RARE EARTHS LIMITED
ACN 112 546 700
20
22ANNUAL REPORT
Contents
01. Who We Are
02. Message from the Executive Chairman
and Chief Executive Officer
03. Review of Operations
04. Sustainability
05. Annual Financial Report
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
06. ASX Additional Information
07. Tenement Schedule & Reserves and Resources
08. Corporate Directory
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2022 ANNUAL REPORT 1
01.
Who We Are
Peak Rare Earths Limited (the “Company” or “Peak”) is
focused on delivering its world-class Ngualla Rare Earth
Project (“Ngualla Project”) in Tanzania, which is one of
the largest, highest grade Neodymium and Praseodymium
(“NdPr”) rare earth deposits in the world. It is located
approximately 147km from the city of Mbeya in southern
Tanzania and on the edge of the East African Rift Valley. The
Ngualla deposit contains Ore Reserves of 18.5Mt grading at
4.80% Rare Earth Oxide (“REO”) for 887kt REO and Mineral
Resources of 214.4Mt grading 2.15% REO for 4.61Mt REO1.
RWANDA
BURUNDI
KENYA
AFRICA
Tanzania
Dodoma
Ngualla Project
TANZANIA
DR CONGO
Mbeya
ZAMBIA
Pemba
Zanzibar
Dar es Salaam
Mafia
Indian Ocean
The Ngualla Project entails the construction of a mine, mill,
beneficiation plant, community projects and associated
infrastructure. The Concentrate produced from the Ngualla
Project is to initially be sold to third-party refineries and is
amenable to the extraction of Neodymium-Praseodymium
Oxide (“NdPr Oxide”) and other Rare Earths products.
NdPr Oxide is a critical component of high-strength
permanent magnets, which are used in the production of
electric vehicles and wind turbines. The demand outlook for
NdPr Oxide is strong and closely aligned to global trends
around decarbonisation, the electrification of transport and
renewable energy generation.
Significant milestones were achieved at the Ngualla Project
during 2022 which support the future development of the
project.
2 PEAK RARE EARTHS
Who We Are 01.
NGUALLA PROJECT OVERVIEW1
Location:
Geology:
Ore Reserves:
Mineral Resources:
Life of mine:
Mining:
ROM throughput:
Annual production:
Tanzania (~1,000km west of Dar es Salaam and ~150km from Mbeya)
Weathered carbonatite with a high-grade bastnasite-rich zone, low in acid
consuming elements and radionuclides
18.5Mt grading 4.80% REO for 887kt REO
214.4Mt grading 2.15% REO for 4.61Mt REO
20+ years (covering only Ore Reserves)
Open Pit with low strip ratio of 1.77x
800ktpa dry ore
37.2ktpa of concentrate (45% TREO grade)
Environmental Certificate:
Received March 2017
Special Mining Licence:
SML application approved by Tanzanian Cabinet and to be formally
granted upon finalisation of Framework Agreement
SEG/Heavy: 1.5%
Lanthanum: 0.4%
Cerium: 1.6%
Lanthanum: 30.1%
SEG/Heavy: 2.9%
NdPr: 22.3%
Ngualla
concentrate
volume2
Cerium: 44.2%
Ngualla
concentrate
value3
NdPr: 96.6%
1 Information relating to financial forecasts, production targets, infrastructure, project execution, cost estimating, metallurgical test work, exploration
results, Mineral Resource estimates, Ore Reserve estimates and studies are taken from the Company’s ASX announcements dated 22 February
2016, 2 March 2017, 12 April 2017, 28 August 2017, 12 October 2017, 25 August 2021 and 28 October 2021. The ASX announcements are available
to view on /https://www.peakresources.com.au/asx-announcements/. The Company advises that it is undertaking a Bankable Feasibility Study
Update and negotiating an Economic Framework Agreement with the Government of Tanzania, and the outcome of one or both, may confirm new
information or data that materially affects the information included in the relevant announcement.
2 Based on Life-Of-Mine composition of Ngualla concentrate.
3 Based on YTD average prices (Asian Metal).
2022 ANNUAL REPORT 3
01. Who We Are
Vision & Values
We believe that these
concepts are well
captured in the Swahili
phrase “Kazi Wajibu Utu”,
which reflects the themes
of “Work, Responsibility
and Humanity”.
4 PEAK RARE EARTHS
4 PEAK RARE EARTHS
4 PEAK RARE EARTHS
Who We Are 01.
PURPOSE STATEMENT:
To develop and operate world-class and sustainable rare earth
projects that support global decarbonisation, local communities and
shareholder value creation.
VALUES STATEMENT:
At Peak Rare Earths, we act with Integrity to achieve our Purpose
and to ensure the Safety, Health and Wellbeing of our people and
communities.
We are Accountable to our shareholders, employees and stakeholders
to deliver and operate our assets by employing a Sustainability ethos
and a Progressive mindset.
VALUES:
The following set of values were developed and agreed by the
Peak Team:
Safety, Health & Wellbeing – commitment to safety best practice and the health
and wellbeing of the team
Integrity – ethics, transparency and adherence to Anti Bribery and Corruption
Accountability – reliability, trust and responsibility
Sustainability – long-term sustainability ethos
Progressive Mindset – innovation, diversity, new technologies, commitment to
continuous improvement, empowerment, and speaking-up
2022 ANNUAL REPORT 5
2022 ANNUAL REPORT 5
2022 ANNUAL REPORT 5
Message from the
Executive Chairman
02.
In this context the strategic and value proposition of
Peak Rare Earths Limited (“Peak”) and our Ngualla Rare
Earth Project in Tanzania (“Ngualla”) is, we believe, world
class and even more critical to tomorrow’s decarbonising
world that we had previously believed. Ngualla is one of
the world’s largest and highest grade undeveloped NdPr
concentrate deposits. Since I came on board as your
Chairman only a few months ago, we have changed our
strategy to one that I believe is very achievable in the
near term, and that is to focus on the most immediate,
deliverable and highest value return for our shareholders
and the country of Tanzania; that being a focus on
producing a concentrate and perhaps other downstream
derivatives. This means a decision on building our own
refinery or otherwise is left for a later time. This means
a simpler and lower cost initial development project and
a requirement in the near term to sign agreements for
concentrate offtake sufficient to support our future project
financing approach.
Dear Peak Shareholders,
The shift towards decarbonisation of energy production and
transportation is now one of the key pillars of the global
economy. This was underscored at the end of FY2022
when, in June 2022, the European Parliament voted to ban
new Internal Combustion Engine (“ICE”) vehicles from
2035 onwards. More than 30 countries, as well as dozens
of states and cities across the world, have committed to the
complete phasing-out of ICE vehicles by this date. These
commitments sit alongside the net zero emissions by 2050
target of more than 100 countries signed under the Paris
Agreement.
To achieve this radical change there is a clear and rapidly
growing need for the raw materials to build the electric
vehicles and wind turbines essential to significantly
reducing carbon emissions. The high strength permanent
magnets in these technologies require Neodymium
and Praseodymium (“NdPr”) rare earth materials. As
EV production continued to grow throughout the year,
demand growth forecasts for rare earths have incrementally
increased and demand is now credibly estimated to grow at
a compound rate of close to 10% over the next decade.
I agreed to join Peak in July 2022 as Executive Chairman
and commenced in the role in August. My experience in
the development of major resources projects at Fortescue
Metals Group Limited and Sirius Minerals PLC during the
past two decades is directly applicable to what we’re trying
to achieve at Peak and I am excited to be joining as a leader
of the Company at this pivotal point in its history.
On assuming the Executive Chairman role, Tony Pearson
moved from Non-Executive Chairman to Deputy Chairman
and Managing Director Bardin Davis became Chief
Executive Officer, stepping down from the Board to focus
on executive duties. These changes bolster our executive
team and provide greater senior resourcing on our project
activities. I would like to thank Bardin, Tony and the wider
Peak team across Tanzania and Australia for their efforts
during FY2022.
Our team worked closely with the Government of Tanzania’s
Ministry of Minerals throughout the year and I would like
to acknowledge Her Excellency Samia Suluhu Hassan,
President of Tanzania, the Honourable Dr. Doto Mashaka
Biteko, Minister Of Minerals, Hon.Prof. Palamagamda
Kabudi, Chair of the Special Presidential Government
Negotiating Committee, and Hon. Philipo Mulugo, Member
6 PEAK RARE EARTHS
of Parliament for Songwe for their support for our project.
We are confident of finalising a Framework Agreement with
the Tanzanian Government by the end of calendar 2022.
We would like to express our gratitude to our shareholders
for your continued support and belief in the Company’s
potential to become the next fully integrated NdPr Oxide
producer. It has been a long journey I know but I hope you
agree that our revised development strategy and updated
Bankable Feasibility Study for Ngualla is compelling, and
we look forward to moving through to the final engineering,
offtake agreements, financing and development decisions
in the second half of FY2023.
Yours faithfully,
Dr Russell Scrimshaw
Executive Chairman
Message from Chair and Chief Executive Officer 02.
2022 ANNUAL REPORT 7
Message from the
Chief Executive Officer
02.
Dear Peak Shareholders,
We have made substantial progress in advancing our
world-class Ngualla Rare Earth Project (“Ngualla Project”)
during FY2022 and our positioning to become a leading
international and sustainable rare earth producer.
The Ngualla Project is one of the largest and highest grade
undeveloped rare earth projects in the world. It benefits
from a long life-of-mine supported by JORC Compliant Ore
Reserves, low strip ratio, low levels of radionuclides (such
as uranium and thorium) and acid consuming elements
as well as a robust flowsheet that is supported by two
Bankable Feasibility Studies and extensive pilot plant
testwork.
Following the Cabinet of Ministers of the Government
Tanzania approving the Special Mining Licence (“SML”)
application for the Ngualla Project in July 2021, we initiated
a Bankable Feasibility Study Update (“BFS Update”),
completed a $31.675 million equity raising, bought-back a
2% life-of-mine royalty and implemented a series of senior
technical and management appointments.
The BFS Update follows a Bankable Feasibility Study
that was completed in April 2017. It was commissioned to
reflect a material improvement in the outlook for rare earth
prices, an expansion in production capacity, movements
in capital expenditure and operating costs, optimisation
opportunities, a reduction in carbon footprint and the
potential to further de-risk development. The BFS Update
has been substantially completed and is expected to be
finalised and announced in late October 2022.
Negotiations with the Government of Tanzania on the
finalisation of a Framework Agreement for the Ngualla
Project are nearing completion. Peak has been working
with the Government of Tanzania to structure a Framework
Agreement that aligns its strategic and financial objectives
with the Tanzanian Government’s objectives to maximise
value-addition and financial benefits to the country.
We have agreed to initially develop the Ngualla Project
on a standalone basis and defer any decision on the
development of its Teesside Refinery until the completion of
an independent study on the feasibility of a Tanzanian rare
earth refinery.
Following the finalisation of a Framework Agreement,
we intend to commission an independent study into the
feasibility of a Tanzanian refinery and further downstream
processing in partnership with the Government of Tanzania.
This study would assess the technical, economic and
environmental feasibility of a Tanzanian refinery as well as
the potential to produce intermediate products such as a
Mixed Rare Earth Carbonate.
The benefits of initially focusing on the development of
the Ngualla Project include significantly reducing upfront
capital and funding requirements, lowering technical and
commissioning risk and preserving optionality around
downstream refining options.
The Ngualla Project’s high-grade bastnaesite concentrate
is well positioned to take advantage of rising deficits in the
global rare earth concentrate market and a surplus of global
refining capacity. We have received considerable inbound
interest around concentrate offtake arrangements for the
Ngualla Project and are progressing a Memorandum of
Understanding (“MOU”) that covers a high proportion of its
annual production.
From a sustainability perspective, the development of
the Ngualla Project will supply the global market with
responsibly mined and processed rare earth products
that will enable low carbon technologies to facilitate
decarbonisation and power the green transformation.
8 PEAK RARE EARTHS
Our approach to sustainability is well captured by the
Swahili phrase “Kazi Wajibu Utu”, which reflects the themes
of “Work, Responsibility and Humanity”. We are committed
to working responsibly to build a better, greener, and more
sustainable future for our communities, customers, and
stakeholders.
One of our key sustainability initiatives completed during
FY2022 was a major upgrade and repairs to 46km of the
Ngwala–Kininga Road. This has enhanced accessibility to
the Ngwala region, provided the community with safe and
all-year round road access and facilitated the establishment
of regular bus and trucking services. I would encourage you
to review the Sustainability section of this Annual Report,
which sets out other key sustainability advancements.
In support of our positioning to be a leading international
rare earth producer, we changed our name from Peak
Resources Limited to Peak Rare Earths Limited and
implemented a share consolidation to support a more
effective capital structure and a share price that would be
more appealing to a wider range of investors.
As we look forward to FY2023, Peak is well positioned to
progress to a Final Investment Decision and commence the
construction and development of the Ngualla Project for the
benefit of all of our stakeholders.
Yours sincerely,
Bardin Davis
Chief Executive Officer
2022 ANNUAL REPORT 9
Message from Chair and Chief Executive Officer 02. 03.
Review of
Operations
10 PEAK RARE EARTHS
10 PEAK RARE EARTHS
Review of Operations 03.
Peak Rare Earths Limited (the “Company” or “Peak”)
continued to progress the pre-development and
commercialisation of its world-class Ngualla Rare Earth
Project (“Ngualla Project”) in Tanzania. After consideration
of a number of factors, in August 2022, the Company took
the strategic decision to undertake a staged development
approach with the Ngualla Project to commence ahead of
construction of a refinery.
The key events of the Company’s operations over the last
twelve months and to the date of this Directors’ Report are
as follows:
▶ Tanzanian Cabinet approval of a Special Mining
Licence application for the Ngualla Project and
Initiation of Economic Framework Agreement
discussions;
▶ Strategic decision for a staged development of the
Ngualla Project ahead of construction of a refinery;
▶ Raising total capital of A$34.421 million in the form of
a A$30 million equity placement, A$1.675 million Share
Purchase Plan and A$2.746 million from the exercise of
options;
▶ Repayment of the ANRF Royalty Facility and the
termination of a 2% life-of-mine royalty;
▶ Commencement of a Bankable Feasibility Study
Update;
▶ Completion of repairs and improvements to the Ngualla
Access Road;
▶ Progressing financing and strategic partnerships;
▶ Senior technical, commercial and Board appointments;
▶ Engagement of ESG reporting adviser and
development of Company values and purpose
objective;
▶ Change of name to Peak Rare Earths Limited; and
▶ Implementation of a 10-into-1 consolidation of
securities.
TANZANIAN CABINET APPROVAL
OF A SPECIAL MINING LICENCE
AND ENGAGEMENT ON ECONOMIC
FRAMEWORK AGREEMENT
The Company announced on 22 July 2021 that the Cabinet
of Ministers (“Cabinet”) of the Government of the United
Republic of Tanzania (the “Government”) had approved
the Special Mining Licence (“SML”) application by PR NG
Minerals Limited (“PR NG”), a wholly owned Tanzanian
incorporated subsidiary of the Company, for the Ngualla
Rare Earth Project (“Ngualla Project”).
The SML is the milestone regulatory authorisation required
to develop the Ngualla Project under the Mining Act of the
United Republic of Tanzania (“Tanzania”).
Subject to the formal grant of the SML by the Minister
of Minerals, PR NG has provided a commitment to the
Government to work jointly to establish a Tanzanian
registered company (“Newco”), to which PR NG will
transfer the SML and to seek any requisite consents.
Newco is to be owned 84% by Peak (via a wholly owned
entity) and 16% by the Government (to be held in the form
of non-dilutable free carried interest shares).
The Company has made substantial progress during the
year on the Framework Agreement negotiations with the
Government of Tanzania in relation to the Ngualla Project
and in progressing solutions that will meet Peak’s strategic
and financial objectives and the Government’s objectives
to maximise value-addition and financial benefits to the
country.
As part of its ongoing engagement with the Government, in
March 2022 Peak hosted a delegation from the Government
to the Ngualla Project. Senior members of the delegation
included the Hon. Dr Stephen Kiruswa - Deputy Minister for
Minerals, Hon. Phillip Mulugo – Member of Parliament for
the Songwe Region and Mr. Simon Simalenga – Songwe
District Commissioner. The Deputy Minister for Minerals,
Hon. Dr Stephen Kiruswa, praised Peak’s community
initiatives and delivered strong messages of government
support for the Ngualla Rare Earth Project.
2022 ANNUAL REPORT 11
2022 ANNUAL REPORT 11
03. Review of Operations
During meetings with the Special Presidential Government
Negotiating Committee (“SPGNC”), Peak tabled the
potential deferment of any decision to proceed with the
construction of the Teesside Refinery until an independent
assessment of the technical, economic and environmental
feasibility of a Tanzanian rare earth refinery has been
completed (“Independent Assessment”).
Retail shareholders were also extended a similar
opportunity via a Share Purchase Plan (“SPP”) raising at
A$0.09 per share. The SPP enabled Peak to raise a further
A$1.675 million.
The use of proceeds for the combined A$31.675 million
includes the following:
▶ Progressing pre-development activities for the Ngualla
Project and Teesside Refinery (including offtake and
financing arrangements);
▶ Expanding the Company’s technical and marketing
team; and
▶ Repaying the ANRF Royalty Facility.
During the year a further $2.746 million was raised through
the exercise of listed and unlisted options.
REPAYMENT OF THE ROYALTY FACILITY
On 6 August 2021, the Company announced an intention
to repay a financing facility from ANRF Royalty Company
Limited (“ANRF”) for a total of US$9,978,755 (A$13,750,524).
This financing facility was extended to the Company in 2015
and used to fund the original Bankable Feasibility Study. It
was accompanied by a 2% life-of-mine royalty and security
arrangements and a series of undertakings.
Peak is continuing to engage with the SPGNC on this
proposed staged development approach as well as
finalising the Framework Agreement.
STAGED DEVELOPMENT OF THE
NGUALLA PROJECT AHEAD OF
CONSTRUCTION OF A REFINERY
In August 2022, the Company took the strategic decision
to undertake a staged development approach with the
Ngualla Project to commence ahead of construction of a
refinery.
Under this approach, Peak would remain committed to a
longer-term integrated strategy, but would implement the
following staged development approach:
▶ Initially develop the Ngualla Project by constructing
a mine and beneficiation plant to produce rare earth
concentrate for export to offshore third-party refineries;
and
▶ Depending upon the outcome of the Independent
Assessment, develop a refinery either in Tanzania or at
Teesside, UK.
