ANNUAL REPORT
2020
ENABLING LOW CARBON TECHNOLOGIES
ABN: 72 112 546 700
CONTENTS PAGE
2020 Highlights…………………………………………………………………………………………………………………….……01
Chairman’s Letter………………………………………………………………………………………………………………………02
Review of Operations…………………………………………………………………………………………………………………04
Director’s Report …………………………………………………………………………………………………………..….………11
Auditor’s Independence Declaration…………………………………………………………………..…………..…………24
Independent Auditor’s Report……………………………………………………………………………….………….………25
Consolidated Statement of Comprehensive Income……………………………………………………………..……31
Consolidated Statement of Financial Position……………………………………………………………………….……32
Consolidated Statement of Cash Flows………………………………………………………………………………..…….33
Consolidated Statement of Changes in Equity ……………………………………………………………………………34
Notes to Financial Statements ………………………………………………………………………………………………..…35
Directors Declaration………………………………………………………………………………………………………….…..…68
Tenement Schedule and Reserves & Resources………………………………………………………………….………69
Additional Shareholder Information………………………………………………………………………………………..…74
Corporate Governance Statement………………………………………………………………………………………..……76
2020 HIGHLIGHTS
SML application process continuing to progress in Tanzania
NdPr prices up by +35% since April 2020
Fully permitted rare earth hub in the UK can provide an NdPr supply independent of China
Peak 100% ownership structure lays the foundations for development of the Ngualla Project
Swift action taken to strengthen balance sheet and manage expenditure
PEAK AT A GLANCE
WORLD CLASS NDPR RARE EARTH ASSET
Peak has a 100% interest in the Ngualla Rare Earth Deposit. One of the largest and highest grade
undeveloped NdPr Deposits in the world.
ADVANCED UNDEVELOPED NDPR PROJECT
Definitive Feasibility Study completed by tier one engineering firm Wood Group Plc.
Based on a JORC compliant Mineral Resource and Ore Reserve and a process flowsheet fully
proven and piloted.
PRODUCING A FULLY SEPARATED PRODUCT
Establish a rare earth Mine and Concentrator at Ngualla in Tanzania.
Operate a rare earth separation plant in Tees Valley, United Kingdom producing pure
separated NdPr Oxide.
LOW COST PRODUCER
Peak projected to be cash flow positive at US$32 per kg of NdPr making it a lowest quartile cost
producer.
At an NdPr price of US$77.50 the project has annual EBITDA of US$150 million.
RARE EARTH SUPPLY INDEPENDENT OF CHINA
No reliance on China who currently control 80% of global rare earth supply.
1
CHAIRMAN’S LETTER
Dear Shareholder,
The 2020 financial year was a challenging year for most companies,
marked by the significant impact of COVID-19. Against this backdrop,
Peak has continued to make steady progress towards securing its
Special Mining License (SML).
During the year, Peak finalised the consolidation of its ownership of
the Ngualla Rare Earth Project, acquiring a 100% ownership interest in
the project in November 2019. In addition, the team has been very
active throughout the year in pursuit of the SML – with positive
discussion and interaction at all levels of the Tanzanian Government
continuing to take place. The Tanzanian Government has advised the Company that its technical due
diligence of the project is now complete. With the completion of this important step, the Company
understands that the SML is now only awaiting Cabinet approval. Further details on these activities can be
found in the Operations Review section of this Report. More broadly, it appears that the Tanzanian
Government is committed to reinvigorating its mining sector after a difficult few years. Most encouragingly,
in January 2020 the Tanzanian Government reached an agreement to conclude its long-running
negotiations with Barrick Gold Corporation. Peak understands that the terms of that agreement may form
the blueprint for all future SMLs.
The impact of COVID-19 has changed how many governments, organisations, businesses and people view
the world and what measures they need to take to safeguard against future disruptions. COVID-19 has also
provided impetus for many governments to accelerate policies to achieve a greener future. Peak is ready
to play its part in this transition.
The vulnerability of the global rare earth supply chain and the need for businesses to diversify their critical
raw material supplies has been evident for much of the past year through the ongoing China-USA trade
dispute and more recently the supply chain disruptions caused by COVID-19. Certainty of supply of these
critical materials has become an increasing focus for the countries and governments in which these
industrial high-tech businesses operate. Recently, government policies and stimulus packages have been
targeted towards the green economy and renewable energy applications: electric vehicles, wind turbines,
robotics and numerous other technology developments that require increasing amounts of, and will drive
increasing demand for, rare earths, in particular Neodymium (Nd) and Praseodymium (Pr).
Peak’s Ngualla Rare Earth Project, together with its Teesside downstream processing facility, align the
Company’s future with these global developments. Peak is one of the few rare earth development
companies that has a fully piloted process through to separated products. Being wholly outside of China,
controlling this process in-house and producing separated products will enable Peak to capture more of
the value from these sought-after rare earth products.
2
CHAIRMAN’S LETTER
I would like to take this opportunity to thank former directors; Mr Jetter, Mr Sennitt and former Chair, Mr
Meurer for their stewardship of the Company during the last year and of course Peak’s departing CEO,
Rocky Smith. Their collective input has been instrumental in the development of the Company’s plans and
vision. I wish them all well in their future endeavours.
Also, I would like to thank the rest of the team at Peak for their continued determination and dedicated
efforts to see Peak’s vision achieved. Finally, I would also like to express my gratitude to our shareholders
and other key stakeholders for their continued support of the Company.
Tony Pearson
Acting Chair
3
REVIEW OF OPERATIONS
SUMMARY
SML application process continuing to progress in Tanzania
Highlights
•
• NdPr prices up by +35% since April 2020
•
•
•
Fully permitted rare earth hub in the UK can provide an NdPr supply independent of China
Peak 100% ownership structure lays the foundations for development of the Ngualla Project
Swift action taken to strengthen balance sheet and manage expenditure
Activities during the year have been focussed on securing the Special Mining Licence (SML) for the Mine and associated process
facility in Tanzania. Implementation of the new legislation in Tanzania has been a drawn out process for all parties, however
recent strides forward mean that the Company is now only awaiting Tanzanian Government Cabinet approval of its SML
application.
Receipt of the SML is the final major permitting hurdle for the complete Project. Once approved, the Company will be in a
position to negotiate an economic framework for the project with the Tanzanian Government, including the form and nature
of the Government’s free carried interest. The Company has an option over land for the refinery in Teesside, UK and all
permitting for construction and operation of the refinery has already been received. Increasing desire from western countries
and their governments to secure a rare earth supply chain independent of China highlights the opportunity and value of Peak’s
plans to develop both the Ngualla rare earth deposit and Teesside separation facility.
To position Peak ready to capitalise on the increased focus on NdPr, and the burgeoning demand for NdPr expected from the
increasing take up of electric vehicles led the Company to restructure the ownership of the Project with Peak moving back up
to a 100% interest level. Peak believes the simplified ownership structure will assist in readying the Company to secure project
development finance, including attracting additional institutional investors and strategic development partners to the Project.
With the NdPr price showing steady increases over the last few months of the financial year and beyond these developments
look well timed.
The Group’s operations have been largely unaffected by the Covid-19 pandemic, however it has made capital market conditions
extremely volatile. The Company acted swiftly in April 2020 to keep a tight rein on expenditure and prudently undertook a
$1.5million placement to strengthen the Company’s financial position.
Once the SML is granted, and with the positive market dynamics and increased NdPr pricing all working in the right direction
the Company is well positioned to advance the Project in the forthcoming year.
SML APPLICATION PROCESS CONTINUING TO PROGRESS IN TANZANIA
In recent months, despite the Perth based executive being unable to visit Tanzania, the Company has been maintaining a very
regular two-way dialogue with the Tanzanian government and its agencies through its in-country team and local professional
advisors. These activities have been carefully managed and co-ordinated and progress continues to be being made towards
the issue of the SML.
Tanzania is scheduled to hold elections in October 2020. During this run up period all government departments and activities
are expected to continue as normal, including on-going meetings of the Government Cabinet. The Company has been given
reassurance that the elections will have little affect on the processing of the SML application.
There were a number of important developments to the SML application process during the year; following a recommendation
for grant by the Mining Commission the SML application was presented to the Cabinet in early October 2019. Following the
Cabinet’s deliberation, a Presidential delegation comprised of a number of officials from all relevant government departments
were tasked with undertaking a full technical due diligence of the country’s two pending SML applications. As part of this due
diligence the delegation visited the Ngualla site in the middle of October 2019. The main focus of the delegation was to validate
4
REVIEW OF OPERATIONS
the Company’s JORC compliant resource model and to independently sample available diamond and RC drill core held at the
site. During this process the Company has been commended on a number of occasions for its open and transparent approach
to sharing information with the government. The delegation has completed its technical due diligence. Although the Company
is not privy to the Presidential delegation’s report it understands that the due diligence process has been satisfied. The
Technical Report is now awaiting submission to the Cabinet of the Tanzanian Government and the Cabinet’s approval for the
issue of the SML.
The Special Mining Licence is the final major regulatory requirement for the Ngualla Project, with the associated Teesside
Refinery already fully permitted and land secured under option. Upon receipt of the SML, the Project will be the among the
most advanced rare earth development projects that has a JORC Compliant Ore Reserve, completed Definitive Feasibility
Study and fully piloted process from ore to separated oxides that is permitted and ready to construct.
POSITIVE MINING INDUSTRY DEVELOPMENTS IN TANZANIA
The Tanzanian Government has taken a number of steps during the year to encourage investment and reinvigorate the
country’s mining industry. The sector recorded a growth rate of 15.3% in the first quarter of 2020 compared to the growth
rate of 10% recorded for the same quarter in 2019. Mineral concentrate that had been held as part of the dispute between
Barrick Gold Corp (Barrick) and the government was also released for export during the June quarter. This followed the
announcements in January 2020 that Barrick had concluded its negotiations with the Tanzanian Government. The Company
understands that the terms of the agreement, which broadly implement mechanisms that will see a 50/50 split of the economic
benefits from Barrick’s mining operations between Barrick and the Tanzanian Government, will form the blueprint for all future
SML’s, something that Peak welcomes.
NdPr PRICES ON THE UP FED BY FUNDAMENTALS
The vulnerability of the global supply chain and the need for businesses to diversify their critical raw material supplies has been
evident for much of the last year through the ongoing China-USA trade dispute and more recently the supply chain disruptions
caused by the Covid-19 pandemic. Certainty and surety of supply of these critical materials must become an increasingly core
focus for the countries and governments in which these industrial high tech businesses operate.
In our dialogue with our potential strategic partners and customers, it is positively acknowledged that Peak has the unique
capabilities to offer a fully integrated mine-to-single-rare earth metals solution outside of China. The Company’s offtake efforts
predominantly continue to be focused at outside of China customers with particular focus towards Japan and Europe.
ELECTRIC VEHICLES (EV) TO DRIVE DEMAND
Despite and in fact due to the pandemic, EV sales and the transition to electric mobility more widely is expected to accelerate
in most markets. Many vehicle manufacturers have fast tracked their focus to EVs and new models. Supportive policy in Europe
and China in particular where the governments have introduced new subsidy programs or extended existing ones emphasised
the need for manufacturers to prioritise EVs .
EVs share of global sales is forecast to rise hitting 7% in 2023 with EV sales of around 5.4 million. Some delay is forecast for
new EV launches in North America, but the timelines in Europe and China remain largely unchanged.
5
REVIEW OF OPERATIONS
Each NEV unit represents an additional +1kg of incremental demand for NdPr. Peak’s proposition is well
positioned to help meet this increasing demand.
These market dynamics are starting to deliver a steady increase in the NdPr price:
Source: Peak Resources and Asian Metals
FULLY PERMITTED RARE EARTH HUB IN THE UK CAN SUPPLY AN NdPr SUPPLY INDEPENDENT OF CHINA
In June 2020 the Company activated the second option period with the payment of GBP 48,000. The land option is over a 19-
hectare parcel of land located in the Wilton International Site until June 2021.
Planning permissions for the refinery and environmental licences for operation of the facility are all in place. Potential exists
for Peak to create a go to rare earth processing hub at Teesside and take in additional feedstock from other rare earth
projects:
Site fully permitted for construction and operation
250-year land option with room for expansion
Excellent infrastructure and location to market
Sustainable options for waste management and disposal
•
•
•
•
• Readily available low cost reagents
6
REVIEW OF OPERATIONS
Teesside refinery site and surrounding area and facilities
PEAK 100% OWNERSHIP STRUCTURE LAYS THE FOUNDATIONS FOR PROJECT DEVELOPMENT
restructuring
The Project ownership
transaction
completed in November 2019 improves availability of
institutional equity funding and probability of finding a
strategic partner(s) to make equity investment at the
Project level.
The transaction with Appian Pinnacle Holdco Limited
(Appian) and International Finance Corporation (IFC) saw
them swap out their ownership interests in Mauritian
registered company, Peak African Minerals (PAM) for
additional shares in Peak Resources Limited. PAM is the
parent company of Tanzanian registered PR NG Minerals
Limited which is the holder of the Project’s Exploration
Licences and Special Mining Licence application.
