2007
Corporate Directory
Directors
Michael Kiernan - Non-Executive Chairman
Robert Tyson - Executive Director
Simon Hadfield – Non-Executive Director
Company Secretary
David Hocking
Registered and Principal Office
Level 1, 79 Hay St, Subiaco, WA 6008
Telephone: (08) 9382 3955
Facsimile: (08) 9388 1025
Website: www.peelex.com.au
Email: rtyson@peelex.com.au
Share Registry
Computershare investor Services
Level 2, 45 St Georges Tce, Perth, WA 6000
Telephone: 1300 557 010
Auditors
Bdo Kendalls audit & assurance (Wa) Pty ltd
128 Hay St, Subiaco, WA 6008
Legal Advisors
Steinepreis Paganin
Level 4, Next Building,
16 Milligan St, Perth, WA 6000
Home Exchange
ASX Code: PEX
ABN
42 119 343 734
Peel exPloration limited AnnuAl RepoRt 2007
Contents
SECTION 1 - Chairman’s Report
SECTION 2 - Review of Operations
SECTION 3 - Schedule of Tenements
SECTION 4 - Directors’ Report
SECTION 5 - Income Statement
SECTION 6 - Balance Sheet
SECTION 7 - Statement of Cash Flows
SECTION 8 - Statement of Changes in Equity
SECTION 9 - Notes to the Accounts
SECTION 10 - Directors’ Declaration
SECTION 11 - Auditor’s Independence Declaration
SECTION 12 - Independent Auditor’s Report
SECTION 13 - Corporate Governance Statement
SECTION 14 - Shareholder Information
Peel exPloration limited AnnuAl RepoRt 2007
3
5
12
13
18
19
20
21
22
34
35
36
38
42
Trough Gully adit and cut,
Dungowan project, NSW.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 1
Chairman’s Report
Peel Exploration Limited was formed in April 2006 to prospect for base and precious metal deposits along the Peel
Fault in the New England Fold Belt region of north-eastern New South Wales. Peel Exploration listed on the ASX on
17 May 2007 raising $3 million.
At present the Company’s tenements are all located in the New England region of New South Wales and comprise a
mix of base and precious metals-prospective prospects and projects. A brief description of each of the tenements is
given in the Operations Review and greater detail is available in the prospectus.
In the five months since listing, Peel Exploration has steadfastly pursued its strategy of “exploring forgotten mineral
fields”. As previously stated, Peel Exploration believes that the New England Fold Belt, particularly the portion
located in northern New South Wales, represents a unique opportunity for mineral exploration. The area has a rich
mining history, yet despite its proven endowment, the Belt remains poorly explored with minimal modern exploration
techniques having been utilised.
During the brief period since listing, Peel Exploration (through its exploration managers - Geos Mining Mineral
Consultants Pty Ltd) has completed the GIS digitisation and interrogation of data for the Dungowan and Barry project
areas, and has completed several field reconnaissance trips. Drill target planning for many of Peel Exploration’s
projects is now well advanced.
Perhaps most importantly for the Company is the recent acquisition of the historic Attunga-Kensington mineral fields,
located approximately 30 kilometres north of Tamworth. The Attunga project represents a potential “company-maker”
for Peel, and perfectly fits the Intrusive-Related Gold System deposit model. Intrusive-Related Gold Systems can be
very large and Peel is rightly excited by the Attunga project’s potential. The Attunga area is known to contain several
non-JORC tungsten resources (reported by previous explorers); along with numerous untested surface gold-tungsten
geochemical anomalies. Peel has already begun the process of expediting exploration of the area and looks forward
to rapidly testing the most obvious targets.
I would like to thank my fellow Directors, Rob Tyson and Simon Hadfield, our Company Secretary - David Hocking,
and the managers of Peel’s exploration programme - Geos Mining Mineral Consultants, for the hard work and
commitment to the Company that they have all made. I would also like to acknowledge the contributions made by the
team at Bell Potter whom supported Peel Exploration’s IPO.
Lastly, and most importantly, I would like to thank all of Peel Exploration’s shareholders for supporting the Company.
Michael Kiernan
Chairman
27 September 2007
Peel exPloration limited AnnuAl RepoRt 2007
Peel exPloration’s
Project locations
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 2
Review of operations
Since listing in May 2007, Peel Exploration has been
Geos Mining, headed by veteran geologist Sue Border,
logically and efficiently moving forward with its strategy
has proven expertise in providing world’s best practice
of exploring forgotten mineral fields.
exploration and management services in a cost
Appointment of Geos Mining
A key element in Peel Exploration’s initial exploration
effective and transparent manner. The appointment
of Geos Mining will help Peel Exploration preserve
shareholder capital and obtain maximum return for
strategy has been the engagement of Geos Mining
each dollar spent.
Mineral Consultants Pty Ltd to manage the exploration
of the Company’s 700 km2 of existing granted tenements
in New South Wales. Geos Mining is a specialist geology
Dungowan Project - EL6613
The Dungowan Project covers an area of about 252 km2
consultancy firm based in Sydney and is responsible
and is located about 15 km east of Tamworth, in the New
for the day-to-day management and exploration of Peel
England Fold Belt region of NSW.
Exploration’s licences.
Dungowan project
location and magnetics.
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Trough Gully adit entrance.
Within the Dungowan Project are two specific areas of
During the period since listing, GIS compilation of historic
interest:
exploration data has been undertaken along with several
• numerous historic copper mines/workings in the
field visits to the Dungowan project in preparation for drill
vicinity of Dungowan; and
target definition.
• numerous historic gold workings in the vicinity of
Limbri.
Other upcoming work at Dungowan will include the
acquisition of high-resolution airborne magnetic and
The
licence area
is considered prospective
for
radiometric data, scheduled for November 2007.
polymetallic VHMS mineralisation, syngenetic (volcanic-
related), exhalative gold mineralisation, and epigenetic
structurally controlled gold mineralisation related to
regional deformation, metamorphism and granite-
intrusive phases.
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Barry Project - EL6614
The Barry Project covers an area of about 48 km2 and
During the period since listing, GIS compilation of
is located about 25 km southeast of Nundle in the New
historic exploration data and an initial reconnaissance
England Fold Belt region of NSW.
field trip have been undertaken in preparation for follow-
The Barry Project is centred on a cluster of copper
work at Barry will include the acquisition of high-resolution
and molybdenum workings. Exploration in the 1970s
airborne magnetic and radiometric data, scheduled
returned many significant copper values, however no
for November 2007. At mid-September 2007, access
follow-up work has ever been reported. Peel Exploration
negotiations with a key landholder were continuing.
up mapping and geochemistry surveys. Other upcoming
considers the area to be prospective for polymetallic
VHMS mineralisation and intrusive-related precious/base
metal mineralisation.
Barry Project location and geology.
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Waverley Project - EL6719
The Waverley Project covers an area of about 100 km2
No exploration activity has been completed at Waverley
during the period since listing. Upcoming exploration
and is located about 40 km northeast of Scone in the
activity will see the GIS compilation of historic exploration
New England Fold Belt region of NSW.
data, along with initial reconnaissance field trips. Other
The licence encompasses the historic Waverley silver-
of high-resolution airborne magnetic and radiometric
lead-zinc workings and a large untested magnetic
data, scheduled for November 2007.
upcoming work at Waverley is to include the acquisition
anomaly proximal to the Waverley workings.
Prospecting in the mid 1990s returned anomalous values
of up to 739 ppm silver, 14.6% zinc and 9.4% lead. The
Waverley Project is considered prospective for intrusive-
related precious/base metal mineralisation.
Waverley Project location and magnetics.
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Armidale Project - EL6722
The Armidale Project covers an area of about 300 km2
and is located about 5 km north of Armidale in the New
regional exploration tenure. The Armidale Project is
considered prospective for precious metals deposits.
England Fold Belt region of NSW.
No exploration activity has been completed at Armidale
during the period since listing. Upcoming exploration
The licence encompasses numerous historic precious
activity will see the GIS compilation of historic exploration
and exotic metals mines and workings, including three
data commence, along with initial reconnaissance
regionally-significant silver mines. The area also abuts
field trips.
