2 October 2012
Dear Peel Mining Shareholders
RE: 2012 Annual Report Lodgement
Please see the below re-lodgement of the 30 June 2012 Annual Report including the
Independent Auditor’s Report and the Auditor’s Independence Declaration, that were
excluded on the prior announcement due to an upload error.
Yours sincerely
Ryan Woodhouse
Company Secretary
Peel Mining Limited ACN 119 343 734
Unit 1, 34 Kings Park Rd, West Perth, WA 6005. Ph: (08) 9382 3955. Fax (08) 9388 1025.
E:info@peelmining.com.au www.peelmining.com.au
Peel Mining Limited
Annual Report
30 June 2012
Share Registry
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Tce
PERTH WA 6000
Telephone
Facsimile:
+61 (0)8 9323 2000
+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
Website
www.peelmining.com.au
Chairman’s report
Directors
– Chairman
Simon Hadfield
– Managing Director
Rob Tyson
Graham Hardie
– Non-executive Director
Craig McGown – Non-executive Director
Company Secretaries
David Hocking
Ryan Woodhouse
Registered Office
Unit 1, 34 Kings Park Rd
WEST PERTH WA 6005
Telephone: +61 (0) 8 9382 3955
+61 (0) 8 9388 1025
Facsimile:
Stock Exchange Listing
Securities of Peel Mining Limited are listed on the
Australian Securities Exchange (ASX)
ASX Code: PEX
ACN: 119 343 734
Contents
Chairman’s report
Review of operations
Schedule of tenements
Directors’ report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Auditor’s independence declaration
Independent auditor’s report
Corporate governance statement
Shareholder information
2
3
21
22
28
29
30
31
32
45
46
47
49
51
1
Chairman’s report
Dear Fellow Shareholders,
It is a pleasure to report to you on what has been another busy and exciting year for Peel. The Company’s work over the year was
predominantly focused on the exciting Mallee Bull copper-polymetallic discovery, in the Cobar district of western NSW.
Mallee Bull, located in the 4-Mile Goldfield area of the Gilgunnia project, was initially identified in January 2011 as a strong
coincident magnetic and electromagnetic (EM) anomaly following a helicopter-borne geophysical survey (VTEM). Investigation
commenced immediately and by March, RC drilling was underway.
In July/August 2011, after several rounds of drilling and considerable perseverance, massive and stringer/breccia sulphides
containing strong copper-silver-gold-lead-zinc-cobalt mineralisation were intersected. These initial drill results included 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.
Following the identification of significant mineralisation, Peel embarked on a 5,817m follow-up RC and diamond drilling programme
in November 2011. This drilling was completed in February 2012 with results confirming a significant “greenfields” copper-
polymetallic discovery. Some of the better results from this programme included 11m at 2.71% copper plus silver and gold, 10m at
2.66% copper plus silver and gold, and 10m at 2.22% copper plus silver and gold.
Whilst your company was very encouraged by the results, the stock market was in a period of significant decline and Peel’s shares
were not immune. During this period, Peel was approached by a number of large companies interested in farming into Mallee Bull.
To this end, your board was pleased to partner the Mallee Bull project with CBH Resources Limited. CBH, which is 100%-owned by
Tokyo Stock Exchange-listed Toho Zinc Co. Ltd, is an Australian-based mineral resources company producing zinc, lead and silver
from the Endeavour Mine north of Cobar and the Rasp mine at Broken Hill.
Under the agreement, CBH has the right to earn an interest of up to 50% over a three-year period through staged expenditure of
$8.33 million. CBH brings a wealth of technical expertise and resources to the Mallee Bull project, particularly with regards to
exploration and development within the Cobar Superbasin, and I sincerely welcome CBH/Toho as our partner.
Peel believes that the CBH partnership provided an opening to underwrite Peel’s exploration efforts within the Cobar Superbasin,
and to that effect, took the opportunity to acquire and peg further ground within the district. At September 2012, Peel has more
than 1,000 km² of new 100%-owned tenure which includes several advanced prospects.
Subsequent to the year’s end, renewed exploration at Mallee Bull had commenced as part of the farm-in agreement, and
pleasingly, the most significant mineralisation discovered to date at Mallee Bull was returned from the second drillhole with a 72m
of cumulative intercept at 2.11% copper plus strong gold, silver and cobalt values.
In line with your Company’s philosophy to reduce risk through project diversity, during the year Peel also completed exploration at
the Apollo Hill gold project in WA, at the Ruby Silver project in NSW and at the Rise and Shine gold project in New Zealand. The
most significant achievement at these projects was the completion of an updated inferred resource estimate at Apollo Hill of
505,000 ounces gold.
The coming year is shaping up as a very exciting time with follow-up drilling at Mallee Bull now well advanced and exciting results
beginning to flow. Your board believes that the Company’s policy of systematically exploring several projects at once is paying off,
and plans on testing several new prospects over the coming year.
I would like to thank managing director Rob Tyson and fellow non-executive directors Graham Hardie and Craig McGown and
Company Secretaries David Hocking and Ryan Woodhouse for their contribution over the past 12 months. I would also like to thank
Michael Oates, Steve Leggett, David Vaarwerk, Bob Brown, Nancy Vickery 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
28th September 2012
2
Review of operations
Background
Peel Mining Limited is focused on precious, base and specialty metals exploration with its projects, located in Australia and New
Zealand. At September 2012, Peel held six key separate mineral projects comprising granted exploration licences and licences
under application.
(cid:120)
Gilgunnia (EL7461 and ML1361) containing the Mallee Bull copper-polymetallic discovery and the May Day polymetallic
deposit (located on a 100 hectare mining lease). The tenure also hosts the historic Gilgunnia and 4-Mile goldfields. Early in the
reporting period, Peel announced the discovery of high-grade copper-polymetallic mineralisation at the Mallee Bull prospect,
located within the 4-Mile Goldfield. Since then, Peel has made significant advances confirming Mallee Bull as one of the region’s
most important discoveries in recent times. May Day and Mallee Bull appear to be classic analogues for Cobar-style precious and
base metal mineralisation. During the year, Peel and CBH Resources Limited reached an agreement, under which CBH Resources
has the right to earn up to 50% of the Gilgunnia project through staged expenditure of $8.33 million.
Cobar Superbasin Project (CSP) is a package of tenements (ELs and ELAs) covering 1,389 km2 of prospective stratigraphy
(cid:120)
within the Cobar Superbasin. The tenements are considered prospective for Cobar-style and VHMS polymetallic deposits. The
package includes EL7519, which abuts EL7461 (Gilgunnia) and is subject to a purchase agreement with Oz Minerals Ltd. EL7519
contains several strong magnetic anomalies which Peel believes have not been adequately tested. The package also hosts the
Mundoe prospect where previous drilling returned significant base and precious metal values.
(cid:120)
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. During the year, Peel
announced an updated inferred resource estimate of 505,000 ounces gold.
(cid:120)
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 Hydes-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.
(cid:120)
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. During the year, Peel completed surface mapping and geochemical sampling and an
RC drill programme.
(cid:120)
Attunga contains numerous historic gold, tungsten, molybdenum and 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.
4-Mile RTP Magnetics
4-Mile VTEM late time (3-10 mS)
3
Review of operations
Details on Assets
Gilgunnia
The Gilgunnia project, located about 100km south of Cobar in western NSW, contains the Mallee Bull copper-polymetallic
discovery, the May Day polymetallic deposit and the historic Gilgunnia and 4-Mile goldfields. During the year, Peel and CBH
Resources Limited reached an agreement, under which CBH Resources has the right to earn up to 50% of the Gilgunnia project
through staged expenditure of $8.33 million. Further information is provided below.
Exploration over the reporting period has focused on the Mallee Bull prospect area where investigations have returned highly
encouraging results. Mallee Bull was initially recognised in January 2011, when a strong electromagnetic (EM) and coincident
magnetic anomaly was identified in the 4-Mile Goldfield following an airborne EM survey (VTEM). 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.
Mallee Bull Discovery
In late 2010, an airborne electromagnetic geophysical survey (VTEM) was flown over the May Day and 4-Mile/Butchers Dog areas.
Butchers Dog 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 Mallee Bull 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.
Peel completed a ground-based geophysical (fixed-loop TEM) survey which confirmed the existence of a moderate-strong
conductor and 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. Accessory sulphide minerals observed included pyrrhotite, pyrite, and arsenopyrite.
Systematic exploration followed and involved several rounds of additional drilling (4 more RC drillholes plus a diamond tail) and
several downhole geophysical (DHEM) surveys. 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
drillhole 4MRCDD006 intersected a 10m zone of massive sulphide averaging more than 20% combined lead-zinc plus silver-gold,
and a 6.65m semi-massive zone averaging better than 3% copper plus silver-gold. Mineralisation included chalcopyrite, sphalerite,
galena, pyrrhotite, pyrite, and arsenopyrite.
Mallee Bull 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 sequence of turbidite and volcaniclastic sediments interpreted to be
age equivalent of the Chesney and Great Cobar Slate Formations found in the immediate Cobar region.
Mineralisation occurs either as massive sulphide or breccia/stringer styles and occurs within a package of brecciated volcaniclastic
and turbidite sediments comprising siltstones and mudstones and is interpreted as occurring as a shoot-like structure dipping
moderately to the west. Drill intercepts in Table 1 are construed as being close to true width.
In September and October 2011, Peel completed further ground-based geophysics including high-resolution magnetics and gravity
surveys, and additional downhole and fixed loop EM surveys. RAB geochemical/geological drilling was also completed in
anticipation of significant drill programme.
