2023
ANNUAL
REPORT
2 | PEAK RARE EARTHS
CONTENTS
01. Who We Are
02. Message from the Executive Chairman
03. Message from the Chief Executive Officer
04. Review of Operations
05. Sustainability
06. 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
07. ASX Additional Information
08. Tenement Schedule, Reserve & Resources
09. Corporate Directory
4
8
10
12
20
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43
61
63
69
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71
72
73
102
103
105
108
2023 ANNUAL REPORT | 3
01.
WHO WE ARE
Peak Rare Earths Limited (the “Company” or “Peak”) is focused on developing its world-class
Ngualla Rare Earth Project (“Ngualla Project”) in Tanzania.
Development of the Ngualla Project will create substantial shareholder value, generate
thousands of jobs and billions of dollars of revenue for the Government of Tanzania over its
life, enhance infrastructure and economic opportunities for the local community and produce
rare earths that will support low carbon technologies in powering the green transformation.
The Ngualla Project is widely regarded as one of the world’s premier underdeveloped
rare earths projects. It contains one of the largest and highest-grade Neodymium
and Praseodymium (“NdPr”) deposits in the world.
It is located approximately 147km from the city of
Mbeya in the Songwe Region in southern Tanzania
and on the edge of the East African Rift Valley.
The Ngualla Project has been granted a Special Mining
Licence and benefits from an executed Framework
Agreement with the Government of Tanzania.
4 | PEAK RARE EARTHS
The Ngualla Project entails the construction of a mine, mill, beneficiation plant, community
projects and associated infrastructure. The concentrate produced will initially be shipped to
refineries that will produce “NdPr Oxide” and other separated rare earths products.
Longer-term there is the potential for the Ngualla Project to move further downstream into
the production of a Mixed Rare Earth Carbonate and potentially NdPr Oxide.
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.
High-Grade Ore Reserves1
TREO - 4.80% and NdPr - 1.02%
Low Radionuclides1
U - 15ppm and Th - 53ppm
Multi-Generational
24-year life-of-mine based on
Ore Reserves, which account
for less than 20% of Mineral
Resources1
Significant Explorations and
Development Upside
Includes heavy rare earths,
niobium, phosphate and
fluorspar
Compelling Project Economics1
NPV8% of USD$1,483m and IRR
of 37.3%
Significant milestones were achieved at the Ngualla
Project during FY2023 which support the future
development of the Ngualla Project.
1See Bankable Feasibility Study Update announced on ASX on 24
October 2022 and the Compliance Statement on page 105.
2023 ANNUAL REPORT | 5
VISION AND VALUES
We believe that our vision and values are well
captured in the Swahili phrase “Kazi Wajibu
Utu”, which reflects the themes of “Work,
Responsibility and Humanity”.
6 | PEAK RARE EARTHS
VALUES
Our five values guide our behaviours
and the decision making of the
Company.
Safety, Health & Wellbeing
Commitment to safety best
practice and the health and
wellbeing of our people
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
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.
2023 ANNUAL REPORT | 7
02.
MESSAGE FROM THE
EXECUTIVE CHAIRMAN
On top of these geological benefits, the Ngualla
resource has the capacity to support an operation
with strong financial returns. As outlined in our
Updated Bankable Feasibility Study released in
October 2022, Ngualla’s NPV, IRR and operating cash
flow potential places it right at the top of the world’s
most attractive undeveloped rare earths projects.
Since I joined the business in July 2022, I have been
impressed throughout our interactions with the
Government of Tanzania which culminated in the
signing of a Framework Agreement for Ngualla in
April 2023. I would like to again extend my thanks
to Her Excellency, Dr Samia Suluhu Hassan, the
President of Tanzania; Honourable Minister for
Minerals; Honourable Deputy Minister for Minerals;
Cabinet members; Permanent Secretary for Minerals;
Honourable MP for Songwe Province; Regional
Commissioner for the Songwe Region; and the District
Commissioners of the Songwe District for their support
in reaching our agreement.
Peak is committed to delivering the foreign direct
investment, direct and indirect jobs and the
community development benefits from the transition
of Ngualla through construction and operations. We
have already seen these benefits begin during our
studies phase and we will be delighted to see a step
change when Tanzania becomes one of the major
rare earth producers outside of China.
Secondly, in terms of having the right people, during
the year we continued to evolve our core team to
capitalise on the latent economic potential of the
Ngualla resource.
At a Board level, we appointed three highly regarded
professionals as Non-Executive Directors in Ian
Chambers, Nick Bowen and Hannah Badenach.
Shasha Lu also joined the Board as the nominee of
substantial holder, Shenghe.
Mr Chambers is a former Head of Institutional
Equities and Head of Wealth Management at Morgan
Stanley Australia. He brings more than 35 years of
experience in international financial markets including
institutional securities, wealth management and
capital markets.
Mr Bowen has 35 years with ASX-listed construction
and contract mining companies operating in
Australia, Africa and other overseas jurisdictions
where he was involved in the construction,
development and operation of international mining
projects. His previous roles include Managing Director
of Macmahon Holdings Limited and Executive Global
Head of Mining Services with Orica Limited.
RUSSELL SCRIMSHAW
Dear Peak Shareholders,
It is my pleasure to present to you the Annual Report
for Peak Rare Earths Limited (“Peak” or “Company”) for
the 2023 Financial Year.
Based on my several decades of experience in the
global resources industry, I have come to learn there
are three simple but critical factors in developing a
successful greenfields resource project:
1. An outstanding resource or deposit;
2. A highly capable and motivated team; and
3. A supportive market for your product.
In all three categories Peak shareholders can have
confidence that the Company has the necessary
ingredients in place to grow the Company into an
important supplier of rare earths and critical minerals
in the future.
Firstly, our Ngualla Rare Earths Project (“Ngualla”)
has a high-grade rare earths deposit with a high
proportion of neodymium and praseodymium
(“NdPr”), two critical elements needed in
decarbonisation applications. The deposit is multi-
generational with a mine life of 24 years already
demonstrated and significant potential to extend.
The bastnaesite mineralisation which hosts the rare
earths has low radionuclides and has well understood
metallurgical characteristics.
Ngualla is also a multi-element carbonatite system
with potential for other high value critical minerals
such as niobium and phosphate which could provide
additional revenue streams in future years.
8 | PEAK RARE EARTHS
Ms Badenach has more than 20 years of experience in resources, supply
chain, business development, commodity trading and marketing in global
markets across Africa, Europe, Asia, South America and the Middle East.
She has held a number of senior positions with global commodity trading
house, Noble Resources Limited.
Ms Shasha Lu is Managing Director of Shenghe Resources Overseas
Development where she leads and manages overseas investment, cross-
border corporate management, international trade and the building of
a complete rare earth/monazite supply chain. Previous roles include
directorships with ASX-listed companies, Arafura Resources Limited and
Globe Metals and Mining Corporation.
Collectively they bring significant relevant experience to what we’re trying
to achieve at Peak.
I would also like to acknowledge the valuable contributions of Tony
Pearson and Giles Stapleton who both retired from their Non-Executive
Director positions in 2023.
Our management team led by Chief Executive Officer, Bardin Davis, was
further bolstered by senior metallurgical and geological appointments
as we prepare for development. The team delivered critical milestones in
FY2023 and early FY2024 which has made this period the most formative of
the Company’s life to date.
Through the execution of a binding offtake agreement for Ngualla and a
non-binding memorandum of understanding (MOU) for cooperation on
delivering an EPC and funding solution in August 2023, we have enhanced
the capabilities of our internal team with a partnership with Shenghe, one
of the world’s leading rare earths companies. This strategic co-operation
agreement differentiates Peak’s strategy from our development peers and
supports a pathway to a successful project funding solution for Ngualla
which we hope to achieve in FY2024.
Finally, in terms of the market, in my first letter to you as Executive
Chairman last year, I commented on the clear and rapidly growing role
NdPr plays in the permanent magnets needed to build the electric vehicles
and wind turbines essential to significantly reducing carbon emissions.
These trends have shown no signs of slowing and demand for NdPr is
forecast to roughly double in a decade from now, presenting a clear
market opportunity for Ngualla.
I trust you can see why we believe Peak has a tremendous opportunity
to become a significant global player in the burgeoning critical minerals
sector for decades to come. There are a range of aspiring rare earth
producers with mature development assets and we believe our underlying
resource, team and strategic partnership with Shenghe place Peak and
Ngualla at the front of the pack.
To you, our shareholders, I would like to express my gratitude for the
faith and support you have shown to the Company throughout the
year, including participation in the $2.5 million two tranche placement
completed in June 2023.
We look forward to moving through final engineering, project financing
and a development decision for Ngualla in FY2024.
We believe the Company has a very bright future. Although I feel our share
price does not reflect the advances we have made during the last twelve
months, I am very grateful to all our stakeholders for your ongoing support
and interest in the longer term value, success and benefits of Peak.
Yours faithfully,
Dr Russell Scrimshaw AM
Executive Chairman
2023 ANNUAL REPORT | 9
03.
MESSAGE FROM THE
CHIEF EXECUTIVE OFFICER
BARDIN DAVIS
Dear Peak Shareholders,
Our vision for Peak is to be a leading international rare earths and critical minerals
group that develops world-class projects, creates substantial shareholder
value, supports and invests in our communities and plays an important role in
decarbonisation and the green energy transformation.
During the 2023 Financial Year, Peak completed critical steps towards fulfilling this
vision. We believe our Ngualla Rare Earths Project (“Ngualla Project”) is clearly now
the most financially attractive, bankable and deliverable rare earths development
project in the world today. This view has also been supported by our strategic
partner Shenghe, one of the world’s leading rare earths companies.
The completion of the Bankable Feasibility Study Update (“BFS Update”) in October
2022 built a strong foundation for this belief. The BFS Update re-affirmed the
world-class nature of the Ngualla Project from both a technical and economic
perspective. It made advancements on the technical studies undertaken for the
original 2017 Bankable Feasibility Study and applied a current financial and market
overlay to those findings. Importantly, the BFS Update was also aligned with our
adoption of a staged integration and development approach.
A more detailed summary of the BFS Update is contained within the Operations
Review of this Annual Report which I would encourage you to review. Highlights
included a post-tax NPV(8%, real) of US$1,483m (A$2,353m), an equity IRR of 37.3%
and average operating cashflow per annum of $438m for the 24-year life of mine,
based on the then prevailing Adamas rare earth pricing forecasts. These outcomes
were based on the Ngualla Ore Reserve, which accounts for less than 20% of overall
Mineral Resources, highlighting the multi-generational potential of the Ngualla
Project deposit.
10 | PEAK RARE EARTHS
We believe that Ngualla has the longer-term
potential to be not only multi-generational, but
also a multi-commodity project. To this end,
a new exploration programme focused on the
critical minerals’ potential of the Ngualla Deposit
has commenced. No exploration drilling had
been undertaken for over five years as Peak
focused on development studies and approvals.
The new exploration programme entails an initial
RC drilling campaign of approximately 4,000m
and builds upon historical drilling and trenching,
which delivered high-grade intercepts of rare
earths, niobium, phosphate and fluorspar.
Two landmark milestones were achieved in
April 2023, being the signing of the Framework
Agreement and the grant of the Special Mining
Licence (“SML”) for Ngualla Project.
The Framework Agreement was executed in the
presence of Her Excellency, Dr Samia Suluhu
Hassan, at the State House in Dodoma. It sets
out the basis of the Government of Tanzania’s
agreement for the licencing, development,
economic benefit sharing and the formation of
a joint venture with respect to the development
and operation of the Ngualla Project. In
alignment with the Framework Agreement, the
Government of Tanzania holds a 16% interest in
Peak’s Tanzanian operating subsidiaries, Mamba
Minerals Corporation (operator of the Ngualla
Project) and Mamba Refinery Corporation
(operator of any future Tanzanian refining and
downstream operations).
The SML covers an initial area of approximately
18km2, which contains the Ngualla Project
deposit and applies for a term of up to 30 years.
We were delighted to celebrate the Ngualla
Project Framework Agreement and SML with over
5,000 members of our local Ngwala community
in early July 2023. The Deputy Minister for
Minerals, the Hon. Dr. Steven Kiruswa was the
guest of honour. Other dignitaries included
Members of Parliament, the Songwe District
Commissioner, senior representatives from
the Mining Commission and members of the
Songwe District Council.
Our sustainability philosophy is well captured
by the Swahili phrase “Kazi Wajibu Utu”, which
reflects the themes of “Work, Responsibility
and Humanity”. We actively support the local
Ngwala community through the construction
of classrooms and teachers housing, the
development and maintenance of local road
and infrastructure and through the funding of
local medical clinics as well as sporting and
cultural events. The construction of the Ngualla
Project will deliver substantial benefits to both
the community and Tanzania including the
creation of thousands of jobs, the development
of additional infrastructure and the generation
of substantial revenue for the Government of
Tanzania.
The translation of our non-binding
Memorandum of Understanding (“MOU”) with
Shenghe in October 2022 into a binding offtake
agreement in August 2023 is a key enabler for
the Project. The offtake covers 100% of the rare
earth concentrate produced for an initial term of
seven years, significantly de-risking the Ngualla
Project. The concurrent signing of a non-binding
MOU for co-operation on delivering a fixed
price and turnkey Engineering, Procurement
and Construction (“EPC”) and project funding
solution provides a clear and highly credible de-
risked pathway to project development.
The strategic alliance with Shenghe is also
expected to deliver other benefits. Collaboration
to lower the upfront capital is underway and
Shenghe’s extensive experience in beneficiating
and processing bastnaesite rare earth ores,
such as those we have at Ngualla, will assist
in supporting the commissioning and further
optimisation of the Project. Following the signing
of the MOU with Shenghe, we are targeting a final
investment decision and start of construction
by the end of May 2024 and the completion
of construction by early 2026. Early works and
front-end engineering and design to support this
timeline are underway.
In May 2023 we completed a Placement to
raise $27.5 million (before costs) to a range
of institutional and high net worth investors.
Shenghe participated in the raising to top-up
its shareholding, as did several of our Directors.
The Placement leaves Peak well-funded as it
progresses to a final investment decision.
On behalf of the Company, I would like to extend
my thanks to our employees, contracting
partners, local communities, the Government
of Tanzania, our Board of Directors and our
shareholders for their engagement and support
throughout FY2023. The Peak team will be
working hard to continue our recent success in
advancing Ngualla in the upcoming period with
the aim of commencing construction ahead of
this time in 2024.
Yours sincerely,
Bardin Davis
Chief Executive Officer
2023 ANNUAL REPORT | 11
04.
REVIEW OF
OPERATIONS
Peak has continued to progress
the pre-development and
commercialisation of its world-class
Ngualla Project in Tanzania.
In August 2022, the Company made the strategic decision to
adopt a staged development approach entailing:
•
Initially developing the Ngualla Project on a
standalone basis to produce a high-grade rare earth
concentrate for export to third-party refiners; and
• Subject to the outcome of an independent feasibility
study, assess the potential to undertake further
downstream processing in the future in Tanzania,
including the development of a Mixed Rare Earth
Carbonate (MREC) refinery and possibly a final
separation facility.
The key events of the Company’s operations over the last 12
months and to the date of this Directors’ Report are as follows:
• Completion of the Ngualla Project Bankable Feasibility
Update;
• Execution of a Framework Agreement with the
Government of Tanzania for the Ngualla Project;
• Grant of a Special Mining Licence for the Ngualla
Project;
• Execution of a Binding Offtake Agreement (subject to
conditions precedent) and a Non-Binding Strategic
EPC and Funding MOU for Ngualla;
• Completion of a $27.5m capital raising;
• Commencement of FEED, early works planning and
procurement of long lead items;
• Undertaking a new critical minerals exploration
programme;
• Progression of the strategic sustainability roadmap;
and
• Key board and technical team appointments.
12 | PEAK RARE EARTHS
PROJECT METRICS AND FINANCIAL
SUMMARY
Financial outputs for the Ngualla Project
are shown below net of distributions to the
Government of Tanzania which
include
corporate taxes, royalties and other fees, and
dividends attributable to the Government of
Tanzania’s 16% Free Carried Interest (“FCI”).
The NPV for Peak’s interest in the Ngualla
Project is estimated at US$1,483m under the
base case pricing assumptions.
COMPLETION OF THE NGUALLA
PROJECT BANKABLE FEASIBILITY
UPDATE
During the year Peak completed a Bankable
Feasibility Study Update (“BFS Update”) on
the Ngualla Project. The BFS Update followed
a Bankable Feasibility Study (“BFS”) that was
completed in April 2017. Both the BFS and BFS
Update are backed by extensive pilot plant
test work, detailed engineering design and
cost studies, and JORC 2012 Compliant Ore
Reserves and Mineral Resources estimates.
