Peel Mining Limited Annual Report 2011
Annual Report
for the Financial Year ended 30 June 2011
PEEL MINING LIMITED
& CONTROLLED ENTITIES
ABN 42 119 343 734
0
Corporate directory
Directors
Simon Hadfield – Chairman
Rob Tyson – Managing Director
Graham Hardie – Non-executive Director
Craig McGown – Non-executive Director
Share Registry
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Tce
PERTH WA 6000
Telephone: +61 (0)8 9323 2000
Facsimile: +61 (0)8 9323 2033
Solicitors to the Company
Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
Auditors
BDO Audit (WA) Pty Ltd
38 Station St
SUBIACO WA 6008
Company Secretary
David Hocking
Registered Office
Unit 1, 34 Kings Park Rd
WEST PERTH WA 6005
Telephone: +61 (0) 8 9382 3955
Facsimile: +61 (0) 8 9388 1025
Website
www.peelmining.com.au
Contents
SECTION 1
Chairman‟s report
SECTION 2
Review of operations
SECTION 3
Schedule of tenements
SECTION 4
Directors‟ report
SECTION 5
Consolidated statement of comprehensive income
SECTION 6
Consolidated statement of financial position
SECTION 7
Consolidated statement of changes in equity
SECTION 8
Consolidated statement of cash flows
SECTION 9
Notes to the consolidated financial statements
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
2
3
16
17
22
23
24
25
26
39
40
41
43
45
1
Chairman’s report
Dear Fellow Shareholders,
It is a pleasure to report to you on what has been a busy and exciting year for Peel. The Company‟s work
over the year has culminated in an exciting “greenfields” discovery at the 4-Mile prospect within Peel‟s
100%-owned May Day-Gilgunnia project in NSW.
The first significant achievement during the year was the completion of due diligence and subsequent
acquisition of the Apollo Hill gold project in WA. As part of the due diligence process, Peel undertook
various activities including preliminary metallurgical testwork, an Aboriginal Heritage survey and resource
estimation work. In November 2010, Peel exercised its option to acquire Apollo Hill and in December
2010 announced a maiden inferred resource estimate for Apollo Hill of 341,000 ounces gold, equating to
an acquisition cost of $3 per ounce. Subsequent to year‟s end Peel announced an updated inferred
resource estimate of 505,000 ounces gold.
The second major achievement during the year was the identification of the 4-Mile prospect located
within Peel‟s May Day-Gilgunnia project. In January 2011, a strong electromagnetic (EM) anomaly was
identified following a helicopter-borne geophysical survey (VTEM).
Investigation commenced immediately and by March, RC drilling was underway. Encouraging results were
received with highly-anomalous polymetallic (gold-silver-copper-lead-zinc) mineralisation intersected in
all drillholes. Follow-up downhole geophysics indicated that the EM anomaly remained untested.
To that end, your Company continued to systematically explore at 4-Mile with several more phases of
drilling and downhole geophysics. This work culminated in discovery drillhole 4MRC007 intersecting
multiple zones of strong copper-dominated polymetallic mineralisation including massive sulphides.
Subsequent to the reporting period, Peel announced that further drilling had intersected high-grade
mineralisation including a 10m zone averaging more than 20% combined lead-zinc plus silver-gold, and a
6.65m zone averaging better than 3% copper plus silver-gold.
Whilst it is too early to determine how important a discovery 4-Mile is, results to date clearly show a
highly promising exploration target in a world-class mineral province.
In line with your Company‟s philosophy to remain vigilant to opportunity, Peel also secured an exciting
silver play, near Armidale NSW. The Ruby project was staked in late 2010 and investigation to date
shows good potential for the project to host high-grade silver mineralisation.
Your board believes that the Company‟s policy of systematically exploring several projects at once, or
having multiple irons in the fire so-to-speak, is beginning to pay off. The coming year is shaping up as a
very exciting time with follow-up drilling planned for 4-Mile, and an initial drill programme planned for
Ruby. Investigations at Apollo Hill will also continue.
I would like to thank managing director Rob Tyson and fellow non-executive directors Graham Hardie and
Craig McGown and Company Secretary David Hocking for their contribution over the past 12 months. I
would also like to thank Michael Oates, Steve Leggett and David Vaarwerk, and all of Peel‟s other
employees/contractors who have contributed to the Company‟s activities.
Finally, I would like to thank our shareholders for their continued support throughout the year.
Yours sincerely
Simon Hadfield
CHAIRMAN
30th September 2011
2
Review of operations
Background
Peel Mining Limited is focused on precious, base and specialty metals exploration with four key projects,
all located in Australia.
At September 2011, Peel held five separate mineral projects comprising granted exploration licences and
licences under application, all located in Australia. In addition, Peel has lodged applications over the Rise
and Shine gold project in Central Otago, New Zealand.
May Day & Gilgunnia contains the May Day polymetallic deposit (located on a 100 hectare mining
lease) and the historic Gilgunnia and 4-Mile goldfields. Subsequent to the reporting period, Peel
announced the discovery of high-grade polymetallic mineralisation at the 4-Mile prospect. The May Day
deposit and the 4-Mile discovery appear to be classic analogues for Cobar-style precious and base metal
mineralisation.
Apollo Hill contains two significant gold deposits; Apollo Hill and the Ra Zone. These deposits
exhibit the hallmarks of a major mineralised Archean system, showing extensive and intense
hydrothermal alteration and deformation. Subsequent to the year‟s end Peel announced an updated
inferred resource estimate of 505,000 ounces gold.
Ruby Silver contains numerous historic silver and gold mines/workings/prospects including the
very high grade Ruby and Tulloch silver mines. Hydrothermal mineralisation associated with
quartz/carbonate veins containing narrow silver-rich (up to 60,000 g/t) massive sulphide pods and
shoots. Recent work by Peel has identified multiple chargeable IP anomalies at Tulloch and Rockvale.
contains
Attunga
copper
mines/workings/prospects. Peel has outlined a high-grade tungsten-molybdenum resource at the Attunga
Tungsten Deposit (1.29 Mt at 0.61% WO3 and 0.05% Mo), and also identified significant gold
mineralisation at the Kensington gold prospect, and gold-copper-molybdenum mineralisation at the
Attunga Copper Mine prospect.
tungsten, molybdenum
numerous
historic
gold,
and
Yerranderie contains the historic Yerranderie silver field area. Investigations by Peel indicate that
substantial amounts of silver-lead-gold mineralisation remain present in surface waste and tailings dumps
at Yerranderie. Peel is examining the potential to retreat and remediate the Yerranderie environ.
Rise and Shine contains multiple workings associated with the Rise and Shine Shear Zone, and
the Cromwell Lode in the nearby Bendigo Goldfield. The Rise and Shine Shear Zone is considered
structurally similar to the Macraes Shear Zone that hosts multi-million ounce Macraes gold mine. The
Cromwell lode has produced about 150,000 ounces of gold grading about 10 g/t gold.
Details on Assets
May Day-Gilgunnia
The May Day-Gilgunnia project, located about 100km south of Cobar in central NSW, contains the historic
May Day polymetallic (Au-Ag-Cu-Pb-Zn) deposit, and the historic Gilgunnia and 4-Mile goldfields.
Exploration over the reporting period has focused on the May Day and the 4-Mile prospect areas. To that
end, in January 2011, a strong electromagnetic (EM) anomaly was identified at 4-Mile. Investigation
commenced immediately culminating in the discovery of multiple zones of strong polymetallic (Au-Ag-Cu-
Pb-Zn) mineralisation including massive sulphides. Further information is provided below.
4-Mile Discovery
In late 2010, a 120 line kilometre airborne geophysical survey (VTEM) was flown over the May Day and
4-Mile/G5 areas. G5 is a discrete, relatively large, 20nT magnetic anomaly located to the immediate
north of the historic 4-Mile goldfield. In early 2011, interpretation of the data resulted in the recognition
of a coincident late time conducting anomaly and magnetic high. The anomaly is proximal to the historic
4-Mile goldfield area, a series of surface and underground gold workings located about 10 km east of the
May Day deposit
3
Review of operations
Peel completed a ground-based geophysical (fixed-loop TEM) survey which confirmed the existence of a
moderate-strong conductor. In March 2010, a programme of three RC drillholes for a total of 663m
targeting the geophysical anomaly was completed. This drilling resulted in the discovery of strongly
anomalous polymetallic (gold-silver-copper-lead-zinc) mineralisation in all three drillholes. Other
accessory sulphide minerals observed included pyrrhotite, pyrite, and arsenopyrite
4-Mile RTP Magnetics
4-Mile VTEM late time (3-10 mS)
Systematic exploration followed and involved multiple rounds of additional drilling (4 more RC drillholes
plus a diamond tail) and multiple downhole geophysical (DHEM) surveys. Subsequent to the reporting
period, this work culminated in discovery drillhole 4MRC007 intersecting multiple zones of strong copper-
dominated polymetallic mineralisation including massive sulphides. In late August 2011, Peel announced
that follow-up diamond drilling had intersected high-grade mineralisation including a 10m zone averaging
more than 20% combined lead-zinc plus silver-gold, and a 6.65m zone averaging better than 3% copper
plus silver-gold.
Drillhole 4MRCDD006 intersected multiple intervals of massive sulphide and stringer mineralisation,
including chalcopyrite, sphalerite, galena, pyrrhotite, pyrite, and arsenopyrite. The mineralisation occurs
within a package of variably sheared and brecciated turbidite sediments comprising siltstones and
mudstones and is interpreted as occurring as a shoot-like structure dipping moderately to the west and
plunging to south. Drill intercepts are construed as being close to true.
4-Mile is interpreted to be positioned in a favourable geological and structural position, sited on the
“nose” of an anticline – a suitable high-stress environment, and occurring in a geological unit interpreted
to be age equivalent of the Chesney and Great Cobar Slate Formations found in the immediate Cobar
region.
Results to date show 4-Mile to be a highly promising exploration target in a world-class mineral province.
At the time of writing, Peel had completed further ground-based geophysics including high-resolution
loop EM surveys. RAB
magnetics and gravity surveys, and additional downhole and
geochemical/geological drilling was also underway and further RC/diamond drilling was planned for as
soon as possible.
fixed
4
Review of operations
Significant 4-Mile Drilling Results
Hole ID
Northing
Easting
Azimuth
(true)
Dip
4MRC001
6413351 415281
090
-60
Final
Depth
225
4MRC002
6413348 415326
090
-60
219
4MRC003
6413352 415359
090
-60
219
From
(m)
To
(m)
Interval
(m)
165
194
205
138
164
173
213
110
133
176
205
197
138
168
199
206
143
165
174
214
120
134
179
208
216
143
3
5
1
5
1
1
1
10
1
3
3
19
3
Cu
(%)
0.03
Ag
(g/t)
9
Au
(g/t)
0.06
Pb
(%)
0.65
Zn
(%)
0.50
0.27
0.09
0.04
0.01
0.03
0.15
0.03
0.09
0.11
0.01
0.17
0.04
0.64
0.14
3.10
1.20
0.15
-
0.74
1.65
1.42
0.27
1.94
1.49
21
22
11
4
7
20
24
26
14
8
13
5
19
41
34
19
30
0.15
0.87
1.88
0.24
1.49
1.50
0.15
1.28
2.10
0.82
0.18
0.10
0.32
0.15
0.59
0.05
0.95
1.23
0.09
1.17
2.20
0.02
0.15
1.22
0.85
0.24
1.55
0.07
0.43
0.97
0.15
0.42
0.47
0.45
0.31
0.24
1.78
1.16
2.16
0.77
9.01 11.00
0.93
0.65
0.13
0.14
0.15
0.28
1.21
0.17
2.76
-
3.59
-
-
24
90
18
15
55
59
0.21
0.48
0.49
1.48
0.21
9.99
0.39
2.00
0.20
0.15
0.51
1.75
0.3
0.16
0.29
0.18
0.26
0.21
4MRC004
6413353
415243
4MRC005
6413348
415404
4MRCDD006
6413377
415179
090
105
090
-65
-60
-70
including
and
and
and
255
147
345.1 253.00 312.00
59.00
253.00 263.00
10.00
267.35 274.00
293.70 303.00
306.00 311.00
4MRC007
6413365
415210
090
-70
270
including
and
and
and
and
187
218
219
226
235
248
262
188
266
220
230
242
256
266
6.65
9.30
5.00
1
48
1
4
7
8
4
Notes
1.
