in the mineral processing sector.
Responsible for operations at Molycorp’s rare earth mining and processing site in California, USA, Rocky managed
500 employees and an annual operational budget in excess of US$150 million. He recruited, developed and led the
team responsible for the implementation of the redesigned and expanded Mountain Pass operation. It is a vote of
confidence in the Ngualla Project that an operator of this calibre has chosen to join the Peak team and relocate
from the United States.
9
Executive General Manager - Sales, Marketing & Business Development, Mr. Michael Prassas also joined the Peak team
from leading global chemical and rare earth company Solvay where he was previously Global Account Manager for
Automotive Catalysis and Sales Manager - Rare Earth Systems.
With over 20 years’ experience in sales and marketing as well as extensive experience in business development Michael’s
priority will be to secure strategic partnerships and offtake agreements with global rare earth users.
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
Peak places great importance on social and environmental responsibility and is committed to assisting communities in
which it operates whilst maintaining best practise environmental and health and safety standards.
As well as being a high priority on moral principles, the Company sees a market advantage in being the ethically
sustainable, long term supplier of choice to the global rare earth market.
The Company values the excellent relationship maintained with the local village, district authorities and individuals and
recognises that the development of the Ngualla Project must provide benefits for both Company and Community.
The Ngwala community identified the priorities for new social programs during the year as additional teacher’s houses
at neighbouring sub villages, additions to the community clinic, and assistance with the water supply infrastructure
including two water bores and pumps. The Company has completed these projects and handed them over to the
community, and is continuing with the construction of additional teachers houses and other projects.
Figure 6: Chunya District Commissioner the Hon. Elias Tarimo
pumps the first bucket of water from the Madodomia water bore.
Figure 7: First bucket of water from the Itiziro water bore and
pump accepted by Itiziro villager.
Figure 8: Pair of teachers houses completed at Itiziro.
Figure 9: Ngwala village dispensary waiting area constructed by
Peak.
10
REVIEW OF OPERATIONS
APPENDIX
Corporate Governance and Internal Controls
Peak ensures that the Ore Reserve and Mineral Resources estimates are subject to appropriate governance and internal
controls which are reviewed periodically in line with the expansion and development of the Company.
The Mineral Resource estimate and Ore Reserve were derived by independent consulting organisations whose staff
are highly competent and professional. Competent Persons named by the company are Members or Fellows of the
Australian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and qualify as Competent
Persons as defined in the JORC Code. The Mineral Resource consultant carried out rigorous reviews of the quality of
the database and geological models prior to estimation. Internal technical reviews are carried out systematically by both
of the independent consulting organisations.
The Company confirms that it is not aware of any new information or data that materially affects the information included
in the original market announcements and that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed.
Comparison of Mineral Resources and Ore Reserves with previous year
The tables below compare the Ore Reserve and Mineral Resource statements for 2015 and 2016. The Ore Reserve
holding has not changed from the previous year. A revised Mineral Resource estimate was completed in February 2016
by SRK Consultants after further drilling in 2015.
Table 1: Classification of Ore Reserves for the weathered Bastnaesite Zone at Ngualla.
Ore Reserve as at 30 June 2016
Ore Reserve as at 30 June 2015
JORC
Category
Proved
Probable
Total
Ore Tonnes
(million)
18.0
2.7
20.7
REO%
4.53
4.62
4.54
Contained
Ore Tonnes
REO tonnes
(million)
817,000
124,000
941,000
18.0
2.7
20.7
REO%
4.53
4.62
4.54
Contained
REO tonnes
817,000
124,000
941,000
Ngualla
weathered
Bastnaesite
Zone
* A 3.0% cut-off grade is applied. See Table 4 for the breakdown of individual REO’s. Reported according to the JORC 2012 Code and Guidelines.
The Ngualla Ore Reserve is detailed in the ASX announcement titled ‘Ngualla Rare Earth Project – Maiden Ore Reserve’
of 19 March 2014, which also includes a detailed summary of the supporting project assumptions and data. The Ore
Reserve and the accompanying Ngualla Project Preliminary Feasibility Study, detailed in the ASX announcement
titled ‘Peak Resources Delivers Robust PFS for Ngualla’ of 19 March 2014 were based on the 2013 Ngualla Weathered
Bastnaesite Zone Mineral Resource, which is detailed in the ASX announcement titled ‘Increased Resource Estimate to
improve Ngualla Project economics’ of 4 April 2013.
Table 2: Classification of All Mineral Resources for the Ngualla Rare Earth Project at a 1.0% REO cut-off grade.
Mineral Resource
as at 30 June 2016
Mineral Resource
as at 30 June 2015
Lower cut-off
grade
JORC Resource
Category
Ore Tonnes
(millions)
REO
(%)*
Contained
REO tonnes
Ore Tonnes
(millions)
Ngualla
Weathered
Bastnaesite
Zone
1.0% REO
Measured
Indicated
Inferred
Total
86.1
112.6
15.7
214.4
2.61
1.81
2.15
2.15
2,250,000
2,040,000
340,000
81
94
20
4,620,000
195
REO
(%)*
2.66
2.02
1.83
2.26
Contained
REO tonnes
2,100,000
1,900,000
380,000
4,000,000
* REO (%) includes all the lanthanide elements plus yttrium oxide. See Tables 5 and 6 for breakdown of individual REO’s. Figures above may not sum due to
rounding. The number of significant figures does not imply an added level of precision
11
The Mineral Resource estimate as at 30 June 2016 is detailed in the ASX announcement titled ‘Higher grade Ngualla
Mineral Resource contains nearly 1 million tonnes rare earth oxide’ of 22 February 2016 and was reported according
to the JORC 2012 Code and Guidelines. The Ngualla Mineral Resource estimate as at 30 June 2015 is detailed in the
ASX announcement titled ‘Increased Resource Estimate to improve Ngualla Project economics’ of 4 April 2013 and was
reported according to the JORC 2004 Code and Guidelines.
Table 3: Classification of Mineral Resources for the Weathered Bastnaesite Zone mineralisation at a 1.0% and 3.0% REO cut-off grades.
Mineral Resource
as at 30 June 2016
Mineral Resource
as at 30 June 2015
Lower cut-off
grade
JORC Resource
Category
Ore Tonnes
(millions)
REO
(%)*
Contained
REO tonnes
Ore Tonnes
(millions)
REO
(%)*
Contained
REO tonnes
Ngualla
Weathered
Bastnaesite
Zone
1.0% REO
3.0% REO
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
18.9
1.9
0.5
21.3
17.9
1.7
0.4
19.9
4.75
4.85
4.43
4.75
4.88
5.14
4.84
4.90
900,000
90,000
20,000
21.8
4.1
0.2
1,010,000
26.0
870,000
90,000
20,000
980,000
19
2.9
0.11
21.6
4.20
3.85
3.56
4.14
4.53
4.62
4.10
4.54
900,000
150,000
6,000
1,050,000
840,000
140,000
4,000
982,000
* REO (%) includes all the lanthanide elements plus yttrium oxide. See Tables 5 and 6 for breakdown of individual REO’s. The Weathered Bastnaesite Zone
Mineral Resource is contained within an is a subset of the Total All Ngualla Project Mineral Resource at a 1% REO cut-off grade in Table 2 above. Figures above
may not sum due to rounding. The number of significant figures does not imply an added level of precision.
Table 4: 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
Ngualla Ore Reserve
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 REO*
* 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
0.1
0.00
0.20
100
12
REVIEW OF OPERATIONS
Table 5: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for the 2016 Total
Ngualla +1% REO, Weathered Bastnaesite Zone +1% REO and Weathered Bastnaesite Zone +3% REO and Mineral Resources summarised
in Tables 2 and 3.
Oxide
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
Ngualla 2016
Total Mineral Resource
Ngualla 2016 Weathered
Bastnaesite Zone Resource
Ngualla 2016 Weathered
Bastnaesite Zone Resource
1% REO
27.25
48.23
4.81
16.2
1.66
0.34
0.75
0.07
0.16
0.02
0.06
0.00
0.04
0.00
0.47
100
1% REO
27.58
48.27
4.77
16.5
1.6
0.29
0.61
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100
3% REO
27.63
48.27
4.77
16.5
1.60
0.29
0.61
0.05
0.08
0.01
0.03
0.00
0.01
0.00
0.20
100
* Figures may not sum due to rounding to 0.01%.
Table 6: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for the 2015 Total
Ngualla +1% REO, Weathered Bastnaesite Zone +1% REO and Weathered Bastnaesite Zone +3% REO and Mineral Resources summarised
in Tables 2 and 3.
Ngualla 2015
Total Mineral Resource
Ngualla 2015 Weathered
Bastnaesite Zone Resource
Ngualla 2015 Weathered
Bastnaesite Zone Resource
1% REO
1% REO
3% REO
Oxide
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
* Figures may not sum due to rounding to 0.01%.
27.1
48.2
4.81
16.3
1.67
0.35
0.76
0.07
0.16
0.02
.006
0.00
0.02
0.00
0.48
100
28.1
46.0
5.83
16.6
1.99
0.35
0.71
0.06
0.09
0.01
0.05
0.00
0.01
0.00
0.21
100
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
13
Ore Reserves
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.
Mineral Resource estimates
The information in this report that relates to Mineral Resources as reported in 2015 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 this statement that relates to the Mineral Resource Estimates 2016 is based on work conducted by Rod Brown of SRK Consulting (Australasia)
Pty Ltd, and the work conducted by Peak Resources, which SRK has reviewed. Rod Brown takes responsibility for the Mineral Resource Estimate. Rod Brown
is a Member of The Australian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration, and to the activities undertaken, to qualify as Competent Person in terms of the Australian Code for the Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code, 2012 edition).Rod Brown consents to the inclusion of such information in this report in the form and context
in which it appears.
Exploration and Geology
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.
Metallurgy
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 the General Manager Metallurgy of the Company and has
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.
Project Engineering and Cost Estimation
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 General Manager – Development 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. Lucas consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
14
REVIEW OF OPERATIONS
PEAK RESOURCES LIMITED – ANNUAL REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The directors of Peak Resources Limited submit herewith the financial statements of the Company for the financial year ended 30
June 2016. 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 Peter Harold
Mr Darren Townsend
Mr Dave Hammond
Mr Jonathan Murray
Mr Robin Mills
Mr John Jetter
Non-Executive Chairman (appointed 1 December 2015)
Managing Director
Technical Director
Non-Executive Director (Chairman from 1 April 2015 to 30 November 2015)
Non-Executive Director
Non-Executive Director
INFORMATION ON DIRECTORS
Mr Peter Harold– Non-Executive Chairman (Appointed Chairman 1 December 2015)
B.AppSc (Chem), AFAICD
Mr. Harold trained as an industrial chemist and has almost 30 years operational and corporate experience in the minerals industry
specialising in financing, marketing, operating and business development with a focus on building cash flow generative businesses.
Peter was a founding director of Panoramic Resources Limited (formerly Sally Malay Mining) and has been responsible for managing
the company through the development phase of the $65 million Savannah (formerly the Sally Malay) Nickel Project in the Kimberley
region of WA and the acquisition of five other resource projects.