A total of 386,161,369 new fully paid ordinary shares
were issued to Appian and IFC on completion. The
diagram below shows the current ownership structure
for the Project:
7
REVIEW OF OPERATIONS
SWIFT ACTION TAKEN TO STRENGTHEN THE FINANCIAL POSITION AND MANAGE EXPENDITURE
Due to the Covid-19 pandemic the equity market environment continues to be extremely uncertain and volatile. The Board
determined to act swiftly and decisively to strengthen the Company’s financial position to provide a secure financial platform
pending receipt of the SML and improved equity market conditions. On 14 April 2020, Peak completed a $1.5million Placement,
which was well supported by current qualifying investors of the Company.
A total of 100,000,000 fully paid ordinary shares at an issue price of $0.015 were issued to the Placement participants.
Participants also received one attaching listed Option, exercisable at A$0.03 on or before 14 April 2022 for every two Placement
shares issued. An additional 38m listed Options were issued to brokers (or their nominees) who assisted with the Placement.
EXPENDITURE MANAGEMENT AND CASH CONSERVATION
To conserve cash, the Company’s Directors deferred a 100% of their Directors’ fees for the period April through July 2020. In
addition, the Company’s executive agreed to a 50% deferral in their contracted cash remuneration over the same period.
Following receipt of shareholder approval the deferments were settled by issue of new fully paid ordinary shares based on the
5-day VWAP of Peak’s shares prior to the date of issue. These arrangements sought to ensure that the interests of shareholders,
Directors and the executive team are strongly aligned whilst reducing the Company’s cash burn rate. There has been some
further reduction in headcount and all other expenditure has been minimised, where possible.
IMPACT OF COVID-19
Whilst the Covid-19 pandemic caused some initial disruption to the Company’s activities, through utilisation of the various
conferencing and communication platforms available the day to day activities have been largely unaffected. After a few weeks
of working from home, consistent with the federal government advice, all Perth based employees returned to working from
the office towards the end of May 2020.
In Tanzania the government acted early and implemented a number of measures including the closing of schools, quarantining
international visitors, restriction on travel and the implementation of social distancing. During this period the government
moved to teleconferencing rather than face to face meetings which allowed for the SML application process to continue.
The Company’s operations in the country continue to be largely unaffected. Following the end of the wet season in June 2020
the Ngualla site opened in August 2020 to undertake essential maintenance activities.
OUTSTANDING PROJECT FUNDAMENTALS
The Project Update reported in October 2017 demonstrates the exceptional fundamentals of the Project and excellent
exposure to the NdPr price, with over 90% of its planned revenue to come from NdPr:
•
•
•
Post Tax NPV8 US$ 612 million and IRR 22% at Project Update 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.
PRODUCTION ASSUMPTIONS
Life of Mine
Average Life of Mine REO Grade
Life of Mine Strip Ratio (Waste: Ore)
Average Mill Throughput
Average REO Mineral Concentrate Production
Average NdPr Mixed Oxide 2N Production
Average La Oxide Equivalent Production (final product: 7,995 tpa Carbonate)
Average Ce Oxide Equivalent Production (final product: 3,475 tpa Carbonate)
Average SEG and Mixed Heavy Oxide Equivalent Production (final product: 625 tpa Carbonate)
26 Years
4.80%
1.78
711,000 tpa
32,700 tpa
2,810 tpa
4,230 tpa
1,920 tpa
330 tpa
8
REVIEW OF OPERATIONS
OPERATING COSTS
Average Operating Cost - Ngualla plus concentrate transport
Average Tees Valley Refinery Operating Cost to Final Product
Total Consolidated Operating Cost to Final Product
Total Consolidated Operating Cost/kg (NdPr Mixed Oxide 2N#)
CAPITAL COSTS including growth and contingency
Ngualla (Mine and Process)
Ngualla (Infrastructure)
Tees Valley Refinery
Owners Costs
Total Capital Pre-Production
Average Annual Consolidated Sustaining Capital
FINANCIAL METRICS
Consolidated Total Revenue
Consolidated Average Annual Revenue
Total Consolidated (Post Tax) Cash Generation
Annual Average Consolidated (Post Tax) Cashflow
Average Annual EBITDA
NPV8 - Pre Tax and Royalties
NPV8 - Post Tax and Royalties
NPV10 - Pre Tax and Royalties
NPV10 - Post Tax and Royalties
IRR - Pre 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 Rare Earth Oxide Equivalent
Cerium Rare Earth Oxide Equivalent
SEG Mixed Heavy Oxide Equivalent
US$ 51m p.a
US$ 40m p.a
US$ 91m p.a
US$ 32.24/kg
US$ 52 million
US$ 138 million
US$ 157 million
US$ 18 million
US$ 365 million
US$ 5 million
US$ 6.27 billion
US$ 241m p.a
US$ 3.01 billion
US$ 108 m p.a
US$ 150 m p.a
US$ 914 million
US$ 612 million
US$ 686 million
US$ 444 million
26%
22%
62%
5 Years
US$ 77.50/kg
US$ 3.70/kg
US$ 2.20/kg
US$ 8.00/kg
Figure 2: Ngualla Project production assumptions and projected economics
#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 confirms 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.
9
REVIEW OF OPERATIONS
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.
Due to the protracted SML application process the Company did not undertake any major Community Programmes during the
year, however Peak does continue to assist the local community where practical and cost effective to do so. A number of
community initiatives were completed and handed over to the community prior to the site closure in December 2019 including:
supply of a new delivery bed and equipment for the Ngwala maternity ward, supply and installation of soccer and netball goal
posts at three schools in the Ngwala ward, and renovation of the kindergarten classroom at Ngwala primary school.
Songwe DED with PRNG Minerals CLO receiving the renovated classroom and 15 desks
10
DIRECTORS REPORT
The directors of Peak Resources Limited (“Company”) submit herewith the financial statements of the Company for the
financial year ended 30 June 2020. 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 Tony Pearson
Mr Jonathan Murray
Mr Robert Sennitt
Mr Peter Meurer
Mr John Jetter
Non-Executive Chairman (Appointed Interim Chairman 16 September 2020)
Non-Executive Director
Non-Executive Director (Appointed 15 January 2020, Resigned 11 September 2020)
Non-Executive Director (Resigned 16 September 2020)
Non-Executive Director (Resigned 15 January 2020)
INFORMATION ON DIRECTORS
Mr Peter Meurer– Non-Executive Chairman (Appointed 23 April 2018, Resigned 16 September 2020)
MBA from RMIT
Peter has had a distinguished career of over 40 years in the Corporate Finance sector and was most recently 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 not currently a director of any other listed companies and held no public company directorships in the past
three years.
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 serves as a director
of the following other listed companies and held no other public company directorships in the past three years:
• Hannans Limited Ltd – from 22 January 2010
• Vietnam Industrial Investments Limited - from 19 January 2016
Mr Robert Sennitt – Non-Executive Director (Appointed 15 January 2020, Resigned 11 September 2020)
BEc (Sydney Uni) and Member of the Institute of Chartered Accountants
Robert joined the Peak Board as Appian Pinnacle Holdco Limited’s (Appian) 2nd Nominee Director and replaces Mr John
Jetter. Robert is a Senior Advisor to Appian in Australia. He has been involved in the resources sector in Australia for over
thirty years, initially as an investment banker where he held senior positions with J.P. Morgan, Macquarie Bank and RBC
Capital Markets and more recently as Managing Director and CEO of Mineral Deposits Limited (MDL), before its takeover
in July 2018. At MDL, Robert was appointed to the Executive Committee that had responsibility for the management of
the TiZir Mineral Sands Joint Venture, comprising the Grande Cote mining operation in Senegal and the TTI smelting
operation in Norway.
Robert is not currently a director of any other listed companies and ceased to be a director of listed company, MDL in
August 2018.
11
DIRECTORS REPORT
Mr Tony Pearson – Interim Non-Executive Chairman (Appointed 16 September 2020) Non-Executive Director (Appointed
21 August 2018)
B.Comm, AICD
Tony is an experienced international natural resources executive and company director. He is currently Chair of ASX listed
Cellnet, The Royal Botanic Garden & Domain Trust, and Communicare. Prior to this, he was a Commissioner at the
Independent Planning Commission, 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 $15billion across equities, hybrids, bonds,
convertibles and project finance. Tony serves as a director of the following other listed companies and held no other
public company directorships in the past three years:
•
Cellnet Group Ltd – from 5 October 2018
Mr John Jetter – Non-Executive Director (Appointed 1 April 2015, Resigned 15 January 2020)
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 serves as a director of the following other listed companies and held no other public
company directorships in the past three years:
• Otto Energy – from 10 December 2007
• Venture Minerals Ltd – from 8 June 2010
COMPANY SECRETARY
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 15 years working in the resources
sector in CFO and Company Secretarial roles for both ASX and TSX listed companies.
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 profit of the Group after providing for income tax amounted to $7,652,714 (2019: loss $4,596,053).
The basic and diluted profit per share for the Group for the year was 0.65cents (2019: loss 0.58 cents).
12
DIRECTORS REPORT
FINANCIAL POSITION
The net assets of the Group have increased from $27,947,140 at 30 June 2019 to $55,868,357 at 30 June 2020.
The Group’s working capital, being current assets less current liabilities, was $2,037,335 at 30 June 2020 (2019: $351,045).
As reported with $2.55million cash at bank at the end of the reporting period, Peak is well funded going into the
2020/2021 financial year to fund the Ngualla Project, 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:
On 4 November 2019 Peak’s shareholders approved the acquisition of the remaining 25% interest in 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. All conditions of the acquisition were satisfied and completion occurred on 12 November 2019. A
total of 386,161,369 new fully paid ordinary shares were issued at an issue price at the completion date of $0.043 to
Appian Pinnacle Holdco Limited (Appian) and International Finance Corporation (IFC), after reduction for their
outstanding contributions for the PAM group costs to completion. The cost of this acquisition consideration was
$16,604,938.
The total cost of acquisition has been determined using the accumulated cost approach with the difference between this
cost and the carrying value of Peak’s equity accounted investment of its interest in associate on derecognition taken
through the profit and loss as part of the gain on acquisition and reconsolidation of associate of $10,429,216.
The Group’s acquisition of PAM was accounted for as an asset acquisition rather than a business combination in the
consolidated financial statements.
Following the initial announcement of the Project ownership restructuring transaction above, on 8 August 2019 the
Company completed a placement of 119,888,380 new fully paid ordinary shares to sophisticated, professional and other
exempt investors. The placement was undertaken at $0.04 per share raising gross funds, before fees, of $4.795m. Part of
the proceeds from the placement were used to repay in full the balance of the outstanding loan due to Appian (repaid
US$1.314m on 10 September 2019).
On 14 April 2020, 100,000,000 fully paid ordinary shares were issued following a placement of shares to sophisticated,
professional and other exempt investors at $0.015 per share to raise $1,500,000 before costs. Participants in the
placement each received 1 for 2 free attaching quoted options exercisable at $0.03 each on or before 14 April 2022. A
further 38,000,000 quoted options were issued to brokers of the placement. The total of 88,000,000 options have been
issued which trade under the code PEKOD on the ASX.
On 14 June 2020 61,088,247 PEKOC $0.06 options expired unexercised.
AFTER BALANCE DATE EVENTS
Non-executive directors Mr Sennitt and Mr Meurer resigned as directors of the Company on 11 September 2020 and 16
September 2020 respectively, with Mr Pearson becoming the interim non-executive chairman. Other than the matters
referred to above there were no other events that have a material impact on the financial statements or operations of
the Group and Company.
13
DIRECTORS REPORT
MEETINGS OF DIRECTORS
The number of meetings attended by each Director of the Company during the financial year was:
Board Meetings
Peter Meurer
Jonathan Murray
John Jetter
Robert Sennitt
Tony Pearson
Number held and
entitled to attend
13
13
6
7
13
Number attended
13
13
5
7
12
Note – no Audit Committee Meetings or Remuneration Committee Meetings were held during the year as the function of
these committees was dealt with by the full Board.
EQUITY HOLDINGS OF DIRECTORS
As at the date of this report, the Directors’ interest in the Company were:
Peter Meurer
Jonathan Murray
Robert Sennitt
Tony Pearson
Equity shares
1,737,365
3,028,575
-
245,583
Equity options
30,000,000
10,000,000
-
10,000,000
Performance Rights
-
-
-
-
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.
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.
14
DIRECTORS REPORT
The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
directors and executives to run and manage the Company.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives
of the Company is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed by the Board. All executives receive a base salary (which is based on factors such as length of service and
experience) and superannuation. The Company 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 at 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 a director, Tony Pearson:
•
•
•
2,000,000 Unlisted Options exercisable at $0.05, expiring 21 June 2021, vesting subject to continuous service
criteria.
3,000,000 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.
5,000,000 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.
The Company received approval from Shareholders for an Employee Option Plan (EOP) and Performance Rights Plan
(PRP) at the Annual General Meeting on 29 November 2017.
During the 2019 financial year the Board approved a Long-Term Incentive Scheme (LTIS) and Short Term Incentive
Scheme (STIS) with issues made under the EOP and PRP respectively. No new issues were made under the schemes
during the 2020 financial year.