All drillholes were drilled reverse circulation using face sampling hammer except for 4MRCDD006 which had an NQ diamond core tail from
240-345.1m.
2. Drill chips were collected in plastic bags at 1m intervals. Sample recoveries were considered adequate for all samples.
3. Drill chips/core was logged in detail based on lithology, mineralisation, and alteration.
4.
Samples for analysis were collected by hand spearing rock chip material except for 4MRC007 where the interval 216m-270m was gained via a
1:8 riffle splitter and 4MRCDD006 where samples were collected by sawing core in half.
Samples were submitted as 1m or 4m composite intervals for RC or as 1m half-core intervals unless a geological contact was used for
diamond.
Samples were analysed at ALS Chemex utilising methods: Au‐AA25 for Au (fire assay); ME‐ICP61 for multi-element including Ag, Cu, Pb, Zn;
Ag-OG62 for > 100 g/t Ag; Cu-OG62 for >1% Cu; Pb-OG62 for >1% Pb; and Zn-OG62 for >1% Zn.
Standards for Au and base metals were included (approximately 2% of all samples). Duplicates were also included (approximately 2% of all
samples).
5.
6.
7.
8. Drillhole collars were surveyed by handheld GPS (Garmin GPS72).
9. Downhole surveys were routinely run.
5
Review of operations
6
Review of operations
May Day
May Day was discovered in 1898 and was initially developed as an underground copper-lead-silver mine.
Exploration in the 1970s identified high grade gold-base metal mineralisation to a depth of about 250m
below surface. Exploration in the late 1980s defined a shallow gold resource, which eventually lead to the
development in 1996 of a small-scale mining operation comprising an open pit with a heap leach gold
circuit.
In the period since acquisition in late 2009 through June 2011, Peel has completed multiple phases of
exploration involving: an initial due diligence site visit inclusive of geological mapping and rock chip
sampling; geophysical surveys comprising gravity and Induced Polarisation; remodeling of airborne
magnetic data; laser scanning and survey pick-up of the open pit and historic drillholes; an RC drilling
programme; early-warning metallurgical testwork; and a helicopter-borne geophysical survey (VTEM).
Geological mapping and rock chip sampling completed as part of due diligence confirmed that May Day
mineralisation is structurally controlled and that high grade precious-base metal mineralisation is present
within the open pit.
Several geophysical surveys were also completed in advance of drilling and to provide additional
geological information about the local geological environment. An approximately 12km2 gravity survey
and a 15 line kilometre Induced Polarisation (IP) survey was undertaken over the immediate May Day
mine environment and 2 kilometres along strike to the northeast. This data, along with regional airborne
magnetic data shows that a moderate-to-strong chargeable IP anomaly and a deep (greater than 400m
depth) magnetic anomaly is associated with the May Day deposit.
In May 2010, Peel completed a programme of 10 RC drillholes for 1,877m of drilling at the May Day gold-
base metal deposit, located about 100km south of Cobar in central-western New South Wales. This
drilling programme was primarily designed to test for down-dip extensions to known mineralisation.
Better drill results included the following intercepts:
16m at 1.78 g/t Au, 42 g/t Ag, 0.25% Cu, 0.95% Pb, 1.33% Zn from 159m in MDRC002;
24m at 0.96 g/t Au, 20 g/t Ag, 0.07% Cu, 0.70% Pb, 0.85% Zn from 120m in MDRC004;
27m at 2.12 g/t Au, 27 g/t Ag, 0.11% Cu, 0.43% Pb, 0.75% Zn from 120m in MDRC005;
3m at 1.33 g/t Au, 98 g/t Ag, 0.92% Cu, 7.29% Pb, 8.19% Zn from 140m in MDRC006, and;
10m at 2.15 g/t Au, 28 g/t Ag, 0.06% Cu, 0.34% Pb, 0.39% Zn from 213m in MDRC010.
Peel is encouraged by the results returned, which confirm down dip extensions and that mineralisation is
shear-related and occurs as a sub-vertical lense/shoot. Mineralisation occurs at or near the interbedded
contact of a fine-grained sedimentary hangingwall and a porphyritic volcanic footwall, is associated with
silica/talc alteration, and includes disseminated through to massive sphalerite-galena-pyrite-pyrrhotite-
chalcopyrite sulphides. The true width is estimated to be about 65% of the reported intercepted widths.
The May Day deposit appears to be analogous to Cobar‐style precious and base metal mineralisation.
Drill results support the Company‟s belief that the May Day deposit possibly represents remobilised
mineralisation or “leakage” from a deeper mineralised system. Interpretation of magnetic data indicates
the source of a magnetic high anomaly to be located at greater than 400m below surface.
Following the drilling, Peel undertook early-warning metallurgical testwork on a single sample of May Day
mineralisation to determine potential extraction characteristics. Excellent results were returned with key
findings of this testwork being:
encouraging grind characteristics were observed;
gravity gold extraction yielded 45% of gold reporting to 0.6% mass;
flotation extraction yielded 77% of gold, 88% of zinc, 52% of lead, and 46% of copper reporting
to 13% mass; and
24 hour cyanidation yielded 71% of gold reporting to 2% of mass.
Late in 2010, Peel completed a helicopter-borne geophysical survey (VTEM) over the May Day area. No
anomalies were detected.
Recent developments at the nearby 4-Mile prospect add significant value to the May Day-Gilgunnia
project and further support the prospectivity of Peel‟s tenure including the May Day deposit. Further work
at May Day will involve a deep drilling programme targeting the magnetic anomaly at depth.
7
Review of operations
Apollo Hill
The Apollo Hill gold project, located about 50 km southeast of Leonora, WA, contains two significant gold
deposits; Apollo Hill and the Ra Zone. In June 2010, Peel announced that it had entered into an option
agreement with Hampton Hill Mining NL (ASX:HHM) to acquire the entire issued capital of Apollo Mining
Pty Ltd, the 100%-owner of the Apollo Hill gold project in the North Eastern Goldfields of WA.
The Apollo Hill gold project exhibits the hallmarks of a major mineralised system, showing extensive and
intense hydrothermal alteration and deformation. Two significant gold deposits, Apollo Hill and the Ra
deposit, have been identified to date and remain open in several directions.
Background
Fimiston Mining Limited discovered
Apollo Hill in December 1986 during a
drill program aimed at finding the
source of abundant eluvial gold at the
base of a prominent hill in the area.
Active drilling since then has outlined
extensive gold mineralisation and
alteration over a one kilometre strike
length, which is up to 250m wide and
dips 45-60 degrees to the east.
Multiple gold mineralisation events
are interpreted to have occurred at
complex
Apollo Hill
during
deformational
Gold
is accompanied by
mineralisation
quartz veins and carbonate-pyrite
alteration associated with a mafic-
felsic contact.
a
history.
overburden,
The Apollo Hill gold project straddles
a major shear zone, known as the
Apollo shear zone, which
is a
component of the Keith Kilkenny
Fault system. This shear zone is
beneath
largely
concealed
transported
often
associated with the Lake Raeside
drainage
and previous
surface geochemical sampling and
shallow RAB drilling has consequently
been of limited effectiveness. Deeper
drilling by previous explorers has
largely focussed on the only locality
where this shear zone is exposed at
surface, Apollo Hill itself, and also on
a nearby parallel trend termed the
Western trend (Ra deposit).
system,
Due Diligence
Peel undertook various due diligence work programs on Apollo Hill during the option period. As part of
this, in September 2010, Peel undertook an Aboriginal Heritage and work program clearance survey
utilising the services of consulting anthropologist Daniel de Gand and Wongatha Aboriginal Heritage
Consultants, the outcome, of which was positive with large areas of the project area effectively cleared
for future exploration access.
Also as part of due diligence, Peel undertook preliminary metallurgical testwork on two representative
samples of Apollo Hill mineralisation to determine potential extraction characteristics. Key findings of this
testwork were:
8
Review of operations
Overall gold extraction was excellent for both samples, with 98.68% and 98.76% total gold
extracted for Sample 1 (15-16m - AD002) and Sample 2 (154-155m – AD002), respectively.
Leach kinetics were rapid for both samples, with a significant proportion of gold solubilised within
the first two hours of cyanide contact.
Both samples contained a significant amount of gravity recoverable gold, greater than 80%.
Relatively low base metal levels limit the possibility of excess reagent consumption caused by
base metal - cyanide complexation.
Organic carbon levels below detectable limit, indicating very little chance of preg-robbing
occurring during cyanidation.
Acquisition
In November 2010, Peel elected to exercise its option to acquire Apollo Hill. The key terms of the sale
agreement saw Peel issue 11 million fully paid ordinary shares to HHM in consideration for Apollo Hill, and
HHM granted a 5% gross overriding royalty on Apollo Hill gold production exceeding 1 million ounces.
Peel’s Activities
In December 2010, Peel reported a maiden resource estimate for the Apollo Hill and Ra deposits. The
highlights of this work were:
Maiden resource at Apollo Hill and Ra deposits estimated at 11.1 Mt at 1.0 g/t Au for 341,000
ounces of gold (using 0.5 g/t gold cut off).
Maximum depth of the resource estimate was 150m below surface.
Apollo Hill deposit extends to surface and remains unexploited.
Mineralisation at Apollo Hill and Ra deposits remains open at depth and along strike to the south
of both deposits.
Potential increase in resources with minimal further drilling.
In line with the potential to increase resources at Apollo Hill through minimal further drilling, in April
2011, Peel commenced a programme of infill and extensional drilling. By June 2011, Peel had completed
an approximately 3,600 metre RC and diamond drilling programme that was designed to increase sample
density to allow for the extension of the Apollo Hill resource model; and to provide representative gold-
mineralised material for additional metallurgical testwork.
The RC drilling component comprised 21 drillholes for 3,276 metres of drilling. This drilling was designed
primarily to enable the extension of the existing Apollo Hill resource model a further 200 metres (grid)
south, and to a minimum depth of about 150 metres below surface. The diamond drilling component
comprised 2 drillholes for 310 metres of HQ diamond core drilling. This drilling was designed primarily to
provide sufficient material for further metallurgical testwork. This testwork has been deferred until a
more appropriate time.
Subsequent to the reporting period, in September 2011, Peel reported a 48 per cent increase in the
resource estimate for Apollo Hill, to 505,000 ounces contained gold.
The updated resource estimate – which was estimated by Hellman and Schofield Pty Ltd (H&S) and
incorporated the results of drilling undertaken by Peel – totals 17.2 million tonnes at 0.9 g/t Au for
505,000oz of gold (using a 0.5 g/t gold cut-off) across the Apollo Hill and Ra deposits.