The BFS Update was commissioned in August
2021 to reflect a material improvement in
the outlook for Neodymium-Praseodymium
in
(“NdPr”) Oxide prices, an expansion
production
in
capital expenditure and operating costs,
optimisation opportunities, a reduction in
carbon footprint and the potential to further
de-risk development.
capacity, movements
The BFS Update supports a technically robust
project with an increased capacity and
highly attractive economics and shareholder
returns.
2023 ANNUAL REPORT | 13
PRODUCTION METRICS
UNIT
YEARS 1-6
GRADE MINED
% TREO
5.40%
CONCENTRATE PRODUCTION
CONCENTRATE PRODUCTION
CONCENTRATE GRADE
NdPr % (OF CONCENTRATE BASKET)
MINE LIFE
COST METRICS
PRE-PRODUCTION CAPITAL
ktpa dry
ktpa TREO
% TREO
% mass
Years
UNIT
$m
AVERAGE ANNUAL OPERATING COST
$m p.a.
AVERAGE ANNUAL OPERATING COST
$/kg TREO
REVENUE AND PROFIT METRICS²
UNIT
40.5
18.2
45.00%
22.60%
24¹
US$
321
93
5.8
US$
LOM
4.80%
36
16.2
45.00%
22.30%
A$²
509
148
9.2
A$
AVERAGE PRICE
$/kg NdPr
$232/kg
$368/kg
AVERAGE ANNUAL REVENUE
AVERAGE ANNUAL EBITDA
AVERAGE OPERATING CASHFLOW
FINANCIAL OUTPUTS³
PEAK POST-TAX NVP8%, REAL
EQUITY IRR
$m p.a.
$m p.a.
$m p.a.
UNIT
$m
%
538
448
276
US$
1,483
37.30%
854
711
438
A$
2,353
¹Based on Ore Reserves only
2Based on AUD-USD exchange rate of USD 0.63/ AUD $1.00 (as of 21 October 2022)
3Real discount rate (all modelling is in real terms)
Further details on the BFS Update study
outcomes can be found in the Company
announcement dated 24 October 2022, titled
“Completion of Ngualla Project BFS Update”.
The Company confirms that at this time
it is not aware of any new information or
data that materially affects the information
included in the announcement and that
all material assumptions and technical
the estimates
parameters underpinning
continue to apply and have not materially
changed. The Company further advises
that there are various workstreams being
undertaken, including Front End Engineering
and Design (“FEED”), a dual-track assessment
of Engineering, Procurement, Construction
and Management (“EPCM”) and Engineering,
Procurement and Construction
(“EPC”)
execution models and further optimisation of
the project flow sheet, the outcomes of which
may change the information included in the
BFS Update in future.
14 | PEAK RARE EARTHS
SIGNING OF FRAMEWORK AGREEMENT FOR THE NGUALLA PROJECT
On 17 April 2023 a binding Framework Agreement was executed with the Government of
Tanzania with respect to the Ngualla Project. The Framework Agreement sets out the basis of
the Government of Tanzania’s agreement for the licencing, development, economic benefit
sharing and the formation of entities held by Peak and the Government of Tanzania with
respect to the development and operation of the Ngualla Project.
The signing of the Framework Agreement followed the establishment and incorporation of
the following companies held by Peak and the Government of Tanzania:
• Mamba Minerals Corporation Limited
(“MML”) – that owns and will operate the
Ngualla Project; and
• Mamba Refinery Corporation Limited
(“MRL”) – that will own and operate
any future Tanzanian refining and
downstream operations.
Both entities are owned 84% by Peak (via a 100% owned UK subsidiary, Ngualla Group UK
Limited) and 16% by the Government of Tanzania (via the Treasury Registrar).
Peak and the Government of Tanzania have also agreed a series of other documents
contemplated by the Framework Agreement relating to the formation and management
of MML and MRL, including Memorandum and Articles of Association and a Shareholders
Agreement.
2023 ANNUAL REPORT | 15
For the year ended 30 June 2023, the Group recognised a share-based payment for
government participation amounting to $21,189,140 (2022: $Nil) as required and determined
by accounting standards. Estimating the fair value of the share-based payment arising on
the issue of the 16% interest in the Ngualla Project to the Tanzanian Government required
determination of an appropriate valuation model under accounting standard AASB 2. The
fair value was determined by applying 16% of the Group’s adjusted market capitalisation of
$132,432,122 at the date on which the Framework Agreement was executed.
GRANT OF SPECIAL MINING LICENCE FOR THE NGUALLA PROJECT
On 25 April 2023, the Government of Tanzania granted a Special Mining Licence (“SML”) for the
Ngualla Project to MML, which is owned 84% by Peak (via a 100% owned UK subsidiary, Ngualla
Group UK Limited) and 16% by the Government of Tanzania (via the Treasury Registrar).
The Ngualla Project SML has initially been granted over the original SML application area
of approximately 18.14km2. Under the Framework Agreement, the Government of Tanzania
has undertaken to expand the SML area to include an existing Prospecting Licence (PL
10897/2016) and a recently expired Prospecting Licence (PL 9157/2013), which would
increase the SML area to approximately 54.64km2.
Ngualla Project – Special Mining Licence Area
The initial term of the SML is the shorter of 33 years or the life of the mine, with the ability to
extend on application in accordance with the law at the time.
16 | PEAK RARE EARTHS
COMPLETION OF A $27.5 MILLION CAPITAL RAISING
During the June 2023 quarter, Peak completed a $27.5 million (before costs) institutional
placement with the issuance of 55 million shares at an offer price of $0.50 per share.
Peak’s largest shareholder, Shenghe Resources (Singapore) Pte Ltd (“Shenghe”), participated
in the placement and topped-up its shareholding from 19.8% to 19.9%. Two of Peak’s directors
also participated in the placement and further increased their shareholdings. The placement
was also well supported by other existing shareholders and resulted in a range of new high
quality institutional and high net worth investors joining the register.
SIGNING OF A BINDING OFFTAKE AGREEMENT AND A NON-BINDING
STRATEGIC EPC AND FUNDING MOU FOR NGUALLA
On 19 October 2022, Peak and Shenghe signed a non-binding MOU covering concentrate
offtake and strategic co-operation in support of the development of the Ngualla Project.
On 9 August 2023, Peak executed a binding offtake agreement with Shenghe and signed a
non-binding memorandum of understanding (“MOU”) covering cooperation on delivering
an EPC and funding solution with Shenghe’s holding company, Shenghe Resources Holding
Co., Ltd (Shenghe Holdco).
The Binding offtake agreement terms include:
100% of rare earth concentrate;
•
• Minimum of 50% of intermediate and final rare earth products;
• An initial term of 7 years; and
• A number of conditions precedent, including Peak shareholder approval.
The non-binding MOU supports an integrated development and funding solution with:
• Shenghe Holdco to arrange and provide a fixed price and turnkey Engineering,
Procurement and Construction (“EPC”) solution and project funding solution;
• Peak and Shenghe Holdco to collaborate around opportunities to reduce capital and
operating costs, expedite construction and further optimise the Ngualla project; and
• Potential for Shenghe Holdco to subscribe for a significant non-controlling equity
interest in the Ngualla Project (via a 100% Peak owned subsidiary), which would
substantially lower Peak’s equity and debt funding requirements.
COMMENCEMENT OF FEED, EARLY WORKS PLANNING AND PROCUREMENT
OF LONG LEAD ITEMS
A Front-End Engineering Design (“FEED”) study for the Ngualla Project was commenced in
the June 2023 quarter to build upon the Bankable Feasibility Study Update (“BFS Update”)
completed in October 2022.
Key components of the FEED study include:
• An assessment of contract mining and surface mining technology;
• A logistics study, including an evaluation of a rail option with the Tanzania-Zambia
Railway Authority (“TAZARA”) for transportation;
• Development of vendor packages and an evaluation of a potential EPC delivery
solutions; and
• Appointment of Wood Group Plc as FEED study manager.
Enabling works for the Ngualla Project were also commenced during the June 2023 quarter
and included the commencement of geotechnical and water borefield drilling, upgrading of
the Ngualla camp facilities to support construction activities and advancement of detailed
designed packages for long lead equipment items.
2023 ANNUAL REPORT | 17
UNDERTAKING A NEW CRITICAL MINERALS EXPLORATION PROGRAMME
In June 2023 an exploration programme focussing on the critical mineral potential of the
Ngualla deposit was initiated. The programme will initially focus on two areas within the
deposit, the Northern Zone and the Breccia Zone, which are prospective for a range of critical
minerals including heavy rare earths, monazite-hosted rare earths, niobium, phosphate and
fluorspar.
The drilling programme commenced in September 2023 and will comprise of ~40 Reverse
Circulation (“RC”) drill holes and ~4,000 metres of drilling. SRK has also been engaged to
develop a conceptual model for the Northern Zone, which will further delineate prospective
mineralisation as well as refine individual drill targets.
A large number of samples from previous trenching of the Breccia Zone have been identified.
These samples will be transported to Perth for assaying and further analysis. The Breccia
Zone remains highly prospective for fluorite; an important critical mineral with growing use in
a range of EV related applications and technologies.
Ngualla Deposit – including the Bastnaesite Zone and other prospective areas
18 | PEAK RARE EARTHS
PROGRESSION OF THE STRATEGIC SUSTAINABILITY ROADMAP
During the year, Peak completed several activities in accordance with its Sustainability
Strategy. Key activities included:
• Continued community engagement with Peak hosting the annual Nanenane Festival in
Ngwala to commemorate the National Farmers Day and sponsoring the sports festival,
and together with the Songwe District Medical Office, launching health awareness
campaigns;
• Completed an impact assessment of the Ngwala- Kininga Road upgrade undertaken
last year;
• Finalised a Sustainability Materiality Assessment via a survey of internal and external
stakeholders; and
Implemented a Sustainability Policy.
•
KEY BOARD AND TECHNICAL TEAM APPOINTMENTS
Board Appointments
On 15 August 2022, Dr Russell Scrimshaw (AM), a distinguished corporate executive was
appointed to the role of Executive Chairman. Following this appointment, the Company
completed 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.
Shasha Lu was appointed as a Non-Executive Director at the 2022 Annual General Meeting
following her nomination by Shenghe pursuant to the marketing and strategic MOU with
Shenghe.
The board was further strengthened with the following non-executive director appointments:
Ian Chambers as a Non-Executive Director on 20 March 2023;
•
• Nick Bowen as a Non-Executive Director on 5 June 2023 ; and
• Hannah Badenach as a Non-Executive Director on 1 July 2023.
During the year, Tony Pearson, Giselle Collins and Giles Stapleton resigned as a Non-Executive
Directors of the Company. The Company thanks all retired directors for their valuable
contribution and stewardship during their time as Directors.
TECHNICAL TEAM APPOINTMENTS
Peak appointed Ray Anguelov as Head of Technical Services and Patrick Odhiambo as Head
of Exploration during the June 2023 quarter to support ongoing technical workstreams.
Ray Anguelov has over 25 years of metallurgical experience with specific expertise in
developing and commissioning rare earth plants. He was most recently General Manager
of Commissioning at Vital Metals Limited (ASX:VML) and was also previously Metallurgical
Superintendent at Northern Minerals Limited (ASX:NTU). Ray will replace Mark Godfrey, who
has retired from his full-time position, but has been retained on a consulting basis.
Patrick Odhiambo has over 20 years of geological and exploration experience with specific
expertise in carbonatite geological systems. He previously held the role of Geology Manager at
Peak for over 10 years and was instrumental in the development and definition of the Ngualla
Project Mineral Resource and Ore Reserve. More recently Patrick was Geology Manager at
OreCorp Limited (ASX:ORR).
RISK MANAGEMENT
The Risk Management commentary is contained in the section below on page 32.
2023 ANNUAL REPORT | 19
05.
SUSTAINABILITY
At Peak, we hold a primary belief in
‘kazi wajibu utu’ which means to ‘work
responsibly to better humanity’ in Swahili.
It is this belief that underpins our purpose
and approach to sustainability.
OUR APPROACH TO SUSTAINABILITY
Through our world-class, Ngualla Project we are committed to delivering
low carbon technologies to drive the decarbonisation transition. This
commitment is essential to ensuring the long-term success of our business.
The Peak Values Statement incorporates the kazi wajibu utu principle. 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. By
operating in affiliation with the kazi wajibu utu principle and our five values,
we are clear on the pathway to evolve Peak’s culture and derive how we go
about delivering our purpose.
SUSTAINABILITY POLICY
Our sustainability governance
is bounded by our Sustainability
Policy which was formalised this
year. The Policy reinforces our
sustainability obligations to meet
our responsibilities and objectives.
Acceptance of the Sustainability
Policy is a fundamental term of
engagement with the Company and
is the responsibility of each person
who works for, contracts with or does
business with the Company.
OUR VALUES
Safety, Health & Wellbeing
Integrity
Accountability
Sustainability
Progressive Mindset
Implementation of the Sustainability Policy is the responsibility of management
under the oversight of the Chief Executive Officer, and the Board. At this time,
the Audit and Risk Committee are responsible for the identification and
management of environmental, social and governance risks where appropriate.
Our Sustainability Policy is available on our website and can be found here.
20 | PEAK RARE EARTHS
OUR SUSTAINABILITY AMBITION
We are working responsibly to build a better,
greener and more sustainable future for our
communities, customers and stakeholders.
SUSTAINABILITY AMBITION
We continue to work on our objective to integrate sustainability into every
aspect of our business. We strive to hold ourselves to the highest standards
so that the Ngualla Project becomes a long term, environmentally and
socially sustainable supplier of choice in the global rare earth market.
To ensure we fully embed sustainability into our business as we progress
from development to production, we must ensure everyone is aligned to the
purpose and values of the business. Our statement of ambition articulates
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.
2023 ANNUAL REPORT | 21
ESG JOURNEY
STRATEGIC PLAN
Last year, we developed an ESG roadmap to ensure we are targeting global best practice as
we mature, increase our scope, and expand transparency. The roadmap timeline has been
updated this year to reflect the latest project timelines following the signing of the binding
Framework Agreement and issuance of the Special Mining Licence to Mamba Minerals Limited
in April 2023, and the commencement of the early works program.
The following table showcases the updated roadmap for our realistic and achievable
goals alongside our business growth strategies. The roadmap begins with establishing
measurement systems to understand our current level of ESG maturity. Once measurement
systems have been established, the next stages are to improve our ESG performance.
FY2022
•
Internal stakeholder engagement
mapping
FY2023
• Sustainability Policy formalised
• External Stakeholder engagement
• Materiality assessment
survey
• Sustainability positioning
• Selection of priority materiality topics
• Annual Report
• Second Annual Report Sustainability
• Gap review and roadmap finalised
section
• Governance Review
22 | PEAK RARE EARTHS
FY2024
•
Life Cycle Assessment (LCA)
• Preferred ESG frameworks selected
• ESG submission to Digbee
• Set sustainability targets
• Engage with ESG rating agencies
• Establish reporting systems
• Supply chain / responsible sourcing
engagement project
•
Inaugural sustainability report
FY2025
• Commence reporting against
selected frameworks
• Engage with ESG rating agencies
• Governance review
• Human Rights Policy
• Second sustainability report
2023 ANNUAL REPORT | 23
STAKEHOLDER IDENTIFICATION
At Peak, we know that trusted partnerships and relationships are the
foundation of a strong social licence to operate. Developing strong, effective,
and long-lasting relationships with our stakeholders will ensure the long term,
multigenerational success of the business.
During the year we continued to strengthen our relationships with our
stakeholders. Of particular importance were the engagement activities with
various Tanzanian Authorities, the regional communities near the Ngualla
Project, our major shareholder and offtake partner Shenghe, other shareholders
contractors, as well as prospective suppliers and financiers.
We understand the importance of our stakeholders to the success of the Ngualla
Project, and we conducted a stakeholder engagement survey on Sustainability.
In addition to helping us update our material topics (discussed further in this
report), the survey gave stakeholders the opportunity to provide feedback on
our sustainability performance. The stakeholder mapping exercise undertaken
last year helped identify the stakeholders to invite to participate in the survey.
The figure below depicts the invited stakeholder groups.
The survey asked participants to provide qualitative feedback on our key
achievements, key
improvement areas, emerging risks, and emerging
opportunities. This feedback is helping us to shape our sustainability strategy
and has been incorporated into our Risk Management process (refer to the
Materiality and Risk Management sections for more detail).