15
DIRECTORS REPORT
On 5 March 2020, 41,300,000 Unlisted 2019 LTIS $0.03 options expiring 5 March 2023 and 2,000,000 2019 STIS
Performance rights issued under the above schemes vested. 8,000,000 Performance Rights lapsed which failed to
meet the vesting criteria.
Subsequent to cessation of service to the Company the following unlisted options issued to former directors were
cancelled:
•
•
3,000,000 unlisted options with an exercise price of $0.10
5,000,000 unlisted options with an exercise price of $0.15
Company performance, shareholder wealth and director’s and executive’s remuneration
Summary of group's performance and movements in Peak Resources Limited's share price over the last five years:
2016
2019
2017
2020
2018
Total income ($)
12,374,452
98,795
618,718
1,861,274
9,253
Net profit/(loss) before tax ($)
7,652,714
(4,596,053)
(4,903,224)
(4,886,187)
(15,892,428)
Net profit/(loss) after tax ($)
7,652,714
(4,596,053)
(4,903,224)
(4,886,187)
(15,892,428)
Closing share price at end of year
(cents)
Basic profit/(loss) per share (cents)
Dividends per share (cents)
$0.021
$0.048
$0.036
$0.067
$0.048
0.65
-
(0.58)
-
(0.82)
-
(1.04)
-
(3.95)
-
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 2020 financial year were:
Peter Meurer – Non-Executive Chairman
Jonathan Murray – Non-Executive Director
Tony Pearson – Non-Executive Director
John Jetter- Non-Executive Director (Resigned 15 January 2020)
•
•
• Robert Sennitt – Non-Executive Director (Appointed 15 January 2020)
•
•
• Rocky Smith – Chief Executive Officer
• Michael Prassas – Executive General Manager Sales, Marketing & Business Development
• Graeme Scott– Chief Financial Officer & Company Secretary
•
Lucas Stanfield – General Manager of Development
Total remuneration for the year was:
Salary and fees
Non-monetary benefits
Superannuation
Share based payments
Total
2020
$
1,304,150
88,048
69,825
305,485
2019
$
1,371,249
103,032
57,950
395,256
1,767,508
1,927,487
16
Remuneration of individual KMP’s were:
DIRECTORS REPORT
Short term benefits
Post-
employment
benefits
Share based payments
Proportion related
to:
Salary &
fees*
Non-
monetary
Super-
annuation*
Performance
Rights
Options
Total
Equity#
Performa
nce#
30-Jun-20
$
$
$
$
$
$
%
%
Directors
Peter Meurer
Jonathan Murray
Robert Sennitt2
Tony Pearson
John Jetter1
Executives
Rocky Smith3
Michael Prassas
Graeme Scott
Lucas Stanfield
Total
50,000
40,000
18,415
40,000
31,644
180,059
389,091
250,000
250,000
235,000
1,124,091
1,304,150
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54,367
22,452
-
57,164
(23,065)
110,918
104,367
62,452
18,415
97,164
8,579
290,977
49,297
38,751
-
-
88,048
88,048
-
23,750
23,750
22,325
69,825
69,825
(3,914)
(2,516)
(2,516)
(2,237)
(11,183)
(11,183)
70,178
46,254
46,254
43,064
504,652
356,239
317,488
298,152
205,750 1,476,531
316,668 1,767,508
52%
36%
0%
59%
0%
38%
14%
13%
15%
14%
14%
18%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
# The % excludes the value of the options which were written back during the year.
1 Mr Jetter ceased service with the company on 15 January 2020.
2 Mr Sennitt was appointed 15 January 2020.
3 Mr Smith has a salary of $377,775 and also received an insurance allowance of $11,316 under his employment contract.
* The Company’s executive team agreed to a 50% deferral in their contracted cash remuneration and the Company’s Directors
agreed to defer a 100% of their Directors’ fees for four months for the period 1 April 2020 to 31 July 2020. As at 30 June 2020
the gross deferred amounts owing to Directors and Executives reported in trade and other payables and reported in the table
above totalled $190,323. The deferred executive remuneration and Directors fees was settled in equity based on $0.0342 Per
Ordinary Fully Paid Share calculated based on the 5 day VWAP up to and including 6 August 2020 for a total value of consideration
$128,662, this amount is net of PAYG withholding tax obligations due on the deferred amounts.
Remuneration of individual KMP’s were:
Short term benefits
Post-
employment
benefits
Share based payments
Proportion related
to:
Salary &
fees
Non-
monetary
Super-
annuation
Performance
Rights
Options
Total
Equity#
Perfor
mance#
30-Jun-19
$
$
$
$
$
$
%
%
Directors
Peter Meurer
Darren Townsend1
Jonathan Murray
John Jetter
Tony Pearson2
Executives
Rocky Smith3
Michael Prassas4
Graeme Scott5
Lucas Stanfield
Total
50,000
26,667
40,000
40,000
34,517
191,184
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54,367
(613)
22,452
22,452
-
98,658
104,367
26,054
62,452
62,452
34,517
289,842
389,091
275,974
280,000
235,000
1,180,065
1,371,249
85,573
17,459
-
-
103,032
103,032
-
11,875
23,750
22,325
57,950
57,950
20,714
13,316
13,316
11,837
59,183
59,183
83,170
52,450
52,450
49,345
578,548
371,074
369,516
318,507
237,415 1,637,645
336,073 1,927,487
52%
0%
36%
36%
0%
34%
14%
14%
14%
15%
14%
17%
0%
0%
0%
0%
0%
0%
4%
4%
4%
4%
4%
3%
17
DIRECTORS REPORT
# The % excludes the value of the options which were written back during the year.
1 Mr Townsend ceased employment with the company on 28 February 2019.
2 Mr Pearson was appointed 21 August 2018.
3 Mr Smith has a salary of $377,775 and also received an insurance allowance of $11,316 under his employment contract.
4Mr Prassas received his superannuation entitlement for the half year to 31 December 2018 as salary totalling $11,875. He also
received a cash payment of $14,099 for his annual flight allowance under his employment contract.
5 Mr Scott received a retention bonus of $30,000 included in his Salary and fees for the period.
Options and performance rights granted / vested / cancelled during the year ended 30 June 2020
Options granted during the year:
30-Jun-20
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
Directors
Peter Meurer
Jonathan Murray
John Jetter1
Tony Pearson
Robert Sennitt2
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
-
-
-
11-Nov-19
11-Nov-19
11-Nov-19
-
-
-
-
-
-
-
2,000,000 $0.0144
3,000,000 $0.0111
5,000,000 $0.0112
-
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,754 11-Nov-19 $0.0500 21-Jun-21
33,399 21-Jun-22 $0.1000 21-Jun-22
56,205 21-Jun-23 $0.1500 21-Jun-23
-
-
-
-
-
-
-
2,000,000
-
-
-
118,358
-
-
-
-
-
5-Mar-20 $0.030 5-Mar-23
5-Mar-20 $0.030 5-Mar-23
5-Mar-20 $0.030 5-Mar-23
5-Mar-20 $0.030 5-Mar-23
-
-
-
2,000,000
11,000,000
7,250,000
7,250,000
6,750,000
32,250,000
34,250,000
-
-
-
-
-
-
10,000,000
Total
* Options are valued using the Black-Scholes option pricing model on date of grant.
# Unvested Options vest on achievement of length of service criteria.
1Mr Jetter resigned 15 January 2020.
2Mr Sennitt was appointed 15 January 2020.
118,358
No performance rights were granted during the year.
Movements in performance rights during the year:
30-Jun-20
Date of
issue
Number of
performance
rights lapsed
Total value
of issue $
Vesting
Date#
Exercise
Price
Expiry Date
Number vested
during the year
Value
per
perform
ance
right*
-
-
-
-
-
Directors
Peter Meurer
Darren Townsend
Jonathan Murray
John Jetter
Tony Pearson
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5-Mar-19
5-Mar-19
5-Mar-19
5-Mar-19
(2,800,000)
(1,800,000)
(1,800,000)
(1,600,000)
(8,000,000)
(8,000,000)
$0.024
$0.024
$0.024
$0.024
(67,200)
(43,200)
(43,200)
(38,400)
(192,000)
(192,000)
5-Mar-20
5-Mar-20
5-Mar-20
5-Mar-20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5-Mar-21
5-Mar-21
5-Mar-21
5-Mar-21
700,000
450,000
450,000
400,000
2,000,000
2,000,000
18
DIRECTORS REPORT
* Performance Rights are valued using the Black-Scholes option pricing model on date of grant.
# The unvested Performance Rights to vest on achievement of performance criteria, as determined by the Company’s Board, by
5 March 2020 or the Performance Rights will lapse.
Options and performance rights granted / vested / cancelled during the year ended 30 June 2019
Options granted during the year:
30-Jun-19
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
Directors
Peter Meurer
Darren Townsend1
Jonathan Murray
John Jetter
Tony Pearson
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
17-Jan-19
5-Mar-19
17-Jan-19
5-Mar-19
17-Jan-19
5-Mar-19
17-Jan-19
5-Mar-19
1,500,000 $0.0099
11,000,000 $0.0126
750,000 $0.0099
7,250,000 $0.0126
750,000 $0.0099
7,250,000 $0.0126
750,000 $0.0099
6,750,000 $0.0126
36,000,000
36,000,000
Total
* Options are valued using the Black-Scholes option pricing model on date of grant.
# Unvested Options vest on achievement of length of service criteria.
1Mr Townsend resigned 28 February 2019.
Performance Rights granted during the year:
17-Jan-19
5-Mar-20
17-Jan-19
5-Mar-20
17-Jan-19
5-Mar-20
17-Jan-19
5-Mar-20
$0.035
$0.030
$0.035
$0.030
$0.035
$0.030
$0.035
$0.030
17-Jan-22
5-Mar-23
17-Jan-22
5-Mar-23
17-Jan-22
5-Mar-23
17-Jan-22
5-Mar-23
14,878
138,470
7,439
91,264
7,439
91,264
7,439
84,970
443,165
443,165
1,500,000
-
750,000
-
750,000
-
750,000
-
3,750,000
3,750,000
Value
per
perform
ance
right*
-
-
-
-
-
30-Jun-19
Date of
issue
Number of
performance
rights issued
Total value
of issue $
Vesting
Date#
Exercise
Price
Expiry Date
Number
vested during
the year
Directors
Peter Meurer
Darren Townsend
Jonathan Murray
John Jetter
Tony Pearson
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5-Mar-19
5-Mar-19
5-Mar-19
5-Mar-19
$0.024
$0.024
$0.024
$0.024
3,500,000
2,250,000
2,250,000
2,000,000
10,000,000
10,000,000
84,000
54,000
54,000
48,000
240,000
240,000
5-Mar-20
5-Mar-20
5-Mar-20
5-Mar-20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5-Mar-23
5-Mar-23
5-Mar-23
5-Mar-23
-
-
-
-
-
-
Total
* Performance Rights are valued using the Black-Scholes option pricing model on date of grant.
# The unvested Performance Rights to vest on achievement of performance criteria, as determined by the Company’s Board,
by 5 March 2020 or the Performance Rights will lapse.
19
DIRECTORS REPORT
Shareholdings of KMP’s
30-Jun-20
Directors
Peter Meurer
Jonathan Murray
John Jetter*
Tony Pearson
Robert Sennitt
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
Opening Balance
Granted as
Remuneration
Exercise of
Options/PRs
Other Movements
Closing
Balance
1,250,000
2,638,753
-
-
-
3,888,753
1,249,989
3,750,000
325,000
-
5,324,989
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,250,000
2,638,753
- .
- .
-
3,888,753
-
1,333,334
-
-
1,333,334
1,249,989
5,083,334
325,000
-
6,658,323
10,547,076
Total
* Mr Jetter ceased to be KMP’s during the period and his holdings are not reported at period end.
9,213,742
1,333,334
-
-
Option Holdings of KMP’s including performance rights
30-Jun-20
Directors
Peter Meurer
Jonathan Murray
John Jetter
Tony Pearson
Robert Sennitt
Opening
Balance
Granted as
Remuneration
Exercise of
Options & PRs
Expired/
Cancelled1
Other
Movements
Closing
Balance
Vested at 30
June
30,416,666
10,333,334
10,000,000
-
-
-
-
-
10,000,000
-
50,750,000
10,000,000
-
-
-
-
-
-
(416,666)
(333,334)
(8,000,000)
-
-
(8,750,000)
-
-
(2,000,000)
-
-
(2,000,000)
30,000,000
10,000,000
10,000,000
2,000,000
-
-
10,000,000
2,000,000
-
-
50,000,000
14,000,000
Executives
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
19,208,333
12,583,333
11,791,666
11,000,000
54,583,332
105,333,332
- .
666,667.
- .
- .
666,667
Total
(1,333,333)
* Mr Jetter ceased to be KMP’s during the period and his holdings are not reported at period end.
1 8,000,000 options issued to Mr Jetter were cancelled following cessation of service. A further 1,833,332 PEKOC listed options issued
to KMP’s expired unexercised, these options were granted through participation in the Company’s capital raisings and had an exercise
price of $0.06 and expired on 14 June 2020. A further 8,000,000 performance rights issued to executives expired.
