ACN 119 343 734
Directors
Simon Hadfield
Rob Tyson
Graham Hardie
Non-executive Chairman
Managing Director
Non-executive Director
Share Registry
Link Market Services Limited
Level 4, 152 St Georges Tce
PERTH WA 6000
Company Secretary
Ryan Woodhouse
Registered Office
Unit 1, 34 Kings Park Rd
WEST PERTH WA 6005
Telephone: +61 (0) 8 9382 3955
Email:
info@peelmining.com.au
Stock Exchange Listing
Securities of Peel Mining Limited are
listed on
the Australian Securities
Exchange (ASX)
ASX Code: PEX
ACN: 119 343 734
Telephone +61 1300 554 474
Facsimile: +61 (0)2 9287 0303
Website: www.linkmarketservices.com
Auditors
PricewaterhouseCoopers
Level, 15
125 St Georges Terrace
Perth WA 6000
Website
www.peelmining.com.au
Chairman’s report
Review of operations
Schedule of tenements
Directors’ report including remuneration report
Consolidated statement of profit and loss and other 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
Additional ASX information
Shareholder Information
2
4
14
15
26
27
28
29
30
56
57
58
64
73
Peel Mining Limited is a company limited by shares, incorporated and domiciled in Australia. The
financial statements were authorised for issue by the directors on 27 September 2018. The
directors have the power to amend and reissue the financial statements.
1
Dear Fellow Shareholders
Peel Mining Limited continued to forge ahead in 2017/18 with the discovery of the high-grade Southern
Nights zinc-lead-silver prospect, the successful spin-out of the Apollo Hill gold project and encouraging
progress on the pre-feasibility study to mine the high-grade Mallee Bull copper project. The Company
also had some exceptional copper hits at its Wirlong project, near Mallee Bull in the Cobar region of
NSW, with this project now shaping up as a typical Cobar-type deposit, with many similarities to
Glencore’s CSA copper mine.
The Southern Nights discovery and the latest success at Wirlong vindicate the Company’s decision to
focus its exploration efforts in the lightly-explored southern end of the Cobar basin in NSW, which over
the past 100 years has been home to some of the richest copper-zinc-lead-silver mines and gold mines
in Australia. Since it began exploring in this area eight years ago Peel has made four significant high-
grade discoveries, all with similar tenor to existing mines in the area.
Southern Nights
The high-grade zinc-lead-silver discovery now known as Southern Nights was confirmed with
exceptional assay results from drilling in early October 2017 about 1km south of the Company’s Wagga
Tank project. Results included:
21m @ 31.02% Zn, 12.05% Pb, 258 g/t Ag, 1.43 g/t Au from 194m in WTRC035
58m @ 3.88% Zn, 1.19% Pb, 28 g/t Ag, 0.28 g/t Au from 139m in WTRC033.
Further results announced in January included:
46m @ 17.01% Zn, 9.57% Pb, 272 g/t Ag, 1.22 g/t Au from 201m in Hole WTRCDD033,
including 16m @ 25.66% Zn, 15.01% Pb, 361 g/t Ag, 0.86 g/t Au
Further drilling has had continued success and the company’s 100%-owned Wagga Tanks/Southern
Nights project is now emerging as one of the most significant zinc polymetallic discoveries in Australia
in recent years. Southern Nights is now defined by significant mineralisation over >700m strike with
mineralisation open to the south and north and at depth. Wagga Tanks and Southern Nights together
are now defined by geophysics and RAB drilling results over a strike length of >2.7km.
The Company has almost completed a $12.3 million fund raising via a placement and fully underwritten
rights issue with approximately $6m of this to be used to further accelerate drilling at Southern Nights.
2
Mallee Bull
In July 2018 Peel announced positive infill drilling results from its 50%-owned Mallee Bull deposit. The
drilling was undertaken as part of a Pre-Feasibility Study investigating the development of the upper
portion of Mallee Bull as a “dig and truck” operation, under which ore would be milled at JV partner
CBH’s Endeavour mine at Cobar, where surplus milling capacity exists. The infill drilling, targeting
between 180m-300m below surface, included:
11m @9.02% Cu, 114 g/t Ag, 0.37% Au from 296m in MBRCDD115
14.15m @ 4.27% Cu, 51 g/t Ag, 0.25 g/t Au from 262m in MBRCDD110
The company looks forward to announcing a positive outcome from this study in the near future and
working closely with CBH Resources to advance Mallee Bull into this exciting new phase.
Apollo Hill
The Company’s Apollo Hill gold project was sold to new company Saturn Metals Ltd, which successfully
floated on the ASX in March, raising $7 million in a heavily oversubscribed IPO. Peel retained 35.71% of
Saturn.
Saturn’s team has been working diligently post float completing three rounds of drilling at the Apollo
Hill gold project and their Managing Director, Ian Bamborough, plans to update the existing inferred
mineral resource at Apollo Hill by the end of October 2018. As a major shareholder of the Company we
look forward to this significant development.
Finally, on behalf of all shareholders, I would like to thank Peel’s first-rate team for the excellent results
achieved in the past year.
Yours Sincerely,
Simon Hadfield
Chairman
27th September 2018
3
Company Overview
Peel Mining Limited (“Peel”) is a base and precious metals explorer focused on the Cobar Region of New
South Wales, Australia. Peel Mining Ltd has been active in the Cobar basin since March 2010. In that
time, Peel has grown to become NSW’s predominant greenfield’s explorer, gaining the largest single
company holding of over 5,000 km2 in the Cobar basin. The Company has three major project areas;
the Mallee Bull Joint Venture, Cobar Superbasin Project and Wagga Tank project area.
The Mallee Bull Project is centred on the namesake Mallee Bull copper deposit, discovered in August
2011. In 2012 CBH Resources Limited farmed into the project spending $8.1 million to earn a 50%
interest. Mallee Bull represents one of the highest grade, undeveloped copper resources in Australia
with an updated resource estimate published in July 2017 (See mineral estimation tables’ page 12 of
this report).
Peel’s Cobar Superbasin Project (CSP) is under a farm-in agreement with Japanese Oil Gas and Metals
National Corporation (JOGMEC) which is earning up to a 50% interest by spending up to $7 million
exploration expenditure. The project consists of 16 highly prospective tenements covering ~2,500 km2
in the Cobar Basin. Investigations so far have resulted in the discovery of a significant copper
mineralised system at the Wirlong prospect.
Wirlong has received minimal modern exploration and is defined by >2 km strike of sheared volcanics
and sediments; large multi-element soil geochemical anomalies; and coincident/semi-coincident
geophysical anomalies.
Wagga Tank is located ~130 km south of Cobar on the western edge of the Cobar Superbasin.
Mineralisation represents a polymetallic Cobar-style or VHMS-type deposit with multiple significant
historic drill intercepts. The mineralisation is interpreted to occur as sub-vertical elongate shoots/lenses
within zones of brecciation and hydrothermal alteration.
Mineralisation discovered by historic drilling (20 percussion drillholes and 22 diamond drillholes)
comprises a near surface oxide gold zone, a possible supergene-enriched copper-gold-silver zone, and
a primary zinc-lead-silver -rich massive sulphide zone starting at the base of oxidation (~120m below
surface). In 2016, Peel acquired 100% of the Wagga Tank licences in a non-dilutive acquisition for
$40,000 and a 2% Net Smelter Royalty (“NSR”). No significant exploration including drilling had occurred
since 1989 after the ground had been land banked by major companies. Post year end, the Company
has agreed to purchase the NSR in accordance with its first right of refusal.
4
Wagga Tank - Southern Nights
The Company’s focus during the year was at the Wagga Tank/Southern Nights prospect, following the
success of an initial 18-hole maiden drilling program. The second phase of drilling commenced in late
May 2017, which led to the discovery of significant zinc-lead-silver mineralisation at the “Southern
Nights” prospect located almost 1km south of the main deposit. Better intercepts as part of Phase 2
drilling are listed below. The true widths of reported downhole intervals are approximately 30-50% for
all west-oriented (270 degree collar azimuth) drillholes and 70-90% for east-oriented (085/090 degree
collar azimuth) drillholes.
6m @ 8.52% Zn, 2.97% Pb and 12 g/t Ag from 282m in WTRCDD020
20m @ 2.40% Zn, 0.80% Pb, 44 g/t Ag from 390m in WTRCDD021
11m @ 7.15% Zn and 2.31% Pb, 58 g/t Ag from 396m in WTRCDD023
15m @ 1.02% Zn, 0.42% Pb, 28.8 g/t Ag from 112m, 6m @ 1.27% Zn, 0.58% Pb, 73.4 g/t Ag from
139m and 6m @ 1.99% Zn, 0.45% Pb, 27 g/t Ag from 179m to end-of-hole in WTRC031
142.1m @ 7.39% Zn, 3.76% Pb, 0.15% Cu, 101 g/t Ag, 0.54 g/t Au from 108m in WTRCDD033
21m @ 31.02% Zn, 12.05% Pb, 258 g/t Ag, 1.43 g/t Au from 194m in WTRC035
102m @ 4.3% Zn, 1.14% Pb, 0.41% Cu, 27g/t Ag, 0.44 g/t Au from 195m in WTRCDD043
19m @ 10.9% Zn, 3.6% Pb, 0.13% Cu, 0.99 g/t Ag, 0.46 g/t Au from 215m in WTRCDD062
18m @ 8.58% Zn, 3.02% Pb, 40 g/t Ag, 0.08 g/t Au from 180m in WTRC063
Phase 2 drilling also saw the completion of 84 RAB holes over the Wagga Tank/Southern Nights
prospect areas to test for geochemical anomalism and locate the contact between the Wagga Tank and
Vivigani stratigraphic units. The RAB drilling succeeded in extending the strike of lead-zinc anomalism,
which remains open, to ~2.7km.
Drilling under Phase 3 at the Wagga Tank-Southern Nights prospect commenced in January 2018 with
several aims: test the strike and down-dip potential of the local Southern Nights area; and test the
mineralisation in the Wagga Tank-Southern Nights “corridor” zone. Better intercepts as part of Phase 3
drilling are listed below.
17m @ 2.8% Zn, 0.96% Pb, 0.21% Cu, 469 g/t Ag, 0.91 g/t Au from 181m in WTRCDD064
13.1m @ 5.49% Zn, 1.53% Pb, 0.39% Cu, 31 g/t Ag, 0.51 g/t Au from 259.8m in WTRCDD075
31m @ 3.7% Zn, 1.51% Pb, 0.25% Cu, 25 g/t Ag, 0.19 g/t Au from 274m including 7m @ 11.32%
Zn, 4.92% Pb, 49 g/t Ag, 0.23 g/t Au from 277m in WTRCDD081
19m @ 3.52% Zn, 1.11% Pb, 18 g/t Ag, 0.1 g/t Au from 278m including 5m @ 8.18% Zn, 3.75% Pb,
46 g/t Ag, 0.12 g/t Au from 279m in WTRCDD084
9.3m @ 10.24% An, 0.44% Pb, 0.31% Cu, 23 g/t Ag, 0.32 g/t Au from 261.9m in WTRCDD105
46.4m @ 3.91% Zn, 1.51% Pb, 60 g/t Ag, 0.17 g/t Au from 227.6m including 18.9m @ 7.00% Zn,
2.74% Pb, 112 g/t Ag, 0.35 g/t Au from 227.6m in WTRCDD106
30m @ 1.59% Zn, 0.64% Pb, 16 g/t Ag from 258m including 3m @ 6.71% Zn, 3.07% Pb, 78 g/t Ag
from 258m in WTRCDD107
11.9m @ 3.02% Zn, 1.39% Pb, 203 g/t Ag from 240m including 7.4m @ 4.88% Zn, 2.08% Pb, 311
g/t Ag from 241m in WTRCDD108
Of note is the strongly mineralised intercept returned from drillholes within the Wagga Tank-Southern
Nights corridor which establishes a link between the two deposits:
5.5m @ 5.68% Zn, 3.07% Pb, 60 g/t Ag from 215.5m in WTRCDD101
14.45m @ 2.43% Cu, 2.67 g/t Au, 123 g/t Ag, 2.58% Zn, 0.87% Pb from 435.55m in WTRCDD123
5
An offhole conductor detected from DMEM of WTRCDD123 suggests likely extensions to mineralisation
The down-dip continuity of mineralisation was successfully tested with returned important mineralised
intercepts at more than 350m below surface:
22.1m @ 6.62% Zn, 2.19% Pb, 0.87% Cu, 60 g/t Ag, 0.42 g/t Au from 459m in WTRCDD122
Post year end, the Company has started planning for the next phase of drilling at Southern-
Nights/Wagga Tank with the goal of establishing a maiden resource at the prospect by mid-2019.