In February 2012, Peel completed a Phase 1 follow-up 5,817m RC/diamond drilling programme designed to test along strike and
down dip of previously intersected mineralisation. Drilling was carried out on an approximate 40m by 40m grid pattern and
comprised a series of RC and RC pre-collar/diamond tail drillholes.
Multiple drillholes intersected zones of copper-polymetallic mineralisation comprising intervals of massive sulphide and/or stringer
mineralisation, including visible chalcopyrite, sphalerite and galena with accessory sulphide minerals including pyrrhotite, pyrite,
and arsenopyrite. See Table 1 for full drill assay results.
Drilling returned to March 2012 showed that high-grade copper-dominant polymetallic mineralisation at Mallee Bull had a strike
length of at least 120m, came to within at least ~150m of surface, and extended to at least ~300m below surface and was open in
multiple directions including at depth. Peel notes that several strongly mineralised intercepts were recorded from deeper drillholes
(4MRCDD008/009), and that Cobar-style deposits are typically short in strike length but long in the vertical plane.
In May 2012, Peel and CBH Resources Limited reached an agreement, under which CBH Resources has the right to earn up to 50%
of the Gilgunnia project through staged expenditure of $8.33 million. CBH, which is wholly-owned by Tokyo Stock Exchange-listed
Toho Zinc Co. Ltd, is an Australian-based mineral resources company producing zinc, lead and silver from the Endeavour Mine north
of Cobar and the Rasp mine at Broken Hill.
4
Review of operations
CBH brings a wealth of technical expertise and resources to Mallee Bull, particularly with regards to exploration and development,
and Peel believes that attracting a partner of CBH’s calibre is testament to the excellent potential of Mallee Bull.
The key terms of the Farm-in Agreement between Peel and CBH are:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Agreement covers all of the May Day-Gilgunnia project assets (ML1361 and EL7461) including Mallee Bull copper-
polymetallic discovery.
Peel to be responsible for exploration activities (operator).
Stage 1 of the Farm-in sees CBH earn a 15% interest in the project by making a payment of $1 million to Peel (received
July 2012) as contribution to past expenditure and by contributing $1.5 million to eligible exploration expenditure within
a 12 month period (underway as at September 2012).
Stage 2 of the Farm-in sees CBH (at its election) earn an additional 15% interest in the project (30% total interest) by
contributing a further $2.5 million to eligible exploration expenditure within a 12 month period.
Stage 3 of the Farm-in sees CBH (at its election) earn an additional 20% interest in the project (50% total interest) by
contributing a further $3.33 million to eligible exploration expenditure within a 12 month period.
CBH may elect to form a joint venture at the end of any stage and the parties can then elect to contribute on pro-rata
basis or be diluted according to an industry-standard dilution formula.
Subsequent to the year’s end, in July 2012, diamond drilling recommenced at Mallee Bull, as part of Stage 1 of CBH Resources’
$8.3m farm-in. Exploration drilling was to comprise about 4,000m of diamond drilling targeting down-dip/plunge mineralisation
and was expected to take approximately 3 months.
As part of the current exploration programme, RAB drilling designed to test for potential oxide or supergene mineralisation was
also being completed. Additionally, a fixed-loop (surface) EM geophysical survey targeting the prospective Four Mile Volcanics unit
that hosts the mineralisation at Mallee Bull was completed in August. This survey was designed to test the strike continuation of
the Four Mile Volcanics.
of
strong massive
In August/September 2012, Peel reported the
intersection
and
stringer/breccia sulphide mineralisation as part
of the current exploration programme. Best
cumulative results received at the time of
writing included:
72m @ 2.11% Cu, 41 g/t Ag, 1.13 g/t Au,
36m @ 1.58% Cu, 48 g/t Ag, 0.43 g/t Au,
(cid:120)
384 g/t Co (3.51% Cu Eq) in MBDD002
(cid:120)
132 g/t Co (2.52% Cu Eq) in MBDD003
(cid:120)
250 g/t Co (1.99% Cu Eq) in MBDD005
42m @ 1.01% Cu, 23 g/t Ag, 0.91 g/t Au,
At the time of writing, drilling at Mallee Bull
was continuing with vertical drillhole MBDD007
currently underway and designed to serve as a
platform for downhole EM and wedging/navi-
drilling of deeper targets. Downhole EM was
also scheduled to commence.
Drilling completed to date indicates that high-
grade copper-dominant polymetallic sulphide
mineralisation at Mallee Bull has a strike length
of ~120m, comes to within 150m of surface,
and now extends to at least 400m below
surface and is open in multiple directions
including at depth. The balance of the Phase 2
diamond drilling programme will test down dip
from 400m below surface and at the time of
writing was continuing.
5
Review of operations
Butcher’s Dog Magnetic Anomaly
the anomalous
a 3D volume of
inversion modelling was
In November 2011, 3D
performed on the total magnetic intensity (TMI) data
collected during the VTEM survey of the 4-Mile area.
As a result,
susceptibility was calculated. Interpretation of the data
shows a large magnetic feature located about 1 km
north of Mallee Bull. This feature, named the Butcher’s
Dog prospect, is assumed to be positioned under the
axial plane of the 4-Mile anticline, with its core
(susceptibility 4 x 10-3 SI) interpreted to be 500-1000m
below surface. The top of the magnetic source is
interpreted to be between 300-500m below surface.
The modelling also shows the magnetic anomaly
associated with the Mallee Bull prospect as a horn-like
feature extending out of the core of the Butcher’s Dog
magnetic anomaly.
In February 2012, Peel completed one deep drillhole
targeting Butcher’s Dog. Drillhole BDRCDD001 was
drilled as a vertical hole to a depth of 680m. No
satisfactory explanation for the magnetic anomaly was observed from geological logging or downhole geophysics. Further
investigation is required.
Wirchilleba Station Option
In April 2012, Peel secured a 12-month option-to-purchase agreement over portions of Wirchilleba Station, which includes the
immediate footprint of the Mallee Bull copper-polymetallic discovery. The material terms of the option agreement are:
The vendor has entered into an option agreement with Peel pursuant to which the vendor granted (12-month) options to Peel to
purchase parts of the Wirchilleba property. The vendor has granted the following options to Peel:
1.
2.
an option to purchase the land comprised of Western Lands Lease 3456 (F/I 1339/762952) for a purchase price of
$800,000 (First Option); and
an option to purchase the land comprised of Western Lands Lease 3458 (F/I 1341/762954); Lot 1 on Plan 750656; and Lot
1 on Plan 750710, for a purchase price of $890,467 (Second Option).
Peel has paid an option fee of $80,000 which will be considered as a deposit on the first option in the event that it is exercised. The
exercise of the Second Option is conditional upon the exercise of the First Option. In the event that either of the options is
exercised, the vendor and Peel shall enter into a formal contract for the sale of the relevant land.
This option will help to provide Peel with security of tenure and land access as exploration at Mallee Bull progresses.