The updated resource estimate highlights the potential of the Apollo Hill Project for future economic
extraction. The updated resource estimate at a range of gold cut-off grades is shown below:
September 2011 Apollo Hill Inferred Resource estimates to 180 metres depth (190mRL)
Ra
Cut Off
Au g/t
0.2
0.4
0.5
0.6
0.8
1.0
1.2
Apollo Hill
koz
Mt Au g/t
745
0.5
43
614
0.8
22
505
0.9
16
424
1.0
12
302
1.2
7
206
1.4
4
126
1.6
2
Note: The significant figures in above reflect the precision of estimates and include rounding errors.
Mt Au g/t
0.7
2.4
1.0
1.5
1.1
1.2
1.2
1.0
1.4
0.7
1.6
0.5
1.8
0.4
Mt Au g/t
0.5
0.8
0.9
1.0
1.2
1.4
1.6
koz
691
566
463
386
270
180
103
45.4
23.5
17.2
13.0
7.7
4.5
2.4
koz
54
48
42
39
32
26
23
Total
9
Review of operations
10
Review of operations
Resource Estimation Summary
The Apollo Hill Project comprises two deposits, the main Apollo Hill deposit in the north of the project
area, and the smaller Ra deposit in the south. Gold mineralisation at the project is associated with quartz
veins and carbonate-pyrite alteration along a north-east dipping contact between felsic rocks to the west,
and mafic dominated rocks to the east. The combined mineralised zones extend over a strike length of
about 1.4 kilometres, and have been intersected by drilling to a maximum depth of about 350 metres
below surface.
Within the area covered by the current model, the study database contains 136 aircore, 214 reverse
circulation (RC), and 59 diamond holes for 26,761 metres of drilling. An additional 135 RAB holes in this
area were not included in the resource dataset. Peel's RC and diamond drilling provides approximately 18
per cent of the mineralised composites used for resource estimation.
Mineralised domains used for the current estimates were interpreted by H&S. Outlines capturing zones of
continuous mineralisation with composited gold grades above approximately 0.1 g/t were digitised on
cross sections aligned with the drilling traverses and linked to form closed three dimensional wireframes.
In addition to the mineralised domain, the current estimates include a background domain which contains
only rare, isolated mineralised drill results.
Peel Mining supplied H&S with a set of strings representing the interpreted base of oxidation and top of
fresh rock. Triangulations produced from these strings were used define the oxidation subdomains used
for the current estimates.
Peel Mining completed a total of 52 immersion density measurements from samples obtained from
diamond core drilling. These spatially clustered samples are of uncertain representivity. The current
estimates assume densities specified by Peel and range from 1.8 t/bcm for oxidised Ra mineralisation to
2.8 t/bcm for fresh mafic Apollo Hill mineralisation.
H&S estimated the resources for Apollo Hill by Multiple Indicator Kriging, with block support correction to
reflect likely open pit mining selectivity, a method that has been demonstrated to provide reliable
estimates of gold resources recoverable by open pit mining for a wide range of mineralisation styles.
Although the model estimates extend to around 290 metres depth, the reported resources only include
estimates to about 180 metres below surface to reflect realistic extraction depths.
Peel Mining believes that the shallow and extensive nature of mineralisation at the Apollo Hill gold project
suggests that the project has reasonable prospects for eventual economic extraction.
Planning of additional exploration is advanced, with a preliminary in-house scoping study to commence
shortly. Further work will be aimed at obtaining a better understanding of the controls/vectors for
mineralisation at Apollo Hill, as well as generating new regional exploration targets.
Ruby Silver
During the reporting period, Peel was granted a 21 unit (~60 km2) exploration licence covering the
historic Ruby-Tulloch-Rockvale silverfield. Peel has since lodged an ELA adjacent to the Ruby silver
project. EL7711 is located approximately 30 km east of Armidale in north-eastern New South Wales.
Background
EL7711 encompasses much of the central part of the Rockvale Adamellite which hosts silver-gold-arsenic
mineralisation both at its margin and within the intrusion on northeast/northwest fracture zones, possibly
associated with aplite dykes. Major known deposits are the Ruby and Tulloch silver mines and the
Rockvale arsenic mine. There are, however, many other underexplored prospects and anomalies within
EL7711, adding to its prospectivity for silver and gold.
The Ruby silver mine, associated with an outcropping aplite dyke, has a lode up to 1.4 metres wide and
was worked to a depth of 120 metres between 1895 and 1905. Historic production is estimated to be
about 350,000 ounces silver at a recovered grade of ~600 g/t Ag.
In 1968, a nine-hole diamond drill program was undertaken to test the main workings at Ruby. Records
of this work are poor, but it is known that the first hole intersected 5.08 metres at a grade of ~6,700 g/t
Ag from 90.5 metres downhole. True width was estimated at about 3 metres. Three of the other drillholes
intersected old workings, while values in a further three were reported only as “low”. No results were
recorded for the other two drillholes. No further drilling has been completed at Ruby.
11
Review of operations
Results from an IP geophysics survey completed in 1969 suggest that sulphide mineralisation possibly
extends well beyond the known silver-rich shoot at Ruby, and presents future exploration targets.
At the Tulloch mine, mined between 1913 and 1928, an estimated 50,000 ounces silver at a recovered
grade of ~6,200 g/t Ag have been won. The silver mineralisation is developed in fissures associated with
three obliquely intersecting sets of shears near the contact of sediments.
in
as
The Rockvale arsenic
mine was discovered in
the
1923, and
period
1928,
to
produced 2,950 tonnes
of ore containing about
600 tonnes of white
arsenic. Mineralisation
irregular
occurs
shoots in altered aplite
within
Rockvale Adamellite.
Mineralisation
is
predominantly pyrite-
but
arsenopyrite,
silver-gold-lead
mineralisation (similar
to both the Ruby and
is
Tulloch mines)
recorded.
the
The
Point
Silver
prospect lies about 2
kilometres along strike
from the Ruby silver
mine and comprises a
pipe-like body of aplite
50
approximately
in diameter.
metres
exploration
Previous
has
identified highly
anomalous silver-gold
in
mineralisation
chips.
rock
surface
Peel
that
believes
Silver Point has bulk
tonnage potential and
should be drill tested
accordingly.
The Happy Valley and G Reef prospects lie along strike to the west of the Tulloch silver mine. These
prospects also contain historic workings, along with highly anomalous silver-gold mineralisation in surface
rock chips. A strong IP anomaly between the Tulloch mine and Happy Valley which has an associated
magnetic anomaly also remains untested.
Peel’s Activities
During April/May 2011, Peel undertook an 18 line kilometre IP survey over the historic Tulloch silver mine
and Rockvale arsenic mine areas in preparation for an upcoming drill programme. This work identified
multiple zones of strong shallow chargeable anomalism, many of which are coincident or proximal to
known historic workings. These chargeable IP responses are interpreted as areas of possibly concentrated
sulphide mineralisation and will be high-priority targets for future drill programmes.
At Rockvale, eight 200m-spaced lines of IP were completed covering an area of about 1.8 km2. Elevated
chargeable IP responses were returned over a broad zone about 400m wide and more than 1km in strike,
with scattered strong chargeable responses also present. This area is also semi-coincident with a zone of
lower resistivity, which is interpreted as possibly being associated with alteration and/or structural
deformation. Many of the strongest IP responses appear to be very close to (less than 50m), or at
surface.
12
Review of operations
Mapping by Peel at Rockvale has identified several, possibly intersecting, lines of lode that appear to be
structurally-controlled, and the results of the IP survey appear to support the assumed positions of these
lodes. Of note, the strongest IP response occurs on the northern-most line of the Rockvale survey, with
anomalism remaining open in this direction. Peel has lodged an exploration licence application over any
possible extensions to this response.
At Tulloch, five 200m-spaced lines of IP were completed covering an area of about 1.1 km2. Multiple
moderate-strong zones of chargeable response were defined, and similar to Rockvale, these zones appear
to represent intersecting structural features. The strongest IP trend runs almost east-west and is about
400m wide and 600m long. This trend remains open to the northeast. Encouragingly, the central IP
responses, closest to the Tulloch workings, are coming from a depth of about 40m.
During the quarter, Peel also completed a first-pass reconnaissance mapping and rock chip/dump
sampling programme at the Tulloch, G Reef, Happy Valley and Rockvale areas. This sampling returned
very high silver and gold values. Samples were collected from shaft dumps at the Rockvale, G Grid and
Happy Valley areas from rock chips along the line of lode at Rockvale. See Appendix 3 for technical
details.
Ongoing reconnaissance geological mapping and sampling programmes over the Tulloch, G Reef/Happy
Valley and Rockvale areas has delineated the Rockvale line of lode at surface for more than 1000m.
Mapping and sampling has also identified that the G-Reef lode is traceable in outcrop for 700m in length.
In places the lode zone is up to 5m wide and is associated with sericitised granite.
Peel plans to complete an approximately 1,200m first-pass RC drilling programme at Ruby in late
calendar 2011.
13
Review of operations
Attunga
Attunga is located about 20 km north of Tamworth, NSW. Within the Attunga project, there are three
specific areas of interest: the Attunga Tungsten Deposit; the Attunga Copper Mine prospect and the
Kensington gold-tungsten prospect. The Attunga Project area is considered prospective for tungsten-
molybdenum skarn-type mineralisation, base/precious metal skarn-type mineralisation, and gold (+/-
tungsten) intrusive-related gold system type mineralisation.
Attunga Tungsten Deposit
During the period 2007-2009, Peel completed multiple phases of exploration at the Attunga Tungsten
Deposit including the completion of an independent JORC-compliant resource estimation in April 2008. A
high-grade inferred tungsten-molybdenum resource was defined with results including 1.29 Mt at 0.61%
WO3 and 0.05% Mo for 9,400t contained WO3 equivalent using a 0.2% WO3 equivalent cutoff.
In March 2009, Peel completed initial metallurgical testwork resulting in the production of high grade WO3
concentrate along with a potential process flowsheet. The potential process flow sheet identified would
involve staged crushing and grinding, conventional gravity concentration (spirals), drying of gravity
concentrates, removal of magnetic gangue material (garnet) via magnetic circuit, and flotation of fine (-
75 micron) spiral tails. Secondary processing/mineral dressing would involve further flotation work.
In June 2009, Peel announced that new drilling at Attunga had returned high grade tungsten intercepts
including 27m at 0.54% WO3 and 0.06% Mo from 19m (including 2m at 3.38% WO3 and 0.27% Mo) from
22m in RC drillhole AP1-026, and 2m at 0.59% WO3 and 0.03% Mo from 58m in RC drillhole AP1-027.
During financial year 2010, Peel completed an in‐house conceptual study into development options for the
Attunga Tungsten Deposit with results indicating that a low capital expenditure operation could yield
positive returns. Peel believes that the deposit‟s small, high grade nature and proximity to excellent
infrastructure and services bodes well for its future advancement/potential development.
Attunga Copper Mine
The Attunga Copper Mine, located about 800m north of the Attunga Tungsten Deposit was discovered in
1902 and worked over various periods up until World War 2. Total recorded production was about 1,600t
ore grading ~6% copper, ~8 g/t gold and ~150 g/t silver. Other significant metals present include
bismuth, and molybdenum.
In May 2009, Peel completed a drilling programme targeting the historic Attunga Copper Mine workings
and an EM anomaly. While thick clays prevented the effective testing of the EM anomaly, drilling to the
south of the historic workings resulted in the discovery of polymetallic mineralisation. Drillhole ACM-004
returned 75m at 1.02 g/t Au, 0.87% Cu, 0.09% Mo, 0.06% Bi, and 22 g/t Ag from 136m including 27m
at 1.60 g/t Au, 1.66% Cu, 0.18% Mo, 0.1% Bi, and 39 g/t Ag from 136m. The true width of the above
intervals is construed to be approximately 25% of the downhole intercepts.