Peter is currently the Managing Director of Panoramic Resources. He is also the Chairman of Youth Focus, an independent not for
profit charity that focusses on the prevention of youth suicide and depression. He has held previous senior roles with Spectrum
Rare Earths, Alloy Resources, Shell Australia, Australian Consolidated Minerals, MPI Mines Limited and Normandy Mining
Limited.). Peter has also served as a director of the following other listed companies:
Panoramic Resources Limited – from 16 March 2001
Pacifico MInerals Limited - from 19 August 2013
Spectrum Rare Earths Limited - from 1 March 2007 to June 2014
Alloy Resources Limited - from 15 September 2005 to June 2014
Mr Darren Townsend – Managing Director (Appointed 3 February 2014)
B.Eng (Mining-Hons) EMBA Managing Director
Darren is a mining engineer with extensive mining and corporate experience. Prior to joining Peak over a period of 6 years Darren was
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. Previously
Darren has also 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 7 years, led and managed the development of the mine to become the world's largest hard rock Tantalum operations. Darren
has also served as a director of the following other listed companies:
De Grey Mining Ltd – from 23 May 2006 until 20 November 2014
Pacific Wildcat Resources Corp – from 25 July 2008 until 14 January 2015
Mr David Hammond – Technical Director (Appointed 25 October 2010)
MSc in Mineral Exploration, DIC, BSc (Hons), MAusIMM
David has over 25 years technical and management experience in Africa, Australia and South America. He has been Technical
Director with Peak and the Ngualla Project for almost six years, since the second drill hole into the main Bastnaesite Zone. He was
2
15
PEAK RESOURCES LIMITED – ANNUAL REPORT
previously the Exploration Manager with De Grey Mining Limited working on projects in the Pilbara and new project acquisitions
globally. Previous positions include Exploration Manager for Sons of Gwalia in NE Goldfields of 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 – Non-Executive Director (Appointed 22 February 2011, Chairman from 1 April 2015 to 30 November 2015)
Bachelor Laws and Commerce
Jonathan 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). Jonathan has also served as a director of the following other
listed companies:
Hannans Reward Ltd – from 22 January 2010
Lemur Resources Limited (appointed 6 November 2013; resigned 29 May 2014)
Highfield Resources Ltd (appointed 25 October 2011; resigned 14 August 2013)
Vietnam Industrial Investments Limited - from 19 January 2016
Mr Robin Mills – Non-Executive Director (Appointed 1 April 2015)
BSc.Eng.Rand.(Mining), FSAIMM., FIMMM.(UK), CEng.(UK)
Robin is a South African who has had a long global mining career as an engineer, operating manager and director.
For 40 + years this included operational, consulting and board level assignments with the Anglo American and De Beers Groups,
primarily in gold, nickel, copper, platinum and diamond mine projects and operations in Africa, North and South America.
He operated in positions ranging from Mine and General Manager, Consulting Engineer, COO and CEO responsibilities over that
period and concluded his career with the majors as the Group Technical Director for De Beers. Robin is currently a senior partner in
the London based Appian Capital Advisory LLP. Robin also serves as a director of the following other listed companies:
Royal Bafokeng Platinum Ltd (JSE) – from 20 September 2010
RoXgold Incorporated (TSX) – from 11 June 2015
Mr John Jetter – Non-Executive Director (Appointed 1 April 2015)
BLaw, BEcon, INSEAD
John has Bachelor of Law and Bachelor of Economics degrees and has extensive international finance and M&A experience having
been the former Managing Director, CEO and head of investment banking of JP Morgan in Germany and Austria, and a member of
the European Advisory Council of JP Morgan in London. He has held various senior positions with JP Morgan during which time he
focused his attention on major corporate clients and advised on some of Europe’s largest transactions. Before joining JPMorgan, he
spent 12 years with CRA Limited (now Rio Tinto) in a variety of senior management roles gaining extensive experience in the mining
and mineral processing industries. In addition, John has an extensive understanding of the rare earths industry and has been actively
involved in negotiating and executing rare earth offtake agreements. John has also served as a director of the following other listed
companies:
Otto Energy – from 10 December 2007
Venture Minerals Ltd – from 8 June 2010
COMPANY SECRETARY
The following person(s) have held the position of company secretary during or at the end of the financial year:
Graeme Scott – Company Secretary (Appointed 3 November 2014)
FCCA
Graeme is a fellow of the Association of Chartered Certified Accountants (UK) with more than 20 years’ experience in professional and
corporate roles in both Australia and the UK. He has spent the last 11 years working in the resources sector in CFO and Company
Secretarial roles for both ASX and TSX listed companies.
16
DIRECTORS’ REPORT
3
PEAK RESOURCES LIMITED – ANNUAL REPORT
PRINCIPAL ACTIVITIES
During the year, the principal activities of the Company consisted of:
(a) Mineral processing technological evaluations;
(b) Mining and associated infrastructure, feasibility evaluations; and
(c) Mineral definition and development.
OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $15,892,428 (2015: loss $4,195,877).
The basic and diluted loss per share for the Group for the year was 3.95 cents (2015: 1.26 cents).
FINANCIAL POSITION
The net assets of the Group have decreased from $33,459,177 at 30 June 2015 to $26,891,541 at 30 June 2016.
The Group’s working capital, being current assets less current liabilities, was $6,960,223 at 30 June 2016 (2015: net working capital
deficiency ($6,418,152)). The Company announcement on 26 April 2016 - Restructured funding package set to deliver Ngualla BFS
which addresses the Company’s working capital requirements as follows:
Restructured funding package underpins completion of the Bankable Feasibility Study (BFS) for the world-class Ngualla Rare
Earth Project.
Peak to increase ownership of Ngualla to 75% (from 62.5%)
Appian Natural Resources Fund (Appian) remains strongly supportive and will participate in both the Placement and Rights
Issue
Appian to cover any shortfall in Rights Issue via a long term Loan of up to $6 million
In addition to the A$7m raising, Appian’s Stage 2 Ngualla project financing of an additional ~$A3.1 million expected to be
received prior to end of June 2016 following regulatory approvals.
Since the above announcement, the Company completed a A$1,000,000 placement in May and raised a further A$1,004,824 in
June under the announced Rights Issue (10 for 36 Entitlement Issue). Subsequent to the year end the Company is in the process of
completing a placement of the Entitlement Issue shortfall to Appian and IFC for a further A$815,348 and has received ~A$4.1m on
draw down of the long term loan facility provided by Appian.
In addition and following receipt of final regulatory approvals a total of ~A$3.1 was received in August and September 2016 by
Peak’s majority owned associated company Peak African Minerals from the Stage 2 Ngualla project financing noted above.
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 advancing the development of the Ngualla Rare Earth Project towards becoming a long term, low cost supplier of magnet
Summary
metal raw materials. The review of the group’s operations is included in pages 6 through 14 of this report.
A series of successful technical work programs completed during the year have substantially de-risked the Ngualla Rare Earth Project.
A Project Update released in March 2016 summarised major advances in development plans for the project, as well as improved
capital and operating costs that together place Ngualla well ahead of its peers as the leading rare earth development project:
Low Capital Costs
Low Operating costs
Advanced stage of development
Products aligned to market demand
Low risk project
Team with REO operational and marketing experience
4
17
PEAK RESOURCES LIMITED – ANNUAL REPORT
and an annual operational budget in excess of US$150 million. He recruited, developed and led the team responsible for the
implementation of the redesigned and expanded Mountain Pass operation. It is a vote of confidence in the Ngualla Project that an
operator of this calibre has chosen to join the Peak team and relocate from the United States.
Executive General Manager - Sales, Marketing & Business Development, Mr. Michael Prassas also joined the Peak team from leading
global chemical and rare earth company Solvay where he was previously Global Account Manager for Automotive Catalysis and Sales
Manager - Rare Earth Systems.
With over 20 years’ experience in sales and marketing as well as extensive experience in business development Michaels priority will
be to secure strategic partnerships and offtake agreements with rare earth users in industry globally.
Social and Environmental Responsibility
Peak places great importance on social and environmental responsibility and is committed to assisting communities in which it
operates whilst maintaining best practise environmental and health and safety standards.
As well as being a high priority on moral principles, the Company sees a market advantage in being the ethically sustainable, long
term supplier of choice to the global rare earth market.
The Company values the excellent relationship maintained with the local village, district authorities and individuals and recognises that
the development of the Ngualla Project must provide benefits for both Company and Community.
The Ngwala community identified the priorities for new social programs during the year as additional teacher’s houses at neighbouring
sub villages, additions to the community clinic, and assistance with the water supply infrastructure including two water bores and
pumps. The Company has completed these projects and handed them over to the community, and is continuing with the construction
of additional teachers houses and other projects.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than detailed below and in the Review of Operations above there were no significant changes in the state of affairs of the
Company, during the financial year:
On the 26 July 2015 the Company announced the closing of Stage 1 of the Bankable Feasibility (BFS) financing with Appian and the
IFC. The Stage 1 closure involved the following:
1.
Issue of 40,107,495 and 10,026,874 fully paid ordinary shares for A$0.09 per share to Appian and IFC respectively for a
total of A$4,512,094.
2. Appian have the right to nominate two directors to the Peak Board (Mr Mills and Mr Jetter appointed 1 April 2015) and IFC
have the right to nominate one director.
3. A subscription of US$4,385,219 into Peak’s 100% owned subsidiary Peak African Minerals giving Appian and IFC a 10%
and 2.5% interest respectively. Peak retains an 87.5% interest.
4. A subscription of A$2,599,004 for a convertible loan note, convertible into either 33,370,698 fully paid ordinary shares in
Peak at A$0.103 per share or an additional combined interest of 4.99% in Peak African Minerals.
5. Appian have been granted rights to an equal number of directors as Peak on the Peak African Minerals board, including
the right to nominate the chairman with a casting vote.
6. The granting of a 2% Gross Sales Royalty over the production from the Ngualla Rare Earth Project for a payment of
US$5,191,200.
Pursuant to the closing of stage 1 of the financing transaction with Appian and IFC on 24 July 2015, in which Appian and IFC
acquired a direct 12.5% interest in Peak African Minerals (PAM), the company that held the interests in the Group’s Ngualla project,
it has been determined that Peak Resources no longer solely controls nor does it have joint control of PAM despite maintaining its
majority ownership and beneficial interests in PAM. The company has determined that based on its involvement in the PAM Board
(albeit it does not control the Board decisions) along with its ownership interest in the company, Peak Resources is deemed to have
significant influence over PAM and accordingly is considered to be an associate under Australian Accounting Standards. In
accordance with the requirements of Australian Accounting Standards, the PAM Group has been deconsolidated from the Peak
Group effective July 2015 and the retained interest in PAM has been re-measured at its fair value, being the deemed cost on initial
recognition of Peak’s investment in the associate.
Capital raising equity issues were made during the year as follows:
PEAK RESOURCES LIMITED – ANNUAL REPORT
24 July 2015 issue of 50,134,369 shares to Appian and IFC at $0.09 per share to raise A$4,512,094 (refer 1 above)
30 December 2015 issue of 26,696,558 shares to Appian on conversion of loan note at $0.103 per share (refer 4 above)
5 May 2016 placement issue of 20,000,000 shares at $0.05 per share to raise A$1,000,000
17 June 2016 issue of 20,096,476 shares at $0.05 per share to raise A$1,004,824 under the Company’s 10 for 36
entitlement issue.
8
AFTER BALANCE DATE EVENTS
On the 15 August 2016 the closing of Stage 2 of the Bankable Feasibility (BFS) financing with Appian occurred and subsequent to that
on 22 September 2016 the closing of Stage 2 with IFC. The Stage 2 closure involved a subscription of US$ 2,374,955 into Peak’s
majority owned associate PAM giving Appian and IFC an additional 10% and 2.5% interest respectively. Peak retains a 75% interest
in PAM (Appian 20%, IFC 5%).