Table 1 - Significant Mallee Bull Phase 1 Drilling Results
Hole ID Northing Easting
Azi Dip
4MRC001
6413351 415281 090
-60
Final
Depth
(m)
225
4MRC002
6413348 415326 090
-60
219
4MRC003
6413352 415359 090
-60
219
4MRC004
4MRC005
4MRCDD006
6413353 415243 090
6413348 415404 105
6413377 415179 090
-65
-60
-70
255
147
345.1
From
(m)
To
(m)
Width
(m)
165
194
205
138
164
173
213
110
133
176
205
197
138
253
168
199
206
143
165
174
214
120
134
179
208
216
143
263
3
5
1
5
1
1
1
10
1
3
3
19
3
10
Cu
(%)
0.03
0.27
0.09
0.04
0.01
0.03
0.15
0.03
0.09
0.11
0.01
0.17
0.04
0.14
Ag
(g/t)
Au
(g/t)
9
21
22
11
4
7
20
24
26
14
8
13
5
41
0.06
0.15
0.24
0.15
0.82
0.18
0.05
0.09
0.02
0.15
0.07
0.15
0.45
0.77
Pb
(%)
0.65
0.87
1.49
1.28
0.10
0.32
0.95
1.17
1.22
0.85
0.43
0.42
0.24
9.01
Zn
(%)
0.50
1.88
1.50
2.10
0.15
0.59
1.23
2.20
0.24
1.55
0.97
0.47
1.16
11.00
6
Review of operations
and
and
and
4MRC007
and
and
and
and
and
4MRCDD008
6413365 415210 090
-70
270
6413390 415170
90
-72
399.7
4MRCDD009
6413350 415160
90
-70
388
4MRCDD010
6413310 415160
90
-70
372.6
4MRCDD011
6413270 415160
90
-70
331
4MRC012
6413270 415200
90
-70
4MRC013
4MRC014
6413270 415280
6413310 415280
90
90
-70
-70
4MRC015
6413310 415240
90
-70
4MRC016
6413310 415200
90
-70
274
229
230
270
259
4MRCDD017
6413350 415188
90
-70
390.9
4MRC018
6413430 415260
90
-70
244
4MRC019
6413430 415220
90
-70
256
4MRC020
6413470 415260
90
-70
250
267.35
293.7
306
187
219
226
235
248
262
295
299
301
311
317
320
322
341
355
358
366
368
292.8
302
310
315
326
336
222
264
266
271
262
270
273
225
233
-
164
214
200
208
233
247
232.82
235
243
245
247
258
274
276
336
358
180
207
210
215
237
254
184
274
303
311
188
220
230
242
256
266
298
300
303
313
318
321
323
342
357
362
367
373
297
307
312
316
329
343
226
265
267
278
266
271
278
230
234
-
180
215
203
214
244
249
234
237
244
246
254
261
275
278
338
360
184
208
211
232
247
256
198
6.65
9.3
5
1
1
4
7
8
4
3
1
2
2
2
1
1
1
2
4
1
5
4.2
5
2
1
3
7
4
1
1
7
4
1
5
5
1
-
16
1
3
6
11
2
3.10
1.20
0.15
-
1.65
1.42
0.27
1.94
1.49
0.03
0.17
0.43
0.34
0.76
0.62
0.33
0.23
0.56
1.98
0.5
0.73
0.06
2.4
1.37
0.86
0.29
2.32
0.02
0.17
0.71
1.31
1.34
0.52
1.42
0.26
0.5
-
0.47
-
0.1
2.01
2.71
0.68
1.18 0.005
0.05
1.92
0.49
0.67
1.13
0.49
0.34
0.07
0.05
0.24
0.13
1.43
0.68
2.66
-
-
2
1
1
7
3
1
2
2
2
4
1
1
17
10
2
14
34
19
30
-
90
18
15
55
59
16
36
14
9
21
12
8
47
11
45
31
8
31
28
17
12
30
14
184
16
12
19
11
5
12
7
5
-
14
-
9
64
36
31
13
10
15
18
21
41
27
33
10
8
10
20
33
21
41
-
3
0.65
0.93
0.28
0.14
1.21
0.15
-
3.59
9.99
1.48
0.39
0.21
0.51
0.15
0.16
0.3
0.26
0.18
0.21
1.39
0.84
0.35
0.5
0.21
0.14
0.17
0.05
0.17
0.21
0.32
0.12
0.23
1.31
0.02
0.01
0.1
0.28
0.72
0.48
0.14
0.11
0.07
0.19
2.87
0.05
0.6
0.05
0.15
0.11
0.09
0.85
0.45
0.15
0.1
0.12 0.003
0.47
0.12
0.1
0.17
0.12
0.56
0.05
0.69
0.05
0.03
0.07
0.05
0.36
0.05
0.04
0.08
-
-
0.22
0.21
-
3.05
0.41
0.13
0.52
0.43
0.11
0.26
0.48
0.26
0.39
0.07
0.78
0.06
0.05
0.07
0.41
0.2
0.3
0.13
0.56
0.47
0.33
0.08
0.46
0.12
0.67
0.04
0.51
0.43
0.25
0.13
0.63
0.15
0.44
0.52
0.19
0.87
0.42
0.51
-
0.67
0.34
0.05
0.13
0.17
2.76
-
2.00
0.20
1.75
0.29
0.21
0.11
0.11
0.93
0.04
0.14
0.1
0.03
0.4
0.03
0.04
0.02
0.05
0.14
0.05
0.05
0.04
0.93
0.04
0.01
0.8
0.13
0.14
0.05
0.03
0.04
0.55
0.04
-
0.22
-
0.51
0.22
0.07
0.07
0.75
0.36
0.12
0.83
0.47
0.15
0.06
0.83
1.6
0.75
0.32
1.02
0.93
0.22
0.22
-
0.38
7
Review of operations
4MRC021
4MRCDD022
6413470 415220
6413470 415180
90
90
-70
-70
270
300.9
4MRCDD023
6413430 415180
90
-70
301
4MRC024
6413390 415280
90
-70
238
4MRCDD025
6413390 415215
90
-70
354.5
4MRC026
4MRC027
250
208
202
209
239
255
271
257
264
272
277
282
165
174
189
216
222
228
207
210
215
219
223
227
258
266
273
142
147
152
225
141
169
196
217
237
243
263
275
262
267
274
279
283
171
184
190
218
226
231
208
212
218
222
225
229
261
267
275
145
148
153
226
150
172
199
15
28
4
8
4
5
3
2
2
1
6
10
1
2
4
3
1
2
3
3
2
2
3
1
2
3
1
1
1
9
3
3
-
-
-
-
-
2.14
2.22
1.75
3.88
3.28
0.26
2.22
0.78
0.61
0.36
0.58
0.07
1.38
0.13
0.22
3.48
0.38
1.84
0.75
0.94
0.09
1.57
0.62
1.47
0.04
1.39
0.44
2
2
4
-
-
41
38
26
57
33
11
33
5
38
18
24
17
17
23
19
40
5
36
24
37
14
14
47
67
9
36
10
-
-
-
-
-
1.29
0.75
0.63
1.67
0.29
0.4
0.44
0.1
0.21
0.1
0.1
0.05
0.61
0.25
0.81
0.82
0.45
0.13
0.22
0.4
0.12
0.09
0.06
0.54
0.03
0.12
0.07
0.47
0.45
0.36
0.36
0.42
0.23
0.09
0.1
0.1
0.15
0.11
0.11
0.03
0.07
0.06
0.63
1.65
0.15
7.12
0.31
0.13
0.06
1.4
0.14
0.78
0.69
0.06
0.91
2.07
1.3
0.82
0.43
0.46
0.75
0.45
0.78
0.4
0.54
0.12
0.05
0.02
0.17
0.16
0.16
0.09
0.07
0.05
0.94
2.35
0.15
3.84
0.31
0.3
0.18
0.5
0.18
0.75
0.75
0.38
0.75
1.65
1.84
1.3
0.9
Information regarding drilling/assaying data
1.
2.
3.
4.
5.
6.
7.
8.
Drilling was completed as HQ diamond core.
Sample recoveries were considered adequate for all samples.
Drillcore has been logged in detail based on lithology, mineralisation, and alteration.
Samples for analysis were collected by sawing core in half.
Samples were submitted as 1m half-core intervals.
Samples were analysed at ALS Chemex utilising methods: Au-AA25 for Au (fire assay); ME-ICP41 for multi-element including
Ag, Cu, Pb, Zn; Ag-OG46 for >100 g/t Ag; Cu-OG46 for >1% Cu; Pb-OG46 for >1% Pb; and Zn-OG46 for >1% Zn. Check
sampling is being completed using 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.
Drillhole collars were surveyed by DGPS.
Downhole gyroscopic surveys were run continuously.
* Copper Equivalent Calculation Explanation:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
The copper equivalent (CuEq) calculation represents the total metal value for each metal, multiplied by the conversion
factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no
allowance is made for recovery losses that may occur should mining eventually result, nor metallurgical flowsheet
considerations.
The copper equivalent calculation is intended as an indicative value only. No metallurgical testwork has been completed to
date however it is the Company’s opinion that all the elements included in the copper equivalent calculation have a
reasonable potential to be recovered.
Copper
conversion
Copper Equivalent Formula (CuEq) = (Cu (ppm) x 0.0075 + Ag (ppm) x 0.96 + Au (ppm) x 50.00 + Co (ppm) x 0.025)/0.0075;
Price Assumptions - Cu (US$7,500/t), Ag (US$30/oz), Au (US$1,500/oz), Co (US$25,000/t).
Pb and Zn have not been used in copper equivalent calculation.
assumptions
equivalent
long-term
follow:
factors
price
used
and
8
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 completed
multiple phases of exploration involving:
an initial due diligence site visit inclusive
of geological
mapping and rock chip
sampling; geophysical surveys comprising
gravity
Polarisation;
Induced
remodeling of airborne magnetic data;
laser scanning and survey pick-up of the
open pit and historic drillholes; an RC
drilling
early-warning
metallurgical testwork; and a helicopter-
borne geophysical survey (VTEM).
programme;
and
Geological mapping and
rock chip
sampling completed as part of due
diligence confirmed that
mineralisation is structurally controlled
and that high grade precious-base metal
mineralisation is present within the open
pit.
May Day
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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
10m at 2.15 g/t Au, 28 g/t Ag, 0.06% Cu, 0.34% Pb, 0.39% Zn from 213m in MDRC010
Results returned 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 theory 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.
Early-warning metallurgical testwork on a single sample of May Day mineralisation to determine potential extraction characteristics
returned excellent results, key findings of this testwork being:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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.
9
Review of operations
Late in 2010, Peel completed a helicopter-borne geophysical survey (VTEM) over the May Day area. No anomalies were detected.
Developments at the nearby Mallee Bull prospect add significant value to the Gilgunnia project and support the prospectivity of the
May Day deposit. Further work at May Day will involve a deep drilling programme targeting the magnetic anomaly at depth.
Cobar Superbasin Project (CSP)
During the year, Peel considerably strengthened its strategic position within the Cobar Superbasin by pegging and acquiring
additional highly-prospective tenure. In total, Peel has added six new licences covering an area in excess of 1,100 km2.
Of high importance amongst these tenements is ELA4493, about 90 km west of Condoblin in NSW, and covering about 300 km2 of
the Rast Trough, the Southern extension of the Cobar Superbasin. ELA4493 was pegged by Peel and is centred on the Mundoe
prospect, which is defined by a 2km long multi-element geochemical anomaly, coincident geophysical anomalies, and encouraging
historic drill results.
Mundoe was first identified in the 1970s as a “bulls-eye” magnetic anomaly. Follow-up exploration in early 1980s included
geological mapping, RAB drilling, IP and gravity geophysical surveys, and a single diamond drillhole where a best result of 3m @
2.90% Zn, 0.87% Zn, 30 g/t Ag and 0.4 g/t Au from 88m was returned.