The benefits of this approach include the following:
▶ Maintaining optionality around the potential of a
Tanzanian rare earth refinery;
▶ Significantly reducing the up-front capital expenditure
and funding requirements;
▶ Lowering commissioning and technical risk around the
concurrent development of the Ngualla Project and a
rare earth refinery; and
▶ Taking advantage of offtake appetite for Ngualla’s high-
grade rare earth concentrate.
EQUITY RAISINGS COMPLETED
During the financial year, Peak raised total capital of
A$34.421 million.
A A$30 million two-tranche equity placement was
completed to institutional, sophisticated and professional
investors at an issue price of A$0.09 per share on 4th
October 2021. It resulted in numerous new Australian and
international institutional shareholders joining the register.
12 PEAK RARE EARTHS
Review of Operations 03.
The Company identified an opportunity to further optimise
the value of its integrated Ngualla-Teesside Project by
pursuing an increase in concentrator capacity and the
scope of the BFS Update was amended to allow for an
increase in the Ngualla flotation plant average Life-of-Mine
(“LOM”) capacity to 800ktpa. This reflects an approximate
28% increase in capacity over the average LOM capacity
of 624ktpa in the BFS published in April 2017 (“April 2017
BFS”) and an approximate 13% increase in the average
LOM capacity of 711ktpa that was reflected in an internal
optimisation study completed in August 2017 (“August 2017
Optimisation”).
The rationale for repaying the ANRF Royalty facility
included:
▶ Enabling Peak to meet its commitments to the
Government of Tanzania in relation to the transfer of
the SML into a newly incorporated entity that would
be owned 84% by the Company and 16% by the
Government of Tanzania;
▶ Termination of a 2% revenue royalty obligation over
the life of the Ngualla Project;
▶ Increasing shareholder exposure to project earnings;
and
▶ Enhanced ability to finance the Ngualla Project.
Shareholders approved the transaction on 28 September
2021 and it was completed on 5 October 2021.
COMMENCEMENT OF A BANKABLE
FEASIBILITY STUDY UPDATE AND
TARGET PRODUCTION CAPACITY
INCREASE
On 25 August 2021, the Company announced that Amec
Foster Wheeler (part of the Wood Group plc) had been
engaged to lead a Bankable Feasibility Study (“BFS”)
Update. Amec Foster Wheeler led the original BFS
which was completed in 2017.
2022 ANNUAL REPORT 13
This higher mine-concentrator throughput should increase
the average LOM production to approximately 37.2ktpa of
rare earth concentrate.
As part of the BFS Update, testwork has and will continue
to be undertaken prior to a Final Investment Decision to
support detailed design. The program of work is to focus
on optimising recoveries, minimising overall operating
costs in the mining and the processing plants and further
decreasing the start-up risks.
Key activities progressed during the year included the
following:
▶ Completion of geotechnical studies on the Southern
Access and the Plant Access Roads;
▶ Progressing detailed engineering of the Ngualla mine,
mill and concentrator and the Teesside Refinery to
support a throughput capacity of 800ktpa;
▶ Plant layouts redesigned to support improved
operability, maintenance and fire safety;
▶ Updating of mine plan to support the increased
throughput capacity of 800ktpa (a ~28% increase over
the 2017 Bankable Feasibility Study average capacity of
624ktpa);
▶ Development of constructability plans for the Ngualla
Project and the Teesside Refinery;
▶ Commissioning of a detailed transportation and
logistics study;
▶ Redesign of the Ngualla Tailings Storage Facility to
allow for higher mine throughput and the optimisation
of retention structures;
▶ Beneficiation plant testwork programs;
▶ Collection of bulk ore samples from the Ngualla Project
for an upcoming beneficiation pilot plant campaign;
▶ Progressing technical and external reviews of the
Teesside Refinery;
▶ Finalisation of process design criteria for the purposes
of the Bankable Feasibility Study Update; and
▶ Process Flow Diagrams (PFDs) and mass balances;
▶ Commissioning an independent market study for NdPr
Oxide and Concentrate by leading intelligence provider
Adamas;
▶ A solar-battery-diesel hybrid power plant design
concept at Ngualla;
▶ A renewable energy study at Teesside;
▶ Completion of an updated Environmental and Social
Impact Assessment (ESIA) at Ngualla and subsequent
renewal of Peak’s Environmental Certificate by the
National Environmental Management Council within
Tanzania;
▶ Hazard Identification Studies (HazID) for both the
Ngualla Rare Earth and Teesside Refinery projects; and
▶ Identifying opportunities to mitigate broader
inflationary pressures associated with higher shipping
rates, commodity input prices and labour rates.
On 31 August 2022, Peak announced that it expects the
BFS Update to be completed between mid-late October
2022.
NGUALLA ACCESS ROADWORKS
A major upgrade of the Southern Access Road was
completed over a 48 km length from the village of Kininga
to the Ngualla Project. Key aspects of the works included
the addition of five new major waterway crossings, repairs
to heavily eroded sections of the road, the addition of rock
and other aggregates to the roadbed, clearing of trees to
widen and improve overall safety of the road with increased
visibility. This work was completed without any HSE
incidents and with over 50% of the workforce being hired
directly from local communities.
The roadworks will support safe and reliable year-round
access to the Ngualla Project and the surrounding
communities and will also facilitate early project works.
FINANCING AND STRATEGIC
PARTNERSHIPS
Peak with the assistance of its debt adviser, Waterborne
Capital, has been engaging with a broad suite of
developments banks, export credit agencies and
commercial banks on project and export financing appetite
and structures. Prospective financiers have been provided
with an Information Memorandum, Financial Model and
access to a Virtual Data Room.
In conjunction with project and debt financing initiatives,
Peak has also been engaging with several strategic parties
that have expressed interest in securing a project level
investment in the Ngualla Project. Such investments would
limit Peak’s equity funding requirements.
SENIOR TECHNICAL AND COMMERCIAL
APPOINTMENTS
The Company made a series of senior and commercial
appointments to support the BFS Update and to advance
the Ngualla Project towards development and construction.
Key appointments include the following:
Lello Galassi – Head of Operations &
Development
Lello has been a project manager and developer for 14
brownfield and greenfield international mining and large
infrastructure projects. Lello has a strong track-record in the
14 PEAK RARE EARTHS
03. Review of Operations delivery of greenfield projects, cost control and schedule
targets, best practice with respect to safety, environmental
and community outcomes and the development of
associated infrastructure. His international experience
extends to the Democratic Republic of Congo (“DRC”),
Guinea, South Africa, Peru, Chile, Guyana, Spain, Australia
and Canada. During his career he has worked with ICL, Rio
Tinto, Freeport McMoran and Phelps Dodge.
Lello was most recently Vice President Project
Development & Construction with Sabina Gold & Silver
Corporation
Mark Godfrey – Head of Technical Services
Mark has over 40 years of metallurgical experience and has
worked with a broad suite of leading international mining
companies including Glencore, Newcrest, MMG, Rio Tinto,
BHP and Impala Platinum. Mark has spent a significant
portion of his career in Africa and has extensive experience
in overseeing feasibility studies, pilot plant test work,
optimisation of flow sheets, commissioning of projects,
debottlenecking and operational enhancements.
Mark was most recently Technical Manager Metallurgy at
the Komoto Copper Project (Glencore) based in the DRC.
Andrea Cornwell – Head of Marketing & Sales
Andrea has over 28 years of international resources
marketing experience and has held senior strategic
marketing and sales roles with major resources groups
such as South32, BHP, Vale, Anglo American and Shell.
She has led “go-to market” strategies for large greenfield
projects and has substantial experience in leading and
executing international marketing strategies, developing
and managing customer relationships, overseeing shipping
and logistics as well as structuring long-term offtake and
sales agreements.
Andrea’s most recent role was Vice President Marketing,
Carbon Steel Raw Materials & Freight with South32 based
in Singapore.
Gavin Beer – Consulting Metallurgist
Gavin has approximately 30 years of relevant technical and
operational experience and specialises in the rare earth and
critical metal sectors.
Gavin was the General Manager Metallurgy for Peak
between 2015 and 2017 and was responsible for the
development and optimisation of the metallurgical process
from Ore-to NdPr Oxide and other separated rare earth
products. He managed pilot plants for the beneficiation,
hydrometallurgy and solvent extraction separation
processes that led into the original Bankable Feasibility
Study (“BFS”) completed in 2017.
Matthew Horgan – GM Corporate Development
Matthew joined the Company from the corporate advisory
firm Azure Capital and was previously with Alcoa where
he held a range of corporate development, commercial,
marketing and chemical engineering roles.
The technical appointments of Lello, Mark and Gavin
have provided Peak with a highly experienced and
complementary team with a combined track-record in the
development and optimisation of African and international
mining and rare earth projects.
The appointment of Andrea and Matthew has provided
Peak with a strong marketing, commercial and corporate
development capabilities.
BOARD APPOINTMENTS
Giles Stapleton – Non-Executive Director
Giles Stapleton was appointed to the Board of Directors
following his election as a Non-Executive Director at the
AGM.
Giles is a barrister at Ninth Floor Selborne Chambers
in Sydney. His experience as a barrister extends across
corporate, commercial, property, equity, and family law.
Giles also has extensive experience in banking, property
and funds management and was previously Head of
Investment Management at Valad Property Group where he
was responsible for A$900m of property funds.
Russell Scrimshaw – Executive Chairman
On 15 August 2022, Russell Scrimshaw was appointed to
the role of Executive Chairman.
Russell is a distinguished corporate executive and company
director with experience in large scale mining project
development and operations, product marketing, finance,
business development and technology. Russell was a
founding director of Fortescue Metals Group and served
in executive roles including Deputy CEO and Executive
Director. He was a key part of the management team that
developed Fortescue’s mining, port and rail operations
and was instrumental in establishing Fortescue’s strong
relationships with large steel mill groups across a vast
Asian customer base.
More recently Russell was Chairman of UK-listed Sirius
Minerals PLC (acquired by Anglo American in 2020), which
is developing a large Polyhalite fertiliser project in North
Yorkshire, in close proximity to Peak’s Teesside site. He has
also held senior executive positions at the Commonwealth
Bank of Australia and Optus. Russell is currently Chairman
of the Garvan Research Foundation, a Non-Executive
Director of the Garvan Institute of Medical Research, Vice
Chairman of Ignition Wealth and a Non-Executive Director
of software company, BrewAI.
2022 ANNUAL REPORT 15
Review of Operations 03. 03. Review of Operations
ENGAGEMENT OF ESG REPORTING
ADVISER
Peak engaged Environmental, Social and Governance
(“ESG”) specialists Futureproof, to help develop a multi-
year sustainability program. Futureproof is assisting Peak in
articulating a relevant Sustainability Strategy that underpins
all the ESG work completed to-date, and ensuring its
future ESG goals are set with appropriate structures and
processes to enhance ESG performance and sophistication
as the company develops. The ESG program will be guided
by the Global Reporting Initiative (GRI) Sustainability
Reporting Standards.
An outline of this ESG framework is included in the
sustainability section of the Annual Report with a
standalone Sustainability Report planned for 2023.
PEAK’S PURPOSE AND VALUES
The Peak Team completed a set of workshops to develop
and agree on a set of principles to govern our purpose, our
decision making and the ways that we deal with each other,
our communities and other external stakeholders.
The resulting Purpose and Values Statements and set of
Values are set out in the Vision and Values section of the
Annual Report.
CHANGE IN NAME TO PEAK RARE
EARTHS
Following shareholder approval at the Company’s Annual
General Meeting (“AGM”) held on 29 November 2021,
the Company’s name was changed from Peak Resources
Limited to Peak Rare Earths Limited.
The name change was undertaken to better differentiate the
Company and align it with the rare earths sector.
In conjunction with its name change, the Company also
launched a new website www.peakrareearths.com.
16 PEAK RARE EARTHS
Review of Operations 03.
RISK MANAGEMENT
The Company is exposed to business risks which may
adversely affect the achievement of its business strategies
and financial prospects. During the year the Company
conducted workshops to identify, rank and develop controls
to mitigate and monitor risks. The Company has identified a
number of material risk exposures including but not limited
to the following:
IMPLEMENTATION OF SECURITIES
CONSOLIDATION
A capital consolidation entailing the conversion of every ten
(10) securities into one (1) security was also approved at the
AGM.
The rationale for the capital consolidation was to support a
more appropriate and effective capital structure and a share
price that would be more appealing to a broader range of
investors.
The consolidation was completed on 10 December 2021
with trading on a normal T+2 basis commencing on 13
December 2021.
RISK
MITIGATING PRACTICES
Serious injury or fatality
sustained at work
▶ Embedded safety conscious culture
▶ Staff safety training programs
▶ Contractor pre-qualification
▶ Induction and training
Uncertain political/fiscal/ tax
environments
▶ Regular review processes and procedures
▶ Ongoing stakeholder/government engagement
▶ Dedicated Country Manager and other in-country expertise
▶ Strong local development track record and local stakeholder support
▶ Active proponents of non-political government agendas
Bribery or corruption
▶ Anti-Bribery and Corruption and Code of Conduct
▶ Inclusion of Anti-Bribery and Corruption requirements for sub-contractors included
within contracts
▶ Financial system controls in place
▶ Regular review and audits
Project delivery failure
▶ Establishing project methodology
▶ Use of third-party technical advisors and consultants
▶ Establishing monitoring and reporting processes
▶ Procurement and contract management procedures and practices
2022 ANNUAL REPORT 17
04. Sustainability
04.
Sustainability
18 PEAK RARE EARTHS
18 PEAK RARE EARTHS
Our approach to
sustainability
We are committed to deliver our
high-grade, Ngualla Rare Earth
Project to enable low carbon
technologies to power the green
transformation. We recognise
that our long-term commitment
to sustainability is integral to our
ongoing success.
Peak has a fundamental belief in ‘kazi wajibu utu’ which
means ‘working responsibly to better humanity’ in Swahili.
We act consistently with the kazi wajibu utu principle which
means we act with integrity to achieve our purpose and to
ensure the safety, health and wellbeing of our people and
communities. We are accountable to our shareholders,
employees, and stakeholders to deliver and operate
our assets by employing a sustainability ethos and a
progressive mindset.
In so doing, the five core values that build Peak’s culture
and derives how it goes about delivering its purpose
are (i) Integrity, (ii) Safety, Health and Wellbeing, (iii)
Accountability, (iv) Sustainability, and (v) Progressive
Mindset.
”
Sustainability 04.
“
Sustainability is one of our core
values. It is underpinning every
element of the development of
both our company and the Ngualla
project in Tanzania and I am excited
by our Team’s commitment and
focus to its evolution, improvement
and ultimate success.
Andrea Conwell
Head of Marketing and Sales (ESG Lead)
Sustainability is a pivotal part of our ethos, as it is for our
stakeholders including local communities, customers,
suppliers, and shareholders. We are integrating
sustainability into every aspect of the company. At Peak, we
will strive to hold ourselves to the highest standards so that
the Ngualla Project becomes a long term, environmentally
and socially sustainable supplier of choice to the global rare
earth market.
Sustainability can be mapped across many facets of the
organisation when considering the Environmental, Social
and Governance (“ESG”) issues. This section highlights
the Sustainability journey that Peak has begun, the work
achieved to date, and its long-term goals.
2022 ANNUAL REPORT 19
2022 ANNUAL REPORT 19
Our ESG Journey
Peak engaged ESG specialists
Futureproof to help develop
this multi-year sustainability
program and is assisting Peak in
articulating a relevant Sustainability
Strategy that underpins all the
ESG work completed to-date and
ensuring its future ESG goals are
set with appropriate structures
and processes to enhance ESG
performance and sophistication as
the company develops.
Peak created a Sustainability project team which was led
by the Chief Executive Officer and consists of a range of
internal representatives including from marketing, finance,
and operations. The project team participated in a series of
workshops to assist in developing the FY22 ESG program
which was guided by the Global Reporting Initiative (GRI)
Sustainability Reporting Standards.
MATERIALITY ASSESSMENT AND
STAKEHOLDER ENGAGEMENT
We commenced our ESG journey with a materiality
assessment which identified and prioritised the
sustainability topics that are considered the most important
for the business and its stakeholders at its present stage
of project maturity. These sustainability topics are the
foundation of Peak’s sustainability strategy.
1
IDENTIFICATION
2
PRIORITISATION
3
VALIDATION
4
CONTINUOUS
IMPROVEMENT
20 PEAK RARE EARTHS
Materiality Assessment Process
04. Sustainability Our ESG Journey
(Continued)
EMPLOYEES
BOARD
GOVERNMENTS
& REGULATORS
NGOS
CONTRACTORS
& SERVICE
PROVIDERS
SUPPLIERS
JOINT VENTURE
PARTNERS
COMMUNITY
SHAREHOLDERS &
INVESTORS
COMPETITORS &
PEERS
ADVOCATES
INDUSTRY
ASSOCIATIONS
FINANCIERS &
INSURERS
CUSTOMERS
Figure 1: Key stakeholders
The first step of the materiality process was conducting
a stakeholder mapping exercise to identify key
stakeholders. Peak believes that trusted partnerships and
relationships are the foundation of a strong social licence
to operate. Developing strong, effective, and long-lasting
relationships with its stakeholders will ensure the long-
term, multigenerational success of Peak’s business. Figure
1 depicts the list of Stakeholders that Peak considers
important for ongoing engagement for sustainability issues.
2022 ANNUAL REPORT 21
Sustainability 04. 04. Sustainability
Our ESG Journey
(Continued)
The next step in the
materiality assessment
process was to identify the
key sustainability topics
affecting Peak and its
stakeholders.
In Q4/FY22, many topics were identified, rated and
prioritised according to the status of the project at the time.
This was done by combining feedback from Peak’s senior
management and subject matter experts, stakeholder
expectations, and an analysis of the external environment.
The materiality assessment acts as a useful tool to prioritise
the focus areas at a point in time. Peak recognises that
material topics will change over time as the project
progresses from development to operational readiness and
will adapt accordingly. Some of the FY22 material topics
prioritised from this first assessment were:
▶ health and safety
▶ government and
▶ business ethics and
governance compliance
▶ community benefit and
safety
regulatory compliance
▶ waste and hazardous
materials planning
22 PEAK RARE EARTHS
Sustainability Ambition
Sustainability 04.
Peak recognises that for sustainability to become
fully embedded in the business as it progresses from
development to production, it must align with the current
purpose and values of the business. With this in mind,
leadership and the project team created a statement of
ambition to articulate what sustainability means to Peak.
It aims to set a standard and give focus to the overall
objectives of Peak’s sustainability and ESG activities.
PEAK’S SUSTAINABILITY AMBITION:
We are working responsibly to build a better,
greener and more sustainable future for our
communities, customers and stakeholders.