Peak Board
Members
Suppliers
Peers
Community
Leaders
Shareholders
& Investors
NGOs
Peak
Employees
Contractors
& Service
Providers
Government
& Regulators
Community
Members
Financiers &
Insurers
Industry
Associations
Customers
24 | PEAK RARE EARTHS
MATERIALITY ASSESSMENT
At Peak Rare Earths, we recognise the importance
of integrating sustainability into every aspect of
our business, to ensure there is a strong pathway
to achieve long term sustainability goals. This will
require continual improvement of our sustainability
performance year after year. In recognition of our
sustainability journey and to ensure it is aligned to
the expectations of those most important to our
business, we conducted a stakeholder engagement
survey. The results of this survey helped form the
basis of our updated materiality assessment.
Background
We prepared a survey with the aim of ranking
the sustainability priorities most important to our
internal and external stakeholders. These priorities
have now been embedded into our sustainability
strategy. Survey participants were selected based
on the results of our stakeholder mapping exercise
conducted last year.
A review of international trends allowed us to
identify 24 sustainability topics relevant for Peak’s
sustainability context. The topics were broken down
into Environment (9 topics), Social (8 topics), and
Governance (7 topics) categories.
The objective was for participants to rank the
sustainability topics in order of importance and
to provide feedback on their perception of our
sustainability performance. We invited 153 internal
and external stakeholders to complete the survey.
All responses were anonymous and non-attributable,
with online and paper options available. The survey
was broken down into three sections:
Section 1: Stakeholder group identification.
Section 2: Ranking sustainability issues in order of
relative importance in each ESG category.
Section 3: Qualitative feedback on sustainability
aspects where Peak has performed well, areas for
improvement, and emerging risks and opportunities.
2023 ANNUAL REPORT | 25
Results
Following a five week open period, the survey was closed with a 48% response rate with all
stakeholder groups represented. In order to compare the average rankings of stakeholders
between the three categories, raw data was normalised according to a 0-10 scale. The
average ranking score was calculated for each topic. From these results, a materiality
matrix was developed to unite the average rankings of importance between internal and
external stakeholders. All external stakeholders (55 responses) were selected to represent
importance to ‘Stakeholders’. Peak Employees (both corporate and Tanzanian based) and
board members (19 responses) represented the importance to ‘Business’. Topics with an
average ranking of 5 and above could be considered most material to Peak.
From the materiality assessment results, the following material topics were selected to be
the priority topics for measuring, monitoring and reporting going forward:
ENVIRONMENT
SOCIAL
GOVERNANCE
• Waste and Hazardous
• Health and Safety
• Business Ethics and
Materials
• Tailings and Tailings
Storage Facilities
• Community
Engagement
• Community benefit
• Water Management
and Security
Governance
• Government, Legal
and Regulatory
Compliance
• Risk management
This group of topics represents the preferences of the wide selection of stakeholders
surveyed and allows us to capture a balance of all ESG pillars.
26 | PEAK RARE EARTHS
2023 ANNUAL REPORT | 27
ESG HIGHLIGHTS
PRESENCE IN TANZANIA
In December of 2022, we completed negotiations with the
Special Presidential Government Negotiation Team (“SPGNT”)
with respect to a Framework Agreement for the Ngualla Rare
Earth Project (“Ngualla Project” or “the Project”). In April of this
year, we were pleased to announce the final approval of the
binding Framework Agreement with the Government of the
United Republic of Tanzania (Government of Tanzania).
The Framework Agreement sets out the basis of the
Government of Tanzania’s agreement for the licencing,
development, economic benefit sharing and the formation
of a joint venture between Peak and the Government of
Tanzania with respect to the development and operation of
the Ngualla Project.
The Ngualla Project is one of the largest, highest grade and
lowest cost Neodymium and Praseodymium (“NdPr”) rare
earth projects in the world. It is located approximately 147km
from the city of Mbeya in southern Tanzania on the edge of
the East African Rift Valley. As part of a staged development
strategy, the Project will initially be developed to produce a
high-grade concentrate for export to third-party refiners. A
Bankable Feasibility Study Update (“BFS Update”) covering
the development of the Project as a standalone concentrate
project was completed in October 2022.
The Ngualla Project includes the development of a mine, mill,
beneficiation facilities, concentrator, community projects
and associated infrastructure. It will create around 600 direct
jobs and 3,000 indirect jobs during construction as well as
around 220 direct and 1,000 indirect jobs during operations.
The Project will deliver the Government of Tanzania a
substantial source of revenue in the form of corporate taxes,
indirect taxes, royalties, and dividends arising from its 16%
non-dilutable free carried interest.
The Ngualla Project will position Tanzania
as a major player in the international
rare earths sector and enables us to
play an important role in supporting
global decarbonisation initiatives.
Minister for Minerals of the United Republic of
Tanzania, the Hon. Dr Dotto Biteko
28 | PEAK RARE EARTHS
2023 ANNUAL REPORT | 29
The Framework Agreement sets out the fiscal outline
for the project and provides for the economic and
legal benefits provided to each party. The Framework
formalises the following aspects:
• The rights and obligations of the parties in
relation to the Ngualla Project.
• The term, development and conduct of mining
and beneficiation operations on the site of the
Ngualla Project.
• The fiscal assumptions underlying how economic
benefits will be shared between parties.
• The way the
joint venture entities Mamba
Minerals Corporation Ltd (“MML”) and Mamba
Refinery Corporation Ltd (“MRL”) will be owned,
controlled, managed, and financed.
• The manner in which the key principles of the
Framework Agreement will be implemented.
30 | PEAK RARE EARTHS
Following the signing of the Framework Agreement, a Special Mining Licence for the Ngualla
Project was granted by the Government of Tanzania to MML in accordance with the terms
of the Framework Agreement. The initial term of the licence will be the shorter of 33 years
and the life of the mine, with the ability to extend on application in accordance with the
laws at that time. This term extends Peak’s presence in Tanzania which began in 2008 with
exploration activities, for many decades to come.
2023 ANNUAL REPORT | 31
GOVERNANCE
FY2023 has been significant for Peak in establishing its corporate presence in Tanzania. Peak
and the Government of Tanzania, after negotiations throughout FY2022-2023, executed the
Framework Agreement, the Shareholder’s Agreement, and the Memorandum and Articles of
Association in April 2023.
These Agreements established the basis for the joint venture structure between Peak and
the Government of Tanzania. In February of this year, Peak registered and incorporated
Mamba Minerals Corporation Limited (“MML”) and Mamba Refinery Corporation Limited
(“MRL”). Both entities share the same ownership structure, with Peak owning 84% via wholly
owned subsidiaries and the Government of Tanzania owning 16% free carried interest via the
Treasury Register. MML now holds the Special Mining Licence (“SML”) for the Ngualla Project
and MRL will own and operate any future Tanzanian refining and downstream operations.
These arrangements provide the basis to mine, refine, and export minerals from Tanzania.
In order to ensure full and ongoing compliance with the terms of the Agreements and
Tanzanian regulations, and in alignment with the key governance materiality topics around
ethics and governance, compliance and risk management, Peak has been working to
establish the appropriate policies, protocols and structures for the businesses. This has
included the appointment of the Directors to the Boards of MML and MRL and the holding of
the inaugural MML Board meeting. The Peak and MML Boards will have oversight of all the
company’s policies and governance frameworks, including but not limited to Governance
and compliance, Anti-bribery and Corruption, Code of Business Conduct, Risk Management,
and Sustainability.
RISK MANAGEMENT
The Company is exposed to various risks which could negatively affect the company’s
strategies, financial prospects, and activities. In accordance with the company’s Risk
Management Policy guidelines, during the period Peak evaluated the key risks inherent to
its business and stakeholders during the period. A comprehensive corporate Risk Register
is the framework for which risks are identified and controlled by the Executive Management
team, and to which the Audit and Risk Committee and Board has oversight. The Risk Register
defines and priortises the risks, and pre and post mitigation ratings. Risk owners are assigned
and are responsible for mitigation action planning and review.
In March 2023, Ian Chambers joined the Peak Board as a Non-Executive Director and was
appointed as the Chair of the Audit and Risk Committee. With respect to the governance of
the company’s Risk Management Framework this committee assists the Management team
to identify and manage project, commercial, economic, environmental, social, governance
and sustainability risks.
Peak conducted an extensive stakeholder survey as part of its Sustainability strategy. This
stakeholder engagement exercise is aiding the company to prioritise material topics for
future reporting purposes as it develops robust sustainability practices. The survey identified
Risk Management as one of the top 3 material topics in the Governance pillar. Peak will ensure
its ongoing commitment to the risk management protocols of both Peak and its business
entities in Tanzania. Furthermore, the survey participants identified key sustainability related
risks and opportunities pertaining to the Ngualla Project which have been integrated into
Peak’s risk assessment process. It has aided a robust evaluation of key risks targeted at the
current pre-Financial Investment Decision (FID) and Front-End Engineering Design (FEED)
phase of the company’s operations.
32 | PEAK RARE EARTHS
Material risks that were identified, reassessed, and managed by the company during FY2023
include but are not limited to the risks listed in table below (not in order of priority). The
mitigiations and a year-on-year change to the risk trend is indicated via the following arrow
symbols; (no change), (increasing risk), (decreasing risk).
Health & Safety
Risk
Risks are controlled through the Safety Management Plan.
• No reportable lost time injuries or fatalities were reported for the period.
•
• A Health Impact Study was conducted in consultation with the Tanzanian
Medical Association and the Songwe Regional District Medical Officer and
plans and policies are being developed.
Regulatory &
Political Risk
Opertation &
Technical Risk
•
•
Regulatory Compliance action plan regarding the establishment of the
Mamba entities in Tanzania was implemented.
The execution of the Framework Agreement, Shareholder’s Agreement and
Memorandum and Articles of Association, with the Government of Tanzania
and compliance to those agreements mitigates the risk.
• Under the leadership of the President of Tanzania, Her Excellency, Dr. Samia
Suluhu Hassan, Tanzania has prioritised development of the mining sector
and adopted more attractive foreign investment policies and initiatives.
• Anti-bribery and corruption policy in place.
•
•
Framework Agreement executed and a Special Mining Licence for the Ngualla
Project granted.
Project costs and timeline amended following the Bankable Feasibility Study
Update and execution of the Framework Agreement.
• Offtake Agreement executed with Shenghe for 100% of rare earth concentrate.
• MOU with Shenghe for strategic, EPC and funding cooperation.
• Optimisation test programs initiated for flowsheet design, grade, recovery
•
•
and optimisation.
Technical collaboration with Shenghe also specifically looking at flowsheet
design, grade, recoveries and cost optimisations.
Relationship management of prospective lenders reviewing the Ngualla
Project.
Counterparty &
Funding Risk
• A $27.5 million equity placement was completed.
•
Shenghe led Chinese funding opportunities.
• Other jurisdiction funding opportunities.
• MOU with Shenge covering an integrated development and funding solution.
Environmental
Management &
Sustainability
Risk
Community
Benefit Risk
Macro-
economics
• Updates to the Environmental and Social Management Plan for the purpose
of project construction, and development of an Environmental and Social
Action Plan.
Implementation of Tailing Dam Breach Impact Assessment design
recommendations.
•
• Completion of a baseline water and water sourcing study.
•
Progression of the company’s strategic Sustainability roadmap, including
scoping for a Life-Cycle-Assessment and the commencement of a Digbee
assessment using the online platform for completion in 2023. Board approval
of the company’s inaugural Sustainability Policy in June 2023.
Stakeholder Survey completed in June 2023 on ESG Materiality.
Focus reinforced with future compulsory reporting.
•
•
• Completion of a Human Impact Study (Phase 1) looking at community
livelihood impacts and land valuation.
• Ongoing impact assessment of the Ngwala-Kininga Road upgrade
completed in FY2022 taking into account the growth of agribusiness,
electrification of the local villages, and construction of a medical clinic.
• Ongoing community engagement and development of a 5-year Social
Development Plan.
• Whilst rare earth prices have been impacted by several temporary
headwinds over recent months, the long-term outlook for rare earths remains
positive with market analysts continuing to forecast a growing supply-
demand deficit and rising prices for NdPr Oxide.
• Current challenging equity and capital market conditions.
2023 ANNUAL REPORT | 33
SOCIAL
At Peak, through our Purpose we are committed
to genuine engagement with our people and
communities to deliver positive outcomes
with mutual benefits for all stakeholders in the
region. It is our duty to ensure health, safety
and wellbeing not only in the workplace, but
also in our neighbouring communities for
the life of the project and beyond. This is why
health, safety and wellbeing is also a corporate
value. As we progress with the Ngualla Project
we will continue to implement best practices
that will generate positive social impacts,
collaborative relationships and community
benefits for years to come.
It brings me great comfort to witness the community surrounding our
Ngualla Project develop through the efforts made by Peak. The positive
changes brought about by Peak’s development initiatives, such as the
construction of Ngwala Kininga road fills me with pride. The impact of
the road work alone has led to increased market access and increased
prices for agricultural products, and improved social services like the
construction of a new health center and installation of a power line to
connect the Ngwala village to the national power grid. Witnessing these
improvements in individual lives and the community provides me with
enthusiasm and motivates me to continue working closely with the
community toward sustainable development.
Mary Duncan, Community Liaison Officer
POSITIVE SOCIAL IMPACTS OF ROAD IMPROVEMENTS
Last year, we disclosed our efforts in reconstructing 46 kilometres of the Ngwala-Kininga
Road in Tanzania. This work has continued to provide significant positive impacts on
the local Ngwala community by improving connectivity, social development, and
economic growth.
Road impact on agricultural trade
The road has improved accessibility which has lowered transport costs, driving greater
demand for agricultural trade and the community is benefitting from increased
business transactions and income. Since the Ngwala-Kininga road upgrade, prices of
agricultural products have been on the rise as buyers and trucks can now come directly
to Ngwala village to purchase produce and this has lifted the demand for the produce.
The renewed interest in agriculture, is increasing the size of the market for the farmer’s
produce. To maintain this growth, we are developing a livelihood program aimed at
enhancing the income of individuals and households in surrounding communities and
improving food security. The program will span over a five-year period and involve
engagement with local agriculturalists to enhance current farming practices.
34 | PEAK RARE EARTHS
Road impact on health access
The road construction has also provided
access for the Government to commence
construction of
the Ngwala Medical
Centre. The centre will ultimately consist
of 13 buildings,
including an outpatient
department (OPD) with six doctors’ rooms,
a theatre, a maternity unit, male and female
wards, as well as laundry facilities. The
road has ensured efficient and affordable
transportation of construction materials. The
OPD building is currently operational, while
other buildings are still under construction.
We are currently collaborating with local
authorities to determine how we can further
contribute to the process, for example, with
provision of medical equipment and supplies.
Road impact on access to electricity
to
the
With greater accessibility
local
communities now available the Tanzanian
Government has initiated the installation of a
power line from Kapalala ward to Ngwala that
will bring electrification to these communities
that to date have never been connected to the
national electricity grid. This transformation
is expected to provide Ngwala with access to
electricity in 2024. Before this, locals relied on
the use of small solar panels and kerosene
lamps. The electrification infrastructure will
extend to the local village, and the Ngualla
Project’s camp facilities.
COMMUNITY ENGAGEMENT
Each year in August the local communities
celebrate Nanenane, “National Farmers Day”.
As part of these celebrations, Peak has been
sponsoring a sports festival since 2014, which
sees various sports, games and singing and
dancing take place. This year the company
was pleased to host three officials from
the Department of Sports and Culture. The
festival was used to launch various health
awareness campaigns including a blood
donation drive and Covid-19 vaccinations.
In collaboration with the Songwe District
Medical Office, health attendants from the
Mwambani District Hospital conducted
the blood donation program to address a
shortage of blood with the District Blood Bank,
and implemented a Covid-19 vaccination
program in the community.
2023 ANNUAL REPORT | 35
WORKFORCE AND COMMUNITY HEALTH INITIATIVES
At the close of FY2022, we commenced a Health Impact Study that has
continued through FY2023 and was coordinated with development of the
Ngualla Project’s medical and clinical systems. The Study is being conducted
in consultation with the Tanzanian Medical Association and the Songwe
Regional District Medical Officer. We are nearing the end of the study and
developing an implementation plan for the medical systems, forming plans
and policies to deal with possible health impacts on the villagers and others
in the area. We aim to specifically target HIV infiltration, communicable
diseases, tuberculosis control, and malaria abatement.
SUPPORTING LOCAL EDUCATION
In August 2022, Peak commenced a reward program to encourage young
students to participate in the inter-school examination program by providing
incentives to local students to support their educational outcomes. The
program rewards students for taking the National Examination which is
essential for high school eligibility. Students who perform well are rewarded
with gifts such as exercise books, pens, uniforms, and school bags. Since the
program began, class attendance has significantly improved from ~60%
attendance to nearly 100% attendance, a very meaningful achievement.