(3,008,333)
(2,633,333)
(1,841,666)
(1,600,000)
(9,083,332)
(17,833,332)
16,200,000
10,616,667
9,950,000
9,400,000
46,166,667
96,166,667
16,200,000
10,616,667
9,950,000
9,400,000
46,166,667
60,166,667
-
-
-
-
-
10,000,000
- .
- .
- .
- .
-
-
Performance income as a proportion of total income
No bonuses have been paid to executives during the year.
20
DIRECTORS REPORT
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 (Resigned 15 January 2020) / Tony Pearson / Robert Sennitt (Appointed 15 January
2020) - 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 2001. Fees are currently set at $40,000 per annum effective 1 July
2018. No retirement benefits are provided for.
Rocky Smith – Chief Executive Officer - (Transitioned from COO to CEO 21 September 2017)
Rocky is employed under an Executive Service Agreement (ESA). The agreement provides for an annual salary of
$377,775 inclusive of superannuation, plus private health and life cover insurance, 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. Mr Prassas ceased employment with the Company on 15 July 2020.
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 except six months’ notice following a change of control termination.
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 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 except six months’ notice following a change of control termination.
Other transactions
During the year Steinepreis Paganin Lawyers and Consultants, a legal practice associated with Mr Jonathan Murray
received $139,723 (2019: $20,010) as fees for the provision of legal advice. Balance outstanding at 30 June 2020 and
included in trade creditors $7,428 (30 June 2019: $10,946).
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
PEKOD
Expiry Date
14 April 2022
Exercise Price
Number under option
$0.03
88,000,000
21
Unissued ordinary shares of the Company under option to service providers only are:
DIRECTORS REPORT
Expiry Date
27 February 2021
14 June 2021
11 November 2020
11 May 2021
Exercise Price
Number under option
$0.06
$0.065
$0.06
$0.06
4,000,000
9,000,000
5,994,419
21,000,000
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
17 January 2022
5 March 2023
Exercise Price
Number under option
$0.065
$0.05
$0.10
$0.15
$0.035
$0.03
11,750,000
18,000,000
11,000,000*
25,000,000*
5,750,000
41,300,000
* Vesting subject to length of service and milestone criteria.
On 14 June 2020, 61,088,247 PEKOC listed Options with an exercise price of $0.06 expired unexercised.
During the year 8,000,000 Unlisted director options with exercises prices ranging from $0.10 to $0.15 were cancelled
following cessation of service.
Details of options issued during the year are detailed in the Remuneration Report and note 22 to this report.
At the date of this report Performance Rights on issue to employees are:
Expiry Date
5 March 2021
Exercise Price
$Nil
Number of Performance Rights
2,000,000*
*Vested Performance Rights.
No Performance Rights were issued during the year.
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
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 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 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.
22
PROCEEDINGS ON BEHALF OF COMPANY
DIRECTORS REPORT
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 2020 has been received and can be found
immediately following this Directors’ report.
No amounts have been paid or payable to the auditor for non-audit services, payments to the auditors are set out in
Note 5 to the Financial Statements.
The Board of Directors is satisfied that the provision of non-audit services performed during the year by the Company’s
auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are satisfied that the services did not compromise the external auditor’s independence for the following
reason:
• All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
•
objectivity of the auditor; and
The nature of the services provided does not compromise the general principles relating to auditor’s
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,
Tony Pearson
Non-executive Chairman
Perth, 17 September 2020
23
AUDITOR’S INDEPENDENCE DECLARATION
24
INDEPENDENT AUDITOR’S REPORT
25
INDEPENDENT AUDITOR’S REPORT
26
INDEPENDENT AUDITOR’S REPORT
27
INDEPENDENT AUDITOR’S REPORT
28
INDEPENDENT AUDITOR’S REPORT
29
INDEPENDENT AUDITOR’S REPORT
30
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the Year Ended 30 June 2020
Interest income
R&D rebate received
Other income
Gain on re-measurement of financial liabilities
Gain on derecognition of associate
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
Fair value adjustments to other assets measured at fair value
through profit or loss
Profit/ (Loss) before income tax
Income tax expense
Profit/ (Loss) after income tax
Other comprehensive income/(loss), net of tax
Items that could be transferred to profit or loss in future:
Recycled to the profit or loss on derecognition of associate
Exchange differences on translation of foreign operations
Group’s share of associate’s other comprehensive income
Total comprehensive income/(loss) for the year
Note
5
5
5
19
4
5
3
8
2020
$
2019
$
37,034
110,037
62,500
1,735,665
10,429,216
12,374,452
(705,365)
(819,645)
(16,899)
(297,520)
(1,510,336)
(948,436)
(353,988)
(69,549)
98,245
-
550
-
-
98,795
(902,217)
(471,005)
(5,886)
(1,163,204)
(1,096,476)
(132,000)
(924,060)
-
7,652,714
(4,596,053)
-
-
7,652,714
(4,596,053)
(3,764,892)
40,792
503,253
-
(156,378)
1,683,792
4,431,867
(3,068,639)
Profit/(loss) per share (in cents)
Basic and Diluted profit/(loss) per share
7
0.65
(0.58)
The statement should be read in conjunction with the accompanying notes
31
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Note
2020
$
2019
$
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Loans – due from associates measured at fair value through
profit or loss (FVPTL)
Prepayments
Total current assets
Non-current assets
Loans – due from associates measured at FVPTL
Property plant and equipment
Exploration and evaluation costs
Investment in associate
Investments
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Loans and borrowings
Total current liabilities
Non-current liabilities
Other payables
Loans and borrowings
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
9
10
11
12
12
13
14
3
15
16
17
18
19
17
19
21
20
The statement should be read in conjunction with the accompanying notes
2,546,021
2,147,324
31,962
30,000
-
84,466
17,275
30,000
446,532
6,929
2,692,449
2,648,060
-
41,789
59,419,382
416,961
6,196
-
-
33,509,484
8,000
219,284
8,000
127,254
59,688,455
34,067,895
62,380,904
36,715,955
412,178
242,936
-
655,114
-
5,857,433
5,857,433
6,512,547
276,252
196,668
1,824,095
2,297,015
1,430,011
5,041,789
6,471,800
8,768,815
55,868,357
27,947,140
99,893,335
3,616,198
77,223,630
6,017,400
(47,641,176)
(55,293,890)
55,868,357
27,947,140
32
CONSOLIDATED STATEMENT OF
CASH FLOWS
For the Year Ended 30 June 2020
Note
2020
$
2019
$
OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Government rebates received
Borrowing costs paid
Cash used in operating activities
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Payment for Teesside Land Purchase Option
Contributions to associates
Cash acquired on acquisition of PAM
Cash used in investing activities
FINANCING ACTIVITIES
Proceeds from issue of equity shares
Costs of issuing equity shares
Repayment of borrowings
Proceeds from borrowings
(Repayment to) associate and other parties
Cash generated from/(used in) financing activities
Net increase/ (decrease) in cash and cash equivalents
Balance at the beginning of the year
Effect of foreign currency translation
Balance at the end of the year
9
3
4
9
The statement should be read in conjunction with the accompanying note
(3,129,879)
36,210
172,537
(67,463)
(2,988,595)
(11,685)
(92,030)
(667,861)
41,897
(729,679)
6,295,535
(230,767)
(1,914,947)
48,246
(28,065)
4,170,002
451,728
2,147,324
(53,031)
2,546,021
(1,513,664)
110,309
-
(315,823)
(1,719,178)
(5,350)
-
(2,100,117)
-
(2,105,467)
6,232
-
(560,031)
272,306
(140,008)
(421,501)
(4,246,146)
6,468,748
(75,278)
2,147,324
33
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the Year Ended 30 June 2020
At 1 July 2018
Loss for the year 2019
Other comprehensive loss
Group’s share of associate’s other
comprehensive income
Total comprehensive loss for the year
Equity issued
Equity based payments
At 30 June 2019
Profit for the year 2020
Other comprehensive loss
Group’s share of associate’s other
comprehensive income
Total comprehensive income/(loss)
for the year
Equity issued
Equity based payments
Transaction costs
At 30 June 2020
Contributed
Equity
$
77,217,398
-
-
Share
based
payment
reserve
$
2,497,108
-
-
Foreign
currency
translation
reserve
$
1,521,873
-
(156,378)
Accumulate
d losses
Total equity
$
(50,697,837)
(4,596,053)
-
$
30,538,542
(4,596,053)
(156,378)
-
-
1,683,792
-
1,683,792
-
6,232
-
77,223,630
-
-
-
-
471,005
2,968,113
-
-
1,527,414
-
-
3,049,287
-
(3,724,100)
-
-
503,253
(4,596,053)
-
-
(55,293,890)
7,652,714
-
-
-
22,900,472
-
(230,767)
99,893,335
-
-
819,645
-
3,787,758
(3,220,847)
-
-
-
(171,560)
7,652,714
-
-
-
(47,641,176)
(3,068,639)
6,232
471,005
27,947,140
7,652,714
(3,724,100)
503,253
4,431,867
22,900,472
819,645
(230,767)
55,868,357
The statement should be read in conjunction with the accompanying notes
34
NOTES TO FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Peak Resources Limited for the year ended 30 June 2020 was authorised for issue in accordance
with a resolution of the directors on 17 September 2020.
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 corporate directory in 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 other assets and
non-current assets which are measured at fair value through profit or loss. All amounts are presented in Australian
Dollars unless otherwise noted.
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the
Corporations Act 2001, Australian 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 as issued by the International Accounting Standards Board
(IFRS).
Going concern
The Group has net current assets of $2,037,335 (2019: $351,045) at 30 June 2020 and incurred an operating cash
outflow of $2,988,595 for the year ended 30 June 2020 (2019: $1,719,178).
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 $2.55million cash at bank at the end of the reporting period Peak is well funded in the short term
to fund the Ngualla Project, 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 indicate that there will be a need
in the future to obtain further funding.
In the directors’ opinion, there are reasonable grounds to believe that the Group has the ability to raise further
funding as and when required based on its past ability to raise equity funding. However, in the event that additional
funding is not forthcoming, the Group will need to reduce its discretionary spending to ensure that it has sufficient
cash on hand to continue its operations. As a result of the need to raise additional equity or reduce discretionary
spending if funds are not forthcoming, there is a material uncertainty whether the Group will be able to continue as
a going concern and therefore whether it will realise its assets and discharge its liabilities in the normal course of
business and at the amounts stated in the consolidated financial statements. No adjustments have been made
relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
b) Impact of new standards applied for the first time
The accounting policies adopted in the preparation of the consolidated financial statements for the year are
consistent with those followed in the preparation of the Company’s annual financial report for the year ended 30
June 2019, except for the adoption of new and amended accounting standards and interpretations effective as of 1
July 2019, being AASB 16 “Leases” and AASB Interpretation 23 “Uncertainty over Income Tax Treatments”. The
35
NOTES TO FINANCIAL STATEMENTS
adoption of these new and amended accounting standards and interpretations did not have a material impact on the
consolidated entity and no restatement of comparative financial information to reflect the adoption of these new
standards and interpretations was required.
The Company has not early adopted any other accounting standard, interpretation or amendment that has been
issued but is not yet effective.
AASB 16 Leases
AASB 16 was issued in January 2016 and it replaces AASB 117 “Leases”, AASB Interpretation 4 “Determining whether
an Arrangement contains a Lease”, AASB Interpretation 115 “Operating Leases – Incentives” and AASB Interpretation
127 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”. AASB 16 sets out the principles
for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases
under a single on-balance sheet model similar to the accounting for finance leases under AASB 117. The standard
includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal computers) and short-
term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the
underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise
the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also
required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a
change in future lease payments resulting from a change in an index or rate used to determine those payments). The
lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-
of-use asset. Lessor accounting under AASB 16 is substantially unchanged from today’s accounting under AASB 117.
Lessors will continue to classify all leases using the same classification principle as in AASB 117 and distinguish
between two types of leases: operating and finance leases. AASB 16 requires lessees and lessors to make more
extensive disclosures than under AASB 117.
Transition to AASB 16
The Group adopted AASB 16 retrospectively to each prior reporting period presented. The Group elected to apply the
standard to contracts that were previously identified as leases applying AASB 117 and AASB Interpretation 4. The
Group has not applied the standard to contracts that were not previously identified as containing a lease applying
AASB 117 and AASB Interpretation 4. The Group has only one lease which expires on 31 December 2020. and the
impact of AASB 16 is not material.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
This Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects
the application of AASB 112 and does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically
include requirements relating to interest and penalties associated with uncertain tax treatments.
The Interpretation specifically addresses the following:
- Whether an entity considers uncertain tax treatments separately
- The assumptions an entity makes about the examination of tax treatments by taxation authorities
- How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax
rates
- How an entity considers changes in facts and circumstances
The interpretation requires that an entity has to determine whether to consider each uncertain tax treatment
separately or together with one or more other uncertain tax treatments. The approach that better predicts the
resolution of the uncertainty should be followed. There was no material impact to the consolidated entity from
adopting this interpretation.
Since the Group operates in a complex multinational tax environment, applying the Interpretation in future may affect
its consolidated financial statements. In addition, the Group may need to establish processes and procedures to
obtain information that is necessary to apply the Interpretation on a timely basis.