Between March and May 2010, Peel completed a programme of six diamond drillholes for 944m drilling
that returned encouraging mineralisation up-dip of ACM-004 with an interval of 5.6m at 0.44% Mo, 0.70
g/t Au, 12 g/t Ag, 0.45% Cu, 1.9 g/t Re from 48m and 1.4m at 22.70 g/t Au, 13 g/t Ag, 0.72% Cu from
55m.
The results from the Attunga Copper Mine confirm the presence of significant molybdenum-gold-copper
skarn mineralisation that remains open in several directions and provides encouragement that the
Attunga skarn deposits are possibly part of a larger metalliferous system, perhaps including a
porphyry/mineralised granite source.
Kensington gold prospect
The Kensington gold prospect, located about 5 km north of the Attunga Tungsten Deposit, comprises a
series of historic gold workings (pre-WW1) across 800m strike with mineralisation outcropping, and
covered by a 1,500m long, +100 ppb gold geochemical anomaly, open in several directions.
In July 2008, Peel completed an RC drilling programme encountering widespread gold mineralisation with
better results including 9m at 1.4 g/t Au from 15m, 5m at 2.76 g/t Au from 60m, 14m at 0.78 g/t Au
from 24m and 13m at 1.07 g/t Au.
14
Review of operations
In July 2010, Peel commenced a RAB drilling programme designed to test a reported shallow tungsten
occurrence and to test for additional near-surface gold. Encouraging gold mineralisation was returned
from multiple drillholes with better results including:
24.5m at 0.74 g/t Au from 1.5m including 13m at 1.02 g/t Au from 13m* in KRAB006;
12m at 0.61 g/t Au from 13m in KRAB014;
14m at 1.78 g/t Au from 17m* including 4m at 2.94 g/t Au from 21m in KRAB019;
11m at 0.84 g/t Au from 13m in KRAB022;
13.5m at 1.67 g/t Au from 18m* in KRAB023 (twin of KRAB019);
6.5m at 0.70 g/t Au from 25m* in KRAB024;
4m at 0.50 g/t Au from 5m and 8m at 0.24 g/t Au from 25m in KRAB025;
16m at 0.23 g/t Au from 5m and 5m at 0.18 g/t Au from 29m* in KRAB026.
* denotes mineralisation at end of hole.
Also in July 2010, drilling was undertaken at Kensington NW (1.5km NW of Kensington) with anomalous
results returned from several holes including:
24m at 0.25 g/t Au from 5m in KNWRAB002;
9m at 0.18 g/t Au from 0m in KNWRAB003;
14m at 0.17 g/t Au from 5m in KNWRAB004.
Peel designed the shallow RAB drilling programme at Kensington to target tungsten and gold
mineralisation. Historic data had indicated the presence of a large, shallow, low grade tungsten
occurrence however drilling completed to date has discounted this possibility.
The results from this RAB drilling provide encouragement to the possibility of substantial, near surface,
gold mineralisation at Kensington. Gold mineralisation at Kensington occurs within a package of
structurally deformed sediments and remains open to the northwest and southeast, and down dip.
Peel believes that Kensington holds good potential to host a significant gold system with mineralisation
remaining open.
Rise and Shine
In late 2010, Peel lodged several applications covering the Rise and Shine gold project in Central Otago,
New Zealand. The Rise and Shine project area contains multiple workings associated with the Rise and
Shine Shear Zone, and the Cromwell Lode in the nearby Bendigo Goldfield.
The Rise and Shine Shear Zone is considered structurally similar to the Macraes Shear Zone that hosts
the multi-million ounce Macraes gold mine whilst the Cromwell lode historically produced about 150,000
ounces gold grading about 10 g/t gold.
At the time of writing the grant of the licences was pending.
Yerranderie
Yerranderie, located about 25 km west of Picton, NSW, contains the historic Yerranderie silver field.
Investigations indicate that substantial amounts of silver-lead-gold mineralisation remain present in
surface waste and tailings dumps at Yerranderie.
During 2010, Peel commenced heritage and environmental studies at Yerranderie. Peel also completed a
programme of dump grab sampling with results confirming that high levels of silver‐gold‐lead remain
present in tailings at Yerranderie.
No work was completed in 2011.
Mt Tennyson East
The Company withdrew from the tenement during the year.
15
Schedule of tenements
New South Wales
Project
Attunga
Attunga
Attunga Garnet
Mayday
Gilgunnia
Yerranderie
Ruby Silver
Ruby Silver
Number Holder
EL6883
EL6884
EL7633
ML1361
EL7461
EL7356
EL7711
ELA4296
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Western Australia
Project
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Apollo Hill
Number Holder
E39/1198 Apollo Mining Pty Ltd
P31/1797 Apollo Mining Pty Ltd
P39/4586 Apollo Mining Pty Ltd
P39/4587 Apollo Mining Pty Ltd
P39/4588 Apollo Mining Pty Ltd
P39/4589 Apollo Mining Pty Ltd
P39/4590 Apollo Mining Pty Ltd
P39/4591 Apollo Mining Pty Ltd
P39/4592 Apollo Mining Pty Ltd
P39/4677 Apollo Mining Pty Ltd
P39/4678 Apollo Mining Pty Ltd
P39/4679 Apollo Mining Pty Ltd
P39/4789 Apollo Mining Pty Ltd
E31/0800 Apollo Mining Pty Ltd
E39/1236 Apollo Mining Pty Ltd
E31/0685 Apollo Mining Pty Ltd
E40/0296 Peel Mining Ltd
E39/1644 Peel Mining Ltd
E40/0303 Peel Mining Ltd
New Zealand
Project
Rise and Shine
Rise and Shine
Number Holder
EPA53111 Peel Mining Ltd
EPA53088 Peel Mining Ltd
Peel
Interest
100%
100%
100%
100%
100%
100%
100%
100%
Peel
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Peel
Interest
100%
100%
Rob Tyson
Managing Director
Expiry
21/09/2011 (renewal pending)
21/09/2011 (renewal pending)
01/11/2012
16/01/2011 (renewal pending)
04/03/2012
24/06/2011 (renewal pending)
22/02/2013
application pending
Expiry
30/03/2014
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
30/03/2013
25/06/2013
08/06/2013
03/01/2013
30/06/2016
application pending
application pending
Expiry
application pending
application pending
The information in this report that relates to Exploration Results is based on information compiled by Mr Robert
Tyson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Tyson has sufficient experience
which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves.‟ Mr Tyson consents to the inclusion in
this report of the matters based on the information in the form and context in which it appears.
16
Directors’ report
Your directors present their report on the consolidated entity (referred to hereafter as “the Group”) comprising Peel
Mining Limited (formerly Peel Exploration Limited) and the entities it controlled at the end of, or during the financial
year ended 30 June 2011.
Directors
The following persons were directors of Peel Mining Limited during the financial year and up to the date of this report.
S Hadfield
R Tyson
G Hardie
C McGown
Directors’ interests in shares and options
Directors‟ interests in shares and options as at 30 June 2011 are set out in the table below.
Director
Graham Hardie
Robert Tyson
Simon Hadfield
Craig McGown
Shares Directly and Indirectly Held
Options
12,023,276
5,000,000
3,710,051
1,500,000
-
-
-
-
Principal activities
The principal continuing activity of the Group is the exploration for economic deposits of minerals. For the period of
this report, the emphasis has been on base and precious metals.
Results
The loss of the Group for the financial year after providing for income tax amounted to $460,684 (2010: $711,570).
Dividends
No dividends were paid or proposed during the year.
Review of operations
A review of the operations of the Group during the financial year and the results of those operations are contained in
pages 3 to 16 in this report.
Corporate structure
The Group comprises Peel Mining Limited (formerly Peel Exploration Limited), a limited Company incorporated and
domiciled in Australia and its 100% owned subsidiaries Peel Environmental Services Limited and Apollo Mining Pty Ltd
also both incorporated and domiciled in Australia.
Significant changes in the state of affairs
Contributed equity increased during the financial year by $3,222,378 through the issue of:
(i)
(ii)
32,771,398 ordinary shares at $0.0983 each for cash. The cash received from the increase in contributed
equity was used principally to continue the company‟s exploration programs.
11,000,000 ordinary shares at $0.095 each as consideration for the acquisition of mineral licences.
Details of the changes in contributed equity are disclosed in note 12 to the financial statements.
The Directors are not aware of any other significant changes in the state of affairs of the Group occurring during the
financial year, other than disclosed in this report.
Matters subsequent to the end of the financial period
Non-renounceable entitlement issue
An offer for a pro-rata non-renounceable entitlement issue of one new share for every four shares held by
shareholders at an issue price of 12 cents to raise approximately $2,632,700 was announced by the Company on 30
September 2011. At the date of this report the Company had received advice from shareholders confirming
subscriptions for at least 5,623,335 new shares totalling $674,800.
Other than these matters, there were at the date of this report no other matters or circumstances which have arisen
since 30 June 2011 that have significantly affected or may significantly affect:
i)
ii)
iii)
the operations of the Group;
the results of those operations; or
the state of affairs of the Group.
17
Directors’ report
Likely developments and expected results
As the Group‟s areas of interest are at an early stage, it is not possible to postulate the likely developments and any
expected results.
Information on directors
Simon Hadfield – Non-Executive Chairman
Mr Hadfield has more than 30 years company management experience and has held directorships in publicly-listed
industrial and resource companies. Mr Hadfield is Managing Director of Resource Information Unit Pty Ltd.
Mr Hadfield holds 3,810,051 shares in Peel Mining Limited and no options to acquire further shares.
Robert Maclaine Tyson BApp Sc (Geol) GradDip Applied Finance (SIA) MAusIMM – Managing Director
Mr Tyson is a geologist with more than 15 years resources industry experience having worked in exploration and
mining-related roles for companies including Cyprus Exploration Pty Ltd, Queensland Metals Corporation NL, Murchison
Zinc Pty Ltd, Normandy Mining Ltd and Equigold NL. Mr Tyson has more than five years of senior management
experience. Mr Tyson holds 5,160,014 shares in Peel Mining Limited and no options to acquire further shares.
Graham Hardie FCA– Non-Executive Director
Mr Hardie is the principal of Hardie Finance Corporation, a private Perth-based property development company, and is
also the principal of Entertainment Enterprises, a private Perth-based hospitality company. He is a Fellow of the
Institute of Chartered Accountants and a former partner in a leading Chartered Accounting firm. He has extensive
commercial and financial experience and has held board positions on a number of public companies in the mining,
media, transport and retail industries. Mr Hardie holds 12,023,276 shares in Peel Mining Limited and no options to
acquire further shares.
Craig McGown FCA – Non-Executive Director
Mr McGown is an Investment Banker with over 35 years experience consulting to companies in Australia and
internationally, particularly in the natural resource sector. He holds a Bachelor of Commerce degree, is a Fellow of the
Institute of Chartered Accountants and an Affiliate of the Securities Institute of Australia. Mr McGown is the former
Chairman of DJ Carmichael Pty Limited. He is currently a director of the corporate advisory business New Holland
Capital Pty Limited and a Non-Executive Director of Bass Metals Ltd and Non-Executive Chairman of Pioneer Nickel
Limited. He was Chairman of Entek Energy Limited until 28 February 2011. Mr McGown holds 1,500,000 shares in Peel
Mining Limited and no options to acquire further shares.
Company secretary
The company secretary is Mr D Hocking who was appointed to the position of company secretary in March 2007. Mr
Hocking is a qualified Chartered Accountant from the United Kingdom. He has more than 20 years commercial
experience in Australia producing management and financial reports for medium sized businesses in a range of
industries including publishing, franchising, rural merchandising, financial services and the offshore oil industry. Mr
Hocking also brings previous experience as a Company Secretary in a public company.
