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ANNUAL REPORT 2018
ENABLING LOW CARBON TECHNOLOGIES
www.peakresources.com.au
Ground Floor, 5 Ord Street
West Perth, WA 6005
P: +61 8 9200 5360
Contents
2018 Highlights
Chairman's Letter
CEO's Letter
Review Of Operations
Directors' Report
Auditor's Independence Declaration
Independent Auditor's Report
Consolidated Statement Of Comprehensive Income
Consolidated Statement Of Financial Position
Consolidated Statement Of Cash Flows
Consolidated Statement Of Changes In Equity
Notes To Financial Statements
Directors' Declaration
Tenement Schedule and Reserves & Resources
Additional Shareholder Information
Corporate Governance Statement
01
02
04
06
18
31
32
37
38
39
40
41
68
69
73
76
Corporate Directory
Directors
Non-Executive Chairman:
Peter Muerer
Non-Executive Directors:
Jonathan Murray
John Jetter
Tony Pearson
Darren Townsend
Chief Executive Officer:
Rocky Smith
Company Secretary/Chief Financial Officer:
Graeme Scott
Registered office
Ground Floor, 5 Ord Street
West Perth, WA 6005
Contact details
Phone: +61 8 9200 5360
Fax: +61 8 9226 3831
Email: info@peakresources.com.au
Web: www.peakresources.com.au
ACN: 112 546 700
Home stock exhange
ASX: Australian Securities Exchange, Perth
Code: PEK
Auditors
Ernst and Young
11 Mounts Bay Road
Perth, WA 6000
Share registry
Link Market Services
Level 12, 680 George Street
Sydney, NSW 2000
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
PAGE 67
2018 Highlights
Step by Step towards development:tn Tanzania
Special Mining Licence application lodged for the development of the Ngualla Rare Earth Project
in Tanzania
Board and executive appointments position Peak towards project development
Environmental permit and planning permissions received for UK, Teesside rare earth refinery
SFG OPTION SECURED FOR TEESSIDE REINERY Land option secured for Teesside refinery
Successful capital raisings leave Peak well funded to secure final approvals and offtake
NdPr prices improved during the year above the Project Optimisation Study pricing assumptions
and remain comfortably above the Projects breakeven point
The Project Optimisation Study enables delivery of similar economic outcomes as the Bankable
Feasability Study ("BFS") at a lower price deck:
> Average consolidated annual EBITDA US $150m pa over the 26 year life of the Project
> Post Tax NPV8 US$612m and IRR 22% at the then current rare earth prices
> Total Life of Project Opex intensity US$32.24/kg NdPr is the breakeven point for a positive
cash flow, well below current prices.
2015
2016
2017
2019+
Appointment of AMEC FW
as BFS lead Engineering firm
Results from pilot plant test
work complete
New mineral resource
estimate
Project economics updated
Advance engineering
Advance Environmental
Permitting
Beneficiation pilot plant
Advancement of ESIA
BFS Drilling Program
AUD $23.4m
from Appian & IFC
investment
Optimisation Studies:
- Location of downstream
plant
- Stockpiling of Cerium
- Beneficiation Improvement
Bankable Feasibility Study
completed delivering a US
$35m p.a or 30% savings in
operating costs compared
to Pre Feasibility Study
Tanzanian Environmental
Certificate received
Project Optimisation
delivered similar financial
results with a lower price
deck. NdPr price reduced
from US$85kg to US
$77.50kg
Special Mining Licence
Application Submitted
Secure Grant of Special
Mining Licence in Tanzania -
application lodged
Ramp up discussions with
potential offtake partners
with special focus on magnet
manufacturers
Secure strategic partner to
fund development of Ngualla
Front End Engineering and
Design (FEED)
Commencement of
Operations Readiness
Programs
PAGE 1
Chairman's Letter
Peter Meurer
4 October 2018
Dear Shareholder
I am delighted to be addressing you for the first time since joining the Company as Chairman in April 2018. I accepted the
position after I had undertaken extensive due diligence. My findings gave me great enthusiasm for the opportunities for the
Company and convinced me that the Ngualla Rare Earth Project is an outstanding resource development opportunity. I am
pleased to be able to share with you some of these insights into Peak Resources and Ngualla;
1) Ngualla is one of the best NdPr resources in the world, having a larger resource than Lynas or Mt. Pass, with relatively high
grade ore and very importantly a high ratio of NdPr.
In addition, the Company has a strategic vision for a fully integrated rare earth development with a refinery located in the
Tees Valley in the United Kingdom. This in my opinion is a distinct advantage for Peak Resources.
2) My discussions with other mining companies and individuals with mining operations in Tanzania, left me with the
impression that most of the past and current mining operations were largely unaffected, in spite of the 2017 mining law
changes. While the outlook for the future operations seemed uncertain, many indicated they believed now was a good time
to be having discussions with the Tanzanian government about mining licenses, because open and transparent discussions
would likely be welcome by the government that welcomes a healthy mining industry, indeed it is most encouraging to see
several new mining licences recently approved in Tanzania.
3) The Peak management team were open and positive, and it is a real benefit to the Company that many have previous rare
earths experience. Their enthusiasm for the Project is driven by the following attributes; its high ore quality, positive piloting
results, optimized process design, and one of the world’s lowest projected operating cost positions for production of NdPr.
4) Finally the undeniable thematic of the coming Electric Vehicle (EV) Revolution is demonstrated by the major automotive
Original Equipment Manufacturers (OEM’s) forecasting double digit % growth in EVs as a percentage of their total production
by 2025, with many OEM’s forecasting growth in excess of 25% per annum. We are just at the beginning of this consumer
driven transformation.
Peak Resources’ market capitalization is without a doubt one of the most heavily depressed by the perceived issues related
to Tanzania, but now that uncertainty is being removed it is time to build value back in the Company and prepare to bring
this outstanding resource into production. It is worth reflecting on the Bankable Feasibility Study (BFS) that was completed
in April 2017, that points to a Project valuation of approximately US$700m at forecast NdPr prices. The BFS is an important
document for the Company as it defines the natural advantages of the Project.
PAGE 2
ENABLING LOW CARBON TECHNOLOGIES
Chairman's Letter
(continued)
Building this business up step by step, by addressing each concern, focusing on finding the right strategic partners to help
drive the development forward and being in the right position to take best advantage of the increase in metal pricing that
will come with higher NdPr consumption. This will drive shareholder value.
I’m excited to be here and I’m ready to help push Peak Resources into it’s rightful position as one of the best rare earth
producers to fully separated products operating outside of China.
In concluding, I would like to thank all stakeholders who are involved with the Company, but in particular our shareholders,
and Peak’s Management team.
Peter Meurer
Non-Executive Chairman
THE ASSET - THE MARKET - THE TEAM
PEAK RESOURCES - MORE THAN THE SUM OF ITS PARTS AND THE FIRST CHOICE
FOR INVESTMENT IN THE RARE EARTH SPACE.
PAGE 3
ENABLING LOW CARBON TECHNOLOGIES CEO's Letter
Rocky Smith
4 October 2018
Dear Shareholder
Introduction
The Electric Vehicle (EV) Revolution will have a significant impact on the demand for NdPr, making it clear, we are getting very
close to seeing this business take off. The Ngualla Project remains the best undeveloped NdPr project in the world.
Now that we are close to securing our Special Mining Licence (SML) in Tanzania, we will start moving toward securing finance,
final engineering, and then construction for both the Ngualla and Teesside facilities.
In a significant appointment to the board, Mr. Peter Meurer joined Peak Resources as the Non-Executive Chairman. Peter
has years of leadership in the financial industry, the last being Executive Chairman at Nomura Australia Bank. His extensive
experience and connections were evident in our last fundraising activity, resulting in it being over-subscribed we capped it
out at A$7million dollars. Peak’s financial health has rarely been better, and we are focused on delivering our project pre-
development activities.
Market Conditions
To date, Lithium, Cobalt and Graphite have often been the center of the EV discussion, but these battery minerals can go
nowhere without an NdFeB magnet motor to move the car. NdPr consumers around the world are starting to wake up to the
realisation that tight supply of materials will cause them disruptions if they don’t secure dedicated “outside of China” NdPr
supply. Over the coming year, this reality is set to improve our commercial position and dialogues.
Some industry and financial analysts are starting to see and forecast that the NdPr consumption will outstrip the current
worldwide production capacity, starting as early as 2021. In a recent analysis by investment bank UBS, dated 23 July 2018,
they make a clear case for this timing.
The timing of bringing the Ngualla Project online will be important, because when this supply tightness occurs the metal
pricing will react. In the last quarter of 2017, supply tightened due to Chinese clamping down on illegal and environmentally
non-compliant production, we saw an over 100% increase in pricing in just a few months.
More alarming for the consumers of NdPr is the fact, that from today, for the next 10 - 15 years, the NdPr consumption is
forecast to grow at 2,000 MT/year which is just a little less than planned annual production from our project. Given the timing
for finding and putting a rare earth operation into production is usually around +10 years, our NdPr production business will
continue to have opportunities for many years to come.
PAGE 4
ENABLING LOW CARBON TECHNOLOGIES
CEO's Letter
(continued)
The Future
It is easy to get excited about the future, but the work of putting together a leading rare earth company “outside of China”,
will require a lot of focused efforts. We need the support of the Tanzanian government, and our strategic investors, to
develop this opportunity. An initial investment will support the Front End Engineering Design (FEED) activity and kickoff of
the Operational Readiness programs.
Our plan will then turn to finding strategic and equity partners, coupled with finance partners to deliver the funding
package for both plants. Once our financing has been secured, the execution of the construction phase begins.
Thanks
I want to thank the Peak Resources team, our project partners, the members of Tanzanian government and our
shareholders. Without your support our progress would not be possible.
Rocky Smith
Chief Executive Officer
View of Ngualla Hill
PAGE 5
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
Summary
The year saw successful completion of a project optimisation program which led to significantly improved project economics.
These results further reinforced the Company’s 75% owned Ngualla Rare Earth Project in Tanzania as one of the leading
magnet rare earth development project opportunities.
With 90% of Ngualla’s future revenue to be derived from neodymium-praseodymium oxide (“NdPr”), the project is one of
a very few capable of helping to meet the predicted surge in demand for this vital raw material for the high performance
permanent magnets used in the preferred motors of electric vehicles (EVs).
The Special Mining Licence (“SML”) application was lodged for the Ngualla Project with the Ministry of Energy and Minerals
in August 2017. Unfortunately the grant of the licence has been delayed following the enactment of the legislative
changes announced by the Tanzanian Government in July 2017. The newly formed Mining Commission which is to make
recommendation to the Government for the granting of licences made the final appointments to the Commission in April
2018 and it has now begun processing the backlog of applications. We understand that Ngualla is one of only three SML
applications and the Minister of Minerals has requested that these applications are dealt with as a priority. Now that the
Commission is active we are optimistic that the SML is now not too far away. The SML is the last permit required in Tanzania
ahead of a construction decision once financing can be secured.
Our Site 2 refinery, planned for Teesside, UK received planning permission for construction in June 2018. In the same month
we secured an option for a 250 year lease over the refinery site. The site is ideally located close to port facilities, availability
of chemicals and has great “plug and play” infrastructure and waste disposal facilities. The Company has been welcomed by
the Teesside community and there is a ready and skilled workforce waiting for the construction to begin. The environmental
permit was also received in September 2018.
Once the SML is acquired this represents the last permit needed ahead of a construction decision once financing can be
secured. With this in mind the Company has increased its offtake marketing activity with a number of trips made to China,
Europe and the US to engage with interested offtake parties, the reception has generally been very positive both towards the
Company and the Ngualla Project with a growing recognition that the demand for our planned products, in particular NdPr,
will not be able to be met by the current producers. This expected demand is going to be driven by the increasing moves by
the car manufacturers to bring EVs to their model line ups, along with the incremental demand required for wind turbines,
robotics and other new battery operated applications.
PEAK - AHEAD OF THE PACK
The only development stage Project that has fully piloted all stages
of the process through to seperated products, with a fully costed
plan and strategy to process to separated proucts in-house.
PAGE 6
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Process Optimisation Studies Lead to Improved Project Economics
The Company completed a process optimisation study in August 2017 and released a comprehensive Project Update to
include the latest rare earth price trends at that time (ASX Announcement “Lower price deck delivers similar BFS results for
Ngualla” of 12 October 2017).
The Project Update study builds on the BFS completed in April 2017 by including the improvements gained from the collector
screening testwork (ASX Announcement “Process optimisation study boosts Ngualla’s operating margin” of 28 August 2017).
The financial analysis of the study outcomes reinforces Ngualla’s position as the leading development project for NdPr.
The study shows that Ngualla’s already low unit operating costs are driven even lower, resulting in a significant 20% increase
in operating margin at BFS prices due to improved production rates, for an estimated total additional capital outlay of US $9
million.
A financial analysis of the project using the process optimisation improvements combined with a lower rare earth price
assumption delivers project economics at a similar level to those of the BFS.
The financial evaluation of the Project Update using the price deck of NdPr US$ 77.50/kg, Lanthanum oxide US$ 3.70/kg and
Cerium oxide US$ 2.20. Recent demand projections for coming EV revolution, suggest NdPr consumption will increase by
2,000 MT/year through 2035, which shows Ngualla to be a long term and profitable project, with substantial upside should
prices increase further.
Table 1 provides a comparison of key project financial assumptions and outcomes between the BFS rare earth price
assumptions and the Project Update process optimisation with the lower price deck. The results illustrate the exceptional
status and quality of the Ngualla Project.
The average annual operating margin, NPV10, IRR and payback period are all already close to the BFS analysis despite the BFS
assuming 10% higher NdPr prices. The solid project economics provides support for the Company’s focus to progress Ngualla
towards production in time for the increased demand for NdPr from electric vehicles.
Highlights Include:
• Post Tax NPV8 US$ 612 million and IRR 22%* at current rare earth price assumptions.
• Total Life of Project Opex intensity US$ 32.24 / kg NdPr is the breakeven point for a positive cash flow, well
below current prices.
• Total pre-production CAPEX of US$ 365 million for the Ngualla and Tees Valley refinery combined. This has
the potential to be the lowest Capex among its peers for a fully integrated producer.
• Average consolidated annual EBITDA US$ 150 mpa over the 26 year life of the Project.
NdPr Market Developments and Business Development Activities
The financial markets and end users are beginning to realise the important part rare earths and in particular the magnet
metals Neodymium and Praseodymium (NdPr) will play in the electric vehicle revolution. NdPr will be a key component
with over 95% of drive motors in EVs set to utilise NdPr magnets. Peak is well placed to offer high-quality products from
an ethical, fully transparent supply chain solution and with approximately 90% (see figure 1) of the Ngualla Project revenue
projected to be derived from NdPr.