Exploration in the 1990s culminated in the discovery of strong copper-silver mineralisation in three separate drillholes covering
400m strike. Better results from this drilling included:
(cid:120)
(cid:120)
(cid:120)
6m @ 1.66% Cu, 103 g/t Ag from 111m in MURP-2;
3m @ 122 /t Ag, 0.3 g/t Au from 42m and 6m @ 0.42% Cu, 14 g/t Ag from 69m in MURP-3;
12m @ 1.09% Cu, 60 g/t Ag in MURP-4.
A small follow-up drilling programme in 2005 failed to return mineralisation. However, a data review by Peel indicates that
mineralisation is likely to be dipping to the east presenting a significant possibility that this drilling (drilled from west to east)
inadequately tested the previously intersected mineralisation.
During the year Peel reached agreement with OZ Exploration Pty Ltd, a subsidiary of OZ Minerals Ltd (ASX: OZL), to purchase a
strategic exploration license in close proximity to Peel’s Mallee Bull copper-polymetallic discovery. Peel has also pegged several
large tenement areas that had been held by OZ Minerals.
10
Review of operations
11
Review of operations
A review of exploration data has identified several exciting targets of immediate interest to the southwest of Peel’s Mallee Bull
deposit. These targets will be prioritised for drill testing in due course.
The following is a summary of the acquisition terms agreed between Peel and OZ Minerals Ltd:
Peel to acquire a 100% interest in Exploration Licence EL7519.
(cid:120)
(cid:120) OZ Minerals Ltd not to renew other tenements in close proximity to the above EL.
(cid:120)
Peel to issue OZ Minerals Ltd: 2,500,000 PEX shares at $0.10 per share ($250,000).
(cid:120)
Consideration shares voluntarily escrowed for 12 months.
Subsequent to the year’s end, exploration planning was well advanced at key prospects within the Cobar Superbasin project.
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, 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. 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.
extensive
The Apollo Hill gold project exhibits the
hallmarks of a major mineralised system,
intense
showing
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.
and
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 Apollo Hill
during a complex deformational history.
Gold mineralisation
is accompanied by
quartz veins and carbonate-pyrite alteration
associated with a mafic-felsic contact.
is
largely
previous
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
concealed beneath
transported overburden, often associated
with the Lake Raeside drainage system,
and
geochemical
sampling and shallow RAB drilling has
limited
been
consequently
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).
surface
of
12
Review of operations
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
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:
(cid:120) Overall gold extraction was excellent for both samples, with 98.68% and 98.76% total gold extracted for Sample 1 (15-
(cid:120)
(cid:120)
(cid:120)
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.
(cid:120) Organic carbon levels below detectable limit, indicating very little chance of preg-robbing occurring during cyanidation.
In December 2010, Peel reported a maiden resource estimate for the Apollo Hill and Ra deposits. The highlights of this work were:
(cid:120) 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).
(cid:120) Maximum depth of the resource estimate was 150m below surface.
(cid:120)
Apollo Hill deposit extends to surface and remains unexploited.
(cid:120) Mineralisation at Apollo Hill and Ra deposits remains open at depth and along strike to the south of both deposits.
(cid:120)
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.
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:
Table 2 – September 2011 Apollo Hill Inferred Resource estimates to 180 metres depth (190mRL)
Cut Off
Au g/t
0.2
0.4
0.5
0.6
0.8
1.0
1.2
Total
Au g/t
Mt
0.5
43
0.8
22
0.9
16
1.0
12
1.2
7
1.4
4
1.6
2
Note: The significant figures in above reflect the precision of estimates and include rounding errors.
Apollo Hill
Au g/t
0.5
0.8
0.9
1.0
1.2
1.4
1.6
Ra
Au g/t
0.7
1.0
1.1
1.2
1.4
1.6
1.8
Mt
45.4
23.5
17.2
13.0
7.7
4.5
2.4
koz
691
566
463
386
270
180
103
koz
54
48
42
39
32
26
23
Mt
2.4
1.5
1.2
1.0
0.7
0.5
0.4
koz
745
614
505
424
302
206
126
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
13
Review of operations
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.
gold
grades
composited
Mineralised domains used for the current
estimates were interpreted by H&S. Outlines
capturing zones of continuous mineralisation
with
above
approximately 0.1 g/t were digitised on cross
sections aligned with the drilling traverses and
form closed
linked
three dimensional
In addition to the mineralised
wireframes.
domain,
include a
background domain which contains only rare,
isolated mineralised drill results.
the current estimates
to
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
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.
samples
are
of
that
a method
H&S estimated the resources for Apollo Hill by
Multiple Indicator Kriging, with block support
correction to reflect likely open pit mining
selectivity,
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.
has
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.
Metallurgical Testwork
Metallurgical testwork on Apollo Hill mineralisation was undertaken during financial year 2012. Results confirm that Apollo Hill gold
mineralisation is readily amenable to gravity gold and cyanide leaching recovery techniques. The key outcomes from this testwork
to date are:
14
Review of operations
Head Assay Characteristics
(cid:120)
Assays indicate clean, coarse-grained gold mineralisation with variable assay repeatability.
Comminution Characteristics
(cid:120)
(cid:120)
(cid:120)
SMC testwork indicates hard to very-hard rock strength of larger particle sizes (DWI average of 11.3 kWh/m3); HPGR
should be considered.
Bond Ball Mill Work Index indicates medium hardness of smaller particle sizes (BWI average of 14.3 kWh/t).
Bond Abrasion Index indicates low abrasiveness of ore (BAI of 0.055 Ai); low steel ball consumption and low wear on
crushing and grinding equipment, pipework, etc.
Gold Extraction Characteristics
(cid:120)
(cid:120)
Excellent gravity gold extraction with 88% recovery at 75 µm; 68% recovery at 500 µm.
Excellent gravity plus cyanide leach gold extraction (48hrs) with 99% recovery at 75 µm; 96% recovery at 500 µm;
moderate cyanide consumption, low lime consumption.
(cid:120) Moderate to good cyanide leach gold extraction at coarse grind/fine crush sizes: 86% at 2mm; 72% at 4mm; 73% at 6mm;
moderate cyanide consumption, low lime consumption.
Other Activities
Late in 2012, Peel acquired mining licence M39/296 from Birimian Gold Limited for 750,000 ordinary Peel shares as consideration.
M39/296 is immediately along strike (southeast) from the Apollo Hill resource and is considered to have good potential to host
additional gold resources.
On the exploration front, Peel completed a field reconnaissance trip to Apollo Hill with a focus on mining licence M39/296 and
regional exploration. A number of prospects were identified for follow-up and a substantial geochemical survey has now been
planned. Subsequent to the year’s end, Peel completed an additional aboriginal heritage survey to clear areas identified for follow-
up exploration.
Ruby Silver
In 2011, Peel was granted an exploration licence covering the historic Ruby-Tulloch-Rockvale silverfield. Peel has since been
granted an additional licence adjacent to the Ruby silver project. Ruby Silver is located approximately 30 km east of Armidale in
north-eastern New South Wales.
The Ruby Silver project 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 the project, 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.
Results from an historic 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.
The Rockvale arsenic mine was discovered in 1923, and in the period to 1928, produced 2,950 tonnes of ore containing about 600
tonnes of white arsenic. Mineralisation occurs as irregular shoots in altered aplite within the Rockvale Adamellite. Mineralisation is
predominantly pyrite-arsenopyrite, but silver-gold-lead mineralisation (similar to both the Ruby and Tulloch mines) is recorded.
15
Review of operations
Peel’s Activities
During 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.
Also in 2011 Peel also completed several 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.
In May 2012, Peel completed a maiden RC drilling programme at Ruby Silver comprising 15 holes for 1,483m. The programme was
designed to test IP chargeability anomalies, and to also test beneath historic workings at the Rockvale and Tulloch mines. Several
narrow, high-grade silver intercepts were recorded with better results including:
(cid:120)
(cid:120)
(cid:120)
PRRC009 – 2m @ 32 g/t Ag from 9m, 3m @ 227 g/t Ag from 20m and 3m @ 267 g/t Ag, 0.82% Pb, 0.39% Zn from 115m;
PRRC010 – 5m @ 145 g/t Ag, 0.23 g/t Au from 93m; and
PRRC013 – 2m @ 173 g/t Ag from 16m and 1m @ 71 g/t Ag from 24m.
Best results were obtained from drilling directed at the Tulloch Lode. High-grade mineralisation was intersected below the base of
old workings. Significantly, several shallow high-grade results were returned from near surface in a previously unidentified parallel
lode.
Peel plans to complete a follow-up surface geochemical survey to help delineate any near-surface mineralisation.