Straits Resources Ltd’s Hillgrove gold-antimony mine’s
Armidale Project location and geology.
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Attunga Project location.
0
Peel exPloration limited AnnuAl RepoRt 2007
Review of operations
SeCtion 2
Attunga Project - ELA3177 & ELA3182
In June 2007, Peel Exploration lodged applications
Peel Exploration engaged Dr Tim Baker, who is widely
regarded as an expert in the study of IRGS deposits, to
for exploration licences covering the historic Attunga-
determine if the characteristics of the Attunga area fit with
Kensington gold-tungsten-molybdenum mineral fields,
those commonly found associated with IRGS deposits.
about 20 km north of Tamworth. ELA3177 and ELA3182,
Dr Baker subsequently corroborated Peel Exploration’s
referred to as the Attunga Project, cover a combined
opinion with regard to the Attunga region stating that
area of about 250 km2.
“an intrusion-related gold model is readily applicable.
Prospects in the region contain metal signatures common
The area under application contains numerous historic
to IRGS and the wide variety of mineralisation styles is a
mines, prospects and workings, and initial investigations
common feature of intrusion centred systems.”
utilising historic exploration
reports coupled with
modern datasets indicate that the Attunga-Kensington
The Attunga Project has presented Peel Exploration
mineralising structure bears the hallmarks of an Intrusive-
with an outstanding opportunity to delineate gold and
Related Gold System (IRGS).
tungsten resources in the near term.
Intrusive-Related Gold Systems are an under-recognised
With this in mind, the Company has further engaged the
and economically important class of gold deposit.
services of Geos Mining Mineral Consultants to manage
Examples of IRGS deposits include Fort Knox in Alaska,
the exploration of the Attunga Project. In anticipation of
Kidston in north Queensland, and Timbarra in northern
the NSW government granting exploration licences, GIS
New South Wales.
data compilation has already commenced, as has the
fast-tracking of landowner negotiations.
Other important aspects of the Attunga-Kensington
mineral fields include:
• only minor modern exploration;
The immediate exploration priority upon approval of
the licenses will be to test the validity of certain historic
• several historic non-JORC tungsten resources reported
exploration results and, if confirmed, move quickly
by previous explorers; and
to drill test some of the most obvious gold-tungsten
• numerous large untested surface geochemical gold-
anomalies.
tungsten anomalies.
Rob Tyson
Executive Director
The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Tyson and Mrs Sue Border,
both of whom are Members of the Australasian Institute of Mining and Metallurgy. Mr Tyson and Mrs Border each have sufficient experience
which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which they are undertaking to
qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.’ Mr Tyson and Mrs Border each consent to the inclusion in this report of the matters based on their information in the form
and context in which it appears.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 3
Schedule of tenements
new south Wales
Project
number
Holder
ownership
expiry
Dungowan
el6613
peel exploration ltd
Barry
el6614
peel exploration ltd
Waverley
el6719
peel exploration ltd
Armidale
el6722
peel exploration ltd
100%
100%
100%
100%
21 August 2008
21 August 2008
25 February 2009
25 February 2009
Attunga
el6883
peel exploration ltd
100%
21 September 2009
Attunga
el6884
peel exploration ltd
100%
21 September 2009
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 4
Directors’ Report
Your directors present their report on the Company for the financial period ended 30 June 2007.
The following persons hold office as Directors at the date of this report. Their qualifications and experience are:
Michael Kiernan – Non-Executive Chairman
With more than 30 years experience in the mining
David Hocking – Company Secretary
Mr Hocking is a qualified Chartered Accountant from the
and transport industries, Mr Kiernan brings a wealth
United Kingdom. He has more than 20 years commercial
of knowledge and experience to the Peel Exploration
experience in Australia producing management and
board. Mr Kiernan retains the position of Chairman at
financial accounts for medium sized businesses in a
Monarch Gold Mining Company Ltd, Territory Resources
range of industries including publishing, franchising,
Ltd, India Resources Ltd, Precious Metals Australia Ltd
rural merchandising, financial services and the offshore
and Mineral Resources Ltd, and is also a Director of
oil industry. Mr Hocking also brings previous experience
Matilda Minerals Ltd.
as a Company Secretary in a public company.
Robert Maclaine Tyson – Executive Director
Mr Tyson is a geologist with more than 15 years resources
Directors’ Interests in Shares and Options
Directors’ interests in shares and options as at 30th
industry experience having worked in exploration and
June 2007 are set out in the table below. Between the
mining-related roles for companies including Cyprus
end of the financial period and the date of this report,
Exploration Pty Ltd, Queensland Metals Corporation
Michael Kiernan purchased 1,622,874 options, Robert
NL, Murchison Zinc Pty Ltd, Normandy Mining Ltd and
Tyson purchased 1,372,874 options and Simon Hadfield
Equigold NL. Mr Tyson has more than five years of senior
purchased 1,172,873 options.
management experience and retains the position of
General Manager at resources industry publisher and
conference business, Resource Information Unit Pty Ltd.
Mr Tyson is a Member of the Australasian Institute of
Mining and Metallurgy.
Simon Hadfield – Non-Executive Director
Mr Hadfield has more than 30 years experience
managing medium and large companies including the
holding of directorships at publicly-listed industrial and
resource companies. Mr Hadfield is Managing Director
of Resource Information Unit Pty Ltd.
director
Michael Kiernan
Robert tyson
Simon Hadfield
Shares directly and
indirectly Held
3,000,000
2,500,000
2,100,000
options
4,000,000
3,750,000
3,550,000
Peel exPloration limited AnnuAl RepoRt 2007
Directors’ Report
SeCtion 4
Activities
The continuing principal activity of the Company is the
Other than as disclosed above there were at the date of
this report no matters or circumstances which have arisen
exploration for economic deposits of minerals. For the
since 30th June 2007 that have significantly affected or
period of this report, the emphasis has been on base and
may significantly affect:
precious metals.
Results
The loss of the Company for the financial period after
providing for income tax amounted to $409,724 (2006:
$5,164).
i) the operations of the Company;
ii) the results of those operations; or
iii) the state of affairs of the Company.
Likely Developments and Expected Results
As the Company’s areas of interest are at an early stage, it
is not possible to postulate the likely developments and any
Dividends
No dividends were paid or proposed during the period.
expected results.
Review of Operations
Peel Exploration Limited successfully completed its IPO
Remuneration Report
The remuneration report is set out under the following
headings:
and was admitted to the Official List of the ASX on May
a) Principles used to determine the nature and amount of
17, 2007. The Company concentrated on the exploration
remuneration (audited);
of its various projects located in the New England region of
b) Details of remuneration (audited);
northern New South Wales. A summary of the Company’s
c) Service agreements (audited);
activities during the year is contained in the Operations
d) Share-based compensation (audited); and
Review section of the Annual Report.
e) Additional information (unaudited).
Corporate Structure
Peel Exploration Limited is a limited Company that is
a) Principles used to determine the nature and
amount of remuneration (audited)
incorporated and domiciled in Australia.
The objective of the Company’s remuneration framework
Employees
The Company had three employees as at 30 June 2007
appropriate for the results delivered. The framework aligns
executive reward with achievement of strategic objectives
– them being the Directors. The Company uses consultants
and the creation of value for shareholders. The Board
and contractors as required.
believes that executive remuneration satisfies the following
is to ensure reward for performance is competitive and
Significant Changes
The Directors are not aware of any significant changes in
• competitiveness and reasonableness
• acceptability to shareholders
the state of affairs of the Company occurring during the
• performance linkage /
financial period, other than disclosed in this report.
alignment of executive compensation
key criteria:
Matters Subsequent to the End of the Financial
Period
On September 21 2007, the NSW government granted
• transparency
• capital management.
These criteria result in a framework which can be used
EL6883 & EL6884. These licences are jointly referred to as
to provide a mix of fixed and variable remuneration, and
the Attunga Project.
a blend of short and long-term incentives in line with the
Company’s limited financial resources.
Since the end of the financial period the Company has
issued 15,000,000 options exercisable at 20c each on or
before 30 November 2010, at an issue price of 1c each
raising $150,000.