On the 20 September 2016 the Company received ~A$4.1m under a term loan facility provided by Appian.
MEETINGS OF DIRECTORS
The number of meetings attended by each Director of the Company during the financial year was:
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Robin Mills
Board Meetings
Number held and
entitled to attend
8
12
12
12
12
12
Number attended
8
12
10
12
11
12
Note – no Audit Committee Meetings or Remuneration Committee Meetings were held during the year as the function of these
committees was dealt with by the full Board.
EQUITY HOLIDINGS OF DIRECTORS
18
As at the date of this report, the Directors’ interest in the Company were:
DIRECTORS’ REPORT
Equity shares
Equity options
Performance Rights
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter*
Robin Mills*
600,000
1,590,198
1,456,669
-
-
-
-
6,000,000
4,000,000
1,000,000
666,666
666,666
5,000,000
2,500,000
-
-
-
-
*During the year an allocation of options was made to Messrs Jetter and Mills following approval by shareholders on 11 September
2015. Details of these issues are provided in the Remuneration Report.
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.
FUTURE DEVELOPMENTS
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.
9
PEAK RESOURCES LIMITED – ANNUAL REPORT
17 June 2016 issue of 20,096,476 shares at $0.05 per share to raise A$1,004,824 under the Company’s 10 for 36
entitlement issue.
AFTER BALANCE DATE EVENTS
On the 15 August 2016 the closing of Stage 2 of the Bankable Feasibility (BFS) financing with Appian occurred and subsequent to that
on 22 September 2016 the closing of Stage 2 with IFC. The Stage 2 closure involved a subscription of US$ 2,374,955 into Peak’s
majority owned associate PAM giving Appian and IFC an additional 10% and 2.5% interest respectively. Peak retains a 75% interest
in PAM (Appian 20%, IFC 5%).
On the 20 September 2016 the Company received ~A$4.1m under a term loan facility provided by Appian.
MEETINGS OF DIRECTORS
The number of meetings attended by each Director of the Company during the financial year was:
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Robin Mills
Board Meetings
Number held and
entitled to attend
8
12
12
12
12
12
Number attended
8
12
10
12
11
12
Note – no Audit Committee Meetings or Remuneration Committee Meetings were held during the year as the function of these
committees was dealt with by the full Board.
EQUITY HOLIDINGS OF DIRECTORS
As at the date of this report, the Directors’ interest in the Company were:
Equity shares
Equity options
Performance Rights
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter*
Robin Mills*
-
600,000
1,590,198
1,456,669
-
-
-
6,000,000
4,000,000
1,000,000
666,666
666,666
-
5,000,000
2,500,000
-
-
-
*During the year an allocation of options was made to Messrs Jetter and Mills following approval by shareholders on 11 September
2015. Details of these issues are provided in the Remuneration Report.
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.
PEAK RESOURCES LIMITED – ANNUAL REPORT
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
9
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.
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.
19
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 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 directors
are not provided with any specified 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 and performance rights are valued using the Black-Scholes methodology. Details of options and performance
rights provided to directors are detailed in the Remuneration Report.
The remuneration of non-executive directors has been set at a maximum of $300,000 as approved by shareholders at the 26
Non-executive director remuneration
November 2015 annual general meeting.
Performance based remuneration
executive remuneration packages.
The Company continues to review and consider the inclusion of performance based remuneration component built into director and
The Company has previously, during the 30 June 2015 financial year, issued 2,500,000 vested performance rights and 8,000,000
unvested performance rights. The unvested performance rights vest on achievement of performance milestones:
(i) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for the construction of a rare earth processing
plant for its Ngualla Rare Earth Project and approval of the Board of the Company being received to proceed with construction; or
ii) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for an amount in excess of AUD $50 million
and approval by the Board of such financing.
10
PEAK RESOURCES LIMITED – ANNUAL REPORT
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.
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 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 directors
are not provided with any specified 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 and performance rights are valued using the Black-Scholes methodology. Details of options and performance
rights provided to directors are detailed in the Remuneration Report.
Non-executive director remuneration
The remuneration of non-executive directors has been set at a maximum of $300,000 as approved by shareholders at the 26
November 2015 annual general meeting.
Performance based remuneration
The Company continues to review and consider the inclusion of performance based remuneration component built into director and
executive remuneration packages.
The Company has previously, during the 30 June 2015 financial year, issued 2,500,000 vested performance rights and 8,000,000
unvested performance rights. The unvested performance rights vest on achievement of performance milestones:
(i) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for the construction of a rare earth processing
plant for its Ngualla Rare Earth Project and approval of the Board of the Company being received to proceed with construction; or
ii) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for an amount in excess of AUD $50 million
and approval by the Board of such financing.
10
20
DIRECTORS’ REPORT
PEAK RESOURCES LIMITED – ANNUAL REPORT
The Board consider that the achievement of these milestones will deliver increased shareholder wealth.
The employment agreements for the two additional executive appointments made during the year of Chief Operating Officer –
Development and Executive General Manager Sales, Marketing and Business development provide for provision of discretionary
performance bonuses.
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:
Other income
Net loss before tax
Net loss after tax
2016
$
9,253
2015
$
38,426
2014
$
54,134
2013
$
2,503,930
2012
$
582,143
(15,892,428)
(4,195,877)
(3,148,903)
(2,867,384)
(5,297,738)
(15,892,428)
(4,195,877)
(3,148,903)
(2,867,384)
(5,297,738)
Closing share price at end of year
$0.048
$0.085
Basic loss per share (cents)
Dividends per share
3.95
-
1.13
-
$0.06
1.05
-
$0.13
1.15
-
$0.22
3.01
-
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 and in some instances performance rights 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. Details of directors and executives interests in shares and options at year
end are detailed below.
Details of remuneration
The relevant Key Management Personnel (KMP) of the group for the 2016 financial year were:
Peter Harold – Non-Executive Chairman (Appointed 1 December 2015)
Darren Townsend – Managing Director
David Hammond – Technical Director
Jonathan Murray – Non-Executive Director (Non-Executive Chairman 1 April 2015 to 30 November 2015)
John Jetter- Non-Executive Director (Appointed 1 April 2015)
Robin Mills- Non-Executive Director (Appointed 1 April 2015)
Rocky Smith – Chief Operations Officer (Appointed 6 February 2016)
Michael Prassas – Executive General Manager Sales, Market & Business Development (Appointed 18 February 2016)
Graeme Scott– Chief financial Officer & Company Secretary (Appointed 3 November 2014)
Alastair Hunter – Non-Executive Chairman (Resigned 1 April 2015)
Jeffrey Dawkins – Chief financial Officer & Company Secretary (Resigned 3 November 2014)
Total remuneration for the year was:
Salary and fees
Non-monetary benefits
Superannuation
Share based payments
2016
$
1,257,002
11,835
80,416
298,421
2015
$
951,530
-
63,838
472,726
1,647,674
1,488,094
11
21
PEAK RESOURCES LIMITED – ANNUAL REPORT
Remuneration of individual KMP’s were:
Short term benefits
Post-
employment
benefits
Share based
payments*
Proportion related
to:
Salary &
fees
Non-
monetary
Super-
annuation
Performance
Rights
Options
Total
Equity
Perfor-
mance
30-Jun-16
$
$
$
$
$
$
%
%
Directors
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Robin Mills
Executives
Rocky Smith
Michael Prassas
Graeme Scott
-
40,000
-
351,354
-
281,667
-
39,584
-
39,584
-
39,584
791,773 -
3,800
29,750
26,758
-
-
-
60,308
-
119,348
59,674
-
-
-
179,022
-
42,757
28,505
7126
6011
6011
43,800
543,209
396,604
46,710
45,595
45,595
90,410 1,121,513
153,889
99,673
211,667
465,229
6,913
4,922
-
-
-
20,108
11,835 20,108
12,200
-
6,100
-
-
10,689
- 28,989
173,002
110,695
242,464
526,161
Total remuneration
1,257,002
11,835
80,416
179,022 119,399 1,647,674
0%
8%
7%
15%
13%
13%
8%
7%
6%
4%
6%
7%
0%
22%
15%
0%
0%
0%
16%
0%
0%
0%
0%
11%
30-Jun-15
Directors
Alastair Hunter
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Robin Mills
Executives
Jeffrey Dawkins
Graeme Scott
Salary &
fees
$
Non-
monetary
$
Super-
annuation
$
Performance
Rights
$
Options
Total
Equity
$
$
%
Perfor-
mance
%
-
56,534
-
319,445
-
300,000
-
36,676
-
10,000
10,000
-
732,655 -
5,371
10,103
28,500
-
-
-
43,974
5,250
65,041
153,834
14,614
218,875 - 19,864
-
-
77,967
59,964
137,837
-
-
-
167,039
471,012
520,670
50,259
10,000
10,000
275,768 176,583 1,228,980
27,167
81,500
54,333
13,583
-
-
-
-
8,271
- 20,375
12,104 82,395
176,719
259,114
63%
30%
37%
27%
0%
0%
37%
15%
5%
8%
47%
13%
26%
0%
0%
0%
22%
0%
0%
0%
Total remuneration
951,530
-
63,838
275,768 196,958
1,488,094
52%
18%
*Some options and performance rights are subject to length of service vesting criteria and achievement of performance
milestone vesting criteria.
Options and performance rights granted during the year ended 30 June 2016
Options granted during the year
30-Jun-16
Date of
issue
Number of
options
issued
Value per
Option¹
Total value
of issue $
Vesting
Date²
Exercise
Price
Expiry
Date
Number
vested
during the
year
Directors
John Jetter
Robin Mills
27-Oct-15
27-Oct-15
27-Oct-15
27-Oct-15
333,333 $ 0.013
333,333 $ 0.009
333,333 $ 0.013
333,333 $ 0.009
1,333,332
4,249
3,074
4,249
3,074
14,646
5-Jan-16
5-Jan-17
27-Oct-15
5-Jan-16
$ 0.15 5-Jan-18 333,333
$ 0.20 5-Jan-18 -
$ 0.15 5-Jan-18 333,333
$ 0.20 5-Jan-18 -
666,666
12
22
DIRECTORS’ REPORT
PEAK RESOURCES LIMITED – ANNUAL REPORT
Executives
Rocky Smith
Michael Prassas
Total
17-June-16
17-June-16
17-June-16
17-June-16
2,000,000 $ 0.006
2,000,000 $ 0.004
1,000,000 $ 0.006
1,000,000 $ 0.004
6,000,000
7,333,332
11,734
7,270
5,867
3,635
28,506
43,152
17-June-16
5-Jan-17
17-June-16
5-Jan-17
$ 0.15 5-Jan-18
$ 0.20 5-Jan-18
$ 0.15 5-Jan-18
$ 0.20 5-Jan-18
2,000,000
-
1,000,000
-
3,000,000
3,666,666
1. Options are valued using the Black-Scholes method on date of grant
2.
The unvested $0.20 options vest after continuous service on 5 January 2017.