MANAGING OUR SOCIAL IMPACTS
During FY2023, we completed Phase 1 of a Human Impact Study which was a
comprehensive survey of the impacted individuals and valuation of the land
and livelihood that will be impacted by the development of the Ngualla Project.
Phase 2 of the Study will include community and individual consultation and
negotiation for compensation developing a “replacement land alternative”
with input and advice from the Ngwala village Elders and Council. This will
commence in FY2024.
36 | PEAK RARE EARTHS
LOOKING AHEAD
As Peak redefines and expands its topics
of Materiality, the three social pillars of
Health and Safety, Community Benefit and
Security, and Community Engagement
will be the ongoing focus for our social
development planning. As the Ngualla
Project continues to develop, we will
continue to work with local communities to
sustainably develop and create a safe and
prosperous work environment. In FY2024
and beyond, we plan to commence the
following activities in alignment with the
prioritised materiality topics:
• Camp relocation study and impacts
on Ngwala village
• Upgrade of the Safety Management
Plan which will include Road Safety
and Community Security
• Community Benefit Planning
• The second phase of the Human
Impact Study
• A Human Rights Policy
2023 ANNUAL REPORT | 37
ENVIRONMENT
At Peak, we aim to ensure that our mining, production and associated
activities are carried out in a manner that complies with the locally and
internationally accepted best practices in environmental management.
Through upholding best practices in delivering the Ngualla Project, we strive
to ensure that benefits are realised for our stakeholders, whilst minimising
impacts to the environment and neighbouring communities.
Our commitment to continual improvement of environmental, social and
sustainability performance is embodied by and implemented through the
Environmental and Social Management System (ESMS) and our Environmental
and Social Management Plan (ESMP). The ESMP is intended to be a structured
system for managing environmental and social impacts as a result of pre-
construction activities.
In planning and implementing the Ngualla Project, Peak via the Mamba
Minerals Corporation Limited (MML) entity, aims to adhere to the Equator
Principles (2020) and the IFC Performance Standards (2012). Specialist
Environmental Consultants have been appointed to review our Environmental
Social Impact Assessment (ESIA) and the ESMP. This will be conducted prior to
moving forward with the early stages of construction. A master document to
capture all the relevant Environmental and Social Studies activities, referred
to as the Environmental & Social Action Plan (ESAP), has been prepared and
is under review.
Other environmental initiatives of note throughout the year included:
• Completion of a baseline and water sourcing study report.
• Commencement of land access and acquisition planning that will
•
continue into FY2024.
Introduction of design improvements to the Tailings Storage Facility (TSF)
following the FY2022 Tailings Dam Breach Impact Assessment.
38 | PEAK RARE EARTHS
We have kicked off a Life Cycle Assessment (LCA) with Minviro, leading
consultants in LCA development, and this will be completed later in 2023.
The LCA is an analysis tool that will assess our environmental impacts
associated with all the stages of our production life, from raw material
extraction through processing, manufacturing, distribution, and use.
This will help to quantify the environmental impact of potentially
producing mixed rare earth carbonate (MREC) at the Ngualla mine. The
LCA will also contribute with our climate change management strategy
by providing a detailed interpretation of climate change impacts of both
construction and production phases of the Project.
We recognise that there is more to achieve in ensuring that we minimise
our environmental impacts as we progress with our activities. Moving
forward into FY2024 and beyond, we plan to undertake the following:
• Dust/Noise/Vibration impacts of the road upgrades (commenced
August 2023);
• Specific Environmental Policy to be updated for Mamba Minerals
(MML) and to include monitoring plans;
• Update of Biodiversity Studies (covering both the wet season and dry
seasons);
• Water quality surveying; and
• Quarry Planning for extraction of sand.
2023 ANNUAL REPORT | 39
ROADMAP AND NEXT STEPS
In continuing to mature as our scope grows and with transparency in mind, we
are in the process of establishing a preferred ESG reporting framework. We have
been assessing the suitability of different sustainability disclosure initiatives and
reporting frameworks. The review has been comprised of globally recognised
frameworks that cover all sectors and those tailored to mining activities. Our
final selection will be based on our current stage of development, stakeholder
needs and peer review. Selecting the right framework will help in setting up our
data collection systems to prepare for our inaugural FY2024 sustainability report.
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.
40 | PEAK RARE EARTHS
Although supply chain management has not been included as a material topic for our
business at this time, it is likely to become a material topic as we transition into an operating
site in future. Our aim 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.
Last year, we wrote a sustainable supply chain questionnaire to capture a better
understanding of our potential supplier’s ESG programs and considerations. Our supply
chain evaluation process will continue to evolve as the company grows. In FY2024 we plan
to execute a supply chain engagement project to better understand the sustainability
performance of our suppliers and ensure responsible sourcing practices are adopted.
As our sustainability journey continues to mature, the path forward should focus on
achieving effective improvement and change. Once we establish a strong data monitoring
system to track our sustainability performance, the next step is to set targets against
indicators to improve company performance. The requirements of reporting frameworks
such as GRI and TCFD, seek disclosure on performance-based targets. Effective target
setting and KPIs will ensure forward momentum remains and impacts are effectively
managed. In FY2024 we plan to examine the applicability of targets to our business and
develop a target setting approach.
2023 ANNUAL REPORT | 41
06.
FINANCIAL REPORT
42 | PEAK RARE EARTHS
DIRECTORS’ REPORT
The directors of Peak Rare Earths Limited (“Company” or “Peak”) (ACN: 112 546 700) submit herewith
the financial statements of the Company for the financial year ended 30 June 2023. 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)
Abdullah Mwinyi
Non-Executive Director (appointed 15 November 2020)
Shasha Lu
Non-Executive Director (appointed 30 November 2022)
Ian Chambers
Non-Executive Director (appointed 20 March 2023)
Nick Bowen
Non-Executive Director (appointed 5 June 2023)
Hannah Badenach
Non-Executive Director (appointed 1 July 2023)
Bardin Davis
Chief Executive Officer (CEO) (Non-Executive Director from 21 October 2020,
Managing Director (MD) from 9 December 2020, stepped down as MD on 9
July 2022 to take up the CEO role)
Tony Pearson
Non-Executive Deputy Chair (Non-Executive Director from 21 August 2018,
Chair from 21 October 2020, appointed Deputy Chair from 15 August 2022,
resigned 30 June 2023)
Giselle Collins
Non-Executive Director (appointed 9 March 2021, resigned 9 November 2022)
Giles Stapleton
Non-Executive Director (appointed 29 November 2021, resigned 5 June 2023)
INFORMATION ON DIRECTORS
Dr Russell Scrimshaw (AM) – 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 from 2011 to March 2020 (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 Chairman of ARI Pty Ltd.
Russell is a member of the Audit and Risk Committee and Nomination and Remuneration Committee.
Russell held no other listed public company directorships in the past three years.
2023 ANNUAL REPORT | 43
The Hon. Abdullah Mwinyi – Non-Executive Director (Appointed 15 November 2020)
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 other listed public company directorships in the past three years
Shasha Lu - Non-Executive Director (Appointed 30 November 2022)
Since early 2014, Ms Lu has been the Managing Director of Shenghe Resources Overseas Development
where she leads and manages overseas investment, cross-border corporate management,
international trade and the building of a complete rare earth/monazite supply chain. Prior to that, Ms
Lu was an Executive Director and CEO of Hong Kong East China Non-Ferrous Mineral Resources Co. Ltd &
Sino-Australia International Mineral Resources Limited, responsible for overseas investment, scientific
research and management. Ms Lu has previous experience as a director of ASX-listed companies,
having been an Executive Director of Arafura Resources Limited (ASX:ARU) and an Executive Director
and Vice President of Globe Metals and Mining Corporation (ASX:GBE). Ms Lu holds a Bachelor and a
Masters of Medical Science from Nanjing University, a Doctorate of Medical Science (PhD) from Tianjin
Medical University & Karolinska Institute, a Post-Doctorate of Medical Science from Karolinska Institute,
and an Executive Master of Business Administration from Nanjing University. Ms Lu is also a graduate
of the Australian Institute of Company Directors (GAICD).
Ian Chambers - Non-Executive Director (Appointed 20 March 2023)
Ian is a distinguished executive and company director with more than 35 years of experience in
international financial markets including institutional securities, wealth management and capital
markets. Ian spent approximately 24 years with Morgan Stanley Australia where he was Managing
Director, Head of Institutional Equities and Head of Wealth Management Australia. Ian has a proven
record
in organisational development, governance, operational management and financial
performance. He is a member of ASIC’s Financial Services Credit Panel and Markets Disciplinary Panel
and was inducted into the Australian Stockbrokers Foundation Hall of Fame in 2015.
Ian has held no other listed public company directorships in the past three years.
Ian is Chair of the Audit and Risk Committee and a member of the Nomination and Remuneration
Committee.
Nick Bowen - Non-Executive Director (Appointed 5 June 2023)
Nick Bowen has extensive experience in the construction, development and operation of international
mining projects. He has spent over 35 years with ASX-listed construction and contract mining
companies operating in both Australia and overseas, including Africa. Previous roles include 12 years
as Managing Director of Macmahon Holdings Limited, two years as Executive Global Head of Mining
Services with Orica Limited and nine years as Managing Director of mining contractor Eltin Limited. He
has also held the head executive role at the Lubambe Copper Mine in Zambia and the Shishen Iron
Ore Mine in South Africa. Nick is a Life Member of the Western Australian Chamber of Minerals and
Energy, Member of the Australian Institute of Mining and Energy and Fellow of the Australian Institute
of Company Directors.
Nick serves as a Non-Executive Director of Aveng Limited (JSE) from 17 July 2023.
Nick is Chair of the Nomination and Remuneration Committee.
Hannah Badenach - Non-Executive Director (Appointed 1 July 2023)
Hannah Badenach is an experienced executive and company director with more than 20 years of
experience in resources, supply chain, business development, commodity trading and marketing in
global markets across Africa, Europe, Asia, South America and the Middle East.
44 | PEAK RARE EARTHS
Hannah has extensive experience in particular in Africa and China, has built and run multiple metal
supply chains across Africa (including Tanzania) and has an extensive network in China across sales
and marketing. She holds a Bachelor of Arts/Law (HONS) from the University of Tasmania and is a
graduate of the Australian Institute of Company Directors.
Hannah was a non-executive director of ASX listed public company, Aspire Mining Limited, until 31
January 2023.
Bardin Davis – Chief Executive Officer (Non-Executive Director from 21 October 2020, Managing
Director (MD) from 9 Dec 2020, stepped down as MD on 9 July 2022 to take on the CEO role)
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 (now ACEN Australia), 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 other listed public company directorships in the past three years.
Tony Pearson– Non-Executive Deputy Chair (Non-Executive Director from 21 August 2018, Chair from
21 October 2020, appointed Deputy Chair 15 August 2022, resigned 30 June 2023)
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 serves as a non-executive director of the following other listed companies:
• Cellnet Group Ltd – from 5 October 2018, delisted 28 August 2023
• Xanadu Mines Limited - from 3 May 2021
• QEM Limited – from 24 August 2023
Giles Stapleton – Non-Executive Director (Appointed 29 November 2021, resigned 5 June 2023)
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.
Giles has held no other listed public company directorships in the past three years.
Giselle Collins - Non-Executive Director (Appointed 9 March 2021, resigned 9 November 2022)
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.
2023 ANNUAL REPORT | 45
Giselle is a Chair of ASX listed Hotel Property Investments, appointed 19 April 2017 (appointed as Chair
9 July 2022) and Non-Executive Director of ASX listed Cooper Energy Limited, appointed 19 August 2021,
and ASX listed Generation Development Group Limited, appointed 18 November 2021.
COMPANY SECRETARY
Phil Rundell – Company Secretary and Chief Financial Officer (Appointed 16 December 2020)
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 specialising in providing company
secretarial, compliance, accounting and reconstruction services for the last 12 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
OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $32,800,639 (2022: $22,731,602).
The material expenditures that contributed to the loss that were necessarily incurred to progress the
activities of the Company include:
•
Employee benefits expenses of $3,157,157 (2022: $2,579,194) (refer to the Remuneration Report
and Review of Operations);
• Administration and other costs of $3,853,724 (2022: $4,284,188) 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 $3,297,432 (2022: $7,036,692) on completion of the bankable
feasibility study update, FEED, other technical studies and the Early work on the Ngualla project
(refer to the Review of Operations); and
•
• A share based payment for government participation of $21,189,140 (2022: $nil) for the accounting
valuation of the issue of the 16% free carried interest in the Ngualla Project to the Government
of Tanzania.
The basic and diluted loss per share for the Group for the year was 15.38 cents (2022: 11.66 cents).
FINANCIAL POSITION
The net assets of the Group have increased from $70,859,306 at 30 June 2022 to $88,883,143 at 30 June
2023.
The Group’s working capital, being current assets less current liabilities, was $23,807,448 at 30 June
2023 (2022: $7,879,544).
The Company had $25,852,484 million cash at bank at the end of the reporting period and is well
funded going into the 2023/2024 financial year to fund the pre-development activities in respect of
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 12.
46 | PEAK RARE EARTHS
EVENTS SUBSEQUENT TO REPORTING DATE
On 1 July 2023, Hannah Badenach was appointed as a Non-Executive Director.
On 9 August 2023, Peak executed a binding offtake agreement for the Ngualla Rare Earth Project with
Shenghe and a non-binding memorandum of understanding (MOU) for cooperation on delivering an
EPC and funding solution with Shenghe Holdco. The binding offtake agreement terms include:
100% of rare earth concentrate
•
• Minimum of 50% of intermediate and final rare earth products
• An initial term of 7 years
• Conditions precedent, including Peak shareholder approval
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.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than detailed below, in Note 24 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:
• 55 million shares issued under a two-tranche equity placement at an issue price of $0.50 to
raise $27.5 million.
MEETINGS OF DIRECTORS
The number of meetings attended by each Director of the Company during the financial year was:
Number held and entitled to attend
Number attended
BOARD MEETINGS
Russell Scrimshaw^
Tony Pearson*
Abdullah Mwinyi
Shasha Lu^
Ian Chambers^
Nick Bowen^
Giselle Collins*
Giles Stapleton*
9
10
10
5
2
1
5
9
9
10
3
4
2
1
4
7
*Resigned during the year ^Appointed during the year
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.
AUDIT & RISK COMMITTEE MEETINGS
Number held and entitled to attend
Number attended
Tony Pearson*
Giles Stapleton*
Giselle Collins*
Russell Scrimshaw^
4
2
2
2
4
2
2
2
*Resigned during the year ^Appointed during the year
The Board has a Nomination and Remuneration Committee with the Committee to comprise of at
least two independent non-executive Directors.
2023 ANNUAL REPORT | 47
Giles Stapleton*
Giselle Collins*
*Resigned during the year
NOMINATION & REMUNERATION COMMITTEE MEETINGS
Number held and entitled to attend
Number attended
1
1
1
1
EQUITY HOLDINGS OF DIRECTORS
As at the date of this report, the Directors’ interest in the Company were:
Russell Scrimshaw
Abdullah Mwinyi
Shasha Lu
Ian Chambers
Nick Bowen
Hannah Badenach
EQUITY SHARES
EQUITY OPTIONS
PERFORMANCE RIGHTS
300,000
78,070
-
1,475,000
210,000
256,000
-
-
-
-
-
-
4,000,000
88,596
-
-
-
-
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 at
the Ngualla Project 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.
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 share-based incentives
based on key performance areas affecting the Company’s activities, milestones and financial results.
The Board believes the remuneration policy to be appropriate and effective in its ability to attract and
retain skilled and experienced 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:
48 | PEAK RARE EARTHS
The Company has a Nomination and Remuneration Committee to review the remuneration policy
that sets the remuneration and performance 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, experience and peer comparatives) 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
shareholder approval are able to participate in the employee incentive plan. 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. On 15 June 2023 shareholders approved the adoption of an Employee Incentive
Plan (EIP) compliant with legislative changes.
The objectives of the EOP, PRP and EIP 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.
During the year the following unlisted options and performance rights issued to directors and executives
were issued/ exercised/ lapsed or were cancelled:
Issued:
1,550,000 incentive performance rights expiring 23 September 2026
•
• 4,100,000 incentive performance rights expiring 15 December 2026
Exercised:
•
1,361,887 vested performance rights with an exercise price of $nil
Lapsed:
• 500,000 unlisted options with an exercise price of $1.50
•
173,684 performance rights with an exercise price of $nil
2023 ANNUAL REPORT | 49
Company Performance, Shareholder Returns and Director’s and Executive’s Remuneration
Summary of Group’s performance and movements in the Peak Rare Earths Limited share price over
the last five years:
Total income ($)
2023
697,986
2022
8,602
2021
111,008
Net profit/(loss) before tax ($)
(32,800,639)*
(22,731,602)
(4,770,848)
Net profit/(loss) after tax ($)
(32,800,639)
(22,731,602)
(4,770,848)
2020
12,374,452
7,652,714
#
2019
98,795
(4,596,053)
#
7,652,714
(4,596,053)
$0.465
$0.295
$0.100
$0.210
$0.480
Closing share price at end of
year (cents), adjusted^
Basic profit/(loss) per share
(cents)^
Dividends per share (cents)
-
-
-
(15.38)
(11.66)
(3.13)
6.52
-
(5.75)
-
*Includes a share based payment for government participation of $21,189,140 for the accounting valuation of the issue of the
16% free carried interest in the Ngualla Project to the Government of Tanzania.