36
NOTES TO FINANCIAL STATEMENTS
Standards issued but not yet effective
Significant Australian Accounting Standards and Interpretations that are issued, but are not yet effective, up to the
date of issuance of the Group’s financial statements is not expected to be material. The Group intends to adopt these
new standards and interpretations, if applicable, when they become effective.
New and amended Accounting Standards and Interpretations issued but not yet effective
AASB 2019-1 Conceptual Framework for Financial Reporting
AASB 2019-1 is effective for annual periods being on or after 1 January 2020. The revised Conceptual Framework
includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and
clarifies some important concepts. It is arranged in eight chapters, as follows:
Chapter 1 – The objective of financial reporting
Chapter 2 – Qualitative characteristics of useful financial information
Chapter 3 – Financial statements and the reporting entity
Chapter 4 – The elements of financial statements
Chapter 5 – Recognition and derecognition
Chapter 6 – Measurement
Chapter 7 – Presentation and disclosure
Chapter 8 – Concepts of capital and capital maintenance
AASB 2019-1 has also been issued, which sets out the amendments to Australian Accounting Standards,
Interpretations and other pronouncements in order to update references to the revised Conceptual Framework. The
changes to the Conceptual Framework may affect the application of accounting standards in situations where no
standard applies to a particular transaction or event. In addition, relief has been provided in applying AASB 3 and
developing accounting policies for regulatory account balances using AASB 108, such that entities must continue to
apply the definitions of an asset and a liability (and supporting concepts) in the Framework for the Preparation and
Presentation of Financial Statements (July 2004), and not the definitions in the revised Conceptual Framework.
The Group is in the process of assessing the impact of the new Conceptual Framework.
AASB 2018-7 Definition of Material
AASB 2018-7 is effective for annual periods being on or after 1 January 2020.
This Standard amends AASB 101 “Presentation of Financial Statements” and AAS 108 “Accounting Policies, Changes
in Accounting Estimates and Errors” to align the definition of ‘material’ across the standards and to clarify certain
aspects of the definition. The amendments clarify that materiality will depend on the nature or magnitude of
information. An entity will need to assess whether the information, either individually or in combination with other
information, is material in the context of the financial statements. A misstatement of information is material if it could
reasonably be expected to influence decisions made by the primary users. The Group is in the process of assessing
the impact of the new amendment.
AASB 2019-5 Disclosure Of the Effect of New IFRS Standards Not Yet Issued in Australia
AASB 2019-5 is effective for annual periods being on or after 1 January 2020.
This standard amends AASB 1054 by adding a disclosure requirement for an entity intending to comply with IFRS
Standards to disclose the information specified in paragraphs 30 and 31 of AASB 108 on the potential effect of an
IFRS Standard that has not yet been issued by the AASB so that such entity complying with Australian Accounting
Standards can assess compliance with IFRS standards.
The Group is in the process of assessing the impact of the new amendment.
c) Basis of consolidation
The consolidated financial statements of Peak Resources Limited comprise the financial statements of the Company
and its subsidiaries as at 30 June 2020. 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:
37
NOTES TO FINANCIAL STATEMENTS
-
-
-
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 Group, 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.
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 comprehensive income 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
comprehensive income 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.
38
NOTES TO FINANCIAL STATEMENTS
Upon loss of significant influence over the associate in a situation which is not an asset acquisition, 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. In the case of an asset acquisition (which is not a business combination) where
the Group loses significant influence but gains control of an investment, the Group takes any difference between the
total historical cost of acquisition of the investment and the carrying value of the associate upon loss of significant
influence to the profit and loss.
e) Foreign Currency Translation
The financial statements have been presented in Australian Dollars, which is the Group’s presentation currency.
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. The Company’s
functional currency is Australian dollars. 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.
Translation of foreign operations
As at the reporting date the assets and liabilities of foreign operations are translated from their functional currency
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.
f) Other income
Interest
Interest income is recognised as the interest accrues on the financial asset carried at amortised cost.
R&D rebate grant
The Group is treating its receipt of the R&D rebate as government grant.
Government grants are recognised as income 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.
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
39
NOTES TO FINANCIAL STATEMENTS
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
Accounting policy effective from 1 July 2019: The Group assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration.
Group as a lessee the Group applies a single recognition and measurement approach for all leases, except for short-
term leases and leases of low-value assets.
The Group’s lease pertains to the short-term lease of its office space. This has been recognised as a expense in
Administrative and other costs in the statement of comprehensive income.
Accounting policy applied until 30 June 2019: Lease payments for operating leases, where substantially all the risks
and benefits remain with the lessor, are charged as expenses on a straight line basis over the lease term.
i) Income tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for the financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
- Where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
- In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised
except:
- Where the deferred income tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
- In respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
40
NOTES TO FINANCIAL STATEMENTS
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.
The GST/VAT component of cash flows arising from investing and financing activities, which is recoverable from, or
payable to, the taxation authority, is classified as part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the
taxation authority.
Basic earnings per share
k) Earnings per share
a.
Basic earnings per share (“EPS”) 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 by dividing the profit attributable to ordinary equity holders of the parent (after adjusting
for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding
during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
l) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (OCI) and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient, the Group
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under AASB 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an instrument level.
41
NOTES TO FINANCIAL STATEMENTS
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
-
-
-
-
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the
following conditions are met:
-
-
The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired. The Group’s financial assets at amortised cost includes trade receivables.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its non-listed equity investments under this category.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for
trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not
solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective
of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair
value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on
initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at fair value
through profit or loss are carried in the statement of financial position at fair value with net changes in fair value
recognised in the statement of profit or loss.
42
NOTES TO FINANCIAL STATEMENTS
This category includes derivative instruments and listed equity investments which the Group had not irrevocably
elected to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host
and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the
host; a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is
either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be
required or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The
financial asset host together with the embedded derivative is required to be classified in its entirety as a financial
asset at fair value through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
-
-
The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case,
the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form
of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and
the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default
(a lifetime ECL).
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
43
NOTES TO FINANCIAL STATEMENTS
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below
Loans and borrowings
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
The financial instruments of the Group are (i) cash and cash equivalents; (ii) trade and other receivables; (iii) trade
and other payables, iv) loans and borrowings; (v) loans due from associates measured at fair value through profit or
loss; (vi) other financial assets, including bank deposits.
m) Cash and Cash Equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short term
deposits with an original maturity of three months or less.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
n) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently at
amortised cost, less provisions for expected credit losses. For trade receivables, the Group applies a simplified
approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is
based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
o) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Plant and equipment is depreciated on the straight line basis over their expected useful lives to their estimated
residual value
The useful life of the assets have been set at the following levels to determine the depreciation rates:
Plant and equipment: 2 to 5 years
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.
44
NOTES TO FINANCIAL STATEMENTS
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) 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 it is incurred where the following conditions are satisfied:
The rights to tenure of the area of interest are current; and at least one of the following conditions is also met:
•
•
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling and associated activities and an allocation of depreciation and amortisation of assets used in
exploration and evaluation activities. General and administrative costs are only included in the measurement of
exploration and evaluation costs where they are related directly to operational activities in a particular area of
interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than
the relevant area of interest) is estimated to determine the extent of the impairment loss (if any).
The recoverable amount of exploration and evaluation assets is the higher of fair value less costs of disposal 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.
45
NOTES TO FINANCIAL STATEMENTS
r) Provisions
Provisions are recognised when the Group 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 are 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 option pricing
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Peak Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
•
•
the extent to which the vesting period has expired and
the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The profit or loss charge or credit for a period
represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional
upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any modification that increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
46
NOTES TO FINANCIAL STATEMENTS
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 investment in associate
Impairment exists when the carrying value of the investment in associate exceeds its recoverable amount. The
recoverable amount is referenced 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.
To the extent that investment in associate is determined not to be recoverable, the Group recognises the loss within
‘Share of loss of associate’ in the consolidated statement of comprehensive income.
Impairment of exploration and evaluation costs
The future recoverability of 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 exploration and evaluation costs is determined not to be recoverable in the future, this impairment
will reduce profits and net assets in the period in which this determination is made.
Share based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by using the most appropriate valuation model,
which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield
and making assumptions about them.
Accounting for contingent consideration in asset acquisition
In accounting for the cash component of contingent consideration payable in an asset acquisition, including future
royalties, the Group considers AASB 137 “Provisions, Contingent Liabilities and Contingent Assets” to be the
applicable accounting standard. Accordingly, no obligation for the cash component of contingent consideration
payable based on the future performance of the asset and actions of the Group is recognised at the date of purchase
of the related asset.
47
NOTES TO FINANCIAL STATEMENTS
Measurement of royalty liability
The Group is required to estimate the amount and timing of anticipated repayment dates for the royalty liability
disclosed in note 19. Any changes in either the estimated timing or amount of repayments will impact the
measurement of this liability through the profit and loss and these changes could be significant.
Impact of the COVID-19 pandemic
The COVID-19 outbreak was declared a pandemic by the World Health Organisation in March 2020. The outbreak
and the response of Governments in dealing with the pandemic is interfering with general activity levels within the
community, the economy and the operations of our business. The scale and duration of these developments remain
uncertain as at the date of this report. Management have considered the potential impact of the COVID-19
pandemic in the significant accounting judgements, estimates and assumptions. However, as these are subject to
increased uncertainty the actual outcomes may differ from the estimates.
3. INVESTMENTS IN ASSOCIATES
The Group had a 75% interest in Peak 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. On 12 November
2019 Peak reacquired the balance of the shares in PAM to move back to a 100% ownership interest. The PAM group
is now accounted for as a subsidiary and consolidated into the Peak Group. Prior to re-consolidation on 12 November
2019, Peak Group’s interest in PAM was 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
to date of consolidation:
$AUD
$AUD
For the period 1
July 2019 to date
of acquisition
For the year ended
30 June 2019
Group's share of loss for the period
(353,988)
(924,060)
Group's share of movement of other comprehensive income for
the period
503,253
1,683,792
Peak Resources investment in associate:
Opening balance
Less Group’s share of loss in the associate for the period
Add Group’s share of movement in other comprehensive income in
the associate for the period
Peak’s additional equity investment in PAM during the period
Less: Equity investment in PAM prior to reconsolidation
33,509,484
(353,988)
503,253
667,861
(34,326,610)
30,649,635
(924,060)
1,683,792
2,100,117
-
Investment in associate
-
33,509,484
Classified in the statement of financial position as:
Investment in associate
-
33,509,484
$AUD
$AUD
As at 30 June 2020
As at 30 June 2019
48
NOTES TO FINANCIAL STATEMENTS
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.
4. ASSET ACQUISITION
On 4 November 2019 Peak’s shareholders approved the acquisition of the remaining 25% interest in PAM. All
conditions of the acquisition were satisfied and completion occurred on 12 November 2019. A total of 386,161,369
new fully paid ordinary shares were issued at an issue price at the completion date of $0.043 to Appian Pinnacle
Holdco Limited (Appian) and International Finance Corporation (IFC), after reduction for their outstanding
contributions for the PAM group costs to completion. The cost of this acquisition consideration was $16,604,938.
The total cost of acquisition has been determined using the accumulated cost approach with the difference between
this cost and the carrying value of Peak’s equity accounted investment of its interest in associate on derecognition
taken through the profit and loss as part of the gain on acquisition and reconsolidation of associate of $10,429,216.
The Group’s acquisition of PAM was accounted for as an asset acquisition rather than a business combination in the
consolidated financial statements. The following table illustrates the apportionment of the acquisition cost to the
assets and liabilities of PAM Group at their relative fair values at the acquisition date.
Fair value of consideration transferred
Amount settled for the purchase of the 25% interest in PAM
Previous costs of acquisition
Total cost of PAM acquisition
Assignment of carrying amounts in PAM on acquisition at their relative fair
values:
Cash and cash equivalents
Trade and other receivables
Prepayments
Exploration and evaluation expenditure
Property, plant and equipment
Trade and other payables
Royalty liability
Total cost of PAM acquisition
12 November
2019
$
16,604,938
35,182,644
51,787,582
41,897
811
78,160
59,173,422
40,807
(29,165)
(7,518,350)
51,787,582
49
NOTES TO FINANCIAL STATEMENTS
5. INCOME AND EXPENDITURE ITEMS
Included in profit/(loss) for the year are:
Interest received1
Australian R&D rebate
Other income
Total other income
1This is interest received from instruments held at amortised cost calculated
using effective interest method
Corporate and compliance costs
Occupancy costs
Travel costs
Technical feasibility costs
Fees to Ernst & Young (Australia):
Fees for auditing the statutory financial report of the parent covering the
group and auditing the statutory financial reports of any controlled entities
Total fees to Ernst & Young (Australia) (A)
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for auditing the financial report of any controlled entities
Total fees to overseas member firms of Ernst & Young (Australia) (B)
Total auditor’s remuneration (A)+(B)
6. OPERATING SEGMENTS
2020
$
2019
$
37,034
110,037
62,500
98,245
-
550
209,571
98,795
(120,587)
(92,462)
(275,276)
(948,436)
(81,966)
(63,184)
(55,570)
(132,000)
Auditors' remuneration
79,971
74,963
79,971
74,963
30,229
30,229
110,200
7,201
7,201
82,164
Information reported to the chief operating decision makers for the purposes of resource allocation and assessment
of segment performance focuses on the exploration activities of the Group. The chief operating decision makers
include the board of directors. The Group’s reportable segments under AASB 8 are as follows:
•
Exploration & Development (E&D) – Group’s exploration and development activities for the Ngualla project in
Tanzania; and
• Unallocated - to manage the corporate affairs of the group.