Options granted during the year ended 30 June 2015
Number of
options
issued
Value per
Option¹
Total value
of issue
Vesting
Date²
Exercise
Price
Expiry
Date
Number
vested
during the
year
30-Jun-15
Directors
Jonathan Murray
Alastair Hunter
Darren Townsend
David Hammond
Executives
Jeffrey Dawkins
Graeme Scott
Total
Date of
issue
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
5-Jan-15
333,334 $ 0.024
333,333 $ 0.024
333,333 $ 0.019
666,667 $ 0.024
666,667 $ 0.024
666,666 $ 0.019
2,000,000 $ 0.024
2,000,000 $ 0.024
2,000,000 $ 0.019
1,333,334 $ 0.024
1,333,333 $ 0.024
1,333,333 $ 0.019
13,000,000
5-Jan-15
5-Jan-15
5-Jan-15
500,000 $ 0.024
500,000 $ 0.024
500,000 $ 0.019
1,500,000
14,500,000
8,069
7,997
6,424
16,139
15,993
12,847
48,416
47,980
38,542
32,277
31,987
25,695
292,366
12,104
11,995
9,636
33,735
326,101
5-Jan-15
5-Jan-16
5-Jan-17
5-Jan-15
5-Jan-16
5-Jan-17
5-Jan-15
5-Jan-16
5-Jan-17
5-Jan-15
5-Jan-16
5-Jan-17
5-Jan-15
5-Jan-16
5-Jan-17
$ 0.10 5-Jan-17 333,334
$ 0.15 5-Jan-18 -
$ 0.20 5-Jan-18 -
$ 0.10 5-Jan-17 666,667
$ 0.15 5-Jan-18 -
$ 0.20 5-Jan-18 -
$ 0.10 5-Jan-17 2,000,000
$ 0.15 5-Jan-18 -
$ 0.20 5-Jan-18 -
$ 0.10 5-Jan-17 1,333,334
$ 0.15 5-Jan-18 -
$ 0.20 5-Jan-18 -
4,333,335
$ 0.10 5-Jan-17 500,000
$ 0.15 5-Jan-18 -
$ 0.20 5-Jan-18 -
500,000
4,833,335
No Performance Rights granted during the year ended 30 June 2016.
Performance Rights granted during the year ended 30 June 2015
30-Jun-15
Directors
Alastair Hunter
Date of
issue
Number of
performance
rights issued
value per
performance
right
Total value
of issue
vesting
date
exercise
price
Expiry
date
Number
vested during
the year
5-Jan-15 1,000,000
$ 0.072 72,000 5-Jan-15
$ - 5-Jan-18 1,000,000
Darren Townsend
5-Jan-15 500,000
5,000,000
5-Jan-15
$ 0.072 36,000
360,000
$ 0.072
**
**
$ - 5-Jan-18 -
$ - 5-Jan-18
-
David Hammond
5-Jan-15 1,500,000
$ 0.072 108,000 5-Jan-15
$ - 5-Jan-18 1,500,000
Total
5-Jan-15 2,500,000
10,500,000
$ 0.072 180,000
756,000
**
$ - 5-Jan-18 -
2,500,000
** Vest on achievement of performance milestones
13
23
Shareholdings of KMP’s
30-Jun-16
Directors
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
Robin Mills
John Jetter
Executives
Rocky Smith
Michael Prassas
Graeme Scott
PEAK RESOURCES LIMITED – ANNUAL REPORT
Opening
Balance
Granted as
Remuneration
Exercise of
Options/PRs Cancelled
Market
Transactions
Closing
Balance
-
-
70,589
1,140,001
-
-
1,210,590
-
-
- 1,500,000 -
- -
-
- -
- - 600,000
-
-
600,000
-
-
-
-
-
1,500,000
-
-
-
19,609*
316,668*
-
-
1,590,198
1,456,669
-
-
936,277
3,646,867
-
-
-
-
-
-
- -
- -
- -
-
-
- -
-
-
-
-
- -
-
-
Total
1,210,590
- 1,500,000 -
936,277
3,646,867
*Participation in the Company’s 10 for 36 entitlement issue.
The 1,500,000 shares issued on exercise of Performance Rights had a market value of $97,500 ($0.065 per share) on the date
of issue.
Option Holdings of KMP’s including performance rights
30-Jun-16
Opening
Balance
Granted as
Remuneration
Exercise of
Options &
PRs
Expired/
Cancelled
Market
Transactions
Closing
Balance
Vested at 30
June
Directors
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
Robin Mills
John Jetter
Executives
Rocky Smith
Michael Prassas
Graeme Scott
-
11,000,000
8,000,000
1,000,000
-
-
-
-
-
-
666,666
666,666
(1,500,000)
-
-
-
-
-
-
- - -
-
-
4,000,000
11,000,000
- 6,500,000 2,666,667
666,667
333,333
333,333
1,000,000
666,666
666,666
-
-
-
-
-
20,000,000
1,333,332
(1,500,000)
-
-
1,000,000
4,000,000
2,000,000
-
-
-
- - -
-
-
-
-
-
1,000,000
6,000,000
-
Total
21,000,000
7,333,332
(1,500,000)
-
-
-
-
Performance income as a proportion of total income
No performance based bonuses have been paid to directors or executives during the financial year.
24
DIRECTORS’ REPORT
-
-
-
19,833,332
8,000,000
4,000,000
2,000,000
1,000,000
2,000,000
1,000,000
500,000
7,000,000
3,500,000
26,833,332
11,500,000
14
PEAK RESOURCES LIMITED – ANNUAL REPORT
Service agreements:
The key terms of the service agreements with the KMP’s are:
Darren Townsend – Managing Director
Darren is employed under an Executive Service Agreement (ESA). The agreement provides for an annual salary of $328,500
(previously $400,000) inclusive of superannuation effective 1 May 2016, plus a fully expensed vehicle (not currently taken),
expenses, discretionary bonuses, options and performance rights. The Executive is entitled to leave in accordance with the
relevant legislation. Darren’s engagement has no fixed term but is subject to a six month notice period from either party.
Dave Hammond – Technical Director
Dave is employed under an ESA. The agreement provides for an annual salary of $250,000 (previously $300,000) effective 1 May
2016, plus superannuation, expenses, and eligibility for options. The Executive is entitled to leave in accordance with the relevant
legislation. Dave’s engagement has no fixed term but is subject to a three month notice period from either party.
Peter Harold – Non-Executive Chairman (appointed 1 December 2015)
Under Peter’s agreement annual directors fees of $60,000 (previously $70,000) effective 1 June 2016, plus superannuation are
payable. No retirement benefits are provided for.
Jonathan Murray / John Jetter / Robin Mills - Non-Executive Directors
Non-Executive Directors are appointed by letter agreement with no fixed term ceasing on resignation or removal as a director in
accordance with the Corporations Act. Fees are currently set at $35,000 (previously $40,000) per annum effective 1 June 2016.
No retirement benefits are provided for.
Rocky Smith – Chief Operating Officer - Development (appointed 6 February 2016)
Rocky is employed under an ESA. The agreement provides for an annual salary of $377,775 inclusive of superannuation, plus
private health and life cover, annual airfares, expenses, discretionary performance bonuses and options. The Executive is entitled to
leave in accordance with the relevant legislation. Rocky’s engagement has no fixed term but is subject to a three month notice period
from either party.
Michael Prassas – Executive General Manager Sales, Marketing and Business Development (appointed 18 February 2016)
Michael is employed under an ESA. The agreement provides for an annual salary of $250,000, plus superannuation, plus private
health, annual airfares, expenses, discretionary performance bonuses and options. The Executive is entitled to leave in accordance
with the relevant legislation. Michael’s engagement has no fixed term but is subject to a six month notice period from either party.
Graeme Scott – CFO & Company Secretary (appointed 3 November 2014)
Graeme is employed under an ESA. The agreement provides for an annual salary of $220,000 (previously $200,000) effective 1
December 2015, plus superannuation, expenses, and eligibility for options. The Executive is entitled to leave in accordance with the
relevant legislation. Graeme’s engagement has no fixed term but is subject to a three month notice period from either party.
Other transactions
During the year Steinepreis Paganin Lawyers and Consultants a legal practice associated with Mr Jonathan Murray received
$202,883 (2015: $365,711) as fees for the provision of legal advice. Balance outstanding at 30 June 2016 and included in trade
creditors $26,470 (30 June 2015: $4,276).
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.
(End of Remuneration Report)
OPTIONS AND PERFORMANCE RIGHTS
At the date of this report
Unissued ordinary shares of the Company under option to service providers only are:
Expiry Date
20 February 2017
3 March 2018
5 June 2017
Exercise Price
Number under option
$0.55
$0.55
$0.15
6,250,000
150,000
2,500,000
15
25
PEAK RESOURCES LIMITED – ANNUAL REPORT
Unissued ordinary shares of the Company under option to directors, former directors and employees are:
Expiry Date
5 January 2017
5 January 2018
5 January 2018
Exercise Price
Number under option
$0.10
$0.15
$0.20
6,383,334
10,049,999
10,049,999*
*Vesting subject to length of service criteria
Unissued ordinary shares of the Company under Performance Right to directors and former directors are:
Expiry Date
5 January 2018
Exercise Price
$0.00
Number under option
8,000,000#
#Vest on achievement of performance milestones
Option or rights holders do not have any right, by virtue of the option or right to participate in any share issue of the Company or any
related body corporate.
2,500,000 ordinary shares were issued as a result of the exercise of Performance Rights by a director and former director during the
financial year ended 30 June 2016.
Details of options and performance rights issued during the year are detailed in the Remuneration 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 2016 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 5 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).
PEAK RESOURCES LIMITED – ANNUAL REPORT
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,
Peter Harold
Non-executive Chairman
Perth, 28 September 2016
26
DIRECTORS’ REPORT
16
17
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
As lead auditor for the audit of Peak Resources Limited for the financial year ended 30 June 2016, I
declare to the best of my knowledge and belief, there have been:
a. no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Peak Resources Limited and the entities it controlled during the financial
period.
Ernst & Young
D A Hall
Partner
Perth
28 September 2016
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
27
18
DH:VH:PEAK:012
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 2016, 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
copy of which is included in the directors’ report.
28
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
19
DH:VH:PEAK:013
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 2016
and of its performance for the year ended on that date;
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.
Emphasis of matter
Without qualifying our opinion, we draw attention to Note 2(a) of the financial report which describes the
principal conditions that raise doubt about the entity’s ability to continue as a going concern. These
conditions indicate the existence of an uncertainty that may cast significant doubt about the company’s
ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its
assets and discharge its liabilities in the normal course of business.