PAGE 7
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Table 1: Comparison of BFS production assumptions to Project Update
PRODUCTION ASSUMPTIONS
Life of Operation
AVERAGE ANNUAL PRODUCTION (TONNES)
Ore Mill Feed
Processed Mineral Concentrate
NdPr mixed oxide 2N
La oxide equivalent (final product: La carbonate)
Ce oxide equivalent (final prduct Ce carbonate)
SEG and Mixed Heavy oxide equivalent (final product mixed carbonate)
CAPITAL COSTS
Total Capital cost*
Average Annual Consolidated Sustaining Capital
OPERATING COSTS
Average Annual Operating Cost#
Unit operating cost> (/kg NdPr)
FINANCIAL METRICS
Consolidated Average Annual Revenue
Average Annual Operating margin (EBITDA)
Annual Average Consolidated (Post Tax) Cashflow
NPV8 - Post Tax and Royalties
NPV10 - Post Tax and Royalties
IRR - Post Tax and Royalties
Operating Margin
Payback Period (from Start of Operations)
COMMODITY PRICE ASSUMPTIONS AVERAGE LOM
NdPr Mixed Oxide 2N Min 75% Nd2O3
Lanthanum Oxide Equivalent
Cerium Oxide Equivalent
SEG Mixed Heavy Oxide Equivalent
BFS
31 Years
BFS
624,000 tpa
28,300 tpa
2,420 tpa
3,650 tpa
1,660 tpa
280 tpa
BFS
US $356m
US $5m
BFS
US $83m
US $34.20
BFS
US $228m
US $145m
US $104m
US $633m
US $445m
21%
64%
5 years
BFS
US $85.00/kg
US $4.41/kg
US $2.25/kg
US $8.00/kg
PROJECT
UPDATE
26 Years
PROJECT
UPDATE
711,000 tpa
32,700 tpa
2,810 tpa
4,230 tpa
1,920 tpa
330 tpa
PROJECT
UPDATE
US $365
US $5m
PROJECT
UPDATE
US $91m
US $32.24
PROJECT
UPDATE
US $241m
US $150m
US $108m
US $612m
US $444m
22%
62%
5 years
PROJECT
UPDATE
US $77.50/kg
US $3.70/kg
US $2.20/kg
US $8.00/kg
*Total pre production Capex, for Ngualla mine and Multi-stage Processing Facility and Tees Valley refinery combined.
#Material assumptions are as per BFS and Ore Reserve ASX Announcements of 12 April 2017 except where indicated in this report.
The information is extracted from the report entitled “Lower price deck delivers similar BFS results for Ngualla” released on the 12 October 2017 and is available to view
on the Company’s website www.peakresources.com.au/asx-announcements/. The Company confirms that it is not aware of any new information or data that materially
affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions
and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company con-
firms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
The information in this report pertaining to the Project financial and economic analysis has not been audited and contains non-IFRS measures; EBITDA is a non IFRS
measure calculated as the earnings before tax, interest, depreciation and amortisation.
PAGE 8
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Final products from the project planned to be
produced annually are:
2,810 tonnes of neodymium and praseodymium oxide
(2N min 75% Nd2O3)
8,040 tonnes lanthanum carbonate
(equivalent to 4,230tpa oxide)
3,475 tonnes cerium carbonate
(equivalent to 1,920tpa oxide)
Relative value contributors
2% Ce Carbonate
7% La Carbonate
1% Mid-Heavy
Carbonate
625 tonnes of mixed SEG and Heavy rare earth carbonate
(equivalent to 330tpa oxide)
Relative value* contributors by product type and constituent REO’s.
* Relative value of contained REO equivalent product mix based on prices assumed
in the BFS for individual rare earth oxide
90%
NdPr Mixed
Oxide
Neodymium and praseodymium
are expected to generate 90% of
Ngualla's future revenue
Figure 1 - Ngualla Project planned annual production
Key Demand Drivers
E-Mobility - literally the driving force of change
The VW-Gate for petrol engines and now the “Dieselgate” are accelerating the transition towards E-mobility. The automotive
industry is currently facing meeting the new legislation objectives for CO2 reduction (WLTP) and NOx requirements (RDE).
Automaker Commitments to EVs
Between 2018 and 2025 - US$365billion
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Source: Peak Resources Limited based on individual company and industry announcements
PAGE 9
ENABLING LOW CARBON TECHNOLOGIES
Review of Operations
(continued)
All the big Automotive Original Equipment Manufacturers (OEM) are expecting to reach double digits in percentage of sales
for electric vehicles in their portfolios by 2025. To get an idea of the size of what is coming we recommend to observe the
many investment announcements from the car manufacturers related to electric and hybrid vehicles; according to a recently
published study from AlixPartners the investment commitment has reached an eye-popping US$255 billion in R&D and
capital expenditures to support the launch of more than 200 new electric vehicle models to the market by 2022. Additionally,
approximately US$61 billion is being invested in autonomous vehicle technology. The consulting group also indicated that
55% of M&A in the automotive sector over the last two years were in some way connected to electrification or autonomy.
China leading the pack – EVs are here to stay
China’s growing E-mobility market will achieve annual sales of more than one million new energy vehicles in calendar year
2018. The Chinese economy is on track to double this figure soon, becoming undeniably the single biggest electric vehicles
market in the world in both sales and manufacturing. The Chinese are not only dominating globally the private passenger car
sector, they are also aggressively converting their public transport by switching complete cities in one go to electric buses as
demonstrated recently in Shenzhen, where 16,000 city buses were electrified. This all points to the undeniable fact that EVs
are here to stay, they will be the driver for the automobile industry, and with it a new age for new commodities is starting.
This view is supported by recent analysis published by the likes of Bloomberg Energy and the International Energy Agency.
Peak is positive that electrification will happen and with it the world will experience a shift in today’s landscape, producing
new commodity champions to support this wave. Peak and the Ngualla Project are ideally positioned to capture and ride this
wave.
Annual Global passenger EV Sales
Battery Electric v Plug-in Hybrid
s
'
0
0
0
1000
900
800
700
600
500
400
300
200
100
0
54
68
2012
107
99
2013
159
129
2014
995
597
701
390
408
287
263
185
2015
2016
2017
2018
Source: Bloomberg New Energy Finance
Battery Electric
Plug-In Hybrid
Source: Bloomberg New Energy Finance
PAGE 10
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Other applications and new technologies
In the near term the second biggest driver of NdPr demand are wind turbines. Wind power prices fell rapidly for both onshore
and offshore, and the offshore sector had its best year yet. The bid prices for new projects were down due to technology
innovation and scale, reduced financing costs due to lower perceived risk, and fierce competition in the industry. We saw
in 2017 dramatic price reductions in the market. Markets in Morocco, India, Mexico and Canada realised prices in the area
of US$ 0.03/kWh, with a recent Mexican tender coming in with prices well below US$ 0.02/kWh. Meanwhile, offshore wind
had its first ‘subsidy-free’ bids in tenders in Germany and the Netherlands, with tenders for nearly 2 GW of new offshore
wind capacity receiving no more than the wholesale price of electricity. So overall a promising outlook for wind industry
delivering another robust year with more than 52 GW added (about 4% less than in 2016) for a total of 539 GW. With these
new records, the market is optimistic to accomplish new record highs in the coming years.
Supply Considerations and Constraints
New environmental protection procedures impacting the Chinese supply chain
The Chinese government has continued to reinforce their environmental policy. Environmental inspection rounds, especially
from the central government, along with violations identified, led to plant shutdowns, rectification and environmental
upgrades. According to market sources Asian Metal, Ganzhou Jisheng Technology Co. Ltd., NdPr oxide output has been
reduced by an estimated 60% month on month in June 2018 affected by the environmental inspection activities. The Chinese
environmental and supply side reforms will likely impact the overall supply availability of material in the market (e.g. Made
in China 2025) and lead to increased production costs (Beautiful China Policy e.g. Environmental Protection tax law and Blue
Sky Protection Plan).
This view is further supported by the published goals of the 5 Year Rare Earth Industry Plan by China’s Ministry of Industry
and Information Technology (MIIT) which aims for further consolidation and vertical integration of the rare earth industry.
A task force was formed in January 2018 by China Association of Automobile Manufacturers and Association of China Rare
Earth Industry, as directed by MIIT, to facilitate upstream and downstream cooperation among the rare earth, permanent
magnet, motor and new energy vehicles sectors. Baotou recently announced that the Northern Rare Earth Group plans
to invest RMB 10 billion (US$~1.5 billion) in building a national center of excellence for the production and research and
development of electric motors. Furthermore, Xiamen Tungsten announced signing of an agreement with Jimei District
Government of Xiamen City on the construction of an Electric Motor Permanent Magnet Park. As the cornerstone investor,
Xiamen Tungsten will invest approximately RMB 2 billion (US$~300 million) to establish an industrial development fund with
other investors, in order to raise RMB 10 billion for permanent magnet motor development and manufacturing programs.
Source: Peak Resources Limited based individual company and industry announcements
PAGE 11
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
We anticipate that the Chinese government must start to raise the quota annually to meet their communicated 5 year rare
earth industry targets of 140,000t per annum by 2020. We don’t view these increases as a negative that leads to increased
supply, but rather implementation of a mechanism which enables the Chinese government to legitimise certain already
existing output. There has been no NdPr stockpiling activities from the Chinese government since June 2017 amidst several
rounds of discussions. We expect that the Chinese government will most likely carry out a new stockpiling program in Q4-
2018.
New Quota and Chinese stockpiling program
China’s Ministry of Natural Resources & Ministry of Industry and Information Technology have increased the rare earth min-
ing quota to 120,000t for calendar year 2018, a 15,000t or 14% increase from 105,000t in 2017. The 2018 first half year quota
was 70% of the 2017 full year quota which represented a 40% increase from the corresponding 2017 first half. The balance
of the 2018 full year quota leaves 2018 second half year quota 11% less than the same period last year and 37% less than the
quota used for the first half of 2018.
NdPr Market Pricing
NdPr US$/kg
$95.00
$85.00
$75.00
$65.00
$55.00
$45.00
$35.00
$37.17
3 Jan 2017
$40.78
BFS 12 Apr 2017
#NdPr Price Target $77.50
$47.18 26 Sept 2018
Nov 2016
Jan 2017 Mar 2017 May 2017
Jul 2017
Sep 2017
Nov 2017
Jan 2018 Mar 2018 May 2018
Jul 2018
Sep 2018
Source: Asian Metal
PAGE 12
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
NdPr prices improved during the year to be periodically above the Project Optimisation Study pricing assumptions and
currently remain comfortably above the Projects operating cost breakeven pricing. One particular period was illustrative
of where we anticipate the price will move once the expected supply constraints arrive; starting in July 2017 over 3 month
period we saw a price increase reaching around US$80 / kg NdPr, driven by the governmental environmental inspections
and compliance initiatives in China. The compliance activities temporarily reduced the available manufacturing capacity
and in consequence reduced the NdPr oxide output over that period causing the price spike. Following this price peak the
market normalised for a period to around USD$50-55 / kg NdPr and more recently in July-August 2018 the price for NdPr
has pulled back further below US$50 / kg NdPr, the latter is mainly a result of a stronger US dollar whilst at the same time
the Yuan experienced a quite significant devaluation.
Marketing and communication
Peak stepped up its marketing activities during the year to introduce the Company and the Ngualla Project to the global
rare earth and offtake community through participation and presentations at a number of rare earth industry conferences
in China. These conferences are a great platform to proactively promote our Project and we are seeing increased interest
and engagement from potential offtake partners throughout the supply chain. We are also targeting industry participants
elsewhere in Asia, Europe and the US where there is an increasing understanding of the need to secure supplies of material
independent of China.
The biggest blind spot in the global commodity market - NdPr
In February 2018, Peak Resources published a white paper to share its
industry insights and outline why we believe NdPr is the biggest blind
spot in the global commodity market. The world is openly concerned
about exhausting its supplies of battery metals such as lithium, graphite
and cobalt, however, at this point it is still not widely understood that
behind each battery is a motor and that nearly all announced NEVs (new
energy vehicles) and other mobility applications will be equipped with a
NdPr permanent magnet motor. Technology metals and very importantly
NdPr will be at the heart of the next industrial rEVolution. The white
paper aims is to provide a 360 degree perspective on the rare earth
market (China, supply & demand, upcoming megatrends like EV, drones,
clean energy from wind) with a particular focus on NdPr and permanent
magnets as well as an overall benchmark analysis on development rare
earth projects worldwide. The white paper is available to download from
our website: http://www.peakresources.com.au/whitepaper/
PAGE 13
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Organisational Changes Positioning Ngualla Ready for Development
Highly experienced investment banker, Peter Meurer commenced as
Non-Executive Chairman
Peter Meurer commenced as Non-Executive Chairman on 23 April 2018. Peter’s
experience, extensive contacts and strategic guidance are well matched to the
requirements for the final stages in the development path for the Ngualla Project.
Peter has a distinguished career of over 40 years in the Corporate Finance sector
and is current ly Non-Executive Chairman of Nomura Australia. Peter has a strong
strategic focus and has forged trusted advisor relationships through the many market
related trans actions in which he has been involved covering all aspect of corporate
finance including; equity raisings, debt financing, corporate advisory and M&A.
During his tenure at Nomura, Peter has been involved in domestic and international
M&A transactions together with their project
financings.
Experience Rare Earth industry operator, Rocky Smith installed as CEO
In September 2017 Rocky Smith, the previous Chief Operating Officer of Peak, took
on the role of Chief Executive Officer of the Company. Rocky has been with Peak
since early 2016 and is an experienced executive with unique operational experience
having managed the Mountain Pass rare earth operation in the USA prior to joining
the Company. Rocky’s involvement in completing the development of the processing
flow sheet, BFS and Optimisation Study has made a significant contribution to the
Ngualla Project’s eco nomics.
Tanzania Ngualla Project Permitting
A Special Mining Licence (SML) application for the Ngualla Rare Earth Project was lodged at the end of August 2017. Major
pre-requisites for the grant of an SML include an Environmental Impact Assessment Certificate and detailed Feasibility Study.
The completion of these items, together with the sustained rise in NdPr prices of over 100% in the 12 months to August 2017
provided the impetus to lodge the application through the Company’s 75% owned Tanzanian company and the holder of the
Ngualla Prospecting Licences, PR NG Minerals Limited.