Table 3 – Ruby Silver significant drill results
Hole ID Northing Easting
Azi Dip
PRRC001
6637764 403646 315
PRRC002
6637380 403287 315
PRRC003
PRRC004
PRRC005
PRRC006
6637211 403177 315
6637151 403207 180
6637328 403056 315
6637680 403212 315
65
65
65
65
65
80
Final
Depth
(m)
102
90
72
120
90
96
PRRC007
PRRC008
6638588 401593 315
6638330 401600 284
65
70
90
103
PRRC009
6638334 401617 284
70
120
PRRC010
PRRC011
PRRC012
6638300 401585 284
6637653 403398 315
6638412 401806 284
PRRC013
6638328 401615 284
PRRC014
PRRC015
6638300 401584 284
6638373 401565 284
70
65
60
70
60
60
108
144
132
56
80
80
From
(m)
To
(m)
Width
(m)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Cu
(%)
Comment
-
44
12
-
-
10
10
-
22
9
-
17
34
32
227
267
145
-
40
173
71
-
53
74
-
-
7
19
38
70
88
75
6
-
54
76
-
-
9
20
39
72
90
77
9
102
103
9
20
115
93
-
28
16
24
57
74
11
23
118
98
-
29
18
25
58
75
-
1
2
-
-
2
1
1
2
2
2
3
1
2
3
3
5
-
1
2
1
1
-
-
-
-
-
0.08
0.05
-
-
0.15
0.08
0.29
-
-
0.18
-
- 0.51
-
- 0.05 0.10
-
-
-
-
- 0.04
-
-
-
-
-
-
-
-
-
0.1
-
0.3 0.35
0.09 0.21
-
-
-
-
-
-
-
-
-
-
-
-
0.15 0.12
0.15 0.82 0.39
-
0.23
-
-
-
-
-
-
-
-
-
0.12
-
-
-
-
-
-
-
-
-
0.15
0.36
Abandoned due to
high water inflow
-
-
- No Significant Assays
- No Significant Assays
-
-
-
-
-
-
-
Abandoned due to
void/stope
-
-
-
-
-
-
-
-
- No Significant Assays
-
-
Abandoned due to
bit shank
-
No Significant Assays
-
-
-
-
-
-
16
Review of operations
Rise and Shine
In November 2011, Peel was awarded EP 53088 and EP 53111 covering the Rise & Shine gold project. The Rise & Shine gold project,
located about 20km northeast of Cromwell in Central Otago, New Zealand, hosts multiple historic gold workings with historic
production estimated at more than 180,000 ounces gold.
EP 53111 was the subject of a
competitive permit allocation
process (NAA) initiated in late
2010 and encompasses the Rise
& Shine Shear Zone and the
historic Bendigo goldfield, whilst
EP 53088 provides a regional
exploration buffer surrounding
EP 53111. Gold mineralisation is
known to be associated within
the Rise & Shine Shear Zone,
with multiple lode and alluvial
gold workings occurring over a
strike length of at least 4 km.
The historic Bendigo “reefs”
comprise a series of sub-vertical
lodes with workings up to 130m
below surface.
The Rise & Shine Shear Zone
appears to be structurally similar
to the Macraes Shear Zone, host
the multi-million ounce
to
Macraes gold mine. The Rise & Shine Shear Zone represents a gold mineralised low-angle deformation zone formed in a
compressional environment and comprises a zone of hydrothermally altered schist. Alteration comprises variable silicification,
sericitisation, chloritisation and widespread carbonate alteration. The shear is about 50m thick and is traceable for at least 7 km,
strikes 140 degrees, and dips to the northeast.
Substantial amounts of exploration have previously been completed at Rise & Shine however the majority of work has been
directed at historic workings sited at the base of the Rise & Shine Creek Valley. Peel believes that the Rise & Shine Shear Zone could
possibly be “flatter” than previously assumed offering potential for large-tonnage, low-grade grade gold deposits extending up-dip
from previously defined mineralisation. To that end, Peel plans to complete a programme of RC drilling aimed at testing this model.
The Rise and Shine Shear Zone contains three prospects: Alluvials; Rise and Shine mine; and Come in Time mine. These are inferred
to represent mineralised “shoots” possibly similar to the shoots at the Macraes goldfield. Potential mineralisation in the permit
area comprises the possible up-dip extension of the Rise and Shine Shear Zone, along with potential for higher grade lenses of
mineralisation down plunge within the shoots, similar to the higher grade lenses within the Macraes Shear Zone.
17
Review of operations
Better results from RC drilling along the Rise & Shine Shear Zone by the most recent tenement holder (2005-2010) included:
Hole
RCB19
RCB23
RCB24
RCB25
RCB26
RCB29
RCB31
RCB33
RCB37
RCB41
From (m) To (m)
42
34
64
33
34
42
57
53
34
29
37
25
56
22
16
27
39
52
31
19
Interval (m) Gold (g/t)
2.76
5
1.90
9
2.03
8
1.25
11
0.85
18
1.09
15
1.58
18
28.2
1
8.98
3
1.14
10
The bulk of the hard rock gold production came from the Bendigo goldfield. The Bendigo reefs comprise sub vertical lodes in
psammitic or semi-psammitic schist. The geological relationship of the Bendigo Reefs to the Rise and Shine Shear Zone is uncertain.
These lodes comprise a swarm of E-trending, narrow, vertical to sub-vertical shears composed of crushed schist, quartz veins,
stringers, and puggy clay.
The reefs at the Bendigo Goldfield were mined from 1865 to 1913 and sporadically through to 1942. Historic gold production was at
least 180,000 oz, of which about 150,000 oz was produced from the Cromwell Lode.
The Cromwell Lode was mined over a strike of 400m, and is reported to have been traced for another 1200m to the east. Thickness
ranged from 0.6 – 1.8m, averaging 0.9m with an average grade of about 10 g/t gold. BHP concluded that a deep diamond drilling
programme was required to assess gold potential beneath the worked lodes. Minimal modern exploration has been completed.
During the year a field reconnaissance visit was undertaken confirming the areas prospectivity. At the time of writing, exploration
planning for Rise and Shine was advancing with initial activities, subject to access, planned for early calendar 2013.
18
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.
In 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.
In late 2012, Peel commenced a review of the Attunga Tungsten Deposit with a view to advancing the project.
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.
No further work was completed at the Attunga Copper Mine in 2012.
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.
In July 2010, Peel completed a RAB drilling programme at Kensington and Kensingto NW designed to test a reported shallow
tungsten occurrence and to test for additional near-surface gold. Encouraging gold mineralisation was returned from multiple
drillholes.
19
Review of operations
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.
No work was completed during 2012.
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 2012.
Morawa
In 2012, Peel was granted a single exploration licence covering a small greenstone belt located about 20km north of Morawa. The
area is considered to have potential to host VMS-style base-precious metals. Exploration planning commenced during 2012.
20
Schedule of tenements
Number
EL6883
EL6884
EL7633
ML1361
EL7461
EL7356
EL7711
EL7856
EL7519
ELA4493
ELA4562
ELA4574
ELA4575
ELA4576
Number
E39/1198
P31/1797
P39/4586
P39/4587
P39/4588
P39/4589
P39/4590
P39/4591
P39/4592
P39/4677
P39/4678
P39/4679
P39/4789
E31/0800
E39/1236
E31/0685
E39/1644
E40/0296
E40/0303
M39/0296
E70/4252
Holder
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
OZ Exploration Pty Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Holder
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Mining Ltd
Peel Interest
Expiry
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
21/09/2013
21/09/2013
1/11/2012
16/01/2016
4/03/2012
24/06/2013
22/02/2011
1/11/2013
3/5/2012(renewal/transfer pending)
application pending
application pending
application pending
application pending
application pending
Peel Interest
Expiry
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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
8/06/2013
3/01/2013
19/12/2016
1/06/2013
6/03/2017
29/09/2014
5/01/2017
Number
EP53111
EP53088
Holder
Peel Mining Ltd
Peel Mining Ltd
Peel Interest
Expiry
100%
100%
19/10/2016
19/10/2016
New South Wales
Project
Attunga
Attunga
Attunga Garnet
Mayday
Gilgunnia
Yerranderie
Ruby Silver
Ruby Silver East
Gilgunnia South
Euabalong
Tara
Wyree
Manuka
Mirrabooka
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
Bob's Bore
27 Well
Bulyairdie
Isis
Karrakarook
New Zealand
Project
Rise and Shine
Mt Moka
Rob Tyson
Managing Director
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.
21
Directors’ report
Your directors present their report on the consolidated entity (referred to hereafter as “the Group”) comprising Peel Mining
Limited and the entities it controlled at the end of, or during the financial year ended 30 June 2012.
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 2012 are set out in the table below.
Director
Graham Hardie
Robert Tyson
Simon Hadfield
Craig McGown
Shares Directly and Indirectly Held
Options
15,029,095
7,000,000
4,812,564
1,875,000
-
-
-
-
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 $ 527,337 (2011: $460,684).
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 20
in this report.
Corporate structure
The Group comprises Peel Mining 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 $2,704,800 through the issue of:
(i)
(ii)
21,964,368 ordinary shares at $0.12 each for cash. The cash received from the increase in contributed equity was used
principally to continue the company’s exploration programs.
750,000 ordinary shares at $0.12 each as consideration for the acquisition of a mining lease.
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
Employee Options Issue
600,000 unlisted employee options were issued on 11 July 2012 in accordance with Peel Mining Limited’s employee share option
plan. The options were issued with an exercise price of 8 cents with 300,000 options vesting immediately and 300,000 vesting on 11
July 2013. The options will lapse on 31 July 2014.
Stage 1 of Mallee Bull Farm-in Agreement with CBH Resources commences
Peel Mining Limited has commenced Stage 1 of their farm-in agreement with CBH Resources Limited after conditions precedent
were met. The conditions precedent were that Foreign Investment Review Board approval for the farm in agreement was obtained
and that CBH Resources Limited made a payment of $1,000,000 to Peel Mining Limited as reimbursement of expenditure made on
the Mallee Bull Project. At the date of this report drilling as part of exploration activities had commenced and Peel Mining Limited
had received $750,000 in cash calls from CBH to fund these activities.
22
Directors’ report
The Group has a contingent liability for the year ended 30 June 2012 due to Oz Minerals Investments Pty Ltd for the purchase of a
tenement. The liability is for 2,500,000 shares at a deemed price of 10 cents per share upon transfer of the tenement.
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 4,812,564 shares in Peel Mining Limited and no options to acquire further shares.