Meetings of Directors
Director‟s attendance at Directors meetings are shown in the following table:
Director
R Tyson
S Hadfield
C McGown
G Hardie
Number held whilst in office
Number attended
9
9
9
9
9
9
9
9
Remuneration report (audited)
The remuneration report is set out under the following headings:
a) Principles used to determine the nature and amount of remuneration
b) Details of remuneration
c) Service agreements
d) Share-based compensation and
e) Additional information.
a) Principles used to determine the nature and amount of remuneration
The objective of the remuneration framework of Peel Mining Limited is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of
strategic objectives and the creation of value for shareholders. The Board believes that executive remuneration
satisfies the following key criteria:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linkage / alignment of executive compensation
• transparency
• capital management.
These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a blend
of short and long-term incentives in line with the Company‟s limited financial resources.
18
Directors’ report
Board and senior management
Fees and payments to the non-executive Directors and senior executives reflect the demands which are made on, and
the responsibilities of, the Directors and the senior management. Such fees and payments are reviewed annually by the
Board.
Company policy in relation to issuing options and remunerating executives is that directors are entitled to
remuneration out of the funds of the Company but the remuneration of the non-executive Directors may not exceed in
any year the amount fixed by the Company in general meeting for that purpose. The aggregate remuneration of the
non-executive directors has been fixed at a maximum of $200,000 per annum to be apportioned among the non-
executive Directors in such a manner as they determine (refer below). Directors are also entitled to be paid reasonable
travel, accommodation and other expenses incurred in consequence of their attendance at Board meetings and
otherwise in the execution of their duties as Directors.
Remuneration is not linked to past group performance but rather towards generating future shareholder wealth through
share price performance. Peel Mining Limited (formerly Peel Exploration Limited) listed on 11 May 2007 at 20c per
share and the share price at 30 June 2011 was 9.4c (2010: 7c). The shares recorded high and low points of 13c and 7c
during the year, and are trading at 14c on 21 September 2011. The company has recorded a loss each financial year to
date as it carries out exploration activities on its tenements. No dividends have been paid.
b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each of the Directors of Peel Mining Limited
and those senior executives of the Company who received the highest emoluments during the year ended 30 June 2011
are set out in the following table.
Table 1: Director and senior executive remuneration
Short-Term Employment Benefits Post Employment Long-Term
Cash salary
and fees
Bonuses,
other
benefits
Consulting
Fees
Superannuation
$
$
$
$
114,511
50,000
50,000
50,000
78,800
343,311
-
-
-
-
-
-
-
-
-
-
-
-
10,280
4,500
4,500
4,500
7,092
30,872
2011
Directors
RM Tyson
S Hadfield
C McGown
G Hardie
Other executives
D Hocking
Total
Benefits
Long-
service
leave
$
-
-
-
-
-
-
Share Based
Payment
Options
Total
% Perfor-
mance
Related
$
-
-
-
-
$
124,791
54,500
54,500
54,500
0%
0%
0%
0%
3,400
89,292
0%
3,400
377,583
Short-Term Employment Benefits Post Employment Long-Term
Cash salary
and fees
Bonuses,
other
benefits
Consulting
Fees
Superannuation
Benefits
Long-
service
leave
Share Based
Payment
Options
Total
% Perfor-
mance
Related
2010
Directors
RM Tyson
S Hadfield
C McGown
G Hardie
Other executives
D Hocking
Total
$
$
$
$
$
$
$
110,000
50,000
50,000
16,668
64,800
291,468
-
-
-
-
-
-
-
-
-
-
-
-
9,900
4,500
4,500
1,500
5,832
26,232
-
-
-
-
-
-
-
-
-
-
-
-
119,900
54,500
54,500
18,168
0%
0%
0%
0%
70,632
0%
317,700
1. Options do not represent cash payments to Directors and executives and options granted may or may not be
exercised by the Directors and executives.
19
Directors’ report
c) Service agreements
Remuneration and other terms of employment for the Directors and executives are not formalised in
Service/Appointment agreements. Major provisions of employment are set out below:
R Tyson
There is no written contract for Mr Tyson, who received payments and benefits totalling $124,791 (2010:$119,900) in
his role as Managing Director of the Company.
S Hadfield
There is no written contract for Mr Hadfield, who received payments and benefits totalling $54,500 (2010:$54,500) in
his role as a director of the Company.
G Hardie
There is no written contract for Mr Hardie, who received payments and benefits totalling $54,500 (2010:$18,168l) in
his role as a director of the Company.
C McGown
There is no written contract for Mr McGown, who received payments and benefits totalling $54,500 (2010:$54,500) in
his role as a director of the Company.
d) Share-based compensation
Directors
No options over shares in the company were granted to any directors during the year.
Employees
Options over shares in Peel Mining Limited may be granted under the Peel Mining Limited Employee Option Plan which
was created in June 2008 and approved by shareholders at annual general meeting. The Employee Option Plan is
designed to provide long-term incentives for employees to deliver long-term shareholder returns. Under the plan,
participants are granted options 50% of which vest immediately and the remainder vest after twelve months provided
the employees are still employed by the Company at the end of the vesting period. Participation in the plan is at the
Board‟s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed
benefits.
Once vested the options are exercisable at $0.08 up to and including 30 March 2013. Options granted under the plan
carry no dividend or voting rights.
Details of options over ordinary shares in the company provided as remuneration to each director and key
management personnel of Peel Mining Limited are set out below. When exercisable, each option is convertible into one
ordinary share of Peel Mining Limited. Further information on the options is set out in note 13 to the financial
statements.
Name
Directors
Other key management personnel
D Hocking
Number
granted during year
of
options
Number of options
vested during year
2011
2010
2011
2010
-
100,000
-
-
-
50,000
-
-
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from
grant date to vesting date and the amount is included in the remuneration tables above. Fair values at grant date have
been determined using Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk-free interest rate for the term of the option.
The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting
period is as follows:
Grant Date
Date Vested &
Exercisable
Expiry Date
Exercise
Price
Value per Option at
Grant Date
18 March 2011
18 March 2011 (50%)
30 March 2013
8 cents
3 cents
18 March 2012 (50%)
5 December 2008
5 December 2008
30 April 2011
30 cents
23 June 2008
23 June 2008 (50%)
30 November 2010
25 cents
5 cents
7 cents
23 June 2009 (50%)
No options were exercised by directors of Peel Mining Limited or other key management personnel during the year.
20
Directors’ report
e) Additional information
Details of remuneration: cash bonuses, options
No cash bonuses have been paid by the Company.
Share-based compensation: options
Other than options granted and exercised under the Company Employee Option Plan, as described in (d) above, there
were no options issued to or exercised by directors of Peel Mining Limited or other key management personnel during
the year.
End of Audited Remuneration Report
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
Expiry date
shares
18 March 2011 (employees)
30 March 2013
8 cents
option
300,000
No option holder has any right under the options to participate in any other share issue of the company.
Shares issued on the exercise of options
The following ordinary shares of the Company were issued during the year on the exercise of options.
Issue price of
Number under
16 August 2010
Issue price of
Number of shares
Shares
2011
2010
cents
cents
25
20
issued
2011
2010
Number Number
20,000 250
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $5,103 (2010: $15,428) to insure the directors and
company secretary of the Group. The policy insures each person who is or was a director or company secretary of the
Group against certain liabilities arising in the course of their duties. The directors have not disclosed the amount of
the premiums paid as such disclosure is prohibited under the terms of the policy.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings
to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings. The Group was not a party to any such proceedings during the year.
Environmental Performance
Peel Mining Limited holds exploration licences and mining leases issued by the NSW Department of Primary Industry
and the WA Department of Mining. These licences specify 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 respective Departments‟ guidelines and standards. There have been no significant known breaches of the
licence conditions.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007, which
requires entities to report annual greenhouse gas emissions and energy use, despite strong reservations about the
misguided purposes and overly bureaucratic nature of this legislation. For the measurement period 1 July 2010 to 30
June 2011 the directors have assessed that there are no current reporting requirements. Disclosures may be required
in future years if the Act remains in place in its present form.
Auditor’s Independence Declaration
A copy of the auditor‟s independence declaration as required under section 307C of the Corporations Act 2001 is
included at the end of this financial report.
Auditor
BDO Audit (WA) Pty Ltd continues in office under section 327 of the Corporations Act 2001.
Non-Audit Services
The company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor‟s expertise and experience with the company are important. There were no non-audit services provided by the
auditors or their related entities during the year.
This report is made in accordance with a resolution of the Board of Directors and signed for on behalf of the board by:
Rob Tyson
Managing Director
Perth, Western Australia
30 September 2011
21
Consolidated statement of comprehensive income
For the year ended 30 June 2011
Consolidated
2011
Note $
2010
$
Revenue from continuing operations
3
66,038
43,850
Share-based remuneration to employees
Depreciation expense
Employee and directors‟ benefit expenses
Exploration expenditure written off
Administration expenses
(10,200)
-
13
8
(32,445)
(303,860)
9
(6,358)
(173,859)
(29,126)
(337,511)
(172,432)
(216,351)
Loss before income tax
(460,684)
(711,570)
Income tax expense
4
-
-
Loss from continuing operations
(460,684)
(711,570)
Other comprehensive income
-
-
Total comprehensive loss for the year is attributable to
the members of Peel Mining Limited
(460,684)
(711,570)
Basic and diluted loss per share (cents per share)
22
(0.007)
(0.02)
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes
22
Consolidated statement of financial position
as at 30 June 2011
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Security deposits
Plant & equipment
Exploration assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Accumulated losses
Option reserve
Total Equity
Consolidated
Note
2011
$
2010
$
5
6
7
8
9
11
1,532,413
710,490
74,045
46,939
1,606,458
757,429
115,000
125,000
17,860
46,033
4,291,595
4,424,455
1,891,521
2,062,554
6,030,913
2,819,983
625,766
625,766
625,766
186,730
186,730
186,730
5,405,147
2,633,253
12
13
13
7,384,925
4,162,547
(2,559,500)
(2,098,816)
579,722
569,522
5,405,147
2,633,253
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
23
Consolidated statement of changes in equity
for the year ended 30 June 2011
CONSOLIDATED
Contributed
Accumulated
Reserves
Equity
Losses
$
$
$
Total
Equity
$
Balance at 1 July 2009
2,901,921
(1,387,246)
569,522
2,084,197
Total comprehensive income for the year
-
(711,570
-
(711,570)
2,901,921
(2,098,816)
569,522
1,372,627
Transactions with equity holders in their capacity as equity holders:
Issue of share capital
Share issue expenses
1,305,941
(45,315)
-
-
-
1,305,941
-
(45,315)
Balance at 30 June 2010
4,162,547
(2,098,816)
569,522
2,633,253
Total comprehensive income for the year
-
(460,684)
-
(460,684)
4,162,547
(2,559,500)
569,522
2,172,569
Transactions with equity holders in their capacity as equity holders:
Issue of share capital
Share issue expenses
Share based payments
3,342,598
-
- 3,342,598
(120,220)
-
-
(120,220)
-
-
10,200
10,200
Balance at 30 June 2011
7,384,925
(2,559,500)
579,722 5,405,147
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
24
Consolidated statement of cash flows
For the year ended 30 June 2011
Consolidated
2011
2010
Note
$
$
Cash flows from operating activities
Payments to suppliers and employees
(490,849)
(659,187)
Interest received
66,038
43,850
Net cash outflow from operating activities
20
(424,811)
(615,337)
Cash flows from investing activities
Payment for mineral exploration expenditure
(936,372)
(496,555)
Payment of security deposits
Refund of security deposits
(10,000)
(45,000)
20,000
-
Payments for purchase of plant and equipment
(4,272)
(19,264)
Net cash outflow from investing activities
(930,644)
(560,819)
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
2,297,598
1,030,941
(120,220)
(45,315)
Net cash inflow from financing activities
2,177,378
985,626
Net decrease in cash and cash equivalents
Cash and cash equivalents at the start of year
821,923
(190,530)
710,490
901,020
Cash and cash equivalents at the end of year
5
1,532,413
710,490
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
25
Notes to the consolidated financial statements
1. Statement of Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial report includes the
financial statements for the consolidated entity which comprises Peel Mining Limited (formerly Peel Exploration
Limited) and the subsidiaries it controlled at the end of, or during the financial year ended 30 June 2011.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting
Interpretations and the Corporations Act 2001.