The segments have applied the same accounting policies as applied to the Group and disclosed in the notes 1 and 2
to these financial statements.
30 June 2020
E&D
$
Unallocated
Total
$
$
E&D
$
Interest income
Other income
Re-measurement gain on
royalty liability
Gain on derecognition of
associate
Total income
-
-
-
-
-
37,034
172,537
37,034
172,537
1,735,665
1,735,665
10,429,216
10,429,216
12,374,452
12,374,452
30 June 2019
Unallocated
Total
$
98,245
550
-
-
$
98,245
550
-
-
98,795
98,795
-
-
-
-
-
50
NOTES TO FINANCIAL STATEMENTS
Depreciation and
amortisation
Share based payment
expenses
Borrowing costs
(11,196)
(5,703)
(16,899)
-
-
(819,645)
(819,645)
(297,520)
(297,520)
-
-
-
(5,886)
(5,886)
(471,005)
(471,005)
(1,163,204)
(1,163,204)
Share of loss of associate
Technical feasibility costs
(353,988)
(948,436)
-
-
(353,988)
(924,060)
(948,436)
(132,000)
-
-
(924,060)
(132,000)
Other expenses
Income Tax
Segment results
Segment assets
Segment liabilities
Additions to non-current
assets during the year:
Plant and equipment
Investment in associate
-
-
(2,285,249)
(2,285,249)
-
-
-
-
(1,998,693)
(1,998,693)
-
-
(1,313,620)
8,966,336
7,652,715
(1,056,060)
(3,539,993)
(4,596,053)
59,448,993
(5,857,433)
2,931,911
62,380,904
33,509,484
3,206,471
36,715,955
(655,114)
(6,514,547)
-
(8,768,815)
(8,768,815)
-
667,861
667,861
11,686
-
11,686
11,686
667,861
-
2,100,117
679,550
2,100,117
5,350
-
5,350
5,350
2,100,117
2,105,467
7. PROFIT/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations basic and dilutive earnings per share
computations:
Basic and Diluted profit/ (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 profit/(loss) per share
Weighted average number of ordinary shares used in calculating
diluted profit/(loss) per share
Anti-dilutive options over ordinary shares and performance rights
excluded from the weighted average number of shares
8. INCOME TAX
2020
Cents
0.65
2019
Cents
(0.58)
2020
Nos.
1,174,788,181
2019
Nos.
799,220,870
1,175,432,990
799,220,870
204,794,419
183,054,035
a.
The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
CONSOLIDATED CONSOLIDATED
2020
$
2019
$
-
-
-
-
-
-
b.
The prima facie tax benefit on loss from ordinary activities before income tax
is reconciled to the income tax as follows:
Loss before income tax
7,652,715
4,596,053
51
NOTES TO FINANCIAL STATEMENTS
Prima facie tax benefit on loss from ordinary activities before income tax at
30.0% (2019:30%)
2,295,815
(1,378,816)
CONSOLIDATED CONSOLIDATED
2020
$
2019
$
Add tax effect of:
- Revenue losses not recognised
- Other non-allowable items
- Other deferred tax balances not recognised
Less tax effect of:
- Gain on derecognition of associate
- Gain on re-measurement of financial liabilities
- Non-assessable items
Income tax expense reported in statement of comprehensive income
c.
Deferred tax recognised at 30.0% (2019:27.5%):
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 30.0% (2019:27.5%) (Note 1):
Carry forward revenue losses
Carry forward capital losses
Unrealised FX
Capital raising costs
Provisions and accruals
Other
699,892
686,311
61,301
3,743,319
3,128,765
520,700
93,854
-
-
(1,299)
(3,649)
643,673
804,265
300,036
369,158
-
-
369,158
-
(5,053,678)
(1,051)
(4,106)
4,948
5,058,835
-
-
7,452,367
1,766,535
295,504
487,097
93,369
859,008
-
295,504
583,737
112,121
628,940
1,292
9,187,345
3,388,129
The tax benefits of the above deferred tax assets will only be obtained if:
(a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits
to be utilised;
(b) the company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the company in utilising the benefits.
Note 1 – the corporate tax rate for eligible companies will reduce from 30% to 25% by 30 June 2022 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.
52
NOTES TO FINANCIAL STATEMENTS
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 profit/(loss) to operating cash flows
Profit/(Loss) for the year
Adjustments for non-cash items:
Gain on derecognition of associate
Gain on re-measurement of financial liabilities
Fair value adjustments
Share of loss of associate
Share based payments expenses
Depreciation expenses
Foreign exchange gain/loss
Other non-cash items
Movement in working capital items:
(Increase)/Decrease in trade and other receivables
Decrease in prepayments
Increase in trade and other payables
Increase in provisions
10. TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other receivable
Ageing of receivables
Recoverable within 3 months
Receivables are non-interest bearing and unsecured
2020
$
2019
$
546,021
2,000,000
547,324
1,600,000
2,546,021
2,147,324
7,652,714
(4,596,053)
(10,429,216)
(1,735,665)
69,549
353,988
819,645
16,899
43,948
(174,131)
(25,551)
624
372,333
46,268
-
-
16,603
924,060
471,005
5,886
270,461
-
46,211
5,347
1,101,084
36,218
(2,988,595)
(1,719,178)
2020
$
21,671
10,291
31,962
31,962
31,962
2019
$
13,772
3,503
17,275
17,275
17,275
53
NOTES TO FINANCIAL STATEMENTS
11. OTHER FINANCIAL ASSETS
Bank Term Deposit
2020
$
2019
$
30,000
30,000
30,000
30,000
A deposit of $30,000 (2019: $30,000) 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. LOANS – DUE FROM ASSOCIATE
Current
Loans – due from associates measured at FVTPL
Non-current
Loans – due from associates measured at FVTPL
2020
$
2019
$
-
-
-
446,532
416,961
863,493
The Associate-company loan 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 on acquisition of PAM
Additions
Depreciation for the year
Balance at the end of the year
14. EXPLORATION AND EVALUATION EXPENDITURE
Movement in net carrying amount:
Balance at beginning of year
Additions on acquisition of PAM
Foreign exchange movements
Balance at 30 June
Capitalised areas of interest
Ngualla Rare Earth Project, Tanzania
2020
$
2019
$
309,768
(267,979)
103,052
(96,856)
41,789
6,196
6,196
40,807
11,685
(16,899)
41,789
6,731
-
5,351
(5,886)
6,196
2020
$
2019
$
-
59,173,422
245,960
59,419,382
59,419,382
59,419,382
-
-
-
-
-
-
54
NOTES TO FINANCIAL STATEMENTS
15. INVESTMENTS
Investment in listed shares – at fair value through profit or loss (Level 1)
16. OTHER ASSESTS
Site 2 option payment
2020
$
8,000
8,000
2020
$
219,284
219,284
2019
$
8,000
8,000
2019
$
127,254
127,254
The Company signed a 24 month option on 18 June 2018 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 included the ability to extend the option for a
further 12 months. The Company extended the option for a further 12 months commencing on 18 June 2020.
17. 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 30-120 days.
18. PROVISIONS
Employee benefits - leave entitlements
19. LOANS AND BORROWINGS
Current:
Appian loan facility
Total Current loans & borrowings
Non-current:
2020
$
2019
$
412,178
276,252
-
1,430,011
412,178
-
412,178
276,252
1,430,011
1,706,263
2020
$
2019
$
242,936
196,668
2020
$
2019
$
-
-
1,824,095
1,824,095
Working capital loan facility – Peak African Minerals
-
5,041,789
55
NOTES TO FINANCIAL STATEMENTS
ANRF Royalty Liability
Total Non-Current loans & borrowings
5,857,433
-
5,857,433
5,041,789
30 June 2020
Non-current – ANRF Royalty Liability – In July 2015 ANRF Royalty Company Limited (ANRF) and International Finance
Corporation (IFC) advanced US$5,191,191 to PRNG towards completion of the Definitive Feasibility Study for the
Ngualla Rare Earth's project. This amount will be repaid via a 2% gross sales royalty from the potential mining
operation. Forms of security customary for an agreement of this type have been agreed and have been or are
registered including share pledges over the shares in PRNG, and asset level security given by PRNG.
Movement in net carrying amount of ANRF Royalty Liability:
Balance at beginning of year
Additions on acquisition of PAM
Gain on re-measurement
Foreign exchange movements
Balance at 30 June
2020
$
2019
$
-
(7,518,350)
1,735,665
(74,748)
5,857,433
-
-
-
-
-
30 June 2019
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. The loan was
fully repaid on its maturity in September 2019.
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.
20. RESERVES
At 1 July 2018
Share based payment made in 2019
Group’s share of associates FCTR
Exchange difference on translation of foreign
operations
At 30 June 2019
Share based payment made in 2020
Group’s share of associates FCTR
Recycled to the profit or loss on derecognition of
associate
Exchange difference on translation of foreign
operations
At 30 June 2020
Share based
payment reserve
$
2,497,108
471,005
-
-
2,968,113
819,645
-
-
-
Foreign currency
translation
reserve
$
1,521,873
-
1,683,792
Total
$
4,018,981
471,005
1,683,792
(156,378)
(156,378)
3,049,287
6,017,400
-
503,253
819,645
503,253
(3,764,892)
(3,764,892)
40,792
40,792
3,787,758
(171,560)
3,616,918
56
NOTES TO FINANCIAL STATEMENTS
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.
21. CONTRIBUTED EQUITY
Balance at 30 June 2018
PEKOB 6c Option Conversions
Balance at 30 June 2019
PEK placement @4c per share
PAM Rollup consideration
PEK placement @ 1.5c per share
Equity issue costs
Balance at 30 June 2020
1-Nov-18
8-Aug-19
12-Nov-19
14-Apr-20
Nos.
$
799,152,011
103,858
799,255,869
119,888,380
386,161,369
100,000,000
-
1,405,305,618
77,217,398
6,232
77,223,630
4,795,534
16,604,938
1,500,000
(230,767)
99,893,335
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 242,794,419 options (including performance rights) over unissued
shares as follows:
Options over Ordinary Shares
Expiry Date
Date of expiry/
exercise or issue
Nos
Status
Exercise
Price
Balance at 30 June 2019
Expired:
PEKOC Listed options with an
exercise price of $0.06
Unlisted options with an
exercise price of $0.10
Unlisted options with an
exercise price of $0.15
Expired Performance Rights
Issued:
PEKOD Listed options with an
exercise price of $0.03 expiring
14/04/2022
Unlisted Options, exercisable at
$0.06 expiring 11 May 2021
Unlisted Options, exercisable at
$0.06 expiring 11 May 2021
Unlisted Options, exercisable at
$0.06 expiring 11 Nov 2020
194,888,247
14-Jun-20
(61,088,247)
6-Mar-20
(3,000,000)
6-Mar-20
(5,000,000)
5-Mar-20
(8,000,000)
(77,088,247)
14-Apr-20
88,000,000
Vested
0.03
14/04/2022
11-Nov-19
14,000,000
Vested
0.06
11/05/2021
18-Dec-19
7,000,000
Vested
0.06
11/05/2021
11-Nov-19
5,994,419
Vested
0.06
11/11/2020
57
NOTES TO FINANCIAL STATEMENTS
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
Exercised:
Nil
Balance at 30 June 2020
11-Nov-19
2,000,000
Vested
0.05
21/06/2021
11-Nov-19
3,000,000
Unvested
0.10
21/06/2022
11-Nov-19
5,000,000
Unvested
0.15
21/06/2023
242,794,419
Vested &
unvested
$0.00 -
$0.15
16/01/2021 -
21/06/2023
During the year no options and performance rights were issued to employees under the EOP and PRP approved at
the Annual General Meeting held on 29 November 2017. During the year a total of 61,088,247 options expired
unexercised and 8,000,000 options and 8,000,000 performance rights lapsed for failing to meet the vesting criteria.
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.
22. SHARE BASED PAYMENTS
Employee share option plan
The Group has an 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 2020 no Options were
issued under the EOP to executives and employees.