Peel exPloration limited AnnuAl RepoRt 2007
Directors’ Report
SeCtion 4
table 1: Director and senior executive remuneration
Directors of Peel
Exploration Ltd
Directors Fees
Salaries
Consulting
Fees
Super-
annuation
2007
Directors
RM tyson
Ml Kiernan
S Hadfield
nt Hadfield
other executives
D Hocking
total
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
9,625
9,625
$
-
-
-
-
-
-
Options
$
107,500
107,500
107,500
-
-
322,500
Total
$
107,500
107,500
107,500
-
9,625
332,125
Options do not represent cash payments to Directors and options granted
may or may not be exercised by the Directors.
Board and Senior Management
Fees and payments to the non-executive Directors and
c) Service agreements (audited)
Remuneration and other terms of employment for the
senior executives reflect the demands which are made
Directors and executives are not formalised in Service/
on, and the responsibilities of, the Directors and the senior
Appointment agreements. Major provisions of employment
management. Such fees and payments are reviewed
are set out below:
annually by the Board.
Company policy in relation to issuing options and
who received payments and benefits totalling $107,500 in
remunerating executives is that Directors are entitled to
his role as a Director of the Company.
ML KieRnan - There is no written contract for Mr Kiernan,
remuneration out of the funds of the Company but the
remuneration of the non-executive Directors may not
RM TySon - There is no written contract for Mr Tyson,
exceed in any year the amount fixed by the Company
who received payments and benefits totalling $107,500 in
in general meeting for that purpose. The aggregate
his role as a Director of the Company.
remuneration of the non-executive Directors has been fixed
at a maximum of $200,000 per annum to be apportioned
S HaDfieLD - There is no written contract for Mr Hadfield,
among the non-executive Directors in such a manner as
who received payments and benefits totalling $107,500 in
they determine (refer below). Directors are also entitled to
his role as a Director of the Company.
be paid reasonable travelling, accommodation and other
expenses incurred in consequence of their attendance at
No service agreements had been entered into in the period
Board meetings and otherwise in the execution of their
since 30 June 2007 to the date of this report.
duties as Directors.
b) Details of remuneration (audited)
At 30 June 2007 the Company had granted options over
Details of the nature and amount of each element of the
7,500,000 unissued shares to Directors, all issued in the
remuneration of each of the Directors of Peel Exploration
2007 financial year, arising from the listing of the Company
d) Share-based compensation (audited)
Ltd and those senior executives of the Company who
on the ASX. These were:
received the highest emoluments during the year ended 30
ML Kiernan – 2,500,000
June 2007 are set out in the following table.
RM Tyson – 2,500,000
S Hadfield – 2,500,000
The consolidated entity incurred no Director or senior
executive remuneration in 2006.
These options were all granted on 8 March 2007 and expire
30 November 2010 with an exercise price of 30 cents per
share. They are all escrowed until 17 May 2009.
Peel exPloration limited AnnuAl RepoRt 2007
Directors’ Report
SeCtion 4
table 2: options granted as part of remuneration
2007
Grant
date
Grant
number
Vest
date
Expiry
date
Value per
option at
grant date
$
Exercised
number
Value per
option at
exercise
date
$
Value
at date
option
lapsed
$
% of
remuneration
RM tyson
8.3.07
2,500,000
8.3.07
30.11.10
0.043
Ml Kiernan
8.3.07
2,500,000
8.3.07
30.11.10
0.043
S Hadfield
8.3.07
2,500,000
8.3.07
30.11.10
0.043
-
-
-
-
-
-
-
-
-
100
100
100
The value of the options granted has been recognised
The dividend yield reflects the assumption that no
as share-based remuneration in the financial statements
dividends will be paid out. The expected life of the
and are expensed accordingly.
options is based on historical data and is not necessarily
indicative of exercise patterns that may occur. The
Options granted as a part of Director and executive
expected volatility reflects the assumption that the
remuneration have been valued using a Black and
historical volatility is indicative of future trends, which
Scholes option-pricing model, which takes account of
may also not necessarily be the actual outcome.
factors including the option exercise price, the share
price at time of grant, volatility of the underlying share
Options
included
in Directors’ and executives’
price, the risk-free interest rate and the expected life of
remuneration are treated as follows:
the option.
Fair Value of Options
Model inputs for determining the fair value of options
Fair values have been assessed using the Black and
Scholes option valuation methodology which takes into
account the exercise price, the term of the option, the
granted during year end 30 June 2007 included:
vesting and performance criteria, the impact of dilution,
underlying security spot price
$0.125
and expected price volatility of the underlying share, the
the non-tradable nature of the options, the current price
expected dividend yield and the risk free interest rate for
the term of the option.
exercise price
Dividend rate
$0.30
nil
Standard deviation of returns (annualised)
70%
Risk–free rate
5.85%
Valuation date
1 March 2007
expiration date
30 november
2010
expiration period (years)
3.7509
Black Scholes valuation ($ per security)
0.043
Binomial valuation ($ per security)
0.043
Peel exPloration limited AnnuAl RepoRt 2007
Directors’ Report
SeCtion 4
Share Options
A detailed breakdown of the Company’s options (unquoted options and Directors options) is as follows:
Balance 1 July 2006
Issued to Shareholders on 8 March 2007
Issued to Directors on 8 March 2007
Balance 30 June 2007
options
- exercisable at 20 cents each on or before 30 november 2010
- exercisable at 30 cents each on or before 30 november 2010
$
-
-
322,500
322,500
Options
-
7,500,000
7,500,000
15,000,000
7,500,000
7,500,000
15,000,000
Meetings of Directors
Directors’ attendance at Directors’ meetings are shown in the following table:
Director
Number held whilst in office
Number attended
Ml Kiernan (appointed 15.3.2007)
RM tyson
S Hadfield
nt Hadfield (resigned 15.3.2007)
4
8
8
5
4
8
8
5
Indemnification and Insurance
of Directors and Officers
During the financial year the Company paid insurance
premiums in respect of Directors’ and Officers’ Liability
have been no known breaches of the licence conditions.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as
Insurance contracts for the current Directors and officers.
required under section 307C of the Corporations Act 2001
The Directors have not included details of the nature of the
is included at the end of this financial report.
liabilities covered or the amount of the premium paid in
respect of this insurance, as such disclosure is prohibited
under the terms of the contract.
Auditor
BDO Kendalls Audit & Assurance (WA) Pty Ltd continues
in office under section 327 of the Corporations Act 2001.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring
This report is made in accordance with a resolution of the
proceedings on behalf of the company or intervene in
Board of Directors:
any proceedings to which the company is a party for the
purpose of taking responsibility on behalf of the company
for all or any part of those proceedings.
The company was not a party to any such proceedings
during the year.
Environmental Performance
Peel Exploration Ltd holds exploration licences issued by
the NSW Department of Primary Industry which specifies
guidelines
for environmental
impacts
in relation to
exploration activities. The licence conditions provide for the
full rehabilitation of the areas of exploration in accordance
with the Department’s guidelines and standards. There
Rob Tyson
Director
Perth, Western Australia
Dated on this the 28th day of September 2007.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 5
income Statement
For the Year ended 30 june 2007
Note
2007 $
2006 $
Continuing operations
Revenue
3
13,461
Share-based remuneration to employees and directors
exploration expenditure written-off
(322,500)
(56,719)
-
-
-
Administration expenses
(43,966)
(5,164)
loss before income tax expense
(409,724)
(5,164)
Income tax expense
4
-
-
loss for the year
(409,724)
(5,164)
Basic and diluted loss per share (cents per share)
21
(4.0)
(0.3)
The above income statements should be read in conjunction with the accompanying notes.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 6
Balance Sheet
as at 30 june 2007
Note
2007 $
2006 $
Current assets
Cash and Cash equivalents
trade and other Receivables
total Current assets
non-current assets
Receivables
plant and equipment
exploration licences
total non-current assets
total assets
Current liabilities
trade and other payables
Borrowings
total Current liabilities
total liabilities
net assets / (liabilities)
equity
Contributed equity
Accumulated losses
Reserves
total equity
5
6
7
8
9
10
11
12
13
13
2,656,920
22,850
2,679,770
40,000
1,676
11,425
53,101
2,732,871
26,197
-
26,197
26,197
2,706,674
2,799,062
(414,888)
322,500
2,706,674
1,088
1,000
2,088
-
-
3,220
3,220
5,308
4,000
4,372
8,372
8,372
(3,064)
2,100
(5,164)
-
(3,064)
The above balance sheet statements should be read in conjunction with the accompanying notes.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 7
Statement of Cash Flows
For the Year ended 30 june 2007
Note
2007 $
2006 $
Cash flows from operating activities
payments to suppliers and employees
Interest received
net cash outflow from operating activities
20
Cash flows from investing activities
payments for mineral exploration expenditure
payment of security deposits
payments for purchase of plant and equipment
net cash outflow from investing activities
Cash flows from financing activities
proceeds from issues of shares
transaction costs of issue of shares
loans to other parties
proceeds from borrowings
net cash inflow from financing activities
net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
(101,338)
13,461
(87,877)
(8,205)
(40,000)
(1,676)
(49,881)
3,032,700
(235,738)
1,000
(4,372)
2,793,590
2,655,832
1,088
2,656,920
(1,164)
-
(1,164)
(3,220)
-
-
(3,220)
2,100
-
(1,000)
4,372
5,472
1,088
-
1,088
The above cash flow statements should be read in conjunction with the accompanying notes.