#
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) and the basic profit/(loss) per share have 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.
Details of KMP Remuneration
The relevant Key Management Personnel (KMP) of the group for the 2023 financial year were:
• Russell Scrimshaw - Executive Chairman (appointed 15 August 2022)
• Abdullah Mwinyi - Non-Executive Director
• Shasha Lu - Non-Executive Director (appointed 30 November 2022)
•
Ian Chambers - Non-Executive Director (appointed 20 March 2023)
• Nick Bowen - Non-Executive Director (appointed 5 June 2023)
• Bardin Davis - Chief Executive Officer (CEO) (stepped down as Managing Director on 9 July
2022 to take up the CEO role)
Lello Galassi - Head of Development and Operations
• Philip Rundell - Chief Financial Officer & Company Secretary
•
• Andrea Cornwell - Head of Marketing & Sales
• Ray Anguelov - Head of Technical Services (appointed 15 May 2023)
•
• Giselle Collins - Non-Executive Director (resigned 9 November 2022)
• Giles Stapleton - Non-Executive Director (resigned 5 June 2023)
• Mark Godfrey - Head of Technical Services (resigned 13 April 2023)
Tony Pearson - Deputy Chair (resigned 30 June 2023)
Total KMP remuneration for the year was:
Salary and fees
Superannuation
Share based payments*
Total
2023 $
1,987,358
103,399
1,457,999
3,548,756
2022 $
1,720,824
93,384
556,355
2,370,563
*Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting
value determined in accordance with AASB 2. Inclusive in the consideration reported is the accounting values of unvested
performance rights subject to performance milestones that as at 30 June 2023 had not yet been achieved. The cash benefit
of the unvested performance rights will only be received by the KMP following any sale of the resultant shares, which can only
be attained after the rights have vested, been exercised and the shares are issued.
50 | PEAK RARE EARTHS
Remuneration of individual KMP’s:
Short term benefits
Post-employment
Share based payments*
Salary & fees
Non-monetary
Superannuation
Performance^
Options^
Termination
Payments
30-Jun-23
$
Directors
Russell Scrimshaw¹
Abdullah Mwyini²
Shasha Lu³
Ian Chambers⁴
Nick Bowen⁵
Tony Pearson
Giles Stapleton⁶
Giselle Collins⁷
Executives
Bardin Davis⁸
Philip Rundell
Lello Galassi
Andrea Cornwell
Raytcho Anguelov⁹
Mark Godfrey¹⁰
Total
105,484
55,000
32,242
14,113
3,611
55,443
46,528
25,083
337,504
350,000
240,000
444,186
312,500
45,449
257,719
1,649,854
1,987,358
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
11,076
-
-
1,482
379
5,822
4,885
2,634
26,278
27,500
-
-
27,500
-
22,121
77,121
271,349
35,673
-
3,283
-
177,296
12,500
-
500,101
590,614
83,697
113,984
85,137
-
84,466
957,898
103,399
1,457,999
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
387,909
90,673
32,242
18,878
3,990
238,561
63,913
27,717
863,883
968,114
323,697
558,170
425,137
45,449
364,306
2,684,873
3,548,756
Proportion related to:
#
Equity
#
Performance
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
%
70%
39%
0%
17%
0%
74%
20%
0%
58%
61%
26%
20%
20%
0%
23%
36%
41%
*Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting value determined in accordance with AASB 2. Inclusive in the
consideration reported is the accounting values of unvested performance rights subject to performance milestones that as at 30 June 2023 had not yet been achieved. The cash benefit
of the unvested performance rights will only be received by the KMP following any sale of the resultant shares, which can only be attained after the rights have vested, been 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
¹Mr Scrimshaw was appointed to the role of Executive Chairman on 15 August 2023.
²Mr Mwinyi received a prepayment of his director fees for the period 1 July 2023 to 31 March 2024 of $41,250 not included in his reported 30 June 2023 salary & fees.
³Ms Lu was appointed to the role of Non-Executive Director on 30 November 2022.
⁴Mr Chambers was appointed to the role of Non-Executive Director on 20 March 2023.
⁵Mr Bowen was appointed to the role of Non-Executive Director on 5 June 2023.
⁶Mr Stapleton resigned 5 June 2023.
⁷Mrs Collins resigned 9 November 2022.
⁸Mr Davis stepped down as MD on 9 July 2022 to take on the CEO role, his full remuneration is reported under the executive section.
⁹Mr Anguelov was appointed to the role of Head of Technical Services on 15 May 2023.
¹⁰Mr Godfrey was from his executive role on 13 April 2023, but continues to provide services as and when required as an engaged consultant.
2023 ANNUAL REPORT | 51
Remuneration of individual KMP’s:
Short term benefits
Post-employment
Share based payments*
Salary & fees
Non-monetary
Superannuation
Performance^
Options^
Termination
Payments
30-Jun-22
Directors
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins¹
Rebecca Morgan²
Giles Stapleton³
Executives
Philip Rundell⁴
Mark Godfrey⁵
Lello Galassi⁶
Andrea Cornwell⁷
Total
$
95,000
350,000
55,000
75,376
39,262
29,167
643,805
296,000
234,577
328,493
217,949
1,077,019
1,720,824
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
$
9,500
27,500
-
7,538
3,926
2,917
51,381
-
22,708
-
19,295
42,003
93,383
106,069
380,694
18,604
9,209
-
-
23,360
-
-
-
-
-
514,576
23,360
18,419
-
-
-
18,419
532,995
-
-
-
-
-
23,360
$
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
233,929
758,194
73,604
92,123
43,188
32,083
1,233,122
314,419
257,284
328,493
237,244
1,137,441
2,370,563
Proportion related to:
#
Equity
#
Performance
%
10%
0%
0%
0%
0%
0%
2%
0%
0%
0%
0%
0%
1%
%
45%
50%
25%
10%
0%
0%
42%
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 AASB 2. 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 vested, been 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
¹Ms Collins fees included an additional fee of $20,000 p/a for her role as Chair of the A&R Committee.
²Ms Morgan resigned on 13 February 2022
³Mr Stapleton was appointed to the role of Non-Executive Director on 29 November 2021.
⁴Mr Rundell’s fees include a bonus payment for $50,000 paid during the period.
⁵Mr Godfrey was appointed to the role of Head of Technical Services on 6 September 2021.
⁶Mr Galassi was appointed to the role Head of Development and Operations on 20 September 2021.
⁷Mrs Cornwell was appointed to the role of Head of Marketing & Sales on 20 October 2021.
52 | PEAK RARE EARTHS
Options and performance rights granted / vested / lapsed during the year ended 30 June 2023
Movements in options during the year:
30-Jun-23
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
Directors
Russell Scrimshaw
Abdullah Mwyini
Shasha Lu
Ian Chambers
Nick Bowen
Tony Pearson
Giles Stapleton
Giselle Collins
Executives
Bardin Davis
Philip Rundell
Lello Galassi
Andrea Cornwell
Raytcho Anguelov
Mark Godfrey
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$1.50
21-Jun-23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)
-
-
(500,000)
-
-
-
-
-
-
(500,000)
2023 ANNUAL REPORT | 53
Movements in performance rights during the year:
30-Jun-23
Date of issue
Number of
performance
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
Directors
Russell Scrimshaw
15-Dec-22
3,500,000
Russell Scrimshaw
15-Dec-22
Russell Scrimshaw
15-Dec-22
250,000
250,000
Tony Pearson
Tony Pearson
Abdullah Mwinyi
Abdullah Mwinyi
Giselle Collins
-
-
-
-
-
-
-
-
-
-
$0.475
$0.440
$0.360
-
-
-
-
-
1,662,500
110,000
90,000
-
-
-
-
-
-
-
-
25-Apr-23
17-Apr-23
25-Apr-23
17-Apr-23
-
Giles Stapleton
15-Dec-22
100,000
$0.475
47,500
17-April-23
4,100,000
1,910,000
Executives
Bardin Davis
Bardin Davis
Philip Rundell
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
Total
23-Sep-22
23-Sep-22
23-Sep-22
23-Sep-22
100,000
500,000
500,000
450,000
1,550,000
5,650,000
$0.480
$0.480
$0.480
$0.480
48,000
240,000
240,000
216,000
744,000
2,654,000
25-Apr-23
17-Apr-23
17-Apr-23
30-Jun-23
30-Jun-23
30-Jun-23
30-Jun-23
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
15-Dec-26
15-Dec-26
15-Dec-26
5-Feb-24
9-Dec-25
5-Feb-25
9-Dec-25
9-Dec-25
15-Dec-26
5-Feb-24
9-Dec-25
9-Dec-25
23-Sep-26
23-Sep-26
23-Sep-26
23-Sep-26
-
-
-
75,000
200,000
15,000
28,070
-
26,316
344,386
375,000
300,000
80,001
30,000
169,000
175,000
112,500
1,241,501
1,585,887
-
-
-
-
-
-
-
(100,000)
(73,684)
(173,684)
-
-
-
-
-
-
-
-
(173,684)
^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 vested, been exercised and the shares are issued.
*For performance rights with non-market conditions, the fair value is measured using the closing share price at grant date. For performance rights with market conditions, the fair value is
measured using a binomial pricing model.
#
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.
54 | PEAK RARE EARTHS
Options and performance rights granted / vested / lapsed during the year ended 30 June 2022
Movements in options during the year:
30-Jun-22
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
Directors
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan
Giles Stapleton
Executives
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$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.
2023 ANNUAL REPORT | 55
Movements in performance rights during the year:
30-Jun-22
Date of issue
Number of
performance
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
Directors
Tony Pearson
Bardin Davis
Abdullah Mwinyi
Giselle Collins
Rebecca Morgan
Giles Stapleton
Executives
Philip Rundell
Mark Godfrey
Lello Galassi
Andrea Cornwell
Total
9-Dec-21
9-Dec-21
9-Dec-21
9-Dec-21
9-Dec-21
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
9-Dec-21
200,000
$0.66
132,000
-
-
-
-
-
-
-
-
200,000
1,691,666
-
-
-
-
-
-
132,000
1,116,500
-
-
-
-
-
-
-
-
-
-
$nil
$nil
$nil
$nil
$nil
-
9-Dec-25
9-Dec-25
9-Dec-25
9-Dec-25
9-Dec-25
-
$nil
9-Dec-25
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(100,000)
-
(100,000)
-
-
-
-
(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.
*For performance rights with non-market conditions, the fair value is measured using the closing share price at grant date. For performance rights with market conditions, the fair value is
measured using a binomial pricing model.
#
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.
56 | PEAK RARE EARTHS
Shareholdings of KMP’s
30-Jun-23
Opening Balance
Granted as Remuneration
Exercise of Options/PRs
Market/ Other Movements
Closing Balance
Directors
Russell Scrimshaw
Abdullah Mwinyi
Shasha Lu
Ian Chambers
Nick Bowen
Tony Pearson*
Giselle Collins*
Giles Stapleton*
Executives
Bardin Davis
Philip Rundell
Lello Galassi
Ray Anguelov
Mark Godfrey*
Andrea Cornwell
Total
-
35,000
-
-
-
470,666
30,000
110,976
646,642
905,510
-
-
-
-
-
905,510
1,552,152
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,070
-
-
-
275,000
-
26,316
344,386
675,000
105,001
100,000
-
100,000
37,500
1,017,501
1,361,887
300,000
-
-
1,200,000
110,000
(745,666)
(30,000)
(137,292)
697,042
-
-
-
-
(100,000)
-
(100,000)
597,042
300,000
78,070
-
1,200,000
110,000
-
-
-
1,688,070
1,580,510
105,001
100,000
-
-
37,500
1,823,011
3,511,081
*Ceased to be KMP’s during the period and their holdings are not reported at period end.
2023 ANNUAL REPORT | 57
Option Holdings of KMP’s including performance rights
30-Jun-23
Opening Balance
Granted as
Remuneration
Exercise of Options
& PRs
Expired/ Lapsed
Other Movements
Closing Balance
Vested at 30 June
Directors
Russell Scrimshaw
Abdullah Mwinyi
Shasha Lu
Ian Chambers¹
Nick Bowen
Tony Pearson*
Giselle Collins*
-
131,666
-
-
-
1,300,000
100,000
Giles Stapleton*
-
Executives
Bardin Davis
Philip Rundell
Lello Galassi
Ray Anguelov
Mark Godfrey*
Andrea Cornwell
Total
1,531,666
2,375,000
200,000
-
-
-
-
2,575,000
4,106,666
4,000,000
-
-
-
-
-
-
100,000
4,100,000
-
100,000
500,000
-
500,000
450,000
1,550,000
5,650,000
-
(43,070)
-
-
-
(275,000)
-
(26,316)
(344,386)
(675,000)
(105,001)
(100,000)
-
(100,000)
(37,500)
(1,017,501)
(1,361,887)
-
-
-
-
-
(500,000)
(100,000)
(73,684)
(673,684)
-
-
-
-
-
-
-
(673,684)
-
-
-
-
-
(525,000)
-
-
4,000,000
88,596
-
-
-
-
-
-
(525,000)
4,088,596
-
-
-
-
(400,000)
-
(400,000)
(925,000)
1,700,000
194,999
400,000
-
-
412,500
2,707,499
6,796,095
-
-
-
-
-
-
-
-
-
-
5,000
75,000
-
-
75,000
155,000
155,000
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.
¹Mr Chambers was offered 600,000 performance rights, which were approved by shareholders on 15 June 2023. As of 30 June 2023 these performance rights had not yet been issued.
58 | PEAK RARE EARTHS
Performance income as a proportion of total income
No bonuses have been paid to executives during the year.
Service agreements:
The key terms of the service agreements with the KMP’s are:
Russell Scrimshaw (Executive Chairman from 15 August 2022)
Executive Chairman fees are currently set at $120,000 plus superannuation entitlements per annum
and is subject to an annual review. Following shareholder approval Russell was issued 4,000,000
performance rights under the Company’s Performance Rights Plan.
Tony Pearson (Non-Executive Director from 21 Aug 2018, Chair from 21 October 2020, appointed
Deputy Chair from 15 August 2022, resigned 30 June 2023)
Chair fees were set at $95,000 plus superannuation entitlements per annum and non-executive
director fees set at $50,000 per annum.
Non-Executive Directors
Non-Executive Directors are appointed by letter agreement with no fixed term ceasing on resignation
or removal as a director in accordance with the Corporations Act 2001. Fees are currently set at
$50,000 plus superannuation entitlements per annum, with non-resident directors entitled to receive
the superannuation component as fees. Subject to shareholder approval the Non-Executive Directors
are eligible to be offered and issued performance rights under the Company’s Performance Rights
and Employee Incentive Plans.
Bardin Davis – Managing Director - (Non-Executive Director from 21 Oct 2020, Managing Director
from 9 Dec 2020, Chief Executive Officer from 9 July 2022)
Bardin is employed under an Executive Service Agreement (ESA). The ESA provides for an annual
salary of $350,000 to be reviewed annually 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.
Philip Rundell – CFO & Company Secretary (Appointed 16 December 2020)
Philip is employed under a consulting agreement with the Company with a fixed retainer of $20,000
per month. The engagement has no fixed term and is subject to a 6 month notice period from either
party.
Mark Godfrey – Head of Technical Services - (Appointed 6 September 2021, resigned 13 April 2023)
Mark was employed under an Executive Service Agreement (ESA). The ESA provided for an annual salary
of $285,000 plus discretionary performance bonuses. The Executive was entitled to superannuation
and leave in accordance with the relevant legislation. The engagement had no fixed term but was
subject to a three-month notice period from either party. Mark was issued 450,000 performance rights
under the Company’s Performance Rights Plan.
Lello Galassi – Head of Development and Operations - (Appointed 20 September 2021)
Lello is employed under an Executive Service Agreement (ESA). The ESA provides for an annual salary
of UD$300,000 plus discretionary performance bonuses and will receive 24 days of annual leave per
year. Upon any 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 was 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 Cornwell – Head of Marketing and Sales - (Appointed 29 November 2021)
Andrea is employed under an Executive Service Agreement (ESA). The ESA 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. Under the ESA, Andrea was issued 450,000
performance rights under the Company’s Performance Rights Plan. Andrea will leave the employ of
the Company on or around 15 December 2023.