Supply Chain
Supply chain was not considered a material topic for
the business in its current stage of development but is
likely to become a material topic as Peak transitions into
construction and an operating site.
We plan to offer a practical transparent and traceable
supply chain solution to the growing low carbon technology
space. The Company’s plan is to have a green and
sustainable approach to production as a fundamental part
of our business strategy and a point of differentiation for our
products compared with some other sources of rare earths.
During FY2022, we implemented a sustainable supply
chain questionnaire to enable Peak to better understand
its potential supplier’s ESG programs and considerations.
The responses to the questionnaire can be used as a part
of Peak’s procurement selection criteria. The supply chain
evaluation process will continue to evolve as the company
grows.
2022 ANNUAL REPORT 23
04. Sustainability
Gap Review and
Roadmap
To ensure Peak operates in line with global best practice, we are developing an ESG roadmap to continue to mature,
expand our scope and grow transparency. This process will include establishing a preferred ESG reporting framework
and setting up data collection systems to prepare for our inaugural FY23 sustainability report and undertaking an ESG
stakeholder survey to validate our material topics.
There are numerous ESG reporting frameworks. Reporting against one or more of these frameworks will enable us to
communicate with our stakeholders about the sustainability of our business in a clear and comprehensive manner,
draw comparisons to our peers, and drive deeper integration of sustainability into our business, whilst identifying new
opportunities to increase value for stakeholders.
The frameworks shown in Table 1 are being considered for Peak’s inaugural sustainability report.
UNITED NATIONS
SUSTAINABLE
DEVELOPMENT GOALS)
GLOBAL REPORTING
INITIATIVE SUSTAINABILITY
REPORTING STANDARDS
(GRI)
WORLD ECONOMIC FORUM
(WEF) STAKEHOLDER
TASKFORCE FOR CLIMATE-
RELATED FINANCIAL
DISCLOSURES (TCFD)
The UN SDGs
framework consists
of a universal set
of sustainability
goals which have
been adopted by
over 190 countries
and are designed
to address urgent
global sustainability
challenges by 2030.
GRI is the oldest
and most widely
recognised global
sustainability reporting
standard. It focuses on
disclosing a company’s
impact on the
economy, environment,
and society, including
financially material
information and
management
approach.
This Framework
tries to simplify the
otherwise complicated
landscape of ESG
reporting. It is focused
on creating long-term
sustainable value,
while driving positive
outcomes for business,
the economy, society,
and the planet. It is
different to GRI as it
has a common set of
metrics that need to
be addressed.
Climate risk
disclosures are
becoming mandatory
for large businesses in
the United Kingdom,
European Union,
Japan, and New
Zealand. The objective
of this reporting
framework is to
mitigate the financial
risks/costs of climate
change on a business.
24 PEAK RARE EARTHS
Table 1: ESG frameworks
Proposed
Roadmap
We are also reviewing the specific needs of our future customers as well as prospective lenders and financiers as part
of the framework assessment. This includes evaluating the International Financial Corporation (IFC) guidelines, Equator
Principles, and the Initiative for Responsible Mining Assessment (IRMA) framework.
Table 2 describes the proposed roadmap for setting realistic and achievable goals alongside Peak’s business growth
strategies. The roadmap begins with establishing measurement systems to understand Peak’s current level of ESG
maturity. Once measurement systems have been established, the next stages are focused on continuing to improve Peak’s
ESG performance.
FY22
FY23
FY24
FY25
▶ Internal stakeholder
engagement
mapping
▶ Materiality
assessment
▶ Sustainability
positioning
▶ Preferred ESG
frameworks
selected
▶ External
stakeholder
materiality survey
▶ Governance review
▶ Annual Report
▶ TCFD roadmap
▶ Gap review and
roadmap finalised
▶ Inaugural
▶ Set sustainability
▶ Commence
targets
▶ Supply chain
engagement
project
reporting against
IRMA
▶ Engage with ESG
rating agencies
▶ Engage with ESG
rating agencies
▶ TCFD/Other
reporting
▶ TCFD/Other
reporting
▶ Third sustainability
report
sustainability report
▶ Second
sustainability report
Table 2: Proposed ESG roadmap
2022 ANNUAL REPORT 25
Sustainability 04. 04. Sustainability
Case Study –
Ngwala-Kininga Road Upgrade
In the last quarter of 2021, Peak and
its local subsidiary PR NG Minerals
reconstructed 46 kilometres of the
Ngwala-Kininga Road in Tanzania.
This work has had a significant
positive impact on the Ngwala local
community.
For many years prior, the poor road conditions had been
a significant obstacle for Ngwala village. The Ngwala –
Kininga Road is the main road connecting the Ngwala
village to the District Headquarters, and other villages and
wards. Forty-six kilometres of the road was in very poor
condition. The road was additionally impacted during the
rainy season (December to April), where the road at times
was completely unpassable, resulting in the temporary
closure of the road. These circumstances caused the
Ngwala local community to pay as much as two or three
times the normal price for public transport along the road.
The road improvements included widening and resurfacing
the road and installing culverts at locations where
watercourses intersected the road to enable year-round
access. These changes have significantly improved the
social and economic lives of people in Ngwala village.
Benefits have included:
▶ Journeys from Ngwala village to the District
Headquarters at Mkwajuni- Songwe now takes 3 hours
instead of 11 hours, and the journey from Ngwala to
Mbeya, is now 8 hours instead of 2 days.
▶ Patients of the Ngwala Dispensary, including pregnant
women, can access emergency transport to Mwambani
District Hospital and no longer need to pay 200,000 to
300,000 Tanzanian Shillings (TZS) (almost one month’s
income).
▶ Prices of day-to-day supplies and groceries in the
Ngwala village was previously twice the normal price
and has now been significantly reduced due to lower
transport costs.
▶ Buses are now reliable and regular when previously
there was no reliable public transport from Ngwala to
Mkwajuni or Mbeya city.
▶ Farmers in Ngwala are now able to sell their farm
produce at a much more profitable price.
▶ The roadworks has also enabled the Tanzanian
Government to prepare for the connection of the
Ngwala Village to the national power grid.
Public transport in Ngwala village before the road upgrade
Condition of Ngwala Kininga road before repairs
Improved condition of Ngwala- Kininga road after repairs reconstruction
26 PEAK RARE EARTHS
Sustainability 04.
Nanenane (Farmers Day) Tournament sponsored by Peak and PRNG Minerals
2022 ANNUAL REPORT 27
05. Annual Financial Report
05.
Annual
Financial Report
30 June 2022
28 PEAK RARE EARTHS
Directors’ Report
Annual Financial Report 05.
The directors of Peak Rare Earths Limited (“Company”) (ACN: 112 546
700) submit herewith the financial statements of the Company for the
financial year ended 30 June 2022. In order to comply with the provisions
of the Corporations Act 2001, the directors report as follows:
DIRECTORS
The names of directors who held office during or since the end of the year and until the date of this report are as below.
Directors were in office for this entire period unless otherwise stated.
Russell Scrimshaw
Executive Chairman (appointed 15 August 2022)
Tony Pearson
Bardin Davis
Non-Executive Deputy Chair (Non-Executive Director from 21 Aug 2018, Chair from 21
October 2020, appointed Deputy Chair from 15 August 2022)
Chief Executive Officer (CEO) (Non-Executive Director from 21 Oct 2020, Managing Director
(MD) from 9 Dec 2020, stepped down as MD on 9 July 2022 to take up the CEO role)
Abdullah Mwinyi
Non-Executive Director (appointed 15 November 2020)
Giselle Collins
Giles Stapleton
Non-Executive Director (appointed 9 March 2021)
Non-Executive Director (appointed 29 November 2021)
Rebecca Morgan
Non-Executive Director (appointed 9 March 2021, resigned 14 February 2022)
INFORMATION ON DIRECTORS
Russell Scrimshaw – Executive Chairman (Appointed 15 August 2022)
Russell is a distinguished corporate executive and company director with experience in large scale mining project
development and operations, product marketing, finance, business development and technology. Russell was a founding
director of Fortescue Metals Group and served in executive roles including Deputy CEO and Executive Director. He was
a key part of the management team that developed Fortescue’s mining, port and rail operations and was instrumental in
establishing Fortescue’s strong relationships with large steel mill groups across a vast Asian customer base.
More recently Russell was Chairman of UK-listed Sirius Minerals PLC (acquired by Anglo American in 2020), which is
developing a large Polyhalite fertiliser project in North Yorkshire, in close proximity to Peak’s Teesside site. He has also held
senior executive positions at the Commonwealth Bank of Australia and Optus. Russell is currently Chairman of the Garvan
Research Foundation, a Non-Executive Director of the Garvan Institute of Medical Research, Vice Chairman of Ignition
Wealth and a Non-Executive Director of software company, BrewAI.
Russell served as the Chairman of UK-Listed Sirius Minerals PLC from 2011 to March 2020 and held no other public
company directorships in the past three years.
2022 ANNUAL REPORT 29
2022 ANNUAL REPORT 29
05. Annual Financial Report
Directors’Report (Continued)
Tony Pearson– Non-Executive Deputy Chair (Non-Executive Director from 21 August 2018, Chair
from 21 October 2020, appointed Deputy Chair 15 August 2022)
B.Comm, MAICD
Tony is an experienced international natural resources executive and company director. He is currently the Chair of ASX
listed Cellnet Group Ltd, a Non-Executive director of ASX-listed Xanadu Mines Limited, Chair of Lifestyle Solutions, a
Trustee of the Royal Botanical Gardens & Domain Trust and a Non-Executive Director of Communicare Inc. He was
formerly a Commissioner at the Independent Planning Commission, and previously 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 years’ commercial and investment banking experience, covering the Asia Pacific natural
resources industry, most recently as a Managing Director at HSBC.
Tony is a member of the Audit & Risk Committee.
Tony serves as a non-executive 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
▶ Xanadu Mines Limited - from 3 May 2021
Bardin Davis – Chief Executive Officer (Non-Executive Director from 21 Oct 2020, Managing
Director (MD) from 9 Dec 2020, stepped down as MD on 9 July 2022 to take on the CEO role)
GAICD, MAppFin, GradDipAcc, B.Ag Econ (1st Class Hons)
Bardin has over 25 years of investment banking and corporate experience in the mining and energy sectors. He
commenced his career with diversified mining group, North Limited, before moving into investment banking and has also
spent time working in renewable energy. Previous roles include the Chief Financial Officer of UPC\AC Renewables, the
Head of the Resources & Energy Group – Asia Pacific, Deputy Head of Corporates – Asia Pacific and Head of Advisory
– Australia for HSBC and Head of Metals & Mining Asia for Macquarie Capital. He has significant emerging markets
experience and has worked on a broad range of international advisory, capital markets and financing transactions.
Bardin held no listed public company directorships in the past three years.
The Hon. Abdullah Mwinyi – Non-Executive Director (Appointed 15 November 2020)
LLB, LLM (Cardiff University)
Abdullah is a member of the Tanzanian Parliament, having entered Parliament in 2007. He has also held roles as a Member
of the East African Legislative Assembly (2007 – 2017), where he was Chair of the Legal, Privileges and Rules Committee
and the Regional Affairs and Conflict Resolution Committee, and Chair of Swala Oil and Gas (Tanzania) plc. Abdullah is a
lawyer by profession, having been awarded a LLB and LLM from the University of Cardiff, and, in 2007, established Asyla
Attorneys, where he specialised in corporate, commercial, labour and employment law.
Abdullah has held no listed public company directorships in the past three years.
Giselle Collins - Non-Executive Director (Appointed 9 March 2021)
B. Economics (U.Syd), Chartered Accountant (CAANZ), GAICD, GFINSIA
Giselle brings a wealth of audit, risk, governance, and commercial expertise to Peak. Giselle is currently Chair of ASX listed
Hotel Property Investments, a non-executive director of Cooper Energy and Generation Development Group and a Trustee
of the Royal Botanic Garden & Domain Trust. Giselle is also Chair of AMP Limited’s Responsible Entity board for its listed
managed investment schemes (ipac Asset Management).
Giselle was previously Chairman of Aon Superannuation as Trustee for Aon Master Trust (now SmartMonday), Chairman
of the Travelodge Hotel Group and Chairman of The Heart Research Institute. Giselle has served as a Non-Executive
Director on a diverse range of other boards including Big4 Holiday Parks, GenerationLife, Minjerribah Camping and the
Royal Australian Institute of Architects.
30 PEAK RARE EARTHS
Directors’ Report (Continued)
Annual Financial Report 05.
Giselle has been appointed Chair of both the Company’s Audit & Risk Committee and Nomination & Remuneration
Committee.
Giselle is a Chair of ASX listed Hotel Property Investments, appointed 19 April 2017 (appointed as Chair 9th July 2022)
and Non-Executive Director of ASX listed Cooper Energy Limited, appointed 19 August 2021, and ASX listed Generation
Development Group Limited, appointed 18th November 2021.
Giles Stapleton – Non-Executive Director (Appointed 29 November 2021)
Giles is a barrister in private practice at Selborne Chambers, Sydney. Prior to commencing his legal career, Giles spent
approximately fifteen years in executive roles with listed companies in banking, property, and funds management.
Giles’ previous role immediately before commencing his legal practice was Head of Investment Management at Valad
Property Group where he was responsible for managing a number of direct property funds with AUM of c.A$900m. In that
role, Giles was responsible for the investment strategies, making the investment recommendations to the responsible entity
board and investors and for overseeing the execution of the investment strategies of each managed fund. His approach
in that role was focussed on actively engaging with the Board and investors of each fund and in delivering the approved
strategies.
Rebecca Morgan – Non-Executive Director (Appointed 9 March 2021, Resigned 13 February 2022)
BSc(Hons) (Applied Geology), GradDip(Mine Engineering), MscEng (Mine Engineering)
Rebecca has a Bachelor of Science (Hons) Applied Geology; Post Graduate Diploma (Mine Engineering, and a Master of
Engineering Science (Majoring in Mineral Economics and Mine Optimisation) from Curtin University. Rebecca is also a
Member of the Australian Institute of Geoscientists and the Australian Institute of Mining and Metallurgy.
Rebecca was appointed Chair of the Company’s Nomination and Remuneration Committee.
Rebecca was a Non-Executive Director of ASX listed Salt Lake Potash Limited from 22 June 2021 to 22 October 2021. She
was also a director of Vulcan Energy Resources Limited (formerly Koppar Resources Limited) from 5 February 2018 to 4
September 2019.
COMPANY SECRETARY
Phil Rundell – Chief Financial Officer and Company Secretary (Appointed 16 December 2020)
CA, DipBus
Phil was a former Partner at Coopers & Lybrand (now PricewatehouseCoopers) and a Director at Ferrier Hodgson. He is
now a sole practitioner Chartered Accountant and has specialised in providing company secretarial, compliance, accounting
and reconstruction services for the last 10 years.
PRINCIPAL ACTIVITIES
During the year, the principal activities of the Company included:
(a) Mineral processing technological evaluations;
(b) Mining and associated infrastructure feasibility evaluations; and
(c) Progressing approvals for the Ngualla Project and Teesside Refinery
2022 ANNUAL REPORT 31
05. Annual Financial Report
Directors’ Report (Continued)
OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $22,731,602 (2021: loss $4,770,848).
The material expenditures that contributed to the loss that were necessarily incurred to progress the activities of the
Company include:
▶ Employee benefits expenses of $2,579,194 (2021: $725,552) with the recruitment of an experienced management
team to undertake the bankable feasibility study update and project execution (refer to the Remuneration Report and
Review of Operations);
▶ Administration and other costs of $4,284,188 (2021: $1,397,265) include consultants and legal costs primarily associated
with the Framework Agreement, financing and offtake documentation, negotiation and advice, and additional
insurance costs;
▶ Technical feasibility costs of $7,036,692 (2021: $1,555,761) on the bankable feasibility study update, other technical
studies and remediation of the southern access road to the Ngualla project (refer to the Review of Operations); and
▶ Borrowing costs of $7,874,527 (2021: $323,904) primarily related to interest on repayment of the ANRF Royalty Liability
and termination of a gross life-of-mine royalty.
The basic and diluted loss per share for the Group for the year was 11.66 cents (2021: loss 3.13 cents).
FINANCIAL POSITION
The net assets of the Group have increased from $55,294,679 at 30 June 2021 to $70,859,306 at 30 June 2022.
The Group’s working capital, being current assets less current liabilities, was $7,879,544 at 30 June 2022 (2021: $2,892,383).
The Company had $9.479 million cash at bank at the end of the reporting period and is well funded going into the
2022/2023 financial year to fund the pre-development activities in respect pf 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.
REVIEW OF OPERATIONS
The Review of Operations commentary is contained in the section above on page 10.
EVENTS SUBSEQUENT TO REPORTING DATE
On 15 August 2022, Russell Scrimshaw a distinguished corporate executive was appointed to the role of Executive
Chairman. Following this appointment, the Company undertook a Board reorganisation with Tony Pearson transitioning to
the role of Non-Executive Deputy Chair and Managing Director Bardin Davis assuming the role of Chief Executive Officer,
stepping down from the Board to focus on his executive duties.
On 31 August 2021, Peak announced that it expects the BFS Update to be completed between mid-late October 2022.
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.
32 PEAK RARE EARTHS
Directors’ Report (Continued)
Annual Financial Report 05.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than detailed below, in Note 27 of the financial statements (subsequent events) 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 10 December 2021, the Company completed a consolidation of securities by conversion of every ten (10) securities into
one (1) security. The figures below are stated on a post consolidated basis.
▶ 33,333,333 shares issued under a two-tranche equity placement at an issue price of $0.90 to raise $30 million
▶ 1,861,451 shares issued under Share Purchase Plan at an issue price of $0.90 to raise a further $1.675 million
▶ 9,133,333 listed and un-listed options were exercised during the year with various exercise prices and expiry dates
raising $2.745 million.
MEETINGS OF DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan
Giles Stapleton
BOARD MEETINGS
NUMBER HELD AND
ENTITLED TO ATTEND
NUMBER ATTENDED
13
13
13
13
9
8
13
13
6
13
6
8
The Board has an Audit and Risk Committee, with the Committee to comprise of at least three independent non- executive
Directors but where circumstances otherwise determine, the Committee can comprise two independent non-executive
Directors.
The number of meetings attended by each member of the Committee during the financial year was:
Giselle Collins
Rebecca Morgan*
Tony Pearson
* Resigned during the year.
AUDIT & RISK COMMITTEE MEETINGS
NUMBER HELD AND
ENTITLED TO ATTEND
NUMBER ATTENDED
5
4
5
5
4
5
2022 ANNUAL REPORT 33
Directors’ Report (Continued)
A Nomination and Remuneration Committee was formed during the year with the Committee to comprise of at least three
independent non- executive Directors but where circumstances otherwise determine, the Committee can comprise two
independent non-executive Directors.