0
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 8
Statement of Changes in equity
at 0 april 00
loss for the period
Issue of share capital
at 0 June 00
loss for the year
Issue of share capital
Share issue expenses
Share-based payments
For the Year ended 30 june 2007
Contributed equity
$
Accumulated
losses $
Reserves $
Total equity $
-
-
2,100
2,100
-
3,032,700
235,738
-
-
(5,164)
-
(5,164)
(409,724)
-
-
-
-
-
-
-
-
-
-
(322,500)
-
(5,164)
2,100
(3,064)
(409,724)
3,032,700
(235,738)
322,500
at 0 June 00
2,799,062
(414,888)
322,500
2,706,674
The above changes in equity statements should be read in conjunction with the accompanying notes.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 9
notes to the Accounts
1. Statement of Significant Accounting Policies
The principal accounting policies adopted in the preparation
of the financial report are set out below. These policies
attributable to temporary differences and to unused
tax losses.
have been consistently applied to all the years presented,
Deferred income tax is provided on all temporary
unless otherwise stated. The financial report includes
differences at the balance sheet date between the tax
the financial statements for Peel Exploration Limited
bases of assets and liabilities and their carrying amounts
(“the Company”).
for financial reporting purposes.
(a) Basis of preparation
Deferred income tax assets are recognised for all
This general purpose financial report has been prepared
deductible temporary differences, carry
forward of
in accordance with Australian Accounting Standards,
unused tax assets and unused tax losses, to the extent
other authoritative pronouncements of the Australian
that it is probable that taxable profit will be available
Accounting Standards Board, Urgent Issues Group
against which the deductible temporary differences, and
Interpretations and the Corporations Act 2001.
the carry-forward of unused tax assets and unused tax
Compliance with IFRS
losses can be utilised. A deferred income tax asset is not
recognised where the deferred income tax asset relating
Australian Accounting Standards
include Australian
to the deductible temporary difference arises from the
equivalents to International Financial Reporting Standards
initial recognition of an asset or liability in a transaction
(AIFRS). Compliance with AIFRS ensures that the financial
that is not a business combination and, at the time of
statements and notes of Peel Exploration Limited comply
the transaction, affects neither the accounting profit nor
with International Financial Reporting Standards (IFRS).
taxable profit or loss or when the deductible temporary
Historical cost convention
difference is associated with investments in subsidiaries,
associates or interests in joint ventures, in which case a
These financial statements have been prepared under the
deferred tax asset is only recognised to the extent that it
historical cost convention.
is probable that the temporary difference will reverse in
(b) Revenue recognition
Revenue is recognised to the extent that it is probable that
the foreseeable future and taxable profit will be available
against which the temporary difference can be utilised.
the economic benefit will flow to the company and the
The carrying amount of deferred income tax assets is
revenue can be reliably measured. The following specific
reviewed at each balance date and reduced to the extent
recognition criteria must also be met before revenue is
it is no longer probable that sufficient taxable profit will be
recognised.
Interest income
available to allow all or part of the deferred income tax to
be utilised.
Revenue is recognised as the interest accrues using the
Deferred income tax assets and liabilities are measured at
effective interest rate method.
the tax rates that are expected to apply to the year when
(c) income tax
the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted at the balance
The income tax expense or revenue for the period is
date. Income taxes relating to items recognised directly
the tax payable on the current period’s taxable income
in equity are recognised in equity and not in the income
based on the national income tax rate for each jurisdiction
statement.
adjusted by changes in deferred tax assets and liabilities
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
(d) impairment of assets
(h) fair value estimation
At each reporting date, the company assesses whether
The fair value of financial assets and financial liabilities
there is any indication that an asset may be impaired.
must be estimated for recognition and measurement or for
Where an indicator of impairment exists, the company
disclosure purposes.
makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable
The carrying value less impairment provision of trade
amount the asset is considered impaired and is written
receivables and payables are assumed to approximate
down to its recoverable amount.
their fair values due to their short-term nature. The fair value
Recoverable amount is the greater of fair value less costs
discounting the future contractual cash flows at the current
to sell and value in use. It is determined for an individual
market interest rate that is available to the Company for
of financial liabilities for disclosure purposes is estimated by
asset, unless the asset’s value in use cannot be estimated
similar financial instruments.
to be close to its fair value less costs to sell and it does
not generate cash inflows that are largely independent
(i) Plant and equipment
of those from other assets or groups of assets, in which
All assets acquired, including plant and equipment are
case, the recoverable amount is determined for the cash-
initially recorded at their cost of acquisition, being the fair
generating unit to which the asset belongs. The estimated
value of the consideration provided plus incidental costs
future cash flows are discounted to their present value
directly attributable to the acquisition.
using a pre tax discount rate that reflects current market
assessments of the time value of money and the risks
Plant and equipment is included at cost less provision for
specific to the asset.
depreciation and any impairment in value and depreciated
on a straight-line basis commencing from the time the asset
No impairment losses have been recognised for the years
is held ready for use.
ending 30 June 2007 and 2006.
An item of plant and equipment is derecognised upon
(e) Cash and cash equivalents
disposal or when no future economic benefits are
For cash flow statement preparation purposes, cash and
expected from its use or disposal. Any gain or loss arising
cash equivalents includes cash on hand and deposits
on derecognition of the asset (calculated as the difference
held at call with financial institutions. Bank overdrafts are
between net disposal proceeds and the carrying amount of
shown within borrowings in the current liabilities of the
the asset) is included in profit or loss in the year the asset
balance sheet.
is derecognised.
(f) Trade and other receivables
(j) exploration and evaluation expenditure
Trade receivables, which generally have 30 to 90 day terms,
Exploration licences
are carried at nominal amounts due less an allowance for
Exploration licences costs are capitalised on payment.
any uncollectible amounts. An allowance for doubtful
They are not amortised but are reviewed each financial
debts is made when there is objective evidence that the
period in respect of each licence being still held by the
Company will not be able to collect the debts. Bad debts
Company. They are expensed through the profit and loss
are written off when identified.
where the licence is no longer held and the licence cost is
(g) other financial assets
Security deposits
not recoverable.
The company’s policy with
respect
to exploration
Security deposits are non-derivative financial assets with
expenditure is to write off all costs as incurred. Accordingly,
fixed or determinable payments that are not quoted in an
exploration expenditure of $56,719 has been written
active market.
off during the year. The decision to write off exploration
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
expenditure as incurred does not indicate any change in the
net of tax, from the proceeds. Incremental costs directly
board’s view of the intrinsic value of the mining leases held
attributable to the issue of new shares or options for the
by the company. Rather, the decision was taken, as it is the
acquisition of a business are not included in the cost of the
most prudent treatment available under current accounting
acquisition as part of the purchase consideration.
standards for such expenditure.