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2016. 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 2016,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
D A Hall
Partner
Perth
28 September 2016
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
29
20
DH:VH:PEAK:013
PEAK RESOURCES LIMITED – ANNUAL REPORT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 30 June 2016
Note
2016
$
5
5
4
3
8
Finance income
Total income
Employee benefits expenses
Share based payments expenses
Impairment of capitalised exploration costs
Depreciation expenses
Borrowing costs
Administrative and other costs
Technical feasibility costs
Share of loss of associate
Gain recognised on disposal of former subsidiary
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive /income/(loss), net of tax
Items that could be transferred to profit or loss in future:
Exchange differences on translation of foreign operations
Recycled to the profit and loss on disposal of former subsidiary
Group’s share of associate’s other comprehensive income
2015
$
38,426
38,426
(964,718)
(535,597)
(1,915)
(37,757)
(504,130)
(2,190,186)
-
-
-
9,253
9,253
(1,088,331)
(416,680)
-
(14,987)
(76,917)
(823,953)
(4,420,592)
(15,908,627)
6,848,406
(15,892,428)
(4,195,877)
-
-
(15,892,428)
(4,195,877)
(25,138)
(1,273,526)
1,533,916
942,416
-
-
Total comprehensive loss for the year
(15,657,176)
(3,253,461)
Loss per share (in cents)
Basic and Diluted loss per share
7
(3.95)
(1.26)
The statement should be read in conjunction with the accompanying notes
30
21
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
PEAK RESOURCES LIMITED – ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
Note
2016
$
2015
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other Financial Assets
Other assets – due from associate
Prepayments
Assets held for sale – investment in associate
Total current assets
Non-current assets
Property plant and equipment
Capitalised exploration and evaluation costs
Investment in associate
Investments
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Short term loans
Total current liabilities
Non-current liabilities
Other payables
Loans and borrowings – due to associate
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
9
10
11
4
12
13
4
14
15
16
17
15
17
19
18
1,723,830
125,002
55,000
2,890,821
32,336
3,692,430
8,519,419
2,943,861
993,819
99,500
-
453,423
-
4,490,603
27,594
85,143
-
39,784,186
22,154,579
8,000
22,190,173
30,709,592
-
8,000
39,877,329
44,367,932
1,372,578
186,618
-
1,896,829
94,226
8,917,700
1,559,196
10,908,755
45,256
2,213,599
2,258,855
3,818,051
-
-
10,908,755
26,891,541
33,459,177
63,828,274
3,315,921
54,943,414
2,875,989
(40,252,654)
(24,360,226)
26,891,541
33,459,177
The statement should be read in conjunction with the accompanying notes
22
31
PEAK RESOURCES LIMITED – ANNUAL REPORT
CONSOLIDATED STATEMENT
OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2016
Note
2016
$
2015
$
(5,518,853)
(3,167,620)
OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Finance costs paid
Borrowing costs paid
Cash used in operating activities
9
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Proceeds from disposal of former subsidiary
Payment for exploration and evaluation costs
Cash used in investing activities
FINANCING ACTIVITIES
Proceeds from issue of equity shares
Reduction in performance bonds – restricted cash
Costs of issuing equity shares
(Repayment of) / Proceeds from borrowings
Borrowings from associate
Loans to associate
Cash generated from financing activities
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
9
The statement should be read in conjunction with the accompanying notes
32
7,988
-
(153,175)
(5,664,040)
(27,194)
5,184,950
-
5,157,756
9,266,663
44,500
(593,802)
(8,917,700)
1,134,166
(1,769,119)
(835,292)
(1,341,576)
2,943,861
121,545
1,723,830
39,996
(18,012)
(37,692)
(3,183,328)
(31,276)
-
(4,672,130)
(4,703,406)
31,749
4,500
-
8,917,700
-
-
8,953,949
1,067,215
1,889,474
(12,828)
2,943,861
23
PEAK RESOURCES LIMITED – ANNUAL REPORT
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2016
Contributed
Equity
$
54,911,664
-
-
-
31,750
-
54,943,414
-
-
-
-
9,298,662
180,000
-
(593,802)
63,828,274
Share
based
payment
reserve
$
1,066,866
-
-
-
-
535,597
1,602,463
-
-
-
-
(32,000)
(180,000)
416,680
-
1,807,143
Foreign
currency
translation
reserve
$
331,110
-
942,416
942,416
-
-
1,273,526
-
(1,298,664)
1,533,916
235,252
-
-
-
-
1,508,778
Accumulated
losses
$
(20,164,349)
(4,195,877)
-
(4,195,877)
-
-
(24,360,226)
(15,892,428)
-
-
(15,892,428)
-
-
-
-
(40,252,654)
Total equity
$
36,145,291
(4,195,877)
942,416
(3,253,461)
31,750
535,597
33,459,177
(15,892,428)
(1,298,664)
1,533,916
(15,657,176)
9,266,662
-
416,680
(593,802)
26,891,541
At 30 June 2014
Loss for the year 2015
Other comprehensive income
Total comprehensive loss for the year
Equity issued
Equity based payments
At 30 June 2015
Loss for the year 2016
Other comprehensive income
Group’s share of associate’s other
comprehensive income
Total comprehensive loss for the year
Equity issued
Performance Rights exercised
Equity based payments
Transaction costs
At 30 June 2016
The statement should be read in conjunction with the accompanying notes
24
33
NOTES TO FINANCIAL
STATEMENTS
PEAK RESOURCES LIMITED – ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Peak Resources Limited for the year ended 30 June 2016 was authorised for issue in accordance with a
resolution of the directors on 23 September 2016.
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 Available for sale (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 Group has net current assets of $6,960,223 (2015: net current liabilities $6,418,152) and incurred an operating cash outflow after
income tax of $5,664,040 (30 June 2015: $3,183,328) for the year ended 30 June 2016. The Group’s ability to continue as a going
concern and meet its debts as and when they fall due is dependent on the ability to raise additional capital.
As noted in the Directors Report in the After Balance Date Events section the following funding for the Company and development of
the Ngualla project has been secured:
Subsequent to the year end the Company is in the process of completing a placement of the Entitlement Issue shortfall to Appian and
IFC for A$815,348 and has received ~A$4.1m on draw down of the long term loan facility provided by Appian.
In addition and following receipt of final regulatory approvals a total of ~A$3.1 was received in August and September 2016 by Peak’s
majority owned associated company Peak African Minerals from the Stage 2 Ngualla project financing.
In the directors’ opinion, there are reasonable grounds to believe that the Company has the ability to raise further funding as and when
required. However, in the event additional funding is not forthcoming the Group may be unable to continue as a going concern. No
adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Group not continue as a going concern.
b) Adoption of new or revised accounting standards
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The mandatory adoption of Australian Accounting Standards and Interpretations that have come into effect in the current financial
reporting period have not had a material impact on the amounts reported in the Group.
Standards and Interpretations in issue not yet adopted
A number of new Standards, amendment of Standards and interpretations have recently been issued but are not yet effective and
have not been adopted by the Group as at the financial reporting date. The potential effect of these Standards is yet to be fully
determined. However, it is not expected that the new or amended Standards will significantly affect the Group’s accounting policies,
financial position or performance, except for the following:
34
NOTES TO FINANCIAL STATEMENTS
25
PEAK RESOURCES LIMITED – ANNUAL REPORT
Title
Summary
AASB 9 – Financial Instruments
A finalised version of AASB 9 which contains accounting requirements for financial instruments,
replacing AASB 139 Financial Instruments: Recognition and Measurement. The standard contains
requirements in the areas of classification and measurement, impairment, hedge accounting and
de-recognition.
AASB 2014-3 - Accounting for
Acquisitions of Interests in Joint
Operations (AASB1 & AASB11)
AASB 11 Joint Arrangements now provides guidance on the accounting for acquisitions of
interests in joint operations in which the activity constitutes a business. The impact of this change
to the Group is that such acquisitions will be accounted for as business combinations and not
asset acquisitions.
AASB 15 - Revenue from Contracts
with Customers
AASB 15 provides a single, principles-based five-step model to be applied to all contracts with
customers. Guidance is provided on topics such as the point in which revenue is recognised,
accounting for variable consideration, costs of fulfilling and obtaining a contract and various
related matters. New disclosures about revenue are also introduced.
AASB16 – Leases
IFRS 16 provides a new lessee accounting model which requires a lessee to recognise assets
and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of
low value. A lessee measures right-of-use assets similarly to other non-financial assets and lease
liabilities similarly to other financial liabilities. Assets and liabilities arising from a lease are initially
measured on a present value basis. The measurement includes non-cancellable lease payments
(including inflation-linked payments), and also includes payments to be made in optional periods if
the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an
option to terminate the lease. IFRS 16 contains disclosure requirements for lessees.
Application date for
Group
1 July 2018
1 July 2018
1 July 2018
1 July 2019
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 2016. 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.
If the Group loses control over a subsidiary, it derecognises the related assets, liabilities, non-controlling interest and other
components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair
value. 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.
26
35
PEAK RESOURCES LIMITED – ANNUAL REPORT
d) Investment in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee, but is not control or joint control over those policies. The Group’s
investments in its associates are accounted for using the equity method. Under the equity method, the investment in an associate is
initially measured at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets
of the associate since the entity became an associate.
The statement of profit or loss reflects the Group’s share of the results of operations of the associate. Any change in other
comprehensive income (OCI) of those investees is presented as part of the Group’s OCI. In Addition when there has been a change
recognised directly in the equity of an associate, the Group recognises its share of any changes, when applicable, in the statement of
changes in equity. Unrealised gains or losses resulting from transactions between the Group and associate are eliminated to the
extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss outside
operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate. The financial
statement of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to
bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its
investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in
the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value, and then recognises the loss as ‘Share of profit of an associate’ in the
statement of profit or loss.
Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any
difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment
and proceeds from disposal is recognized in profit and loss.
e) 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.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in
other comprehensive income or profit or loss, respectively).
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.
f) 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.
36
NOTES TO FINANCIAL STATEMENTS
27
PEAK RESOURCES LIMITED – ANNUAL REPORT
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.
g) 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.
h) 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.
i) 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.
28
37
PEAK RESOURCES LIMITED – ANNUAL REPORT
j) 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.
Basic earnings per share
k) Earnings per share
a.
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 EPS is calculated as the net profit attributable to members, adjusted for:
Diluted earnings per share
• costs of servicing equity (other than dividends) and;
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and,
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary
shares divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
l) 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; (v) short term loans; and (vi) other financial assets, including bank deposits.
m) 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.
n) 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.
o) 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
38
NOTES TO FINANCIAL STATEMENTS
29
PEAK RESOURCES LIMITED – ANNUAL REPORT
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.
p) 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.
q) Trade and Other Payables
Trade payables and other payables are initially recognised at fair value, then carried at amortised cost. 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.
30
39
PEAK RESOURCES LIMITED – ANNUAL REPORT
r) 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.
s) 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).
The current plans in place to provide these benefits is the Employee Option Plan (EOP) and Performance Rights Plan (PRP), which
provides benefits to directors, senior executives and other eligible participants as determined by the Board; 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 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.
t) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are
expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
40
NOTES TO FINANCIAL STATEMENTS
31
PEAK RESOURCES LIMITED – ANNUAL REPORT
u) 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.
Capitalisation of Exploration and Evaluation
The Group assesses the criteria on which exploration and evaluation expenditure is capitalised based on the criteria in Note 2(p).
32
41
PEAK RESOURCES LIMITED – ANNUAL REPORT
3. DE-CONSOLIDATION OF PEAK AFRICAN MINERALS AS A SUBSIDIARY AND RECOGNITION AS AN
ASSOCIATE
Pursuant to the closing of stage 1 of the financing transaction with Appian and IFC on 24 July 2015, in which Appian and IFC acquired
a direct 12.5% interest in Peak African Minerals (PAM), the company that held the interests in the Group’s Ngualla project, it has been
determined that Peak Resources no longer solely controls nor does it have joint control of PAM despite maintaining its majority
ownership and beneficial interests in PAM. The company has determined that based on its involvement in the PAM Board (albeit it
does not control the Board decisions) along with its ownership interest in the company, Peak Resources is deemed to have significant
influence over PAM and accordingly is considered to be an associate under Australian Accounting Standards. In accordance with the
requirements of Australian Accounting Standards, the PAM Group has been deconsolidated from the Peak Group effective July 2015
and the retained interest in PAM has been re-measured at its fair value, being the deemed cost on initial recognition of Peak’s
investment in the associate. Fair value has been determined with reference to the implied market value of the Appian and IFC payment
which is an arms-length transaction therefore the Directors believe this represents fair value in an orderly transaction. The fair value is
level 3 per the fair value hierarchy.