Fenceline/The Bird
The Fenceline prospect, also known as ‘The Bird’, is located approximately 4km east of the Wagga Tank-
Southern Nights prospect area, and is defined by historic RC and/or diamond drillholes designed to test
a coherent surface lead geochemical anomaly. Notable historic intercepts include:
15m @ 2.02% Zn, 3.08% Pb, 18 g/t Ag, 1.03 g/t Au from 115m in diamond hole FLDH-1
7m @ 4.71% Zn, 3.49% Pb, 39 g/t Ag, 0.74 g/t Au from 84m in RC hole FLP-1
10m @ 2.34 g/t Au from 80m in RC hole FLP-2
4m @ 4.04% Zn, 1.57% Pb, 4.8 g/t Ag in RC hole FLP-3
18.9m @ 7.38% Pb, 0.28% Zn, 35.3 g/t Ag, 1.21 g/t Au from 115m (incl. 6m @ 16.3% Pb, 0.58%
Zn, 77.3 g/t Ag, 2.53 g/t Au from 118.2m and 3.7m @ 10.3% Pb, 0.34% Zn, 51.4 g/t Ag, 1.46 g/t Au
from 128.4m) in RC/diamond tail hole HFLD5
The maiden RC drilling program at Fenceline was completed this year, comprising a total of 12 holes
(2,256m) to follow-up significant historic intercepts as well as test a strong >2.5km strike chargeability
anomaly identified from an IP survey completed in Nov/Dec 2017. Multiple drillholes returned high-
grade supergene Pb-Au-Ag mineralisation or primary sulphide mineralisation akin to that at Wagga
Tank and Southern Nights. An additional 7 RC drillholes (1,398m) and 1 AC drillhole (125m) were
subsequently completed with the aim of extending this new mineralisation along strike to the north
and south. Best intercepts from the laboratory results are listed below:
27m @ 11.26% Pb, 61 g/t Ag, 2.22 g/t Au from 116m in TBRC001
8m @ 8.93% Pb, 29 g/t Ag, 1.07 g/t Au from 90m in TBRC002
2m @ 1.14% Zn, 0.98% Pb, 16 g/t Ag from 105m and 3m @ 2.13% Zn, 0.63% Pb from 162m in
TBRC011
4m @ 1.52% Zn, 0.83% Pb, 22 g/t Ag from 129m and 2m @ 7.48% Zn, 4.49% Pb, 0.23% Cu, 36 g/t
Ag, 0.21 g/t Au from 137m in TBRC012
8m @ 6.29% Pb, 33 g/t Ag, 0.94 g/t Au from 94m in TBRC029
6m @ 2.62% Pb, 18 g/t Ag, 1.76 g/t Au from 97m in TBRC030
3m @ 5.41% Zn, 2.78% Pb, 0.25% Cu, 43 g/t Ag, 0.15 g/t Au from 159m in TBRC033
A strong chargeable zone is coincident with anomalous surface geochemistry and historic workings
located 1.5km north of Fenceline, at The Bird prospect. Future activity at Fenceline and The Bird
prospects will involve diamond drilling to gain a better understanding of the structural setting.
6
Wagga Tank-Southern Nights Drill Plan
Gilgunnia/Mallee Bull Project
The Gilgunnia/Mallee Bull 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. Peel and CBH Resources Limited (a wholly owned subsidiary of the Japanese
listed Toho Zinc Co. Ltd.) are in a 50:50 Joint Venture over the project tenements EL7461 and ML1361.
7
Mallee Bull is interpreted to be located in a favourable geological and structural position; it is situated
in the high-stress environment of the “nose” of an anticline, and occurs in a geological sequence of
turbidite and volcaniclastic sediments which are thought to be age equivalent to the Chesney and Great
Cobar Slate Formations found in the immediate Cobar region. Mineralisation occurs either as massive
sulphide or breccia/stringer styles within a package of brecciated volcaniclastic and turbidite sediments
comprising siltstones and mudstone, and is interpreted to occur as a shoot/lens-like structure dipping
moderately to the west. The deposit has been currently split into three lenses; Silver Ray, Union Lode
and Mallee Bull Deeps.
Silver Ray Pre-feasibility Study
This financial year, Peel and JV partner CBH Resources Limited focused on the Silver Ray lens (formerly
T1) pre-feasibility study. The pre-feasibility study aims to investigate the conceptual development of the
Silver Ray lens as a "dig and truck" operation under which ore would be milled at CBH’s Endeavor mine
approximately 150km away, where surplus milling capacity exists.
Drilling at Mallee Bull this financial year commenced with a program focused on the Silver Ray high-
grade near-surface zinc-lead-silver-gold lens (formerly known as ‘T1’). The program aimed to: infill to a
maximum of 20m by 20m drill spacing, define the limits of the Silver Ray mineralisation and provide
material for ongoing metallurgical test work and geotechnical review. All pending laboratory assays of
the previous financial year were returned, with the significant intercepts listed below:
10m @ 7.10% Pb, 19 g/t Ag and 0.53 g/t Au from 46m in MBRC073
3m @ 5.98% Zn, 3.33% Pb, 54 g/t Ag from 77m in MBRC084
9m @ 20.82% Zn, 10.64% Pb, 338 g/t Ag and 1.91 g/t Au from 88m in MBRC085
3m @ 12.74% Zn, 6.93% Pb, 263 g/t Ag and 1.25 g/t Au from 119m in MBRC088
9m @ 10.80% Zn, 6.89% Pb, 337 g/t Ag and 0.45 g/t Au from 129m in MBRC089
Towards year end, the Joint Venture undertook a program which comprised of 16 RC/diamond
drillholes, aimed to infill to a maximum of 30m spacing between drill intercepts into the Union Lode,
located between ~180m and ~300m below surface. This would allow for an update to the Union Lode
resource model to an indicated mineral resource estimate. Initial interpretation of drilling results
indicates that the area of interest shows continuity of the Mallee Bull Deeps lode (stringer/breccia style)
mineralisation.
Significantly, the high-grade intervals returned from drillholes MBRCDD110 - 14.15m @ 4.27% Cu, 51 g/t
Ag, 0.25 g/t Au from 262m; and MBRCDD115 -11m @ 9.02% Cu, 114 g/t Ag, 0.37 g/t Au from 296m rank
as the best copper mineralised intercepts returned from the deposit. The true width on mineralised
intercepts is estimated to be ~80% of the downhole width. Other significant assays include:
16m @ 2.19% Cu, 49 g/t Ag, 0.38 g/t Au from 237m including 9m @ 2.69% Cu, 67 g/t Ag, 0.43
g/t Au from 242m in MBRCDD104
18m @ 1.53% Cu, 24 g/t Ag, 0.38 g/t Au from 234m including 4.86m @ 3.53% Cu, 34 g/t Ag,
0.64 g/t Au from 234.86m in MBRCDD113
5m @ 11.09% Zn, 5.48% Pb, 32 g/t Ag, 0.14 g/t Au from 305m in MBRCDD106
13m @ 1.76% Cu, 9 g/t Ag, 0.05 g/t Au from 281m including 4m @ 2.90% Cu, 12 g/t Ag, 0.06
g/t Au from 288m in MBRCDD103
An indicated mineral resource estimate is expected to be completed towards the end of 2018.
8
Mallee Bull: Section view drilling Silver Ray/Union Lodes
9
Cobar Superbasin Project
Work on the Cobar Superbasin Project continued during the year with Japan Oil, Gas and Metals
National Corporation (JOGMEC) completed their earn-in up give it the option to take up a 50% interest
in the project by funding $7 million of exploration expenditure. Work focused on the Wirlong prospect,
located within EL8307, approximately 30km SW of Nymagee and 80km SSE of Cobar.
Peel was initially drawn to the area by the presence of historic copper workings, a topographic high, a
multi-element surface geochemical anomaly and coincident or semi-coincident magnetic, radiometric,
gravity, IP and electromagnetic anomalies. It has since proven to represent a very large hydrothermal
system hosting significant copper mineralisation along more than 2.5km strike length and to depths of
up to 950m.
Drilling completed in late July 2017, was highly successful in its aims to better define and extend the
known mineralised system. Exceptional copper-silver drill intercepts returned such as:
27m @ 5.3% Cu, 23 g/t Ag from 286m from WLRC026
31m @ 3.19% Cu, 11 g/t Ag from 299m (including 10m @ 8.83% Cu, 28 g/t Ag from 299m) in
WLRC052
24m @ 0.85% Cu, 8 g/t Ag from 179m in WLRC053
Additional drilling at Wirlong was completed in January 2018 and comprised 2 RC/diamond drillholes,
WLRCDD056 to test the southern extension of known mineralisation and WLRCDD057 over the ‘Dirty
Deeds’ gravity anomaly. Anomalous mineralisation was encountered in both drillholes, however not to
economic grades. Following the completion of the final earn-in by JOGMEC, there has been a pause in
activities. A pro rata funding period under the farm-in agreement is expected to commence later in
2018 with both parties funding 50% of exploration.
Corporate
In early September 2017, plans to vend Peel's Apollo Hill gold project to the newly established, 100%-
owned subsidiary, Saturn Metals Limited (Saturn) were announced. An agreement was subsequently
entered into by Peel's 100%-owned subsidiary Apollo Mining Pty Ltd (Apollo), which held the Apollo Hill
assets, to sell its interest in the tenements and contractual rights and obligations to Saturn.
As consideration for the assets, Saturn issued 20,000,000 fully paid ordinary shares to Peel as Apollo's
nominee. The company held a general meeting on the 10th October 2017 at which shareholder
approval was obtained for the transaction. All tenements and applications were subsequently
transferred to Saturn. Saturn opened its Initial Public Offering on the 10th January 2018 seeking to raise
up to $7,000,000 though the issue of up to 35,000,000 shares at $0.20 per Share. The offer was
announced and closed on the 20 February 2018 with the maximum amount of $7,000,000 raised. The
Company was admitted to the Official List of ASX Limited on Wednesday 7 March 2018. Official
Quotation of the following securities commenced on Friday, 9 March 2018. Post float and at year end,
Peel held a 35.71% stake in Saturn.
In November Peel completed a placement of 15,000,000 fully paid ordinary Peel shares at an issue
price of $0.40 each, raising $6,000,000 before costs. The placement, which was priced at an 11.1%
discount to Peel’s last traded price of $0.45 and a 5% discount to the Company’s five-day volume
weighted average price (VWAP), was significantly oversubscribed, reflecting excellent support from
major shareholders and new sophisticated and institutional investors. The majority of these funds were
used to progress the Company’s Wagga Tank/Southern Nights project.
10
Post year end the company announced that it had successfully completed an oversubscribed
placement raising $3.6 million, and in conjunction with a fully underwritten rights issue to raise a
further $8.7 million, will raise a total of $12.3 million. The placement was strongly supported, with
existing major shareholders, institutional, sophisticated and strategic investors participating.
The fully underwritten non-renounceable pro-rata rights issue offering eligible shareholders the
opportunity to subscribe for one (1) new fully paid ordinary share (New Share) for every eight (8) fully
paid ordinary shares (Shares) held at the record date at an issue price of $0.36 per New Share (Rights
Issue or Offer). Approximately 24.3 million New Shares were be offered to eligible shareholders under
the Rights Issue to raise approximately $8.7 million before costs.
At the time of this report the rights issue was still in process. Funds from the rights issue will
predominantly be used to deliver a maiden JORC Resource at Wagga Tank/ Southern Nights. Funds
from the placement component of the raising is to be used to fund the purchase of the 2% Net Smelter
Royalty (NSR) over the Wagga Tank and Mt View tenements in Cobar NSW. MMG Limited (MMG), the
holder of the royalty, notified Peel on 10 August 2018 that it had received an offer from a TSX-listed
royalty streaming business to purchase the NSR.
Pursuant to Peel’s first right of refusal under the Royalty Deeds, MMG offered to sell the 2% NSR to Peel
for $3.3 million (incl GST) in cash. In accordance with the terms of the relevant Royalty Deeds, Peel has
elected to exercise its right to acquire the royalty interests. Following the acquisition Peel will have
unencumbered 100% ownership of the tenements acquired from MMG. At the time of this report the
transaction had yet to be completed.
11
Mineral Resource Estimation Governance Statement
The Mallee Bull Mineral Resource estimate was unchanged for the year, after being updated in 2016. The
Attunga Mineral Resource estimates remained unchanged from the Resources estimate as at 30 June 2014.
Peel Mining Ltd has ensured that the Mineral Resource estimates are subject to good governance
arrangements and internal controls. The Mineral Resources reported have been generated by independent
external consultants who are experienced in best practices in modelling and estimation methods. The
consultants have also undertaken a review of the quality and suitability of the underlying information used
to generate the resource estimations. Additionally, Peel Mining Ltd carries out regular reviews and audits of
internal processes and external contractors that have been engaged by the Company.
The Mineral Resources estimates for Mallee Bull and Apollo Hill were compiled and reported in accordance
with the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the
JORC Code) 2012 Edition, whilst the Attunga Resource Estimate was completed in accordance with the JORC
Code 2004 Edition.
The tables below set out Mineral Resource estimates for 2018, which are unchanged from 2017.
Mallee Bull Mineral Resource estimate at 30 June 2018 based on 1% copper equivalent (CuEq) cut-off grade
Mineral Resource - as at 30 June 2018
Category
Kt
Indicated
Inferred
Total
1,340
5,420
6,760
CuEq
%
2.15
2.7
2.6
Cu
%
0.91
2
1.8
Ag g/t
Au g/t
Pb %
Zn %
30
31
31
0.4
0.4
0.4
0.96
0.5
0.6
1.23
0.4
0.6
Note: The figures in the above table are rounded to reflect the precision of the estimates and include
rounding errors.
Attunga Tungsten Deposit Inferred Mineral Resource Estimate based on a 0.2% WO3 equivalent cut-off
Mineral Resource - as at 30 June 2018
Mt
WO3 % Mo %
WO3equivalent
cut-off
0.2
WO3Eq
%
0.73
1.29
0.61
0.05
Note: The figures in the above table are rounded to reflect the precision of the estimates and include
rounding errors.
12
Competent Persons Statements
Mallee Bull
The information referred to in this announcement in relation to the Mallee Bull Resource Estimate is
based on information compiled by Jonathon Abbott, a Competent Person who is a Member of the
Australian Institute of Geoscientists. At the time of calculating the Resource Estimate Mr Abbott was a
full time employee of MPR Geological Consultants Pty Ltd and is an independent consultant to Peel
Mining Ltd.
Mr Abbott has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as defined
in the 2012 Edition of the 'Australasian Code of Reporting of Mineral Resources and Ore Reserves'. Mr
Abbott consented to the release of the matters based on his information in the form and context in
which it appears.
Attunga Tungsten Deposit
The information referred to in this announcement in relation to the Attunga Resource Estimate is based
on information compiled by Mr Murray Hutton, a Competent Person who is a Member of the Australian
Institute of Geoscientists. At the time of calculating the Resource Estimate Mr Hutton was a full time
employee of Geos Mining and was an independent consultant to Peel Mining Ltd.
Mr Hutton has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as defined
in the 2004 Edition of the 'Australasian Code for Reporting of Mineral Resources and Ore Reserves'. Mr
Hutton consented to the inclusion of the matters based on his information in the form and context in
which it appears.
Peel Mining Exploration Results
The information in this report that relates to Exploration Results is based on information compiled by
Rob Tyson who is a fulltime employee of the company. Mr Tyson is a member of the Australasian
Institute of Mining and Metallurgy.