Robert Maclaine Tyson B.App Sc(Geol).GradDip Applied Finance(SIA)– Managing Director
Mr Tyson is a geologist with more than 20 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 7,000,000
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 15,029,095 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 Resources Limited. Mr McGown holds 1,875,000 shares in Peel Mining
Limited and no options to acquire further shares.
Company Secretaries
Mr D Hocking ACA (UK)
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.
Mr R Woodhouse CA
Newly appointed to the position of joint company secretary in June 2012, Mr Woodhouse is a Member of the Institute of Chartered
Accountants and has more than 5 years of accounting, governance and commercial experience within the mining and energy
industries.
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
Principles used to determine the nature and amount of remuneration
Remuneration report (audited)
The remuneration report is set out under the following headings:
a)
b) Details of remuneration
Service agreements
c)
Share-based compensation and
d)
e) Additional information.
23
Directors’ report
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:
(cid:127) competitiveness and reasonableness
(cid:127) acceptability to shareholders
(cid:127) performance linkage / alignment of executive compensation
(cid:127) transparency
(cid:127) 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.
Board and senior management
Fees and payments to the Directors and other key management personnel reflect the demands which are made on, and the
responsibilities of, the Directors and the senior management. Such fees and payments are determined by the Board and reviewed
annually.
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 listed on 11 May 2007 at 20c per share and the share price at 30 June 2012 was 7.8c (2011: 9.4c).
The shares recorded high and low points of 19c and 7.8c during the year, and were trading at 37c on 17 September 2012. 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 2012 are set out in the
following table.
Table 1: Director and senior executive remuneration
Short-Term Employment Benefits
Post Employment
Long-Term
Benefits
Share Based
Payment
Cash salary
and fees
Bonuses,
other
benefits
Consulting
Fees
Superannuation
Long-service
leave
Options
Total
% Perfor-
mance
Related
$
$
$
$
$
$
$
2012
Directors
RM Tyson
S Hadfield
C McGown
G Hardie
Other executives
D Hocking
R Woodhouse*
Total
135,000
50,000
50,000
50,000
80,400
16,443
381,843
12,150
4,500
4,500
4,500
7,236
1,480
34,366
* Ryan Woodhouse was appointed on the 30th April 2012.
147,150
54,500
54,500
54,500
87,636
17,923
416,209
0%
0%
0%
0%
0%
0%
24
Directors’ report
Short-Term Employment Benefits
Post Employment
Long-Term
Benefits
Share Based
Payment
Cash salary
and fees
Bonuses,
other
benefits
Consulting
Fees
Superannuation
Long-service
leave
Options
Total
% Perfor-
mance
Related
2011
Directors
RM Tyson
S Hadfield
C McGown
G Hardie
Other executives
D Hocking
Total
$
$
$
$
114,511
50,000
50,000
50,000
78,800
343,311
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
10,280
4,500
4,500
4,500
7,092
30,872
$
-
-
-
-
$
124,791
54,500
54,500
54,500
0%
0%
0%
0%
3,400
3,400
89,292
0%
377,583
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. Options are not linked to the performance of the company.
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 $147,150 (2011:$124,791) 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 (2011:$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 (2011:$54,500) 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 (2011:$54,500) in his role as a
director of the Company.
D Hocking
There is no written contract for Mr Hocking, who received payments and benefits totalling $87,636 (2011:$ 89,292) in his role as
Company Secretary.
R Woodhouse
There is no written contract for Mr Woodhouse, who received payments and benefits totalling $17,923 (2011:$nil) in his role as
Company Secretary.
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.
25
Directors’ report
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 24 to the financial statements.
Name
Directors
Other key management personnel
D Hocking
Number of options granted
during year
Number of options vested
during year
2012
-
-
2011
-
2012
-
2011
-
100,000
50,000
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%)
No options were exercised by directors of Peel Mining Limited or other key management personnel during the year.
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.
Use of remuneration consultants
During the year ended 30 June 2012, the Group did not employ the services of a remuneration consultant to review its existing
remuneration policies and to provide recommendations in respect of both executive short-term and long-term incentive plan
design.
Voting and comments made at the company’s 2011 Annual General Meeting
Peel Mining Limited received more than 99% of “yes” votes on its remuneration report for the 2011 financial year. The company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
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
18 March 2011 (employees)
30 March 2013
16 July 2012 (employees)
31 July 2014
Issue price of
Number under
shares
8 cents
8 cents
option
200,000
600,000
No option holder has any right under the options to participate in any other share issue of the company.
26
Directors’ report
Shares issued on the exercise of options
The following ordinary shares of the Company were issued during the year on the exercise of options.
11 October 2011
Issue price of
Shares
2012
cents
8
2011
cents
25
Number of shares
issued
2012 2011
Number Number
100,000 20,000
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $7,894.54 (2011: $5,103) 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 Regulation
Peel Mining Limited holds exploration licences and mining leases issued by the NSW Department of Primary Industry, the WA
Department of Mining and the New Zealand Petroleum & Minerals Department. 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.
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
28th September 2012
27
Consolidated statement of comprehensive income
For the year ended 30 June 2012
Consolidated
2012
Note $
2011
$
Revenue from continuing operations
3
68,673
66,038
Share-based remuneration to employees
Depreciation expense
Employee and directors’ benefit expenses
Exploration expenditure written off
Administration expenses
13
8
9
-
(15,318)
(10,200)
(32,445)
(320,659)
(303,860)
-
(6,358)
(260,033)
(173,859)
Loss before income tax
(527,337)
(460,684)
Income tax expense
4
-
-
Loss from continuing operations
(527,337)
(460,684)
Other comprehensive income/loss
-
-
Total comprehensive loss for the year is attributable to the
members of Peel Mining Limited
Loss for the year is attributable to the members of Peel
Mining Limited
(527,337)
(460,684)
(527,337)
(460,684)
Basic and diluted loss per share (cents per share)
22
(0.005)
(0.007)
The above Statement of Comprehensive income should be read in conjunction with the accompanying notes
28
Consolidated statement of financial position
as at 30 June 2012
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
Consolidated
Note
2012
$
2011
$
5
6
7
8
9
629,049
1,532,413
30,883
74,045
659,932
1,606,458
162,056
86,855
115,000
17,860
6,864,104
7,113,015
4,291,595
4,424,455
Total Assets
7,772,947
6,030,913
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Accumulated losses
Option reserve
Total Equity
11
190,337
190,337
190,337
625,766
625,766
625,766
7,582,610
5,405,147
12
13
13
10,089,725
7,384,925
(3,086,837)
(2,559,500)
579,722
579,722
7,582,610
5,405,147
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
29
Consolidated statement of changes in equity
for the year ended 30 June 2012
CONSOLIDATED
Contributed
Accumulated
Reserves
Equity
Losses
$
$
$
Total
Equity
$
Balance at 1 July 2010
4,162,547
(2,098,816) 569,522
2,633,253
Loss for the year
Total comprehensive income/loss for the year
-
-
(460,684)
(460,684)
-
-
(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
Loss for the year
(527,337)
(527,337)
Total comprehensive income/loss for the year
-
(527,337)
-
(527,337)
7,384,925
(3,086,837)
579,722
4,877,810
Transactions with equity holders in their capacity as equity holders:
Issue of share capital
Share issue expenses
2,733,724
(28,924)
-
-
-
-
2,733,724
(28,924)
Balance at 30 June 2012
10,089,725
(3,086,837)
579,722
7,582,610
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
30
Consolidated statement of cash flows
For the year ended 30 June 2012
Consolidated
2012
2011
Note
$
$
Cash flows from operating activities
Payments to suppliers and employees
(519,416)
(490,849)
Interest received
68,673
66,038
Net cash outflow from operating activities
20
(450,743)
(424,811)
Cash flows from investing activities
Payment for mineral exploration expenditure
(2,938,108)
(936,372)
Payment of security deposits
Refund of security deposits
(105,000)
(10,000)
60,000
20,000
Payments for purchase of plant and equipment
(84,312)
(4,272)
Net cash inflow/(outflow) from investing activities
(3,067,420)
(930,644)
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
2,643,724
2,297,598
(28,924)
(120,220)
Net cash inflow from financing activities
2,614,800
2,177,378
Net decrease in cash and cash equivalents
(903,363)
821,923
Cash and cash equivalents at the start of year
1,532,412
710,490
Cash and cash equivalents at the end of year
5
629,049
1,532,413
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
31
Notes to the consolidated financial statements 30 June 2012
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 and the subsidiaries it controlled at the end of, or during the financial year
ended 30 June 2012.
(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.
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 acquisition 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
recognised.
Interest income
Revenue is recognised as the interest accrues using the effective interest rate method.
recognition criteria must also be met before
following specific
revenue
is
Income tax
(d)
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 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
32
Notes to the consolidated financial statements 30 June 2012
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.
Impairment of assets
(e)
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 (2011: $nil) have been recognised for the year ending 30 June 2012.
Cash and cash equivalents
(f)
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.
Fair value estimation
(i)
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.
Plant and equipment
(j)
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.
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.
Exploration and evaluation expenditure
(k)
All exploration and evaluation expenditure are 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, and significant operations are being undertaken in
relation to, the area of interest.
33
Notes to the consolidated financial statements 30 June 2012
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 $nil (2011: $6,358) being written off during the year.
Trade and other payables
(l)
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 2012 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 9 Financial Instruments and AASB 2009 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 de-recognition 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.
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.
34
Notes to the consolidated financial statements 30 June 2012
AASB 11 Joint Arrangements (effective for the annual reporting periods commencing on or after 1 January 2013).