An SML is restricted to major mining and processing projects such as Ngualla that have a capital investment over US$100
million and offers superior advantages over a Mining Licence (“ML”) in terms of the maximum area and period of tenure that
can be approved. The SML application lodged for Ngualla is for a duration of 31 years over an area of 18.14km².
PAGE 14
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Social and Environmental Responsibility
Peak takes its community and social responsibilities very seriously and is proud of its record to date. The projects undertaken
in the past and the manner in which the Company engages with the local community has resulted in widespread support for
the Ngualla project.
The current programme includes the construction of two classrooms and a teacher’s office at a local school. The construction
of the classrooms commenced in 2017 and is anticipated to be completed before the Ngualla site closes again this November
for the wet season.
Above: Community classroom's project at Itiziro nearing completion
Above: CEO Rocky Smith and Project Manager Patrick Ochieng inspect
Site Plans
Above: The Ngualla camp team September 2018
PAGE 15
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Teesside, UK Rare Earth Refinery
Planning permission secured
Planning permission for the planned refinery was granted in June by the Redcar and Cleveland Borough Council. The
permission is a substantial milestone in the development of the refinery and the primary regulatory hurdle required to allow
the construction of the plant. The receipt of the planning permission was a culmination of 18 months of work by Peak and
its UK based engineering and environmental consultants WYG. The environment licence which is required for the operation
of the facility was also received from the Environment Agency in September 2018.
Teesside Refinery
The Teesside rare earth refinery and separation plant is planned to process 32,700 tonnes per year of beneficiated ore from
the proposed Ngualla mine and processing plant in Tanzania. The refinery will produce high purity rare earths including
2,800 tonnes of mixed Neodymium (Nd) and Praseodymium (Pr) oxide. Nd and Pr are the core ingredients for permanent
magnets used in the high-efficiency electric-motors and generators that are crucial to low carbon technologies such as EVs
wind energy, robotics and many others. The demand for NdPr is projected to grow exponentially as these new technologies
grow in response to the global low carbon revolution.
The Teesside plant is a key differentiator between Peak and other rare earth development companies as Peak is the only
current developer who is planning to produce saleable rare earth oxide products in-house enabling the company to sell its
products directly to end users and manufacturers. The plant will also significantly add value to the project as the separated
rare earths will command a higher price than a less refined concentrate or a mixed carbonate.
3D Model of
the Teesside
Refinery located
in the Teesvalley
Industrial Area
Option Agreement Signed for Refinery Land
Following a Heads of Terms agreed with the
UK’s Homes and Communities Agency (HCA)
in 2017 the Company signed a 2-year option
for a 250 year lease over a 19 hectare parcel of
land in Teesside. The agreement also includes
the ability to extend the option for a further
12 months if required.
Located in the Wilton International Site, near
the town of Middleborough in the United
Kingdom, the site is in a large industrial park
offering a “plug and play” option with access
to reliable competitively priced power, other
utilities and services. Wilton is also adjacent
to the 3rd largest deep water port in the UK
to which the beneficiated rare earth minerals
will be shipped. The site also offers an existing
effluent disposal system and is close to a
number of solid waste management facilities.
The large (19 hectares) size of the parcel of
land will allow space for future expansions
that the Company is considering which include
the doubling of production as well as allowing
for potential metal making facilities and acid
making plants.
PAGE 16
ENABLING LOW CARBON TECHNOLOGIES Review of Operations
(continued)
Global Requirements for NdPr
BEV/PHEV
Air Con + Refrigeration
Electronics
Hybrid EVs
Wind Turbines
Automotive
Other Industrial
Industrial Robotics
Speakers
E-Bikes
PAGE 17
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
Director's Report
The directors of Peak Resources Limited submit herewith the financial statements of the Company for the financial year ended 30 June
2018. 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 Meurer
Mr Darren Townsend
Mr Jonathan Murray
Mr John Jetter
Mr Tony Pearson
Mr Peter Harold
Mr David Hammond Technical Director (Resigned 3 November 2017)
Non-Executive Chairman (Appointed 23 April 2018)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (Appointed 21 August 2018)
Non-Executive Chairman (Resigned 31 December 2017)
INFORMATION ON DIRECTORS
Mr Peter Meurer – Non-Executive Chairman (Appointed 23 April 2018)
MBA from RMIT
Peter has a distinguished career of over 40 years in the Corporate Finance sector and is currently Non-Executive Chairman of Nomura
Australia. He first joined Nomura Australia in 2009 and prior to this held the roles of Vice Chairman for Citigroup and Merrill Lynch.
Peter has a strong strategic focus and has forged trusted advisor relationships through the many market related transactions in which
he has been involved covering all aspect of corporate finance including equity raisings, debt financing, corporate advisory and M&A.
Peter is currently the Non-Executive Chairman of Nomura Australia.
Mr Darren Townsend – Non-Executive Director (Appointed 3 February 2014, Managing Director from 3 February 2014 to 3 November
2017)
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 Talison) 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 is not currently a
director of any other listed companies.
Mr Jonathan Murray – Non-Executive Director (Appointed 22 February 2011, Chairman from 1 April 2015 to 30 November 2015 and
31 December 2017 until 22 April 2018)
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 Limited Ltd – from 22 January 2010
Vietnam Industrial Investments Limited - from 19 January 2016
PAGE 18
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
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
Mr Tony Pearson – Non-Executive Director (Appointed 21 August 2018)
B.Comm, AICD
Tony is an experienced international natural resources executive and company director. He is currently a Commissioner at the
Independent Planning Commission, and prior to this he was a group executive at TSX/HKEx listed SouthGobi Resources, based in Hong
Kong, where he was responsible for the company’s corporate and strategic initiatives. Tony also has over 15 year’s commercial and
investment banking experience, covering the Asia Pacific natural resources industry, most recently as a Managing Director at HSBC.
During his career Tony has raised or invested in excess of $15bn across equities, hybrids, bonds, convertibles and project finance. Tony
is not currently a director of any other listed companies.
Mr Peter Harold – Non-Executive Chairman (Appointed 1 December 2015, Resigned 31 December 2017)
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 also serves as a director of the following other listed companies:
Panoramic Resources Limited – from 16 March 2001
Pacifico MInerals Limited - from 19 August 2013
Horizon Gold Limited – from 10 August 2016
Mr David Hammond – Technical Director (Appointed 25 October 2010, Resigned 3 November 2017)
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 seven years, since the second drill hole into the main Bastnaesite Zone. He was 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.
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 14 years working in the resources sector in CFO and Company
Secretarial roles for both ASX and TSX listed companies.
PAGE 19
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
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 $4,903,224 (2017: loss $4,886,187).
The basic and diluted loss per share for the Group for the year was 0.82 cents (2017: 1.04 cents).
FINANCIAL POSITION
The net assets of the Group have increased from $22,675,197 at 30 June 2017 to $31,217,637 at 30 June 2018.
The Group’s working capital, being current assets less current liabilities, was $7,594,395 at 30 June 2018 (2017: $2,653,847).
The Company completed a two tranche new share placement in May 2018 which resulted in the Company raising $7.33m before
costs. A total of 183,264,889 new shares were issued at $0.04 per share, in addition each subscriber received a free 1 for 2, 2 year
option exercisable at $0.06 before 14 June 2020. The Company’s major shareholder and project partner Appian Natural Resources
Fund (Appian) maintained its pre placement ownership interest percentage in the Company with its $1.031m subscription applied
towards part repayment of the loan due to Appian from the Company. In addition Appian provided a waiver from the mandatory loan
repayment provisions on the balance of funds raised by the placement.
As reported with $6.47m cash at bank at the end of the reporting period Peak is well funded going into the 2018/2019 financial year
to meet its share of the Ngualla Project costs, and its corporate and administration requirements.
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.
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:
During the year the Company has made further contributions to Associate Company, Peak African Minerals (PAM) amounting to
$2,592,090 for its share of the Ngualla Project costs. Peak maintains a 75% interest in PAM (Appian 20%, IFC 5%). During the year the
Company repaid $3.121m to Appian against the loan facility provided by Appian to the Company.
Capital raising equity issues were made during the year as follows:
15 September 2017 placement - issue of 30,625,000 shares at $0.04 per share to raise $1,225,000
25 September 2017 completion of placement - issue of 39,375,000 shares at $0.04 per share to raise $1,575,000
27 October 2017 pursuant to a 1 for 8 Rights Issue - issue of 50,056,627 shares at $0.04 per share to raise $2,002,265
2 November 2017 pursuant to the shortfall offer pursuant to the 1 for 8 Rights Issue - issue of 18,375,264 shares at $0.04 per share
to raise $735,111
3 May 2018 placement issue tranche 1 - issue of 86,000,000 shares at $0.04 per share to raise $3,440,000
21 June 2018 placement issue tranche 2 issue - issue of 97,264,889 shares at $0.04 per share to raise $3,890,596
Participants in the September 2017 placement and 1 for 8 rights issue each received 1 for 2 free attaching option exercisable at $0.06
each on or before 1 November 2018. 81,215,888 options have been issued which trade under the code PEKOB on the ASX.
Participants in the May and June 2018 placement each received a 1 for 3 free attaching option exercisable at $0.06 each on or before
14 June 2020. 61,088,247 options have been issued which trade on the ASX under the code PEKOC.
PAGE 20
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
AFTER BALANCE DATE EVENTS
There have been no events subsequent to 30 June 2018 that are expected to have a material impact on the financial statements or
operations of the Company.
MEETINGS OF DIRECTORS
The number of meetings attended by each Director of the Company during the financial year was:
Board Meetings
Peter Meurer
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Tony Pearson
Number held and
entitled to attend
2
15
19
13
19
19
0
Number attended
2
15
17
10
19
19
0
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 Meurer
Jonathan Murray
Darren Townsend
John Jetter
Tony Pearson
1,250,000
2,638,753
675,000
-
-
30,416,666
10,424,376
10,037,500
10,000,000
-
-
-
-
-
-
Details of issues made to directors during the period 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.
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.
PAGE 21
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
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.
During the year the company issued the following performance based option packages to its directors:
14,000,000 Unlisted Options exercisable at $0.10, expiring 21 June 2022, vesting subject to continuous service and the Company
either (a) entering into an agreement with a strategic partner for the development of its Ngualla Project; or (b) attracting $20 million
worth of funding for FEED (Front End Engineering and Design) for the development of the Ngualla Project.
30,000,000 Unlisted Options exercisable at $0.15, expiring 21 June 2023, vesting subject to continuous service and the Company
settling a funding package for the development and construction of the Ngualla Project.
The Board consider that the achievement of these milestones will deliver increased shareholder wealth.
PAGE 22
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
The Company received approval from Shareholders for its Employee Option Plan (EOP) and Performance Rights Plan (PRP) at the
Annual General Meeting on 29 November 2017. Under the scheme eligible participants will, subject to meeting continuing service
conditions, be offered the following series of Options:
Tranche 1 – 50% of share Options by number of total package with an exercise price set at an approximate 25% premium to the 1
month VWAP to date of issue. These Options will vest on 30 June 2018 subject to satisfaction of continuing service with the Company
at that time. The Options will expire 3 years from the date of issue.
Tranche 2 - 25% of share Options by number of total package with an exercise price set at an approximate 25% premium to the 1
month VWAP to date of issue. These Options will vest on issue on or around 1 January 2019 and will be issued subject to satisfaction
of criteria determined by the Board including continuing service with the Company at that time. The Options will expire 3 years from
the date of issue.
Tranche 3 - 25% of share Options by number of total package with an exercise price set at an approximate 25% premium to the 1
month VWAP to date of issue. These Options will vest on issue on or around 1 January 2020 and will be issued subject to satisfaction
of criteria determined by the Board including continuing service with the Company at that time. The Options will expire 3 years from
the date of issue.
During the year the Tranche 1 issues have been made to employees with a total of 11,750,000 Options issued with an exercise price of
$0.0625 and expire on 16 January 2021.
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:
Total income
Net loss before tax
Net loss after tax
2018
$
618,718
2017
$
1,861,274
2016
$
9,253
2015
$
38,426
2014
$
54,134
(4,903,224)
(4,886,187)
(15,892,428)
(4,195,877)
(3,148,903)
(4,903,224)
(4,886,187)
(15,892,428)
(4,195,877)
(3,148,903)
Closing share price at end of year
$0.036
$0.067
$0.048
$0.085
Basic loss per share (cents)
Dividends per share
0.82
-
1.04
-
3.95
-
1.13
-
$0.06
1.05
-
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 2018 financial year were:
Peter Meurer – Non-Executive Chairman (Appointed 23 April 2018)
Darren Townsend – Non-Executive Director (Transitioned from MD to N.E.D 3 November 2017)
Jonathan Murray – Non-Executive Director
John Jetter- Non-Executive Director
Rocky Smith – Chief Executive Officer (Transitioned from COO to CEO 21 September 2017)
Michael Prassas – Executive General Manager Sales, Market & Business Development
Graeme Scott– Chief financial Officer & Company Secretary
Lucas Stanfield – General Manager of Development (Became a KMP 2 October 2017)
Peter Harold – Non-Executive Chairman (Resigned 31 December 2017)
David Hammond – Technical Director (Resigned 3 November 2017)
PAGE 23
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
Total remuneration for the year was:
Salary and fees
Non-monetary benefits
Superannuation
Share based payments
Total
Remuneration of individual KMP’s were:
2018
$
2017
$
1,647,780
1,571,607
88,830
64,923
34,489
1,836,022
59,011
78,850
215,130
1,924,598
Short term benefits
Post-em-
ployment
benefits
Share based
payments
Proportion related to:
Salary &
fees
Non-
monetary
Super-
annuation
Options
Total
Equity#
Performance#
30-Jun-18
$
$
$
$
%
Perfor-
mance
Rights*
$
$
-
2,850
8,666
8,282
-
-
-
-
160,785
170,229
-
32,850
(298,043)
32,473
(66,440)
(149,022)
-
-
-
32,473
32,473
44,291
67,473
67,473
19,798
(447,065)
258,204
315,876
-
-
-
-
-
-
-
61,658
27,172
-
-
88,830
88,830
-
-
22,800
22,325
45,125
-
-
-
-
-
89,340
565,089
44,670
345,592
44,670
307,470
44,670
301,995
223,350
1,520,146
64,923
(447,065)
481,554
1,836,022
94%
0%
14%
0%
48%
48%
34%
15%
12%
14%
15%
15%
21%
Directors
Peter Meurer
Peter Harold
Darren Townsend
David Hammond1
Jonathan Murray
John Jetter
Executives
Rocky Smith2
Michael Prassas
Graeme Scott
Lucas Stanfield3
9,444
30,000
190,464
185,031
35,000
35,000
484,939
414,091
273,750
240,000
235,000
1,162,841
Total remuneration
1,647,780
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
* The value of the performance rights expensed from date of issue to 30 June 2017 totalling $447,805 ($298,043 for Darren Townsend and $149,022
for David Hammond) were written back during the year on cancellation of the rights due to the vesting conditions not having been meet.