The Company has recorded a gain of $6,848,406 on the disposal of the interest in the PAM Group and the recognition of the
investment in the associate at fair value. Set out below are the notional fair values of the PAM Group on the date it became an
associate and Peak’s share of the equity accounted investment.
$USD*
Carrying amounts prior to
de-consolidation
July 2015
$USD*
$AUD*
Fair values
Fair values
Balance Sheet
Current Assets
Cash & Cash Equivalents
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Property, plant & equipment
Exploration & Evaluation
Total Non-Current Assets
Total Assets
Current Liabilities
Trade Creditors & Accruals
Total Current Liabilities
Non-Current Liabilities
Interest bearing loans and
borrowings
Total Non-Current Liabilities
Total Liabilities
Net Assets
3,897,220
329,624
94,877
4,321,721
55,420
30,464,956
30,520,376
34,842,097
(386,778)
(386,778)
(4,063,415)
(4,063,415)
(4,450,193)
30,391,904
3,897,220
329,624
94,877
4,321,721
55,420
35,273,052
35,328,472
39,650,193
(386,778)
(386,778)
(4,063,415)
(4,063,415)
(4,450,193)
35,200,000
Peak Resources Limited 87.5% share of PAM investment
5,089,379
430,456
123,900
5,643,735
72,373
46,063,079
46,135,452
51,779,187
(505,093)
(505,093)
(5,306,413)
(5,306,413)
(5,811,506)
45,967,681
40,221,720
* PAM is considered to have a functional currency of US dollars and for the purposes of recognising its results in the Peak Resources
Group the financial statements are translated to an Australian dollar presentational currency.
Fair value of Peak Resources investment in associate (87.5%)
Less net assets (AUD) of PAM Group de-consolidated from Peak Resources*
Recycle of FCTR on disposal of subsidiary
Gain on disposal of interest in controlled entity*
42
NOTES TO FINANCIAL STATEMENTS
$AUD
40,221,720
(34,646,840)
1,273,526
6,848,406
33
PEAK RESOURCES LIMITED – ANNUAL REPORT
4. INVESTMENTS IN ASSOCIATES
As set out in Note 3, the Group has an 87.5% interest in Pan African Minerals (PAM), a company domiciled in Mauritius, that
owns 100% of the shares in PR NG Minerals Limited (“PRNG”), the 100% owner of the Ngualla Project in Tanzania. The
Group’s interest in PAM is accounted for using the equity method in the consolidated financial statements. The following table
illustrates the summarised financial information of the Group’s investment in PAM:
$AUD
July 2015
5,643,735
46,135,452
505,093
5,306,413
45,967,681
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Income
Administrative costs
Employee benefits
Depreciation and amortisation expenses
Other expenses(1)
Finance costs
Loss before income tax expense
Income tax expense
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Group's share of loss for the period
Group's share of movement of other comprehensive income for the
period
Peak Resources investment in associate:
Opening balance (note 3)
Less Group’s share of loss in the associate for the period
Add Group’s share of movement in other comprehensive income in the
associate for the period
Investment in associate
Classified in the statement of financial position as:
Asset held for sale – investment in associate(2)
Investment in associate
Investment in associate
$AUD
30 June 2016
305,457
41,246,479
4,429,558
7,582,939
29,539,439
46,839
(468,689)
(101,977)
(33,084)
(16,325,659)
(1,298,718)
(18,181,288)
-
(18,181,288)
1,753,047
(16,428,241)
(15,908,627)
1,533,916
40,221,720
(15,908,627)
1,533,916
25,847,009
3,692,430
22,154,579
25,847,009
(1) Included in this amount is an impairment expense of AUD$15,472,510, as sufficient data exists to indicate that, although a
development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset may not be
recovered in full from successful development or by sale. The impairment charge is made with reference to the fair value of the
project implied by the negotiated transaction between the shareholders of PAM, being Peak Resources Limited, Appian and IFC,
34
43
PEAK RESOURCES LIMITED – ANNUAL REPORT
which is an arms-length transaction therefore the Directors believe this represents fair value in an orderly transaction relating to
Stage 2 of the financing arrangement. The fair value is level 3 per the fair value hierarchy.
(2) Based on the transaction in (1) which settled on 15 August 2016 following receipt of regulatory approval, the portion of the
associate subject to disposal has been re-classified as a current asset held for sale.
5. INCOME AND EXPENDITURE ITEMS
Included in loss for the year are:
Interest received
Gain on sale of non-current assets
Australian R&D rebate receivable
Total other income
Occupancy costs
Listing compliance costs
Travel & accommodation
Technical feasibility costs(1)
2016
$
2015
$
9,253
38,426
-
-
-
-
-
-
(219,990)
(72,043)
(166,072)
(4,420,592)
(234,608)
(63,644)
(350,598)
-
(1) Feasibility costs incurred by the Group are expensed as incurred. In the previous period these may have been capitalised to
exploration and evaluation costs in the subsidiary disposed depending on the application of the Group’s accounting policy.
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
33,670
-
33,670
8,378
-
8,378
25,000
-
25,000
18,012
-
18,012
44
NOTES TO FINANCIAL STATEMENTS
35
PEAK RESOURCES LIMITED – ANNUAL REPORT
6. 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 chief operating decision makers include the board of
directors. The Group’s reportable segments under AASB 8 are as follows:
Exploration & Development (E&D) – Group’s exploration and development activities for the Ngualla project 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 2016
30 June 2015
Finance income
Other income
Total income
Depreciation and amortisation
Impairment of exploration and
evaluation costs
Impairment of Investments
Share based payment expenses
Borrowing costs
Gain on disposal of former
subsidiary
Share of loss of associate
Technical feasibility costs
Other expenses
Income Tax
Segment results
Segment assets
Segment liabilities
Additions to non-current
assets:
Plant and equipment
Investment in associate
Capitalised exploration &
evaluation costs
E&D
$
Unallocated
Total
E&D
Unallocated
Total
$
$
$
$
$
-
-
-
9,253
-
9,253
9,253
-
9,253
-
-
-
38,426
38,426
-
-
38,426
38,426
(2,418)
(12,569)
(14,987)
(21,548)
(16,209)
(37,757)
-
-
-
-
-
-
-
-
-
(416,680)
(416,680)
(76,917)
(76,917)
6,848,406
6,848,406
-
-
(15,908,627)
(4,420,592)
(1,915)
-
(1,915)
-
-
-
-
-
-
4,000
4,000
(535,597)
(535,597)
(297,226)
(297,226)
-
-
-
-
-
-
(1,912,284)
(1,912,284)
1,255,951
(4,621,759)
(3,365,808)
-
-
-
-
-
(15,908,627)
(4,420,592)
-
-
(20,331,637)
4,439,209
(15,892,428)
1,232,488
(5,428,365)
(4,195,877)
25,847,009
4,862,583
30,709,592
40,949,243
3,418,689
44,367,932
-
(3,818,051)
(3,818,051)
(4,435,887)
(6,472,868)
(10,908,755)
-
22,154,579
-
22,154,579
27,194
-
27,194
22,154,579
22,779
8,497
31,276
-
-
5,849,868
-
5,849,868
27,194
22,181,773
5,872,647
8,497
5,881,144
7. 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 based on reported losses after tax as set out in the
Statement of Comprehensive Income
2016
Cents
(3.95)
Nos.
2015
Cents
(1.26)
Nos.
Weighted average number of ordinary shares used in calculating
Basic & Diluted loss per share
Anti-dilutive options over ordinary shares and performance rights excluded from the
weighted average number of shares
402,377,186
334,230,002
43,383,332
36,050,000
36
45
PEAK RESOURCES LIMITED – ANNUAL REPORT
8. INCOME TAX
a.
The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
2016
$
2015
$
-
-
-
-
-
-
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%
(2014: 30%)
(4,697,153)
(1,258,763)
Add tax effect of:
- Assessable items
- Revenue losses not recognised
- Other non-allowable items
Less tax effect of:
- Other deferred tax balances not recognised
- Australian R&D rebate
Income tax expense reported in statement of comprehensive income
c.
Deferred tax recognised:
Deferred tax liabilities:
Investment in associate
Accrued interest
Other
Deferred tax assets:
Carry forward revenue losses
Provisions and accruals
Net deferred tax
d.
Unrecognised deferred tax assets:
Carry forward revenue losses
Carry forward capital losses
Capital raising costs
Provisions and accruals
Other
12,114
672,306
6,248,951
2,236,218
111,121
2,125,097
-
(7,754,102)
(353)
(986)
5,067,533
2,687,908
-
-
295,504
291,678
4,133,969
-
-
524,342
639,947
94,474
94,474
-
-
-
(730)
(1,106)
1,836
-
-
4,777,845
73,303
405,880
115,073
3,922
The unrecognised deferred tax assets derive from $985,013 of carried forward capital losses and deductible temporary
differences totalling $14,752,157.
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.
4,721,151
5,376,023
37
46
NOTES TO FINANCIAL STATEMENTS
PEAK RESOURCES LIMITED – ANNUAL REPORT
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 2016, 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.
9. 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 disposal of former subsidiary
Share of loss of associate
Share based payments expenses
Impairment of capitalised exploration costs
Depreciation expenses
Foreign exchange gain/loss
Other non-cash items
Movement in working capital items:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in prepayments
Increase / (decrease) in trade and other payables
Increase in provisions
Material non-cash transactions:
2016: No material non-cash transactions occurred during the year.
2015: No material non-cash transactions occurred during the year.
2016
$
2015
$
1,679,330
44,500
1,723,830
1,443,861
1,500,000
2,943,861
(15,892,428)
(4,195,877)
(6,848,406)
15,908,627
416,680
-
14,987
(121,545)
-
868,817
421,086
(524,250)
92,392
-
-
535,597
1,915
37,757
(222,495)
(4,000)
(264,669)
(308,419)
1,230,699
6,164
(5,664,040)
(3,183,328)
38
47
PEAK RESOURCES LIMITED – ANNUAL REPORT
10. TRADE AND OTHER RECEIVABLES
Current
GST / Vat receivable
Other receivable
Ageing of receivables
Recoverable within 3 months
Beyond 3 months
Receivables are non-interest bearing and unsecured
11. OTHER FINANCIAL ASSETS
Bank Term Deposit
2016
$
2015
$
121,478
3,524
125,002
125,002
-
125,002
987,846
5,973
993,819
83,988
909,831
993,819
2016
$
55,000
55,000
2015
$
99,500
99,500
A deposit of $55,000 (2015: $99,500) has been secured against two guarantees issued by the bank as rental deposits for office
leases. This cash balance is not available for withdrawal until the guarantee is withdrawn.
12. 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 / de-recognised on disposal of former subsidiary
Depreciation for the year
Balance at the end of the year
48
NOTES TO FINANCIAL STATEMENTS
2016
$
2015
$
110,079
(82,485)
27,594
85,143
27,194
(69,756)
(14,987)
27,594
247,530
(162,387)
85,143
91,624
31,276
-
(37,757)
85,143
39
PEAK RESOURCES LIMITED – ANNUAL REPORT
13. 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)
De-recognised on disposal of former subsidiary
Balance at the end of the year
Capitalised areas of interest:
Ngualla Rare Earths Project, Tanzania
2016
$
2015
$
39,784,186
-
-
(39,784,186)
-
-
-
33,936,233
5,849,868
(1,915)
-
39,784,186
39,784,186
39,784,186
(a) 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.