AASB 11 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). The
group is continuing to assess its full impact.
AASB 12 Disclosure of Interest in Other Entities (effective for the annual reporting periods commencing on or after 1 January 2013).
AASB 12 introduces new disclosure requirements for interests in associates and joint arrangements, as well as new requirements for
unconsolidated structured entities. As this is a disclosure standard only, there will be no impact on amounts recognised in the
financial statements. However, additional disclosures will be required for interests in associates and joint arrangements, as well as for
unconsolidated structured entities.
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
consolidated statement of financial position or disclosed in the notes to the financial statements. The Group 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 this standard is adopted for the first time for the year
ended 30 June 2014, additional disclosures will be required about fair values. However, there will be no impact on any of the
amounts recognised in the financial statements.
AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (effective
from 1 July 2012).
AASB 2011-9 will align the presentation of items of other comprehensive income (OCI) with US GAAP. When this standard is first
adopted for the year ended 30 June 2013, there will be no impact on amounts recognised for transactions and balances for 30 June
2013 (and comparatives).
AASB 119 – Employee Benefits (effective for annual periods commencing on or after 1 January 2013)
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.
AASB 2012-5 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (effective
periods commencing on or after from 1 January 2013).
When this standard is first adopted for the year ended 30 June 2013, there will be no material impact.
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 of 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 share-based payment transactions with employees by reference to the fair value of
the equity instruments at the grant date. The fair value is determined using a Black-Scholes model. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact expenses and equity.
Impairment of capitalised exploration and evaluation expenditure
It is the group’s policy to capitalise costs relating to exploration and evaluation activities. The future recoverability of capitalised
exploration and evaluation expenditure is dependent upon a number of factors, including whether the group decides to exploit the
related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes which could
impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to
commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and
net assets will be reduced in the period in which the determination is made.
35
Notes to the consolidated financial statements 30 June 2012
Financial Risk Management
2.
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
(cid:120)
Credit risk
(cid:120)
Liquidity risk
(cid:120) 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
Cash and cash equivalents
Trade and other receivables
Note
5
6
Consolidated
2012
$
659,932
30,883
2011
$
1,532,413
74,045
Impairment losses
None of Group’s other receivables are past due. At 30 June 2012 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 2012
Trade and other payables
30 June 2011
Trade and other payables
Carrying
Amount
$
190,337
Consolidated
Contractual
Cash flows
$
190,337
6mths
Or less
$
190,337
625,766
625,766
625,766
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.
36
Notes to the consolidated financial statements 30 June 2012
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 rate risk in this area. Cash and
cash equivalents at variable rates exposes the group to cashflow interest rate risk. The Group is not exposed to fair value interest rate
risk as all of its financial assets and liabilities are carried at amortised amount.
Profile
At the reporting date the interest rate profile of the consolidated entity’s interest-bearing financial instruments was:
Variable rate instruments
Variable Average
Interest Rate
Consolidated
Carrying Amount
Short term cash deposits
5.03%
2012
$
629,049
2011
$
1,532,413
Cash flow sensitivity analysis for variable rate instruments of the consolidated entity
At 30 June 2012 if interest rates had changed +/- 100 basis points from year end rates with all other variables held constant, equity
and post-tax loss would have been $5,273 lower (2011: $4,000).
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
Loss before Income Taxes includes the following
Specific expenses:
Superannuation
Operating lease payments
4. Income tax
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% (2011: 30%)
Expenditure not allowed for income tax purposes:
Non-deductible expenses
Tax loss not brought to account
Income tax benefit reported in the of statement comprehensive
income
Consolidated
2012
$
2011
$
68,673
66,038
22,216
36,000
25,049
36,000
-
-
(527,337)
(158,201)
-
158,201
-
-
(460,684)
(138,205)
-
138,205
-
-
The Company has tax losses arising in Australia of $ 6,210,875 (2011: $3,596,235) 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 2012 the Company also had an unrecognised deferred tax asset in respect
of equity raising costs of $86,627 (2011: $77,950). 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
Consolidated
2012
$
35,148
593,901
629,049
2011
$
432,413
1,100,000
1,532,413
28,088
2,795
30,883
74,045
-
74,045
37
Notes to the consolidated financial statements 30 June 2012
7. Receivables (Non-current)
Security deposits on mining tenements
No receivables are past due or impaired
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
Consolidated
2012
$
162,056
162,056
2011
$
115,000
115,000
197,862
111,007
86,855
17,860
84,313
(15,318)
86,855
113,549
95,689
17,860
46,033
4,272
(32,445)
17,860
6,864,104
4,281,595
4,281,595
90,000
2,492,509
-
6,864,104
1,881,521
1,045,000
1,361,432
(6,358)
4,281,595
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development
and commercial exploitation, or alternatively the sale, of the respective areas of interest.
10. Subsidiary companies
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 1(b):
Name
Peel Environmental Services Limited
Apollo Mining Pty Ltd
Country of
Incorporation
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Equity holding
2012
%
100
100
2011
%
100
100
11. Trade and other payables
Trade payables
12. Contributed equity
(a) Share capital
Ordinary shares fully paid
(b) Movements in ordinary share capital
Consolidated
2012
$
190,337
2011
$
625,766
Consolidated and Parent Entity
2012
Number of
Shares
110,571,683
$
10,089,725
2011
Number of
shares
87,757,315
$
7,384,925
Opening balance, 1 July
87,757,315
7,384,925
43,985,917
4,162,547
Shares issued pursuant to placement
Shares issued pursuant to a 'Rights Issue'
Shares issued as consideration for the acquisition
of a mining lease
Shares issued as result of exercise of options
Transaction costs on share issues
Closing balance, 30 June
21,964,368
2,635,724
22,002,959
1,540,207
10,748,439
752,391
750,000
100,000
90,000
8,000
(28,924)
20,000
-
11,000,000
1,045,000
110,571,683
10,089,725
87,757,315
5,000
(120,220)
7,384,925
38
Notes to the consolidated financial statements 30 June 2012
(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
(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
2012
$
2011
$
(2,559,500)
(527,337)
(3,086,837)
(2,098,816)
(460,684)
(2,559,500)
579,722
-
579,722
569,522
10,200
579,722
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
Consolidated
Opening balance, 1 July
Expired during year
Issued to employees
Closing balance, 30 June
Exercisable at 8 cents each on or before 30 March 2013
2012
Options
300,000
-
(100,000)
200,000
200,000
$
579,722
-
-
579,722
2011
Options
31,573,250
(31,573,250)
300,000
300,000
300,000
$
569,522
-
10,200
579,722
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.
14. Remuneration of Auditors
Amounts paid or due and payable to the auditors
BDO Audit (WA) Pty Ltd:
Auditing or reviewing the financial report
Non-assurance services
Consolidated
2012
$
31,691
12,161
43,852
2011
$
28,564
-
28,564
15. Commitments and Contingencies
The Group has a commitment for the year ended 30 June 2012 due to Oz Minerals Investments Pty Ltd for the purchase of a
tenement. The group has also a contingent liability for royalties equivalent to $1 per tonne of ore processed from the Mining
Lease M39/296 tenement payable to the owners of the land. This liability is contingent on actual ore produced, for which there
is currently no production. The group had no contingent assets or liabilities for 2011.
39
Notes to the consolidated financial statements 30 June 2012
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
2012
$
278,793
444,960
69,000
792,753
2011
$
194,800
94,200
-
289,000
17. Segment information
Management has determined that the Group has one reportable segment, being mineral exploration within Australasia. The
Group is focused only on mineral exploration and the Board monitors the group based on actual versus budgeted exploration
expenditure incurred. 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)
Reconciliation of reportable segment (assets)
Reportable segment assets
Unallocated Segment Assets
Cash and cash equivalents
Trade and other receivables
Other
Total Assets
Reconciliation of reportable segment (loss)
Reportable segment (loss)
Other revenue
Unallocated: - Corporate expenses
Loss before tax
18. Related Parties
Consolidated
2012
$
-
(17,292)
6,950,959
821,988
629,049
30,883
162,056
7,772,947
(17,292)
68,673
(578,718)
(527,337)
2011
$
-
(50,642)
4,309,455
1,721,458
1,532,413
74,045
115,000
6,030,913
(50,642)
66,038
(476,080)
(460,684)
Transactions with related parties
During the year Peel Mining Limited and its subsidiaries (see note 10) had no transactions with related parties other than the
transactions shown in note 23.
19. Events occurring after the Reporting date
Employee Options Issue
600,000 unlisted employee options were issued on 11 July 2012 in accordance with Peel Mining Limited’s employee share
option plan. The options were issued with an exercise price of 8 cents with 300,000 options vesting immediately and 300,000
vesting on 11 July 2013. The options will lapse on 31 July 2014.
Stage 1 of Mallee Bull Farm-in Agreement with CBH Resources commences
Peel Mining Limited has commenced Stage 1 of their farm-in agreement with CBH Resources Limited after conditions precedent
were met. The conditions precedent were that Foreign Investment Review Board approval for the farm-in agreement was
obtained and that CBH Resources Limited made payment of $1,000,000 to Peel Mining Limited as reimbursement of
expenditure made on the Mallee Bull Project. At the date of this report drilling as part of exploration activities had commenced
and Peel Mining Limited had received $750,000 in cash calls from CBH to fund these activities.