# The % excludes the value of the performance rights which were written back during the year.
1 Darren Townsend and David Hammond ceased executive employment during the year. Included in their salary and fees is accrued leave entitlements
paid out totalling $62,754 for Darren Townsend and $97,851 for David Hammond.
2 Rocky Smith received a performance bonus relating to the completion of the BFS totalling $25,000 included in his Salary and fees for the period.
3 Lucas Stanfield become a KMP on 2 October 2017. His remuneration for the full year has been included in this report.
PAGE 24
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
Short term benefits
Post-em-
ployment
benefits
Share based payments
Proportion related to:
Salary &
fees
Non-
monetary
Super-
annuation
Performance
Rights*
Options
Total
Equity# Performance#
30-Jun-17
$
$
$
$
$
%
%
Directors
Peter Harold
Darren Townsend
David Hammond
Jonathan Murray
John Jetter
Robin Mills
Executives
Rocky Smith
Michael Prassas
Graeme Scott
60,000
300,000
250,000
35,011
35,004
8,751
688,766
389,091
273,750
220,000
882,841
$
-
119,022
59,511
-
-
-
5,700
28,500
23,750
-
-
-
5,449
9,596
6,398
1,599
1,271
-
71,149
457,118
339,659
36,610
36,275
8,751
57,950
178,533
24,313
949,562
-
-
-
-
-
-
-
30,204
28,807
-
59,011
-
-
20,900
20,900
-
-
-
-
6,590
3,295
2,399
425,885
305,852
243,299
12,284
975,036
59,011
Total remuneration
* The performance rights are subject to achievement of performance milestone vesting criteria.
# Some options will vest subject to length of service and performance criteria.
1,571,607
178,533
78,850
36,597
1,924,598
8%
2%
2%
4%
4%
0%
2%
2%
1%
1%
1%
3%
0%
26%
18%
0%
0%
0%
19%
0%
0%
0%
0%
9%
Options and performance rights granted during the year ended 30 June 2018
Options granted during the year
30-Jun-18
Directors
Date of
issue
Number
of options
issued
Value per
Option*
Total
value of
issue $
Vesting
Date#
Exercise
Price
Expiry Date
Number vested
during the year
Peter Meurer
21-Jun-18
10,000,000
$0.0159
159,300
21-Jun-18
$0.0500
21-Jun-21
10,000,000
21-Jun-18
5,000,000
$0.0130
64,850
$0.1000
21-Jun-22
21-Jun-18
15,000,000
$0.0127
190,350
$0.1500
21-Jun-23
-
-
Darren Townsend 21-Jun-18
2,000,000
$0.0159
31,860
21-Jun-18
$0.0500
21-Jun-21
2,000,000
21-Jun-18
3,000,000
$0.0130
38,910
21-Jun-18
5,000,000
$0.0127
63,450
$0.1000
21-Jun-22
$0.1500
21-Jun-23
-
-
Jonathan Murray 21-Jun-18
2,000,000
$0.0159
31,860
21-Jun-18
$0.0500
21-Jun-21
2,000,000
21-Jun-18
3,000,000
$0.0130
38,910
21-Jun-18
5,000,000
$0.0127
63,450
$0.1000
21-Jun-22
$0.1500
21-Jun-23
-
-
John Jetter
21-Jun-18
2,000,000
$0.0159
31,860
21-Jun-18
$0.0500
21-Jun-21
2,000,000
21-Jun-18
3,000,000
$0.0130
38,910
21-Jun-18
5,000,000
$0.0127
63,450
$0.1000
21-Jun-22
$0.1500
21-Jun-23
-
-
60,000,000
817,160
16,000,000
PAGE 25
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
30-Jun-18
Executives
Date of
issue
Number
of options
issued
Value per
Option*
Total
value of
issue $
Vesting
Date#
Exercise
Price
Expiry Date
Number vested
during the year
Rocky Smith
16-Jan-18
3,000,000
$0.0298
89,340
30-Jun-18
$0.0625
16-Jan-21
Michael Prassas
16-Jan-18
1,500,000
$0.0298
44,670
30-Jun-18
$0.0625
16-Jan-21
Graeme Scott
16-Jan-18
1,500,000
$0.0298
44,670
30-Jun-18
$0.0625
16-Jan-21
Lucas Stanfield
16-Jan-18
1,500,000
$0.0298
44,670
30-Jun-18
$0.0625
16-Jan-21
Total
7,500,000
67,500,000
223,350
1,040,510
* Options are valued using the Black-Scholes method on date of grant.
# Unvested Options vest on achievement of milestones and length of service criteria.
Options granted during the year ended 30 June 2017
3,000,000
1,500,000
1,500,000
1,500,000
7,500,000
23,500,000
30-Jun-17
Directors
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
Peter Harold 16-Nov-16
500,000
16-Nov-16
500,000
$0.007
$0.004
Executives
1,000,000
-
Total
1,000,000
3,500
16-Nov-16
$ 0.15
5-Jan-18
5-Jan-17
$ 0.20
5-Jan-18
2,000
5,500
-
5,500
500,000
500,000
1,000,000
-
1,000,000
No Performance Rights were granted during the year ended 30 June 2018 or 30 June 2017.
Shareholdings of KMP’s
Opening
Balance
Granted as
Remuneration
Exercise of
Options/PRs
Cancelled
Market
Transactions#
Closing
Balance
30-Jun-18
Directors
Peter Meurer
Peter Harold*
- .
- .
Darren Townsend
600,000
David Hammond*
1,590,198
Jonathan Murray
1,456,669
John Jetter
- .
3,646,867
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
Total
PAGE 26
- .
- .
- .
- .
- .
3,646,867
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
1,250,000
1,250,000
- .
- .
75,000
675,000
(1,590,198)
-
-
- .
- .
1,182,084
2,638,753
- .
- .
(1,590,198)
2,507,084
4,563,753
- .
- .
- .
- .
- .
1,249,989.
1,249,989
3,750,000
3,750,000
325,000
325,000
-
-
5,324,989
5,324,989
(1,590,198)
7,832,073
9,888,742
ENABLING LOW CARBON TECHNOLOGIES
Directors' Report
(continued)
# Participation in the Company’s equity capital raisings.
* Mr Harold and Mr Hammond ceased to be KMP’s during the period and their holdings are not reported at period end.
Option Holdings of KMP’s including performance rights
30-Jun-18
Opening
Balance
Granted as
Remuneration
Exercise of
Options &
PRs
Expired/
Cancelled1
Market
Transactions#
Closing
Balance
Vested at 30
June
Directors
Peter Meurer
-
30,000,000
Peter Harold*
1,000,000
-
Darren Townsend
9,000,000
10,000,000
David Hammond*
5,166,666
-
Jonathan Murray
666,666
10,000,000
John Jetter
666,666
10,000,000
16,499,998
60,000,000
Executives
Rocky Smith
4,000,000
3,000,000.
Michael Prassas
2,000,000
1,500,000.
Graeme Scott
1,000,000
1,500,000
Lucas Stanfield
666,666
1,500,000
7,666,666
7,500,000
-
-
-
-
-
-
-
- .
- .
- .
- .
- .
416,666
30,416,666 10,416,666
(1,000,000)
-
-
-
(9,000,000)
37,500
10,037,500
2,037,500
(5,166,666)
-
-
-
(666,666)
424,376
10,424,376
2,424,376
(666,666)
-
10,000,000
2,000,000
(16,499,998)
878,542
60,878,542 16,878,542
(4,000,000)
520,827
3,520,827
3,520,827
(2,000,000)
1,458,333
2,958,333
2,958,333
(1,000,000)
141,666
1,641,666
1,641,666
(666,666)
- .
1,500,000
1,500,000
(7,666,666)
2,120,826
9,620,826
9,620,826
Total
24,166,664
67,500,000 -
(24,166,664)
2,999,368.
70,499,368 26,499,368
# Participation in the company’s equity capital raisings.
* Mr Harold and Mr Hammond ceased to be KMP’s during the period and their holdings are not reported at period end.
1 7,500,000 performance rights issued to Darren Townsend and Dave Hammond expired for failure to meet the vesting conditions. A further 8,333,332
and 8,333,332 options expired unexercised, these options were granted in the year ended 30 June 2015 and had an exercise price of $0.15 and $0.20
per share respectively and expired on 5 January 2018.
Performance income as a proportion of total income
Rocky Smith received a performance bonus relating to the completion of the Company’s Bankable Feasibility Study totalling $25,000
which is included in his total reported Salary and fees of $414,091 for the period. No other bonuses have been paid to executives
during the year.
Service agreements:
The key terms of the service agreements with the KMP’s are:
Peter Meurer – Non-Executive Chairman (Appointed 23 April 2018)
Under Peter’s agreement annual directors fees of $50,000 effective 23 April 2018 were payable. No retirement benefits are provided
for.
Jonathan Murray / John Jetter/ Darren Townsend - 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 $40,000 (previously $35,000) per annum effective 1 July 2018. No
retirement benefits are provided for.
PAGE 27
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
Darren Townsend - Managing Director– (Transitioned from MD to N.E.D 3 November 2017)
Darren was employed under an Executive Service Agreement (ESA). The agreement provided for an annual salary of $328,500
(previously $400,000) inclusive of superannuation effective 1 May 2016, plus a fully expensed vehicle (not taken), expenses,
discretionary bonuses, options and performance rights. The Executive was entitled to leave in accordance with the relevant legislation.
Darren resigned from the role of Managing Director on 3 November 2017 and transitioned to the position of Non-Executive Director.
Rocky Smith – Chief Executive Officer - (Transitioned from COO to CEO 21 September 2017)
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 six 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.
Lucas Stanfield – Development Manager (appointed executive 2 October 2017)
Lucas is employed under an ESA. The agreement provides for an annual salary of $235,000 effective 1 November 2016, plus
superannuation, expenses, discretionary performance bonuses and eligibility for options. The Executive is entitled to leave in
accordance with the relevant legislation. Lucas’s engagement has no fixed term but is subject to a three 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 $250,000 (previously $220,000) effective 1
November 2017, plus superannuation, expenses, discretionary performance bonuses 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.
Peter Harold – Non-Executive Chairman (Resigned 31 December 2017)
Under Peter’s agreement annual directors fees of $60,000 (previously $70,000) effective 1 June 2016, plus superannuation were
payable. No retirement benefits are provided for. Peter resigned from the role as of 31 December 2017.
Dave Hammond – Technical Director (Resigned 3 November 2017)
Dave was employed under an ESA. The agreement provided for an annual salary of $250,000 (previously $300,000) effective 1 May
2016, plus superannuation, expenses, and eligibility for options. The Executive was entitled to leave in accordance with the relevant
legislation. Dave resigned as of 3 November 2017.
Other transactions
During the year Steinepreis Paganin Lawyers and Consultants a legal practice associated with Mr Jonathan Murray received $191,327
(2017: $79,990) as fees for the provision of legal advice. Balance outstanding at 30 June 2018 and included in trade creditors $35,332
(30 June 2017: $24,468).
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
Listed options on issue are:
CODE
PEKOB
PEKOC
Expiry Date
1 November 2018
14 June 2020
Exercise Price
$0.06
$0.06
Number under option
81,215,888
61,088,247
PAGE 28
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
Unissued ordinary shares of the Company under option to service providers only are:
Expiry Date
1 November 2018*
27 February 2021
14 June 2021
* Listed PEKOB Options
Exercise Price
$0.06
$0.06
$0.065
Number under option
12,000,000
4,000,000
9,000,000
Unissued ordinary shares of the Company under option to directors, employees and former employees are:
Expiry Date
16 January 2021
21 June 2021
21 June 2022
21 June 2023
Exercise Price
$0.0625
$0.05
$0.10
$0.15
Number under option
11,750,000
16,000,000
14,000,000*
30,000,000*
* Vesting subject to length of service criteria and achievement of performance milestones.
During the year 20,616,666 Options with exercise prices ranging from $0.15 to $0.55 expired unexercised.
During the year 8,000,000 Performance Rights expired through the failure to achieve the vesting conditions.
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.
Details of options issued during the year are detailed in the Remuneration Report. No Performance Rights were issued during the year.
There were no Performance Rights remaining on issue at the date of this 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 THE 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 2018 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.
PAGE 29
ENABLING LOW CARBON TECHNOLOGIES Directors' Report
(continued)
The Board of Directors is satisfied that the provision of non-audit services performed during the year by the Company’s auditors is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied
that the services did not compromise the external auditor’s independence for the following reason:
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
The nature of the services provided does not compromise the general principles relating to auditors independence as set out in the
APES 110 (Code of Ethics for Professional Accountants).
The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Peter Meurer
Non-executive Chairman
Perth, 11 September 2018
PAGE 30
ENABLING LOW CARBON TECHNOLOGIES Auditor's Independence
Declaration
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222 Fax:
+61 8 9429 2436 ey.com/
au
Auditor’s Independence Declaration to the Directors of Peak Resources Limited
As lead auditor for the audit of Peak Resources Limited for the financial year ended 30 June 2018, 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
Darryn Hall Partner
Perth
11 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:035
PAGE 31
ENABLING LOW CARBON TECHNOLOGIES Independent Auditor's Report
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222 Fax:
+61 8 9429 2436 ey.com/
au
Independent Auditor's Report to the Members of Peak Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Peak Resources Limited (the ‘Company’) and its subsidiaries
(collectively the ‘Group’), which comprises the consolidated statement of financial position as at 30 June 2018, 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 to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
a)
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018 and of its
consolidated financial performance for the year ended on that date; and
b)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(a) in the financial report, which describes the principal conditions that raise doubt
about the Group’s ability to continue as a going concern. These conditions indicate the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial report of the current year. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the matter is provided in that context. In addition to the
matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter
described below to be the key audit matters to be communicated in our report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:034
PAGE 32
ENABLING LOW CARBON TECHNOLOGIES Independent Auditor's Report
(continued)
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report, including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material misstatement of the financial report.
The results of our audit procedures, including the procedures performed to address the matters below, provide the
basis for our audit opinion on the accompanying financial report.