Options granted during and as at the year ended 30 June
2020:
Outstanding at 1 July 2019
Granted / Vested during the year:
12-Nov-2019 issue of $0.05 vested Unlisted options expiring
21-Jun-2021
12-Nov-2019 issue of $0.10 unvested Unlisted options
expiring 21-Jun-20221
12-Nov-2019 issue of $0.15 unvested Unlisted options
expiring 21-Jun-20232
11-Nov-2019 Issue of $0.06 vested Unlisted Options expiring
11-May-2021
18-Dec-2019 Issue of $0.06 vested Unlisted Options expiring
11-May-2021
11-Nov-2019 Issue of $0.06 vested Unlisted Options expiring
11-Nov-2020
14-Apr-2020 Issue of $0.03 vested PEKOD Listed Options
expiring 14-Apr-2022
Number
123,800,000
WA Exercise
Price
$0.0701
Value per
option
2,000,000
$0.05
$0.0144
3,000,000
$0.10
$0.0111
5,000,000
$0.15
$0.0112
14,000,000
$0.06
$0.0115
7,000,000
$0.06
$0.0083
5,994,419
$0.06
$0.0083
38,000,000
$0.03
$0.0049
58
NOTES TO FINANCIAL STATEMENTS
Exercised during the year
Expired during the year
Outstanding at 30 June 2020
Exercisable at 30 June 2020
WA (weighted average)
- -
-
(8,000,000)
190,794,419
154,794,419
$0.0659
$0.0436
Options granted during and as at the year ended 30 June
2019:
Outstanding at 1 July 2018
Granted / Vested during the year:
17-Jan-19 - issue of $0.035 vested options expiring 17-Jan-
2022
5-Mar-2019 - issue of $0.03 options, vesting after 1 years
continuous service, expiring 05-Mar-2023
Exercised during the year
Expired during the year
Outstanding at 30 June 2019
Exercisable at 30 June 2019
WA (weighted average)
Number
WA Exercise
Price
Value per
option
96,750,000
$0.093
5,750,000
$0.035
$0.0099
43,000,000
$0.03
$0.0126
- -
(21,700,000)
-
123,800,000
46,500,000
$0.0701
$0.0557
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 $0.052 (2019: $0.031).
The weighted average remaining contractual life for share options outstanding at 30 June 2020 was 1.78 years (2019:
3.01 years).
The weighted average fair value of options issued during the year was $0.0076 per option (2019: $0.0123).
Performance Rights Plan
The Group has a 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.
No issues of performance rights were made during the year ended 30 June 2020 (2019: 10,000,000).
59
NOTES TO FINANCIAL STATEMENTS
Performance rights granted during and as at the year
ended 30 June 2020:
Outstanding at 1 July 2019
Expired during the year
Outstanding at 30 June 2020
Exercisable at 30 June 2020
WA (weighted average)
Performance rights granted during and as at the year
ended 30 June 2019:
Outstanding at 1 July 2018
Granted during the year:
Outstanding at 30 June 2019
Exercisable at 30 June 2019
Number
Exercise Price
Value per
performance
right
10,000,000
-
$0.024
(8,000,000)
2,000,000
2,000,000
-
$0.00
$0.00
Number
Exercise Price
Value per
performance
right
-
-
10,000,000
10,000,000
-
-
$0.024
$0.00
-
*Vest subject to achievement of performance criteria as determined by the Company’s Board.
The volume weighted exercise price of rights issued during the year was $0.00 (2019: $0.00)
The weighted average remaining contractual life for rights outstanding at 30 June 2020 was 0.68 years (2019: 0.68
years)
The weighted average fair value of rights issued during the year was $0.024 per right (2019: $0.024)
The options and performance rights have been valued using the Black-Scholes option pricing model with the
following inputs:
Options and performance rights granted during year ended 30 June 2020:
12-Nov-2019 issue of $0.05 vested
Unlisted options expiring 21-Jun-
2021
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
12-Nov-2019 issue of $0.10 unvested
Unlisted options expiring 21-Jun-
2022
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
$0.043
0.75%
0%
77%
$0.0144
$0.043
0.75%
0%
77%
$0.0111
60
NOTES TO FINANCIAL STATEMENTS
12-Nov-2019 issue of $0.15 unvested
Unlisted options expiring 21-Jun-
2023
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
11-Nov-2019 Issue of $0.06 vested
Unlisted Options expiring 11-May-
2021
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
18-Dec-2019 Issue of $0.06 vested
Unlisted Options expiring 11-May-
2021
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
11-Nov-2019 Issue of $0.06 vested
Unlisted Options expiring 11-Nov-
2020
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
14-Apr-2020 Issue of $0.03 vested
PEKOD Listed Options expiring 14-
Apr-2022
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
(WA weighted average)
$0.043
0.75%
0%
77%
$0.0112
$0.043
0.75%
0%
77%
$0.0115
$0.038
0.75%
0%
77%
$0.0083
$0.043
0.75%
0%
77%
$0.0085
$0.018
0.25%
0%
77%
$0.0049
Options and performance rights granted during the year ended 30 June 2019:
16-Jan-19 - issue of $0.035 vested
options expiring 17-Jan-2022
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
$0.024
1.50%
0%
77%
$0.0099
61
NOTES TO FINANCIAL STATEMENTS
5-Mar-2019 - issue of $0.03 options,
vesting after 1 years continuous
service, expiring 05-Mar-2023
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per Option
5-Mar-2019 - unvested Performance
Rights to vest on achievement of
performance criteria by 5 March 2020
or the Performance Rights will lapse
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Value per performance right
(WA weighted average)
$0.024
1.50%
0%
77%
$0.0126
$0.024
1.50%
0%
77%
$0.024
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 $819,645 (2019: $471,005) is $Nil (2019: $Nil) relating to the shares issued during the year,
$830,828* (2019: $411,822) related to options granted during the year and prior year, and -$11,183* (2019: $59,183)
relating to performance rights granted in the prior year.
*Write back of non-market based Options and Performance Rights expired unvested during the year.
23. CONTINGENCIES AND COMMITMENTS
Lease commitments
The company was committed to an office lease of $35,010 per annum for 3 years to 31 December 2020. The lease
provides a break clause during each year of the lease and has been classified as a short-term lease.
Up to 1 year
1 to 5 Years
Capital Commitments
At 30 June 2020, the Group has no capital commitments. (2019: Nil).
Contingencies
At 30 June 2020, the Group had no contingencies (2019: Nil).
2020
$
2019
$
17,505
16,500
-
-
17,505
16,500
62
NOTES TO FINANCIAL STATEMENTS
24. KEY MANAGEMENT PERSONNEL DISCLOSURE
Salary and fees – short term benefits
Non-monetary benefits
Superannuation
Share based payments
2020
$
2019
$
1,304,150
1,371,249
88,048
69,825
305,485
103,032
57,950
395,256
1,767,508
1,927,487
Loans to KMP’s
No loans were made to KMP’s during the financial year (2019: Nil)
The Company’s executive team agreed to a 50% deferral in their contracted cash remuneration and the Company’s
Directors agreed to defer a 100% of their Directors’ fees for four months for the period 1 April 2020 to 31 July 2020.
As at 30 June 2020 the gross deferred amounts owing to Directors and Executives reported in Trade and other
payables totalled $190,323. The deferred executive remuneration and Directors fees was settled in equity based on
$0.0342 Per Ordinary Fully Paid Share calculated based on the 5 day VWAP up to and including 6 August 2020 for a
total value of consideration $128,662, this amount is net of PAYG withholding tax obligations due on the deferred
amounts.
Other transaction and balances with KMP’s
During the year Steinepreis Paganin Lawyers and Consultants, a legal practice associated with Mr Jonathan Murray
received $139,723 (2019: $20,010) as fees for the provision of legal advice. Balance outstanding at 30 June 2020 and
included in trade creditors $7,428 (30 June 2019: $10,946)
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.
25. 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
Peak African Minerals Limited (Directly)
PR Ng Minerals Limited (Indirectly)
Incorporation
Ownership interest
2019
2020
Australia
100%
100%
Australia
Australia
Australia
Australia
Tanzania
U.K
Mauritius
Tanzania
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
75%
63
NOTES TO FINANCIAL STATEMENTS
26. FINANCIAL INSTRUMENTS
The financial instruments of the Group are (i) cash and cash equivalents; (ii) trade and other receivables; (iii) trade
and other payables, iv) loans and borrowings; (v) loans due from associates measured at fair value through profit or
loss; (vi) other financial assets, including bank deposits.
The Group’s principal financial instruments are cash and short term deposits. The main purpose of these financial
instruments is to finance the Group’s operations. It is, and has been throughout the period under review, the Group’s
policy that no trading in financial instruments shall be undertaken.
The financial instruments expose the group to certain risks. The nature and extent of such risks, and the
management's risk management strategy are noted below.
Fair value of financial instruments
Cash and cash equivalents
Trade and other receivables
Other financial assets
Loans due from associate carried at FVTPL
Investments
Trade and other payables
Current loans and borrowings
Non-Current loans and borrowings
2020
$
2019
$
2,546,021
2,147,324
31,962
30,000
-
8,000
17,275
30,000
863,493
8,000
(412,178)
(1,706,263)
-
(5,857,433)
(1,824,095)
(5,041,789)
The carrying amount of financial instruments closely approximate their fair value on account of the short maturity
cycle except Loans Due from Associate carried at FVTPL 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 (Level 2).
For the Non-current – Loans and borrowings carrying amounts approximate their fair values as they are subject
market rates (Level 2).
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’s due from associates $31,962 (2019: $1,735,578) at reporting dates.
As at 30 June 2020, 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.
The contractual maturity analysis of the Group's financial instruments are noted below:
64
NOTES TO FINANCIAL STATEMENTS
Up to 3
months
$
(412,178)
-
-
-
2020
> 3 months
Total
$
$
Up to 3
months
$
2019
> 3 months
Total
$
$
-
-
-
(412,178)
(276,252)
(1,430,011)
(1,706,263)
(5,857,433)
(5,857,433)
-
-
(1,824,095)
-
(1,824,095)
-
-
(6,826,811)
(6,826,811)
-
-
(412,178)
(5,857,433)
(6,269,611)
(2,100,347)
(8,256,822)
(10,357,169)
2,546,021
-
2,546,021
2,147,324
-
2,147,324
-
-
-
30,000
30,000
-
30,000
30,000
-
-
446,532
416,961
863,493
8,000
8,000
-
8,000
8,000
31,962
-
31,962
17,275
-
17,275
2,577,983
38,000
2,615,983
2,611,131
454,961
3,066,092
Financial liabilities
Trade and other
payables
Short term loans
Long term loans
Royalty liability
Total financial
liabilities
Financial assets
Cash and cash
equivalents
Other financial
assets
Loans due from
associate
Investments
Trade and other
receivables
Total financial
assets
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
2020
$
2,546,021
25,460
(25,460)
2019
$
2,147,324
21,473
(21,473)
Foreign currency risk
The Group’s exposure to foreign currency price risk is limited to the USD denominated loans and royalty liability
balances. At 30 June 2020 the Group had an outstanding balance of USD $5,191,191 (2019: USD $6,236,664). The
Group will transfer cash and cash equivalents into foreign currency to meet short term expenditure obligations.
65
NOTES TO FINANCIAL STATEMENTS
The Group’s expenditure obligations in Tanzania are primarily in US dollars as a result the Group is exposed to
fluctuations in the US dollar to Australian currency. These exposures are not subject to a hedging programme. The
Board and management from time to time having regard to likely forward commitments review this policy.
The following table demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other
variables held constant. The impact on the Group’s profit before tax and equity is due to changes in the fair value of
the USD denominated loan balances.
USD$ denominated loan balances in AU$
USD$ denominated Royalty Liability balances in AU$
Impact on profit: +5% movement in USD exchange rate
Impact on profit: -5% movement in USD exchange rate
Impact on equity: +5% movement in USD exchange rate
Impact on equity: -5% movement in USD exchange rate
2020
$
-
5,857,433
-
-
292,872
(292,872)
2019
$
8,295,894
-
414,795
(414,795)
414,795
(414,795)
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 during the year ended 30 June 2020:
1-Jul-19
Cash flows
$
$
2020
Foreign
exchange
movement
$
Other
Movement
30-Jun-20
$
$
Financial liabilities
Current and Non-current
interest bearing loans and
borrowings
Royalty Liability
(6,865,884)
-
Total liabilities from financing
activities
(6,865,884)
-
-
-
-
6,865,884
-
(74,748)
(5,782,685)
(5,857,433)
(74,748)
1,083,199
(5,857,433)
Changes in liabilities arising from financing activities during the year ended 30 June 2019:
1-Jul-18
Cash flows
$
$
2019
Foreign
exchange
movement
$
Other
Movement
30-Jun-19
$
$
(6,763,386)
287,725
(373,620)
(16,603)
(6,865,884)
(6,763,386)
287,725
(373,620)
(16,603)
(6,865,884)
Financial liabilities
Current and Non-current
interest bearing loans and
borrowings
Total liabilities from financing
activities
66
NOTES TO FINANCIAL STATEMENTS
27. SUBSEQUENT EVENTS
On 3 July 2020, 2,000,000 Ordinary Fully Paid Shares were issued to employees on exercise of their vested
performance rights.
On 7 August 2020, Peak issued 3,762,020 Ordinary Fully Paid Shares in settlement of deferred directors fees and
deferred executive remuneration approved by shareholders at a General Meeting of Shareholders on 6 August 2020.
Non-executive directors Mr Sennitt and Mr Meurer resigned as directors of the Company on 11 September 2020 and
16 September 2020 respectively with Mr Pearson becoming the Interim non-executive chairman.
Other than the matters referred to above there were no other events that have a material impact on the financial
statements or operations of the Group and Company.
28. PARENT ENTITY DISCLOSURE
The following details information related to the parent entity, Peak Resources Limited, at 30 June 2020. The
information presented here has been prepared using consistent accounting policies as presented in Note 2.