Mr Tyson has sufficient experience of relevance to the styles of mineralisation and the types of deposits
under consideration, and to the activities undertaken, to qualify as Competent Persons as defined in
the 2012 Edition of the Joint Ore Reserves Committee (JORC) 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 information in the form and context in which it appears. Exploration
results are based on standard industry practices, including sampling, assay methods, and appropriate
quality assurance quality control (QAQC) measures.
13
Project
Burthong
Gilgunnia South
Glenwood
Hillview
Illewong
Iris Vale
Manuka
Mirrabooka
Mundoe
Mundoe North
Norma Vale
Pine Ridge
Sandy Creek
Tara
Yackerboon
Yara
Attunga
Ruby Silver
Gilgunnia
May Day
Beanbah
Brambah
Linera
Marigold
Michelago
Mt View
Mt Walton
Nombinnie
Wagga Tank
Wongawood
Bilpa
Cymbric Vale
Comarto
Devon
Number
Holder
Peel Interest
EL8534
EL7519
EL8314
EL8125
EL8117
EL8113
EL8071
EL8105
EL7976
EL8201
EL8126
EL8345
EL8307
EL8070
EL8112
EL8114
EL8326
EL7711
EL7461
ML1361
EL8450
EL8655
EL8447
EL8656
EL8451
EL7484
EL8414
EL8751
EL6695
EL7226
EL8721
EL8722
EL8790
EL8791
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty Ltd
Peel (CSP) Pty 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 Far West Pty Ltd
Peel Far West Pty Ltd
Peel Far West Pty Ltd
Peel Far West Pty Ltd
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
100%
100%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
14
Your directors present their report on the consolidated entity (“Group”) comprising Peel Mining Limited
(“Company”) and the entities it controlled at the end of, or during the financial year ended 30 June 2018
and the comparative period.
Directors
The following persons were directors of Peel Mining Limited during the financial year and up to the
date of this report.
Simon Hadfield
Graham Hardie
Robert Tyson
Directors’ interests in shares and options
Directors’ interests in shares and options as at the date of this report are set out in the table below.
Director
Simon Hadfield
Graham Hardie
Robert Tyson
Principal activities
Shares Directly and Indirectly Held
3,812,564
15,422,890
7,080,000
Options
1,500,000
1,500,000
3,000,000
The principal 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 for the Group for the financial year after providing for income tax amounted to $1,672,686
(2017: $1,140,539).
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 4 to 13 in this report.
Significant changes in the state of affairs
Contributed equity increased during the financial year by $6,218,600 through the issue of:
(i) 15,000,000 new ordinary shares at $0.40 each as part of a placement to new and existing
shareholders.
(ii) 1,000,000 new ordinary shares issued at $0.07 cents on the exercise of R Tyson’s options as
outlined below.
(iii) 750,000 new ordinary shares issued on the exercise of employee share options raising $148,000.
Details of the changes in contributed equity are disclosed in note 11 to the financial statements.
15
Peel Mining Limited successfully vested the Apollo Hill project in a newly formed 100% owned
subsidiary, Saturn Metals Limited (Saturn). The purpose of this was to list the new entity on the
Australian Stock Exchange (ASX). After a successful Initial Public Offering which raised $7,000,000
though the issue of 35,000,000 shares at $0.20 per Share, the new entity was admitted to the Official
List of ASX Limited on Wednesday 7 March 2018. Official Quotation of the securities commenced on
Friday, 9 March 2018. Post float and at year end, Peel held a 35.71% stake in Saturn.
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 as disclosed in this report.
Events occurring after balance date
On the 7th September 2018, Peel Mining Limited announced that it had successfully completed an
oversubscribed placement raising $3.6 million. At the same time, it announced plans to undertake a
fully underwritten rights issue to raise a further $8.7 million. The placement was strongly supported,
with major existing shareholders, institutional, sophisticated and strategic investors all taking part.
Capital raised would be used to deliver a maiden JORC Resource at Wagga Tank, advance Mallee Bull
towards production, and complete the acquisition of the 2% NSR royalty over Wagga Tank. The
company is exercising its pre-emptive right to purchase 2% NSR royalty from MMG for $3,300,000 (incl
GST).
The company lodged its prospectus for the fully underwritten rights issue with ASIC and the ASX on 10
September 2018. The offer is set to close on 3 October 2018 and the issue date of shareholder
securities would be 9 October 2018 (per the announcement made to the ASX on 25 September 2018).
Other than the above, there were no events occurring after balance date requiring separate disclosure.
Likely developments and expected results
It is the Board’s current intention that the Group will seek to progress exploration on current projects.
These activities are inherently risky and there are no certainties that the group will successfully achieve
its objectives.
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 a director of RIU Conferences Pty Ltd,
Resource Information Unit, and of Sensorum Pty Ltd. No other directorships were held in the past 3
years.
Mr Hadfield holds 3,812,564 shares in Peel Mining Limited and 1,500,000 share options.
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
currently also holds the role of Executive Chairman of Saturn Metals Limited. Mr Tyson has more than
10 years of senior management experience. No other directorships were held in the past 3 years.
Mr Tyson holds 7,080,000 shares in Peel Mining Limited and 3,000,000 share options.
16
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. Mr Hardie 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.
No other directorships were held in the past 3 years.
Mr Hardie holds 15,422,890 shares in Peel Mining Limited and 1,500,000 share options.
Ryan Woodhouse - Company Secretary
Mr Woodhouse has 11 years of experience in the mining and energy industries in the area of
accounting and governance. He holds a Bachelor of Commerce from Curtin University and is a member
of the Institute of Chartered Accountants. Mr Woodhouse currently holds the position of Company
Secretary with both Peel Mining Limited and Saturn Metals Limited.
Mr Woodhouse was appointed Company Secretary on 7 January 2015.
Meetings of directors
Director’s attendance at directors meetings are shown in the following table:
Director
S Hadfield
G Hardie
R Tyson
Number held whilst in office
Number attended
8
8
8
8
8
8
17
The remuneration report is set out under the following headings:
Principles used to determine the nature and amount of remuneration
a)
b) Details of remuneration
Service agreements
c)
Share-based compensation
d)
e) Option holdings of key management personnel
f)
g) Other transactions with directors and key management personnel
h) Additional information
Share holdings of directors
a) Principles used to determine the nature and amount of remuneration
The objective of the remuneration framework of Peel Mining Limited is to ensure reward for
performance is competitive and appropriate for the results delivered. The framework aligns executive
reward with achievement of strategic objectives and the creation of value for shareholders. The board
believes that executive remuneration satisfies the following key criteria:
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
capital management
These criteria result in a framework which can be used to provide a mix of fixed and variable
remuneration, and a blend of short and long-term incentives in line with the Company’s remuneration
policy.
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 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 of fees of the non-executive directors has been fixed at a maximum of $250,000 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. Senior management are paid based on applicable market rates.
Remuneration is not linked to past Group performance but rather towards generating future
shareholder wealth through share price performance. The board and management are issued share
options in the company on a periodic basis as a means to link executive rewards to shareholder value.
Peel Mining Limited listed on 11 May 2007 at 20c per share and the share price at 30 June 2018 was 47c
(2017: 19c). The Company has recorded a loss each financial year to date, except for 2014 during which
it recorded a gain on the partial disposal of the Mallee Bull Project. No dividends have been declared or
paid during the reporting period.
18
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 other key management personnel of the Group during the year ended 30 June 2018
are set out in the following table:
Table 1: Director and Key Management Personnel remuneration
Short-Term
Employment
Benefits
Cash salary
and fees
Post-
Employment
Long-Term
Benefits
Share Based
Payment
Superannuation Long-service
Options
Total
Performance
Related
$
$
$
$
%
230,000
50,000
50,000
330,000
23,006
4,750
4,750
32,506
3,830
-
-
3,830
300,911
164,087
164,087
629,085
557,747
218,837
218,837
995,421
0%
0%
0%
0%
2018
Directors
R Tyson
S Hadfield
G Hardie
Total
Short-Term
Employment
Benefits
Cash salary
and fees
Post-
Employment
Long-Term
Benefits
Share Based
Payment
Superannuation Long-service
Options
Total
Performance
Related
$
2017
Directors
R Tyson
S Hadfield
G Hardie
Other Key Management Personnel
Ryan
Woodhouse*
Total
230,000
50,000
50,000
129,462
$
23,531
4,750
4,750
$
$
%
3,830
-
-
160,270
50,515
50,515
417,631
105,265
105,265
0%
0%
0%
0%
0%
782,690
*From 1 July 2017 Mr R Woodhouse was not considered Key Management Personnel.
459,462
274,068
45,330
3,830
12,299
-
12,768
154,529
leave
$
leave
$
c) Service agreements
Remuneration and other terms of employment for the directors and key management personnel,
except those of non-executive directors are formalised in Employment Agreements or Letters of Offer.
Details of the employment conditions for directors and key management personnel are set out below:
S Hadfield (non-executive chairman)
Mr Hadfield was appointed a director of the Company on 20 April 2006. Mr Hadfield has not entered
into a formal contract with the Company in respect to his appointment as a non-executive director. Mr
Hadfield received cash payments and share options totalling $218,837 (2017: $105,265) in his role as a
non-executive director of the Company.
19
G Hardie (non-executive director)
Mr Hardie was appointed a director of the Company on 24 February 2010. Mr Hardie has not entered
into a formal contract with the Company in respect to his appointment as a non-executive director. Mr
Hardie received cash payments and share options totalling $218,837 (2017: $105,265) in his role as a
non-executive director of the Company.
R Tyson (managing director)
Mr Tyson was appointed a director of the Company on 20 April 2006. Mr Tyson is employed as the
Managing Director of the Company under an ongoing contract. The terms of his contract state:
The managing director receives fixed remuneration of $230,000 per annum gross, plus
statutory superannuation guarantee.
Either the managing director or the Company may terminate the employment at any time by
giving one month written notice.
If the Company terminates the employment the managing director will receive payment of five
weeks’ pay.
The managing director may be invited to participate in the Company’s Employee Share Option
Plan.
If the Company terminates the employment of the managing director any active share options
issued will be cancelled.
Mr Tyson received cash payments, leave entitlements and share options totalling $557,747 (2017:
$417,631) in his role as a Managing Director of the Company.
d) Share-based compensation
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 21 to the financial statements.
Name
Fair Value at Grant Date
Directors
Simon Hadfield
Graham Hardie
Rob Tyson
2018
$
164,087
164,087
328,174
2017
$
50,515
50,515
160,270
Number of options
granted during year
2017
2018
$
$
500,000
500,000
2,000,000
500,000
500,000
1,000,000
Number of options vested
during year
2018
$
500,000
500,000
500,000
2017
$
500,000
500,000
1,000,000
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. Fair values at grant date have been determined using a Black-
Scholes option pricing model that takes into account the exercise price, term of the option, impact of
dilution, share price at grant date, price volatility of the underlying share, expected dividend yield and
the risk-free interest rate for the term of the option.
Options over shares in Peel Mining Limited may be granted to Employees under the Company’s
Employee Share Option Plan, which was initially created in June 2008, and recently re-approved by
shareholders at the annual general meeting held on 22 November 2016. The Employee Share 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 employee is still employed by the Company at the
end of the vesting period. Participation in the plan is at the board’s discretion.
20
The terms and conditions of each grant of options existing for both directors and employees at
reporting date is as follows:
Grant Date
Date Vested &
Exercisable
Expiry Date
Exercise Price
Value per
Option at Grant
Date
7 December 2015
7 December 2015 (100%)
7 December 2018
21.6 Cents
9 cents
19 October 2015
19 October 2015 (50%)
19 October 2016 (50%)
10 October 2016
10 October 2016 (50%)
10 October 2017 (50%)
19 October 2018
19 cents
8 cents
10 October 2019
20.3 cents
8 cents
28 November 2016
28 November 2016 (67%)
28 November 2017 (33%)
28 November 2019
22.3 cents
10 cents
15 August 2017
15 August 2017 (50%)
15 August 2018 (50%)
15 August 2018
26 cents
11 cents
30 November 2017
30 November 2017 (67%)
30 November 2018 (33%)
30 November 2020
78.3 cents
33 cents
21
(e) Option holdings of key management personnel (KMP)
Balance
at the
start of
the year
3,000,000
30 June
2018
Directors
R Tyson
S Hadfield 1,000,000
G Hardie
1,000,000
Granted
as
compensation
Expired
during
year
Exercised
Other
Change
Balance
at end of
the year
Vested
and
exercisable
Unvested
1,000,000
500,000
500,000
-
-
-
(1,000,000)
- 3,000,000
2,500,000
500,000
-
-
- 1,500,000
1,500,000
- 1,500,000
1,500,000
-
-
(f) Share holdings of directors– Shares in Peel Mining Limited (number)
30 June 2018
Directors
G Hardie
R Tyson
S Hadfield
30 June 2017
Directors
G Hardie
R Tyson
S Hadfield
Other Key Management Personnel
R Woodhouse*
Received
during
the year on
the
exercise of
options
Balance at
1 July 2017
Other changes
during the year
Balance at
30 June 2018
15,422,890
7,080,000
3,812,564
-
1,000,000
-
-
(1,000,000)
-
15,422,890
7,080,000
3,812,564
Received
during
the year on
the
exercise of
options
-
-
-
-
Balance at
1 July 2016
15,422,890
7,080,000
3,812,564
200,000
Other changes
during the year
Balance at
30 June 2017
-
-
-
-
15,422,890
7,080,000
3,812,564
200,000
*From 1 July 2017 Mr R Woodhouse was not considered Key Management Personnel.
(g) Other transactions with directors and key management personnel
Simon Hadfield, is a director of Resource Information Unit Pty Ltd (RIU). RIU leases the Company office
space and charges the Company lease fees on arm’s length commercial terms on a monthly basis.
Total fees charged to the Company by RIU for the year ended 30 June 2018 were $58,055 (2017:
$59,981).
During the year the Company participated in conferences organised by RIU Conferences Pty Ltd, to the
value of $15,840 (2017: $14,630), a 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 in relation to any unpaid amounts.
22
Aggregate amounts of each of the above types of “other transactions” with key management personnel
of Peel Mining Limited:
Amounts recognised as expense
Rent and office management fees
Conferences
h) Additional information
Cash bonuses
Consolidated
2018
$
58,055
15,840
73,895
Consolidated
2017
$
59,981
14,630
74,611
No cash bonuses have been paid by the Company during the reporting period.