If the entity acquires its own equity instruments, e.g. as the
The carrying value of exploration and evaluation expenditure
result of a share buy-back, those instruments are deducted
carried forward in respect of each area of interest is assessed
from equity and the associated shares are cancelled.
for impairment when facts and circumstances suggest the
No gain or loss is recognised in the profit or loss and
carrying amount may exceed its recoverable amount. Any
the consideration paid including any directly attributable
resulting impairment loss is recognised as an expense in the
incremental costs (net of income taxes) is recognised
income statement.
directly in equity.
(k) Trade and other payables
(n) earnings per share
These amounts represent liabilities for goods and services
Basic earnings per share is calculated by dividing the profit
provided to the Company prior to the end of the financial
attributable to equity holders of the Company, excluding any
year which are unpaid. The amounts are unsecured and are
costs of servicing equity other than ordinary shares, by the
usually paid within 30 days of recognition.
weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in
(l) Borrowings
ordinary shares issued during the year.
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
Diluted earnings per share adjusts the figures used in the
measured at amortised cost. Any difference between the
determination of basic earnings per share to take into account
proceeds (net of transaction costs) and the redemption
the after income tax effect of interest and other financing
amount is recognised in the income statement over
costs associated with dilutive potential ordinary shares
the period of the borrowings using the effective interest
and the weighted average number of shares assumed to
method.
have been issued for no consideration in relation to dilutive
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled,
(o) Goods and services tax
potential ordinary shares.
or expired. The difference between the carrying amount of
Revenues, expenses and assets are recognised net of goods
a financial liability that has been extinguished or transferred
and services tax (GST), except where the amount of GST
to another party and the consideration paid, including
incurred is not recoverable from the taxation authority. In
any non-cash assets transferred or liabilities assumed, is
these circumstances the GST is recognised as part of the cost
recognised in other income or other expenses.
of acquisition of the asset or as part of the expense item.
Borrowings are classified as current liabilities unless the
Receivables and payables are stated with the amount
Company has an unconditional right to defer settlement
of GST included. The net amount of GST recoverable is
of the liability for at least 12 months after the balance
included as a current asset in the balance sheet.
sheet date.
(m) Contributed equity
Cash flows are included in the statement of cash flows on
a gross basis. The GST components of cash flows arising
Ordinary shares are classified as equity.
from investing and financing activities which are recoverable
Incremental costs directly attributable to the issue of new
from the taxation authority are classified as operating
shares or options are shown in equity as a deduction,
cash flows.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
(p) new accounting standards and interpretations
recognised any impairment losses from inception to date.
Certain new accounting standards and interpretations have
Application of the interpretation will therefore have no
been published that are not mandatory for 30 June 2007
impact on the Company’s financial statements.
reporting periods. The Company’s assessment of the
impact of these new standards and interpretations is set
No initial application of any other issued and effective
out below:
Australian Accounting Standard has had any significant
(i) AASB 7 Financial Instruments: Disclosures and
effect on the current period or any prior period. Furthermore,
AASB 2005-10 Amendments to Australian Accounting
no other new Australian Accounting Standard, which has
Standards (AASB 132, AASB 101, AASB 114, AASB 117,
been issued but is not yet effective, is expected to have any
AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 &
significant effect on a future reporting period.
AASB 1038).
AASB 7 and AASB 2005-10 are applicable to annual
reporting periods beginning on or after 1 January 2007.
2. Financial Risk Management
The net fair values of financial assets and financial liabilities
The Company has not adopted the standards early.
approximate their carrying values, as disclosed in the
Application of the standards will not affect any of the
balance sheet. The maximum exposure to credit risk at
amounts recognised in the financial statements, but will
balance date is the carrying amount of financial assets
impact the type of information disclosed in relation to the
(i.e., cash and receivables) as disclosed in balance sheet
Company’s financial instruments.
and notes to the financial statements. The Company’s
(ii) AASB-I 10 Interim Financial Reporting
instrument’s value will fluctuate as a result of changes in
and Impairment
market interest rates and the effective weighted average
AASB-I 10 is applicable to reporting periods commencing
interest rate on classes of financial assets and financial
on or after 1 November 2006. The Company has not
liabilities, is as follows:
exposure to interest rate risk, which is the risk that a financial
Financial assets & liabilities 00
Cash and cash equivalents
Receivables - current
- non-current
Creditors & accruals
Weighted average interest rate
Financial assets & liabilities 00
Cash and cash equivalents
Receivables - current
- non-current
Creditors & accruals
Fixed interest rate
maturing within
1 year $
Non-interest bearing
$
2,613,460
-
-
-
2,613,460
6.18%
-
-
-
-
-
43,460
22,850
40,000
(26,197)
80,113
1,088
1,000
-
(8,372)
(6,284)
Total $
2,656,920
22,850
40,000
(26,197)
2,693,573
1,088
1,000
-
(8,372)
(6,284)
Weighted average interest rate
nil%
The Company manages its interest rate risk through the use of fixed term deposits, to manage the unpredictability of
financial markets and seek to minimise potential adverse effects on financial performance.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
3. Revenue
Interest received
4. Income Tax
income tax expense
Current tax
Deferred tax
numerical reconciliation of income tax expense to prima facie tax payable:
Accounting loss before income tax
At the statutory income tax rate of 30% (2006: 30%)
expenditure not allowable for income tax purposes:
non-deductible expenses
tax losses not brought to account
Income tax benefit reported in the income statement
2007 $
13,461
-
-
-
(409,724)
(122,917)
96,750
26,167
-
2006 $
-
-
-
-
(5,164)
(1,549)
-
1,549
-
The Company has tax losses arising in Australia of $29,595 (2006: $1,549) that are available indefinitely for offset
against future taxable profits of the Company. No deferred tax asset has been recognised in respect of these losses
at this point in time as the Company is still engaged in exploration activities. The Company also has an unrecognised
deferred tax asset in respect of equity raising costs of $70,721.
5. Cash and Cash Equivalents
Cash at bank and in hand
term deposit with a financial institution
43,460
2,613,460
2,656,920
1,088
-
1,088
The above figures agree to cash at the end of the financial year as shown in the statement of cash flows.
The deposit is bearing a fixed interest rate of 6.18% and has a 30 day term.
6. Trade and Other Receivables
GSt recoverable from taxation authority
unsecured loans – related parties (note 14)
7. Receivables (Non-current)
Security deposits on mining tenements
22,850
-
22,850
-
1,000
1,000
40,000
40,000
-
-
Peel exPloration limited AnnuAl RepoRt 2007
8. Plant and Equipment
Plant and equipment
At cost
less accumulated depreciation
reconciliation
Carrying amount at beginning of year
Additions
Depreciation expense
Carrying amount at end of year
9. Exploration Licences
opening balance
payment of exploration licences
Closing balance
10. Trade and Other Payables
trade payables
other payables
11. Borrowings
notes to the Accounts
SeCtion 9
2007 $
2006$
1,676
-
1,676
-
1,676
-
1,676
3,220
8,205
11,425
23,197
3,000
26,197
-
-
-
-
-
-
-
-
3,220
3,220
4,000
-
4,000
unsecured loan – related party (note 14)
-
4,372
12. Contributed Equity
(a) Share capital
30,000,000 (2006: 2,100,000) ordinary shares fully paid
2,799,062
2,100
(b) Movements in ordinary share capital
Balance July 00
Shares issued 20 April 2006
Balance 0 June 00
Shares issued as seed capital 17 July 2006
Shares issued as seed capital 27 February 2007
Shares issued pursuant to Ipo 11 May 2007
transaction costs on share issues
Balance 0 June 00
(c) ordinary shares
Shares
-
2,100,000
2,100,000
2,700,000
10,200,000
15,000,000
-
30,000,000
$
-
2,100
2,100
20,700
12,000
3,000,000
(235,738)
2,799,062
ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amounts paid on the shares held.
on a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll
each share is entitled to one vote.
(d) options
Information relating to options issued during the year is set out in note 13.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
13. Reserves
(i) Accumulated losses
Balance 1 July
loss for the year
Balance 30 June
(ii) Share-based payments reserve
Balance 1 July
option expenses
Balance 30 June
2007 $
2006 $
(5,164)
(409,724)
(414,888)
-
322,500
322,500
-
(5,164)
(5,164)
-
-
-
nature and purpose of reserve
the share-based payment reserve represents the fair value of equity benefits provided to Directors and employees as part of their
remuneration for services provided to the Company paid for by the issue of equity.