2019
2020
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
$
$
2,551,299
40,997,981
43,549,280
573,547
7,580,226
8,153,773
2,201,439
22,071,069
24,272,508
2,287,914
6,006,554
8,294,468
35,395,507
15,978,040
100,209,089
3,851,242
77,539,381
3,031,596
(68,664,824)
(64,592,937)
35,395,507
15,978,040
(3,606,640)
(2,747,320)
-
-
(3,606,640)
(2,747,320)
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 23, at year end (2019: None).
29. NON-CASH FINANCING AND INVESTING ACTIVITIES
The acquisition of the balance of PAM’s shares from Appian and IFC was settled via the issue of 386,161,369 shares
with a value of $16,604,938 (see Notes 4 and 14).
67
DIRECTOR’S DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Peak Resources Limited, I state that:
In the opinion of the Directors:
(a)
(b)
(c)
Subject to the matters set out in Note 2(a) 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;
the attached financial statements are in compliance with International Financial Reporting Standards, as
stated in note 2 to the financial statements;
the attached financial statements and notes thereto for the financial year ended 30 June 2020 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 2020 and performance of the Group 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
Tony Pearson
Non-Executive Chairman
Perth, 17 September 2020
68
TENEMENT SCHEDULE AND RESERVES AND
RESOURCES
Project
Tenement
%
Status
Arrangement/Comment
Tanzanian Projects
Mikuwo
Mlingi
Ngualla
PL 9157/2013
100
Granted
PL 10897/2016
100
Granted
SML 00601/2017
100
Application
Held by 100% Tanzanian subsidiary company
PR NG Minerals Ltd
Held by 100% Tanzanian subsidiary company
PR NG Minerals Ltd
Held by 100% Tanzanian subsidiary company
PR NG Minerals Ltd
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 2020
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.
69
TENEMENT SCHEDULE AND RESERVES AND
RESOURCES
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
1.318
1.418
1.326
27.59
27.80
27.61
2.305
2.456
2.317
48.25
48.15
48.24
Praseodymium
0.228
0.243
0.229
4.77
4.77
4.77
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total REO
0.788
0.838
0.792
16.49
16.43
16.49
0.077
0.082
0.077
0.014
0.015
0.014
0.029
0.031
0.030
0.002
0.002
0.002
0.004
0.004
0.004
0.000
0.000
0.000
0.001
0.002
0.002
0.000
0.000
0.000
0.001
0.001
0.001
0.000
0.000
0.000
0.010
0.010
0.010
1.61
0.30
0.62
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
1.61
1.61
0.28
0.30
0.60
0.62
0.05
0.05
0.07
0.07
0.01
0.01
0.03
0.03
0.00
0.00
0.01
0.01
0.00
0.00
0.19
0.20
4.78
5.10
4.80
100.00
100.00
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
70
TENEMENT SCHEDULE AND RESERVES AND
RESOURCES
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.
Mineral Resource estimates
The Mineral Resource as at 30 June 2020 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 2020
Lower Cut-
off Grade
JORC Category
Ore Tonnes
(millions)
REO %
Contained
REO Tonnes
BaSO4
%
Ngualla All
Mineral
Resources
1.0% REO
Measured
86.1
2.61
2,250,000
20.2
Indicated
112.6
1.81
2,040,000
13.8
Inferred
15.7
2.15
340,000
17.6
Total
214.4
2.15
4,620,000
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.
71
TENEMENT SCHEDULE AND RESERVES AND
RESOURCES
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 2020
Lower Cut-
off Grade
JORC Category
Ore Tonnes
(millions)
REO %
Contained
REO Tonnes
BaSO4
%
Measured
18.9
4.75
900,000
1.0% REO
3.0% REO
Indicated
Inferred
Total
Measured
Indicated
Inferred
1.9
0.5
21.3
17.9
1.7
0.4
4.85
4.43
90,000
20,000
4.75
1,010,000
4.88
870,000
5.14
90,000
4.84
20,000
Total
19.9
4.90
980,000
37.8
38.3
31.5
37.7
38.6
39.3
35.4
38.6
Ngualla
Weathered
Bastnaesite
Zone
* 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.
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 2020 TOTAL
MINERAL RESOURCE
NGUALLA 2020 WEATHERED
BASTNAESITE ZONE
RESOURCE
NGUALLA 2020
WEATHERED BASTNAESITE
ZONE RESOURCE
1% REO
1% REO
3% REO
OXIDE
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
REO grade (%)
% of total
REO
REO grade (%)
% of total REO
REO grade (%)
0.587
1.039
0.104
0.348
0.036
0.007
27.25
48.23
4.81
16.2
1.66
0.34
1.310
2.293
0.227
0.784
0.076
0.014
27.58
48.27
4.77
16.5
1.60
0.29
1.353
2.364
0.234
0.806
0.078
0.014
% of total
REO
27.63
48.27
4.77
16.5
1.60
0.29
72
TENEMENT SCHEDULE AND RESERVES AND
RESOURCES
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
* Figures may not sum due to rounding.
0.016
0.001
0.003
0.000
0.001
0.000
0.001
0.000
0.010
2.15
0.75
0.07
0.16
0.02
0.06
0.00
0.04
0.00
0.47
100
0.029
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.75
0.61
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100
0.030
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.90
0.61
0.05
0.08
0.01
0.03
0.00
0.01
0.00
0.20
100
73
ADDITIONAL SHAREHOLDER
INFORMATION
Quoted security distribution
The distribution of members and their holdings of quoted equity securities in the company as at 9 October 2020 were
as follows:
Number Held as at 9 October 2020
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
170
282
271
1,487
901
3,111
There were 918 holders with less than a marketable parcel of fully paid shares.
Number Held as at 9 October 2020
Class of Equity Securities
PEKOD $0.03 Options (Expire 14 April 2022)
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Total
Substantial Security holders
-
-
-
2
75
77
Substantial shareholders listed in the Company’s register as at 9 October 2020 were:
Holder
Number of shares
Percentage of issued capital
APPIAN PINNACLE HOLDCO LIMITED
INTERNATIONAL FINANCE CORPORATION
435,878,376
94,870,449
30.89%
6.72%
Unquoted Securities
Class of Equity Security
$0.03 options expiring 5 March 2023
$0.035 options expiring 17 January 2022
$0.05 options expiring 21 June 2021
$0.06 options expiring 27 February 2021
$0.06 options expiring 11 May 2021
$0.06 options expiring 11 November 2020
$0.065 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
Unvested STI performance rights expiring 8 September 2021
Unvested LTI performance rights expiring 8 September 2024
Number
41,300,000
5,750,000
18,000,000
4,000,000
21,000,000
5,994,419
11,750,000
9,000,000
11,000,000
25,000,000
7,400,000
7,600,000
Number of Security Holders
10
11
5
2
7
4
11
3
3
3
6
2
74
ADDITIONAL SHAREHOLDER
INFORMATION
Names of persons holding greater than 20% of a class of unquoted securities:
Number
Class of Equity Security
$0.03 options expiring 5 March 2023
$0.035 options expiring 17 January 2022
$0.05 options expiring 21 June 2021
$0.06 options expiring 21 February 2021
$0.06 options expiring 21 February 2021
$0.06 options expiring 11 May 2021
$0.06 options expiring 11 May 2021
$0.06 options expiring 11 November 2020
$0.06 options expiring 11 November 2020
$0.065 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
Unvested STI performance rights expiring 8 September 2021
Unvested STI performance rights expiring 8 September 2021
Unvested LTI performance rights expiring 8 September 2024
Unvested LTI performance rights expiring 8 September 2024
11,000,000
1,500,000
10,000,000
2,500,000
1,500,000
7,195,760
7,000,000
2,994,419
2,400,000
3,000,000
4,500,000
3,000,000
5,000,000
15,000,000
2,300,000
2,300,000
3,800,000
3,800,000
Holder
Rocky Smith
Rocky Smith
Meurer Investments Pty Ltd
ACN 161 604 315 Pty Ltd
Tyche Investments Pty ltd
Angus William Napier Aitken
Fosters Stockbroking Nominees Pty Ltd
ACN 161 604 315 Pty Ltd
Angus William Napier Aitken
Rocky Smith
Melshare Nominees Pty Ltd
ACN 161 604 315 PTY LTD
Meurer Investments Pty Ltd
Meurer Investments Pty Ltd
Andrew Graeme Scott
Lucas Rhett Stanfield
Andrew Graeme Scott
Lucas Rhett Stanfield
Voting Rights
Ordinary Shares
In accordance with the Company's Constitution, on a show of hands every member present in person or by proxy or
attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or
attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Restricted Securities
As at 30 June 2020, there were no restricted securities.
Twenty largest security holders
The names of the twenty largest holdings of quoted equity securities as at 9 October 2020 are as follows:
Name
APPIAN PINNACLE HOLDCO LIMITED
INTERNATIONAL FINANCE CORPORATION
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
BUSHELL NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JBBM PTY LTD
SAMBOLD PTY LTD
CRX SECURITIES PTY LIMITED
PINNACLE SUPERANNUATION PTY LIMITED
SAIL AHEAD PTY LTD
BEPPE SUPER PTY LIMITED
BUELL PTY LTD
ONE MANAGED INVESTMENT FUNDS LIMITED
BOSTON FIRST CAPITAL PTY LTD
CITICORP NOMINEES PTY LIMITED
DIRDOT PTY LIMITED
Number Held of Ordinary Fully
Paid Shares
435,878,376
94,870,449
24,161,331
22,399,072
19,614,068
16,905,049
16,766,666
16,325,000
14,500,000
14,000,000
10,720,000
8,656,250
8,008,790
7,875,000
7,534,824
7,406,672
7,149,882
% Held of Issued
Ordinary Capital
30.89
6.72
1.71
1.59
1.39
1.20
1.19
1.16
1.03
0.99
0.76
0.61
0.57
0.56
0.53
0.52
0.51
75
ADDITIONAL SHAREHOLDER
INFORMATION
HOTLAKE PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ASHABIA PTY LTD
TOTAL TOP 20
TOTAL
7,146,366
7,037,411
7,010,611
753,965,817
1,411,067,638
0.51
0.50
0.50
53.43%
100.00%
Name
ACN 161 604 315 PTY LTD
924 PTY LTD
SHAW AND PARTNERS LIMITED
JBBM PTY LTD
BUSHELL NOMINEES PTY LTD
MRS DANIELLA WEBER
SAIL AHEAD PTY LTD
CASTLELYONS PTY LTD
MISS JACLYN MARIE LEMKE
PINNACLE SUPERANNUATION PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BOSTON FIRST CAPITAL PTY LTD
MR RICHARD SMITH
NINETY THREE PTY LTD
MR DAVID JAMES STEWART
ASHABIA PTY LTD
KRUGER PARK PTY LTD
SEVENSPEED PTY LTD
YARANDI INVESTMENTS PTY LTD
DUNN & HORNE PTY LTD
MR EDWARD JAN LESCHKE
MR MORGAN DAY
MR MICHAEL BUSHELL
DORIC WEALTH PTY LTD
BONOMINI ENTERPRISES PTY LTD
FIVE T CAPITAL PTY LTD
TOTAL TOP 20
TOTAL
Number Held of PEKOD $0.03
Options Shares (Expire 14 April
2022)
23,000,000
5,700,000
5,000,000
3,333,333
3,333,333
3,000,000
2,400,000
2,200,000
2,000,000
2,000,000
1,750,000
1,666,667
1,666,667
1,615,351
1,549,999
1,500,000
1,166,667
1,125,000
1,000,000
1,000,000
1,000,000
932,982
833,334
800,000
750,000
750,000
71,073,333
88,000,000
% Held of Issued
PEKOC Options
26.14
6.48
5.68
3.79
3.79
3.41
2.73
2.50
2.27
2.27
1.99
1.89
1.89
1.84
1.76
1.70
1.33
1.28
1.14
1.14
1.14
1.06
0.95
0.91
0.85
0.85
80.77%
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 Principles and
Recommendations (Third Edition) in regard to the Corporate Governance Disclosures and provides disclosure of the
Company’s
at:
http://www.peakresources.com.au/corporate-govern
Governance
Company’s
Statement
Corporate
website
the
on
76
CORPORATE DIRECTORY
Directors
Non-Executive Chairman – Tony Pearson
Non- Executive Director – Jonathan Murray
Chief Executive Officer – Rocky Smith
Chief Financial Officer/Company Secretary -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
Website: www.peakresources.com.au
ABN: 72112546700
ACN: 112546700
Australian Stock Exchange
ASX: Australian Securities Exchange, Perth
Code: PEK
Share Registry
Link Market Services
Level 12, 680 George Street, Sydney NSW 2000
Auditors
Ernst & Young
11 Mounts Bay Road, Perth WA 6000
Solicitors
Australia
Steinepreis Paganin
The Read Building Level 4, 16 Milligan Street, Perth WA 6000
Tanzania
Clyde & Co/Ako Law
Jubilee Towers 11th Floor, Ohio Street Dar Es Salaam Tanzania
Peak Resources Limited
Ground Floor, 5 Ord Street
West Perth, WA 6005
Telephone: +61 8 9200 5360
Email: info@peakresources.com.au
Website: www.peakresources.com.au