14. AVAILABLE FOR SALE FINANCIAL ASSETS
Investment in listed shares – at fair value (Level 1)
15. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Non-current
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
2016
$
2015
$
8,000
8,000
8,000
8,000
2016
$
2015
$
1,372,578
1,896,829
45,256
-
1,372,578
45,256
1,417,834
1,896,829
-
1,896,829
40
49
PEAK RESOURCES LIMITED – ANNUAL REPORT
16. PROVISIONS
Employee benefits - leave entitlements
17. LOANS AND BORROWINGS
Current:
Appian Loan - USD $3,000,000
Appian Loan – AUD $5,000,000
Balance at the end of the year
Non-current:
Working capital loan facility – Peak African Minerals
Balance at the end of the year
2016
$
2015
$
186,618
94,226
2016
$
-
-
-
2015
$
3,917,700
5,000,000
8,917,700
2,213,599
2,213,599
-
-
Current -All current shot-term loan facilities together with applicable interest were repaid to Appian on 26 July 2015.
Non-current – majority owned associate company Peak African Minerals has provided a working capital loan facility of up to
US$4,209,317 of which US$1,881,718 remains available for drawdown at the end of the financial year. The facility is repayable
the earlier of 29 March 2021 or on the commencement of commercial production from the Ngualla project. Interest accrues at
8% per annum until repayment.
18. RESERVES
Share based
payment reserve
Foreign currency
translation reserve
At 30 June 2014
Share based payment made in 2015
Exchange difference on translation of foreign operations
At 30 June 2015
Share based payment made in 2016
Equity issued
Performance Rights exercised
Recycled to profit and loss on disposal of former subsidiary
Group’s share of associates FCTR
Exchange difference on translation of foreign operations
At 30 June 2016
$
1,066,866
535,597
-
1,602,463
416,680
(32,000)
(180,000)
-
-
-
1,807,143
Total
$
$
331,110
1,397,976
942,416
535,597
942,416
1,273,526
2,875,989
-
-
-
416,680
(32,000)
(180,000)
(1,273,526)
(1,273,526)
1,533,916
(25,138)
1,508,778
1,533,916
(25,138)
3,315,921
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.
50
NOTES TO FINANCIAL STATEMENTS
41
PEAK RESOURCES LIMITED – ANNUAL REPORT
19. CONTRIBUTED EQUITY
Balance at 30 June 2014
Nos.
$
334,229,133
54,911,664
Exercise of Options at $0.10 per share
30-Jun-15
317,498
31,750
Equity issue costs
Balance at 30 June 2015
Issue of shares to Appian and IFC at $0.09 per share
Issue of shares on exercise of performance rights
Issue of shares to Kibuta Ongwamahuna
Issue of shares on conversion of loan notes at $0.103 per
share
Issue of shares pursuant to a placement at $0.05 per
share
Issue of shares pursuant to 10 for 36 entitlement issue at
$0.05 per share
Equity issue costs
24-Jul-15
28-Aug-15
27-Oct-15
30-Dec-15
4-May-2016 & 5-
May-2016
17-Jun-16
-
334,546,631
54,943,414
50,134,369
2,500,000
500,000
4,512,094
180,000
32,000
26,696,558
2,749,744
20,000,000
1,000,000
20,096,476
1,004,824
(593,802)
Balance at 30 June 2016
454,474,034
63,828,274
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
At the end of the reporting period, there were 43,383,332 options over unissued shares as follows:
Options over Ordinary Shares
Date of expiry/
exercise or issue
Nos
Status
Exercise
Price
Expiry Date
Balance at 30 June 2015
Exercised:
Exercise of performance rights
Expired:
Issued:
Issue of $0.15 unlisted options
Issue of $0.15 unlisted options
Issue of $0.20 unlisted options
Issue of $0.15 unlisted options
Issue of $0.20 unlisted options
Balance at 30 June 2016
28 August 2015
27 October 2015
27 October 2015
27 October 2015
27 October 2015
27 October 2015
36,050,000
(2,500,000)
-
33,550,000
2,500,000
666,666
666,666
3,000,000
3,000,000
43,383,332
Vested and
unvested
$0.00 -
$0.55
20/02/2017 - 05/01/2018
Vested
Vested
Unvested
Vested
Unvested
$0.15
$0.15
$0.20
$0.15
$0.20
05/06/2017
05/01/2018
05/01/2018
05/01/2018
05/01/2018
Other than the issue of 2,500,000 options on 27 October 2015 to an external service provider, Argonaut Capital Limited, the
issues of the options during the year were made under the Company's Employee Option Plan. Included in these issues are
issues to Directors as disclosed in the Remuneration Report which were made subsequent to the receipt of shareholder
approval at a General Meeting held on 11 September 2015.
2,500,000 shares were issued during the year as a result of the exercise of performance rights.
42
51
PEAK RESOURCES LIMITED – ANNUAL REPORT
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.
20. SHARE BASED PAYMENTS
Employee share option plan
The group has an Employee Option Plan (EOP) for the granting of options to eligible participants which was approved by
Shareholders at a General Meeting of the Company on 1 July 2014. During the financial year ended 30 June 2016 a total of
7,333,332 (2015: 19,150,000) options were issued under the EOP to directors, executives, employees and contractors. An
additional 2,500,000 options were issued outside of the EOP to an external service provider following receipt of shareholder
approval.
Options granted during and as at the year ended 30 June 2016:
Outstanding at 1 July 2015
Granted during the year:
27-Oct-2015 - issue of $0.15 vested options expiring 5-Jun-2017
27-Oct-2015 - issue of $0.15 vested options expiring 5-Jan-2018
27-Oct-2015 - issue of $0.20 unvested options expiring 5-Jan-2018
17-Jun-2016 - issue of $0.15 vested options expiring 5-Jan-2018
17-Jun-2016 - issue of $0.20 unvested options expiring 5-Jan-2018
Exercised during the year
Expired during the year
Outstanding at 30 June 2016
Exercisable at 30 June 2016
WA (weighted average)
Number
WA Exercise
Price
Value per
option
19,150,000
$0.15
2,500,000
666,666
666,666
3,000,000
3,000,000
-
-
28,933,332
18,933,333
$0.15
$0.15
$0.20
$0.15
$0.20
-
-
$0.16
$0.13
$0.011
$0.013
$0.009
$0.006
$0.004
The unvested $0.20 options vest on continuous service on 5 January 2017.
Options granted during and as at the year ended 30 June
2015:
Outstanding at 1 July 2014
Granted during the year:
5-Jan-2015 - issue of $0.10 vested options expiring 5-Jan-2017
5-Jan-2015 - issue of $0.15 unvested options expiring 5-Jan-2018
5-Jan-2015 - issue of $0.20 unvested options expiring 5-Jan-2018
Exercised during the year
Expired during the year
Outstanding at 30 June 2015
Exercisable at 30 June 2015
Number
WA Exercise
Price
Value per
option
-
-
6,383,334
6,383,333
6,383,333
-
-
19,150,000
6,383,334
$0.10
$0.15
$0.20
-
-
$0.15
$0.10
$0.024
$0.024
$0.019
The unvested $0.15 and $0.20 options vest after 1 years continuous service on 5 January 2016 and 2 years continuous service
on 5 January 2017 respectively.
The volume weighted exercise price of options issued during the year was $0.169 (2015: $0.15).
The weighted average remaining contractual life for share options outstanding at 30 June 2016 was 1.25 years (2015: 2.19
years).
The weighted average fair value of options issued during the year was $0.007 per option (2015: $0.022).
52
NOTES TO FINANCIAL STATEMENTS
43
PEAK RESOURCES LIMITED – ANNUAL REPORT
Performance Rights Plan
The group has a Performance Rights Plan (PRP) for the granting of performance rights to eligible participants which was
approved by Shareholders at a General Meeting of the Company on 1 July 2014. During the financial year ended 30 June 2015
a total of 10,500,000 performance rights were issued to directors under the PRP.
No performance rights were granted during the year ended 30 June 2016.
Performance rights granted during and as at the year ended
30 June 2016:
Outstanding at 1 July 2015
Granted during the year:
Exercised during the year
Expired during the year
Outstanding at 30 June 2016
Exercisable at 30 June 2016
Performance rights granted during and as at the year ended
30 June 2015:
Number
Exercise
Price
10,500,000
$0.00
Value per
performance
right
-
(2,500,000)
-
8,000,000
-
-
$0.00
-
$0.00
-
Number
Exercise
Price
Value per
performance
right
Granted during the year:
5 January 2015 - issue of vested rights expiring 5 January 2018
5 January 2015 - issue of unvested rights expiring 5 January 2018
2,500,000
8,000,000
$0.00
$0.00
$0.072
$0.072
Exercised during the year
Expired during the year
Outstanding at 30 June 2015
Exercisable at 30 June 2015
-
-
-
10,500,000
2,500,000
-
$0.00
$0.00
The unvested performance rights vest on achievement of performance milestones:
(i) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for the construction of a rare earth
processing plant for its Ngualla Rare Earth Project and approval of the Board of the Company being received to proceed
with construction; or
ii) the Company (or any of its subsidiaries) receiving an offer of unconditional finance for an amount in excess of AUD $50
million and approval by the Board of such financing.
The volume weighted exercise price of rights issued during the year was $0.00 (2015: $0.00)
The weighted average remaining contractual life for rights options outstanding at 30 June 2016 was 1.52 years (2015: 2.52
years)
The weighted average fair value of rights issued during the year was $0.00 per right (2015: $0.072)
The options and performance rights have been valued using the Black-Scholes methodology with the following inputs:
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
2016
$0.057
1.85%
0%
77%
2015
$0.072
2.50%
0%
77%
The expected volatility reflects the assumption that historical volatility over a period similar to the life of the options is indicative
of future trends, which may not necessarily be the case.
44
53
PEAK RESOURCES LIMITED – ANNUAL REPORT
The value of options and performance rights granted are expensed over the vesting period. Included in share based payments
expense of $416,680 (2015: $535,597) is $32,000 (2015: $Nil) relating to the shares issued during the year, $193,723 (2015:
$260,121) related to options granted during the year and prior year, and $190,957 (2015: $275,476) relating to performance
rights granted in the prior year.
21. CONTINGENCIES AND COMMITMENTS
Lease commitments
The company has committed to a non-cancellable office lease of $97,200 per annum to 31 January 2017.
2016
Up to 1 year
$
56,700
56,700
2015
$
56,700
56,700
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 2016 minimum annual expenditure commitments in respect of exploration assets amounted to US$127,340 (2015
$118,967). 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 2016, the Group has no capital commitments. (2015: Nil).
Contingencies
At 30 June 2016, the Group had no contingencies (2015: Nil).
Other Contingencies
Peak has provided a performance guarantee to a service provider for services to the Company’s majority owned associate Peak
African Minerals.
22. KEY MANAGEMENT PERSONNEL DISCLOSURE
Salary and fees – short term benefits
Non-monetary benefits
Superannuation
Share based payments
2016
$
2015
$
1,257,002
951,530
11,835
80,416
298,421
-
63,838
472,726
1,647,674
1,488,094
Loans to KMP’s
No loans were made to KMP’s during the financial year (2015: 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
$202,883 (2015: $365,711) as fees for the provision of legal advice. Balance outstanding at 30 June 2016 and included in trade
creditors $26,470 (30 June 2015: $4,276).