2023 ANNUAL REPORT | 59
Ray Anguelov – Head of Technical Services - (Appointed 15 May 2023)
Ray is employed under an Executive Service Agreement (ESA). The ESA provides that the annual salary
commences at CAD $300,000 per annum and is subject to annual review. The engagement had no
fixed term but is subject to a three-month notice period from either party. Ray 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.
Related party transactions
There were no related party transactions with Key Management Personnel during the year (2022: $nil).
(End of Remuneration Report)
OPTIONS AND PERFORMANCE RIGHTS
At the date of this report no listed or unlisted options over ordinary shares were on issue.
During the year, a total of 275,000 unlisted options were exercised at a $0.30 exercise price. A total
of 784,000 unlisted options with exercises price of $0.30 to $1.50 lapsed, were cancelled, or expired
unexercised. No options were issued.
Details of options movements during the year are detailed in the Remuneration Report and note 19 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
23 September 2026
15 December 2026
Exercise Price
Number of Performance Rights
$Nil
$Nil
$Nil
$Nil
1,550,000
1,031,553
1,637,500
4,000,000
During the year, 6,153,400 performance rights were issued to directors and employees of the Company.
A total of 1,593,929 vested performance rights were exercised for $nil consideration and a total of
173,684 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.
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 of the Company or of any related body
corporate against a liability incurred as an officer.
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.
60 | PEAK RARE EARTHS
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2023 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 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,
Dr Russell Scrimshaw (AM)
Executive Chairman
27 September 2023
2023 ANNUAL REPORT | 61
INDEPENDENT AUDITOR’S REPORT
62 | PEAK RARE EARTHS
INDEPENDENT AUDITOR’S REPORT
2023 ANNUAL REPORT | 63
INDEPENDENT AUDITOR’S REPORT
64 | PEAK RARE EARTHS
INDEPENDENT AUDITOR’S REPORT
2023 ANNUAL REPORT | 65
INDEPENDENT AUDITOR’S REPORT
66 | PEAK RARE EARTHS
INDEPENDENT AUDITOR’S REPORT
2023 ANNUAL REPORT | 67
INDEPENDENT AUDITOR’S REPORT
68 | PEAK RARE EARTHS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Year Ended 30 June 2023
Interest income
R&D rebate
Total income
Employee benefits expenses
Share based payments expenses
Write-off of capitalised exploration costs
Depreciation expenses
Share based payments for government participation
Finance costs
Administrative and other costs
Technical feasibility costs
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income net of tax
Items that could be transferred to profit or loss in future:
Note
17
12
10, 11
22
11, 16
2023
$
111,705
586,281
697,986
2022
$
8,602
-
8,602
(3,157,157)
(2,579,194)
(1,665,584)
(610,449)
-
(320,209)
(21,189,140)
(156,080)
(199,074)
-
(15,379)
(7,874,527)
(3,853,724)
(4,284,188)
(3,297,432)
(7,036,692)
(32,800,639)
(22,731,602)
6
-
-
(32,800,639)
(22,731,602)
Exchange differences on translation of foreign operations
1,900,864
4,598,141
Total comprehensive loss for the year
(30,899,775)
(18,133,461)
Loss after income tax attributable to:
Members of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Members of the parent
Non-controlling interests
(29,386,856)
(18,133,461)
(3,413,783)
-
(32,800,639)
(18,133,461)
(27,485,992)
(18,133,461)
(3,413,783)
-
(30,899,775)
(18,133,461)
Loss per share (in cents)
Basic and Diluted loss per share
4
(15.38)
(11.66)
2023 ANNUAL REPORT | 69
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Note
2023
$
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
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Equity attributable to equity holders of the Company
Contributed equity
Reserves
Accumulated losses
7
8
9
10
11
12
13
14
15
11
11
18
17
25,852,484
9,479,379
251,377
169,957
974,411
80,373
26,273,818
10,534,163
63,794
535,479
63,794
225,337
3,604,882
3,774,955
60,997,405
59,114,040
8,000
8,000
65,209,560
63,186,126
91,483,378
73,720,289
2,140,418
2,447,973
180,554
145,398
96,367
110,279
2,466,370
2,654,619
133,865
133,865
206,364
206,364
2,600,235
2,860,983
88,883,143
70,859,306
166,874,257
140,805,369
8,764,011
5,197,563
(104,530,482)
(75,143,626)
Equity attributable to equity holders of the Company
71,107,786
70,859,306
Non-controlling interests
Total Equity
17,775,357
-
88,883,143
70,859,306
The statement should be read in conjunction with the accompanying notes.
70 | PEAK RARE EARTHS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2023
Note
2023
$
2022
$
OPERATING ACTIVITIES
Payments to suppliers and employees
(9,848,732)
(12,137,690)
Finance costs paid
Interest received
Government rebates received
(15,379)
53,122
586,281
-
8,602
-
Cash used in operating activities
7
(9,224,708)
(12,129,088)
INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Cash used in investing activities
FINANCING ACTIVITIES
Proceeds from issue of equity shares
Costs of issuing equity shares
Additions to bank guarantee
Payment of lease liabilities
Repayment of borrowings
Cash generated from financing activities
Net increase in cash and cash equivalents
Balance at the beginning of the year
Effect of foreign currency translation
(370,338)
(239,505)
(370,338)
(239,505)
27,582,500
34,469,917
(1,513,612)
(1,382,278)
-
(123,900)
(63,794)
(40,671)
-
(13,767,214)
25,944,988
19,215,960
16,349,942
9,479,379
23,163
6,847,367
2,680,367
(48,355)
Balance at the end of the year
7
25,852,484
9,479,379
The statement should be read in conjunction with the accompanying notes.
2023 ANNUAL REPORT | 71
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2023
Contributed
Equity
$
Share based
payment
reserve
$
Foreign
currency
translation
reserve
$
Accumulated
losses
$
Non-
controlling
interests
$
At 30 June 2021
107,717,730
4,644,083
(4,655,110)
(52,412,024)
Loss for the year
Other comprehensive income
Total comprehensive income/
(loss) for the year
-
-
-
Equity issued
34,469,917
-
-
-
-
Equity based payments
-
610,449
Transaction costs
(1,382,278)
-
-
(22,731,602)
4,598,141
-
4,598,141
(22,731,602)
-
-
-
-
-
-
140,805,369
5,254,532
(56,969)
(75,143,626)
-
-
-
-
-
-
-
-
Total equity
$
55,294,679
(22,731,602)
4,598,141
(18,133,461)
34,469,917
610,449
(1,382,278)
70,859,306
At 30 June 2022
Loss for the year
Other comprehensive income
Total comprehensive income/
(loss) for the year
-
-
-
Equity issued
27,582,500
Share based payments for
government participation
(Note 22)
Equity based payments
-
-
-
-
-
-
-
1,665,584
Transaction costs
(1,513,612)
-
-
(29,386,856)
(3,413,783)
(32,800,639)
1,900,864
-
-
1,900,864
1,900,864
(29,386,856)
(3,413,783)
(30,899,774)
-
-
-
-
-
-
-
-
-
27,582,500
21,189,140
21,189,140
-
-
1,665,584
(1,513,612)
At 30 June 2023
166,874,257
6,920,116
1,843,895
(104,530,482)
17,775,357
88,883,143
The statement should be read in conjunction with the accompanying notes.
72 | PEAK RARE EARTHS
NOTES TO FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Peak Rare Earths Limited and its subsidiaries (the Group) for the year ended 30
June 2023 was authorised for issue in accordance with a resolution of the directors on 27 September
2023.
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
a) Basis of Preparation
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).
Going concern
The Group incurred a loss after tax of $32,800,639 (2022: $22,731,602) and had operating cash
outflows of $9,224,708 for the year ended 30 June 2023 (2022: $12,129,088). The loss after tax for
the year ended 30 June 2023 includes a non-recurring share-based payments for government
participation of $21,189,140 for the issuance of the 16% free carried interest in the Ngualla Project to
the Government of Tanzania (Note 22).
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 $25,852,484 cash at bank at the
end of the reporting period, Peak is well funded in the short term to fund the Ngualla Project, and its
corporate and administration requirements. In order to progress the project further, in a timeframe
planned by management, the Group’s cashflow forecasts indicate that there will be a need in the
future to obtain further funding.
In the directors’ opinion, there are reasonable grounds to believe that the Group has the ability
to raise further funding as and when required based on its past ability to raise equity funding.
However, in the event that additional funding is not forthcoming, the Group will need to reduce its
discretionary spending to ensure that it has sufficient cash on hand to continue its operations.
As a result of the need to raise additional equity 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 the amount and classification of liabilities that
might be necessary should the Group not continue as a going concern.
b) Impact of new standards applied for the first time
The accounting policies adopted in the preparation of the consolidated financial statements for
the year are consistent with those followed in the preparation of the Company’s annual financial
report for the year ended 30 June 2023, except for the adoption of new and amended accounting
standards and interpretations effective as of 1 July 2022. The adoption of these new and amended
accounting standards and interpretations did not have a material impact on the consolidated
2023 ANNUAL REPORT | 73
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.
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.
• AASB 2023-2 Amendments to AASB 112 – International Tax Reform Pillar Two Model Rules
• AASB 17 Insurance Contracts
• AASB 2020-1 Amendments to AASs – Classification of Liabilities as Current or Non-current
• AASB 2021-2 Amendments to AASs – Disclosure of Accounting Policies and Definition of
Accounting Estimates
• AASB 2021-5 Amendments to AASs – Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
• AASB 2022-1 Amendments to AASs – Initial Application of AASB 17 and AASB 9 – Comparative
Information
• AASB 2014-10 Amendments to AASs – Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
• AASB 2022-5 Amendments to AASs – Lease Liability in a Sale and Leaseback
• AASB 2022-6 Amendments to AASs – Non-current Liabilities with Covenants
• AASB 2022-7 Editorial Corrections to AASs and Repeal of Superseded and Redundant
Standards
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 2023. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. Specifically, the Group controls an
investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
• activities of the investee)
•
•
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement with the other vote holders of the investee
•
• Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
•
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the statement of comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.
All inter-company balances and transactions between entities in the 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
74 | PEAK RARE EARTHS
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 parent entities
presentation currency.
Foreign currency transactions
In preparing the financial statements of each individual group entity, transactions in foreign
currencies are initially recorded in the functional currency at the exchange rates ruling at the date
of the transaction. The Company’s functional currency is Australian dollars. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date, and gain or loss in exchange rate movements are recognised in profit or loss.
Translation of foreign operations
As at the reporting date the assets and liabilities of foreign operations are translated from their
functional currency at the rate of exchange ruling at the reporting date and the statement of
comprehensive income, statement cash flows and statement of changes in equity are translated at
the weighted average exchange rates for the year. The exchange differences arising on translation
are recognised in other comprehensive income and accumulated balances are carried forward as
a separate component of equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of gain or loss on change in fair value
of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other
comprehensive income or profit or loss are also recognised in other comprehensive income or
profit or loss, respectively).
On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to
that particular foreign operation is recognised in the profit or loss.
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.
2023 ANNUAL REPORT | 75
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.
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.
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 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
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.
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.
76 | PEAK RARE EARTHS
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• Where the deferred income tax liability arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
•
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward
of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry-forward of unused
tax assets and unused tax losses can be utilised except:
• Where the deferred income tax asset relating to the deductible temporary differences arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the
extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilised.
•
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the
profit or loss.
i) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST/VAT except:
When the GST/VAT incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST/VAT is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and Receivables and payables, which are stated
with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position.
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.
ii) Diluted loss per share
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.
2023 ANNUAL REPORT | 77
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.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
•
•
•
•
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses
(debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains
and losses upon derecognition (equity instruments)
Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised
cost if both of the following conditions are met:
•
•
The financial asset is held within a business model with the objective to hold financial assets
in order to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR)
method and are subject to impairment. Gains and losses are recognised in profit or loss when
the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost
includes trade receivables.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under AASB
132 Financial Instruments: Presentation and are not held for trading. The classification is determined
on an instrument-by-instrument basis.
78 | PEAK RARE EARTHS
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been
established, except when the Group benefits from such proceeds as a recovery of part of the cost
of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated
at fair value through OCI are not subject to impairment assessment. The Group elected to classify
irrevocably its non-listed equity investments under this category.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial
assets designated upon initial recognition at fair value through profit or loss, or financial assets
mandatorily required to be measured at fair value. Financial assets are classified as held for
trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,
including separated embedded derivatives, are also classified as held for trading unless they are
designated as effective hedging instruments. Financial assets with cash flows that are not solely
payments of principal and interest are classified and measured at fair value through profit or
loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortised cost or at fair value through OCI, as described above, debt instruments
may be designated at fair value through profit or loss on initial recognition if doing so eliminates,
or significantly reduces, an accounting mismatch. Financial assets at fair value through profit or
loss are carried in the statement of financial position at fair value with net changes in fair value
recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had
not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments
are also recognised as other income in the statement of profit or loss when the right of payment
has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated
from the host and accounted for as a separate derivative if: the economic characteristics and risks
are not closely related to the host; a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair
value through profit or loss. Embedded derivatives are measured at fair value with changes in fair
value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms
of the contract that significantly modifies the cash flows that would otherwise be required or a
reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted
for separately. The financial asset host together with the embedded derivative is required to be
classified in its entirety as a financial asset at fair value through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement
of financial position) when:
•
•
The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially
all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset, the Group continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group also recognises
an associated liability. The transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Group has retained. Continuing involvement that
takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
2023 ANNUAL REPORT | 79
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not
held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective interest rate. The expected cash
flows will include cash flows from the sale of collateral held or other credit enhancements that are
integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Group’s financial liabilities include
trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
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.
l) Cash and Cash Equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
m) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and
subsequently at amortised cost, less 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
80 | PEAK RARE EARTHS
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
The Group expenses all exploration and evaluation expenditure (excluding acquisition costs) as
incurred, as permitted by AASB 6 Exploration for and Evaluation of Mineral Resources.
Exploration and evaluation expenditure in relation to each separate area of interest is recognised as
an exploration and evaluation asset in the year in which it is incurred where the following conditions
are satisfied:
The rights to tenure of the area of interest are current; and at least one of the following conditions
is also met:
•
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in relation to,
the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to
explore, studies, exploratory drilling and associated activities and an allocation of depreciation and
amortisation of assets used in exploration and evaluation activities. General and administrative
costs are only included in the measurement of exploration and evaluation costs where they are
related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable
amount. The recoverable amount of the exploration and evaluation asset (for the cash generating
unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated
to determine the extent of the impairment loss (if any).
The recoverable amount of exploration and evaluation assets is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
An impairment exists when the carrying amount of an asset or cash-generating unit exceeds
its estimated recoverable amount. The asset or cash-generating unit is then written down to its
recoverable amount. Any impairment losses are recognised in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance is
then reclassified to production assets.
2023 ANNUAL REPORT | 81
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 benefits to directors, senior executives and other eligible
participants as determined by the Board are the Incentive Performance Rights Plan (PRP),
the Incentive Employee Option Plan (EOP) and the Employee Incentive Plan (EIP) approved by
shareholders on 15 June 2023.
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 of Options is
determined using a Black-Scholes option pricing model. For Performance Rights with non-market
conditions, the fair value is measured using the closing share price at grant or shareholder approval
date. For performance rights with market conditions, the fair value is measured using a binomial
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).
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.
82 | PEAK RARE EARTHS
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) Non-controlling interest
The Group elected to measure the non-controlling interests in Mamba Minerals Corporation Limited
and Mamba Refinery Corporation Limited at its proportionate share of the book values of their net
assets at each end of the reporting period.
u) Critical accounting judgements and estimates
In the application of Australian Accounting Standards, management is required to make judgments
about applying accounting policies and estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of making the judgments.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future periods if the revision affects both
current and future periods.
Impairment of 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 – key management personnel and employees
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.
Share based payment for government participation
Estimating the fair value of the share based payment arising on the transfer of the 16% interest in
the Ngualla project to the Tanzanian Government requires determination of the most appropriate
valuation model significant judgement. As the fair value of the services received provided by the
Tanzanian Government by to the Group under the framework agreement could not be reliably
estimated, the fair value was determined taking into account utilising an indicative measure of the
fair value of the Ngualla project at the date on which the Group and the Tanzanian Government
entered into a framework agreement.