Going concern
This report is prepared on the going concern basis which assumes the continuity of normal business activity and the
realisation of assets and settlement of liabilities in the normal course of business.
The Group incurred a net loss of $460,684 during the year ended 30 June 2011 and as of that date the Group had net
current assets of $980,692 (2010: $570,699). The Directors believe there are sufficient funds to meet the Group‟s
working capital requirements and as at the date of this report the Group believes it can meet all liabilities as and when
they fall due. However, the Directors recognise that additional funding through the issue of shares will be required for
the Group to continue to actively explore its mineral properties.
The Directors have reviewed the business outlook and the assets and liabilities of the Group and are of the opinion that
the going concern basis of accounting is appropriate as they believe the Group will continue to be successful in
securing additional funds through equity issues as and when the need to raise funds arises.
Compliance with IFRS
Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS).
Compliance with AIFRS ensures that the financial statements and notes of Peel Mining Limited comply with
International Financial Reporting Standards (IFRS).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
(b) Principles of consolidation
The consolidated financial statements are those of the consolidated entity, comprising Peel Mining Limited (the parent
entity) and Apollo Mining Pty Ltd and Peel Environmental Services Limited (the controlled entities) which Peel Mining
Limited controlled during the year and at reporting date (“the Group”). A controlled entity is any entity that Peel
Mining Limited has the power to control the financial and operational policies so as to obtain benefits from its
activities.
Information from the financial statements of the subsidiary is included from the date the parent company obtains
control until such time as control ceases. Where there is a loss of control of a subsidiary, the consolidated financial
statements include the results for the part of the reporting period during which the parent company has control.
Subsidiary acquisitions are accounted for using the purchase method of accounting.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have
been eliminated in full. Unrealised losses are eliminated except where costs cannot be recovered.
Investments in subsidiaries are carried at cost in the parent entity.
(c) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised.
Interest income
Revenue is recognised as the interest accrues using the effective interest rate method.
(d) Income tax
The income tax expense or revenue for the period is the tax payable on the current period‟s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
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 financial reporting purposes.
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. A deferred
income tax asset is not recognised where the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the
26
Notes to the consolidated financial statements
time of the transaction, affects neither the accounting profit nor taxable profit or loss or when the deductible
temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which
case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse
in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax 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 at the
reporting date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit
and loss for the year.
(e) Impairment of assets
At each reporting date, the group assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the company makes a formal estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual
asset, unless the asset‟s value in use cannot be estimated to be close to its fair value less costs to sell and it does not
generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-generating unit to which the asset belongs. The estimated future cash
flows are discounted to their present value using a pre tax discount rate reflecting current market assessments of the
time value of money and the risks specific to the asset.
No impairment losses (2010: $nil) have been recognised for the year ending 30 June 2011.
(f) Cash and cash equivalents
For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand and deposits held
at call with financial institutions. Bank overdrafts are shown within borrowings in the current liabilities on the
statement of financial position.
(g) Trade and other receivables
Trade receivables, which generally have 30 to 90 day terms, are recognised initially at fair value and subsequently at
amortised cost less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is
objective evidence that the group will not be able to collect the debts. The allowance for bad debts is recognised in a
separate account. Bad debts are written off when identified.
(h) Other financial assets – security deposits
The Group classifies its financial assets as loans and receivables. Management determines the classification at initial
recognition and where applicable re-evaluates this designation at the end of each reporting period. Loans and
receivables are carried at amortised cost using the effective interest method. The group assesses at the end of each
financial period whether a financial asset is impaired.
Security deposits are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market.
(i) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the Group for
similar financial instruments.
(j) Plant and equipment
All assets acquired, including plant and equipment are initially recorded at their cost of acquisition, being the fair value
of the consideration provided plus incidental costs directly attributable to the acquisition. Depreciation on Plant and
equipment is calculated using the straight-line method to allocate their cost or revalued amounts over their estimated
useful lives from the time the asset is held ready for use as follows:
- Plant
- Vehicles
- Office equipment
- Computer software
3-5 years
3-5 years
3-5 years
3-5 years
The assets‟ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset‟s carrying amount is written down immediately to its recoverable amount if the asset‟s carrying amount is
greater than its estimated recoverable amount.
27
Notes to the consolidated financial statements
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(k) Exploration and evaluation expenditure
All exploration and evaluation expenditure is capitalised under AASB 6 Exploration for and Evaluation of Mineral
Resource. Mineral interest acquisition, exploration and evaluation expenditure incurred is accumulated and capitalised
in relation to each identifiable area of interest. These costs are only carried forward to the extent that the Group‟s right
to tenure to that area of interest are current and either the costs are expected to be recouped through successful
development and exploitation of the area of interest (alternatively by sale) or where areas of interest have not at
reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active, significant operations in, or in relation to, the area of interest.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until
production commences.
The policy has resulted in exploration expenditure of $6,358 (2010: $172,432) being written off during the year.
(l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. They are recognised
initially at fair value and subsequently at amortised cost.
(m) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of
a business are not included in the cost of the acquisition as part of the purchase consideration.
If the entity acquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted
from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the
consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in
equity.
(n) Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(o) Goods and services tax
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable is included
as a current asset in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from the taxation authority are classified as operating
cash flows.
(p) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief decision maker has been identified as the Board of Directors.
(q) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2011
reporting periods and have not yet been applied in the financial report. The Group‟s assessment of the impact of these
new standards and interpretations is set out below.
AASB 2010-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of Financial Assets
(effective for annual reporting periods beginning on or after 1 July 2011).
Amendments made to AASB 7 Financial Instruments: Disclosures in November 2010, introduce additional disclosures
in respect of risk exposures arising from transferred financial assets. The amendments are not expected to have any
significant impact on the Group‟s disclosures. The Group intends to apply the amendment from 1 July 2011.
28
Notes to the consolidated financial statements
AASB 10 Consolidated Financial Statements (effective for the annual reporting periods commencing on or after 1
January 2013).
AASB 10 introduces certain changes to the consolidation principles, including the concept of de facto control and
changes in relation to the special purpose entities. The group is continuing to assess the impact of the standard.
AASB 11 Joint Arrangements (effective for the annual reporting periods commencing on or after 1 January 2013).
AASB 11 introduces certain changes to the accounting for joint arrangements. Joint arrangements will be classified as
either joint operations (where parties with joint control have rights to assets and obligations for liabilities) or joint
ventures (where parties with joint control have rights to the net assets of the arrangement). Joint arrangements
structured as a separate vehicle will generally be treated as joint ventures and accounted for using the equity method.
The group is continuing to assess the impact of the standard.
AASB 13 Fair Value Measurement (effective for annual reporting periods commencing on or after 1 January 2013).
AASB 13 establishes a single framework for measuring fair value of financial and non-financial items recognised at fair
value on the balance sheet or disclosed in the notes to the financial statements. XX is continuing to assess the impact
of the standard.
AASB 2011-9 Presentation of Financial Statements (effective for annual reporting periods commencing on or
after 1 July 2013).
AASB 101, amended in June 2011, introduces amendments to align the presentation items of other comprehensive
income with US GAAP. The group will apply the amended standard from 1 July 2013. When the standard is first
adopted, there will be changes to the presentation of the statement of comprehensive income. However, there will be
no impact on any of the amounts recognised in the financial statements.
AASB 1054 Australian Additional Disclosures (effective for annual reporting periods beginning on or after 1 July
2011).
AASB 1054, issued in May 2011, moves additional Australian specific disclosure requirements for for-profit entities
from various Australian Accounting Standards into this Standard as a result of Trans-Tasman Convergence Project.
AASB 1054 Australian Additional Disclosures removes the requirement to disclose each class of capital commitments
contracted for at the end of the reporting period (other than commitments for the supply of inventories). When the
standard is adopted for the first time for the financial year ending 30 June 2012, the financial statements will no longer
include disclosures about capital and other expenditure commitments as these are no longer required by AASB 1054.
AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from
AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)
(effective for annual reporting periods beginning on or after 1 January 2013).
AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities. The
standard is not applicable until 1 January 2013 but is available for early adoption. The group is continuing to assess its
full impact.
Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting
Standards (effective for annual reporting periods beginning on or after 1 January 2011).
In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting periods
beginning on or after 1 January 2011 and must be applied retrospectively. The amendment clarifies and simplifies the
definition of a related party. The group will apply the amended standard from 1 July 2011. When the amendments are
applied, the group will need to disclose any transactions between its subsidiaries and its associates. However, there
will be no impact on any of the amounts recognised in the financial statements.
AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to
Australian Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013). On 30
June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this framework,
a two-tier differential reporting regime applies to all entities that prepare general purpose financial statements. The
group is listed on the ASX and is not eligible to adopt the new Australian Accounting Standards - Reduced Disclosure
Requirements. The two standards will therefore have no impact on the financial statements of the entity.
AASB 2010-8 Amendments to Australian Accounting Standards - Deferred Tax: Recovery of Underlying Assets
(effective from 1 January 2012).
In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for measuring
deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. AASB
112 requires the measurement of deferred tax assets and liabilities to reflect the tax consequences that would follow
from the way management expects to recover or settle the carrying amount of the relevant assets or liabilities, that is
through use or through sale. The amendment introduces a rebuttable presumption that investment property which is
measured at fair value is recovered entirely by sale. The amendment is not expected to have any significant impact on
the group‟s financial statements. The group intends to apply the amendment from 1 July 2012.
AASB 119 - Elimination of the „corridor‟ approach for deferring gains/losses for defined benefit plans, actuarial
gains/losses on remeasuring the defined benefit plan obligation/asset to be recognised in OCI rather than in profit or
loss, and cannot be reclassified in subsequent periods, subtle amendments to timing for recognition of liabilities for
termination benefits, and employee benefits expected to be settled (as opposed to due to settled under current
standard) within 12 months after the end of the reporting period are short-term benefits, and therefore not discounted
when calculating leave liabilities. Annual leave not expected to be used within 12 months of end of reporting period will
in future be discounted when calculating leave liability. This standard has no impact as there are no annual leave
provision amounts that are non-current. The group will apply this from 1 July 2013.
29
Notes to the consolidated financial statements
Critical accounting estimates and judgements
(r)
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge
and best available current information.
The Company makes estimates and judgements in applying the accounting policies. Critical judgements in respect of
accounting policies relate to exploration assets, where exploration expenditure is capitalised in certain circumstances.
Recoverability of the carrying amount of any exploration assets is dependent on the successful development and
commercial exploitation or sale of the respective areas of interest.
Capitalisation and carrying amount of capitalised mining license
The mining leases acquired are carried in the consolidated statement of financial position at cost. The directors have
determined that the acquisition cost approximates to the fair value of the asset.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees and consultants by reference to the fair
value of the equity instruments at the date at which they are granted.