Recoverability of the investment in associate
Why significant
How our audit addressed the key audit matter
As at 30 June 2018, the Group holds a 75% interest in Peak
African Minerals (“PAM”). PAM is a Mauritian company that
currently owns 100% of the shares in PR NG Minerals Limited
(“PRNG”), the 100% owner of the Ngualla Project.
We assessed the reasonableness of the Group’s impairment
assessment process and the resultant recoverable value
determined for the Ngualla Project. Our audit procedures
included the following:
The Group’s investment in PAM is accounted for using the
equity method. The carrying amount of the investment in PAM
amounted to $31.1 million (2017: $29.5 million). Disclosure of
investment in PAM is included in notes 3 and 4 to the financial
report including reference to the status of a Special Mining
License in Tanzania over one of PRNG’s 3 licenses.
Upon conclusion of a bankable feasibility study and the follow
up internal process optimisation study for the Ngualla Project,
the Group incorporated these into an overall assessment for the
recoverability of the investment in associate. The Group has
determined that the recoverable amount is higher than the
carrying amount and assessed that it is reasonable that no
impairment was recognised as at 30 June 2018.
We focused on this matter because of the significant judgment
and estimates involved in the determination of the recoverable
amount of the Ngualla Project including assumptions relating
to commodity prices, capital and operating costs and an
appropriate discount rate to reflect the risk having regard to the
current status of the Ngualla Project.
►
►
►
►
►
Assessed the recoverability of the investment in
associate with reference to project economic models
and assumptions included in the recoverable amount
determination such as commodity prices, capital and
operating costs, foreign exchange rates and discount
rates.
Assessed the competence, capabilities and objectivity of
the Group’s experts involved on project economic
models.
Involved our valuation specialists to assist us in evaluating
the methodology used in the impairment model and the
reasonableness of the discount rate and commodity
prices used in the computation.
Performed market comparison of commodity prices and
conducted a price sensitivity analysis to assess the
impact of the changes in the commodity prices.
Reviewed legal correspondence between the Group and
its external legal counsel with respect to the status of
PRNG’s mining and prospecting license rights
applications and the status of its tenure over the areas
to which the project relates. This has been set out in
Note 4 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:034
PAGE 33
ENABLING LOW CARBON TECHNOLOGIES Independent Auditor's Report
(continued)
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information included in
the Company’s 2018 Annual Report other than the financial report and our auditor’s report thereon. We obtained
the directors’ report that is to be included in the annual report, prior to the date of this auditor’s report, and we
expect to obtain the remaining sections of the annual report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
Responsibilities of the directors 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
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:034
PAGE 34
ENABLING LOW CARBON TECHNOLOGIES Independent Auditor's Report
(continued)
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
►
►
►
►
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the enitity’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the consolidated financial report represents the underlying transactions and events in a manner
that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision
and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most significance in the
audit of the financial report of the current year and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:034
PAGE 35
ENABLING LOW CARBON TECHNOLOGIES Independent Auditor's Report
(continued)
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 28 of the directors' report for the year ended 30
June 2018.
In our opinion, the Remuneration Report of Peak Resources Limited for the year ended 30 June 2018, complies with
section 300A of the Corporations Act 2001.
Responsibilities
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.
Ernst & Young
Darryn Hall Partner
Perth
11 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:RP:PEAK:034
PAGE 36
ENABLING LOW CARBON TECHNOLOGIES Consolidated Statement of
Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 30 June 2018
Note
Interest income
R&D rebate received
Other income
Total income
Employee benefits expenses
Share based payments expenses
Depreciation expenses
Borrowing costs
Administrative and other costs
Technical feasibility costs
Share of loss of associate
Loss recognised on partial disposal of associate
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
Total comprehensive loss for the year
Loss per share (in cents)
Basic and Diluted loss per share
5
5
5
5
4
3
8
7
The statement should be read in conjunction with the accompanying notes
2018
$
39,635
561,907
17,176
618,718
(732,455)
(459,792)
(11,232)
(1,499,506)
(763,939)
(27,260)
(2,027,758)
-
2017
$
21,746
1,813,602
25,926
1,861,274
(905,730)
(230,173)
(15,871)
(983,721)
(692,504)
(1,985,476)
(1,433,955)
(500,031)
(4,903,224)
(4,886,187)
-
-
(4,903,224)
(4,886,187)
(48,576)
-
1,068,269
41,064
(172,425)
(851,914)
(3,883,531)
(5,869,462)
(0.82)
(1.04)
PAGE 37
ENABLING LOW CARBON TECHNOLOGIES
Consolidated Statement of
Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
Note
2018
$
2017
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other assets – due from associate
Prepayments
Total current assets
Non-current assets
Property plant and equipment
Investment in associate
Investments
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Other payables
Loans and borrowings – due to associate and other parties
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
9
10
11
12
13
4
14
15
16
17
16
18
20
19
6,468,748
2,125,680
63,487
30,000
1,526,145
12,275
8,100,655
6,731
31,114,813
8,000
127,254
31,256,798
39,357,453
345,809
160,451
506,260
870,170
6,763,386
7,633,556
8,139,816
29,437
55,000
1,227,526
4,709
3,442,352
16,500
29,482,222
8,000
-
29,506,722
32,949,074
588,264
200,241
788,505
303,454
9,181,918
9,485,372
10,273,877
31,217,637
22,675,197
77,217,398
4,042,304
(50,042,065)
65,251,219
2,562,819
(45,138,841)
31,217,637
22,675,197
The statement should be read in conjunction with the accompanying notes
PAGE 38
ENABLING LOW CARBON TECHNOLOGIES
Consolidated Statement of
Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2018
OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
R&D rebate received
Borrowing costs paid
Cash used in operating activities
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Proceeds from sale of non-current assets
Payment for Site 2 Land Purchase Option
Contributions to associates
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
(Loan to) / Borrowings from associate and other parties
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
Note
2018
$
2017
$
(1,583,327)
(4,407,854)
25,406
578,241
(969,000)
(1,948,680)
(3,207)
1,743
(127,253)
(2,592,080)
(2,720,797)
12,867,878
25,000
(901,699)
(2,588,447)
(298,618)
9,104,114
4,434,637
2,125,680
(91,569)
6,468,748
21,585
1,813,602
(725,523)
(3,298,190)
(4,778)
-
-
(6,593,537)
(6,598,315)
1,502,784
-
(79,840)
1,663,294
6,968,319
10,054,557
158,053
1,723,830
243,797
2,125,680
9
4
9
The statement should be read in conjunction with the accompanying notes
PAGE 39
ENABLING LOW CARBON TECHNOLOGIES
Consolidated Statement of
Changes in Equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2018
At 1 July 2016
Loss for the year 2017
Other comprehensive income
Group’s share of associate’s other comprehen-
sive income
Total comprehensive loss for the year
Equity issued
Performance rights exercised
Equity based payments
Transaction costs
At 30 June 2017
Loss for the year 2018
Other comprehensive income
Group’s share of associate’s other comprehen-
sive income
Total comprehensive loss for the year
Equity issued
Performance rights exercised
Equity based payments
Transaction costs
At 30 June 2018
Contributed
Equity
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
Accumulated
losses
Total equity
$
$
63,828,274
1,807,143
1,508,778
(40,252,654)
26,891,541
-
-
-
-
1,502,784
-
-
(79,839)
-
-
-
-
-
-
230,173
-
-
(4,886,187)
(4,886,187)
(131,361)
(851,914)
-
-
(131,361)
(851,914)
(983,275)
(4,886,187)
(5,869,462)
-
-
-
-
-
-
-
-
1,502,784
-
230,173
(79,839)
65,251,219
2,037,316
525,503
(45,138,841)
22,675,197
-
-
-
-
12,867,878
-
-
(901,699)
-
-
-
-
-
-
459,792
-
-
(4,903,224)
(4,903,224)
(48,576)
1,068,269
-
-
(48,576)
1,068,269
1,019,693
(4,903,224)
(3,883,531)
-
-
-
-
-
-
-
-
12,867,878
-
459,792
(901,699)
77,217,398
2,497,108
1,545,196
(50,042,065)
31,217,637
The statement should be read in conjunction with the accompanying notes
PAGE 40
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Peak Resources Limited for the year ended 30 June 2018 was authorised for issue in accordance with a resolution
of the directors on 6 September 2018.
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 $7,594,395 (2017: net current assets $2,653,847) and incurred an operating cash outflow after
income tax of $1,948,680 (30 June 2017: $3,298,190) for the year ended 30 June 2018. 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 reported, with $6.47m cash at bank at the end of the reporting period Peak is well funded in the short term to meet its share of
the Ngualla Project costs, and its corporate and administration requirements. In order to progress the project further, on a time-frame
planned by management, the Group’s cashflow forecasts suggest there will be a need in the future to obtain further funding. 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.
The Company completed a two tranche new share placement in May 2018 which resulted in the Company raising $7.33m before costs.
A total of 183,264,889 new shares were issued at $0.04 per share, in addition each subscriber received a free 1 for 2 2 year option
exercisable at $0.06 before 14 June 2020. The Company’s major shareholder and project partner Appian Natural Resources Fund
(Appian) maintained its pre placement ownership interest percentage in the Company with its $1.031m subscription applied towards
part repayment of the loan due to Appian from the Company. In addition Appian provided a waiver from the mandatory repayment
provisions of the term loan facility for this placement. The loan facility provides that for equity funds raised by the Company over a 12
month period:
a) 25% of any funds raised pursuant to a capital raising of up to $3 million are applied towards repayment of the
Appian loan; and
b) 50% of any funds raised pursuant to a capital raising of over $3 million are applied towards repayment of the
Appian loan.
PAGE 41
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
b) Adoption of new or revised accounting standards
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The Group applied for the first time certain amendments to the standards which are effective for annual periods beginning on or after
1 July 2017. The nature and the impact of each new standard or amendment is described below.
Title
AASB 2016 – 2: Amendments to
Australian accounting Standards
– Disclosure Initiative: Amend-
ments to AASB 107
AASB 2016-1 Amendments to
Australian Accounting Standards
– Recognition of Deferred Tax
Assets for Unrealised Losses
Summary
The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including
both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Group has provided
the information for both the current and the comparative period in Note 24.
This Standard makes amendments to AASB 112 Income Taxes to clarify the accounting for deferred tax assets for unrealised
losses on debt instruments measured at fair value. This does not have an impact on the Group’s financial statements.
AASB 2017-2 Amendments to
Australian Accounting Standards
– Further Annual Improvements
2014-2016 Cycle
This Standard clarifies the scope of AASB 12 Disclosure of Interests in Other Entities by specifying that the disclosure require-
ments apply to an entity’s interests in other entities that are classified as held for sale or discontinued operations in accordance
with AASB 5 Non-current Assets Held for Sale and Discontinued Operations. This does not have an impact on the Group’s
financial statements.
Standards and Interpretations in issue not yet adopted
A number of new Standards, amendment of Standards and interpretations have 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:
Title
Summary
AASB 9 – Financial Instru-
ments
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 15 - Revenue from Con-
tracts with Customers
AASB16 – Leases
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.
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-finan-
cial 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 disclo-
sure requirements for lessees.
Impact on Group financial report
A review has been undertaken by the
management, the standard is not ex-
pected to have an impact on the Group
with the exception of the classification
of some receivable between measure-
ment at amortised cost and at fair val-
ue through profit and loss. Based on
initial assessment, upon adoption, the
Group expects to recognise a transition
adjustment to the opening retained
earnings amounting to $0.6-$0.7 mil-
lion.
Based on the Group’s current opera-
tions, this is not expected to have a
material impact on the Group.
Application date
for Group
1 July 2018
1 July 2018
The Group is still assessing the impact
of this standard.
1 July 2019
PAGE 42
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
Title
Summary
AASB 2014-10: Amendments
to Australian Accounting
Standards – Sale or Contri-
bution of Assets between an
Investor and its Associate or
Joint Venture
The amendments clarify that a full gain or loss is recognised when
a transfer to an associate or joint venture involves a business as
defined in AASB 3 Business Combinations. Any gain or loss resulting
from the sale or contribution of assets that does not constitute a
business, however, is recognised only to the extent of unrelated
investors’ interest in the associate or joint venture.
Impact on Group financial report
Based on the Group’s current opera-
tions, this is not expected to have any
impact on the Group.
Application date
for Group
1 January 2018
AASB 2015-10 defers the mandatory effective date (application
date) of AASB 2014-10 so that the amendments are required to be
applied for annual periods beginning on or after 1 January 2018
instead of 1 January 2016.
The interpretation clarifies that in determining the spot exchange
rate to use on initial recognition of the related asset, expense or
income (or part of it) on the derecognition of non-monetary asset
or non-monetary liability relating to advance consideration, the date
of the transaction is the date on which an entity initially recognises
the non-monetary asset or non-monetary liability arising from the
advance consideration. If there are multiple payments or receipts in
advance, then the entity must determine a date of the transactions
for each payment or receipt of advance consideration.
The Interpretation clarifies the application of the recognition and
measurement criteria in IAS 12 Income Taxes when there is uncer-
tainty over income tax treatments. The Interpretation specifically
addresses the following:
Ø Whether an entity considers uncertain tax treatments
Ø
Ø
Ø
separately
The assumptions and entity makes about the examina-
tion of tax treatments by taxation authorities
How an entity determine taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates
How an entity considers changes in facts and circum-
stances
AASB Interpretation 22 – For-
eign Currency Transactions
and Advance Consideration
AASB Interpretation 23 –
Uncertainty over Income Tax
Treatments
c) Basis of consolidation
Based on the Group’s current opera-
tions, this is not expected to have a ma-
terial impact on the Group.
1 January 2018
Based on the Group’s current opera-
tions, this is not expected to have a ma-
terial impact on the Group.
1 January 2019
The consolidated financial statements of Peak Resources Limited comprise the financial statements of the Group and its subsidiaries
as at 30 June 2018. 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 consistency with
those policies applied by the parent entity. All controlled entities have a June financial year-end.
PAGE 43
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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.
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.
PAGE 44
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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.
Interest
Revenue is recognised as the interest accrues.
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.
PAGE 45
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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.
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.
k) Earnings per share
a. Basic earnings per share
Basic earnings per share is determined by dividing the group operating result after income tax attributable to members by weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during
the year.
b. Diluted earnings per share
Diluted EPS is calculated as the net profit attributable to members, adjusted for:
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.
PAGE 46
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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; (vi) long term loans and borrowings; and (vii) 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 objec-
tive 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
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;
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.
PAGE 47
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drill-
ing 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.
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.
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.