Balance July 00
Issued to Shareholders on 8 March 2007
Issued to Directors on 8 March 2007
Balance 30 June 2007
- exercisable at 20 cents each on or before 30 november 2010
- exercisable at 20 cents each on or before 30 november 2010
Model inputs for options granted during the year ended 30 June 2007 included:
underlying security spot price
exercise price
Dividend rate
Standard deviation of returns (annualised)
Risk free rate
Valuation date
expiration date
expiration period (years)
Black Scholes valuation ($ per security)
Binomial valuation ($ per security)
$
-
-
322,500
322,500
Options
-
7,500,000
7,500,000
15,000,000
7,500,000
7,500,000
15,000,000
$0.125
$0.30
nil
70%
5.85%
1 March 2007
30 november 2010
3.7509
0.043
0.043
the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. the
expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the
actual outcome. no other features of options granted were incorporated into the measurement of fair value.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
14. Key Management Personnel Disclosures
Details of key management personnel
Executive Director
R M Tyson
(appointed on 20 April 2006)
Non-Executive Directors
M L Kiernan
(appointed 15 April 2007)
S Hadfield
(appointed 20 April 2006)
n T Hadfield
(appointed 20 April 2006 and resigned 15 March 2007)
Other key management personnel
The following person also had authority and responsibility for planning, directing, and controlling the activities of the
Company, directly or indirectly:
D Hocking, Company Secretary and Corporate Accountant (appointed 15 March 2007)
Key management personnel compensation
2007 $
2006 $
Short-term employee benefits
post-employment benefits
long-term benefits
Share-based payments
-
-
-
322,500
322,500
-
-
-
-
-
The Company has taken advantage of relief provided by Corporations Regulation 2M.6.04 and has transferred the
detailed remuneration disclosures to the Directors’ Report. The relevant information can be found in the remuneration
report in the Directors’ Report.
equity instrument disclosures relating to key management personnel
Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and share issued on the exercise of such options, together with terms
and conditions of the options, can be found in note 13.
Option holdings
The numbers of options over ordinary shares in the company held during the financial year by each director of Peel
Exploration Limited and other key management personnel of the Company, including their personally related parties,
are set out below:
30 June 2007
directors
R M tyson
M l Kiernan
S Hadfield
n t Hadfield
Balance at
the start of
the year
Granted as
compensation
Granted,
non-
compensation
Exercised
Balance at
end of the
year
Vested and
exercisable
Unvested
-
-
-
-
2,500,000
2,500,000
2,500,000
-
-
1,250,000
1,500,000
1,050,000
50,000
-
-
-
-
-
-
3,750,000
3,750,000
4,000,000
4,000,000
3,550,000
3,550,000
50,000
50,000
-
-
-
-
-
-
-
other key management personnel
D Hocking
-
option holdings for Mr Kiernan are from date of appointment on 15 March 2007. option holdings for Mr n t Hadfield are subsequent to his
date of resignation as a director on 15 March 2007.
All vested options are exercisable at the end of the year.
there were no options held by or issued to directors for the period ended 30 June 2006.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
share holdings of key management personnel shares in Peel exploration limited (number)
Balance at
1 July 2006
Received during
the year on the
exercise of options
Other changes
during the year
Balance at
30 June 2007
30 June 2007
directors
R M tyson
M l Kiernan
S Hadfield
n t Hadfield
1,000,000
-
1,000,000
100,000
-
-
-
-
-
1,500,000
3,000,000
1,100,000
-
-
2,500,000
3,000,000
2,100,000
100,000
-
other key management personnel
D Hocking
-
Shareholdings for Mr M l Kiernan are from date of appointment on 15 March 2007. Shareholdings for Mr n t Hadfield are up to the date of
resignation as a director on 15 March 2007. there were no shares issued as compensation during the year.
30 June 2006
directors
R M tyson
M l Kiernan
S Hadfield
n t Hadfield
Balance at
1 July 2005
Received during
the year on the
exercise of options
Other changes
during the year
Balance at
30 June 2006
-
-
-
-
-
-
-
-
1,000,000
-
1,000,000
100,000
1,000,000
-
1,000,000
100,000
there were no key management personnel other than directors in the period ended 30 June 2006.
Other transactions with key management personnel
A director, R M Tyson, loaned the Company a total of $57,029 during the year ended 30 June 2007. This amount was
repaid during the year.
A director, S Hadfield, is a director of Resource Information Unit (RIU). RIU loaned the Company a total of $37,985
during the year ended 30 June 2007. This amount was repaid during the year.
A director, S Hadfield, is a director of Salamar Pty Ltd. Salamar Pty Ltd loaned the Company a total of $4,372 during
the year ended 30 June 2006. This amount was repaid during the year.
A director, S Hadfield, is a director of Resource Information Unit (RIU). RIU charges the Company management fees
on a monthly basis. Total fees charged to the Company by RIU for the year ended 30 June 2007 were $3,000. This
amount is included on the income statement within administration expenses and on the balance sheet within trade
and other payables at year end.
The Company Secretary, D Hocking, provides accounting services to the Company. Fees for services rendered
during the year ended 30 June 2007 totalled $9,625. This amount has been included on the income statement within
administration expenses. A fee payable to D Hocking of $4,625 is included on the balance sheet within trade and
other payables for accounting services received but unpaid as at year end.
0
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
aggregate amounts of each of the above types of other transactions with key
management personnel of Peel exploration limited:
amounts recognised as expense
Management fees
Accounting service
2007 $
2006 $
3,000
9,625
12,625
-
-
-
aggregate amounts payable to key management personnel or their affiliates at balance date relating to the above types of
other transactions:
Current liabilities
7,625
-
15. Remuneration of Auditors
amounts paid or due and payable to the auditors for:
Auditing or reviewing the financial report
other services
7,750
-
7,750
4,000
-
4,000
16. Contingencies
The Company had no contingent assets or liabilities for the year ended 30 June 2007.
17. Expenditure Commitments
Capital expenditure commitments
Under the terms of mineral tenement licences held by the Company, minimum annual expenditure obligations are
required to be expended during the forthcoming financial year in order for the tenements to maintain a status of good
standing. This expenditure may be subject to variation from time to time in accordance with Department of Industry
and Resources regulations.
capital expenditure commitments contracted for at the reporting date but not recognised
as liabilities are as follows:
Within one year
later than one year but not later than five years
later than five years
18. Related Parties
Transactions with related parties
2007 $
196,500
106,500
-
2006 $
90,000
-
-
303,000
90,000
The son of M L Kiernan, a director, is a promoter for Bell Potter. Bell Potter is the brokering agency the Company used
to list their shares on the Australian Stock Exchange. Amounts totalling $150,000 were paid to Bell Potter during the
year and have been recognised within transaction costs on raising equity in note 14.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
19. Events Occurring After the Balance Sheet Date
The Company issued 15,000,000 $0.20 listed options effective 31 July 2007.
There has not arisen in the interval between the end of financial year and the date of this report any other item,
transaction or event of a material or unusual nature, which is likely in the opinion of the Directors, to affect
substantially the operation of the Company, the result of those operations and the state of affairs of the Company in
the financial year subsequent to 30 June 2007.
20. Reconciliation of Net Cash Outflow from Operating Activities to Loss After Income Tax
net cash outflow from operating activities
Share-based payments
Depreciation
Changes in operating assets and liabilities
Increase in receivables
Increase in payables
loss after income tax
21. Earnings Per Share
2007 $
(87,877)
(322,500)
-
21,850
(21,197)
(409,724)
2006 $
(1,164)
-
-
-
(4,000)
(5,164)
Basic earnings per share
loss from continuing operations attributable to the ordinary equity holders of the
Company
2007 cents
2006 cents
(4.0)
(0.3)
diluted earnings per share
there is no impact of dilutive shares as the Company made a loss for the year, hence any dilution would reduce the loss per share.
reconciliation of loss used in calculation of earnings per share
Basic earnings per share
loss from continuing operations and attributable to the ordinary equity holders of the
Company used in calculating basic earnings per share
(409,724)
(5,164)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
10,200,000
2,100,000
2007 $
2006 $
There is no impact of dilutive shares as the company made a loss for the year, hence any dilution would increase the
weighted average number of shares and reduce the loss per share.