2. Financial Risk Management
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
Credit risk
Liquidity risk
Market risk
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Group‟s receivables from customers. The Group manages its
credit risk on financial instruments, including cash, by only dealing with banks licensed to operate in Australia and
credit ratings of AA.
Trade and other receivables
The Group operates in the mining exploration sector and does not have trade receivables. It is not exposed to credit
risk in relation to trade receivables.
Exposure to credit risk
The carrying amount of the Group‟s financial assets represents the maximum credit exposure. The Group‟s maximum
exposure to credit risk at the reporting date was:
Carrying amounts
Trade and other receivables
Cash and cash equivalents
Note
6
5
Consolidated
2011
$
-
1,532,413
2010
$
3,577
710,490
Impairment losses
None of Group‟s other receivables are past due. At 30 June 2011 the Group does not have any collective impairments
on its other receivables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group‟s
approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group‟s reputation. The Group manages liquidity by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows.
Typically the Group ensures it has sufficient cash on hand to meet expected operational expenses for a period of 180
days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters.
30 June 2011
Trade and other payables
30 June2010
Trade and other payables
Carrying
Amount
$
625,766
Consolidated
Contractual
Cash flows
$
625,766
6mths
Or less
$
625,766
186,730
186,730
186,730
Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices
will affect the Group‟s income or the value of its holdings of financial instruments. The objective of managing market
risk is to manage and control market risk exposures to within acceptable limits, while optimising returns. The Group
does not have any risks associated with foreign exchange rates or equity prices.
Interest rate risk
Interest rate risk is the risk that the Group‟s financial position will be adversely affected by movements in interest
rates that will increase the costs of floating rate debt or opportunity losses that may arise on fixed rate borrowings in a
falling interest rate environment. The Group does not have any borrowings and is, therefore, not exposed to interest
30
Notes to the consolidated financial statements
rate risk in this area. Interest rate risk on cash and short term deposits is not considered to be a material risk due to
the short term nature of these financial instruments.
Profile
At the reporting date the interest rate profile of the consolidated entity‟s interest-bearing financial instruments was:
Variable rate instruments
Short term cash deposits
Consolidated
Carrying Amount
2011
2010
$
1,532,413
$
551,238
Cash flow sensitivity analysis for variable rate instruments of the consolidated entity
At 30 June 2011 if interest rates had changed +/- 100 basis points from year end rates with all other variables held
constant, equity and post tax profit would have been $4,000 higher/lower (2010: $5,512).
Fair values
The carrying values of all financial assets and financial liabilities, as disclosed in the statement of financial position,
approximate their fair values.
3. Revenue
Interest received
Expenditure
Superannuation
Operating lease payments
4. Income tax
Consolidated
2011
$
2010
$
66,038
43,850
25,049
36,000
34,799
36,000
Income tax expense
-
Current tax
-
Deferred tax
Numerical reconciliation of income tax to prima facie tax payable:
-
-
Loss from continuing operations before income tax
At the statutory income tax rate of 30% (2010: 30%)
Expenditure not allowed for income tax purposes:
Non-deductible expenses
Tax loss not brought to account
Income tax benefit reported in the statement of comprehensive
income
(460,684)
(138,205)
(711,570)
(213,441)
-
138,205
-
213,441
-
-
The Company has tax losses arising in Australia of $3,596,235 (2010: $3,458,030) available indefinitely for offset
against future 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. In the year to 30 June 2011 the Company also
had an unrecognised deferred tax asset in respect of equity raising costs of $77,950 (2010: $41,884). The deferred
tax liability arising from capitalised exploration costs and licence acquisitions have been recognised and offset by the
deferred asset balances above.
5. Cash and Cash Equivalents
Cash at bank and in hand
Term deposit with a financial institution
Refer to Note 2 for the policy on financial risk management
6. Trade and other receivables
GST recoverable from taxation authority
Interest accrued on term deposits
No receivables are past due or impaired
7. Receivables (Non-current)
Security deposits on mining tenements
No receivables are past due or impaired
Consolidated
$
$
432,413
1,100,000
1,532,413
159,252
551,238
710,490
74,045
-
74,045
43,362
3,577
46,939
115,000
115,000
125,000
125,000
31
Notes to the consolidated financial statements
8. Plant and equipment
Plant and equipment
At cost
Less accumulated depreciation
Reconciliation
Carrying amount at beginning of year
Additions
Depreciation expense
Closing balance
9. Exploration assets
At cost
Reconciliation
Opening balance
Acquisition of mining lease
Other exploration expenditure
Written off during year
Closing balance
10. Subsidiary companies
Consolidated
2011
$
2010
$
113,549
95,689
17,860
46,033
4,272
(32,445)
17,860
109,277
63,244
46,033
55,895
19,264
(29,126)
46,033
4,281,595
1,891,521
1,891,521
1,045,000
1,361,432
(6,358)
4,291,595
1,119,965
275,000
668,988
(172,432)
1,891,521
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 1(c):
Country of
Incorporation
Name
Peel Environmental Services Limited
Apollo Mining Pty Ltd
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Equity holding
2011
%
100
100
2010
%
100
-
During the year Peel Mining Limited acquired the whole of the share capital of Apollo Mining Pty Ltd from Hampton
Hill Mining NL. The consideration was 11,000,000 fully paid ordinary shares in Peel Mining Limited at 9.5 cents
each. Apollo Mining Pty Ltd owns exploration leases at the Apollo Hill gold prospect near Leonora in Western
Australia. After due consideration of AASB 3 the directors have determined that the acquisition of Apollo Mining Pty
Ltd constituted the acquisition of an individual asset rather than an operating business. Consequently the
transaction has been recognised as an individual asset in the financial statements. The acquisition included a
royalty agreement on which no value has yet been assigned because it is unlikely to come into effect in the
foreseeable future.
11. Trade and other payables
Trade payables
12. Contributed equity
(a) Share capital
Ordinary shares fully paid
(b) Movements in ordinary share capital
Consolidated
2011
$
2010
$
625,766
186,730
Consolidated and Parent Entity
2011
2010
Number of
Shares
87,757,315
$
7,384,925
Number of
shares
43,985,917
$
4,162,547
Opening balance, 1 July
43,985,917
4,162,547
30,926,750
2,901,921
Shares issued pursuant to placement
10,748,439
752,391
7,015,517
701,551
Shares issued pursuant to a 'Rights Issue'
Shares issued as consideration for the
acquisition of a mining lease
22,002,959
1,540,207
3,293,400
329,340
11,000,000
1,045,000
2,750,000
275,000
Shares issued as result of exercise of options
20,000
5,000
250
50
Transaction costs on share issues
-
(120,220)
-
(45,315)
Closing balance, 30 June
87,757,315
7,384,925
43,985,917
4,162,547
32
Notes to the consolidated financial statements
(c) Ordinary shares
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.
(e) Capital risk management
In employing its capital (or equity as it is referred to on the statement of financial position) the company seeks to
ensure that it will be able to continue as a going concern and in time provide value to shareholders by way of
increased market capitalisation or dividends. In the current stage of its development, the company has invested its
available capital in acquiring and exploring mining tenements. As is appropriate at this stage, the company is funded
entirely by equity. As it moves forward to develop its tenements towards a production stage, the company will adjust
its capital structure to support its operational and strategic objectives, by raising additional capital or taking on debt,
as is seen to be appropriate from time to time given the overriding objective of creating shareholder value. In this
regard, the board will consider each step forward in the development of the company on its merits and in the context
of the then capital markets, in deciding how to structure capital raisings.
13. Reserves and accumulated losses
Note
(i) Accumulated losses
Opening balance, 1 July
Loss for the year
Closing balance, 30 June
(ii) Share-based payments reserve
Opening balance, 1 July
Option expenses (employee options)
Closing balance, 30 June
Consolidated
2011
$
2010
$
(2,098,816)
(460,684)
(2,559,500)
(1,387,246)
(711,570)
(2,098,816)
569,522
10,200
579,722
569,522
-
569,522
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.
Share options and reserve movements
Opening balance, 1 July
Expired during year
Issued to employees
Closing balance, 30 June
Consolidated and Parent Entity
2011
2010
Options
31,573,250
(31,573,250)
300,000
300,000
$
69,522
-
10,200
579,722
Options
31,573,250
-
-
31,573,250
$
569,522
-
-
569,522
exercisable at 8 cents each on or before 30 March 2013
exercisable at 20 cents on or before 30 November 2010
exercisable at 30cents each on or before 30 November 2010
exercisable at 25cents each on or before 30 November 2010
exercisable at 30cents each on or before 30 April 2011
300,000
-
-
-
-
300,000
-
22,473,250
7,500,000
600,000
1,000,000
31,573,250
Model inputs for employee options granted during the year ended 30 June 2011 included:
Underlying security spot price
Exercise price
Dividend rate
Standard deviation of returns (annualised)
Risk free rate
Valuation Date
Expiry date
Expiration period (years)
Black Scholes valuation ($ per security)
Binomial valuation ($ per security)
$0.079
$0.08
Nil
75%
4.78%
18-March-20011
30-March-2013
2.04
0.0342
0.0342
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.
33
Notes to the consolidated financial statements
14. Remuneration of Auditors
Amounts paid or due and payable to the auditors
BDO Audit (WA) Pty Ltd:
Auditing or reviewing the financial report
Consolidated
2011
$
2010
$
28,564
28,564
27,246
27,246
15. Contingencies
The Group had no contingent assets or liabilities for the years ended 30 June 2011 and 2010.
16. 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.
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
Consolidated
2011
$
194,800
94,200
-
289,000
2010
$
136,000
157,000
-
293,000
17. Segment information
Management has determined that the Group has one reportable segment, being mineral exploration within
Australia. The Group is focused only on mineral exploration and the Board monitors the group based on actual
versus budgeted exploration expenditure incurred by the individual areas of interest in New South Wales and
Western Australia. This internal reporting framework is the most relevant to assist the Board with making
decisions regarding the Group and its ongoing exploration activities, while also taking into consideration the
results of exploration work that has been performed to date.
Revenue from external sources
Reportable segment (loss)
Reportable segment assets
Reconciliation of reportable segment (loss)
Reportable segment (loss)
Other revenue
Unallocated: - Corporate expenses
Loss before tax
Consolidated
2011
$
-
2010
$
-
(50,642)
4,309,455
(273,714)
1,937,554
(50,642)
66,038
(476,080)
(460,684)
(273,714)
43,850
(481,706)
(711,570)
18. Related Parties
Transactions with related parties
During the year there were no transactions with related parties other than the transactions shown in note 23.
19. Events occurring after the Reporting date
Non-renounceable entitlement issue
An offer for a pro-rata non-renounceable entitlement issue of one new share for every four shares held by
shareholders at an issue price of 12 cents to raise approximately $2,632,700 was announced by the Company on
30 September 2011. At the date of this report the Company had received advice from shareholders confirming
subscriptions for at least 5,623,335 new shares totalling $674,800.
Other than these matters, there were at the date of this report, no other matters or circumstances which have
arisen since 30 June 2011 that have significantly affected or may significantly affect:
a.
b.
c.
the operations of the Group;
the results of those operations; or
the state of affairs of the Group.