PAGE 48
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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.
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
PAGE 49
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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).
3. LOSS ON PARTIAL DISPOSAL OF 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 was
determined that Peak Resources no longer solely controlled nor did it have joint control of PAM despite maintaining its majority
ownership and beneficial interests in PAM.
The Company 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 was deconsolidated from the Peak Group effective July 2015 and the retained interest in PAM re-measured at its fair
value at that time, being the deemed cost on initial recognition of Peak’s investment in the associate. Fair value was determined with
reference to the implied market value of the Appian and IFC payment which is an arms-length transaction therefore the Directors
believed represented fair value in an orderly transaction. The fair value is level 3 per the fair value hierarchy. The Company recorded
a $6,848,406 gain (including the re-cycle of associated foreign currency translation reserve on reclassification from a subsidiary to an
associate) related to this disposal in the half-year 31 December 2015 period.
At the end of the prior period, a portion of the investment in associate was classified as held for sale at 30 June 2016 in accordance with
the dilution of a further 12.5% interest related to stage 2 of the financing transaction with Appian and IFC. On completion of stage 2 of
the financing transaction by Appian and IFC in August 2016 and September 2016 respectively, they invested a combined US$2,874,955
into PAM an additional 10% and 2.5% interest respectively with the Group’s remaining interest in the PAM Group diluted to 75%.
Pursuant to the additional contributions of capital, by Appian and IFC for the stage 2 referred to above, in the associate between 30
June 2016 and the dates of deemed disposal, the Company has recorded a loss of $500,031 on the disposal of this 12.5% interest in the
PAM Group during the period ending 30 June 2017. There were no changes in the interest held in the PAM Group in the current period.
4. INVESTMENTS IN ASSOCIATES
As set out in Note 3, the Group has an 75% 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:
PAGE 50
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Income
Administrative costs
Employee benefits
Depreciation and amortisation expenses
Other expenses
Project costs
Finance costs
Loss before income tax expense
Income tax expense
Loss for the period
Other comprehensive income/(loss)
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
Less Group’s share of loss in the associate for the period
Loss on partial disposal
Recycle of FCTR on partial disposal
Add Group’s share of movement in other comprehensive income in the associate for
the period
Peaks additional equity investment in PAM during the period
Investment in associate
$AUD
$AUD
30 June 2018
30 June 2017
78,330
49,329,168
164,454
8,530,849
40,712,195
531,112
(105,959)
(143,038)
(35,710)
(305,758)
(2,639,012)
(5,312)
(2,703,677)
-
(2,703,677)
1,424,359
(1,279,318)
(2,027,758)
1,068,269
29,482,222
(2,027,758)
-
-
1,068,269
2,592,080
31,114,813
194,277
47,059,107
564,292
7,980,879
38,708,212
264,788
(316,425)
(45,628)
(35,032)
(1,628,373)
-
(11,465)
(1,772,135)
-
(1,772,135)
(1,073,609)
(2,845,744)
(1,433,955)
(851,914)
25,847,009
(1,433,955)
(500,031)
(172,424)
(851,914)
6,593,537
29,482,222
Classified in the statement of financial position as:
Investment in associate
Investment in associate
31,114,813
31,114,813
29,482,222
29,482,222
Tenure over Ngualla Project
The Ngualla Project tenure is held over three licence areas held by PRNG; the area containing the Mineral Resource is subject to a
Special Mining Licence (SML) application lodged in August 2017 for which grant is still pending following enactment of the changes to
the Mining legislation announced by the Tanzanian Government in July 2017. The Prospecting Licence (PL) which PRNG held over this
area, at the time of lodgment of the SML application, expired in September 2017. The Tanzanian Mining Act provides that the PL will
remain valid until grant or refusal to grant an application for a licence is made. The Company expects the SML to be granted in due
course. The other two licence areas are also held by PRNG under granted PLs.
PAGE 51
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
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
Other income
Total other income
Occupancy costs
Listing compliance costs
Travel & accommodation
Technical feasibility costs
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
2018
$
39,635
841
2017
$
21,746
-
561,907
1,813,602
16,335
25,926
618,718
1,861,274
(122,364)
(209,069)
(76,019)
(81,638)
(55,489)
(106,007)
(27,260)
(1,985,476)
Auditors' remuneration
82,814
65,038
-
65,038
5,548
-
5,548
-
82,814
5,886
-
5,886
6. OPERATING SEGMENTS
Information reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment per-
formance 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.
PAGE 52
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
30 June 2018
30 June 2017
E&D
Interest 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
E&D
Total
$
Unallocated
$
Total
$
E&D
Unallocated
Total
$
$
(11,232)
(11,232)
(195)
(15,676)
(15,871)
-
-
-
-
-
-
-
-
-
39,635
39,635
579,083
579,083
618,718
618,718
-
-
-
-
(459,792)
(459,792)
(1,499,506)
(1,499,506)
-
-
-
-
$
-
-
-
-
-
-
-
-
21,746
21,746
1,839,528
1,839,528
1,861,274
1,861,274
-
-
-
-
(230,173)
(230,173)
(983,721)
(983,721)
(500,031)
(500,031)
-
-
(1,433,955)
(1,985,476)
Share of loss of associate
(2,027,758)
Technical feasibility costs
(27,260)
(2,027,758)
(1,433,955)
(27,260)
(1,985,476)
Other expenses
Income Tax
Segment results
Segment assets
Segment liabilities
Additions to non-current assets:
Plant and equipment
Investment in associate
7. LOSS PER SHARE
-
-
(1,496,394)
(1,496,394)
-
-
-
-
(1,598,234)
(1,598,234)
-
-
(2,055,018)
(2,848,206)
(4,903,224)
(3,419,626)
(1,466,561)
(4,886,187)
31,114,813
8,242,640
39,357,453
29,482,222
3,466,853
32,949,074
-
-
2,592,080
2,592,080
(8,139,816)
(8,139,816)
3,207
3,207
-
-
(10,273,877)
(10,273,877)
4,778
4,778
-
2,592,080
6,593,537
-
6,593,537
3,207
2,595,287
6,593,537
4,778
6,598,315
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
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
2018
Cents
(0.82)
Nos.
2017
Cents
(1.04)
Nos.
594,373,862
470,332,142
-
43,383,332
PAGE 53
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
8. INCOME TAX
a.
The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
2018
$
-
-
-
2017
$
-
-
-
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 27.5% (2017: 27.5%) (1,348,386)
(1,343,702)
Add tax effect of:
- Revenue losses not recognised
- Other non-allowable items
- Other deferred tax balances not recognised
Less tax effect of:
- Other deferred tax balances not recognised
- Non-assessable items
Income tax expense reported in statement of comprehensive income
c.
Deferred tax recognised at 27.5% (2017:27.5%) (Note 1):
Deferred tax liabilities:
Investment in associate
Accrued interest
Other
Deferred tax assets:
Carry forward revenue losses
Net deferred tax
d.
Unrecognised deferred tax assets at 27.5% (2017:27.5%) (Note 1):
Carry forward revenue losses
Carry forward capital losses
Unrealised FX
Capital raising costs
Provisions and accruals
Other
PAGE 54
509,097
849,119
163,669
706,555
7,497,098
-
173,499
6,859,951
-
6,361,210
173,499
498,741
-
-
(4,527,414)
(4,791,325)
(4,281)
(3,266)
(369)
(2,185)
4,534,961
4,793,879
-
-
1,142,411
270,879
395,210
186,081
343,867
7,392
403,882
270,879
144,513
197,674
128,626
15,311
2,345,840
1,160,885
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
(b) the company continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the company in utilising the benefits.
(c)
Note 1 - the corporate tax rate for eligible companies will reduce from 30% to 25% by 30 June 2027 providing certain turnover
thresholds and other criteria are met. Deferred tax assets and liabilities are required to be measured at the tax rate that is expected to
apply in the future income year when the asset is realised or the liability is settled. The Directors have determined that the deferred
tax balances be measured at the tax rates stated.
Note 2 - Tax Consolidation
For the purpose of income taxation, the Company and its 100% Australian controlled entities have formed a tax consolidated group
effective from 1 July 2012.
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:
Loss on partial disposal of associate
Share of loss of associate
Share based payments expenses
Depreciation expenses
Foreign exchange gain/loss
Movement in working capital items:
Increase/(Decrease) in trade and other receivables
Increase/(Decrease) in prepayments
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
2018
$
2017
$
318,748
1,581,180
6,150,000
6,468,748
544,500
2,125,680
(4,903,224)
(4,886,187)
-
500,031
2,027,758
1,433,955
459,792
11,232
212,908
(34,049)
(7,568)
324,261
(39,790)
230,173
15,871
(202,731)
95,564
27,627
(526,116)
13,623
(1,948,680)
(3,298,190)
PAGE 55
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
10. TRADE AND OTHER RECEIVABLES
Current
GST 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
2018
$
2017
$
45,993
17,494
25,510
3,927
63,487
29,437
63,487
29,437
-
-
63,487
29,437
2018
$
30,000
30,000
2017
$
55,000
55,000
A deposit of $30,000 (2017: $55,000) has been secured against a guarantee issued by the bank as a rental deposit for the office lease.
This cash balance is not available for withdrawal until the guarantee is withdrawn.
12. OTHER ASSETS – DUE FROM ASSOCIATE
Associate-company loan receivables
The Associate-company loans receivables are non-recourse, interest free loans and repayable on demand.
13. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in net carrying amount
Balance at the beginning of the year
Additions
Disposals
Depreciation for the year
Balance at the end of the year
PAGE 56
2018
$
2017
$
1,526,145
1,227,526
1,526,145
1,227,526
2018
$
2017
$
97,701
(90,970)
103,002
(86,502)
6,731
16,500
16,500
3,207
(1,744)
27,593
4,778
-
(11,232)
(15,871)
6,731
16,500
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
14. INVESTMENTS
Investment in listed shares – at fair value (Level 1)
15. OTHER ASSESTS
Site 2 option payment
2018
$
8,000
8,000
2018
$
127,254
127,254
2017
$
8,000
8,000
2017
$
-
-
The Company has signed a 24 month option for a 250 year lease on a 19 hectare parcel of land in Teesside for a rare earth refinery and
separation plant. The agreement also includes the ability to extend the option for a further 12 months if required. The option term
commenced on 18 June 2018.
16. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Non-current
Other payables
Ageing of payables
Payable within 3 months
Beyond 12 months
Payables are non-interest bearing, unsecured and are generally payable in 30-90 days
17. PROVISIONS
Employee benefits - leave entitlements
Annual leave and long service leave
At 1 July 2017
Arising during the year
Utilised during the year
At 30 June 2018
2018
$
2017
$
345,809
588,264
870,170
303,454
345,809
870,170
1,215,979
588,264
303,454
891,718
2018
$
2017
$
160,451
200,241
2018
$
200,241
188,748
(228,538)
160,451
PAGE 57
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
18. LOANS AND BORROWINGS
Non-current:
Working capital loan facility – Peak African Minerals
Bridging Loan – Appian Pinnacle Holdco Limited
Balance at the end of the year
2018
$
2017
$
4,756,887
2,006,499
6,763,386
4,586,972
4,594,946
9,181,918
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 the facility is deemed fully drawn down 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.
Non-current – Appian loan facility – On 20 September 2016 Appian advanced A$4,179,828 (US$3,145,739) under a full draw down 3
year loan facility. The loan is denominated in US$ with interest of 15% per annum calculated daily and capitalised at the end of each
calendar quarter, payable at the time of the loan repayment. Provisions of the facility provide for partial mandatory repayment from
subsequent capital raisings undertaken by the Company. During the year repayments of principal and interest totalling $3,021,436
(US$2,400,837) were made.
19. RESERVES
At 30 June 2016
Share based payment made in 2017
Recycled to profit and loss on partial disposal of associate
Group’s share of associates FCTR
Exchange difference on translation of foreign operations
At 30 June 2017
Share based payment made in 2018
Group’s share of associates FCTR
Exchange difference on translation of foreign operations
At 30 June 2018
Share based
payment
reserve
$
1,807,143
230,173
-
-
-
2,037,316
459,792
-
-
2,497,108
Foreign currency
translation reserve
$
1,508,778
-
(172,425)
(851,914)
41,064
525,503
-
1,068,269
(48,576)
1,545,196
Total
$
3,315,921
230,173
(172,425)
(851,914)
41,064
2,562,819
459,792
1,068,269
(48,576)
4,042,304
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.
PAGE 58
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
20. CONTRIBUTED EQUITY
Balance at 30 June 2016
Issue of Placement Shares to IFC and Appian
Issue of Shares on conversion of loan note at $0.103 per share
Equity issue costs
Balance at 30 June 2017
PEK placement @ 4c per share
PEK placement @ 4c per share
PEK 1:8 Entitlement Issue @ 4c per share
PEK 1:8 Entitlement Issue @ 4c per share
PEKOB 6c Option Conversions
PEK placement @ 4c per share
PEK placement @ 4c per share
Equity issue costs
Balance at 30 June 2018
14-Oct-16
11-Nov-16
15-Sep-17
25-Sep-17
27-Oct-17
2-Nov-17
27-Feb-18
3-May-18
21-Jun-18
Nos.
454,474,034
16,306,957
6,674,140
477,455,131
30,625,000
39,375,000
50,056,627
18,375,264
100
86,000,000
97,264,889
799,152,011
$
63,828,274
815,348
687,436
(79,839)
65,251,219
1,225,000
1,575,000
2,002,265
735,011
6
3,440,000
3,890,596
(901,699)
77,217,398
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 227,054,035 options over unissued shares as follows:
Options over Ordinary Shares
Date of expiry/
exercise or issue
Nos
Status
Exer-
cise
Price
Expiry
Date
28,616,666
(10,549,999)
(9,916,667)
(8,000,000)
(150,000)
-
Balance at 30 June 2017
Expired:
Unlisted options with an exercise price of $0.15
Unlisted options with an exercise price of $0.20
Unlisted performance rights which failed to achieve the vesting criteria
Unlisted Options, exercisable at $0.55
Issued:
PEKOB listed $0.06 options
PEKOB listed $0.06 options
PEKOB listed $0.06 options
PEKOC listed options exercisable at $0.06 expiring 14 June 2020
Unlisted Options, exercisable at $0.06 expiring 27 February 2021
Unlisted Options, exercisable at $0.0625 expiring 16 January 2021.
Unlisted Options, exercisable at $0.05 expiring 21 June 2021
Unlisted Options, exercisable at $0.10 expiring 21 June 2022
Unlisted Options, exercisable at $0.15 expiring 21 June 2023
Unlisted Options, exercisable at $0.065 expiring 14 June 2021.