Peel exPloration limited AnnuAl RepoRt 2007
notes to the Accounts
SeCtion 9
22. Share-based Payments
option plan
The Company does not have an employee option plan. However, the Board elected to issue 7,500,000 options to
Directors for their services to the Company during the year ended 30 June 2007. No consideration was received for
options granted.
Grant
date
Expiry
date
Exercise
price
30 June
2007
Balance at
start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Balance at
end of the
year
Number
Vested and
exercisable
at end of
the year
Number
8 March
2007
30
november
2010
$0.30
-
7,500,000
-
7,500,000
7,500,000
there were no options issued prior to 8 March 2007.
The remaining contractual life of share options outstanding at the end of the period was 3 years and 5 months.
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2007 was $0.043 per option.
The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable
nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk-free rate for the term of the option.
Model inputs for the options granted during the year ended 30 June 2007 have been included in note 13.
expenses arising from share based-payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee
benefit expense were as follows:
options issued to directors
2007 $
322,500
2006 $
-
23. Comparatives
The comparative figures relate to the period from 20 April 2006 to 30 June 2006.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 10
Directors’ Declaration
The Board of Directors of Peel Exploration Limited declares that:
(a) the financial statements, associated notes and the additional disclosures included in the Directors’ Report
designated as audited of the Company, comply with Accounting Standards, the Corporations Regulations
2001 and other mandatory professional reporting requirements;
(b) the financial statements, associated notes and the additional disclosures included in the Directors’ Report
designated as audited of the Company, give a true and fair view of the financial position as at 30 June 2007
and performance of the Company for the financial year ended on that date;
(c) at the date of this declaration, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due;
(d) the audited remuneration disclosures set out on pages 13 to 17 of the Directors’ Report comply with
Accounting Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001.
The financial report has been made out in accordance with Australian Accounting Standards and the Corporations
Act 2001.
This declaration has been made out after the Board of Directors received the declaration by the Executive Director
and Chief Financial Officer required by Section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
Rob Tyson
Director
Perth, Western Australia
Dated on this the 28th day of September 2007.
Peel exPloration limited AnnuAl RepoRt 2007
Auditor’s independence Declaration
SeCtion 11
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 12
independent Auditor’s Report
Peel exPloration limited AnnuAl RepoRt 2007
independent Auditor’s Report
SeCtion 12
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 13
Corporate Governance Statement
A description of the Company’s main corporate governance practices is set out below. These practices, unless
otherwise stated, were adopted on 20th March 2007. Copies of relevant corporate governance policies are available
in the corporate governance section of the Company’s website at www.peelex.com.au.
Board of Directors
The Board is responsible for guiding and monitoring the Company on behalf of shareholders by whom they are
elected and to whom they are accountable. The Board’s primary responsibility is to oversee the Company’s business
activities and management for the benefit of shareholders. Day-to-day management of the Company’s affairs and
the implementation of corporate strategies and policy initiatives are formally delegated by the Board to the Managing
Director and senior executives, as set out in the Company’s Board charter.
Board composition
The Board charter states that:
• the Board is to comprise an appropriate mix of both Executive and Non-Executive Directors.
• the roles of Chairman and Managing Director will not be combined.
• the Chairman is elected by the full Board and is required to meet regularly with the Managing Director.
Board members should possess complementary business disciplines and experience aligned with the Company’s
objectives, with a number of Directors being independent and where appropriate, major shareholders being
represented on the Board. Consequently, at various times there may not be a majority of directors classified as being
independent, according to ASX guidelines. However, where any Director has a material personal interest in a matter,
the Director will not be permitted to be present during discussions or to vote on the matter.
Directors’ independence
The experience, qualifications and term of office of Directors are set out in the Directors’ Report. The Board comprises
three Directors none of whom are considered independent under the principles set out below. Having regard to the
share ownership structure of the Company, it is considered appropriate by the Board that a major shareholder may be
represented on the Board and if nominated, hold the position of Chairman. Such appointment would not be deemed
to be independent under ASX guidelines. The Chairman is expected to bring independent thought and judgement to
his role in all circumstances. Where matters arise in which there is a perceived conflict of interest, the Chairman must
declare his interest and abstain from any consideration or voting on the relevant matter.
The Board has adopted ASX recommended principles in relation to the assessment of Directors’ independence.
Financial materiality thresholds used in the assessment of independence are set at 10% of the annual gross expenditure
of the Company and/or 25% of the annual income or business turnover of the Director.
Directors have the right, in connection with their duties and responsibilities, to seek independent professional advice
at the Company’s expense, subject to the prior written approval of the Chairman, which shall not be unreasonably
withheld.
Peel exPloration limited AnnuAl RepoRt 2007
Corporate Governance Statement
SeCtion 13
Performance assessment
The Board has adopted a formal process for an annual self assessment of its collective performance and the
performance of individual Directors. The Board is required to meet annually with the purpose of reviewing the role of
the Board, assessing its performance over the previous 12 months and examining ways in which the Board can better
perform its duties. A formal assessment was undertaken during the year, using a self-assessment checklist as the
basis for evaluation of performance against the requirements of the Board charter.
Corporate reporting
The Managing Director and Chief Financial Officer provide a certification to the Board on the integrity of the
Company’s external financial reports. The Board does not specifically require an additional certification that the
financial statements are founded on a sound system of risk management and that compliance and control systems
are operating efficiently and effectively. The Board considers that risk management and internal compliance and
control systems are sufficiently robust for the Board to place reliance on the integrity of the financial statements
without the need for an additional certification by management.
Peel exPloration limited AnnuAl RepoRt 2007
Corporate Governance Statement
SeCtion 13
Board Committees
Whilst at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging
its stewardship makes use of committees. To this end the Board has established or may establish the following
committees:
• Audit Committee;
• Nomination Committee; and
• Remuneration Committee.
At present the Board has deemed that the Company’s current size does not sufficiently warrant the establishment
of the above-mentioned committees; however the Board will continually re-evaluate this position as necessary. If or
when these committees are established, each will have its own written charter. Matters determined by the committees
will be submitted to the full Board as recommendations for Board consideration.
If or when an audit committee is established, the committee will oversee accounting and reporting practices and will
also be responsible for:
• co-ordination and appraisal of the quality of the audits conducted by the Company’s external auditors;
• determination of the independence and effectiveness of the external auditors;
• assessment of whether non-audit services have the potential to impair the independence of the external auditor;
• reviewing the adequacy of the reporting and accounting controls of the Company.
If or when a remuneration committee is established, the remuneration committee will review all remuneration
policies and practices for the Company, including overall strategies in relation to executive remuneration policies
and compensation arrangements for the Managing Director and Non-Executive Directors, as well as all equity based
remuneration plans.
Details of the Company’s current remuneration policies are set out in the Remuneration Report section of the
Directors’ Report. The remuneration policy states that Executive Directors may participate in share option schemes
with the prior approval of shareholders. Executives may also participate in employee share option schemes, with any
option issues generally being made in accordance with thresholds set in plans approved by shareholders. The Board
however, considers it appropriate to retain the flexibility to issue options to executives outside of approved employee
option plans in appropriate circumstances.
The responsibility for the selection of potential directors and to review membership lies with the full Board of the
Company and consequently no separate nomination committee has been established. In circumstances where the
size of the Board is expanded as a result of the growth or complexity of the Company, the establishment of a separate
nomination committee will be reconsidered.
0
Peel exPloration limited AnnuAl RepoRt 2007
Corporate Governance Statement
SeCtion 13
External Auditors
The performance of the external auditor is reviewed annually. BDO Kendalls were appointed as the external auditors
in 2006. It is both the Company’s and BDO Kendalls’ policy to rotate audit engagement partners at least every five
years and the review partner every five years.
The external auditors provide an annual declaration of their independence to the Board. The external auditor is
requested to attend annual general meetings and be available to answer shareholder questions about the conduct of
the audit and the preparation and content of the audit report.