Share-based compensation: options
Other than options granted and exercised under the Employee Option Share 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 2018, 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 2017 Annual General Meeting
Peel Mining Limited received more than 99% of “yes” votes on its remuneration report for the 2017
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
23
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
19 October 2015
7 December 2015 (non-executive directors)
10 October 2016
28 November 2016
5 August 2017
30 November 2017
Expiry date
19 October 2018
7 December 2018
10 October 2019
28 November 2019
5 August 2020
30 November 2020
Issue price of
shares
19 cents
21.6 cents
20.3 cents
22.3 cents
26 cents
78.3 cents
Number
under option
1,100,000
1,000,000
1,000,000
3,000,000
1,050,000
2,000,000
No option holder has any right under the options to participate in any other share issue of the Company.
Shares issued on the exercise of options
Date of Exercise
17 November 2017
28 November 2017
28 November 2017
1 December 2017
25 January 2018
28 March 2018
Issue price of shares
2017
2018
$
$
-
0.19
-
0.203
-
0.26
-
0.07
-
0.19
-
0.19
Number of shares issued
2018
Number
400,000
100,000
50,000
1,000,000
100,000
100,000
1,750,000
2017
Number
-
-
-
-
-
-
-
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $28,650 (2017: $10,266) to insure the
directors and officers of the Group. The policy indemnifies each director and officer of the Group
against certain liabilities arising in the course of their duties.
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.
24
Environmental Regulation
The Group holds exploration licences and mining leases in Australia. 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 jurisdiction’s guidelines
and standards. The Company is not aware of any significant breaches of the licence condition.
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.
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. The Board has
considered the position and is satisfied that the provision of the non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor as set out below did
not compromise the auditor independence requirements of the Corporations Act 2001 for the following
reasons:
All non-audit services have been reviewed by the Board to ensure they do not impact the
impartiality and objectivity of the auditor; and
None of the services undermine the general principles relating to the auditor independence as set
out in APEX 110 Code of Ethics for Professional Accountants.
Details of the fees paid to the auditor during the year can be found at note 22 of the notes to the
consolidated financial statements.
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
Robert Tyson
Managing Director
Perth, Western Australia
27th September 2018
25
Operator management fee income
Interest revenue
Other income
Gain on disposal of asset
Revenue and other income
Share-based remuneration to directors &
employees
Depreciation expense
Employee and directors’ benefit expenses
Exploration expenditure written off
Administration expenses
Loss attributable to associate
Loss before income tax
Income tax benefit (expense)
Consolidated
2018
$
Note
2017
$
110,716
128,158
29,156
333,706
601,736
(753,776)
(64,878)
(461,613)
(673)
(687,333)
(306,149)
162,011
60,772
157,184
-
379,967
(348,527)
(54,646)
(427,987)
(144,737)
(544,609)
-
(1,672,686)
(1,140,539)
-
-
13
21
7
14
5
14
26
15
Loss from continuing operations after income tax
(1,672,686)
(1,140,539)
Other comprehensive income
-
-
Total Loss and comprehensive income for the
year attributable to the members of Peel Mining
Limited
Basic Loss per share for the year attributable to
the members of Peel Mining Ltd
Diluted Loss per share for the year attributable to
the members of Peel Mining Ltd
23
23
(1,672,686)
(1,140,539)
(0.009)
(0.008)
(0.009)
(0.008)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
26
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Total Current Assets
Non-Current Assets
Security deposits
Property
Plant & equipment
Investment in Saturn Metals Limited
Exploration assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-Current Liabilities
Deferred Income
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Accumulated losses
Option reserve
Total Equity
Consolidated
Note
2018
$
2017
$
4
6
10
6
7
7
26
5
8
9
11
12
12
2,291,570
341,941
-
2,633,511
485,866
840,487
376,975
3,693,852
24,585,053
29,982,233
5,906,983
438,144
3,351,969
9,697,096
415,866
840,487
184,405
-
15,389,576
16,830,334
32,615,744
26,527,430
1,110,533
1,110,533
1,066,333
1,066,333
6,363,688
6,363,688
7,474,221
5,418,541
5,418,541
6,484,874
25,141,523
20,042,556
30,266,457
(7,597,706)
2,472,772
25,141,523
24,248,580
(5,925,020)
1,718,996
20,042,556
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
27
12
11
11
Consolidated
Balance at 1 July 2016 Note
Loss for the year
Total comprehensive
loss for the year
Transactions with
equity holders in their
capacity as equity
holders:
Issue of share capital
Share issue expenses
Share based
payments
Balance at 30 June
2017
Loss for the year
Total comprehensive
loss for the year
Issue of share capital
Share issue expenses
Share based
payments
Balance at 30 June
2018
12
11
11
21
21
Contributed
Equity
$
Accumulated
Losses
$
Option
Reserve
$
Total
Equity
$
18,002,700
(4,784,480)
1,370,469
14,588,689
-
(1,140,539)
-
(1,140,539)
6,268,000
(22,120)
-
-
-
-
-
-
6,268,000
(22,120)
348,527
348,527
24,248,580
(5,925,020)
1,718,996
20,042,556
-
6,218,600
(200,723)
(1,672,686)
-
-
-
-
-
(1,672,686)
6,218,600
(200,723)
-
-
753,776
753,776
30,266,457
(7,597,706)
2,472,772
25,141,523
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
28
Consolidated
Note
2018
$
2017
$
Cash flows from operating activities
Payments to suppliers and employees
Research and Development Tax Incentive - Corporate
Management fee income
Interest received
Net cash outflow from operating activities
16
Cash flows from investing activities
Payments for exploration expenditure
Transfer to security deposits
Transfer from security deposits
Payments for purchase of plant and equipment
Proceeds from sale of plant and equipment
Research and Development Tax Incentive - E&E Asset
Proceeds as part of E&E asset farm-out
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Investment in share capital
Net cash inflow from financing activities
(1,386,797)
29,156
272,727
138,879
(946,035)
(10,063,336)
(110,000)
40,000
(296,500)
20,000
777,436
945,147
(8,687,253)
(1,003,411)
140,350
90,038
48,469
(724,554)
(4,178,943)
(50,000)
-
(59,910)
29,500
1,003,856
1,782,126
(1,473,371)
6,218,600
(200,724)
(1)
6,017,875
6,268,000
(22,120)
-
6,245,880
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the start of year
Cash and cash equivalents at the end of year
(3,615,413)
5,906,983
2,291,570
4,047,955
1,859,028
5,906,983
4
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
29
1. 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 27(b):
Name
Peel Environmental Services
Limited
Apollo Mining Pty Ltd
Peel (CSP) Pty Ltd
Peel Far West Pty Ltd
Saturn Metals Limited *
Country of
Incorporation
Class of
Shares
Equity holding
2018
%
Equity holding
2017
%
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100.00
100.00
100.00
100.00
35.71
100.00
100.00
100.00
0.00
100.00
*During the year, Saturn Metals Limited ceased to be a subsidiary of Peel Mining Limited (See note 26).
2. Interests in other entities
Peel Mining Limited has a 50% interest in a joint arrangement called the Mallee Bull Joint Venture which
was formed after CBH Resources Limited completed its 50% earn-in to the Mallee Bull Project on 27th
March 2015. The joint venture agreement in relation to the Mallee Bull Joint Venture requires
unanimous consent from all parties for all relevant activities. The two joint venture parties own the
assets of the joint venture as tenants in common and their interest in assets and liabilities are several,
separate and distinct.
This entity is therefore classified as a joint operation and the Group recognises its direct right to the
jointly held assets, liabilities, revenues and expenses.
Peel Mining Limited is currently in a farm-in arrangement, through its wholly owned subsidiary Peel
(CSP) Pty Ltd, with JOGMEC. JOGMEC is earning the right to a 50% interest in the tenements held by Peel
(CSP) Pty Ltd through funding exploration expenditure. If JOGMEC decided to take up their interest at
this point a joint arrangement is formed between the parties, in relation to the Cobar Superbasin
Project, which requires unanimous consent from all parties for all relevant activities.
The parties to the joint arrangement will own the assets of the joint arrangement as tenants in
common and their interest in assets and liabilities are several, separate and distinct. If this is to occur
the entity is would be classified as a joint operation and the Group would recognises its direct right to
the jointly held assets, liabilities, revenues and expenses.
During the year, JOGMEC paid the Group $945,147 (2017: $1,782,126) for exploration on the project
and management fees as part of the completion of their Stage 2, $3,000,000 earn-in over three (3)
years to acquire an additional 10% of the project (currently earnt the right to acquire 40% as part of
completion of Stage 1 expenditure).
These amounts have been included in the Group’s Consolidated Statement of Cash Flows and
Consolidated Statement of Financial Position, however per the Group’s accounting policy (see note 27),
the contributions are recorded as deferred income, which will offset the capitalised expenditure
incurred resulting in no gain or loss recognised (net effect) until the point in which the interest is taken
up. Currently no cash held by Peel Mining Limited is restricted to be used on the Cobar Superbasin
Project under JOGMEC’s farm-in arrangement.
30
On 8 September 2017, the Board of Peel Mining Limited announced plans to vend its Apollo Hill Gold
project into Saturn Metals Limited with the intention to list the Saturn Metals Limited on the ASX, via an
Initial Public Offering (“IPO”). The Peel Mining Limited held a general meeting on 10 October 2017 at
which they obtained shareholder approval for the transaction. Post successful IPO/Listing of Saturn
Metals Limited, Peel would hold a significant interest in Saturn Metals Limited.
On the 11th October 2017 the Saturn Metals Limited issued 20,000,000 shares to Apollo Mining Pty
Ltd’s nominee for the purchase of the Apollo Hill Gold project. The nominee company was Peel Mining
Limited, the parent company of both entities.
Saturn Metals Limited opened its Initial Public Offering on the 10th January 2018 seeking to raise up to
$7,000,000 though the issue of up to 35,000,000 shares at $0.20 per Share. The offer was announced
and closed on the 20 February 2018 with the maximum amount of $7,000,000 raised. Saturn Metals
Limited was admitted to the Official List of ASX Limited on Wednesday 7 March 2018. Official Quotation
of the following securities commenced on Friday, 9 March 2018. As at year end, Peel Mining Limited
holds 35.71% of the shares in Saturn Metals Limited.
3. Segment information
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.
Management has determined that the Group has three reportable segments, being mineral exploration
under its joint venture with CBH Resources Limited at its Mallee Bull prospect, mineral exploration
under its farm-in agreement with JOGMEC and the other being all other mineral exploration within
Australia. The Group is focused only on mineral exploration and the Board monitors the Group based
on actual versus budgeted exploration expenditure incurred for these three areas. 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. Decisions regarding the Mallee Bull joint venture is
also taken into account by the board, however exploration decisions are made by the Joint Venture
committee, which is made up of members from both Peel Mining Limited and CBH Resources Limited.
31
Revenue from external sources
Reportable segment profit/(loss)
2018
$
Peel
110,716
110,043
2018
$
CSP
2018
$
Mallee Bull
-
-
-
-
2018
Total
110,716
110,043
Segment assets
Segment liabilities
13,442,571
-
6,990,180
(6,363,688)
5,369,765
-
25,802,516
(6,363,688)
Revenue from external sources
Reportable segment profit/(loss)
2017
$
Peel
-
17,274
2017
$
CSP
2017
$
Mallee Bull
-
-
-
-
2017
Total
-
17,274
Segment assets
Segment liabilities
8,996,479
-
5,989,388
(5,418,541)
4,780,570
-
19,766,437
(5,418,541)
Reconciliation of reportable segment (loss)
Reportable segment profit/ (loss)
Interest & Other income
Unallocated expenses
Profit/(loss) before tax
Reconciliation of reportable net assets
Reportable segment assets
Reportable segment liabilities
Cash
Unallocated Assets
Unallocated liabilities
Total Net Assets
4. Cash & cash equivalents
Cash at bank and in hand
Term deposits with financial institutions
Refer to Note 17 for the policy on financial risk management
5. Exploration and evaluation assets
Consolidated
2018
$
110,043
491,020
(2,273,749)
(1,672,686)
Consolidated
2017
$
17,274
217,956
(1,375,769)
(1,140,539)
25,802,516
(6,363,688)
2,291,570
4,521,659
(1,110,533)
25,141,523
19,766,437
(5,418,541)
5,906,983
854,010
(1,066,333)
20,042,556
Consolidated
2018
$
1,291,570
1,000,000
2,291,570
Consolidated
2017
$
406,983
5,500,000
5,906,983
All exploration and evaluation expenditure is capitalised under AASB 6 Exploration for and Evaluation
of Mineral Resources. Mineral interest acquisition costs and exploration and evaluation expenditure
incurred is accumulated and capitalised in relation to each identifiable area of interest.
32
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 undertaken in relation to
the area of interest.
Amortisation is not charged on costs carried forward in respect of areas of interest in the exploration
and evaluation phase or development phase until production commences. This policy has resulted in
exploration expenditure of $673 (2017: $144,737) being written off during the year.
Peel accounts for funds received from the ATO under the Research and Development (R&D) Tax
Incentive Scheme as an offset to the Exploration and Evaluation asset, where the initial expenses to
which it relates were capitalised. A portion of the R&D Tax Incentive Grant relates corporate overheads,
this portion has been recognised as other income.
At cost
Reconciliation
Opening balance
Exploration expenditure
Assets re-classified as held for sale (see note 10)
Impairment Expense
Research and development tax incentive grant
Closing balance
Consolidated
Consolidated
2018
$
2017
$
24,585,053
15,389,576
15,389,576
9,973,586
-
(673)
(777,436)
24,585,053
15,100,555
4,789,582
(3,351,969)
(144,737)
(1,003,855)
15,389,576
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.
6. 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 potentially unrecoverable amounts. An
allowance for doubtful debts is made when there is objective evidence that the Group may 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.
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.