Giselle Collins
Rebecca Morgan*
Tony Pearson*
Giles Stapleton^
NOMINATION & REMUNERATION COMMITTEE MEETINGS
NUMBER HELD AND
ENTITLED TO ATTEND
NUMBER ATTENDED
1
1
1
0
1
1
1
0
*Resigned during the year. ^Appointed during the year
EQUITY HOLDINGS OF DIRECTORS
As at the date of this report, the Directors’ interest in the Company were:
EQUITY SHARES
EQUITY OPTIONS
PERFORMANCE RIGHTS
Tony Pearson
Abdullah Mwinyi
Giselle Collins
Giles Stapleton
Russell Scrimshaw
470,666
35,000
30,000
110,976
-
500,000
-
-
-
-
800,000
131,666
100,000
-
-
Details of issues made to directors during the period are provided in the Remuneration Report.
FUTURE DEVELOPMENTS
Likely future developments in the operations of the Group are referred to elsewhere in the Annual Financial 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 the Teesside refinery
site 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.
34 PEAK RARE EARTHS
05. Annual Financial Report Directors’ Report (Continued)
REMUNERATION REPORT (AUDITED)
The remuneration report outlines the director and executive remuneration arrangements for the Group in accordance with
the requirements of the Corporations Act 2001 and its Regulations.
Remuneration Policy
The remuneration policy of the Company has been designed to align director and executive objectives with shareholder
and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with
market rates and offering specific incentives based on key performance areas affecting the Company’s financial results.
The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
directors and executives to 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 Company has a Nomination and Remuneration Committee to review the remuneration policy that sets the terms and
conditions for the executive directors and other senior executives. All executives receive a base salary (which is based on
factors such as length of service, expertise and experience) and superannuation is paid for Australian resident employees
and directors. 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, performance rights 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 value. 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 to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the
Company and subject to shareholders approval are able to participate in the employee option and performance rights
plans. Non-executive directors are provided superannuation benefits in accordance with Australian statutory requirements,
where the Non-Executive Director is a non-Australian resident the superannuation benefit is provided as an additional fee.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Options and
performance rights are valued using the appropriate valuation methodology. Details of options and performance rights
provided to directors are detailed in the Remuneration Report.
Non-Executive Director Remuneration
The total remuneration of non-executive directors has been set at a maximum of $700,000 (that excludes share-based
payments) as approved by shareholders at the 29 November 2021 Annual General Meeting. It does not mean that the
Company has utilised the entire maximum sum of $700,000 approved for Non-Executive Directors’ fees in each year.
Performance Based Remuneration
The Company continues to review and consider the inclusion of performance based components built into director and
executive remuneration packages.
The Company received approval from shareholders for adoption of an Incentive Employee Option Plan (EOP), Incentive
Performance Rights Plan (PRP), and Director Fee Plan at the Annual General Meeting on 23 December 2020.
The objectives of the EOP and PRP are to attract, motivate and retain key employees and the Company considers that
the adoption of the Plans and the future issue of securities under the Plans will provide selected employees with the
opportunity to participate in the future growth of the Company.
35 PEAK RARE EARTHS
2022 ANNUAL REPORT 35
Annual Financial Report 05. Directors’ Report (Continued)
Following shareholder approval at the Annual General Meeting held on 29 November 2021, the Company issued the
following incentive performance rights expiring 9 December 2025 to directors and executives with the vesting milestones
set out below.
CLASS
BARDIN DAVIS TONY PEARSON ABDULLAH MWINYI GISELLE COLLINS REBECCA MORGAN
PHIL RUNDELL
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Total
50,000
50,000
50,000
150,000
150,000
100,000
100,000
50,000
50,000
75,000
75,000
25,000
75,000
75,000
50,000
50,000
25,000
25,000
10,526
10,526
3,509
10,526
10,526
7,018
7,018
3,509
3,508
15,790
15,790
5,263
15,790
15,789
10,526
10,526
5,263
5,263
15,790
15,790
5,263
15,790
15,789
10,526
10,526
5,263
5,263
13,334
13,333
40,000
40,000
13,333
26,667
26,667
13,333
13,333
750,000
475,000
66,666
100,000
100,000
200,000
The performance rights shall have the following vesting criteria (each, a Milestone) attached to them, subject to the
directors and executives remaining as eligible participants of the plan:
Class A Performance Rights: Class A Performance Rights shall vest subject to the Eligible Participant remaining an
Eligible Participant as at the date that is 12 months from the later of the date of acceptance of the Offer or if applicable, the
date that shareholder approval to the grant of the Class A Performance Rights to the Eligible Participant is received.
Class B Performance Rights: Class B Performance Rights shall vest subject to the Eligible Participant remaining an
Eligible Participant as at the date that is 24 months from the later of the date of acceptance of the Offer or if applicable, the
date that shareholder approval to the grant of the Class B Performance Rights to the Eligible Participant is received.
Class C Performance Rights: Class C Performance Rights shall vest when the Company receives a completed study
in relation to Front End Engineering and Design (FEED) for the construction of the Teesside rare earth processing and
separation plant in the Tees Valley, United Kingdom (Teesside).
Class D Performance Rights: Class D Performance Rights shall vest on the Company, or a subsidiary of the Company,
executing a binding agreement with the Government or an authority, or delegate, of the Government of the United
Republic of Tanzania that sets out the economic parameters (Framework Agreement) for the development of the Ngualla
Rare Earth Project mine and infrastructure in Ngualla, Tanzania (Ngualla Project).
Class E Performance Rights: Class E Performance Rights shall vest on the Company entering into a binding construction
contract for the construction of a rare earth refinery at Teesside.
Class F Performance Rights: Class F Performance Rights shall vest on the Company completing an updated Feasibility
Study (as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (the JORC Code)) in respect of the Ngualla Project and the refinery at Teesside.
Class G Performance Rights: Class G Performance Rights shall vest on the execution of a binding and unconditional
agreement between the Company and a third party whereby the third party undertakes: (i) to provide equity funding of
not less than US$25 million for the development of the refinery at Teesside and/or the Ngualla Project; or (ii) to purchase
a minimum of 10% of the annual production of the refinery at Teesside over the first five years of operations as disclosed in
the Bankable Feasibility Study (as updated).
Class H Performance Rights: Class H Performance Rights shall vest on: (i) the execution by the Company of a binding
agreement(s) with a third party(s) whereby the third party(s) undertakes to provide funding that is sufficient to enable the
Company to develop both the refinery at Teesside and the Ngualla Project in accordance with the Bankable Feasibility
Study (as updated); and (ii) the provision of the funding referred to in paragraph (i) above becoming unconditional and
available to the Company for drawdown.
36 PEAK RARE EARTHS
05. Annual Financial Report Directors’ Report (Continued)
Class I Performance Rights: Class I Performance Rights shall vest on: (i) the vesting conditions that relate to the Class
H Performance Rights having been satisfied; and (ii) the Company announcing to ASX that construction activities in
accordance with the Bankable Feasibility Study (as updated) have commenced at the Ngualla Project.
The Board considers that the achievement of these milestones will deliver increased shareholder wealth.
During the year the following unlisted options and performance rights issued to directors and executives were exercised/
lapsed or were cancelled:
Exercised:
▶ 35,000 vested performance rights with an exercise price of $nil
Lapsed:
▶ 300,000 unlisted options with an exercise price of $1.00
▶ 100,000 performance rights with an exercise price of $nil
Company Performance, Shareholder Returns and Director’s and Executive’s Remuneration
Summary of Group’s performance and movements in the Peak Rare Earths Limited share price over the last five years:
Total income ($)
2022
8,602
2021
111,008
2020
12,374,452
2019
98,795
2018
618,718
Net profit/(loss) before tax ($)
(22,731,602)
(4,770,848)
7,652,714#
(4,596,053)
(4,903,224)
Net profit/(loss) after tax ($)
(22,731,602)
(4,770,848)
7,652,714#
(4,596,053)
(4,903,224)
Closing share price at end of year
(cents), adjusted^
Basic profit/(loss) per share (cents)
Dividends per share (cents)
$0.295
$0.100
$0.210
$0.480
$0.360
(11.66)
-
(3.13)
-
6.52
-
(5.75)
-
(8.25)
-
# Includes gain on remeasurement of financial liabilities of $1.7million and gain on derecognition of associate $10.4million.
^ Note that the closing share price at end of year (cents) has been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December
2021.
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives.
Currently, this is facilitated through a policy to issue performance rights and in some instances options to the majority of
directors and executives to encourage the alignment of personal and shareholder interests. The Company believes the
policy will be effective in increasing shareholder wealth. Details of directors and executives’ interests in shares and options
at year end are detailed below.
2022 ANNUAL REPORT 37
Annual Financial Report 05. Directors’ Report (Continued)
Details of KMP Remuneration
The relevant Key Management Personnel (KMP) of the group for the 2022 financial year were:
▶ Tony Pearson – Chair (appointed Non-Executive Director from 21 Aug 2018, Chair from 21 October 2020,)
▶ Bardin Davis - Managing Director (MD) (appointed Non-Executive Director 21 Oct 2020, MD from 9 Dec 2020)
▶ Abdullah Mwinyi - Non-Executive Director (appointed 15 November 2020)
▶ Giselle Collins - Non-Executive Director (appointed 9 March 2021)
▶ Giles Stapleton - Non-Executive Director (appointed 29 November 2021)
▶ Rebecca Morgan - Non-Executive Director (appointed 9 March 2021, resigned 13 February 2022)
▶ Philip Rundell - Chief Financial Officer & Company Secretary (appointed 16 December 2020)
▶ Mark Godfrey - Head of Technical Services (appointed 6 September 2021)
▶ Lello Galassi - Head of Development and Operations (appointed 20 September 2021)
▶ Andrea Cornwell - Head of Marketing & Sales (appointed 20 October 2021)
Total KMP remuneration for the year was:
Salary and fees
Non-monetary benefits
Superannuation
Share based payments
Termination Payments
Total
2022
$
1,720,824
-
93,384
556,355
-
2,370,563
2021
$
1,078,312
18,240
80,163
787,526
191,661
2,155,902
Remuneration of individual KMP’s were:
SHORT TERM BENEFITS
POST-
EMPLOYMENT
SHARE BASED PAYMENTS*
30-JUN-22
SALARY & FEES NON-MONETARY
SUPER-
ANNUATION
PERFORMANCE^
RIGHTS
OPTIONS^
TERMINATION
PAYMENTS
TOTAL
PROPORTION RELATED TO:
EQUITY#
PERFORMANCE#
$
$
$
$
$
$
$
%
%
DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins1
Rebecca Morgan2
Giles Stapleton3
95,000
350,000
55,000
75,376
39,262
29,167
643,805
-
-
-
-
-
-
9,500
106,069
23,360
27,500
380,694
-
7,538
3,926
2,917
18,604
9,209
-
-
-
-
-
-
-
51,381
514,576
23,360
-
-
-
-
-
-
-
233,929
10%
758,194
73,604
92,123
43,188
32,083
1,233,122
0%
0%
0%
0%
0%
2%
45%
50%
25%
10%
0%
0%
42%
38 PEAK RARE EARTHS
05. Annual Financial Report
Directors’ Report (Continued)
SHORT TERM BENEFITS
POST-
EMPLOYMENT
SHARE BASED PAYMENTS*
30-JUN-22
SALARY & FEES NON-MONETARY
SUPER-
ANNUATION
PERFORMANCE^
RIGHTS
OPTIONS^
TERMINATION
PAYMENTS
TOTAL
PROPORTION RELATED TO:
EQUITY#
PERFORMANCE#
$
$
$
$
$
$
$
%
%
EXECUTIVES
Philip Rundell4
Mark Godfrey5
Lello Galassi6
296,000
234,577
328,493
Andrea Cornwell7
217,949
Total
1,077,019
1,720,824
-
-
-
-
-
-
-
18,419
22,708
-
19,295
42,003
-
-
-
18,419
-
-
-
-
-
-
-
-
-
-
314,419
257,284
328,493
237,244
1,137,441
93,383
532,995
23,360
- 2,370,563
0%
0%
0%
0%
0%
1%
6%
0%
0%
0%
2%
22%
* Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting value determined in
accordance with AASB2. Inclusive in the consideration reported is the accounting values of unvested performance rights and options subject to
performance milestones that as at 30 June 2022 had not yet been achieved. The cash benefit of the unvested performance rights and options will
only be received by the KMP following any sale of the resultant shares, which can only be attained after the rights and options have been vested,
exercised and the shares are issued.
^ Includes the write back of the share-based payments previously recognised for options and performance rights that lapsed during the current
period.
# The % excludes the value of the options which were written back during the year
1 Ms Collins fees included an additional fee of $20,000 p/a for her role as Chair of the A&R Committee.
2 Ms Morgan resigned on 13 February 2022
3 Mr Stapleton was appointed to the role of Non-Executive Director on 29 November 2021
4 Mr Rundell’s fees include a Bonus payment for $50,000 paid during the period.
5 Mr Godfrey was appointed to the role of Head of Technical Services on 6 September 2021.
6 Mr Galassi was appointed to the role Head of Development and Operations on 20 September 2021.
7 Mrs Cornwell was appointed to the role of Head of Marketing & Sales on 20 October 2021.
Remuneration of individual KMP’s were:
SHORT TERM BENEFITS
POST-
EMPLOYMENT
SHARE BASED PAYMENTS*
30-JUN-21
SALARY & FEES NON-MONETARY
SUPER-
ANNUATION
PERFORMANCE^
RIGHTS
OPTIONS^
TERMINATION
PAYMENTS
TOTAL
PROPORTION RELATED TO:
EQUITY#
PERFORMANCE#
$
$
$
$
$
$
$
%
%
DIRECTORS
Tony Pearson1
Bardin Davis2
133,476
204,232
Abdullah Mwinyi3
35,284
Giselle Collins4
Rebecca Morgan5
Peter Meurer6
15,457
15,457
10,556
Jonathan Murray 7
42,345
Robert Sennitt8
3,332
460,139
-
-
-
-
-
-
-
-
-
19,759
137,785
28,332
19,380
688,923
-
27,557
-
-
-
-
(110,220)
-
-
-
4,500
(45,517)
-
-
1,468
1,468
-
-
-
-
-
-
-
-
-
-
-
319,352
912,535
62,841
16,925
16,925
(99,664)
1,328
3,332
42,075
858,765 (127,405)
- 1,233,574
9%
0%
0%
0%
0%
0%
0%
0%
2%
43%
75%
44%
0%
0%
0%
11%
0%
62%
2022 ANNUAL REPORT 39
Annual Financial Report 05.
Directors’ Report (Continued)
SHORT TERM BENEFITS
POST-
EMPLOYMENT
SHARE BASED PAYMENTS*
30-JUN-21
SALARY & FEES NON-MONETARY
SUPER-
ANNUATION
PERFORMANCE^
RIGHTS
OPTIONS^
TERMINATION
PAYMENTS
TOTAL
PROPORTION RELATED TO:
EQUITY#
PERFORMANCE#
$
$
$
$
$
$
$
%
%
EXECUTIVES
Philip Rundell9
Rocky Smith10
Michael Prassas11
Graeme Scott12
Lucas Stanfield13
62,317
162,121
61,180
153,144
179,411
618,173
Total
1,078,312
-
6,500
11,740
-
-
18,240
18,240
-
-
12,865
14,143
11,080
38,088
-
-
-
28,083
28,083
56,166
-
-
-
-
-
-
-
-
62,317
168,621
163,462
249,247
28,199
223,569
-
218,574
191,661
922,328
80,163
914,931 (127,405)
191,661 2,155,902
0%
14%
13%
15%
14%
0%
1%
0%
0%
0%
0%
0%
6%
40%
* 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. The gross deferred
amounts are excluded from the salary and fees for 2021 as they have been accrued and reported in 2020.
^ Includes the write back of the share-based payments previously recognised for options and performance rights that lapsed during the current
period.
# The % excludes the value of the options which were written back during the year
1 Mr Pearson received $54,666 for additional executive services the net amount after PAYG withholding tax obligations was settled in shares and is
included in salary and fees. From 1 November to 30 June 2021 two thirds of Mr Pearson’s Chair fees were agreed to be settled in shares totalling
$51,383 and are included in salary and fees. Mr Pearson was back paid $8,082 in statutory superannuation entitlements for previous periods where
the Company had not met this obligation.
2 Mr Davis was appointed in the role of non-executive director on 21 October 2020 before transitioning to the Managing Director position on 9
December 2020. Mr Davis’ non-executive director fees totalled $6,720 the net amount after PAYG withholding tax obligations was settled in shares.
Mr Davis ESA stipulated that $75,000 per year of his total Managing Director fees were to be paid in shares, during the year Mr Davis earned
$42,030 as part of his equity component of his salary the net amount after PAYG withholding tax obligations was settled in shares. The share
settled fees are included in salary and fees for the period.
3 Mr Mwinyi was appointed to the role of non-executive director on 15 November 2020
4 Ms Collins was appointed to the role of non-executive director on 9 March 2021
5 Ms Morgan was appointed to the role of non-executive director on 9 March 2021
6 Mr Meurer ceased employment with the company on 16 September 2020. On cessation of employment Mr Meurer’s unvested performance-based
options lapsed and the expensed share-based payments recognised under AASB 2 of $110,220 for those options reversed.
7 Mr Murray ceased employment with the company on 8 March 2021. Mr Murray received $12,773 in fees for additional executive services, payment
of which was settled in shares. The share settled fees are included in Salary and fees for the period. On cessation of employment Mr Murry’s
unvested performance-based options lapsed and the expensed share-based payments recognised under AASB 2 of $45,517 for those options
reversed.
8 Mr Sennitt ceased employment with the company on 11 September 2020.
9 Mr Rundell was appointed to the role of CFO and Company Secretary on 16 December 2020.
10 Mr Smith ceased employment with the company on 8 December 2020.
11 Mr Prassas ceased employment with the company on 15 July 2020, in accordance with the terms of his ESA, Mr Prassas received a termination
payment of $125,000 for 6 months’ notice paid in lieu plus other statutory redundancy entitlements. The unused annual leave paid out on
termination totalled $50,764 and is included in his salary and fees.
12 Mr Scott ceased employment with the company on 18 December 2020, in accordance with the terms of his ESA, Mr Scott received a termination
payment of $28,199 for his notice paid in lieu plus other statutory redundancy entitlements. The unused annual leave paid out on termination
totalled $32,318 and is included in his salary and fees.