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.
54
NOTES TO FINANCIAL STATEMENTS
45
PEAK RESOURCES LIMITED – ANNUAL REPORT
23. 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:
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
Associated entities
Peak African Minerals Limited
PR Ng Minerals Limited (Formerly Zari Exploration Limited)
Incorporation
2016
2015
Extent of control
Australia
100%
100%
Australia
Australia
Australia
Australia
Tanzania
Tanzania
Mauritius
Mauritius
Tanzania
100%
100%
100%
100%
-
100%
-
87.5%
87.5%
100%
100%
100%
100%
100%
100%
100%
-
-
24. 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; (v) short term loans and (vi) other financial assets, including bank deposits.
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
Due from associate
AFS Investment
Trade and other payables
Current – Loans and borrowings
Non-current – Loans and borrowings
2016
$
2015
$
1,723,830
2,943,861
125,002
55,000
2,890,821
8,000
993,819
99,500
-
8,000
(1,417,834)
(1,896,829)
-
(8,917,700)
(2,213,599)
-
The carrying amount of financial instruments closely approximate their fair value on account of short maturity cycle. The
approximated fair values are classified as Level 1 in the fair value hierarchy.
46
55
PEAK RESOURCES LIMITED – ANNUAL REPORT
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 $515,283 (2015:
$993,819) at reporting dates.
As at 30 June 2016, 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.
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 concentrations 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:
Up to 3
months
$
2016
> 3 months
Total
$
$
Up to 3
months
$
2015
> 3 months
Total
$
-
$
(1,896,829)
(8,917,700)
-
(1,372,578)
(45,256)
(1,417,834)
(1,896,829)
-
-
-
-
-
(3,099,039)
(3,099,039)
-
-
(8,917,700)
-
(1,372,578)
(3,144,295)
(4,516,873)
(1,896,829)
(8,917,700)
(10,814,529)
Financial liabilities
Trade and other payables
Short term loans
Long term loans(1)
Total financial liabilities
Financial assets
Cash and cash equivalents
1,723,830
-
1,723,830
2,943,861
-
2,943,861
Other financial assets
Due from associate
Investments
Trade and other
receivables
Total financial assets
-
55,000
55,000
2,890,821
-
2,890,821
-
8,000
8,000
-
-
-
99,500
-
8,000
99,500
-
8,000
125,002
-
125,002
83,988
909,831
993,819
4,739,653
63,000
4,802,653
3,027,849
1,017,331
4,045,180
(1)
Loan is repayable the earlier of 29 March 2021 or on the commencement of commercial production from the Ngualla project.
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.
PEAK RESOURCES LIMITED – ANNUAL REPORT
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
2016
$
1,723,830
17,238
(17,238)
2015
$
47
2,943,861
29,439
(29,439)
NOTES TO FINANCIAL STATEMENTS
56
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.
25. SUBSEQUENT EVENTS
as follows:
There were no subsequent events to 30 June 2016 that have a material impact on the financial statements at present other than
On the 15 August 2016 the closing of Stage 2 of the Bankable Feasibility (BFS) financing with Appian occurred and subsequent
to that on 22 September 2016 the closing of Stage 2 with IFC. The Stage 2 closure involved a subscription of US$ 2,374,955
into Peak’s majority owned associate PAM giving Appian and IFC an additional 10% and 2.5% interest respectively. Peak
retains a 75% interest in PAM (Appian 20%, IFC 5%).
On the 20 September 2016 the Company received ~A$4.1m under a term loan facility provided by Appian.
48
PEAK RESOURCES LIMITED – ANNUAL REPORT
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
2016
$
2015
$
1,723,830
2,943,861
17,238
(17,238)
29,439
(29,439)
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.
25. SUBSEQUENT EVENTS
There were no subsequent events to 30 June 2016 that have a material impact on the financial statements at present other than
as follows:
On the 15 August 2016 the closing of Stage 2 of the Bankable Feasibility (BFS) financing with Appian occurred and subsequent
to that on 22 September 2016 the closing of Stage 2 with IFC. The Stage 2 closure involved a subscription of US$ 2,374,955
into Peak’s majority owned associate PAM giving Appian and IFC an additional 10% and 2.5% interest respectively. Peak
retains a 75% interest in PAM (Appian 20%, IFC 5%).
On the 20 September 2016 the Company received ~A$4.1m under a term loan facility provided by Appian.
PEAK RESOURCES LIMITED – ANNUAL REPORT
26. PARENT ENTITY DISCLOSURE
The following details information related to the parent entity, Peak Resources Limited, at 30 June 2016. 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
2016
$
1,925,387
23,291,888
25,217,275
1,541,547
2,258,855
3,800,402
2015
$
3,310,634
44,132,461
47,443,095
6,385,665
-
6,385,665
21,416,873
41,057,430
64,144,025
1,870,627
55,259,165
1,665,948
(44,597,779)
(15,867,683)
21,416,873
41,057,430
48
(28,730,096)
(2,087,678)
-
-
(28,730,096)
(2,087,678)
Peak Resources Limited had no commitments to purchase property, plant and equipment or contingent liabilities, other than the
performance guarantee as referred to in Note 21, at year end.
57
49
PEAK RESOURCES LIMITED – ANNUAL REPORT
DIRECTORS’
DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Peak Resources Limited, I state that:
In the opinion of the Directors:
(a)
(b)
(c)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable;
the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note
2 to the financial statements;
the attached financial statements and notes thereto for the financial year ended 30 June 2016 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 2016 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
Peter Harold
Non-Executive Chairman
Perth, 28 September 2016
PEAK RESOURCES LIMITED – ANNUAL REPORT
TENEMENT
SCHEDULE
TENEMENT SCHEDULE
Project
Tenement
%
Status
Arrangement/Comment
Tanzanian Projects
Ngualla
Ngualla
PL 6079/2009
PL 9157/2013
75*
75*
Granted
Granted
Held by 100% Tanzanian associate company PR
NG Minerals Ltd
Held by 100% Tanzanian associate company PR
NG Minerals Ltd
*On 26 July 2015, the Company announced the closing of stage 1 of the financing transaction with Appian and IFC. On 15
August 2016 the closing of stage 2 with Appian occurred and on 22 September 2016 with IFC. As a result, Peak holds a 75%
beneficial interest in the above two licences with Appian and IFC holding a 20% and 5% interest respectively through their equity
interest in Peak African Minerals.
58
50
51
PEAK RESOURCES LIMITED – ANNUAL REPORT
ADDITIONAL SHAREHOLDER
INFORMATION
ADDITIONAL SHAREHOLDER INFORMATION
Quoted security distribution
The distribution of members and their holdings of quoted equity securities in the company as at 27 September 2016 were as
follows:
Number Held as at 27 September 2016
Class of Equity Securities
Fully Paid Ordinary Shares
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
152
346
335
1,117
432
2,382
There were 576 holders with less than a marketable parcel of fully paid shares.
Substantial Security holders
Substantial shareholders listed in the Company’s register as at 27 September 2016 were:
Holder
Number of shares
Percentage of issued capital
APPIAN PINNACLE HOLDCO LIMITED
75,804,053
16.68%
Unquoted Securities
Class of Equity Security
$0.55 options expiring 20 February 2017
$0.55 options expiring 3 March 2018
$0.10 options expiring 5 January 2017
$0.15 options expiring 5 June 2017
$0.15 options expiring 5 January 2018
$0.20 options expiring 5 January 2018
Unvested performance rights expiring 5 January 2018
Number
6,250,000
150,000
6,383,334
2,500,000
10,049,999
10,049,999
8,000,000
Names of persons holding greater than 20% of a class of unquoted securities:
Number of Security Holders
1
1
13
1
17
17
3
Class of Equity Security
$0.55 options expiring 20 February 2017
$0.55 options expiring 3 March 2018
$0.10 options expiring 5 January 2017
$0.10 options expiring 5 January 2017
$0.15 options expiring 5 June 2017
Unvested performance rights expiring 5 January 2018
Unvested performance rights expiring 5 January 2018
Number
Holder
6,250,000
150,000
2,000,000
1,333,334
2,500,000
5,000,000
2,500,000
Citicorp Nominees Pty Ltd
Mzhci LLC
Darren Townsend
David Hammond
Argonaut Investments
Darren Townsend
David Hammond
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.
52
59
PEAK RESOURCES LIMITED – ANNUAL REPORT
Restricted Securities
As at 30 June 2016, there were no restricted securities.
Twenty largest security holders
The names of the twenty largest ordinary fully paid shareholders as at 27 September 2016 are as follows:
Name
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CRX INVESTMENTS PTY LIMITED
WISEVEST PTY LTD
INTERNATIONAL FINANCE CORPORATION
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ASHABIA PTY LTD
HOTLAKE PTY LTD
ONE MANAGED INVESTMENT FUNDS LIMITED
PASAGEAN PTY LIMITED
YARANDI INVESTMENTS PTY LTD
MR MICHAEL BUSHELL
SAMBOLD PTY LTD
NATIONAL NOMINEES LIMITED
PINNACLE SUPERANNUATION PTY LIMITED
TOWNS CORPORATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD
WAPIMALA PTY LIMITED
RENOM PTY LTD
BUELL PTY LTD
Number Held of
Ordinary Fully
Paid Shares
81,702,430
29,843,077
13,000,000
11,100,000
10,026,874
10,002,148
9,107,252
7,635,000
7,000,000
7,000,000
5,530,114
5,450,179
5,125,000
4,631,971
4,472,223
4,294,954
4,162,104
4,000,000
4,000,000
3,929,397
% Held of Issued
Ordinary Capital
17.98
6.57
2.86
2.44
2.21
2.20
2.00
1.68
1.54
1.54
1.22
1.20
1.13
1.02
0.98
0.95
0.92
0.88
0.88
0.86
TOTAL
232,012,723
51.05%
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.
60
53
CORPORATE DIRECTORY
DIRECTORS
Non-Executive Chairman
Peter Harold
Darren Townsend
Managing Director
David Hammond Technical Director
Jonathan Murray Non-Executive Director
John Jetter Non-Executive Director
COMPANY SECRETARY
Graeme Scott
REGISTERED OFFICE
Ground Floor
5 Ord Street
West Perth WA 6005
SOLICITORS
Steinepreis Paganin (Australia)
The Read Building
Level 4, 16 Milligan Street
Perth WA 6000
Clyde & Co/Ako Law (Tanzania)
11th Floor, Jubilee Towers
Ohio Street ,Dar es Salaam
Tanzania
AUDITORS
Ernst and Young
11 Mounts Bay Road
Perth WA 6000
SHARE REGISTRY
Link Market Services Limited
Level 12,
680 George Street
Sydney NSW 2000
CONTACT DETAILS
Website: www.peakresources.com.au
Email:
info@peakresources.com.au
Telephone:
Facsimile:
(08) 9200 5360
(08) 9226 3831
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
Home Exchange: Perth, Western Australia
Code: PEK
Corporate Governance Statement
The Company has adopted the recommendations of the ASX Corporate Governance Council’s Principles and
Recommendations (Third Edition) in regard to the Corporate Governance Disclosures and provides disclosure of
the Company’s Corporate Governance Statement on the Company’s website at: http://www.peakresources.com.
au/irm/content/corporate-governance
61