33
Receivables (Current)
Receivable from JV Partner
Trade and other receivables
Provision for doubtful debt
GST recoverable from taxation authority
Accrued income
Prepayments
Refer to Note 17 for the policy on financial risk management
Receivables (Non-current)
Security deposits in relation to exploration tenements
Consolidated
2018
$
137,499
40,251
(137,499)
259,876
2,597
39,216
341,941
Consolidated
2017
$
137,667
72,569
(137,499)
153,514
175,330
36,563
438,144
485,866
485,866
415,866
415,866
7. Property, plant & equipment
Property (Land held at cost)
Property, being interests in freehold land, is held at historical cost and is not depreciated as per AASB 116
Property, Plant and Equipment.
Plant and equipment
All assets acquired, including plant and equipment are initially recorded at their cost of acquisition,
being the fair value of the consideration provided plus incidental costs directly attributable to the
acquisition. Depreciation on plant and equipment is calculated using the straight-line method to allocate
their cost or revalued amounts over their estimated useful lives from the time the asset is held ready for
use as follows:
- Plant
3-10 years
- Vehicles
3-5 years
3-5 years
- Office equipment
- Computer software 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 impaired.
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.
34
Impairment of assets
At each reporting date, the Group assesses whether there is any indication that an asset may be
impaired. Where an indicator of impairment exists, the Company makes a formal estimate of
recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset
is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs of disposal 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 of disposal 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.
Nil impairment losses have been recognised for the year ending 30 June 2018 (2017: $nil).
Property
Freehold land (at cost)
Plant and equipment
Depreciating plant and equipment
Less accumulated depreciation
Total property, plant and equipment
Reconciliation
Carrying amount at beginning of year
Additions
Depreciation expense
Disposals
Closing balance
8. Trade and other payables
Consolidated
2018
$
840,487
Consolidated
2017
$
840,487
778,029
(401,054)
376,975
1,217,462
1,024,892
275,964
(64,878)
(18,516)
1,217,462
522,496
(338,091)
184,405
1,024,892
1,011,759
80,446
(54,646)
(12,667)
1,024,892
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 payable within 30 days of
invoice. They are recognised initially at fair value and subsequently at amortised cost.
Trade payables
Accrued expenses & other payables
Consolidated
2018
$
635,529
475,004
1,110,533
Consolidated
2017
$
571,043
495,290
1,066,333
35
9. Deferred income
Japan Oil Gas and Metals National Corporation (“JOGMEC”) farm-in agreement
On 30 September 2014, JOGMEC and Peel executed a Memorandum of Agreement (‘MoA”) pursuant to
which JOGMEC could earn up to a 50% interest in certain exploration tenements held by Peel.
Under the terms of this agreement a wholly owned subsidiary of Peel incurred expenses in relation to
the farm-in and JOGMEC contributed to these expenses by way of cash call. Based on the terms of the
agreement, Peel will account for the MoA as per its policy and the agreement with CBH (above), except
the Management Fee of 10% on all expenditure, which is accrued as cash calls are received.
Funds from farm-out of asset to JOGMEC
Total Deferred Income
10. Assets held for sale
Consolidated
2018
$
6,363,688
6,363,688
Consolidated
2017
$
5,418,541
5,418,541
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their carrying amount and fair value
less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits,
financial assets and investment property that are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal
group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less
costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss
previously recognised. A gain or loss not previously recognised by the date of the sale of the
noncurrent asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised. Non-current assets classified as
held for sale and the assets of a disposal group classified as held for sale are presented separately
from the other assets in the balance sheet.
The liabilities of a disposal group classified as held for sale are presented separately from other
liabilities in the balance sheet. A discontinued operation is a component of the entity that has been
disposed of or is classified as held for sale and that represents a separate major line of business or
geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of
business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results
of discontinued operations are presented separately in the statement of profit or loss.
In February 2017, the directors of Peel Mining Limited decided to start the process of floating on the
Australian Stock Exchange the Exploration and Evaluation assets of Apollo Mining Pty Ltd (a wholly
owned subsidiary which forms part of the Peel reportable segment). As part of this the assets would be
transferred to a new wholly owned subsidiary company, Saturn Metals Limited (“Saturn”), prior to Initial
Public Offering. The process was subject to shareholder approval, which was gained at a general
meeting of the company held on 10 October 2017. Assets were transferred to Saturn the following day.
36
After a successful Initial Public Offering which raised $7,000,000 though the issue of 35,000,000 shares
at $0.20 per Share, Saturn was admitted to the Official List of ASX Limited on Wednesday 7 March 2018.
Official Quotation of the following securities commenced on Friday, 9 March 2018. Post float and at
year end, Peel held a 35.71% stake in Saturn.
Opening Balance
Assets transferred from Exploration and Evaluation
Assets sold
Total assets held for sale
11. Contributed equity
Consolidated
2018
$
3,351,969
317,267
(3,669,236)
-
Consolidated
2017
$
-
3,351,969
-
3,351,969
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) are recognised directly in equity.
(a) Share capital
Authorised and issued, ordinary shares fully paid
(b) Movements in ordinary share capital
Consolidated and Parent Entity
2018
2017
Shares
184,035,969
$
30,266,457
Number of
Shares
167,285,969
$
24,248,580
Opening balance, 1 July
167,285,969
24,248,580
132,585,969
18,002,700
Shares issued as a result of exercise of options
1,750,000
218,600
-
-
Shares issued as a result of share placements
15,000,000
6,000,000
34,700,000
6,268,000
Transaction costs on share issues
Adjustments to share issue costs and related tax
-
-
(200,723)
-
-
-
(22,120)
-
Closing balance, 30 June
184,035,969
30,266,457
167,285,969
24,248,580
(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 21.
37
(e) Capital risk management
In employing its capital 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 and/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 production, 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 funding arrangements.
12. Reserves and accumulated losses
(i) Accumulated losses
Opening balance
Loss for the year
Loss attributable to associate
Closing balance
(ii) Option reserve
Opening balance
Option expenses (employee/director options)
Closing balance
Nature and purpose of reserve
Consolidated
2018
$
Consolidated
2017
$
(5,925,020)
(1,366,537)
(306,149)
(7,597,706)
(4,784,480)
(1,140,539)
-
(5,925,020)
1,718,996
753,776
2,472,772
1,370,469
348,527
1,718,996
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.
38
Share options and reserve movements
2018
2017
Options
$
Options
$
Opening balance
7,100,000
1,718,996
3,100,000
1,370,469
Issued to directors, employees and
contractors
Lapsed
Exercised
Closing balance
Exercisable at 7 cents each on or before 4
December 2017
Exercisable at 19 cents each on or before 19
October 2018
Exercisable at 21.6 cents each on or before 7
December 2018
Exercisable at 20.3 cents each on or before 10
October 2019
Exercisable at 22.3 cents each on or before 28
November 2019
Exercisable at 26 cents each on or before 15
August 2020
Exercisable at 78.3 cents each on or before 30
November 2020
3,050,000
-
(1,750,000)
8,400,000
753,776
-
-
2,472,772
4,000,000
-
-
7,100,000
348,527
-
-
1,718,996
-
600,000
1,000,000
800,000
3,000,000
1,000,000
2,000,000
8,400,000
-
-
-
-
-
-
-
-
1,000,000
1,100,000
1,000,000
1,000,000
3,000,000
-
-
7,100,000
-
-
-
-
-
-
-
-
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 (note 21).
13. Other Income
Income recognition
Income is recognised to the extent that it is probable that the economic benefit will flow to the Group
and the income can be reliably measured. The following specific recognition criteria must also be met
before income is recognised.
Interest income
Interest income is recognised as the interest accrues using the effective interest rate method.
Operator Management Fee
Peel Mining Limited receives a 10% management fee on all exploration expenses from Peel (CSP) Pty
Ltd as the operator of the CSP Project, under the JOGMEC farm-in arrangement. The income is accrued
when expenditure is incurred.
R&D Tax Incentive grant income
Peel accounts for funds received from the ATO under the Research and Development (“R&D”) Tax
Incentive Scheme as an offset to the Exploration and Evaluation asset, where the initial expenses to
which it relates were capitalised. A portion of the R&D Tax Incentive Grant relates to corporate
overheads. This portion has been recognised as other income.
Disposal of asset to associate
Peel has elected to apply the full gain recognition in accounting for the disposal of an asset to an
associate. Under this method when control of a subsidiary is lost a gain or loss is recognised on both
the retained interest in the entity and the portion no longer owned.
39
All other items of income on the consolidated statement of profit or loss and other comprehensive
income are listed below:
Gain and loss of disposal of assets (Exploration & Evaluation)*
Gain and loss of disposal of assets (Property, Plant & Equipment)
Consolidated
2018
$
332,221
1,485
333,706
Consolidated
2017
$
-
16,833
16,833
* Gain recorded on the de-recognition of the Apollo Hill asset which was sold to Saturn Metals Limited.
14. Expenses
Loss before income taxes includes the following specific
expenses:
Employees and director’s benefit expenses
Employee costs
Directors fees
Superannuation
Administration expenses
Corporate
Consultants
15. Income tax
Consolidated
Consolidated
2018
$
255,968
100,263
105,382
461,613
516,114
171,219
687,333
2017
$
236,350
100,013
91,624
427,987
361,373
183,236
544,609
The income tax expense (or benefit) for the period is the tax payable (or refundable) on the current
period’s taxable income based on the notional 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 income 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 are reviewed at each reporting date and reduced to
the extent it is no longer probable that sufficient taxable income will be available to allow all or part of
the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
40
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.
Income tax expense
Current tax
Deferred tax
Numerical reconciliation of income tax to prima facie tax
payable:
Profit/(loss) from continuing operations before income tax
At the statutory income tax rate of 27.5% (2017: 30%)
Expenditure not allowed for income tax purposes:
Non-deductible expenses
Benefit of temporary differences not previously recognised
Previously unrecognised/(utilised) tax losses in the current period
Tax losses not brought to account
Adjustments in respect of R&D Tax Incentive Scheme
Income tax benefit/(expense) reported in the Consolidated Statement
of Profit and Loss and Other Comprehensive income
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting
period and not recognised in net profit or loss or other
comprehensive income but directly debited or credited to equity:
Consolidated
2018
$
-
-
Consolidated
2017
$
-
(224,937)
(1,672,686)
(459,989)
(1,140,539)
(342,162)
188,166
(21,095)
292,918
-
-
62,820
(218,604)
(110,431)
-
608,376
-
-
Deferred tax: share issue costs recognised through equity
(42,193)
(5,960)
The Group has total carried forward tax losses arising in Australia of $21,138,327 (2017: $12,432,777)
available for offset against future assessable income of the Group. The deferred tax asset in respect of
these losses has been used to offset a deferred tax liability. The net deferred tax asset attributable to
the residual tax losses of $111,169 have not been brought to account until convincing evidence exists
that assessable income will be earned of a nature and amount to enable such benefit to be realised.
Deferred taxes: the balance comprises temporary differences attributable to:
DTA – Deferred income
DTA – Provision for doubtful debts
DTA – Employee benefits
DTA – Other
DTL – Exploration & Evaluation
DTL – Investment in associate
DTA – Tax Losses
Net deferred tax liability
1,750,014
37,812
87,232
48,153
(6,609,273)
(1,015,809)
(5,701,871)
5,701,871
-
1,625,562
41,250
79,461
5,960
(5,448,061)
-
(3,695,828)
3,695,828
-
41
16. Reconciliation of cash flows from operating activities to loss after income tax
For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand
and short term deposits held at call (other than deposits used as cash backing for performance bonds)
with financial institutions. Any bank overdrafts are shown within borrowings in the current liabilities on
the statement of financial position.
Net cash outflow from operating activities
Adjustments for
Share-based payments
Depreciation
Exploration expenditure written off
Gain on disposal of asset
Loss of associate
Change in operating assets and liabilities
Decrease/ (increase) in receivables
Increase/ (decrease) in payables
Loss after income tax
17. Financial risk management
Overview
Consolidated
2018
$
(946,035)
Consolidated
2017
$
(724,554)
(753,776)
(64,878)
(673)
330,765
(306,149)
(348,527)
(54,646)
(144,737)
-
-
130,789
(62,729)
(1,672,686)
86,093
45,832
(1,140,539)
The Group is exposed to financial risks through the normal course of its business operations. The key
risks impacting the Group’s financial instruments are considered to be, interest rate risk, liquidity risk,
and credit risk. The Group’s financial instruments exposed to these risks are cash and cash equivalents,
security deposits, trade receivables, trade payables and other payables.
Credit risk
The Group’s maximum exposures to credit risk in relation to each class of recognised financial asset is
the carrying amount of those assets as indicated in the statement of financial position. Credit risk arises
from the non-performance by counterparties of contractual financial obligations. Credit risk arises from
cash and cash equivalents, deposits with banks, any outstanding receivables and committed
transactions.
Management assesses the credit quality of the counterparties by taking into account its financial
position, past experience and other factors. For banks and financial institutions, management
considers independent ratings and only dealing with banks licensed to operate in Australia.
Trade and other receivables
The Group operates in the mining exploration sector and does not have trade receivables from
customers. It does however have credit risk arising from other 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:
42
Carrying amounts
Cash and cash equivalents with AA- rated banks
Receivable from JV partner – unrated counterpart
Provision for doubtful debt
Other receivables – unrated counterpart
External receivables with taxation authority
Security Deposits with AA- rated banks
Consolidated
2018
$
2,291,570
137,499
(137,499)
40,251
259,876
485,866
Consolidated
2017
$
5,906,983
137,667
(137,499)
72,569
153,314
415,866
Note
4
6
6
6
6
6
Impairment losses
At 30 June 2018 the Group has recognised an impairment on a receivable from its joint venture partner,
in line with prior years, in relation to expenses paid for by the Company in relation to the Mallee Bull
tenement. None of Group’s other receivables are past due.
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 ensuring
there are appropriate plans in place to finance these future cash flows.
Typically the Group ensures it has sufficient cash on hand to meet expected operational expenses,
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 2018
Trade and other payables
30 June 2017
Trade and other payables
Interest rate risk
Consolidated Financial
Obligations
$
1,110,533
1,066,333
Note
8
8
Interest rate risk is the risk that the Group’s financial position will be adversely affected by movements
in interest rates, 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
Short term cash deposits
Security deposits
Variable
Average
Interest Rate
2.42%
0.77%
Consolidated
Carrying Amount
2018
$
1,000,000
485,866
2017
$
5,906,983
415,866
43
Cash flow sensitivity analysis for variable rate instruments of the consolidated entity
At 30 June 2018 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 $14,858 lower/higher (2017: $63,228
lower/higher).