34
Notes to the consolidated financial statements
20. Reconciliation of cash flows from operating activities to loss after income tax
Net cash outflow from operating activities
Share-based payments
Depreciation
Change in operating assets and liabilities
Increase in receivables
decrease/(increase) in payables
Loss after income tax
Consolidated
2011
$
2010
$
(424,811)
(10,200)
(32,445)
(615,337)
-
(29,126)
27,106
(20,334)
(460,684)
15,706
(82,813)
(711,570)
21. Non-cash investing and financing activities
Acquisition of a mining lease by issue of
11,000,000 ordinary shares at 9.5cents each
2,750,000 ordinary shares at 10 cents each
1,045,000
-
-
275,000
22. Loss per share
Basic loss per share
Loss from continuing operations attributable to the ordinary
equity holders of the company
Reconciliation of loss used in calculation of loss per share
(0.007)
(0.02)
Loss used in calculating basic loss per share
(460,684)
(711,570)
Consolidated
Number of
Shares
2011
Number of
Shares
2010
Weighted average number of shares used as the denominator
Weighted average number of shares used in calculating
basic loss per share
68,587,085
39,399,001
Effect of dilutive securities
Options on issue at reporting date could potentially dilute earnings per share in the future. The effect in the
current year is to reduce the loss per share hence they are considered anti-dilutive. Accordingly the diluted loss
per share has not been disclosed.
23. Key Management Personnel Disclosures
Consolidated
(a) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
2011
$
343,311
30,872
-
3,400
2010
$
291,468
26,232
-
-
377,583
317,700
(b) Shares issued on exercise of compensation options
There were no shares issued on the exercise of compensation options during the year by key management
personnel.
(c) Option holdings of key management personnel
Granted as
compensation
Expired during
year
Exercised
Balance at
end of the
year
Vested and
exercisable
Unvested
Balance at
the start of
the year
5,122,874
5,122,874
4,722,873
1,000,000
30 June 2011
Directors
R Tyson
S Hadfield
C McGown
Executives
D Hocking
All vested options are exercisable at the end of the year.
200,000
100,000
(200,000)
-
-
-
(5,122,874)
(4,722,873)
(1,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
50,000
50,000
35
Notes to the consolidated financial statements
30 June 2010
Directors
R Tyson
Balance at
the start of
the year
5,122,874
S Hadfield
4,722,873
C McGown
1,000,000
Executives
D Hocking
200,000
Granted,
Granted as
compensation
non-
compensation
Exercised
Balance at end
of the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
5,122,874
5,122,874
4,722,873
4,722,873
1,000,000
1,000,000
200,000
200,000
-
-
-
-
All vested options are exercisable at the end of the year.
(d) Share holdings of key management personnel – Shares in Peel Mining Limited (number)
30 June 2011
Directors
G Hardie
R Tyson
S Hadfield
C McGown
Received during
Balance at
the year on the
Other changes
Balance at
1 July 2010
exercise of options
during the year
30 June 2011
8,015,517
3,798,250
2,995,765
1,000000
-
-
-
-
4,007,759
1,201,750
12,023,276
5,000,000
714,286 3,710,051
1,500,000
500,000
Of the balance at 30 June 2011, the amounts held nominally in respect of each director are: R Tyson 4,227,625 and
S Hadfield 1,000,000.
30 June 2010
Directors
G Hardie
R Tyson
S Hadfield
C McGown
Received during
Balance at
the year on the
Other changes
Balance at
1 July 2009
exercise of options
during the year
30 June 2010
-
2,644,750
2,100,000
-
-
-
-
-
8,015,517
1,153,500
895,765
1,000,000
8,015,517
3,798,250
2,995,765
1,000,000
Of the balance at 30 June 2010, the amounts held nominally in respect of each director are: R Tyson 2,800,000 and
S Hadfield 1,000,000.
(e) Other transactions with key management personnel
A director, S Hadfield, is a director of Resource Information Unit Pty Ltd (RIU). RIU provides head office
accommodation and secretarial services and charges the Company management fees on a monthly basis. Total fees
charged to the Company by RIU for the year ended 30 June 2011 were $36,000 (2010: $36,000). During the year the
Company also placed an advertisement to the value of $1,700 (2010: $1,600) in a publication owned and operated by
RIU. These amounts are included in loss for the year within administration expenses and on the statement of financial
position within trade and other payables at year end.
Aggregate amounts of each of the above types of other transactions with key management personnel of Peel Mining
Limited:
Amounts recognised as expense
Management fees
Advertisements
24. Share–based Payments
Consolidated
2011
$
36,000
1,700
2010
$
36,000
1,600
37,700
37,600
During the year the Company has granted options to employees through its Employee Share Option Plan.
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options granted to directors
Options granted to employees
Consolidated
2011
number
-
300,000
300,000
2010
Number
-
-
-
36
Notes to the consolidated financial statements
(a) Director options
Set out below are summaries of Directors options granted.
30 June 2011
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Expired during
the year
Exercised
during the
year
Balance at end
of the year
Vested and
exercisable at
end of the
year
$
Number
Number
Number
Number
Number
8 Mar‟07
30 Nov‟10
$0.30
5,000,000
(5,000,000)
5 Dec‟08
30 April‟11
$0.30
1,000,000
(1,000,000)
6,000,000
(6,000,000)
-
-
-
-
-
-
-
-
-
Total
30 June 2010
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Balance at end
of the year
Vested and
exercisable at
end of the
year
$
Number
Number
Number
Number
Number
8 Mar‟07
30 Nov‟10
$0.30
5,000,000
5 Dec‟08
30 April‟11
$0.30
1,000,000
Total
6,000,000
-
-
-
-
-
5,000,000
5,000,000
1,000,000
1,000,000
6,000,000
6,000,000
(b) Employee option plan
An employee option plan, designed to provide long-term incentives for senior employees to deliver long-term
shareholder returns, was established in June 2008. The plan was approved by shareholders at annual general
meeting. Under the plan, participants are granted options of which 50% are vested immediately and the remainder
after 12 months employment with the Company.
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share at an exercise price of 25 cents.
Set out below are summaries of options granted under the plan.
30 June 2011
Grant date
Expiry date
Exercise
price
Balance at
start of
the year
Granted
during the
year
Exercised
during the
year
Number
Number
Number
Expired
during the
year
Number
Balance at
end of the
year
Number
Vested and
exercisable
at end of the
year
Number
18 Mar‟11
30 Mar‟13
$0.08
-
300,000
-
-
300,000
150,000
23 Jun‟08
30 Nov‟10
$0.25
600,000
-
(20,000)
(580,000)
-
-
30 June 2010
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Balance at end
of the year
Vested and
exercisable at
end of the year
Number
Number
Number
Number
Number
23 Jun‟08
30 Nov‟10
$0.25
600,000
-
-
600,000
600,000
37
Notes to the consolidated financial statements
25. Parent entity information
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share option reserve
Accumulated losses
Total equity
Statement of comprehensive income
Revenue
Loss for the year
Parent entity
2011
$
2010
$
1,606,458
5,011,020
628,716
628,716
4,382,304
757,429
2,824,983
189,680
189,680
2,635,303
7,384,925
579,722
(3,582,343)
4,382,304
4,162,547
569,522
(2,096,766)
2,635,303
66,038
(460,684)
43,850
(710,240)
Commitments for the parent entity are the same as those for the consolidated entity and are set out in Note 16.
The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at year end.
38
Directors’ declaration
The Board of Directors of Peel Mining Limited declares that:
(a) the financial statements, comprising the statement of comprehensive income, statement of financial position,
statement of cash flows, statement of changes in equity and accompanying notes are in accordance with the
Corporations Act 2001 and:
(i) comply with Accounting Standards and the Corporations Regulations 2001; and
(ii) give a true and fair view of the financial position as at 30 June 2011 and performance for the financial
year ended on that date of the company and consolidated entity.
(b) The company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
(c) In the directors‟ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable;
(d) the remuneration disclosures set out in pages 18 to 21 of the directors‟ report (as part of the audited
Remuneration Report), for the year ended 30 June 2011, comply with section 300A of the Corporations Act
2001; and
(e) the Board of Directors have been given the declaration by the chief executive officer and chief financial officer
required by Section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
Rob Tyson
Managing Director
Perth, Western Australia
30 September 2011
39
Auditor’s independence declaration
40
Independent auditor’s report
41
Independent auditor’s report
42
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 web-site at www.peel.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 one of whom is 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.
Mr Craig McGown who is a non-executive director and holds 1,500,000 shares in the Company is an independent
director under the ASX recommended principles in relation to the assessment of the independence of directors.
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.
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.
The company has established policies for the oversight and management of material business risk.
Board Committees
Whist 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 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.
43
Corporate governance statement
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 policies.
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.
External Auditors
The performance of the external auditor is reviewed annually. BDO Audit (WA) Pty Ltd was appointed as the external
auditors in 2006. It is both the Company‟s and BDO Audit (WA) Pty Ltd‟s 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 web-site 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 web-site. 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 web-site.
Share trading policy
The Company has established a share trading policy which governs the trading in the Company‟s shares and applies to
all directors and key management personnel of the Company.
Under the share trading policy directors or key management personnel must not trade in any securities of the
Company at any time when they are in possession of unpublished, price sensitive information in relation to those
securities.
No acquisitions or sale of Company securities may be made during closed periods i.e. the time from two weeks prior
to, and 24 hours after the release of the quarterly cash flow report nor prior to any anticipated announcement to the
ASX or for a 24 hour period after the announcement. Trading of securities outside the trading windows can only occur
with the approval of the Chairman or Board of Directors.
As required by the ASX rules, the Company notifies the ASX of any transaction in the securities of the Company
conducted by directors.
44
Shareholder information
Information relating to shareholders at 29 September 2011
Distribution of shareholders
Range
1 1
- 1,000
1,001
- 5,000
5,001
- 10,000
10,001
- 100,000
100,001
-
9,999,999
Total
Twenty largest shareholders
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Point Nominees Pty Ltd (Jackson Super Fund)
Hampton Hill Mining NL
Robert MacLaine Tyson
Imperial Corporation Limited
Ionikos Pty Ltd (The McGown Super Fund)
UBS Wealth Management Australia Nominees Pty Ltd
Lisa Duperouzel
Walsec Pty Ltd (Piper Super Fund)
Linda Sala Tenna
John Wardman & Associates (The Wardman Super Fund)
ANZ Nominees Limited
Simon & Fiona Hadfield (Salamar Super Fund)
Salamar Pty Ltd
Hugh & Tanya Brown
Manotel Pty Ltd
Technica Pty Ltd
John Desmond Martin
McGee Contructions Pty Ltd (McGorman Super Fund)
Accord Investment Corporation Pty Ltd
ACT2 Pty Ltd
Alasdair Campbell Cooke
Simon Hadfield
Christopher John Morgan-Hunn
Substantial shareholders
1
2
3
Point Nominees Pty Ltd (Jackson Super Fund)
Hampton Hill Mining NL
Robert MacLaine Tyson
No. of Holders
Shares
%
No. Ord
7
20
81
1,750
70,178
740,998
296
11,673,553
96
75,270,836
-
0.08
0.84
13.30
85.77
503
87,757,315
100.0
No.Ord
Shares
12,023,276
11,000,000
3,877,625
3,470,000
1,500,000
1,000,000
1,500,000
1,000,000
1,500,000
1,000,000
1,450,000
1,443,648
1,366,403
1,259,909
1,250,000
1,193,000
1,150,000
1,100,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
%
13.70
12.53
4.42
3.95
1.71
2.27
1.71
2.27
1.71
2.27
1.65
1.65
1.56
1.44
1.42
1.36
1.31
1.25
1.14
1.14
1.14
1.14
1.14
50,083,861
57.07
No. Ord
Shares
12,023,276
11,978,300
5,160,014
%
13.70
13.65
5.88
At the prevailing market price of $0.145 per share there were seventeen shareholders with less than a marketable
parcel of $500 at 29 September 2011.
At 29 September 2011 there were 503 holders of ordinary shares in the Company.
At the date of this report there were no shares or options restricted by the ASX.
45
Shareholder information
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:
1. each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
2. 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
3. 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.
46