Exercised:
PEKOB listed options exercisable at $0.06
Balance at 30 June 2018
5-Jan-18
5-Jan-18
5-Jan-18
3-Mar-18
27-Oct-17
2-Nov-17
11-Dec-17
21-Jun-18
27-Feb-18
16-Jan-18
21-Jun-18
21-Jun-18
21-Jun-18
21-Jun-18
25,028,257
54,187,631
2,000,000
61,088,247
4,000,000
11,750,000
16,000,000
14,000,000
30,000,000
9,000,000
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Unvested
Unvested
Vested
0.060
0.060
0.060
0.060
0.060
0.0625
0.05
0.10
0.15
0.065
1/11/2018
1/11/2018
1/11/2018
14/06/2020
27/02/2021
16/01/2021
21/06/2021
21/06/2022
21/06/2023
14/06/2021
27-Feb-18
(100)
227,054,035
Vested &
unvested
$0.05
-$0.15
1/11/2018 -
21/06/2023
Pursuant to shareholder approval obtained at the General Meeting held on 14 June 2018, 60,000,000 options were issued to Directors
subject various vesting conditions. A further 11,750,000 options were issued to employees under the Employee Share Options plan
approved at the Annual General Meeting held on 29 November 2017. 28,616,666 options and performance rights expired unexercised
during the period.
Participants in the September 2017 placement and 1 for 8 rights issue each received 1 for 2 free attaching option exercisable at $0.06
each on or before 1 November 2018. 81,215,888 options have been issued which trade under the code PEKOB on the ASX.
PAGE 59
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
Participants in the May and June 2018 placement each received a 1 for 3 free attaching option exercisable at $0.06 each on or before
14 June 2020. 61,088,247 options have been issued which trade on the ASX under the code PEKOC.
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.
21. 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 29 November 2017. During the financial year ended 30 June 2018 a total of 11,750,000
Options were issued under the EOP to directors, executives, employees and contractors.
Outside of the EOP an additional 60,000,000 options were issued to directors, some subject to various performance vesting conditions
as approved by shareholders at the General Meeting of the Company on 14th June 2018.
31,000,000 Options were also issued to Brokers and Advisors to the company during the year.
Options granted during and as at the year ended 30 June
2018:
Outstanding at 1 July 2017
Granted during the year:
02-Nov-17 - issue of $0.06 vested options expiring 1-Nov-
2018
11-Dec-17 - issue of $0.06 vested options expiring 1-Nov-
2018
16-Jan-18 - issue of $0.0625 vested options expiring 16-
Jan-2021
21-Jun-2018 - issue of $0.05 options, vesting subject to
performance criteria, expiring 21-Jun-2021
21-Jun-2018 - issue of $0.10 options, vesting subject to
performance criteria, expiring 21-Jun-20221
21-Jun-2018 - issue of $0.15 options, vesting subject to
performance criteria, expiring 21-Jun-20232
27-Feb-2018 - issue of $0.06 vested options expiring 27-
Feb-2021
21-Jun-18 - issue of $0.065 vested options expiring 14-
Jun-2021
Exercised during the year
Expired during the year
Outstanding at 30 June 2018
Exercisable at 30 June 2018
WA (weighted average)
PAGE 60
Number
WA Exercise
Price
Value per
option
20,466,666
$0.18
10,000,000
$0.06
$0.0086
2,000,000
$0.06
$0.0140
11,750,000
$0.0625
$0.0298
16,000,000
$0.05
$0.0159
14,000,000
$0.10
$0.0130
30,000,000
$0.15
$0.0127
4,000,000
$0.06
$0.01885
9,000,000
$0.065
$0.01546
-
-
(20,466,666)
-
96,750,000
$0.093
52,750,000
$0.058
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
Options granted during and as at the year ended 30 June 2017:
Outstanding at 1 July 2016
Granted during the year:
Number
WA Exercise
Price
Value per
option
28,983,332
$0.16
16-Nov-16 - issue of $0.15 vested options expiring 5-Jun-2018
500,000
$0.15
$0.007
16-Nov-16 - issue of $0.20 options vested on 5-Jan-2017 expiring
5-Jan-2018
500,000
$0.20
$0.004
Exercised during the year
Expired during the year
Outstanding at 30 June 2017
Exercisable at 30 June 2017
WA (weighted average)
-
-
(9,516,666)
-
20,466,666
$0.18
20,466,666
$0.18
1 The Unlisted Options exercisable at $0.10, expiring 21 June 2022 issued to Directors, vesting subject to continuous service and the
Company either (a) entering into an agreement with a strategic partner for the development of its Ngualla Project; or (b) attracting $20
million worth of funding for FEED (Front End Engineering and Design) for the development of the Ngualla Project.
2 The Unlisted Options exercisable at $0.15, expiring 21 June 2023 issued to Directors, vesting subject to continuous service and the
Company settling a funding package for the development and construction of the Ngualla Project.
The volume weighted exercise price of options issued during the year was $0.104 (2017: $0.175).
The weighted average remaining contractual life for share options outstanding at 30 June 2018 was 3.94 years (2017: 0.52 years).
The weighted average fair value of options issued during the year was $0.0163 per option (2017: $0.006).
Performance Rights Plan
The group has a Performance Rights Plan (PRP) for the granting of performance rights to eligible participants which was last approved
by Shareholders at a General Meeting of the Company on 29 November 2017.
During the year ended 30 June 2018, 8,000,000 performance rights expired due to the vesting conditions not being met. No additional
performance rights were issued during the period.
Performance rights granted during and as at the year
ended 30 June 2018:
Outstanding at 1 July 2017
Granted during the year:
Exercised during the year
Expired during the year
Outstanding at 30 June 2018
Exercisable at 30 June 2018
Number
Exercise
Price
8,000,000
$0.00
-
-
-
-
(8,000,000)
-
-
-
$0.00
-
PAGE 61
ENABLING LOW CARBON TECHNOLOGIES Notes to Financial Statements
(continued)
Performance rights granted during and as at the year
ended 30 June 2017:
Outstanding at 1 July 2016
Granted during the year:
Exercised during the year
Expired during the year
Outstanding at 30 June 2017
Exercisable at 30 June 2017
Number
Exercise
Price
8,000,000
$0.00
-
-
-
-
-
-
8,000,000
-
$0.00
-
The volume weighted exercise price of rights issued during the year was $0.00 (2017: $0.00)
The weighted average remaining contractual life for rights options outstanding at 30 June 2018 was 0 years (2017: 0.52 years)
The weighted average fair value of rights issued during the year was $0.00 per right (2017: $0.00)
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
(WA weighted average)
2018
$0.042
1.50%
0%
77%
2017
$0.067
1.50%
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.
The value of options and performance rights granted are expensed over the vesting period. Included in share based payments expense
of $459,792 (2017: $230,173) is $Nil (2017: $Nil) relating to the shares issued during the year, $939,661 (2017: $39,738) related to
options granted during the year and prior year, and -$479.869* (2017: $190,435) relating to performance rights granted in the prior
year.
*Write back of non-market based Performance Rights expired unvested during the year.
22. CONTINGENCIES AND COMMITMENTS
Lease commitments
The company has committed to an office lease of $33,000 per annum for 3 years to 31 December 2020. The lease provides a break
clause during each year of the lease.
Up to 1 year
1 to 5 Years
Capital Commitments
At 30 June 2018, the Group has no capital commitments. (2017: Nil).
PAGE 62
2018
$
16,500
-
16,500
2017
$
8,100
-
8,100
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
Contingencies
At 30 June 2018, the Group had no contingencies (2017: Nil).
23. KEY MANAGEMENT PERSONNEL DISCLOSURE
Salary and fees – short term benefits
Non-monetary benefits
Superannuation
Share based payments
2018
$
2017
$
1,647,780
1,571,607
88,830
64,923
34,489
59,011
78,850
215,130
1,836,022
1,924,598
Loans to KMP’s
No loans were made to KMP’s during the financial year (2017: 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 $191,327
(2016: $79,990) as fees for the provision of legal advice. Balance outstanding at 30 June 2018 and included in trade creditors $35,332
(30 June 2017: $24,468).
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.
24. 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
Peak Resources (Tanzania) Limited
Peak Technology Metals Limited
Associated entities
Peak African Minerals Limited (Directly)
PR Ng Minerals Limited (Indirectly)
Incorporation
Ownership interest
2018
2017
Australia
100%
100%
Australia
Australia
Australia
Australia
Tanzania
U.K
Mauritius
Tanzania
100%
100%
100%
100%
100%
100%
75%
75%
100%
100%
100%
100%
100%
-
75%
75%
PAGE 63
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
25. 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; (vi) long term loans and borrowings; and (vii) 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
Financial assets
Trade and other payables
Non-current – Loans and borrowings
2018
$
2017
$
6,468,748
2,125,680
63,487
30,000
29,437
55,000
912,895
1,227,526
8,000
8,000
(1,215,979)
(891,718)
(6,763,386)
(9,181,918)
The carrying amount of financial instruments closely approximate their fair value on account of the short maturity cycle except Due
from Associate and Non-current – Loans and Borrowings.
For Due from Associate and Non-current, their fair value is determined by discounting future cash flows using rates currently available
for debt on similar terms, credit risk and remaining maturities.
For the Non-current – Loans and borrowings their carrying amounts approximate their fair values as it is subject to commercial lending
rates.
Credit Risk
The group's credit risks arise from potential default of trade and other receivables, cash and cash equivalents, other financial assets
and amount due from associates. The maximum credit exposure is limited to the carrying amount of trade and other receivables and
amount due from associates $1,589,631 (2017: $1,256,964) at reporting dates.
As at 30 June 2018, the receivable balances consist primarily of GST credits. Management does not consider the GST 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.
PAGE 64
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
The contractual maturity analysis of the group's financial instruments are noted below:
Up to 3
months
$
2018
> 3 months
$
Up to 3
months
$
2017
> 3 months
$
Total
$
Total
$
Financial liabilities
Trade and other payables
(345,809)
(870,170)
(1,215,979)
(588,264)
(1,678,792)
(2,267,056)
Short term loans
Long term loans(1)(2)
-
-
-
-
(8,390,514)
(8,390,514)
-
-
-
-
(10,810,908)
(10,810,908)
Total financial liabilities
(345,809)
(9,260,684)
(9,606,493)
(588,264)
(12,489,700)
(13,077,964)
Financial assets
Cash and cash equivalents
6,468,748
-
6,468,748
2,125,680
-
2,125,680
Other financial assets
Due from associate
Investments
-
30,000
30,000
-
55,000
55,000
306,524
1,219,621
1,526,145
1,227,526
-
1,227,526
-
135,254
135,254
-
8,000
8,000
Trade and other receivables
63,487
-
63,487
29,437
-
29,437
Total financial assets
6,838,759
1,384,875
8,223,634
3,382,643
63,000
3,445,643
1) PAM working capital facility is repayable the earlier of 29 March 2021 or on the commencement of commercial production from the Ngualla project.
2) Appian Bridging loan advanced on 20 September 2016 with a 3 year loan facility. Provisions of the facility provide for partial mandatory repayment from
subsequent capital raisings undertaken by the Company
Interest rate risk
Interest rate risk is the risk that fair values and cash flows of the Group’s financial instruments will be affected by changes in the
market interest rates.
The Group’s cash and cash equivalents are impacted by interest rate risks. Other receivables and payables have short maturities and
are non-interest bearing. Management believes that the risk of interest rate movement would not have a material impact of the
Group’s operations.
Management does not closely monitor the interest rates offered on cash and cash equivalents as the Group’s primary objective is
exploration of resources rather than earning interest income. The cash balances are invested at the prevailing short term market
interest rates with credit worthy financial institutions.
The sensitivity of the interest bearing financial instruments to a 1% change in market interest rate are noted below:
Cash and cash equivalents
Impact on profit and equity: +1% movement
Impact on profit and equity: -1% movement
2018
$
2017
$
6,468,748
2,125,680
64,687
21,257
(64,687)
(21,257)
PAGE 65
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
Foreign currency risk
The Group’s exposure to foreign currency price risk is limited to the USD denominated loan balances. At 30 June 2018 the Group had
an outstanding balance of USD $5,657,210 (2017: $6,999,377). The Group will transfer cash and cash equivalents into foreign currency
to meet short term expenditure obligations.
The Group’s expenditure obligations in Tanzania are primarily in US dollars as a result the Group is exposed to fluctuations in the US
dollar to Australian currency. These exposures are not subject to a hedging programme. The Board and management from time to
time having regard to likely forward commitments review this policy.
The following table demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held
constant. The impact on the Group’s profit before tax and equity is due to changes in the fair value of the USD denominated loan
balances.
USD$ denominated loan balances
Impact on profit and equity: +5% movement in USD exchange rate
Impact on profit and equity: -5% movement in USD exchange rate
Commodity price risk
The Group’s exposure to commodity price risk is minimal at this stage of the operation
Changes in liabilities arising from financing activities
2018
US$
2017
US$
5,657,210
6,999,377
282,861
349,969
(282,861)
(349,969)
2018
1-Jul-17
Cash flows
$
$
Foreign
exchange
movement
$
30-Jun-18
$
Financial liabilities
Non-current interest bearing loans and borrowing
(9,181,918)
2,588,447
(169,915)
(6,763,386)
Total liabilities from financing activities
(9,181,918)
2,588,447
(169,915)
(6,763,386)
26. SUBSEQUENT EVENTS
There were no subsequent events to 30 June 2018 that have a material impact on the financial statements at present.
PAGE 66
ENABLING LOW CARBON TECHNOLOGIES
Notes to Financial Statements
(continued)
27. PARENT ENTITY DISCLOSURE
The following details information related to the parent entity, Peak Resources Limited, at 30 June 2018. 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
2018
$
6,565,840
31,287,441
37,853,281
499,125
7,633,556
8,132,681
2017
$
2,205,611
28,292,944
30,498,555
777,851
9,485,371
10,263,222
29,720,600
20,235,333
77,533,149
2,560,592
(50,373,141)
29,720,600
65,566,970
2,100,800
(47,432,437)
20,235,333
(2,940,704)
(2,834,658)
-
-
(2,940,704)
(2,834,658)
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 22, at year end.