Fair values
The carrying values of all financial assets and financial liabilities, as disclosed in the Consolidated
Statement of Financial Position, approximate their fair values.
18. Contingencies & Commitments
The Group had no contingent assets or liabilities as at 30 June 2018 (2017: $Nil).
Operating lease commitments – Peel Mining Limited as lessee
The Company has entered into a commercial property lease agreement for its Perth office, which has
been on a on a month-by-month basis since July 2014.
The group had no other operating lease commitments within 12, before 60 or later than 60 months as
at 30 June 2018.
Exploration commitments
Under the terms of mineral tenement licences held by the Group in New South Wales, there are no
minimum annual expenditure obligations required to be expended during the forthcoming financial
year in order for the tenements to maintain a status of good standing.
Work programs are submitted on application and renewal which may be subject to variation from time
to time in accordance with the relevant state department’s regulations. The Group may at any time
relinquish tenements, and avoid expenditure required on work programs, or may seek exemptions
from the relevant authority. The Groups only commitments in relation to these tenements are the
payment of annual rents which for the upcoming year total $133,720 (2018: $146,037).
19. Events after the reporting period
On the 7th September 2018, Peel Mining Limited announced that it had successfully completed an
oversubscribed placement raising $3.6 million. At the same time, it announced plans to undertake a
fully underwritten rights issue to raise a further $8.7 million. The placement was strongly supported,
with major existing shareholders, institutional and sophisticated investors all taking part.
Capital raised would be used to deliver a maiden JORC Resource at Wagga Tank, advance Mallee Bull
towards production, and complete the acquisition of the 2% NSR royalty over Wagga Tank. The
company is exercising its pre-emptive right to purchase 2% NSR royalty from MMG for $3,300,000 (incl
GST).
The company lodged its prospectus for the fully underwritten rights issue with ASIC and the ASX on 10
September 2018. The offer is set to close on 3 October 2018 and the issue date of shareholder
securities would be 9 October 2018 (per the announcement made to the ASX on 25 September 2018).
Other than above no other matters or circumstances have arisen since the end of the financial period
which significantly affected or may significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group in future financial years.
44
20. Related parties
(a) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2018
$
Consolidated
2017
$
330,000
32,506
3,830
629,085
995,421
459,462
45,330
3,830
274,068
782,690
(b) Other transactions with key management personnel
Simon Hadfield, is a director of Resource Information Unit Pty Ltd (RIU) and RIU Conferences Pty
Ltd. RIU leases office space to the Company and charges rental lease fees on arm’s length
commercial terms on a monthly basis. Total fees charged to the Company by RIU for the year
ended 30 June 2018 were $58,055 (2017: $59,981).
During the year the Company participated in conferences, to the value of $15,840 (2016: $13,860)
organised by RIU Conferences Pty Limited. These amounts are included in losses for the year
within administration expenses.
Aggregate amounts of each of the above types of “other transactions” with key management
personnel of Peel Mining Limited:
Amounts recognised as expense
Rent and office management fees
Conferences
(c) Transaction with Saturn Metals Limited
Consolidated
2018
$
58,055
15,840
73,895
Consolidated
2017
$
59,981
14,630
74,611
Peel Mining Limited (PEX) holds 35.71% of Saturn Metals Limited. During the year the Group sold
the Apollo Hill Gold Project for $4,000,000 in shares in Saturn Metals Limited. Saturn Metals
Limited engaged Peel Mining Limited in a non-exclusive basis to perform and provide
administrative services and facilities through a service agreement. Throughout the year Saturn
Metals Limited made reimbursements for costs associated with the Initial Public Offering and
management services, to Peel Mining Limited.
Sale of Apollo Hill Gold Project
Proceeds from management service to associate
Consolidated
2018
$
4,000,000
448,552
Consolidated
2017
$
-
-
Outstanding balances arising from sale of services with related parties
Saturn Metals Limited
Consolidated
2018
$
2,049
Consolidated
2017
$
-
Other than the above, the Group had no other transactions with related parties.
45
21. Share–based payments
Share-based compensation benefits to directors, employees and consultants are provided at the
discretion of the board.
The fair value of options granted is recognised as an expense with a corresponding increase in equity.
The fair value is measured at grant date and recognised over the period during which the recipient
becomes unconditionally entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes option pricing model
that takes into account the exercise price, term of the option, share price at grant date, expected price
volatility of the underlying share, expected dividend yield and the risk free interest rate for the term of
the option.
(a) Employee share option plan
During the year the Company granted options to employees through its employee share option plan
(“ESOP”).
Total expenses arising from share-based payment transactions recognised in the profit and loss during
the year were as follows:
Options granted to employees
Consolidated
2018
Number
1,050,000
2018
$
2017
Number
124,691
1,000,000
2017
$
87,226
An employee share 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 recently reapproved
by shareholders at annual general meeting held on 22 November 2016. 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 26 cents.
Set out below are summaries of options granted under the plan.
30 June 2018
Grant date
Expiry date
15 Aug 17
15 Aug 20
Exercise
price
$
0.26
Balance
at start
of the
year
Number
Granted
during the
year
Exercised
during the
year
Lapsed
during
the year
Balance at
end of the
year
Vested and
exercisable
at end of the
year
Number
Number
Number
Number
Number
-
1,050,000
(50,000)
-
-
-
1,000,000
475,000
800,000
800,000
600,000
600,000
10 Oct’16
10 Oct’19
0.203
1,000,000
19 Oct’15
19 Oct’18
0.19
1,100,000
-
-
(200,000)
(500,000)
30 June 2017
Grant date
Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Lapsed
during
the year
Balance at
end of the
year
Vested and
exercisable
at end of the
year
$
Number
Number
Number
Number
Number
Number
10 Oct’16
10 Oct’19
$0.203
-
1,000,000
19 Oct’15
19 Oct’18
$0.19
1,100,000
-
-
-
-
-
1,000,000
500,000
1,100,000
1,100,000
46
Fair value of options granted
The assessed fair value at grant date of options granted to employees during the period ended 30 June
2018 was 11 cents per option (2017: 8 cents).
The model inputs for options granted during the years ended 30 June 2018 and 30 June 2017 included:
Options are granted for no consideration
and vest accordingly
Exercise Price
Grant Date
Expiry Date
Share Price at Grant Date
Expected price volatility
Expected dividend yield
Risk-free interest rate
(b) Director options
Employee Options
2018
50% vest immediately
50% vest in one year from grant
date
26.0 cents
15 August 2017
15 August 2020
20.0 cents
100%
0.00%
1.92%
2017
50% vest immediately
50% vest in one year from grant
date
20.3 cents
10 October 2016
10 October 2019
15.0 cents
100%
0.00%
1.67%
During the year the Company, with shareholder approval, granted options to its directors.
Total expenses arising from share-based payment transactions recognised in the profit and loss during
the year were as follows:
Consolidated
2018
Number
2,000,000
2018
$
2017
Number
629,085
3,000,000
2017
$
261,301
Options granted to directors
Set out below are summaries of directors granted.
30 June 2018
Grant
date
Expiry
date
Exercise
price
Balance
at start of
the year
Granted
during
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
Number
30 Nov
17
28 Nov
16
7 Dec 15
30 Nov 20
28 Nov 19
0.783
-
0.223
3,000,000
2,000,00
0
-
7 Dec 18
0.216
1,000,000
5 Dec 14
4 Dec 17
0.07
1,000,000
-
-
-
-
- 2,000,000
- 3,000,000
- 1,000,000
(1,000,000)
-
1,500,000
3,000,000
1,000,000
-
30 June 2017
Grant
date
Expiry
date
Exercise
price
Balance
at start of
the year
Granted
during
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
Number
28 Nov
16
7 Dec 15
28 Nov 19
0.223
-
7 Dec 18
0.216
1,000,000
3,000,00
0
-
5 Dec 14
4 Dec 17
0.07
1,000,000
-
-
-
-
- 3,000,000
- 1,000,000
- 1,000,000
2,000,000
1,000,000
1,000,000
47
Fair value of options granted
The assessed fair value at grant date of options granted to directors during the period ended 30
June 2018 was 33 cents per option (2017: 10 cents).
The model inputs for options granted during the years ended 30 June 2018 and 2017 included:
Recipient
Options are granted for no consideration and vest
accordingly
Exercise Price
Grant Date
Expiry Date
Share Price at Grant Date
Expected Price Volatility
Expected Dividend Yield
Risk-free interest rate
2018
Executive & Non-exec
Director Options
1,500,000 vest
immediately
500,0000 vest 30 Nov 18
78.3 cents
2017
Executive & Non-exec
Director Options
2,000,000 vest
immediately
1,000,000 vest 28 Nov
17
22.3 cents
30 November 2017
28 November 2016
30 November 2020
28 November 2019
58.0 cents
17.5 cents
100%
0.00%
1.88%
100%
0.00%
1.89%
(c) Acquisition – Share based payment
Peel Mining Limited made no acquisitions using share based payments during the year.
(d) Weighted averages – Options
The weighted average exercise price $0.356 (2017: $0.19).
The weighted average fair value of options is $0.15 (2017: $0.08).
The weighted average remaining contractual life is 1.53 years (2017: 1.82 years).
22. Remuneration of auditors
Amounts paid or due and payable to
PricewaterhouseCoopers
Audit and review of financial reports
Taxation services
Indirect taxation services
Valuation services
Total
Consolidated
2018
$
Consolidated
2017
$
52,911
52,911
22,440
58,661
-
81,101
45,900
45,900
10,098
96,660
20,400
127,158
48
23. Loss per share
Basic loss per share is calculated by dividing the profit or loss 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 loss 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.
Basic loss per share
Loss from continuing operations attributable to the ordinary equity
holders of the Company
Diluted earnings/(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
2018
2017
(0.009)
(0.008)
(0.009)
(0.008)
(1,672,686)
(1,140,539)
Consolidated
Number of
Shares
2018
Number of
Shares
2017
177,513,640
150,949,805
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.
24. Non-cash investing and financing activities
On 8 September 2017, the Board of Peel Mining Limited announced plans to vend its Apollo Hill gold
project into Saturn Metals Limited (a wholly owned subsidiary) with the intention to list the Company
on the ASX, via an Initial Public Offering. The Company held a general meeting on 10 October 2017 at
which they obtained shareholder approval for the transaction.
On the 11th October 2017 Saturn Metals Limited issued 20,000,000 shares to Apollo Mining Pty Ltd’s
nominee for the purchase of the Apollo Hill Gold project. The nominee company was Peel Mining
Limited, the parent company of both entities.
Saturn Metals Limited opened its Initial Public Offering on the 10th January 2018 seeking to raise up to
$7,000,000 though the issue of up to 35,000,000 shares at $0.20 per Share. The offer was announced
and closed on the 20 February 2018 with the maximum amount of $7,000,000 raised. Saturn Metals
Limited was admitted to the Official List of ASX Limited on Wednesday 7 March 2018. Official Quotation
of the following securities commenced on Friday, 9 March 2018 (2017: nil).
49
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 profit or loss and other
comprehensive income
Interest Revenue
Other income
Comprehensive loss for the year
Total comprehensive loss for the year
Parent entity
2018
$
2,755,596
26,708,770
(1,141,876)
(1,144,826)
25,563,944
30,223,294
2,472,773
(7,132,123)
25,563,944
2017
$
6,301,589
20,093,461
(808,925)
(832,412)
19,261,049
24,248,580
1,718,996
(6,706,526)
19,261,049
128,157
1,321,663
(517,780)
(517,780)
60,772
319,195
(995,802)
(995,802)
Commitments for the parent entity are the same as those for the consolidated entity and are set out in
note 18.
The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities
at year end.
26. Interests in associate
Peel Mining Limited equity accounts for its sole associate of the group, Saturn Metals Limited, which at
30 June 2018 in the opinion of the directors, was that it is material to the group. The entity has share
capital consisting solely of ordinary shares, which are held directly by the group. The country of
incorporation or registration is also its principal place of business, and the proportion of ownership
interest is the same as the proportion of voting rights held.
Name of
Entity
Place of
business
% of ownership
Interest
Nature of
relationship Method
Saturn
Metals Ltd
Aus
2018
%
35.71%
2017
%
100%
Associate
Equity
Method
Quoted fair value
2017
2018
$
$
4,000,000
1
Carrying amount
2017
2018
$
$
3,693,852
Total equity accounted investment
3,693,852
1
1
50
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Option reserve
Total equity
Statement of profit or loss and other
comprehensive income
Interest Revenue
Other income
Comprehensive loss for the year
Total comprehensive loss for the year
Reconciliation to carrying amounts:
Opening balance (9 March 2018)
Asset acquired during the year
Loss for the period at 35.71%
Closing carrying value
Associate
2018
$
5,177,118
10,365,284
(315,379)
(315,379)
10,049,905
10,631,001
(857,320)
276,224
10,049,905
27,334
-
(857,320)
(857,320)
1
4,000,000
(306,149)
3,693,852
Associate
2017
$
1
1
-
-
1
1
-
-
1
-
-
-
-
1
-
-
1
27. 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 Group which comprises Peel Mining Limited
and its controlled entities at the end of, or during the financial years ended 30 June 2018 and the
comparative period.
(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. Peel Mining Limited is a
for-profit entity for the purpose of preparing the financial statements.
Compliance with IFRS
The financial statements and notes of the Group comply with International Financial Reporting
Standards (IFRS).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
New and amended standards adopted by the group
There were no new significant accounting standards or amendments adopted by the Company for the
period commencing 1 July 2017.
51
(b) Principles of consolidation
The consolidated financial statements are those of the consolidated entity, comprising Peel Mining
Limited (“the parent entity”) and entities controlled during the year and at reporting date (“Group”). A
controlled entity is any entity that the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
Information from the financial statements of the controlled entities 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.
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint
operations or joint ventures. The classification depends on the contractual rights and obligations of
each investor, rather than the legal structure of the joint arrangement.