Code of Conduct
A formal code of conduct for the Company applies to all Directors and employees. The code aims to encourage
the appropriate standards of conduct and behaviour of the Directors, officers, employees and contractors of the
Company. All personnel are expected to act with integrity and objectivity, striving at all times to enhance the reputation
and performance of the Company.
Trading in the Company’s securities by Directors and senior executives is not permitted in the two months immediately
preceding the release of the Company’s annual and half-year financial results. Any transactions to be undertaken
must be notified to the Chairman or Managing Director in advance.
Continuous Disclosure and Shareholder Communications
The Company has a formal written policy for the continuous disclosure of any price sensitive information concerning
the Company. The Board has also adopted a formal written policy covering arrangements to promote communications
with shareholders and to encourage effective participation at general meetings.
The Managing Director and Company Secretary have been nominated as the Company’s primary disclosure officers.
All information released to the ASX is posted on the Company’s website immediately after it is disclosed to the ASX.
When analysts are briefed on aspects on the Company’s operations, the material used in the presentation is released
to the ASX and posted on the Company’s website. All shareholders receive a copy of the Company’s annual report.
In addition, the Company makes all market announcements, media briefings, details of shareholders meetings, press
releases and financial reports available on the Company’s website.
Peel exPloration limited AnnuAl RepoRt 2007
SeCtion 14
Shareholder information
Information relating to shareholders at 28 September 2007.
substantial shareholders
Holder
CRAWleY InVeStMentS ptY ltD
MR lAuRenCe JAMeS KIeRnAn
MR RoBeRt MAClAIne tYSon
MR SIMon HADFIelD
MS lISA DupeRouZel
MRS lInDA SAlA tennA
Distribution of shareholders
No. of Holders
0
23
95
327
27
No. Ord
Shares
3,000,000
3,000,000
2,500,000
2,100,000
2,100,000
2,075,000
No. Ord
Shares
0
67,144
922,826
10,060,020
18,950,010
%
10.00
10.00
8.33
7.00
7.00
6.92
%
0.00
0.22
3.08
33.53
63.17
0.00
0,000,000
00.00
twenty largest shareholders
Holder
CRAWleY InVeStMentS ptY ltD
MR lAuRenCe JAMeS KIeRnAn
MR RoBeRt MAClAIne tYSon
MS lISA DupeRouZel
MRS lInDA SAlA tennA
SAlAMAR ptY ltD
MR SIMon HADFIelD
Blue CRYStAl ptY ltD
KAtAnA CApItAl lIMIteD
ClASSIC CApItAl ptY ltD
No. Ord
Shares
3,000,000
3,000,000
2,100,000
1,500,000
1,500,000
1,100,000
1,000,000
600,000
600,000
500,000
Ron & lIZ noMIneeS ptY ltD (RonAlD JAMeS SupeR FunD A/C)
450,000
MR JoRDAn tYSon + MR FlYnn tYSon
MR pAul HoDDeR + MR JAMeS RAMSAY + MR DAnIel FoSteR
(DeltA Blue InVeStMentS A/C)
MR SCott pAul JoneS + MR RoDneY MAlColM JoneS
+ MISS CARol RoBIn JoneS (SCopA FAMIlY A/C)
KB33 CApItAl ptY ltD (CHARItY A/C)
WonDeR HolDInGS ptY ltD
MAJ ptY ltD (WAllACe SupeR FunD A/C)
MR DenIS IVAn RAKICH (tHe RAKICH RetIReMent A/C)
SAMS MARKetInG ptY ltD (WAuGH pRoVIDent FunD A/C)
HopeRIDGe enteRpRISeS ptY ltD (JoneS FAMIlY A/C)
400,000
300,000
300,000
300,000
290,000
250,000
250,000
250,000
200,000
%
10.00
10.00
7.00
5.00
5.00
3.67
3.33
2.00
2.00
1.67
1.50
1.33
1.00
1.00
1.00
0.97
0.83
0.83
0.83
0.67
1
2
3
4
5
6
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999
Rounding
total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
At the prevailing market price of $0.28 per Share there were five Shareholders with less than a marketable parcel of
,0,000
.
$500 at 28 September 2007.
Peel exPloration limited AnnuAl RepoRt 2007
Shareholder information
SeCtion 14
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999
rounding
total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Distribution of optionholders
No. of Holders
5
77
154
136
21
Options
3,635
349,051
1,280,571
3,514,500
9,852,243
%
0.02
2.33
8.54
23.43
65.68
0.00
,000,000
00.00
twenty largest optionholders
Holder
CRAWleY InVeStMentS ptY ltD
MR lAuRenCe JAMeS KIeRnAn
MR RoBeRt MAClAIne tYSon
MS lISA DupeRouZel
MRS lInDA SAlA tennA
SAlAMAR ptY ltD
MR SIMon HADFIelD
ClASSIC CApItAl ptY ltD
Blue CRYStAl ptY ltD
KAtAnA CApItAl lIMIteD
Options
1,622,874
1,622,874
1,172,874
750,000
750,000
672,873
500,000
495,748
300,000
300,000
Ron & lIZ noMIneeS ptY ltD (RonAlD JAMeS SupeR FunD A/C)
225,000
MR JoRDAn tYSon + MR FlYnn tYSon
MR pAul HoDDeR + MR JAMeS RAMSAY + MR DAnIel FoSteR
(DeltA Blue InVeStMentS A/C)
HopeRIDGe enteRpRISeS ptY ltD (JoneS FAMIlY A/C)
MR SCott pAul JoneS + MR RoDneY MAlColM JoneS
+ MISS CARol RoBIn JoneS (SCopA FAMIlY A/C)
KB33 CApItAl ptY ltD (CHARItY A/C)
WonDeR HolDInGS ptY ltD
MAJ ptY ltD (WAllACe SupeR FunD A/C)
MR DenIS IVAn RAKICH (tHe RAKICH RetIReMent A/C)
SAMS MARKetInG ptY ltD (WAuGH pRoVIDent FunD A/C)
200,000
150,000
150,000
150,000
150,000
145,000
125,000
125,000
125,000
%
10.82
10.82
7.82
5.00
5.00
4.49
3.33
3.30
2.00
2.00
1.50
1.33
1.00
1.00
1.00
1.00
0.97
0.83
0.83
0.83
At the prevailing market price of $0.096 per Option there were eighty-two Optionholders with less than a marketable
parcel of $500 at 28 September 2007.
,,
.
Peel exPloration limited AnnuAl RepoRt 2007
Shareholder information
SeCtion 14
At 28 September 2007 there were 472 holders of ordinary shares in the Company.
The following shares and options are restricted by ASX:
Ordinary fully paid shares, restricted for 24 months from date of quotation (1 June 2006) – 13,890,000
Ordinary fully paid shares, restricted for 12 months from date of quotation (1 June 2006) – 1,000,000
30 November 2010 20c Options restricted for 24 months from date of issue (1 June 2006) – 7,000,000
30 November 2010 20c Options restricted for 12 months from date of issue (1 June 2006) – 500,000
30 November 2010 30c Options restricted for 24 months from date of issue (1 June 2006) – 7,500,000
Voting Rights
The voting rights attaching to the ordinary shares, set out in Clause 12.11 of the Company’s Constitution, are:
“Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at meetings of
Shareholders or classes of Shareholders:
(a) each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
(b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a
Shareholder has one vote; and
(c) on a poll, every person present who is a Shareholder or a proxy, attorney or Representative of a Shareholder
shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or
Representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes
being equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable
in respect of those Shares (excluding amounts credited).”
Statement under ASX Listing Rule 4.10.19
From the date of admission of the Company’s shares on ASX (17 May 2007) to the date of this Annual Report, the
Company has used the cash and assets in a form readily convertible to cash that it had at the time of admission in a
way consistent with its business objectives. Expenditures have been in line with Prospectus estimates.
Peel exPloration limited AnnuAl RepoRt 2007
Peel exPloration limited AnnuAl RepoRt 2007
Exploring forgotten mineral fields
peel exploration limited ACN 119 343 734
telephone (08) 9382 3955 level 1, 79 hay street, subiaco, western australia 6008
www.peelex.com.au