2023 ANNUAL REPORT | 83
3. AUDITORS REMUNERATION
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
2023
$
2022
$
84,700
83,860
Total fees to Ernst & Young (Australia) (A)
84,700
83,860
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)
30,722
30,722
115,422
29,381
29,381
113,241
4. LOSS PER SHARE
The following reflects the income and share data used in the total operations basic and dilutive loss per share
computations:
Basic and Diluted loss per share based on reported losses after
tax as set out in the Statement of Comprehensive Income
2023
Cents
(15.38)
2023
Nos.
2022
Cents
(11.66)
2022
Nos.
Weighted average number of ordinary shares used in
calculating basic loss per share
Weighted average number of ordinary shares used in
calculating diluted loss per share
213,201,222
195,031,962
213,201,222
195,031,962
Anti-dilutive options over ordinary shares and performance
rights excluded from the weighted average number of shares
7,952,553
4,433,266
The weighted average number of ordinary shares in 2022 was 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 18)
84 | PEAK RARE EARTHS
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.
Interest income
Other income
Total income
Depreciation and
amortisation
Share based payment
expenses
Borrowing costs
Write-off of capitalised
exploration costs
30 June 2023
Unallocated
$
111,705
Total
$
111,705
586,281
586,281
697,986
697,986
E&D
$
-
-
30 June 2022
Unallocated
$
8,602
-
8,602
Total
$
8,602
-
8,602
E&D
$
-
-
-
(187,651)
(132,558)
(320,209)
(165,708)
(33,366)
(199,074)
(21,189,140)
(1,665,584)
(22,854,724)
-
-
(15,379)
(15,379)
-
-
-
(156,080)
(3,297,432)
(7,036,692)
-
-
(610,449)
(610,449)
(7,874,527)
(7,874,527)
-
-
(156,080)
(7,036,692)
Technical feasibility costs
(3,297,432)
Other expenses
Income Tax
-
-
(7,010,881)
(7,010,881)
-
-
-
-
(6,863,382)
(6,863,382)
-
-
Segment results
(24,674,223)
(8,126,416)
(32,800,639)
(7,358,480)
(15,373,122)
(22,731,602)
Segment assets
64,821,932
26,661,446
91,483,378
62,773,663
10,946,625
73,720,288
Segment liabilities
(358,268)
(2,241,967)
(2,600,235)
(133,830)
(2,727,153)
(2,860,983)
Additions to non-current
assets during the year:
Plant and equipment
346,865
Right-of-use assets
-
346,865
26,893
86,521
113,414
373,758
86,521
212,010
33,432
27,495
318,366
460,279
245,442
345,861
239,505
351,798
591,303
2023 ANNUAL REPORT | 85
6. INCOME TAX
a.
The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense reported in statement of comprehensive income
b.
The prima facie tax benefit on loss from ordinary activities before
income tax is reconciled to the income tax as follows:
CONSOLIDATED
2023
$
CONSOLIDATED
2022
$
-
-
-
-
-
-
Loss before income tax
Prima facie tax benefit on loss from ordinary activities before income
tax at 30.0% (2022:30%)
(32,800,639)
(22,731,602)
(9,840,192)
(6,819,481)
Add tax effect of:
- Revenue losses not recognised
- Other non-allowable items
Less tax effect of:
- Other deferred tax balances not recognised
- Non-assessable items
2,252,909
8,016,911
(253,744)
(175,884)
Income tax expense reported in statement of comprehensive income
-
c.
Recognised deferred tax assets at 30.0% (2022:30%) (Note 1):
Deferred tax liabilities
Right of use asset
Interest receivable
Deferred tax assets
Carry forward revenue losses
(77,268)
(17,575)
94,843
-
1,466,717
4,913,965
(438,799)
-
-
(87,551)
-
87,551
-
d.
Unrecognised deferred tax assets at 30.0% (2022:30%) (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
11,754,678
9,504,524
295,504
543,997
400,947
1,313,150
80,878
9,350
295,504
665,723
298,181
1,164,670
131,314
9,350
14,398,504
12,069,266
The tax benefits of the above deferred tax assets will only be obtained if:
a.
b.
c. no changes in income tax legislation adversely affect the company in utilising the benefits.
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
Note 1 - the corporate tax rate for eligible companies is 25% providing certain turnover thresholds and other criteria are met.
All other companies are taxed at 30%. 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 - Comparative figures have been restated to meet legislative requirements. The overall tax position has not changed.
Note 3 - 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.
86 | PEAK RARE EARTHS
7. CASH AND CASH EQUIVALENTS
Reconciliation of cash and cash equivalent
For the purpose of the Cash Flow Statement, cash and cash
equivalents comprise the following:
Cash at bank and in hand
Short term deposits
Reconciliation of operating loss to operating cash flows
Loss for the year
Adjustments for non-cash items:
Borrowing costs
Share based payments expenses
Share based payments for government participation
Creditors settled in equity
Write-off exploration costs
Depreciation expenses
Foreign exchange loss/(gain)
Movement in working capital items:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in prepayments
Increase/(Decrease) in trade and other payables
Increase in provisions
8. TRADE AND OTHER RECEIVABLES
Current
GST/VAT receivable
Other receivable
Ageing of receivables
Recoverable within 3 months
Receivables are non-interest bearing and unsecured.
9. OTHER FINANCIAL ASSETS
Bank Term Deposit
2023
$
2,352,484
23,500,000
25,852,484
2022
$
9,479,379
-
9,479,379
(32,800,639)
(22,731,602)
-
1,665,584
21,189,140
-
-
320,209
(9,084)
723,034
(89,584)
(307,555)
84,187
7,874,527
610,449
-
19,847
156,080
199,073
40,966
(241,956)
4,367
1,871,227
67,934
(9,224,708)
(12,129,088)
2023
$
180,641
70,736
251,377
251,377
251,377
2023
$
63,794
63,794
2022
$
968,271
6,140
974,411
974,411
974,411
2022
$
63,794
63,794
A deposit of $63,794 (2022: $63,794), 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.
2023 ANNUAL REPORT | 87
10. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in net carrying amount:
Balance at the beginning of the year
Net Additions
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 2023
LEASE LIABILITIES
Movement in net carrying amount:
Balance at beginning of year
Additions
Accretion of interest
Lease payments
Balance at 30 June 2023
Current
Non-Current
Total
2023
$
826,572
(291,093)
535,479
225,337
373,758
(63,616)
535,479
2023
$
3,774,954
86,521
(256,593)
3,604,882
2023
$
316,643
86,521
15,379
(139,280)
279,263
145,398
133,865
279,263
2022
$
452,814
(227,477)
225,337
24,819
239,505
(38,987)
225,337
2022
$
3,583,243
351,798
(160,087)
3,774,954
2022
$
-
352,812
4,502
(40,671)
316,643
110,279
206,364
316,643
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 $18,200 for the year ended
30 June 2023 (2022: $14,536).
88 | PEAK RARE EARTHS
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
14. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Ageing of payables
Payable within 3 months
15. PROVISIONS
Employee benefits - leave entitlements
16. ROYALTY LIABILITY
2023
$
59,114,040
-
1,883,365
60,997,405
60,997,405
60,997,405
2023
$
8,000
8,000
2023
$
2022
$
54,472,897
(156,080)
4,797,223
59,114,040
59,114,040
59,114,040
2022
$
8,000
8,000
2022
$
2,140,418
2,447,973
-
2,140,418
2,140,418
2023
$
180,554
-
2,447,973
2,447,973
2022
$
96,367
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 “Finance costs” in the profit or loss. During the year ended 30 June 2022, the Group
repaid in full the royalty liability.
2023 ANNUAL REPORT | 89
17. RESERVES
At 30 June 2021
Share based payments
Share based
payment reserve
$
Foreign currency
translation reserve
$
4,644,083
(4,655,110)
610,449
-
Exchange difference on translation of foreign operations
-
At 30 June 2022
Share based payments
5,254,532
1,665,584
Exchange difference on translation of foreign operations
-
At 30 June 2023
6,920,116
4,598,141
(56,969)
-
1,900,864
1,843,895
Total
$
(11,027)
610,449
4,598,141
5,197,563
1,665,584
1,900,864
8,764,011
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
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
Issue of shares on exercise of listed
PEKOD options @ 3 cents per share
Issue of shares Tranche 1 Capital
Raising @ 9 cents per share
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
Issue of shares Tranche 2 Capital
Raising @ 9 cents per share
Issue of shares for nil consideration on
exercise of vested performance rights
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
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
90 | PEAK RARE EARTHS
Nos.
$
1,628,758,098
107,717,730
1-Jul-21
8-Jul-21
330,000
174,518
-
19,847
6-Aug-21
333,333
10,000
13-Aug-21
226,851,892
20,416,670
8-Sep-21
4,166,667
1-Oct-21
1-Oct-21
1,300,000
375,000
125,000
39,000
13,125
4-Oct-21
106,481,442
9,583,330
5-Oct-21
8-Oct-21
10-Dec-21
14-Jan-22
21-Jan-22
2-Feb-22
15-Feb-22
22-Feb-22
482,000
18,614,511
(1,789,079,928)
75,000
290,000
66,667
32,000
18,600
-
1,675,311
-
26,250
87,000
20,000
9,600
5,580
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
Issue of shares for nil consideration to
Tanzanian employees in recognition of
continuing and valued service to the
company
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
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
Issue of shares on exercise of listed
PEKOD options @ 30 cents per share
Equity Issue Costs
Balance at 30 June 2022
Issue of shares for nil consideration on
exercise of vested performance rights
Issue of shares for nil consideration on
exercise of vested performance rights
Issue of shares on exercise of listed
PEKOD options @ 30 cents per share
Issue of shares Tranche 1 Capital
Raising @ 50 cents per share
Issue of shares for nil consideration on
exercise of vested performance rights
Issue of shares Tranche 2 Capital
Raising @ 50 cents per share
Issue of shares Tranche 2 Capital
Raising @ 50 cents per share
Equity Issue Costs
Balance at 30 June 2023
23-Feb-22
Nos.
129,560
1-Mar-22
500,000
4-Mar-22
11-Mar-22
15-Mar-22
17-Mar-22
17-Mar-22
22-Mar-22
116,667
100,000
651,986
45,171
288,667
54,041
$
38,868
150,000
35,000
30,000
195,596
29,135
86,600
16,212
24-Mar-22
2,535,116
760,535
25-Mar-22
28-Mar-22
29-Mar-22
4-Apr-22
5-Apr-22
34,578
15,000
203,709
215,483
51,000
10,373
4,500
61,113
64,645
15,300
7-Apr-22
2,628,132
788,440
12-Apr-22
19-Apr-22
5-Dec-22
19-Dec-22
17-Feb-23
277,184
232,443
207,348,537
514,399
174,494
275,000
83,155
69,732
(1,382,278)
140,805,369
-
-
82,500
5-May-23
28,648,186
14,324,093
15-May-23
905,036
-
20-Jun-23
15,215,000
7,607,500
21-Jun-23
11,136,814
5,568,407
264,217,466
(1,513,612)
166,874,257
2023 ANNUAL REPORT | 91
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 8,219,053 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 2022
4,892,266
Expired/ Lapsed/ Cancelled:
Performance Rights lapse on
director resignation
9-Nov-22
(100,000)
Lapse of Unlisted Options
5-Mar-23
(284,000)
Performance Rights lapse on
director resignation
5-Jun-23
(73,684)
Lapse of Unlisted Options
21-Jun-23
(500,000)
(957,684)
Issued:
Performance Rights issued
as a Long Term Incentive to
employees.
Performance Rights issued
as a Long Term Incentive to
directors.
23-Sep-22
2,053,400
Unvested
15-Dec-22
4,100,000
Unvested
Exercised:
Vested Performance Rights
5-Dec-22
Vested Performance Rights
5-Dec-22
6,153,400
(312,500)
(201,899)
Vested Performance Rights
19-Dec-22
(163,968)
Vested Performance Rights
19-Dec-22
(10,526)
-
$0.30
-
$1.50
-
-
-
-
-
-
9-Dec-25
5-Mar-23
15-Dec-26
21-Jun-23
9-Dec-25
15-Dec-26
23-Sep-26
9-Dec-25
9-Dec-25
30-Nov-26
Un-Listed Options
17-Feb-23
(275,000)
$0.30
5-Mar-23
Vested Performance Rights
15-May-23
(103,400)
Vested Performance Rights
15-May-23
(465,000)
Vested Performance Rights
15-May-23
(320,846)
Vested Performance Rights
15-May-23
(15,790)
Balance at 30 June 2023
(1,868,929)
8,219,053
-
-
-
-
23-Sep-26
5-Feb-25
9-Dec-25
15-Dec-26
For the year ended 30 June 2023, 2,053,400 employee performance rights and 4,100,000 director
performance rights were issued under the Performance Rights Plan approved at the Annual General
Meeting held on 29 November 2021. No performance rights were issued under the Employee Incentive
Plan approved at the General Meeting held on 15 June 2023. No options were issued under the Employee
Option Plan (EOP). During the year a total of 957,684 options and performance rights expired, lapsed
or were cancelled.
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.
92 | PEAK RARE EARTHS
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.
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 2023, no options were issued under the EOP to
executives and employees (2022: nil).
Options granted during and as at the year ended 30 June 2023:
Outstanding at 1 July 2022¹
Granted / Vested during the year:
Exercised during the year
Expired/ Lapsed/ Cancelled during the year
Outstanding at 30 June 2023
Exercisable at 30 June 2023
^WA (weighted average)
Options granted during and as at the year ended 30 June 2022:
Outstanding at 1 July 2022¹
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
Number
1,059,000
-
(275,000)
(784,000)
-
-
Number
5,816,500
-
(4,332,500)
(425,000)
1,059,000
559,000
WA Exercise Price^
$0.8666
-
-
-
-
-
WA Exercise Price^
$0.4413
-
-
-
$0.8666
$0.3000
^WA (weighted average)
¹Outstanding balance of shares at 1 July 2021 adjusted to reflect Capital consolidation of securities 10 to 1 on 10th Dec 2021.
The weighted average remaining contractual life for share options outstanding at 30 June 2023 was
0 years (2022: 0.82 years).
Performance Rights Plan
The Group has an Employee Incentive Plan for the granting of performance rights to eligible participants
which was last approved by Shareholders at a General Meeting of the Company on 15 June 2023.
6,153,400 performance rights were issued during the year ended 30 June 2023 under the Performance
Rights Plan approved at the Annual General Meeting held on 29 November 2021 (2022: 1,918,266).
2023 ANNUAL REPORT | 93
Performance rights granted during and as at the year ended 30 June 2023:
Number
Exercise Price
Fair value per
performance right
Outstanding at 1 July 2022
3,833,266
Granted during the year:
Performance Rights issued under the Company’s Incentive
Performance Rights Plan*
Expired/Lapsed during the year:
Exercised during the year
Outstanding at 30 June 2023
Exercisable at 30 June 2023
0.47
6,153,400
(173,684)
(1,593,929)
8,219,053
-
-
-
-
-
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
-
-
-
-
-
-
-
$0.66
¹Outstanding balance of shares at 1 July 2021 adjusted to reflect Capital consolidation of securities 10 to 1 on 10th Dec 2021.
* 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 (2022: $0.00)
The weighted average remaining contractual life for rights outstanding at 30 June 2023 was 3 years
(2022: 3 years)
The weighted average fair value of rights issued during the year was $0.47 per right (2022: $0.66)
For performance rights with non-market conditions, the fair value is measured using the closing share
price at grant or shareholder approval date. For performance rights with market conditions, the fair
value is measured using a binomial pricing model. Performance rights were issued during the year
with the follow inputs:
94 | PEAK RARE EARTHS
Options and performance rights granted during the year ended 30 June 2023:
23-Sep-2022 – unvested LTI Performance Rights to vest on achievement of
performance criteria by 23 September 2026 or the Performance Rights will
lapse
Share price on date of grant
Fair value per performance right – non-market based
15-Dec-2022 – unvested LTI Performance Rights to vest on achievement of
performance criteria by 15 December 2026 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 – non market based
Fair value per performance right – market-based barrier price $0.80
Fair value per performance right – market-based barrier price $1.50
(WA weighted average)
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 November 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)
$0.48
$0.48
$0.475
3.75%
0%
80.7%
$0.475
$0.44
$0.36
$0.66
0.75%
0%
77%
$0.66
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 $1,665,584 (2022: $610,449) is $Nil (2022: $Nil) relating to the
shares issued during the year, ($46,703)* (2022: $23,360*) relating to options granted during the year
and prior years, and $1,712,287* (2022: $587,089*) relating to performance rights granted during the
year and prior years.
*Includes the write back of the share-based payments previously recognised for options and
performance rights that lapsed during the current period.
2023 ANNUAL REPORT | 95
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
2023
$
155,166
137,549
292,715
Capital Commitments
At 30 June 2023, the Group has no capital commitments (2022: Nil).