Joint operations
Peel Mining Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint
operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These
have been incorporated in the financial statements under the appropriate headings.
Details of joint operations are set out in note 2.
(c) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to
approximate their fair values due to their short-term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Group for similar financial instruments.
(d) Accounting for farmouts
The Group may enter into transactions whereby a third party (“Farmee”) may earn a right to acquire an
interest in assets owned by the Group by meeting certain obligations agreed to by both parties. As the
terms of farm-ins are not generic management assess each agreement on a transaction by transaction
basis and determines the appropriate accounting treatment based on the terms of the agreement.
52
(e) Leases
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks
and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as
operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal
to the present value of the minimum lease payments, each determined at the inception of the lease.
The corresponding liability to the Lessor is included in the statement of financial position as a finance
lease obligation. Lease payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the liability. Finance charges are charged
directly to the statement of profit or loss and other comprehensive income.
Operating lease payments are recognised as an expense when incurred.
(f) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and leave entitlements that are
expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service are recognised in respect of employees’ services up to balance date and are
measured at the amounts expected to be paid when the liabilities are settled.
(g) 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.
(h) New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for
30 June 2018 reporting periods and have not been early adopted by the company. The company’s
assessment of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments– (Effective date 1 January 2019)
AASB 9 addresses the classification, measurement and de-recognition of financial assets and financial
liabilities and introduces new rules for hedge accounting. In December 2014, the AASB made further
changes to the classification and measurement rules and also introduced a new impairment
model. These latest amendments now complete the financial instruments standard.
Management has assessed the assets, liabilities and contracts and believe they currently do not
constitute financial instruments. The classification of assets and liabilities is not likely to change under
the new standard, therefore the application of the standard will not have an impact on the Company’s
accounting for financial assets and liabilities during the period.
53
AASB 15 Revenue from Contracts with Customers – (Effective date 1 January 2019)
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which
covers contracts for goods and services and AASB 111 which covers construction contracts. The new
standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer, so the notion of control replaces the existing notion of risks and rewards.
The standard permits either a full retrospective or a modified retrospective approach for the adoption.
Management has assessed the impact of the new standard, and at this stage, its application to the
Company’s financial statements will have nil effect as the timing of revenue is not expected to change.
AASB 16 Leases – (Effective date 1 July 2019)
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the balance
sheet, as the distinction between operating and finance leases is removed. Under the new standard, an
asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only
exceptions are short-term and low-value leases. Management is yet to assess the impact of the new
standard.
(i) Critical accounting estimates and judgements
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.
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.
Income tax related judgements
The Group is subject to income taxes in Australia. Significant judgement is required in determining the
provision for income taxes. There are certain transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain.
54
The Group estimates its tax liabilities based on the Group's understanding of the tax law. Where the
final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the current and deferred income tax assets and liabilities in the period in which
such determination is made.
In addition, the Group has recognised deferred tax assets relating to carried forward tax losses to the
extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same
taxation authority and the same subsidiary against which the unused tax losses can be utilised.
Utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time
the losses are recouped. Refer to note 15 for the current recognition of tax losses.
55
The board of directors of Peel Mining Limited declares that:
(a) the financial statements, comprising the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of
cash flows, consolidated statement of changes in equity and accompanying notes are in
accordance with the Corporations Act 2001 and:
(i) comply with Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements ; and
(ii) give a true and fair view of the consolidated financial position as at 30 June 2018 and of its
performance for the financial year ended on that date of the consolidated entity.
(b) 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;
(c) 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
27h September 2018
56
Auditor’s Independence Declaration
As lead auditor for the audit of Peel Mining Limited for the year ended 30 June 2018, I declare that to
the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of 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.
Ben Gargett
Partner
PricewaterhouseCoopers
Perth
27 September 2018
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Peel Mining Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Peel Mining Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2018 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 30 June 2018
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
• For the purpose of our audit we used overall Group materiality of $326,000, which represents
approximately 1% of the Group’s total assets.
• We applied this threshold, together with qualitative considerations, to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
• We chose the Group’s total assets because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured whilst in the exploration phase.
• We utilised a 1% threshold based on our professional judgement, noting it is within the range of
commonly acceptable thresholds.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
• The Group’s operational and financial processes are managed by a corporate function in Perth,
where substantially all of our audit procedures were performed.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Board of Directors.
Key audit matter
How our audit addressed the key audit matter
Basis of preparation of the financial report
In assessing the appropriateness of the going concern
basis of preparation for the Group’s financial report we
performed the following procedures, amongst others:
The Group is in the exploration and evaluation phase of
its lifecycle and therefore does not generate revenue
and relies on sufficient funding from its shareholders or
other sources to continue as a going concern. These
funds are used to maintain the good standing of the
Group’s tenements, progress project feasibility studies
and to cover corporate overheads.
• Evaluated the appropriateness of the Group's
assessment of its ability to continue as a going
concern, including whether the period covered is at
least 12 months from the date of the financial
report and that relevant information of which we
are aware from the audit has been included.
In determining the appropriateness of their going
concern basis of preparation of the financial report, the
Group made a number of judgements, including
expenditure required to progress the Group’s projects
and the minimum corporate overhead expenditure
required to continue operations.
Assessing the appropriateness of the Group’s basis of
preparation for the financial report was a key audit
matter due to its importance to the financial report and
the level of judgement involved in forecasting future
cash flows for a period of at least 12 months from the
date of the financial report.
•
Inquired of management and the directors
whether they were aware of any events or
conditions, including beyond the period of
assessment, which may cast significant doubt on
the Group's ability to continue as a going concern.
• Evaluated the Group’s plans for future actions in
relation to raising additional funds, whether the
outcome is likely to improve the situation, and
whether they are feasible in the circumstances.
This included tracing the cash received by the
Group from a share placement subsequent to 30
June 2018 to bank statements and obtaining the
underwriting agreement for a rights issue
subsequent to 30 June 2018.
• Compared the key underlying data and
assumptions in the Group's cash flow forecast to
approved budgets and historical cash outflows,
including an assessment of the reasonableness of
exploration and evaluation expenditure for the
forecast period by comparing forecast expenditure
to submitted work plans to relevant government
authorities.
Key audit matter
How our audit addressed the key audit matter
Carrying value of exploration and evaluation
assets
(Refer to note 5)
We performed the following procedures, amongst
others:
As at 30 June 2018, the Group had capitalised
exploration and evaluation assets of $24,585,053
relating to mining, exploration and prospecting licenses
across New South Wales.
Judgement was required by the Group to assess
whether there were indicators of impairment of the
capitalised exploration and evaluation assets due to the
need to make estimates about future events and
circumstances, such as whether the mineral resources
may be economically viable to mine in the future.
This was a key audit matter because of the size of the
balance and the risk of impairment should the Group
relinquish certain exploration licences as it continues to
assess future viability or the results of exploration
activities not be position.
• Evaluated the Group’s assessment that there had
been no indicators of impairment for its capitalised
exploration and evaluation assets, including
inquiries with management and directors to
develop an understanding of the current status and
future intentions for the Group’s exploration
projects.
•
Tested, on a sample basis, whether the Group
retained right of tenure for its exploration licence
areas by obtaining licence status records from
relevant government databases.
• Obtained management’s exploration expenditure
forecasts supporting their assessment and
compared these to the approved budgets and
future cash flow forecasts of the Group.
•
Inquired of management and directors as to the
future planned expenditure on capitalised
exploration and evaluation assets and assessed
plans for future expenditure to maintain the good
standing of the Group’s tenements.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2018, including the Corporate
Directory, Chairman's report, Review of operations, Directors' report, Schedule of tenements as at 30
June 2018, Additional ASX information and Shareholder information, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 18 to 23 of the Directors’ report for the
year ended 30 June 2018.
In our opinion, the remuneration report of Peel Mining Limited for the year ended 30 June 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Ben Gargett
Partner
Perth
27 September 2018
This page has been intentionally left blank
63
ASX BEST PRACTICE RECOMMENDATIONS
This statement outlines the main corporate governance practices that were formally in place from 15
September 2014 onwards. These corporate governance practices comply with the ASX Corporate
Governance Council recommendations unless otherwise stated.
BOARD OF DIRECTORS
The Board operates in accordance with the broad principles set out in its’ Corporate Governance Plan
(Plan), which is available from the corporate governance information section of the Company website at
www.peelmining.com.au.
ROLE AND RESPONSIBILITIES OF THE BOARD
The Board is responsible for ensuring that the Company is managed in a manner which protects and
enhances the interests of its’ shareholders and takes into account the interests of all stakeholders. This
includes setting the strategic directions for the company, establishing goals for management and
monitoring the achievement of these goals.
A summary of the key responsibilities of the Board include:
1.
2.
3.
4.
5.
6.
7.
Strategy - Providing strategic guidance to the Company, including contributing to the
development of and approving the corporate strategy;
Financial performance - Approving budgets, monitoring management and financial
performance;
Financial reporting and audits - Monitoring financial performance including approval of the
annual and half-year financial reports and liaison with the external auditors;
Leadership selection and performance - Appointment, performance assessment and removal
of the Managing Director. Ratifying the appointment and/or removal of other senior
management, including the Company Secretary and other Board members;
Remuneration - Management of the remuneration and reward systems and structures for
Executive management and staff;
Risk management - Ensuring that appropriate risk management systems and internal controls
are in place; and
Relationships with the exchanges, regulators and continuous disclosure - Ensuring that the
capital markets are kept informed of all relevant and material matters and ensuring effective
communications with shareholders.
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do
with the proper functioning of the board. All directors have direct access to the Company Secretary.
The Board has delegated to management responsibility for the day-to-day operation and administration
of the Company is delegated by the board to the Managing Director. The Board ensures that the
Managing Director and the management team is appropriately qualified and experienced to discharge
their responsibilities and has in place procedures to assess the performance of the Managing Director
and executive directors.
The roles of Chairman and Managing Director are not combined. The Managing Director is accountable
to the Board for all authority delegated to the position.
64
Whilst there is a clear division between the responsibilities of the Board and management, the Board is
responsible for ensuring that management’s objectives and activities are aligned with the expectations
and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is
achieved including:
Board approval and monitoring of a strategic plan;
approval of annual and semi-annual budgets and monitoring actual performance against budget;
and
procedures are in place to incorporate presentations to each Board meeting by financial and
operations management.
COMPOSITION OF THE BOARD
The names, skills, experiences and period of office of the Directors of the Company in office at the date
of this Statement are set out in the Director’s Report. A summary of these skills and experiences are
provided in table 1.
The composition of the Board is determined using the following principles
Persons nominated as Non-executive Directors shall be expected to have qualifications, experience
and expertise of benefit to the Company and to bring an independent view to the Board’s
deliberations. Persons nominated as Executive Directors must be of sufficient stature and security
of employment to express independent views on any matter;
The Chairperson should ideally be independent, but in any case be Non-executive and be elected by
the Board based on his/her suitability for the position;
The roles of Chairperson and Managing Director should not be held by the same individual;
All Non-executive Directors are expected voluntarily to review their membership of the Board from
time-to-time taking into account length of service, age, qualifications and expertise relevant to the
Company’s then current policy and programme, together with the other criteria considered
desirable for composition of a balanced board and the overall interests of the Company;
The Company considers that the Board should have at least three Directors (minimum required
under the Company's Constitution) and to have a majority of independent Directors but
acknowledges that this may not be possible at all times due to the size of the Company. Currently
the Board has three Directors, with only Mr Hadfield as independent. The number of Directors is
maintained at a level which will enable effective spreading of workload and efficient decision
making.
65
The Board has accepted the following definition of an independent Director:
An independent Director is a Director who is not a member of management (a Non-executive Director)
and who:
holds less than 5% of the voting shares of the Company and is not an officer of, or otherwise
associated directly or indirectly with, a shareholder of more than 5% of the voting shares of the
Company;
within the last three years has not been employed in an executive capacity by the Company or
another group member, or been a Director after ceasing to hold any such employment;
within the last three years has not been a principal of a material professional adviser or a material
consultant to the Company or another group member, or an employee materially associated with
the service provided;
is not a material supplier or customer of the Company or other group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer;
has no material contractual relationship with the Company or another group member other than
as a Director of the Company;
has not served on the board for a period which could, or could reasonably be perceived to,
materially interfere with the Director’s ability to act in the best interests of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably
be perceived to, materially interfere with the Director’s ability to act in the best interests of the
Company.
The materiality thresholds are assessed on a case-by-case basis, taking into account the relevant
Director’s specific circumstances, rather than referring to a general materiality threshold.
Table 1: Skills and Experience Matrix of Peel Mining Limited’s Directors
Area
Business and Finance
Leadership
Sustainability &
Stakeholder
Competence
Accounting, Tax, Business Strategy, Corporate Financing, Financial
Literacy, Agreements/Fiscal Terms and Risk Management
Business Leadership, Executive Management and Mentoring, Public
Listed Company Experience
Community Relations, Corporate Governance, Environmental Issues,
Government Affairs, Health & Safety, Human Resources, Industrial
Relations and Remuneration
Industry Specific (Australia) Precious Metals – Exploration & Production, Base Metals – Exploration &
Production, Mining & Resources
The directors on the Board collectively have a combination of skills and experience in the competencies
set out in the table above. These competencies are set out in the skills matrix that the Board uses to
assess the skills and experience of each director and the combined capabilities of the Board. Where an
existing or projected competency gap is identified, the Board will address those gaps. The Board does
not currently consider that there are any existing or projected competency gaps.
INDEPENDENT PROFESSIONAL ADVICE AND ACCESS TO COMPANY INFORMATION
Each director has the right to seek independent professional advice on matters relating to his position
as a director of the Company at the Company’s expense, subject to the prior approval of the Chairman,
which shall not be unreasonably withheld.
66
NOMINATION COMMITTEE / APPOINTMENT OF NEW DIRECTORS
Because of the size of the Company and the size of the Board, the Directors do not believe it is
appropriate to establish a separate Nomination Committee. The Board has taken a view that the full
Board will hold special meetings or sessions as required. The Board are confident that this process for
selection and review is stringent and full details of all Directors are provided to shareholders in the
annual report and on the web.