13 Mr Stanfield ceased employment with the company on 15 December 2020.
40 PEAK RARE EARTHS
05. Annual Financial Report
Directors’ Report (Continued)
Options and performance rights granted / vested / lapsed during the year ended 30 June 2022
Movements in options during the year:
30-JUN-22
DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan
Giles Stapleton
EXECUTIVES
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
Total
DATE OF
ISSUE
NUMBER OF
OPTIONS ISSUED
FAIR VALUE PER
OPTION*
TOTAL VALUE OF
ISSUE $
VESTING
DATE#
EXERCISE PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED
DURING THE YEAR
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$1.00
21-Jun-22
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(300,000)
-
-
-
-
-
(300,000)
-
-
-
-
-
(300,000)
Note that balances pre share consolidation have been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December 2021.
* Options are valued using the Black-Scholes option pricing model on date of grant.
# Unvested Options vest on achievement of length of service criteria.
Movements in performance rights during the year:
30-JUN-22
DATE OF ISSUE
DIRECTORS
Tony Pearson
Bardin Davis
9-Dec-21
9-Dec-21
Abdullah Mwinyi
9-Dec-21
Giselle Collins
9-Dec-21
Rebecca Morgan
9-Dec-21
Giles Stapleton
NUMBER OF PER-
FORMANCE RIGHTS
ISSUED
FAIR VALUE PER
PERFORMANCE
RIGHT*
TOTAL VALUE OF
ISSUE $^
VESTING
DATE#
EXERCISE
PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DURING
THE YEAR
475,000
750,000
66,666
100,000
100,000
-
1,491,666
$0.66
$0.66
$0.66
$0.66
$0.66
-
313,500
495,000
44,000
66,000
66,000
-
984,500
-
-
-
-
-
-
$nil 9-Dec-25
$nil 9-Dec-25
$nil 9-Dec-25
$nil 9-Dec-25
$nil 9-Dec-25
-
-
-
-
-
-
-
-
-
(100,000)
(100,000)
2022 ANNUAL REPORT 41
Annual Financial Report 05.
Directors’ Report (Continued)
30-JUN-22
DATE OF ISSUE
NUMBER OF PER-
FORMANCE RIGHTS
ISSUED
FAIR VALUE PER
PERFORMANCE
RIGHT*
TOTAL VALUE OF
ISSUE $^
VESTING
DATE#
EXERCISE
PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DURING
THE YEAR
EXECUTIVES
Philip Rundell
9-Dec-21
200,000
$0.66
132,000
Mark Godfrey
Lello Galassi
Andrea Cornwell
-
-
-
-
-
-
-
200,000
Total
-
1,691,666
-
-
-
-
-
-
132,000
1,116,500
-
-
-
-
$nil 9-Dec-25
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(100,000)
Note that balances pre share consolidation have been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December 2021.
^ The Performance Rights were granted for no consideration and the employee received no cash benefit at the time of receiving the rights. The
cash benefit will be received by the employee following any sale of the resultant shares, which can only be attained after the rights have been
vested and the shares are issued.
* Performance Rights are valued using the Black-Scholes option pricing model on date of grant.
# For vesting of performance rights with the same expiry date occurring on multiple dates during the period the most recent date is reported in the
table.
Options and performance rights granted / vested / lapsed during the year ended 30 June 2021
Movements in options during the year:
30-JUN-21
DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan
Peter Meurer
Jonathan Murray
DATE OF
ISSUE
NUMBER OF OP-
TIONS ISSUED
FAIR VALUE PER
OPTION*
TOTAL VALUE OF
ISSUE $
VESTING
DATE#
EXERCISE
PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DURING
THE YEAR
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$0.10 21-Jun-22
$0.15 21-Jun-23
$0.10 21-Jun-22
$0.15 21-Jun-23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,000,000)
(15,000,000)
(3,000,000)
(5,000,000)
(28,000,000)
42 PEAK RARE EARTHS
05. Annual Financial Report
Directors’ Report (Continued)
30-JUN-21
EXECUTIVES
Rocky Smith
Michael Prassas
Graeme Scott
Lucas Stanfield
Total
DATE OF
ISSUE
NUMBER OF OP-
TIONS ISSUED
FAIR VALUE PER
OPTION*
TOTAL VALUE OF
ISSUE $
VESTING
DATE#
EXERCISE
PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DURING
THE YEAR
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$0.065
16-Jan-21
$0.035
17-Jan-22
$0.030 5-Mar-23
$0.065
16-Jan-21
$0.030 5-Mar-23
$0.065
16-Jan-21
$0.035
17-Jan-22
$0.030 5-Mar-23
$0.065
16-Jan-21
$0.030 5-Mar-23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
(1,500,000)
(11,000,000)
(1,500,000)
(4,350,000)
(1,500,000)
(750,000)
(7,250,000)
(1,500,000)
(3,375,000)
(35,725,000)
(63,725,000)
* Options are valued using the Black-Scholes option pricing model on date of grant.
# Unvested Options vest on achievement of length of service criteria.
Movements in performance rights during the year:
30-JUN-21
DATE OF ISSUE
DIRECTORS
NUMBER OF PER-
FORMANCE RIGHTS
ISSUED
FAIR VALUE
PER PER-
FORMANCE
RIGHT*
TOTAL VALUE OF
ISSUE $^
VESTING DATE#
Tony Pearson
5-Feb-21
5,000,000
Bardin Davis
5-Feb-21
25,000,000
Abdullah Mwinyi
5-Feb-21
1,000,000
$0.06
$0.06
$0.06
300,000 28-May-21
1,500,000 28-May-21
60,000 28-May-21
Giselle Collins
Rebecca Morgan
Peter Meurer
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EXER-
CISE
PRICE
$nil
$nil
$nil
-
-
-
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DUR-
ING THE YEAR
5-Feb-25
1,750,000
5-Feb-25
8,750,000
5-Feb-25
350,000
-
-
-
-
-
-
-
-
-
-
-
-
Jonathan Murray
5-Feb-21
1,000,000
$0.06
60,000
5-Mar-21
$nil
5-Feb-25
75,000
(925,000)
Robert Sennitt
-
-
-
-
-
- 32,000,000
1,920,000
-
-
10,925,000
(925,000)
2022 ANNUAL REPORT 43
Annual Financial Report 05.
Directors’ Report (Continued)
30-JUN-21
DATE OF ISSUE
NUMBER OF PER-
FORMANCE RIGHTS
ISSUED
FAIR VALUE
PER PER-
FORMANCE
RIGHT*
TOTAL VALUE OF
ISSUE $^
VESTING DATE#
EXER-
CISE
PRICE
EXPIRY DATE
NUMBER VESTED
DURING
THE YEAR
NUMBER LAPSED/
CANCELLED DURING
THE YEAR
EXECUTIVES
Philip Rundell
Rocky Smith
Michael Prassas
-
-
-
-
-
-
Graeme Scott
8-Sep-20
2,300,000
8-Sep-20
3,800,000
Lucas Stanfield
8-Sep-20
2,300,000
8-Sep-20
3,800,000
-
12,200,000
- 44,200,000
Total
-
-
-
$0.037
$0.037
$0.037
$0.037
-
-
-
-
-
-
85,100 17-Nov-20
140,600
-
85,100 17-Nov-20
-
140,600
451,400
2,371,400
-
-
-
$nil
$nil
$nil
$nil
-
-
-
-
-
-
-
-
-
8-Sep-21
759,000
(1,541,000)
8-Sep-24
-
(3,800,000)
8-Sep-21
759,000
(1,541,000)
8-Sep-24
-
(3,800,000)
1,518,000 (10,682,000)
12,443,000
(11,607,000)
* 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 February 2025 or
the Performance Rights will lapse. For vesting of performance rights with the same expiry date occurring on multiple dates during the period the
most recent date is reported in the table.
Shareholdings of KMP’s
OPENING
BALANCE
GRANTED AS
REMUNERATION
EXERCISE OF
OPTIONS/PRS
OTHER
MOVEMENTS
CLOSING
BALANCE
30-JUN-22
DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan*
Giles Stapleton
EXECUTIVES
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
463,306
895,417
-
-
-
-
1,358,723
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,000
-
-
-
35,000
-
-
-
-
-
7,360
10,093
-
30,000
-
110,976
158,429
-
-
-
-
-
470,666
905,510
35,000
30,000
-
110,976
1,552,152
-
-
-
-
-
35,000
158,429
1,552,152
Total
1,358,723
Note that balances pre share consolidation have been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December 2021.
* Ceased to be KMP’s during the period and their holdings are not reported at period end.
44 PEAK RARE EARTHS
05. Annual Financial Report
OPENING
BALANCE
GRANTED AS
REMUNERA-
TION
EXERCISE OF
OPTIONS &
PRS#
EXPIRED/
LAPSED
OTHER
MOVEMENTS
CLOSING
BALANCE
VESTED AT
30 JUNE
Directors’ Report (Continued)
Option Holdings of KMP’s including performance rights
30-JUN-22
DIRECTORS
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca
Morgan*
Giles Stapleton
EXECUTIVES
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
1,125,000
1,625,000
100,000
-
-
-
475,000
750,000
66,666
100,000
100,000
-
-
-
(35,000)
-
-
-
(300,000)
-
-
-
(100,000)
-
2,850,000
1,491,666
(35,000)
(400,000)
-
-
-
-
-
200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,300,000
2,375,000
131,666
100,000
-
-
3,906,666
200,000
-
-
-
-
4,106,666
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
2,850,000
1,691,666
(35,000)
(400,000)
Note that balances pre share consolidation have been adjusted to reflect the effects of the 1 for 10 share consolidation on
9 December 2021.
* Ceased to be KMP’s during the period and their holdings are not reported at period end.
# During the year, 35,000 performance rights were exercised for 35,000 shares at zero exercise price.
Performance income as a proportion of total income
$50,000 in bonuses have been paid to executives during the year.
Service agreements:
The key terms of the service agreements with the KMP’s are:
Tony Pearson (Appointed acting Chair 16 September 2020 and confirmed as Chair 21 October 2020)
Chair Fees were set at $95,000 plus superannuation entitlements per annum.
Non-Executive Directors - Abdullah Mwinyi (Appointed 15 November 2020)/ Giselle Collins (Appointed 9 March
2021)/ Rebecca Morgan (Appointed 9 March 2021, Resigned 13 February 2022)/ Giles Stapleton (Appointed
29 November 2021)
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 $50,000 plus superannuation entitlements
per annum, non-resident directors are entitled to receive the superannuation component as fees.
Bardin Davis – Managing Director - (Appointed MD 9 December 2020)
Bardin is employed under an Executive Service Agreement (ESA). The agreement provides for an annual salary of
$350,000 plus statutory superannuation capped at the concessional contribution threshold. Bardin is entitled to leave in
accordance with the relevant legislation. The engagement had no fixed term but is subject to a six-month notice period
from either party.
2022 ANNUAL REPORT 45
Annual Financial Report 05. Directors’ Report (Continued)
Philip Rundell – CFO & Company Secretary (Appointed 16 December 2020)
Philip is employed under a consulting agreement with the Company. The agreement allows for an hourly charge rate of
$200 per hour to a maximum of $1,500 per day. The engagement has no fixed term and is subject to a 15-day notice period
from either party. Phil was paid a discretionary bonus of $50,000 during the 2022 financial year.
Mark Godfrey – Head of Technical Services - (Appointed 6 September 2021)
Mark is employed under an Executive Service Agreement (ESA). The agreement provided for an annual salary of $285,000
plus discretionary performance bonuses. The Executive is entitled to superannuation and leave in accordance with the
relevant legislation. The engagement had no fixed term but is subject to a three-month notice period from either party.
Mark is entitled to be issued 450,000 performance rights under the Company’s Performance Rights Plan, in addition he will
be entitled to STI’s and LTI’s which may comprise of a combination of cash, shares and performance rights to be agreed.
Lello Galassi – Head of Development and Operations - (Appointed 20 September 2021)
Lello is employed under an Executive Service Agreement (ESA). The agreement provided for an annual salary of
UD$300,000 plus discretionary performance bonuses and will receive 24 days of annual leave per year. Upon relocation to
Perth, Australia, the Executive will be entitled to a living away from home allowance of AUD $8,333 per month and will be
entitled to superannuation in accordance with the relevant legislation. The engagement had no fixed term but is subject
to a three-month notice period from either party. Lello is entitled to be issued 500,000 performance rights under the
Company’s Performance Rights Plan, in addition he will be entitled to STI’s and LTI’s which may comprise of a combination
of cash, shares and performance rights to be agreed.
Andrea Cornwall – Head of Marketing and Sales - (Appointed 29 November 2021)
Andrea is employed under an Executive Service Agreement (ESA). The agreement provided for an annual salary of
$312,500 plus discretionary performance bonuses. The Executive is entitled to superannuation and leave in accordance
with the relevant legislation. The engagement had no fixed term but is subject to a three-month notice period from either
party. Andrea is entitled to be issued 450,000 performance rights under the Company’s Performance Rights Plan, in
addition she will be entitled to STI’s and LTI’s which may comprise of a combination of cash, shares and performance
rights to be agreed.
Related party transactions
There were no related party transactions with Key Management Personnel during the year (2021: $89,677). The balance
outstanding at 30 June 2022 and included in trade creditors is $nil (30 June 2021: $1,183).
(End of Remuneration Report)
OPTIONS AND PERFORMANCE RIGHTS
At the date of this report no Listed options are on issue.
Unissued ordinary shares of the Company under option to directors, employees and contractors are:
EXPIRY DATE
21 June 2023
5 March 2023
EXERCISE PRICE
NUMBER UNDER OPTION
$1.50
$0.30
500,000*
559,000
* Vesting subject to length of service and milestone criteria.
There are no unissued ordinary shares of the Company under option to service providers.
During the year a total of 9,133,333* listed and unlisted options were exercised at various exercise prices. A total of 300,000*
unlisted options with exercises price of $1.00* lapsed, were cancelled, or expired unexercised. No options were issued.
46 PEAK RARE EARTHS
05. Annual Financial Report Directors’ Report (Continued)
Details of options movements during the year are detailed in the Remuneration Report and note 18 to this report.
At the date of this report Performance Rights on issue to directors and employees are:
EXPIRY DATE
5 February 2025
9 December 2025
EXERCISE PRICE
NUMBER OF PERFORMANCE RIGHTS
$Nil
$Nil
2,015,000
1,818,266
During the year 1,918,266* performance rights were issued to directors and employees of the Company. A total of 46,200
vested performance rights were exercised for $nil consideration and a total of 147,600* performance rights lapsed, were
cancelled, or expired.
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.
*The Company’s share capital underwent a 1:10 share consolidation on 10 December 2021. All movements in the equity
components are stated on a post consolidated basis.
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.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the court under legislation such as section 237 of the Corporations Act of Australia for leave to
bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the
purpose of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been
brought or intervened in on behalf of the consolidated entity with leave of the court under such legislation.
2022 ANNUAL REPORT 47
Annual Financial Report 05. 05. Annual Financial Report
Directors’ Report (Continued)
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2022 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
3 to the Financial Statements.
The Board of Directors is satisfied that the provision of non-audit services performed during the year by the Company’s
auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the services did not compromise the external auditor’s independence for the following reason:
▶ All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
▶ The nature of the services provided does not compromise the general principles relating to auditors independence as
set out in the APES 110 (Code of Ethics for Professional Accountants).
The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations
Act 2001.
On behalf of the Directors,
Russell Scrimshaw
Executive Chairman
20 September 2022
48 PEAK RARE EARTHS
Auditor’s Independence Declaration
Annual Financial Report 05.
2022 ANNUAL REPORT 49
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s independence declaration to the directors of Peak Rare Earths Limited As lead auditor for the audit of the financial report of Peak Rare Earths Limited for the financial year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Peak Rare Earths Limited and the entities it controlled during the financial year. Ernst & Young Pierre Dreyer Partner 20 September 2022 05. Annual Financial Report
Independent Auditor’s Report
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of
Peak Rare Earths Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Peak Rare Earths Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2022, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(a) in the financial report, which describes the principal conditions that
raise doubt about the Group’s ability to continue as a going concern. These events or conditions
indicate that a material uncertainty exists that may cast significant doubt about the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
50 PEAK RARE EARTHS
Independent Auditor’s Report (Continued)
Annual Financial Report 05.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matter described below to be the key audit
matter to be communicated in our report. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to this matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
1. Carrying value of capitalised exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
As at 30 June 2022, the Group’s Tanzanian
subsidiary, PRNG Minerals Limited (“PRNG”), held
100% of the Ngualla Project (“Project”) which included
capitalised exploration and evaluation assets of $59.1
million, representing 80% of the Group’s total assets.
The carrying amount of exploration and evaluation
assets is assessed for impairment by the Group when
facts and circumstances indicate that the carrying
amount of exploration and evaluation assets may
exceed its recoverable amount.
The determination as to whether there are any
indicators to require the exploration and evaluation
assets to be assessed for impairment involves a
number of judgments, including whether the Group
has tenure, whether it will be able to perform ongoing
expenditure and whether there is sufficient
information for a decision to be made that the area of
interest is not commercially viable. The directors did
not identify any impairment indicators at 30 June
2022.
Refer to Note 12 in the financial report for capitalised
exploration and evaluation asset balances and related
disclosures.
This was considered a key audit matter because of the
significant judgment involved in determining whether
any impairment indicators were present for the
Group’s capitalised exploration and evaluation asset
balances and the significance of these balances.
In performing our procedures, we:
► Considered whether the Group’s right to explore
was current, which included obtaining and
assessing supporting documentation such as
license agreements. This included reviewing
correspondence between the Group and its
external legal counsel with respect to the status of
PRNG’s mining and prospecting license rights
applications and the status of its tenure over the
Project.
► Considered the Group’s intention to carry out
significant ongoing exploration and evaluation
activities in the relevant areas of interest which
included reviewing the Group’s cash-flow forecast
and enquiring of senior management and the
directors as to their intentions and the strategy of
the Group.
► Assessed whether exploration and evaluation data
or contrary information existed to indicate that the
carrying value of capitalised exploration and
evaluation assets was unlikely to be recovered
through successful development or sale.
► Reviewed the adequacy of the Group’s disclosures
in Note 12 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2022 ANNUAL REPORT 51
05. Annual Financial Report
Independent Auditor’s Report (Continued)
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 Annual Report other than the financial report and our
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
Annual Report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
52 PEAK RARE EARTHS
Independent Auditor’s Report (Continued)
Annual Financial Report 05.