40
Notes to the consolidated financial statements 30 June 2012
20. Reconciliation of cash flows from operating activities to loss after income tax
Loss after income tax
Change in operating assets and liabilities
Increase/(decrease) in receivables
Decrease in payables
Share-based payments
Depreciation
Net cash outflow from operating activities
21. Non-cash investing and financing activities
Acquisition of a mining lease by issue of
11,000,000 ordinary shares at 9.5 cents each
750,000 ordinary shares at 12 cents each
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
Loss used in calculating basic loss per share
Weighted average number of shares used as the denominator
Weighted average number of shares used in calculating basic
loss per share
Effect of dilutive securities
Consolidated
2012
$
(527,337)
2011
$
(460,684)
41,106 (27,106)
20,334
20,170
10,200
-
32,445
15,318
(424,811)
(450,743)
-
90,000
1,045,000
-
Consolidated
2012
2011
(0.005)
(0.007)
(527,337)
(460,684)
Consolidated
Number of
Shares
2012
Number of
Shares
2011
101,132,746
68,587,085
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
2012
$
381,843
34,366
-
-
416,209
2011
$
343,311
30,872
-
3,400
377,583
(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
30 June 2012
Directors
R Tyson
Executives
D Hocking
Balance at
the start of
the year
-
-
100,000
Granted as
compensation
Expired
during year
Exercised
Balance at
end of the
year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
100,000
100,000
-
-
All vested options are exercisable at the end of the year.
41
Notes to the consolidated financial statements 30 June 2012
Balance at
the start of
the year
5,122,874
4,722,873
1,000,000
30 June 2011
Directors
R Tyson
S Hadfield
C McGown
Executives
D Hocking
Granted as
compensation
Expired
during year
Exercised
Balance at
end of the
year
Vested and
exercisable
Unvested
-
-
-
(5,122,874)
(4,722,873)
(1,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
50,000
50,000
200,000
100,000
(200,000)
All vested options are exercisable at the end of the year.
(d) Share holdings of Directors – Shares in Peel Mining Limited (number)
30 June 2012
Received during
Balance at
the year on the
Other changes
Balance at
1 July 2011
exercise of
options
during the year
30 June 2012
Directors
G Hardie
R Tyson
S Hadfield
C McGown
15,029,095
7,000,000
4,812,564
1,875,000
Of the balance at 30 June 2012, the amounts held nominally in respect of each director are: R Tyson 4,500,000 and S Hadfield
1,250,000.
3,005,819
2,000,000
1,102,513
375,000
5,000,000
3,710,051
1,500,000
12,023,276
-
-
-
-
30 June 2011
Received during
Balance at
the year on the
Other changes
Balance at
1 July 2010
exercise of
options
during the year
30 June 2011
Directors
G Hardie
R Tyson
S Hadfield
C McGown
12,023,276
5,000,000
3,710,051
1,500,000
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.
8,015,517
3,798,250
2,995,765
1,000,000
4,007,759
1,201,750
714,286
500,000
-
-
-
-
(e) Other transactions with key management personnel
Simon 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 2012 were $36,000 (2011: $36,000). During the year the Company placed advertisements to the value of $5,100
(2011: $1,700) in a publication owned and operated by RIU and participated in conferences, to the value of $13,744 (2011: nil)
organised by RIU Conferences Pty Limited, another company of which Mr Hadfield is a director. 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
Conferences
Consolidated
2012
$
36,000
5,100
13,744
41,100
2011
$
36,000
1,700
-
37,700
42
Notes to the consolidated financial statements 30 June 2012
24. Share–based Payments
(a) Share-based payment expenses
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 in the profit and loss during the year were as follows:
Options granted to employees
(b) Director options
Set out below are summaries of Directors options granted.
Consolidated
Consolidated
2012
Number
-
2011
Number
300,000
-
300,000
2012
$
-
-
2011
$
10,200
10,200
There were no share based payments currently outstanding or granted to directors during the year.
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
5 Dec’08
Total
30 Nov’10
30 April’11
$0.30
$0.30
5,000,000
1,000,000
6,000,000
(5,000,000)
(1,000,000)
(6,000,000)
-
-
-
-
-
-
-
-
-
(c) 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 8 cents.
Set out below are summaries of options granted under the plan.
30 June 2012
Grant date
Expiry date
Exercise
price
Balance at
start of
the year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Balance at
end of the
year
Number
Number
Number
Number
Number
Vested and
exercisable
at end of
the year
Number
18 Mar’11
30 Mar’13
$0.08
300,000
-
100,000
-
200,000
200,000
30 June 2011
Grant date
Expiry date
Exercise
price
Balance at
start of
the year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Balance at
end of the
year
Number
Number
Number
Number
Number
Vested and
exercisable
at end of
the year
Number
18 Mar’11
30 Mar’13
23 Jun’08
30 Nov’10
$0.08
$0.25
-
300,000
-
-
300,000
150,000
600,000
-
(20,000)
(580,000)
-
-
43
Notes to the consolidated financial statements 30 June 2012
(d) Acquisition of an Asset
During the 2012 year, the Group purchased a mining lease in Western Australia from Birimian Gold Limited for consideration
750,000 Peel Mining Limited shares, at a value of 9 cents per share.
In November 2010, Peel elected to exercise its option to acquire Apollo Hill project. The sale agreement saw Peel issue 11 million
fully paid ordinary shares to HHM in consideration for Apollo Hill, at a value of 9.5 cents per share.
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
Total comprehensive loss for the year
Parent entity
2012
$
2011
$
659,932
7,777,947
193,287
193,287
7,584,660
1,606,458
5,011,020
628,716
628,716
4,382,304
10,089,725
579,722
(3,084,787)
7,584,660
7,384,925
579,722
(3,582,343)
4,382,304
68,673
(527,337)
(527,337)
66,038
(460,684)
(460,684)
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.
44
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)
(ii)
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the financial position as at 30 June 2012 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 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
28th September 2012
45
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
28 September 2012
Peel Mining Limited
The Board of Directors
34 Kings Park Road
WEST PERTH WA 6005
Dear Sirs,
DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF PEEL MINING LIMITED
As lead auditor of Peel Mining Limited for the year ended 30 June 2012, I declare that, to the best
of my knowledge and belief, there have been no contraventions of:
(cid:127)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(cid:127)
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Peel Mining Limited and the entities it controlled during the period.
Chris Burton
Director
BDO Audit (WA) Pty Ltd
Perth, Western Australia
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
46
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PEEL MINING LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Peel Mining Limited, which comprises the
consolidated statement of financial position as at 30 June 2012, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation of the financial report that gives a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Peel Mining Limited, would be in the same terms if given to
the directors as at the time of this auditor’s report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
47
Opinion
In our opinion:
(a) the financial report of Peel Mining Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2012. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Peel Mining Limited for the year ended 30 June 2012
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Chris Burton
Director
Perth, Western Australia
Dated this 28th day of September 2012.
48
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:
(cid:120)
(cid:120)
(cid:120)
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 1,875,000 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:
(cid:120)
(cid:120)
(cid:120)
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.
49
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;
(cid:120)
(cid:120) Determination of the independence and effectiveness of the external auditors;
(cid:120)
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.
(cid:120)
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.
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.
50
Shareholder information
Information relating to shareholders at 18 September 2012
Distribution of shareholders
Range
1
1,001
5,001
10,001
100,001
Total
-
-
-
-
-
1,000
5,000
10,000
100,000
9,999,999,999
Twenty largest shareholders
No. of Holders
Shares
%
No. Ord
12
60
108
321
138
2916
193422
965572
12944907
96464866
0
0.17
0.87
11.71
87.25
639
110,571,683
100.0
No.Ord
Shares
15,322,890
13,750,000
3,877,625
2,737,500
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
POINT NOMINEES PTY LTD
HAMPTON HILL MINING NL
MR ROBERT MACLAINE TYSON
WYTHENSHAWE PTY LTD
JOHN WARDMAN & ASSOCIATES PTY LTD
2,500,000
EMPIRE ENERGY GROUP LIMITED
2,470,000
MR SIMON HADFIELD + MRS FIONA HADFIELD
2,195,560
MR JONATHON TYSON + MR CHRIS TYSON + MR ROBERT TYSON
WYTHENSHAWE PTY LTD
IONIKOS PTY LTD
MR HUGH BROWN + MRS TANYA BROWN
H WALLACE-SMITH AND CO PTY LTD
P J ENTERPRISES PTY LIMITED
NALMOR PTY LTD JOHN CHAPPELL SUPER FUND A/C
SALAMAR PTY LTD
MR SIMON HADFIELD
MCGEE CONSTRUCTIONS PTY LTD
MR JOHN DESMOND MARTIN
WALSEC PTY LTD
MR JASON MARK MOULTRIE
2,000,000
2,000,000
1,875,000
1,555,887
1,500,000
1,500,000
1,450,000
1,367,004
1,250,000
1,200,000
1,138,400
1,020,000
1,000,000
%
13.86
12.44
3.51
2.48
2.26
2.23
1.99
1.81
1.81
1.7
1.41
1.36
1.36
1.31
1.24
1.13
1.09
1.03
0.92
0.9
Substantial shareholders
1
2
3
Point Nominees Pty Ltd (Jackson Super Fund)
Hampton Hill Mining NL
Robert MacLaine Tyson
61,709,866
55.84
No. Ord
Shares
15,322,890
13,750,000
7,000,000
%
13.86
12.44
6.33
At the prevailing market price of $0.37 per share there were fifteen shareholders with less than a marketable parcel of
$500 at 19 September 2012.
At 19 September 2012 there were 639 holders of ordinary shares in the Company.
At the date of this report there were no shares or options restricted by the ASX.
51
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.
52