The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate
mix of expertise and experience. Where a vacancy exists, through whatever cause, or where it is
considered that the Board would benefit from the services of a new Director with particular skills, the
Board determines the selection criteria for the position based on the skills deemed necessary for the
Board to best carry out its responsibilities and then appoints the most suitable candidate who must
stand for election at the next general meeting of shareholders.
Non-executive directors are do not have written agreements setting out the key terms and conditions of
their appointment because the Company’s constitution and the ASX Listing Rules govern the term of
each director’s appointment. Directors are required to retire by rotation. Common law and the
Corporations Act govern the duties of directors and members are required to approve the maximum
fees paid to non-executive directors. Executive directors enter into an employment agreement which
governs the terms of their appointment.
The Board undertakes appropriate checks prior to nominating a director for election by shareholders.
These checks include a police and reference checks. Shareholders are provided with all material
information in its possession concerning a director standing for election or re-election in the relevant
notice of meeting.
An informal induction is provided to all new directors, which includes meeting with technical and
financial personnel to understand Peel Mining Limited’s business, including strategies, risks, company
policies and health and safety.
All directors are required to maintain professional development necessary to maintain their skills and
knowledge needed to perform their duties. In additional to training provided by relevant professional
affiliations of the directors, additional development is provided through attendance at seminars and
provision of technical papers on industry related matters and developments offered by various
professional organisations, such as accounting firms and legal advisors.
TERM OF OFFICE
Under the Company's Constitution, the minimum number of Directors is three. At each Annual General
Meeting, one third of the Directors (excluding the Managing Director) must resign, with Directors
resigning by rotation based on the date of their appointment. Directors resigning by rotation may offer
themselves for re-election.
67
PERFORMANCE OF DIRECTORS AND MANAGING DIRECTOR
The performance of all Directors, the Board as a whole and the Managing Director and Company
Secretary is reviewed annually.
The Board meets once a year with the specific purpose of conducting a review of its composition and
performance. This review includes:
comparison of the performance of the Board against the requirements of the Corporate
Governance Plan;
assessment of the performance of the Board over the previous twelve months having regard to the
corporate strategies, operating plans and the annual budget;
identification of any particular goals and objectives of the Board for the next year;
review the Board’s interaction with management;
review the type and timing of information provided to the directors; and
identification of any necessary or desirable improvements to Board or committee charters.
A review was undertaken during the reporting period.
PERFORMANCE OF SENIOR EXECUTIVES
The Managing Director is responsible for assessing the performance of the key executives within the
Company. This is to be performed through a formal process involving a formal meeting with each
senior executive. The basis of evaluation of senior executives will be on agreed performance measures.
A review of senior executives was undertaken during the reporting period.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001 and the Company’s constitution, Directors must keep the
Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the
Company. Where the Board believes a significant conflict exists, the Director concerned does not
receive the relevant Board papers and is not present at the Board meeting whilst the item is
considered. Details of Directors related entity transactions with the Company are set out in the related
parties note in the financial statements.
DIVERSITY
Peel Mining Limited recognises the benefits arising from employee and Board diversity, including a
broader pool of high quality employees, improving employee retention, accessing different
perspectives and ideas and benefiting from all available talent. Diversity includes, but is not limited to,
gender, age, ethnicity and cultural background.
The Diversity Policy defines the initiatives which assist Peel Mining Limited with maintaining and
improving the diversity of its workforce. A copy of the Diversity Policy can be found in the company’s
Corporate Governance Framework on the Company’s website. The policy does not include a
requirement also set Measurable Objectives for achieving gender diversity and monitor their
achievement. Nor has the Board set measurable objectives for achieving gender diversity, given its
current size and stage of development as an exploration company. However the board is striving to
achieve the initiatives set out in the Policy.
The policy was formally adopted by the company on the 23 September 2015.
68
The respective proportions of men and women on the Board, in senior executive positions and across
the whole organisation are set out in the table below:
Proportion of Women
Organisation as a whole
Executive Management Team
Board
REMUNERATION
Proportion of
women
10 out of 26 (38%)
0 out of 1 (0%)
0 out of 3 (0%)
The performance of the Company depends upon the quality of its Directors and Executives. To prosper,
the Company must attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
Provide competitive rewards to attract high calibre Executives;
Link Executive rewards to shareholder value; and
Establish appropriate performance hurdles in relation to variable Executive remuneration.
A full discussion of the Company’s remuneration philosophy and framework and the remuneration
received by Directors and Executives in the current year is included in the remuneration report, which is
contained within the Report of the Directors.
There are no schemes for retirement benefits for Non-executive Directors, other than superannuation.
BOARD REMUNERATION COMMITTEE
Once the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient
magnitude, to assist the Board in fulfilling its duties, the Board will establish a Remuneration
Committee. Until that time, the Board has taken a view that the full Board will hold special meetings or
sessions as required. The Board are confident that this process is stringent and full details of
remuneration policies and payments are provided to shareholders in the annual report and on the
web.
AUDIT AND RISK COMMITTEE
Due to the limited size of the Company and of its operations and financial affairs, the use of a separate
audit committee is not considered appropriate. The Board assures integrity of the financial statements
by:
a) reviewing the Company’s statutory financial statements to ensure the reliability of the financial
information presented and compliance with current laws, relevant regulations and accounting
standards;
b) monitoring compliance of the accounting records and procedures in conjunctions with the
Company’s auditor, on matters overseen by the Australian Securities and Investments
Commission, ASX and Australian Taxation Office;
c) ensuring that management reporting procedures, and the system of internal control, are of a
sufficient standard to provide timely, accurate and relevant information as a sound basis for
management of the Group’s business;
d) reviewing audit reports and management letters to ensure prompt action is taken;
69
e) when required, nominating the external auditor and at least annually review the external auditor
in terms of their independence and performance in relation to the adequacy of the scope and
quality of the annual statutory audit and half-year review and the fees charged.
RISK OVERSIGHT AND MANAGEMENT
The Board determines the Company’s ‘risk profile’ and is responsible overseeing and approving risk
management strategy and policies, internal compliance and internal control systems. In summary, the
Company policies are designed to ensure strategic, operational, legal, reputation and financial risks are
identified, assessed, effectively and efficiently managed and monitored to enable achievement of the
Company’s business objectives.
The Company has exposure to economic risks, including general economy wide economic risks and
risks associated with the economic cycle which impact on the price and demand for minerals which
affects the sentiment for investment in exploration companies.
There will a requirement in the future for the Company to raise additional funding to pursue its
business objectives. The Company’s ability to raise capital may be effected by these economic risks.
Company has in place risk management procedures and processes to identify, manage and minimise its
exposure to these economic risks where appropriate.
The operations and proposed activities of the Company are subject to State and Federal laws and
regulations concerning the environment. As with most exploration projects and mining operations, the
Company’s activities are expected to have an impact on the environment, particularly if advanced
exploration or mine development proceed. It is the Company’s intention to conduct its activities to the
highest standard of environmental obligation, including compliance with all environmental laws.
The Board currently considers that the Company does not have any material exposure to social
sustainability risk.
The Company’s Corporate Code of Conduct outlines the Company’s commitment to integrity and fair
dealing in its business affairs and to a duty of care to all employees, clients and stakeholders. The code
sets out the principles covering appropriate conduct in a variety of contexts and outlines the minimum
standard of behaviour expected from employees when dealing with stakeholders.
The Board reviewed the Risk Management Framework, including the policies, procedures and the
Company’s Risks during the reporting period.
A summary of Peel Mining Limited’s Risk Management review procedures can be found in the corporate
governance information section of the Company website at www.peelmining.com.au.
Considerable importance is placed on maintaining a strong control environment. The Board actively
promotes a culture of quality and integrity.
Control procedures cover management accounting, financial reporting, compliance and other risk
management issues.
No internal audit function is currently in place due to the size of the Company, however Board regularly
assess the need for an internal audit function. The Board encourages management accountability for
the Company’s financial reports by ensuring ongoing financial reporting during the year to the Board.
Half yearly, the Financial Controller (or equivalent) and the Managing Director are required to state in
writing to the Board that in all material respects:
70
Declaration required under s295A of the Corporations Act 2001 -
the financial records of the Company for the financial period have been properly maintained;
the financial statements and notes comply with the accounting standards;
the financial statements and notes for the financial year give a true and fair view; and
any other matters that are prescribed by the Corporations Act regulations as they relate to the
financial statements and notes for the financial year are satisfied.
Additional declaration required as part of corporate governance -
the risk management and internal compliance and control systems in relation to financial risks
are sound, appropriate and operating efficiently and effectively.
These declarations were received for the June 2018 financial year.
CODE OF CONDUCT
The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board
and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to
ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to
maintain confidence in the Company’s integrity.
The Code of Conduct embraces the values of:
Integrity & Objectivity
Excellence
Commercial Discipline
The Board encourages all stakeholders to report unlawful/unethical behaviour and actively promotes
ethical behaviour and protection for those who report potential violations in good faith.
TRADING IN PEEL MINING LIMITED SECURITIES BY DIRECTORS, OFFICERS AND EMPLOYEES
The Board has adopted a specific policy in relation to Directors and officers, employees and other
potential insiders buying and selling shares.
Directors, officers, consultants, management and other employees are prohibited from trading in the
Company’s shares, options and other securities if they are in possession of price-sensitive information.
The Company's Security Trading Policy is provided to each new employee as part of their induction
training.
The Directors are satisfied that the Company has complied with its policies on ethical standards,
including trading in securities.
CONTINUOUS DISCLOSURE
The Board has a Market Disclosure Policy to ensure the compliance of the Company with the various
laws and ASX Listing Rule obligations in relation to disclosure of information to the market. The
Managing Director is responsible for ensuring that all employees are familiar with and comply with the
policy.
71
The Company is committed to:
a) complying with the general and continuous disclosure principles contained in the Corporations Act
and the ASX Listing rules;
b) preventing the selective or inadvertent disclosure of material price sensitive information;
c) ensuring shareholders and the market are provided with full and timely information about the
Company’s activities; and
d) ensuring that all market participants have equal opportunity to receive externally available
information issued by the Company.
SHAREHOLDER COMMUNICATIONS STRATEGY
The Company recognises the value of providing current and relevant information to its shareholders.
The Company has adopted a Shareholder Communications Strategy which can be accessed from Peel
Mining Limited’s website at http://www.peelmining.com.au/wp-content/uploads/2014/09/Peel-Mining-
Ltd-Corporate-Governance-Framework-board-approved-150914.pdf.
Information is communicated to shareholders through the annual and half yearly financial reports,
quarterly reports on activities, announcements through the Australian Stock Exchange and the media,
on the Company’s web site and through the Chairman’s address at the annual general meeting. After
the Annual General Meeting, the Managing Director provides shareholders with a presentation.
Afterwards all directors are available to meet with any shareholders and answer questions.
Shareholders are encouraged to contact the Company through the Contact Us section on Peel Mining
Limited’s website, to submit any questions via email, or call.
The Company’s website provides communication details for its Share Registry, including an email
address for shareholder enquiries direct to the Share Registry.
In addition, news announcements and other information are sent by email to all persons who have
requested their name to be added to the email list. If requested, the Company will provide general
information by email.
The Company will, wherever practicable, take advantage of new technologies that provide greater
opportunities for more effective communications with shareholders.
The Company ensures that its external auditor is present at all Annual General Meetings to enable
shareholders to ask questions relevant to the audit directly to the auditor.
COMPANY WEBSITE
Peel Mining Limited has made available details of all its corporate governance principles, which can be
found in the corporate governance information section of the Company website at
www.peelmining.com.au.
72
Information relating to shareholders at 25 September 2018
Distribution of shareholders
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
No. Ord
No. of Holders
Shares
79
221
185
559
177
30,675
659,065
1,548,517
21,669,482
170,328,230
%
0.02
0.34
0.80
11.16
87.69
1,221
194,235,969
100.00
Twenty largest shareholders
No. Ord Shares
%
1. ST BARBARA LTD
34,750,000
17.89
JAYLEAF HOLDINGS PTY LTD
2. POINT NOMINEES PTY LTD
3. PERTH CAPITAL PTY LTD
4. ARIKI INVESTMENTS PTY LIMITED
5. HAMPTON HILL MINING NL
6. PERTH CAPITAL PTY LTD
7.
8. WYTHENSHAWE PTY LTD
9. MR ROBERT MACLAINE TYSON
10. CITICORP NOMINEES PTY LIMITED
11. MR SIMON HADFIELD & MRS FIONA HADFIELD
12. MR JONATHON TYSON & MR CHRIS TYSON & MR ROBERT TYSON
13. ARIKI INVESTMENTS PTY LIMITED
14. WARRAMBOO HOLDINGS PTY LTD
15. MR KEIRAN HAYNES
16. MR ANDREW LENOX HEWITT
17. CS FOURTH NOMINEES PTY LIMITED
18. MR MICHAEL HSIAU YUN LAN
19. NALMOR PTY LTD JOHN CHAPPELL SUPER FUND A/C
20. DENKEY PTY LTD
15,422,890
13,608,814
10,855,897
10,350,000
5,920,000
3,602,030
3,110,000
2,877,625
2,695,274
2,195,560
2,030,000
1,950,000
1,891,798
1,500,000
1,470,000
1,421,450
1,300,000
1,300,000
1,300,000
123,126,338
7.94
7.01
5.59
5.33
3.05
1.85
1.60
1.48
1.39
1.13
1.05
1.00
0.97
0.77
0.76
0.73
0.67
0.67
0.67
63.39
Substantial shareholders
No. Ord Shares
%
1.
2.
Hampton Hill Mining NL and Associates
St Barbara Ltd
3. William Hodeson and Associated Companies
4.
Point Nominees Pty Ltd
35,480,612
18.27%
34,750,000
17.89%
19,200,000
8.88%
15,422,890
7.94%
73
At the prevailing market price of $0.39 per share there were 97 shareholders with less than a
marketable parcel of shares at 25 September 2018.
At 25 September 2018 there were 1,221 holders of ordinary shares in the Company.
At the date of this report there were no shares or options restricted by the ASX.
Unquoted securities
At the date of this report the Company had 8,300,000 unlisted share options on issue.
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)”
74