►
►
►
►
►
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the entity
to cease to continue as a going concern
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the consolidated financial report represents the underlying
transactions and events in a manner that achieves fair presentation
Obtain sufficient appropriate audit evidence regarding the financial information of the business
activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2022 ANNUAL REPORT 53
05. Annual Financial Report
Independent Auditor’s Report (Continued)
54 PEAK RARE EARTHS
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the Directors' report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Peak Rare Earths Limited for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Pierre Dreyer Partner Perth 20 September 2022 Consolidated Statement of
Comprehensive Income
For the Year Ended 30 June 2022
Interest income
R&D rebate
Other income
Total income
Employee benefits expenses
Share based payments expenses
Write-off of capitalised exploration costs
Depreciation expenses
Borrowing costs
Administrative and other costs
Technical feasibility costs
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income/(loss), net of tax
Items that could be transferred to profit or loss in future:
Exchange differences on translation of foreign operations
Total comprehensive loss for the year
Loss per share (in cents)
Basic and Diluted loss per share
Annual Financial Report 05.
NOTE
3
17
12
10, 11
16
6
4
2022
$
2021
$
8,602
-
-
8,602
(2,579,194)
(610,449)
(156,080)
(199,074)
9,246
46,137
55,625
111,008
(725,552)
(856,325)
-
(23,049)
(7,874,527)
(323,904)
(4,284,188)
(1,397,265)
(7,036,692)
(1,555,761)
(22,731,602)
(4,770,848)
-
-
(22,731,602)
(4,770,848)
4,598,141
(4,483,550)
(18,133,461)
(9,254,398)
(11.66)
(3.13)
2022 ANNUAL REPORT 55
05. Annual Financial Report
Consolidated Statement
of Financial Position
As at 30 June 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Other financial assets
Property plant and equipment
Right-of-use asset
Exploration and evaluation costs
Investments
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Lease liability – current
Total current liabilities
Non-current liabilities
Lease liability – non-current
Royalty liability
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
The statement should be read in conjunction with the accompanying note
56 PEAK RARE EARTHS
NOTE
2022
$
2021
$
7
8
9
10
11
12
13
14
15
11
11
16
18
17
9,479,379
2,680,367
974,411
80,373
732,455
84,740
10,534,163
3,497,562
63,794
225,337
-
24,819
3,774,955
3,583,243
59,114,040
54,472,897
8,000
8,000
63,186,126
58,088,959
73,720,289
61,586,521
2,447,973
96,367
110,279
576,746
28,433
-
2,654,619
605,179
206,364
-
-
5,686,663
206,364
5,686,663
2,860,983
6,291,842
70,859,306
55,294,679
140,805,369
107,717,730
5,197,563
(11,027)
(75,143,626)
(52,412,024)
70,859,306
55,294,679
Consolidated Statement
of Cash Flows
For the Year Ended 30 June 2022
OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Government rebates received
Cash used in operating activities
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Proceeds from sale of non-current assets
Cash generated from (used in) investing activities
FINANCING ACTIVITIES
Proceeds from issue of equity shares
Costs of issuing equity shares
Proceeds from redemption of bank guarantee
Additions to bank guarantee
Payment of lease liabilities
Repayment of royalty liability
Cash generated from financing activities
Net increase in cash and cash equivalents
Balance at the beginning of the year
Effect of foreign currency translation
Balance at the end of the year
The statement should be read in conjunction with the accompanying notes
Annual Financial Report 05.
NOTE
2022
$
2021
$
(12,137,690)
(4,583,832)
8,602
-
13,574
101,762
7
(12,129,088)
(4,468,496)
(239,505)
-
(239,505)
(245)
531
286
34,469,917
(1,382,278)
-
(63,794)
8,227,067
(402,673)
30,000
-
(40,671)
(3,220,347)
(13,767,214)
-
19,215,960
4,634,047
6,847,367
2,680,367
(48,355)
165,837
2,546,021
(31,491)
7
9,479,379
2,680,367
2022 ANNUAL REPORT 57
05. Annual Financial Report
Consolidated Statement
of Changes in Equity
For the Year Ended 30 June 2022
CONTRIBUTED EQUITY
SHARE BASED
PAYMENT RESERVE
FOREIGN CURRENCY
TRANSLATION
RESERVE
ACCUMULATED
LOSSES
TOTAL EQUITY
$
$
$
$
$
At 30 June 2020
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Equity issued
Equity based payments
Transaction costs
At 30 June 2021
Loss for the year
Other comprehensive income
Total comprehensive income/(loss)
for the year
Equity issued
Equity based payments
Transaction costs
At 30 June 2022
99,893,335
3,787,758
(171,560)
(47,641,176)
55,868,357
-
-
-
8,227,067
-
-
-
-
-
856,325
(402,672)
-
-
(4,770,848)
(4,770,848)
(4,483,550)
-
(4,483,550)
(4,483,550)
(4,770,848)
(9,254,398)
-
-
-
-
-
-
8,227,067
856,325
(402,672)
107,717,730
4,644,083
(4,655,110)
(52,412,024)
55,294,679
-
-
-
34,469,917
-
-
-
-
-
610,449
(1,382,278)
-
-
(22,731,602)
(22,731,602)
4,598,141
-
4,598,141
4,598,141
(22,731,602)
(18,133,461)
-
-
-
-
-
-
34,469,917
610,449
(1,382,278)
140,805,369
5,254,532
(56,969)
(75,143,626)
70,859,306
The statement should be read in conjunction with the accompanying notes
58 PEAK RARE EARTHS
Annual Financial Report 05.
Notes to the
Financial Statements
1. CORPORATE INFORMATION
The financial report of Peak Rare Earths Limited (previously
Peak Resources Limited; the Group) for the year ended 30
June 2022 was authorised for issue in accordance with a
resolution of the directors on 20 September 2022.
Peak Rare Earths 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
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 to continue
with the planned development of the Ngualla Project, or
reduce discretionary spending if funds are not forthcoming,
there is a material uncertainty whether the Group will be
able to progress with its current development initiatives
and continue as a going concern and therefore in this
circumstance 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
a) Basis of Preparation
time
The consolidated financial statements have been prepared
on the basis of historical cost. 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).
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 2022,
except for the adoption of new and amended accounting
standards and interpretations effective as of 1 July 2021. The
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.
Going concern
The Group incurred a loss after tax of $22,731,602 (2021:
$4,770,848) and had operating cash outflows of $12,129,088
for the year ended 30 June 2022 (2021: $4,468,496).
The Group’s ability to continue as a going concern and
meet its debts as and when they fall due is dependent
on its ability to raise additional capital. As reported,
with $9,479,379 cash at bank at the end of the reporting
period, Peak is well funded in the short term to fund the
short term pre-development activities, and its corporate
and administration requirements. Further funding will be
required to develop the project.
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. The standards issued and
amendments but not yet effective are not expected to have
a material impact on the Group.
▶ IFRS 17 Insurance Contracts
▶ Amendments to IAS 1: Classification of Liabilities as
Current or Non-current
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 the quality of the
project and its past ability to raise equity funding. However,
in the event that additional funding is not forthcoming, the
▶ Reference to the Conceptual Framework –
Amendments to IFRS 3
▶ Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
2022 ANNUAL REPORT 59
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
▶ Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37
control until the date the Group ceases to control the
subsidiary.
▶ IFRS 1 First-time Adoption of International Financial
Reporting Standards – Subsidiary as a first-time
adopter
▶ IFRS 9 Financial Instruments – Fees in the “10 per cent”
test for derecognition of financial liabilities
▶ IAS 41 Agriculture – Taxation in fair value measurements
▶ Definition of Accounting Estimates - Amendments to
IAS 8
▶ Disclosure of Accounting Policies - Amendments to IAS
1 and IFRS Practice Statement 2
c) Basis of consolidation
The consolidated financial statements of Peak Rare Earths
Limited comprise the financial statements of the Company
and its subsidiaries as at 30 June 2022. Control is achieved
when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the
Group has:
▶ Power over the investee (i.e. existing rights that give it
the current ability to direct the relevant
▶ activities of the investee)
▶ Exposure, or rights, to variable returns from its
involvement with the investee, and
▶ The ability to use its power over the investee to affect
its returns
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it
has power over an investee, including:
▶ The contractual arrangement with the other vote
holders of the investee
▶ Rights arising from other contractual arrangements
▶ The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there
are changes to one or more of the three elements of
control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the statement
of comprehensive income from the date the Group gains
60 PEAK RARE EARTHS
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) 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 Group’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
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
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.
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 recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
e) 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 a
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.
f) Employee benefits
Employee benefits such as salary and wages are measured
at the rate at which the entity expects to settle the liability;
and recognised during the period over which the employee
services are being rendered.
Provision is made for the Group’s liability for employee
benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be
settled within one year have been measured at the amounts
expected to be paid when the liability is settled, plus related
on-costs. Employee benefits payable later than one year
have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
Superannuation entitlements
Contributions are made by the Group to employee
superannuation funds and are charged as expenses when
incurred.
g) Leases
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.
i) Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-
of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease
payments made at or before the commencement date
less any lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of the
assets, as follows:
▶ 3 to 26 years
The right-of-use assets are also subject to impairment.
The carrying values of right-of-use assets 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.
ii) Lease liabilities
At the commencement date of the lease, the Group
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase
option reasonably certain to be exercised by the
Group and payments of penalties for terminating the
lease, if the lease term reflects the Group exercising
the option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised
as expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments,
the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After
2022 ANNUAL REPORT 61
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a
change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate
used to determine such lease payments) or a change in
the assessment of an option to purchase the underlying
asset.
iii) Short-term leases and leases of low-value
assets
▶ 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.
The Group applies the short-term lease recognition
exemption to its short-term leases of its office
space. This has been recognised as an expense in
Administrative and other costs in the consolidated
statement of comprehensive income.
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.
h) Income tax
Deferred income tax is provided on all temporary
differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for the
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences except:
▶ Where the deferred income tax liability arises from the
initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor
taxable profit or loss; and
▶ In respect of taxable temporary differences associated
with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the
reversal of the temporary differences can be controlled
and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible
temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax
assets and unused tax losses can be utilised except:
▶ Where the deferred income tax asset relating to the
deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss; and
Income taxes relating to items recognised directly in equity
are recognised in equity and not in the profit or loss.
i) Other taxes
Revenues, expenses and assets are recognised net of the
amount of GST/VAT except:
When the GST/VAT incurred on a purchase of goods and
services is not recoverable from the taxation authority, in
which case the GST/VAT is recognised as part of the cost
of acquisition of the asset or as part of the expense item as
applicable; and Receivables and payables, which are stated
with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable
to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
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.
j) Loss per share
i) Basic loss per share
Basic loss per share is determined by dividing the group
operating result after income tax attributable to members
by weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
62 PEAK RARE EARTHS
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
ii) Diluted loss per share
Subsequent measurement
Diluted loss per share 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.
k) 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.
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.
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 AASB 132 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.
2022 ANNUAL REPORT 63
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
Financial assets at fair value through profit or loss
consolidated statement of financial position) when:
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.
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
64 PEAK RARE EARTHS
▶ 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).
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
Financial liabilities
Initial recognition and measurement
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.
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 and
loans and borrowings.
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 the royalty liability.
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, including other financial assets; (ii) trade
and other receivables; (iii) investments, (iv) trade and other
payables and v) royalty liability.
l) Cash and Cash Equivalents
Cash and short-term deposits in the statement of financial
position comprise cash at bank and in hand and short term
deposits with an original maturity of three months or less.
m) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms,
are recognised initially at fair value and subsequently at
amortised cost, less 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.
n) 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.
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.
o) 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:
2022 ANNUAL REPORT 65
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
▶ 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.
66 PEAK RARE EARTHS
p) 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.
q) 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.
r) Share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees (including
senior executives) of the Group in the form of share-
based payments, whereby employees render services in
exchange for shares or rights over shares (equity-settled
transactions).
The current plans in place to provide these benefits are
the Incentive Performance Rights Plan (PRP) and the
Incentive Employee Option Plan (EOP), 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 Rare Earths 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).
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
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 loss per
share.
s) 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.
t) 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 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.
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 16. 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.
2022 ANNUAL REPORT 67
Notes to the
Financial Statements (Continued)
3. INCOME AND EXPENDITURE ITEMS
Included in loss for the year are:
Interest income
Australian R&D rebate
Other income
Total other income
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)
4. LOSS PER SHARE
2022
$
2021
$
8,602
-
-
8,602
9,246
46,137
55,625
111,008
Auditors’ remuneration
83,860
75,560
83,860
75,560
29,381
29,381
117,314
29,119
29,119
104,679
2022
CENTS
2021
CENTS
Basic and Diluted loss per share based on reported losses after tax as set out in the
Statement of Comprehensive Income
(11.66)
(3.13)
2022
NOS.
2021
$ NOS.
Weighted average number of ordinary shares used in calculating basic loss per share
195,031,962
152,607,173
Weighted average number of ordinary shares used in calculating diluted loss per share
195,031,962
152,607,173
Anti-dilutive options over ordinary shares and performance rights excluded from the
weighted average number of shares
4,433,266
9,820,625
The weighted average number of ordinary shares in the above were adjusted to reflect the capital consolidation entailing
the conversion of every ten (10) securities into one (1) security, which occurred on 10 December 2021 (see Note 17).
68 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
5. OPERATING SEGMENTS
Information reported to the chief operating decision makers for the purposes of resource allocation and assessment of
segment performance focuses on the exploration activities of the Group. The chief operating decision makers include the
board of directors. The Group’s reportable segments under AASB 8 are as follows:
▶ Exploration & Development (E&D) – Group’s exploration and development activities for the Ngualla project in
Tanzania; and
▶ Unallocated - to manage the corporate affairs of the group.
The segments have applied the same accounting policies as applied to the Group and disclosed in the notes 1 and 2 to
these financial statements.
30 JUNE 2022
30 JUNE 2021
E&D
$
UNALLOCATED
TOTAL
$
$
E&D
$
UNALLOCATED
TOTAL
$
$
Interest income
Other income
Total income
Depreciation and
amortisation
Share based payment
expenses
Borrowing costs
Write-off of capitalised
exploration costs
-
-
-
8,602
-
8,602
8,602
-
8,602
-
-
-
(165,708)
(33,366)
(199,074)
(16,607)
-
-
(156,080)
(610,449)
(610,449)
(7,874,527)
(7,874,527)
(156,080)
-
-
-
-
-
9,246
101,762
111,008
(6,442)
9,246
101,762
111,008
(23,049)
(856,325)
(856,325)
-
-
-
-
-
(1,555,761)
Technical feasibility costs
(7,036,692)
(7,036,692)
(1,555,761)
Other expenses
Income Tax
Segment results
Segment assets
-
-
(6,863,382)
(6,863,382)
-
-
-
-
(2,446,721)
(2,446,721)
-
-
(7,358,480)
(15,373,122)
(22,731,602)
(1,572,368)
(3,198,480)
(4,770,848)
62,773,663
10,946,625
73,720,288
58,076,050
3,510,471
61,568,521
Segment liabilities
(133,830)
(2,727,153)
(2,860,983)
(5,686,663)
(605,179)
(6,291,842)
Additions to non-current
assets during the year:
Plant and equipment
Right-of-use assets
212,010
33,432
245,442
27,495
318,366
345,861
239,505
351,798
-
3,583,243
245
-
245
3,583,243
591,303
3,583,243
245
3,583,488
2022 ANNUAL REPORT 69
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
6. INCOME TAX
a. The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
2022
$
2021
$
-
-
-
-
-
-
b. The prima facie tax expense/(benefit) on profit/(loss) from ordinary activities
before income tax is reconciled to the income tax as follows:
Loss before income tax
Prima facie tax expense/(benefit) on profit/(loss) from ordinary activities before
income tax at 30.0% (2021:30%)
(22,731,602)
(4,770,848)
(6,819,481)
(1,431,254)
Add tax effect of:
Revenue losses not recognised
Other non-allowable items
Less tax effect of:
Gain on derecognition of associate
Gain on re-measurement of financial liabilities
Other deferred tax balances not recognised
Non-assessable items
Income tax expense reported in statement of comprehensive income
c. Unrecognised deferred tax assets at 30.0% (2021:30%) (Note 1):
Carry forward revenue losses
Carry forward capital losses
Unrealised FX
Capital raising costs
Provisions and accruals
Net right-of-use assets/lease liability
Other
1,466,717
4,913,965
(438,799)
617,258
1,320,223
506,227
-
-
(438,799)
-
-
-
-
136,169
370,058
-
9,504,524
8,037,807
295,504
665,723
298,181
1,164,670
131,314
9,350
295,504
265,945
86,725
979,943
-
9,350
12,069,266
9,675,274
The tax benefits of the above deferred tax assets will only be obtained if:
(a) the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
(b) the Group 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 - Deferred tax assets and liabilities are required to be measured at the tax rate that is expected to apply in the future income year when the asset is
realised or the liability is settled. The Directors have determined that the deferred tax balances be measured at the tax rates stated.
Note 2 - Tax Consolidation
For the purpose of income taxation, the Company and its 100% Australian controlled entities have formed a tax consolidated group effective from 1 July 2012.
70 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
7. CASH AND CASH EQUIVALENTS
Reconciliation of cash and cash equivalent
For the purpose of the Cash Flow Statement, cash and cash equivalents comprise the
following:
Cash at bank and in hand
Reconciliation of operating loss to operating cash flows
Loss for the year
Adjustments for non-cash items:
Borrowing costs
Share based payments expenses
Creditors settled in equity
Write-off exploration costs
Depreciation expenses
Foreign exchange loss/(gain)
Other non-cash items
Movement in working capital items:
Increase in trade and other receivables
(Increase)/Decrease in prepayments
Increase in trade and other payables
Increase/(Decrease) in provisions
8. TRADE AND OTHER RECEIVABLES
Current
GST/VAT receivable
Other receivable
Ageing of receivables
Recoverable within 3 months
2022
$
2021
$
9,479,379
2,680,367
9,479,379
2,680,367
(22,731,602)
(4,770,848)
7,874,527
610,449
19,847
156,080
199,073
40,966
-
323,904
856,325
-
-
23,049
(6,089)
543
(241,956)
(845,171)
4,367
1,871,227
(274)
164,568
67,934
(214,503)
(12,129,088)
(4,468,496)
2022
$
2021
$
968,271
6,140
974,411
730,375
2,080
732,455
974,411
974,411
732,455
732,455
2022 ANNUAL REPORT 71
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
9. OTHER FINANCIAL ASSETS
Bank Term Deposit
2022
$
2021
$
63,794
63,794
-
-
A deposit of $63,794 (2021: $Nil), has been secured against a guarantee issued by the bank for an office rental deposit. This
cash balance is not available for withdrawal until the guarantee is withdrawn.