Contingencies
At 30 June 2023, the Group has no contingencies (2022: Nil).
21. KEY MANAGEMENT PERSONNEL DISCLOSURE
Salary and fees – short term benefits
Superannuation
Share based payments^
2023
$
1,987,358
103,399
1,457,999
3,548,756
2022
$
122,110
214,958
337,068
2022
$
1,720,824
93,384
556,355
2,370,563
^Includes write back of forfeited unvested non-market based Options and Performance Rights during the year.
The balance outstanding at 30 June 2023 and included in trade and other payables is $240,000 (2022:
$Nil).
Loans to KMP’s
No loans were made to KMPs during the financial year (2022: Nil)
Other transaction and balances with KMPs
There were no other related party transactions with KMPs during the year (2022: $Nil). There were no
other balance outstanding at 30 June 2023 (2022: $Nil).
96 | PEAK RARE EARTHS
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:
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)
Incorporation
Australia
Australia
Australia
Australia
Australia
Tanzania
Mauritius
Tanzania
Peak Technology Metals Limited
United Kingdom
Teesside Rare Earth Elements Limited (indirectly)
United Kingdom
Ngualla Group UK Limited (indirectly)
United Kingdom
Mamba Minerals Corporation Limited (indirectly)
Mamba Refinery Corporation Limited (indirectly)
Tanzania
Tanzania
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
84%
84%
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
Incorporation of Mamba Minerals Corporation Limited and Mamba Refinery Corporation Limited
In February 2023, Peak and the Government of Tanzania, incorporated Mamba Minerals Corporation
Limited (”MML”) and Mamba Refinery Corporation Limited (“MRL”), with the shareholders of both
MML and MRL being Peak subsidiary, Ngualla Group UK Limited, holding 84% and the Government of
Tanzania holding 16%.
On 17 April 2023, the Framework Agreement was executed between the Tanzanian Government, Peak
Rare Earths Limited, Ngualla Group UK Limited and PR NG Minerals Limited. The 16% interest in MML
and MRL was issued to the Tanzanian Government without any consideration to fulfill the terms of the
Framework Agreement and the Tanzanian legislation. The Tanzanian Government’s 16% interest is an
un-dilutable, free carried interest and the Tanzania Government is not obliged to make any capital
contributions for the development of the Ngualla Project or operations of MML and MRL.
The Framework Agreement sets out the basis of the Government of Tanzania’s agreement for the
licencing, development, economic benefit sharing and the formation of entities held by Peak and the
Government of Tanzania with respect to the development and operation of the Ngualla Project. The
Group was obliged to transfer all intellectual property, studies, reports, physical assets and any other
assets acquired under the arrangement without any consideration to MML in accordance with the
terms of the Framework Agreement. On 25 April 2023 the Special Mining Licence was issued to MML for
the development and operations of the Ngualla Project.
For the year ended 30 June 2023, the Group recognised a share based payment for government
participation amounting to $21,189,140 (2022: $Nil). Estimating the fair value of the share based payment
arising on the issuance of the 16% interest in the Ngualla Project to the Tanzanian Government required
determination of an appropriate valuation model under accounting standard AASB 2. The fair value
was determined utilising the most appropriate measure available, being 16% of the Group’s adjusted
market capitalisation of $132,432,122 at the date on which the Framework Agreement was executed.
2023 ANNUAL REPORT | 97
The summarised financial information of MML and MRL are as follows:
Loss for the year
Attributable to non-controlling interests
Total comprehensive loss for the year
Attributable to non-controlling interests
Assets
Non-current assets
Total Assets
Total Equity
Attributable to:
Equity holders of parent
Non-controlling interest
2023
$
(21,336,143)
(3,413,783)
(21,336,143)
(3,413,783)
111,095,981
111,095,981
111,095,981
93,320,624
17,775,357
2022
$
-
-
-
-
-
-
-
-
-
23. FINANCIAL INSTRUMENTS
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.
The Group’s principal financial instruments are cash and short term deposits. The main purpose of
these financial instruments is to finance the Group’s operations. It is, and has been throughout the
period under review, the Group’s policy that no trading in financial instruments shall be undertaken.
The financial instruments expose the group to certain risks. The nature and extent of such risks, and the
management’s risk management strategy are noted below.
Fair value of financial instruments
Cash and cash equivalents
Trade and other receivables
Other financial assets
Investments
Trade and other payables
2023
$
25,852,484
251,377
63,794
8,000
2022
$
9,479,379
974,411
63,794
8,000
(2,140,418)
(2,447,973)
The carrying amount of financial instruments closely approximate their fair value on account of the short maturity.
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 $251,377 at 30 June 2023 (2022: $974,411).
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.
98 | PEAK RARE EARTHS
The contractual maturity analysis of the Group’s financial instruments are noted below:
2023
2022
Up to 3
months
$
> 3 months
$
Total
$
Up to 3
months
$
> 3 months
$
Total
$
Financial liabilities
Trade and other payables
(2,140,418)
-
(2,140,418)
(2,447,973)
-
(2,447,973)
Lease Liabilities
(36,040)
(243,223)
(279,263)
(27,041)
(289,602)
(316,643)
Total financial liabilities
(2,176,458)
(243,223)
(2,419,681)
(2,475,014)
(289,602)
(2,764,616)
Financial assets
Cash and cash equivalents
and other financial assets
25,852,484
63,794
25,916,278
9,479,379
63,794
9,543,173
Investments
-
Trade and other receivables
251,377
8,000
-
8,000
251,377
-
974,411
8,000
-
8,000
974,411
Total financial assets
26,103,861
71,794
26,175,655
10,453,790
71,794
10,525,584
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.
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
2023
$
25,852,484
258,525
(258,525)
2022
$
9,479,379
94,794
(94,794)
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. The Group will transfer cash and cash
equivalents into foreign currency to meet short term expenditure obligations. These exposures are not
subject to a hedging programme. The Board and management from time to time having regard to
likely forward commitments review this policy.
Commodity price risk
The Group’s exposure to commodity price risk is minimal at this stage of the operation.
2023 ANNUAL REPORT | 99
Changes in liabilities arising from financing activities during the year ended 30 June 2023:
1-Jul-22
$
Cash flows
$
Foreign exchange
movement
$
Other Movement
$
30-Jun-23
$
2023
Financial liabilities
Lease liabilities
316,643
(138,974)
Total liabilities from
financing activities
316,643
(138,974)
-
-
101,594
279,263
101,594
279,263
Changes in liabilities arising from financing activities during the year ended 30 June 2022:
1-Jul-21
$
Cash flows
$
Foreign exchange
movement
$
Other Movement
$
30-Jun-22
$
2022
5,686,663
(5,974,811)
197,460
-
(40,671)
-
90,688
357,314
-
316,643
5,686,663
(6,015,482)
197,460
448,002
316,643
Financial liabilities
Royalty liability
Lease liabilities
Total liabilities from
financing activities
24. SUBSEQUENT EVENTS
On 1 July 2023, Hannah Badenach was appointed as a Non-Executive Director.
On 9 August 2023, Peak Rare Earths Limited and its major shareholder Shenghe, executed a binding
offtake agreement for the Ngualla Rare Earth Project and signed a non-binding memorandum of
understanding (MOU) for cooperation on delivering an EPC and funding solution. The Binding offtake
agreement terms include:
100% of rare earth concentrate
•
• Minimum of 50% of intermediate and final rare earth products
• An initial term of 7 years
• Conditional, including subject to Peak shareholder approval
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.
100 | PEAK RARE EARTHS
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
2023
$
25,940,650
65,141,263
91,081,913
1,927,543
10,043,456
11,970,999
2022
$
10,264,535
63,326,337
73,590,872
2,296,564
9,210,260
11,506,824
Net assets
79,110,914
62,084,048
Equity
Contributed equity
Share based payment reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
166,874,257
6,983,600
(94,746,943)
79,110,914
140,805,369
5,318,016
(84,039,337)
62,084,048
(10,707,606)
(12,914,903)
Other comprehensive income
-
-
Total comprehensive loss for the year
(10,707,606)
(12,914,903)
Peak Rare Earths Limited had no commitments to purchase property, plant and equipment or
contingent liabilities at 30 June 2023 (2022: $Nil).
2023 ANNUAL REPORT | 101
DIRECTOR’S 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 2023
are in accordance with the Corporations Act 2001 and Corporations Regulation 2001, including
compliance with accounting standards and giving a true and fair view of the financial position
as at 30 June 2023 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
Dr Russell Scrimshaw (AM)
Executive Chairman
27 September 2023
102 | PEAK RARE EARTHS
07.
ASX ADDITIONAL
INFORMATION
SHAREHOLDER INFORMATION
As at 11 October 2023
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
496,699
4,278,823
5,231,425
42,932,727
211,701,792
264,641,466
There were 1,136 holders with less than a marketable parcel of fully paid shares representing 688,327 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
52,399,173
19.80%
UNQUOTED SECURITIES
Class of Equity Security
Expiriry Date
Number
Number of Security
Holders
Unvested Performance Rights exercisable at $Nil
5 February 2025
1,550,000
Unvested Performance Rights exercisable at $Nil
9 December 2025
1,977,096
Unvested Performance Rights exercisable at $Nil
29 September 2026
1,213,500
Unvested Performance Rights exercisable at $Nil
15 August 2027
4,000,000
3
12
9
1
Names of person holding greater than 20% of a class of unquoted securities not issued under an employee incentive scheme:
Class of Equity Rights exerciseable at $Nil
Expiriry Date
Number
Holders
Unvested Performance Rights exercisable at $Nil
15 August 2027
4,000,000
Russell Scrimshaw
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.
2023 ANNUAL REPORT | 103
RESTRICTED SECURITIES
As at 11 October 2023, there were no restricted securities.
TWENTY LARGEST SECURITY HOLDERS
The names of the twenty largest holdings of quoted equity securities are as follows:
Name
SHENGHE RESOURCES (SINGAPORE) PTE LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
PASAGEAN PTY LIMITED
BUTTONWOOD NOMINEES PTY LTD
SPARTA AG
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ONE MANAGED INVESTMENT FUNDS LIMITED
ASHABIA PTY LTD
SUTTON NOMINEES PTY LTD
BUSHELL NOMINEES PTY LTD
MR RICHARD SMITH
JP MORGAN NOMINEES AUSTRALIA PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
PINNACLE SUPERANNUATION PTY LIMITED
SAIL AHEAD PTY LTD
CRX SECURITIES PTY LIMITED
Number
52,399,173
14,805,531
13,458,898
7,725,580
6,101,583
5,000,000
4,531,110
3,706,042
3,104,735
2,453,990
2,372,891
2,144,404
2,100,000
2,000,000
1,923,334
1,899,668
1,713,586
1,600,000
1,550,000
1,543,750
% Held
19.80
5.59
5.09
2.92
2.31
1.89
1.71
1.40
1.17
0.93
0.90
0.81
0.79
0.76
0.73
0.72
0.65
0.60
0.59
0.58
132,134,275
49.93
104 | PEAK RARE EARTHS
08.
TENEMENT SCHEDULE,
RESERVE & RESOURCES
PROJECT
TENEMENT
%
STATUS
ARRANGEMENT/ COMMENT
Tanzanian Projects
Mlingi
PL 10897/2016
100
Granted
Ngualla
SML 693/2023
100
Granted
Held by 100% Tanzanian subsidiary company,
PR NG Minerals Limited
Held by Tanzanian subsidiary company, Mamba
Minerals Corporation Limited, which is owned 84%
by Peak (via 100% UK subsidiary, Ngualla Group UK
Limited) and 16% by the Government of Tanzania
(via the Treasury Registrar)
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, 28 October 2021 and 24 October 2022. The ASX announcements are available to view on
https://www.peakrare earths.com/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 further advises that there are various workstreams being undertaken, including Front End
Engineering and Design (“FEED”), a dual-track assessment of Engineering, Procurement, Construction
and Management (“EPCM”) and Engineering, Procurement and Construction (“EPC”) execution models
and further optimisation of the project flow sheet, the outcomes of which may change the information
included in the relevant announcement.
Table 1: Classification of Ore Reserve estimates for the Weathered Bastnaesite Zone at Ngualla.
JORC Category
Proved
Probable
Total
Ore Reserve as at October 2022
Ore Tonnes (Millions)
17.0
1.5
18.5
REO %
4.78
5.10
4.80
Contained REO Tonnes
813,000
74,000
887,000
2023 ANNUAL REPORT | 105
See Table 2 for the breakdown of individual REO’s. Reported according to the JORC 2012 Code and Guidelines.
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)
REO Grade %
% of Total REO
Rare Earth Oxides
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
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 – Competent Person’s Statement
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 Consultant and is
employed by Orelogy Mine Consulting Pty Ltd, an independent consultant to Peak Rare Earths Limited.
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.
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
JORC Category
Ngualla all
Mineral
Resources
1.0% REO
Measured
Indicated
Inferred
Total
Mineral Resource as at October 2022
Ore Tonnes
(Millions)
86.1
112.6
15.7
214.4
REO %
2.61
1.81
2.15
2.15
Contained REO
Tonnes
BASO₄ %
2,250,000
2,040,000
340,000
4,620,000
20.2
13.8
17.6
16.6
*REO (%) includes all the lanthanide elements plus yttrium oxide. See Tables 5 for breakdown of individual REO’s. Figures above may not sum
dueto 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.
106 | PEAK RARE EARTHS
Table 4: Classification of All Mineral Resources for the Weathered Bastnaesite Zone mineralisation at a 1.0% and 3% REO cut-
off grades.
Lower Cut-Off
Grade
JORC Category
Mineral Resource as at October 2022
Ore Tonnes
(Millions)
REO %
Contained REO
Tonnes
BASO₄ %
Ngualla all
Mineral
Resources
1.0% REO
3.0% REO
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
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
*REO (%) includes all the lanthanide elements plus yttrium oxide. See Table 5 for breakdown of individual REO’s. The Weathered Bastnaesite
ZoneMineral Resource is contained within an is a subset of the Total All Ngualla Project Mineral Resource at a 1% REO cut-off grade in Table 3
above. Figures above may not sum due to rounding. The number of significant figures does not impy an added level of precision.
Table 5: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for
2018 Total Ngualla +1% REO, Weathered Bastnaesite Zone +1% REO and Weathered Bastnaesite Zone +3% REO and Mineral
Resources summarised in Tables 3 and 4.
Ngualla 2022 Total Mineral
Resource
Ngualla 2022 Weathered
Bastnaesite Zone Resource
Ngualla 2022 Weathered
Bastnaesite Zone Resource
Oxide
1% REO
1% REO
3% REO
REO Grade
(%)
% of Total
REO
REO Grade
(%)
% of Total
REO
REO Grade
(%)
% of Total
REO
Lanthanum
Cerium
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Total
La₂O3
CeO2
Pr6O11
Nd₂O3
Sm₂O
3
Eu₂O3
Gd2O3
Tb4O7
Dy₂O3
Ho₂O3
Er₂O3
Tm2O3
Yb2O3
Lu2O3
Y2O3
*Figures may not sum due to rounding.
0.587
1.039
0.104
0.348
0.036
0.007
0.016
0.001
0.003
0.000
0.001
0.000
0.001
0.000
0.010
2.15
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
Mineral Resource estimates – Competent Person’s Statement
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
Rare Earths Limited, 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.
2023 ANNUAL REPORT | 107
09.
CORPORATE DIRECTORY
PEAK RARE EARTHS LIMITED
ABN: 72 112 546 700
DIRECTORS
Russell Scrimshaw
Abdullah Mwinyi
Shasha Lu
Ian Chambers
Nick Bowen
Hannah Badenach
Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Philip Rundell
CHIEF EXECUTIVE OFFICER
Bardin Davis
REGISTERED OFFICE
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 (Tanzania)
11th Floor, Jubilee Towers
Ohio Street ,Dar es Salaam, Tanzania
Bowmans Tanzania
2nd Floor, The Luminary
Cnr Haile Selassie and Chole Roads
Masaki, Dar es Salaam, Tanzania
AUDITORS
Ernst and Young
11 Mounts Bay Road
Perth WA 6000
SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
CONTACT DETAILS
Website: www.peakrareearths.com
Email: info@peakrareearths.com
Telephone:
Facsimile:
(08) 9200 5360
(08) 9226 3831
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
Home Exchange: Perth, Western Australia
Code: PEK
Corporate Governance Statement
The Company has adopted the recommendations of the ASX Corporate Governance Council’s
Principles and Recommendations (Third Edition) in regard to the Corporate Governance Disclosures
and provides disclosure of the Company’s Corporate Governance Statement on the Company’s
website here.
108 | PEAK RARE EARTHS