PAGE 67
ENABLING LOW CARBON TECHNOLOGIES
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) Subject to the matters set out in Note 2 to the Financial Statements there are reasonable grounds to believe that the company
will be able to pay its debts as and when they become due and payable;
(b) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 2 to the
financial statements;
(c) the attached financial statements and notes thereto for the financial year ended 30 June 2018 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 2018 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 Meurer
Non-Executive Chairman
Perth, 11 September 2018
PAGE 68
ENABLING LOW CARBON TECHNOLOGIES
Tenement Schedule and
Reserves and Resources
TENEMENT SCHEDULE
Project
Tenement
%
Status
Arrangement/Comment
Tanzanian Projects
Mikuwo
Mlingi
Ngualla
PL 9157/2013
PL 10897/2016
SML 00601/2017
75*
75*
75*
Granted
Granted
Application
Held by 100% Tanzanian associate company PR NG Minerals Ltd
Held by 100% Tanzanian associate company PR NG Minerals Ltd
Held by 100% Tanzanian associate company PR NG Minerals Ltd
*Peak holds a 75% beneficial interest in the above three licences with Appian and IFC holding a 20% and 5% interest respectively through their equity
interest in Peak African Minerals.
ORE RESERVES AND MINERAL RESOURCES
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 annual review date is 30 June.
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. The Company confirms that the form and context in
which the Competent Person's findings are presented have not been materially modified from the original market announcements.
THERE HAS BEEN NO CHANGE TO ORE RESERVES AND MINERAL RESOURCES WITH PREVIOUS YEAR
Ore Reserve estimates
The Ore Reserve estimate was completed by Orelogy Consulting Pty Ltd and released to the ASX on 12 April 2017 titled "Ngualla Rare
Earth Project - Updated Ore Reserve". The release includes a detailed summary of the supporting project assumptions and data.
Table 1: Classification of Ore Reserve estimates for the Weathered Bastnaesite Zone at Ngualla.
ORE RESERVE AS AT 30 JUNE 2018
JORC CATEGORY
Ore Tonnes
(millions)
REO %
Contained REO
Tonnes
Proved
Probable
Total
17.0
1.5
18.5
4.78
5.10
4.80
813,000
74,000
887,000
See Table 2 for the breakdown of individual REO’s. Reported according to the JORC 2012 Code and Guidelines.
PAGE 69
ENABLING LOW CARBON TECHNOLOGIES Tenement Schedule and
Reserves and Resources
(continued)
Table 2: Relative components of individual rare earth oxides (including yttrium) as a percentage of total REO for the Ngualla Project Ore Reserve estimate
(refer to Table 1)
RARE EARTH OXIDES
REO GRADE (%)
% OF TOTAL REO
Proved
Probable
All
Proved
Probable
All
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total REO
1.318
2.305
0.228
0.788
0.077
0.014
0.029
0.002
0.004
0.000
0.001
0.000
0.001
0.000
0.010
4.78
1.418
2.456
0.243
0.838
0.082
0.015
0.031
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
5.10
1.326
2.317
0.229
0.792
0.077
0.014
0.030
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.80
27.59
48.25
4.77
16.49
1.61
0.30
0.62
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100.00
27.80
48.15
4.77
16.43
1.61
0.28
0.60
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.19
100.00
27.61
48.24
4.77
16.49
1.61
0.30
0.62
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100.00
Values may not balance due to rounding to 0.01%
Ore Reserves
The information in the announcement that relates to Ore Reserve estimates and estimated mine operating costs is 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 mineralisation 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 statement that relates to the Mineral Resource estimates 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 Australasian 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.
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 Australasian 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.
PAGE 70
ENABLING LOW CARBON TECHNOLOGIES Table 2: Relative components of individual rare earth oxides (including yttrium) as a percentage of total REO for the Ngualla Project Ore Reserve estimate
(refer to Table 1)
Tenement Schedule and
Reserves and Resources
(continued)
Mineral Resource estimates
The Mineral Resource as at 30 June 2018 is detailed in the ASX announcement titled ‘Mineral Resource estimate re-stated to include
barite’ of 2 March 2017. The estimates were reported according to the JORC 2012 Code and Guidelines and were completed by Rod
Brown of SRK Consulting (Australasia) Pty Ltd.
Table 3: 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 2018
Lower Cut-
off Grade
JORC Category
Ore Tonnes
(millions)
REO %
Contained
REO Tonnes
BaSO4
%
Ngualla All
Mineral
Resources
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
4,620,000
20.2
13.8
17.6
16.6
* REO (%) includes all the lanthanide elements plus yttrium oxide. See Tables 5 for breakdown of individual REO’s. Figures above may not sum due to
rounding. The number of significant figures does not impy an added level of precision.
The Weathered Bastnaesite Zone Mineral Resource estimate summarised below is a subset and contained within the All Mineral
Resources reported in Table 3 above and is detailed in the same ASX announcements as stated above.
Table 4: 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 2018
Lower Cut-
off Grade
JORC Category
Ore Tonnes
(millions)
REO %
Contained
REO Tonnes
BaSO4
%
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
1,010,000
870,000
90,000
20,000
980,000
37.8
38.3
31.5
37.7
38.6
39.3
35.4
38.6
* REO (%) includes all the lanthanide elements plus yttrium oxide. See Table 5 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 3 above.
Figures above may not sum due to rounding. The number of significant figures does not impy an added level of precision.
PAGE 71
ENABLING LOW CARBON TECHNOLOGIES Tenement Schedule and
Reserves and Resources
(continued)
Table 5: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for 2018 Total Ngualla +1% REO,
Weathered Bastnaesite Zone +1% REO and Weathered Bastnaesite Zone +3% REO and Mineral Resources summarised in Tables 3 and 4.
NGUALLA 2018 TOTAL
MINERAL RESOURCE
NGUALLA 2018
WEATHERED BASTNAESITE
ZONE RESOURCE
NGUALLA 2018
WEATHERED BASTNAESITE
ZONE RESOURCE
1% REO
1% REO
3% REO
OXIDE
REO grade (%)
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.
0.587
1.039
0.104
0.348
0.036
0.007
0.016
0.001
0.003
0.000
0.001
0.000
0.001
0.000
0.010
2.15
% of total
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
REO grade (%)
% of total REO
REO grade (%)
% of total REO
1.310
2.293
0.227
0.784
0.076
0.014
0.029
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.75
27.58
48.27
4.77
16.5
1.60
0.29
0.61
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100
1.353
2.364
0.234
0.806
0.078
0.014
0.030
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.90
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
PAGE 72
ENABLING LOW CARBON TECHNOLOGIES Additional Shareholder
Information
(continued)
ADDITIONAL SHAREHOLDER INFORMATION
Quoted security distribution
The distribution of members and their holdings of quoted equity securities in the company as at 28 September 2018 were as follows:
Number Held as at 28 September 2018
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
165
295
289
1139
735
2623
There were 929 holders with less than a marketable parcel of fully paid shares.
Number Held as at 28 September 2018
Class of Equity Securities
PEKOB $0.06 Options (Expire 1 November 2018)
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
73
113
58
149
104
497
Number Held as at 28 September 2018
Class of Equity Securities
PEKOC $0.06 Options (Expire 14 June 2020)
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
-
-
-
23
95
118
PAGE 73
ENABLING LOW CARBON TECHNOLOGIES Additional Shareholder
Information
(continued)
Substantial Security holders
Substantial shareholders listed in the Company’s register as at 28 September 2018 were:
Holder
Number of shares
Percentage of issued capital
APPIAN PINNACLE HOLDCO LIMITED
112,351,377
14.06%
Unquoted Securities
Class of Equity Security
$0.05 options expiring 21 June 2021
$0.06 options expiring 21 February 2021
$0.0625 options expiring 16 January 2021
$0.065 options expiring 14 June 2021
Unvested $0.10 options expiring 21 June 2022
Unvested $0.15 options expiring 21 June 2023
Number
16,000,000
4,000,000
11,750,000
9,000,000
14,000,000
30,000,000
Number of Security Holders
4
2
11
3
4
4
Names of persons holding greater than 20% of a class of unquoted securities:
Class of Equity Security
Number Holder
$0.05 options expiring 21 June 2021
$0.06 options expiring 21 February 2021
$0.06 options expiring 21 February 2021
$0.0625 options expiring 16 January 2021
$0.065 options expiring 14 June 2021
$0.065 options expiring 14 June 2021
Unvested $0.10 options expiring 21 June 2022
Unvested $0.15 options expiring 21 June 2023
Voting Rights
10,000,000
2,500,000
1,500,000
3,000,000
4,500,000
3,000,000
5,000,000
15,000,000
Meurer Investments Pty Ltd
ACN 161 604 315 Pty Ltd
Tyche Investments Pty ltd
Rocky Smith
Melshare Nominees Pty Ltd
ACN 161 604 315 PTY LTD
Meurer Investments Pty Ltd
Meurer Investments Pty Ltd
Ordinary Shares
In accordance with the Company's Constitution, on a show of hands every member present in person or by proxy or attorney or
duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised
representative has one vote for every fully paid ordinary share held.
Restricted Securities
As at 30 June 2018, there were no restricted securities.
PAGE 74
ENABLING LOW CARBON TECHNOLOGIES
Additional Shareholder
Information
(continued)
Twenty largest security holders
The names of the twenty largest holdings of quoted equity securities as at 28 September 2018 are as follows:
Name
CITICORP NOMINEES PTY LIMITED
INTERNATIONAL FINANCE CORPORATION
J P MORGAN NOMINEES AUSTRALIA LIMITED
CRX INVESTMENTS PTY LIMITED
SAMBOLD PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
ERP STRATEGIC MINERALS LLC
BUSHELL NOMINEES PTY LTD
JBBM PTY LTD
ONE MANAGED INVESTMENT FUNDS LIMITED
DIRDOT PTY LIMITED
HOTLAKE PTY LTD
CS FOURTH NOMINEES PTY LIMITED
PINNACLE SUPERANNUATION PTY LIMITED
ACN 161 604 315 PTY LTD
ASHABIA PTY LTD
BEPPE SUPER PTY LIMITED
JB ADVISORY PTY LIMITED
BNP PARABIS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
TOTAL TOP 20
TOTAL
Name
ERP STRATEGIC MINERALS LLC
CITICORP NOMINEES PTY LIMITED
MR MICHAEL NOEL JEFFERY
TYCHE INVESTMENTS PTY LTD
JBBM PTY LTD
ACN 161 604 315 PTY LTD
ACN 161 604 315 PTY LTD
ACN 161 604 315 PTY LTD
723 PTY LTD
ZENIX NOMINEES PTY LTD
SAIL AHEAD PTY LTD
MR CHRISTOPHER RUSSELL VICKERS
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CRX INVESTMENTS PTY LIMITED
MRS JENNY LEE BUSHELL
YARANDI INVESTMENTS PTY LTD
BUSHELL NOMINEES PTY LTD
UNAVAL NOMINEES PTY LTD UNAVAL MANAGEMENT RETIREMENT
BEPPE SUPER PTY LIMITED
SAMBOLD PTY LTD
TOTAL TOP 20
TOTAL
Number Held of Ordinary
Fully Paid Shares
118,637,066
31,846,257
30,972,660
16,427,337
16,325,000
14,076,026
12,609,662
12,500,000
11,072,401
10,500,000
7,875,000
7,149,882
7,146,366
6,731,000
6,500,000
6,250,000
6,200,000
6,156,250
6,150,000
5,295,476
340,420,383
799,152,011
Number Held of PEKOB
$0.06 Options Shares (Ex-
pire 1 November 2018)
6,250,000
4,812,349
4,204,687
3,567,500
3,125,000
3,000,000
2,901,224
2,631,387
2,000,000
2,000,000
1,923,437
1,500,000
1,386,840
1,250,000
1,250,000
1,250,000
1,250,000
1,125,000
1,053,125
900,428
% Held of Issued
Ordinary Capital
14.85
3.99
3.88
2.06
2.04
1.76
1.58
1.56
1.39
1.31
0.99
0.89
0.89
0.84
0.81
0.78
0.78
0.77
0.77
0.66
42.60%
100.00%
% Held of Issued
PEKOB Options
7.70
5.93
5.18
4.39
3.85
3.69
3.57
3.24
2.46
2.46
2.37
1.85
1.71
1.54
1.54
1.54
1.54
1.39
1.30
1.11
58.34%
www.peakresources.com.au
Ground Floor, 5 Ord Street,
West Perth, WA 6005
Ph: +61 8 9200 5360
100.00%
47,380,977
81,215,788
PAGE 75
ENABLING LOW CARBON TECHNOLOGIES Additional Shareholder
Information
(continued)
Name
CITICORP NOMINEES PTY LIMITED
723 PTY LIMITED
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
ACN 161 604 315 PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
JB ADVISORY PTY LIMITED
NERO RESOURCE FUND PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BEPPE SUPER PTY LIMITED
WISEVEST PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ASHABIA PTY LTD
JBBM PTY LTD
CRX INVESTMENTS PTY LIMITED
SPRING STREET HOLDINGS PTY LTD
MR MICHAEL DIMITRIOS PRASSAS
MR KEVIN GERARD DOYLE
ACN 161 604 315 PTY LTD
723 PTY LIMITED
TOTAL TOP 20
TOTAL
Number Held of PEKOCB
$0.06 Options Shares
(Expire 14 June 2020)
8,588,296
5,057,521
4,166,666
2,083,333
2,083,333
2,083,333
2,050,000
1,250,000
1,250,000
1,033,333
866,666
837,500
833,333
833,333
833,333
833,333
833,333
824,999
816,666
791,666
37,949,977
61,088,247
% Held of Issued
PEKOC Options
14.06
7.70
6.82
3.41
3.41
3.41
3.36
2.05
2.05
1.69
1.42
1.37
1.36
1.36
1.36
1.36
1.36
1.35
1.34
1.30
61.55%
100.00%
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.
CORPORATE GOVERNANCE STATEMENT
The Company has adopted the recommendations of the ASX Corporate Governance Council's Principals and Recommendations (Third
Edition) in regard to the Corporate Governance Disclosures and provies disclosure of the Company's Corporate Governance Statement
on the Company's website at: http://www.peakresources.com.au/corporate-governance/
PAGE 76
ENABLING LOW CARBON TECHNOLOGIES THE
INVESTMENT
PROPOSITION
THE
MARKET
THE
TEAM
THE
ASSET
P
E
A
K
R
E
S
O
U
R
C
E
S
L
I
M
I
T
E
D
|
A
n
n
u
a
l
R
e
p
o
r
t
|
J
U
N
E
2
0
1
8
ANNUAL REPORT 2018
ENABLING LOW CARBON TECHNOLOGIES
www.peakresources.com.au
Ground Floor, 5 Ord Street
West Perth, WA 6005
P: +61 8 9200 5360