10. PROPERTY, PLANT AND EQUIPMENT
2022
$
2021
$
452,814
(227,477)
225,337
24,819
239,505
(38,987)
225,337
213,309
(188,490)
24,819
41,789
(828)
(16,142)
24,819
2022
$
2021
$
3,583,243
-
351,798
3,590,150
(160,087)
(6,907)
3,774,954
3,583,243
Plant and equipment
At cost
Accumulated depreciation
Movement in net carrying amount
Balance at the beginning of the year
Net Additions / (Disposals)
Depreciation for the year
Balance at the end of the year
11. LEASES
RIGHT OF USE ASSETS
Movement in net carrying amount:
Balance at beginning of year
Additions
Depreciation for the year
Balance at 30 June 2022
72 PEAK RARE EARTHS
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
LEASE LIABILITIES
Movement in net carrying amount:
Balance at beginning of year
Additions
Accretion of interest
Lease payments
Balance at 30 June 2022
Current
Non-Current
Total
2022
$
2021
$
-
352,812
4,502
(40,671)
316,643
110,279
206,364
316,643
-
-
-
During the year ended 30 June 2021, the Group executed a 250-year lease on a 19-hectare parcel of land at Teesside, UK
for an upfront payment of £1,858,712 or A$3,403,424 (net of VAT receivable) and with an annual peppercorn lease payment
of £0.01 or A$0.01 per annum. During the year ended 30 June 2022, the Group executed a 3-year lease on its office space.
The Group also has certain contracts which contain a lease with terms of 12 months or less and contracts which contain
a lease of low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for
these. Leases that are short-term and low value amounted to $14,536 for the year ended 30 June 2022 (2021: $35,434).
12. EXPLORATION AND EVALUATION EXPENDITURE
Movement in net carrying amount:
Balance at beginning of year
Exploration assets written off during the year
Foreign exchange movements
Balance at 30 June
Capitalised areas of interest
Ngualla Rare Earth Project, Tanzania
13. INVESTMENTS
Investment in listed shares – at fair value through profit or loss
2022
$
2021
$
54,472,897
59,419,382
(156,080)
-
4,797,223
(4,946,485)
59,114,040
54,472,897
59,114,040
54,472,897
59,114,040
54,472,897
2022
$
2021
$
8,000
8,000
8,000
8,000
2022 ANNUAL REPORT 73
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
14. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Ageing of payables
Payable within 3 months
Payables are non-interest bearing, unsecured and are generally payable in 30-120 days.
15. PROVISIONS
2022
$
2021
$
2,447,973
576,746
2,447,973
2,447,973
576,746
576,746
2022
$
2021
$
Employee benefits - leave entitlements
96,367
28,433
16. ROYALTY LIABILITY
Non-current:
ANRF Royalty Liability
2022
$
2021
$
-
-
5,686,663
5,686,663
In July 2015, ANRF Royalty Company Limited (ANRF) and International Finance Corporation (IFC) advanced US$5,191,201
to the Group for a 2% Gross Sales Royalty from the Ngualla Rare Earth’s project in accordance with the Royalty
Agreement. On 5 August 2021, Peak Rare Earths Limited, PR NG Minerals Limited (wholly owned subsidiary of the Group),
Appian and ANRF entered into a conditional Royalty Repayment and Release Agreement whereby the parties agreed
to terminate the Royalty Agreement following a cash payment by PR NG Minerals Limited to Appian and ANRF of the
Principal Sum of US$5,191,201 and accrued interest of US$4,787,554 totalling US$9,978,755 (or A$13,767,214).
The Royalty Repayment and Release Agreement was approved by Peak shareholders at a General Meeting held on 28
September 2021 and the transaction was completed on 5 October 2021. The excess of the total repayment of A$13,767,214
over the carrying value of the royalty liability at 5 October 2021 is recognised as “Borrowing costs” in the profit or loss.
74 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
Movement in net carrying amount of ANRF Royalty Liability:
Balance at beginning of year
Accretion of interest
Foreign exchange movements
Repayment of royalty liability
Balance at 30 June 2022
17. RESERVES
2022
$
2021
$
5,686,663
5,857,433
90,688
197,460
(5,974,811)
323,904
(494,674)
-
-
5,686,663
SHARE BASED
PAYMENT
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVE
TOTAL
$
$
At 30 June 2020
Share based payments
Exchange difference on translation of foreign operations
At 30 June 2021
Share based payments
Exchange difference on translation of foreign operations
At 30 June 2022
3,787,758
856,325
-
4,644,083
610,449
-
5,254,532
(171,560)
-
(4,483,550)
(4,655,110)
-
4,598,141
(56,969)
3,616,198
856,325
(4,483,550)
(11,027)
610,449
4,598,141
5,197,563
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.
18. CONTRIBUTED EQUITY
NOS.
$
Balance at 30 June 2020
1,405,305,618
99,893,335
Issue of shares for nil consideration on exercise of vested Performance Rights
3-Jul-20
2,000,000
-
Shares issued in settlement of deferred directors fees and deferred executive
remuneration @ $0.0342
7-Aug-20
3,762,020
128,661
Placement @3.2c per share
SPP @3.2c per share
28-Oct-20
109,375,000
3,500,000
17-Nov-20
26,562,493
850,000
Issue of shares for nil consideration on exercise of vested Performance Rights 24-Nov-20
2,442,000
Shares issued in settlement of director fees at $0.063078 per Share
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
23-Dec-20
25-Jan-21
25-Jan-21
861,469
750,000
14,000,000
-
54,340
48,750
700,000
2022 ANNUAL REPORT 75
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
NOS.
$
Issue of shares on settlement deed
Issue of shares on exercise of unlisted options
Issue of shares on settlement deed
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on settlement deed
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares for nil consideration on exercise of vested performance rights
8-Mar-21
Issue of shares on exercise of unlisted options
Issue of shares for nil consideration on exercise of vested performance rights
Shares issued in settlement of director fees at $0.0954 per share
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
Issue of shares on exercise of unlisted options
11-Mar-21
1-Apr-21
1-Apr-21
6-May-21
7-May-21
10-May-21
25-May-21
4-Jun-21
10-Jun-21
Issue of shares for nil consideration on exercise of vested performance rights
21-Jun-21
Issue of shares on exercise of unlisted options
25-Jun-21
Equity issue costs
Balance at 30 June 2021
Issue of shares for nil consideration on exercise of vested performance rights
Shares issued in settlement of equity component of executive remuneration
@ 11.3722 cents per share
29-Jan-21
29-Jan-21
1-Feb-21
2-Feb-21
2-Feb-21
2-Feb-21
4-Feb-21
11-Feb-21
15-Feb-21
3,019,230
400,000
4,500,000
4,000,000
4,000,000
800,000
800,000
2,000,000
730,770
15-Feb-21 1,125,000
19-Feb-21
5-Mar-21
3,375,000
1,750,000
75,000
3,000,000
2,250,000
205,751
11,166,295
2,171,596
662,109
208,747
4,500,000
4,500,000
8,250,000
210,000
196,250
20,000
191,250
240,000
240,000
40,000
40,000
100,000
47,500
39,375
101,250
52,500
-
180,000
-
19,628
669,978
130,296
39,727
6,262
292,500
292,500
-
6,300
(402,672)
1,628,758,098
107,717,730
1-Jul-21
8-Jul-21
330,000
174,518
-
19,847
Issue of shares on exercise of listed PEKOD options @ 3 cents per share
6-Aug-21
333,333
10,000
Issue of shares Tranche 1 Capital Raising @ 9 cents per share
13-Aug-21
226,851,892
20,416,670
Issue of shares on exercise of listed PEKOD options @ 3 cents per share
Issue of shares on exercise of listed PEKOD options @ 3 cents per share
Issue of shares on exercise of listed PEKAI options @ 3.5 cents per share
8-Sep-21
1-Oct-21
1-Oct-21
4,166,667
1,300,000
375,000
125,000
39,000
13,125
Issue of shares Tranche 2 Capital Raising @ 9 cents per share
4-Oct-21
106,481,442
9,583,330
Issue of shares for nil consideration on exercise of vested performance rights
5-Oct-21
Share Purchase Plan @ 9 cents per share
Capital Consolidation 10 securities into 1
Issue of shares on exercise of listed PEKAI options @ 35 cents per share
Issue of shares on exercise of listed PEKAI options @ 30 cents per share
76 PEAK RARE EARTHS
8-Oct-21
482,000
18,614,511
10-Dec-21
(1,789,079,928)
14-Jan-22
21-Jan-22
75,000
290,000
-
1,675,311
-
26,250
87,000
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
NOS.
$
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
2-Feb-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
15-Feb-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
22-Feb-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
23-Feb-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
01-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
4-Mar-22
11-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
15-Mar-22
Issue of shares for nil consideration to Tanzanian employees in recognition of
continuing and valued service to the company
17-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
17-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
22-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
24-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
25-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
28-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
29-Mar-22
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
Issue of shares on exercise of listed PEKOD options @ 30 cents per share
4-Apr-22
5-Apr-22
7-Apr-22
12-Apr-22
19-Apr-22
66,667
32,000
18,600
129,560
500,000
116,667
100,000
651,986
45,171
288,667
54,041
2,535,116
34,578
15,000
203,709
215,483
51,000
2,628,132
277,184
232,443
20,000
9,600
5,580
38,868
150,000
35,000
30,000
195,596
29,135
86,600
16,212
760,535
10,373
4,500
61,113
64,645
15,300
788,440
83,155
69,733
Equity Issue Costs
Balance at 30 June 2022
(1,382,278)
207,348,537
140,805,369
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 and Performance Rights over ordinary shares
At the end of the reporting period, there were 4,892,266 options and performance rights over unissued shares as follows:
OPTIONS AND PERFORMANCE RIGHTS OVER
ORDINARY SHARES
DATE OF
EXPIRY/
EXERCISE
OR ISSUE
NOS
STATUS
EXERCISE
PRICE
EXPIRY DATE
Balance at 30 June 2021
Expired/ Lapsed/ Cancelled:
127,644,253
PEKAK Performance Rights lapsed
13-Sep-21
(476,000)
Capital Consolidation 10 securities into 1 –
Unlisted Options & Performance Rights
10-Dec-21
(34,776,000)
-
-
13-Sep-21
-
2022 ANNUAL REPORT 77
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
OPTIONS AND PERFORMANCE RIGHTS OVER
ORDINARY SHARES
DATE OF
EXPIRY/
EXERCISE OR
ISSUE
NOS
STATUS
EXERCISE
PRICE
EXPIRY DATE
Capital Consolidation 10 securities into 1 –
Listed PEKOD Options
10-Dec-21
(73,387,120)
-
-
Lapse of Unlisted PEKAI Options
17-Jan-22
(125,000)
$0.35
17-Jan-22
PEKAK Performance Rights lapsed on
director resignation
Lapse of Listed PEKOD Options
Lapse of Unlisted PEKAI Options
14-Feb-22
(100,000)
-
9-Dec-25
17-Apr-22
21-Jun-22
(3,300)
(300,000)
(109,167,420)
$0.30
$1.50
17-Apr-22
21-Jun-22
Issued:
9-Dec-21
1,918,266
Unvested
-
9-Dec-25
Performance Rights issued as a Long
Term Incentive to employees under
the Company’s Incentive Performance
Rights Plan and with the approval of
the Company’s shareholders given at
the Annual General Meeting held on 29
November 2021.
Vested PEKAK Performance Rights
Listed PEKOD Options
Listed PEKOD Options
Unlisted PEKAI Options
Unlisted PEKAI Options
Vested PEKAK Performance Rights
Vested PEKAK Performance Rights
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
78 PEAK RARE EARTHS
1-Jul-21
6-Aug-21
1,918,266
(330,000)
(333,333)
8-Sep-21
(4,166,667)
1-Oct-21
1-Oct-21
5-Oct-21
5-Oct-21
2-Feb-22
15-Feb-22
22-Feb-22
(375,000)
(1,300,000)
(132,000)
(350,000)
(66,667)
(32,000)
(18,600)
23-Feb-22 (129,560)
1-Mar-22
(500,000)
4-Mar-22 (116,667)
11-Mar-22
15-Mar-22
(100,000)
(651,986)
17-Mar-22
(288,667)
22-Mar-22
(54,041)
24-Mar-22
(2,535,116)
25-Mar-22
28-Mar-22
29-Mar-22
(34,578)
(15,000)
(203,709)
-
08-Sep-21
$0.03
$0.03
$0.035
$0.03
-
-
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
14-Apr-22
14-Apr-22
17-Jan-22
5-Mar-23
8-Sep-21
5-Feb-25
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
05. Annual Financial Report Notes to the
Financial Statements (Continued)
OPTIONS AND PERFORMANCE RIGHTS OVER
ORDINARY SHARES
DATE OF
EXPIRY/
EXERCISE OR
ISSUE
NOS
STATUS
EXERCISE
PRICE
EXPIRY DATE
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Listed PEKOD Options
Balance at 30 June 2022
4-Apr-22
5-Apr-22
(215,483)
(51,000)
7-Apr-22
(2,628,132)
12-Apr-22
19-Apr-22
(277,184)
(232,443)
(15,502,833)
4,892,266
$0.30
$0.30
$0.30
$0.30
$0.30
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
14-Apr-22
Vested &
unvested
$0.00 -$1.50
08/09/21 -
09/12/25
For the year ended 30 June 2022, 1,918,266 performance rights were issued to employees under the Performance Rights
Plan’s approved at the Annual General Meeting held on 29 November 2021. No options were issued under the Employee
Option Plan (EOP). During the year a total of 428,300 options and 576,000 performance rights expired, lapsed or were
cancelled. Capital consolidation of 10 securities into 1 occurred on 10 December 2021.
During the year ended 30 June 2021, 47,000,000 performance rights were issued to employees under the Performance
Rights Plan’s approved at the Annual General Meeting held on 29 November 2017 and 21 December 2020. No options were
issued under the EOP. During the year a total of 75,169,419 options and 12,545,000 performance rights expired, lapsed or
were cancelled.
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.
2022 ANNUAL REPORT 79
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
19. SHARE BASED PAYMENTS
Employee share option plan
The Group has an Incentive Employee Option Plan (EOP) for the granting of options to eligible participants. During the
financial year ended 30 June 2022, no options were issued under the EOP to executives and employees.
Options granted during and as at the year ended 30 June 2022:
Outstanding at 1 July 20211
Granted / Vested during the year:
Exercised during the year
Expired/ Lapsed/ Cancelled during the year
Outstanding at 30 June 2022
Exercisable at 30 June 2022
^WA (weighted average)
NUMBER
WA EXERCISE
PRICE^
5,816,500
$0.4413
-
(4,332,500)
(425,000)
1,059,000
559,000
-
-
-
$0.8666
$0.3000
1 Outstanding balance of shares at 1 July 2021 adjusted to reflect Capital consolidation of securities 10 to 1 on 10th Dec 2021.
Options granted during and as at the year ended 30 June 2021:
Outstanding at 1 July 2020
Granted / Vested during the year:
Exercised during the year
Expired/ Lapsed/ Cancelled during the year
Outstanding at 30 June 2021
Exercisable at 30 June 2021
^WA (weighted average)
NUMBER
WA EXERCISE
PRICE^
190,794,419
$0.0659
-
57,460,000)
(75,169,419)
58,165,000
50,165,000
-
-
-
$0.0441
$0.0302
The weighted average remaining contractual life for share options outstanding at 30 June 2022 was 0.82 years (2021: 1.04
years).
Performance Rights Plan
The Group has an Incentive Performance Rights Plan (PRP) for the granting of performance rights to eligible participants
which was last approved by Shareholders at a General Meeting of the Company on 29 November 2021.
1,918,266 performance rights were issued during the year ended 30 June 2022 (2021: 47,000,000).
80 PEAK RARE EARTHS
05. Annual Financial Report
Notes to the
Financial Statements (Continued)
Performance rights granted during and as at the year ended 30 June 2022:
NUMBER
EXERCISE
PRICE
FAIR VALUE PER
PERFORMANCE
RIGHT
Outstanding at 1 July 20211
Granted during the year:
Performance Rights issued under the Company’s Incentive
Performance Rights Plan and with the approval of the Company’s
shareholders given at the Annual General Meeting held on 29
November 2021
Expired/ Lapsed during the year
Exercised during the year
Outstanding at 30 June 2022
Exercisable at 30 June 2022
2,143,800
1,918,266
(147,600)
(81,200)
3,833,266
-
1 Outstanding balance of shares at 1 July 2021 adjusted to reflect Capital consolidation of securities 10 to 1 on 10th Dec 2021.
Performance rights granted during and as at the year ended 30 June 2021:
NUMBER
EXERCISE
PRICE
Outstanding at 1 July 2020
Granted during the year:
Performance Rights as a Short-Term Incentive employees. The
Performance Rights will vest on achievement of performance
milestones set by the Board
Performance Rights as a Long-Term Incentive to employees. The
Performance Rights will vest on achievement of performance
milestones set by the Board
Performance Rights issued under the Company’s Incentive
Performance Rights Plan and with the approval of the Company’s
shareholders given at the Annual General Meeting held on
21 December 2020
Expired/Lapsed during the year
Exercised during the year
Outstanding at 30 June 2021
Exercisable at 30 June 2021
2,000,000
7,400,000
7,600,000
32,000,000
(12,545,000)
(15,017,000)
21,438,000
-
$0.66
FAIR VALUE PER
PERFORMANCE
RIGHT
$0.024
0.037
0.037
0.06
-
-
-
-
-
-
-
-
-
-
-
-
-
*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 (2021: $0.00)
The weighted average remaining contractual life for rights outstanding at 30 June 2022 was 3 years (2021: 3.81 years)
The weighted average fair value of rights issued during the year was $0.66 per right (2021: $0.06273)
2022 ANNUAL REPORT 81
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
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 the year ended 30 June 2022:
9-Dec-2021 – unvested LTI Performance Rights to vest on achievement of performance
criteria by 29 Nov 2025 or the Performance Rights will lapse
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Fair value per performance right
(WA weighted average)
Options and performance rights granted during the year ended 30 June 2021:
8-Sep-2020 – unvested STI Performance Rights to vest on achievement of
performance criteria by 8 Sep 2021 or the Performance Rights will lapse
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Fair value per performance right
8-Sep-2020 – unvested LTI Performance Rights to vest on achievement of
performance criteria by 8 Sep 2024 or the Performance Rights will lapse
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Fair value per performance right
5-Feb-2021 – unvested Performance Rights to vest on achievement of
performance criteria by 5 Feb 2025 or the Performance Rights will lapse
WA Share price on date of grant
WA Risk-free interest rate
Dividend yield
Expected volatility
Fair value per performance right
(WA weighted average)
$0.66
0.75%
0%
77%
$0.66
$0.037
0.75%
0%
77%
$0.037
$0.037
0.75%
0%
77%
$0.037
$0.06
0.75%
0%
77%
$0.06
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 $610,449 (2021: $856,325) is $Nil (2021: $Nil) relating to the shares issued during the year, $23,360*
(2021: -$127,405*) relating to options granted during the year and prior years, and $587,089* (2021: $983,730*) relating to
performance rights granted during the year and prior years.
* Includes write back of non-market based Options and Performance Rights expired unvested during the year.
82 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
20. CONTINGENCIES AND COMMITMENTS
Lease commitments - Group as a lessee
The maturity analysis of lease payments as at 30 June are as follows
Up to 1 year
1 to 5 Years
Capital Commitments
At 30 June 2022, the Group has no capital commitments (2021: Nil).
Contingencies
At 30 June 2022, the Group has no contingencies (2021: Nil).
21. KEY MANAGEMENT PERSONNEL DISCLOSURE
Salary and fees – short term benefits
Non-monetary benefits
Superannuation
Share based payments^
Termination Payments
2022
$
2021
$
122,110
214,958
337,068
12,425
20,708
33,133
2022
$
2021
$
1,720,824
1,078,312
-
93,384
556,355
-
18,240
80,163
787,526
191,661
2,370,563
2,155,902
^ Includes the write back of the share-based payments previously recognised for options and performance rights that lapsed during the period.
Loans to KMP’s
No loans were made to KMPs during the financial year (2021: Nil)
Other transaction and balances with KMPs
There were no other related party transactions with KMPs during the year (2021: $89,677). The balance outstanding at
30 June 2022 and included in trade creditors is $nil (2021: $1,183).
2022 ANNUAL REPORT 83
Annual Financial Report 05.
Notes to the
Financial Statements (Continued)
22. GROUP STRUCTURE
Parent and subsidiaries
The parent and the ultimate parent entity of the Group is Peak Rare Earths Limited, a company listed on the Australian
Securities Exchange.
The components of the Group are:
INCORPORATION
2022
2021
OWNERSHIP INTEREST
Parent
Peak Rare Earths Limited
Controlled entities
PRL Pty Ltd
Peak Hill Gold Mines Pty Ltd
Redpalm Pty Ltd
Pan African Exploration Limited
Peak Resources (Tanzania) Limited
Peak African Minerals Limited
PR Ng Minerals Limited (Indirectly)
Peak Technology Metals Limited
Teesside Rare Earth Elements Limited (indirectly)
Ngualla Group UK Limited (indirectly)
23. FINANCIAL INSTRUMENTS
Australia
100%
100%
Australia
Australia
Australia
Australia
Tanzania
Mauritius
Tanzania
United Kingdom
United Kingdom
United Kingdom
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
The financial instruments of the Group are (i) cash and cash equivalents, including other financial assets; (ii) trade and
other receivables; (iii) investments, (iv) trade and other payables, v) royalty liability.
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.
Cash and cash equivalents
Trade and other receivables
Investments
Trade and other payables
Royalty liability
2022
$
2021
$
9,479,379
2,680,367
974,411
8,000
732,455
8,000
(2,447,973)
(576,746)
-
(5,686,663)
The carrying amount of financial instruments closely approximate their fair value on account of the short maturity cycle
except for royalty liability. The carrying amount of royalty liability approximates its fair values as it is subject to market rates
(Level 2).
84 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
Credit Risk
The Group’s credit risks arise from potential default of trade and other receivables, cash and cash equivalents and other
financial assets. The maximum credit exposure is limited to the carrying amount of trade and other receivables of $974,411
at 30 June 2022 (2021: $732,455).
As at 30 June 2022, the receivable balances consist primarily of UK VAT and GST credits. Management does not consider
the UK VAT or 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:
2022
2021
UP TO 3
MONTHS
$
> 3 MONTHS
TOTAL
$
$
UP TO 3
MONTHS
$
> 3 MONTHS
TOTAL
$
$
Financial liabilities
Trade and other payables
(2,447,973)
-
(2,447,973)
(576,746)
Lease Liabilities
Royalty liability
316,643
316,643
-
-
-
-
-
-
-
(576,746)
-
(5,686,663)
(5,686,663)
Total financial liabilities
(2,447,973)
316,643
(2,131,330)
(576,746)
(5,686,663)
(6,263,409)
Financial assets
Cash and cash equivalents
9,479,379
Investments
Trade and other receivables
-
974,411
63,794
8,000
-
9,543,173
2,680,367
-
2,680,367
8,000
974,411
-
732,455
8,000
-
8,000
732,455
Total financial assets
10,453,790
71,794
10,525,584
3,412,822
8,000
3,420,822
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. Trade and 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.
2022 ANNUAL REPORT 85
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
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
Foreign currency risk
2022
$
2021
$
9,479,379
2,680,367
94,794
(94,794)
26,804
(26,804)
The Group’s exposure to foreign currency price risk is limited to the USD denominated royalty liability. At 30 June 2022, the
Group had an outstanding balance of USD $nil (2021: USD $5,191,191). The Group will transfer cash and cash equivalents
into foreign currency to meet short term expenditure obligations.
The Group’s expenditure obligations in Tanzania are primarily in US dollars as a result the Group is exposed to fluctuations
in the US dollar to Australian currency. These exposures are not subject to a hedging programme. The Board and
management from time to time having regard to likely forward commitments review this policy.
The following table demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other
variables held constant. The impact on the Group’s profit before tax and equity is due to changes in the fair value of the
USD denominated loan balances.
USD$ denominated Royalty liability balances in AU$
Impact on profit and equity: +5% movement in USD exchange rate
Impact on profit and equity: -5% movement in USD exchange rate
2022
$
2021
$
-
-
-
5,686,663
284,333
(284,333)
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 2022:
1-JUL-21
CASH FLOWS
2022
FOREIGN
EXCHANGE
MOVEMENT
OTHER
MOVEMENT
30-JUN-22
$
$
$
$
$
Financial liabilities
Royalty liability
Lease liabilities
5,686,663
(5,974,811)
197,460
-
(40,671)
-
90,688
357,314
Total liabilities from financing activities
5,686,663
(6,015,482)
197,460
448,002
-
316,643
316,643
86 PEAK RARE EARTHS
05. Annual Financial Report Notes to the
Financial Statements (Continued)
Changes in liabilities arising from financing activities during the year ended 30 June 2021:
1-JUL-20
CASH FLOWS
2021
FOREIGN
EXCHANGE
MOVEMENT
OTHER
MOVEMENT
30-JUN-21
$
$
$
$
$
Financial liabilities
Royalty liability
Lease liabilities
5,857,433
-
(494,674)
323,904
5,686,663
-
(3,220,392)
-
3,220,392
-
Total liabilities from financing activities
5,857,433
(3,220,392)
(494,674)
3,544,296
5,686,663
24. SUBSEQUENT EVENTS
On 15 August 2022, Russell Scrimshaw a distinguished corporate executive was appointed to the role of Executive
Chairman. Following this appointment, the Company undertook a Board reorganisation with Tony Pearson transitioning
to the role of Non-Executive Deputy Chairman and Managing Director Bardin Davis assuming the role of Chief Executive
Officer, stepping down from the Board to focus on his executive duties.
On 31 August 2021, Peak announced that it expects the BFS Update to be completed between mid-late October 2022.
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.
2022 ANNUAL REPORT 87
Annual Financial Report 05. Notes to the
Financial Statements (Continued)
25. PARENT ENTITY DISCLOSURE
The following details information related to the parent entity, Peak Rare Earths Limited. The information presented here has
been prepared using consistent accounting policies as presented in Note 2.
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payment reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2022
$
2021
$
10,264,535
3,347,560
63,326,337
46,208,048
73,590,872
49,555,608
2,296,564
9,210,260
420,005
7,834,740
11,506,824
8,254,745
62,084,048
41,300,863
140,805,369
107,717,730
5,318,016
4,707,567
(84,039,337)
(71,124,434)
62,084,048
41,300,863
(12,914,903)
(2,775,363)
-
-
(12,914,903)
(2,775,363)
Peak Rare Earths Limited had no commitments to purchase property, plant and equipment or contingent liabilities at 30
June 2022 (2021: None).
88 PEAK RARE EARTHS
05. Annual Financial Report
Directors’ Declaration
In accordance with a resolution of the directors of Peak Rare Earths Limited, I state that:
In the opinion of the Directors:
(a) 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;
(b) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note
2 to the financial statements;
(c) the attached financial statements and notes thereto for the financial year ended 30 June 2022 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 2022 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
Russell Scrimshaw
Executive Chairman
20 September 2022
2022 ANNUAL REPORT 89
Annual Financial Report 05.
06.
ASX Additional Information
SHAREHOLDER INFORMATION
As at 12 October 2022
QUOTED SECURITIES DISTRIBUTION
The distribution of members and their holding of quoted equity securities in the Company were as follows:
SIZE OF HOLDING
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
NUMBER OF FULLY PAID
ORDINARY SECURITIES
522,597
3,944,421
4,655,785
42,455,324
155,770,410
207,348,537
There were 1,276 holders with less than a marketable parcel of fully paid shares representing 844,265 shares.
SUBSTANTIAL SECURITY HOLDERS
The substantial shareholder listed in the Company’s register was:
HOLDER
NUMBER OF SHARES
PERCENTAGE OF ISSUE
CAPITAL
SHENGHE RESOURCES (SINGAPORE) PTE LTD
41,153,414
19.85%
UNQUOTED SECURITIES
CLASS OF EQUITY SECURITY
EXPIRY DATE
NUMBER
Vested Options exercisable at $0.30
Unvested Options exercisable at $1.50
5 March 2023
21 June 2023
Unvested Performance Rights exercisable at $Nil
5 February 2025
Unvested Performance Rights exercisable at $Nil
9 December 2025
Unvested Performance Rights exercisable at $Nil
29 September 2026
559,000
500,000
2,015,000
1,818,266
2,053,400
NUMBER OF
SECURITY HOLDERS
5
1
3
9
9
Names of person holding greater than 20% of a class of unquoted securities not issued under an employee incentive
scheme:
CLASS OF EQUITY SECURITY
EXPIRY DATE
Unvested Options exercisable at $1.50
5 March 2023
NUMBER
500,000
HOLDERS
Ciao! Punto Pty Limited AFT Ciao!
Punto Family Trust
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.
90 PEAK RARE EARTHS
RESTRICTED SECURITIES
As at 12 October 2022, there were no restricted securities.
TWENTY LARGEST SECURITY HOLDERS
The names of the twenty largest holdings of quoted equity securities are as follows:
NAME
NUMBER
% HELD
SHENGHE RESOURCES (SINGAPORE) PTE LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
CS FOURTH NOMINEES PTY LIMITED
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
SAIL AHEAD PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
SPARTA AG
ASHABIA PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
PASAGEAN PTY LIMITED
BUSHELL NOMINEES PTY LTD
SAMBOLD PTY LTD
ONE MANAGED INVESTMENT FUNDS LIMITED
PINNACLE SUPERANNUATION PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MEURER INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CRX SECURITIES PTY LIMITED
MR RICHARD SMITH
Total
Balance of register
Total on issue
41,153,414
7,534,969
5,731,327
3,352,255
3,125,000
3,060,000
3,051,401
2,934,599
2,706,042
2,565,000
2,120,885
2,083,098
2,000,000
2,000,000
2,000,000
1,882,924
1,600,000
1,579,399
1,550,000
1,544,721
1,543,750
1,423,334
19.85
3.63
2.76
1.62
1.51
1.48
1.47
1.42
1.31
1.24
1.02
1.00
0.96
0.96
0.96
0.91
0.77
0.76
0.75
0.74
0.74
0.69
96,542,118
110,806,419
207,348,537
46.56
53.44
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 GOVENANCE STATEMENT
The Company has adopted the recommendations of the ASX Corporate Governance Council’s Principles and
Recommendations (Third Edition) in regard to the Corporate Governance Disclosures and provides disclosure of the
Company’s Corporate Governance Statement on the Company’s website at: http://www.peakresources.com.au/corporate-
governance/.
2022 ANNUAL REPORT 91
ASX Additional Information 06. Tenement Schedule &
Reserves and Resources
07.
PROJECT
TENEMENT
%
STATUS
Tanzanian Projects
Mlingi
Ngualla
PL 10897/2016
100
Granted
SML 00601/2017
100 Application
ARRANGEMENT/
COMMENT
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
Compliance Statement
Information contained in this presentation relating to financial forecasts, production targets, infrastructure, project
execution, cost estimating, metallurgical test work, exploration results, Mineral Resource estimates , Ore Reserve estimates
and studies are taken from the Company’s ASX announcements dated 22 February 2016, 2 March 2017, 12 April 2017, 28
August 2017, 12 October 2017, 25 August 2021 and 28 October 2021. The ASX announcements are available to view on /
https://www.peakresources.com.au/asx-announcements/. The Company confirms that at this time it is not aware of any
confirmed new information or data that materially affects the information included in the relevant announcement and that
all material assumptions and technical parameters underpinning the estimates in the relevant announcement continue
to apply and have not materially changed. The Company confirms that at this time the form and context in which the
Competent Person’s findings are presented have not been materially modified from the original market announcements.
The Company also advises that it is undertaking a Bankable Feasibility Study Update and negotiating an Economic
Framework Agreement with the Government of Tanzania, and the outcome of one or both, may confirm new information or
data that materially affects the information included in the relevant announcement.
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)
Proved
Probable
Total
17.0
1.5
18.5
REO %
4.78
5.10
4.80
CONTAINED REO
TONNES
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.
92 PEAK RARE EARTHS
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
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total REO
REO GRADE (%)
% OF TOTAL REO
PROVED
PROBABLE
1.318
2.305
0.228
0.788
0.077
0.014
0.029
0.002
0.004
0.000
0.001
0.000
0.001
0.000
0.010
4.78
1.418
2.456
0.243
0.838
0.082
0.015
0.031
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
5.10
ALL
1.326
2.317
0.229
0.792
0.077
0.014
0.030
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.80
PROVED
PROBABLE
27.59
48.25
4.77
16.49
1.61
0.30
0.62
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
27.80
48.15
4.77
16.43
1.61
0.28
0.60
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.19
ALL
27.61
48.24
4.77
16.49
1.61
0.30
0.62
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100.00
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
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.
2022 ANNUAL REPORT 93
Tenement Schedule & Reserves and Resources 07. Table 3: Classification of All Mineral Resources for the Ngualla Rare Earth Project at a 1.0% REO cut-off grade.
LOWER
CUT-OFF
GRADE
1.0% REO
MINERAL RESOURCE AS AT 30 JUNE 2020
JORC
CATEGORY
ORE TONNES
(MILLIONS)
REO %
CONTAINED
REO TONNES
BASO4
%
Measured
Indicated
Inferred
Total
86.1
112.6
15.7
214.4
2.61
1.81
2.15
2.15
2,250,000
2,040,000
340,000
4,620,000
20.2
13.8
17.6
16.6
NGUALLA ALL
MINERAL
RESOURCES
* 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.
LOWER CUT-
OFF GRADE
1.0% REO
3.0% REO
JORC
CATEGORY
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
MINERAL RESOURCE AS AT 30 JUNE 2020
ORE TONNES
(MILLIONS)
REO %
CONTAINED
REO TONNES
BASO4
%
18.9
1.9
0.5
21.3
1.7
0.4
19.9
19.9
4.75
4.85
4.43
4.75
5.14
4.84
4.90
4.90
900,000
90,000
20,000
1,010,000
90,000
20,000
980,000
980,000
37.8
38.3
31.5
37.7
39.3
35.4
38.6
38.6
NGUALLA ALL
MINERAL
RESOURCES
* 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.
94 PEAK RARE EARTHS
07. Tenement Schedule & Reserves and Resources 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
REO GRADE
(%)
% OF TOTAL
REO
REO GRADE
(%)
% OF TOTAL
REO
REO GRADE
(%)
% OF TOTAL
REO
0.587
1.039
0.104
0.348
0.036
0.007
0.016
0.001
0.003
0.000
0.001
0.000
0.001
0.000
0.010
2.15
27.25
48.23
4.81
16.2
1.66
0.34
0.75
0.07
0.16
0.02
0.06
0.00
0.04
0.00
0.47
100
1.310
2.293
0.227
0.784
0.076
0.014
0.029
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.75
27.58
48.27
4.77
16.5
1.60
0.29
0.61
0.05
0.07
0.01
0.03
0.00
0.01
0.00
0.20
100
1.353
2.364
0.234
0.806
0.078
0.014
0.030
0.002
0.004
0.000
0.002
0.000
0.001
0.000
0.010
4.90
27.63
48.27
4.77
16.5
1.60
0.29
0.61
0.05
0.08
0.01
0.03
0.00
0.01
0.00
0.20
100
OXIDE
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
* Figures may not sum due to rounding.
2022 ANNUAL REPORT 95
Tenement Schedule & Reserves and Resources 07. 08.
Corporate Directory
PEAK RARE EARTHS LIMITED
ABN:72 112 546 700
DIRECTORS
Russell Scrimshaw
Executive Chairman
Tony Pearson
Non-Executive Deputy Chair
Abdullah Mwinyi
Non-Executive Director
Giselle Collins
Non-Executive Director
AUDITORS
Ernst and Young
11 Mounts Bay Road
Perth WA 6000
Giles Stapleton
Non-Executive Director
SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
CONTACT DETAILS
Website:
www.peakrareearths.com
Email:
info@peakrareearths.com
Telephone:
(08) 9200 5360
Facsimile:
(08) 9226 3831
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
Home Exchange: Perth, Western Australia
Code:
PEK
COMPANY SECRETARY
Philip Rundell
REGISTERED OFFICE
Peak Rare Earths Limited
Level 9, 190 St Georges Terrace
Perth WA 6000
SOLICITORS
Corrs Chambers Westgarth (Australia)
Level 6, Brookfield Place Tower 2
123 St Georges Terrace
Perth WA 6000
Clyde & Co/Ako Law (Tanzania)
11th Floor, Jubilee Towers
Ohio Street ,Dar es Salaam
96 PEAK RARE EARTHS
HEAD OFFICE PERTH
HEAD OFFICE (TANZANIA)
Level 9, 190 St Georges Terrace
Perth WA 6000
First Floor Mezzanine,
Kambarage Tower, Kikuyu Avenue
PO Box 7362
Cloisters Square WA 6850
+61 8 9200 5360
+61 8 9226 3831
info@peakrareearths.com
www.peakrareearths.com
PO Box 2764
Dodoma, Tanzania