ACN 119 343 734
1
Directors
Simon Hadfield
Rob Tyson
Graham Hardie
James Simpson Executive Director Mining
Non-executive Chairman
Managing Director
Non-executive Director
Share Registry
Link Market Services Limited
Level 4, 152 St Georges Tce
PERTH WA 6000
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
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
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
20
21
33
34
35
36
37
61
62
63
69
79
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 23 September 2019. The directors
have the power to amend and reissue the financial statements.
PAGE 1
Dear Fellow Shareholders,
Continued exploration success at the Wagga Tank-Southern Nights polymetallic project over the past
year has dramatically improved the Company’s prospects in the Cobar Basin in NSW.
Your Directors now believe that the 100%-owned WT-SN and the nearby 50%-owned Mallee Bull
copper project together offer potential for the critical mass required to support new development
options.
With that in mind the Company will push hard to establish higher confidence resources for both
projects as soon as possible.
Drilling at WT-SN during 2018-19 returned some of the highest-grade zinc-rich drill intercepts reported
anywhere in the world including one stunning intercept of 18.2m @ 40.3% Zn, 15.7%Pb, 0.97% Cu,
356 g/t Ag and 2.77 g/t Au from 182m.
This culminated in the publication of a maiden resource for the WT-SN project of 3.8Mt for 9.2% zinc
equivalent (348,000t contained ZnEq). It included a very rich zone at Southern Nights of 290,000t at
32.9% ZnEq commencing at ~150m below surface, which was included in a high-grade resource of
1.7Mt at 14.7% ZnEq.
Further drilling at WT-SN since year end has identified a new high grade zone and this, combined with
other drilling, is expected to increase significantly the grade and volume of an updated mineral
resource.
During the year, your Company agreed with CBH Resources (a subsidiary of Toho Zinc of Japan) to
seek approval to establish an exploration decline at the Mallee Bull joint-venture project for the
purpose of drilling out the deeper copper ore body to establish a more indicative resource. A dig and
truck operation taking ore to CBH’s Endeavour mine for processing was one of several options being
considered by both companies for future development.
Mallee Bull has a current resource estimate of 6.76Mt at 2.6% copper equivalent and it is hoped that
grade and tonnage could increase significantly with further drilling of Mallee Bull Deeps.
Saturn Metals Investment
During the prior financial year Peel successfully completed the spin out of Saturn Metals Ltd and now
has a 27.33% stake in the new company.
In November 2018 Saturn reported an updated resource estimate for its Apollo Hill gold project of
20.7Mt at 1 g/t Au for 685,000oz gold1, an uplift of 36% on the previous resource.
PAGE 2
New drill results have highlighted the existence of near-surface, high-grade mineralised structures
which have the potential to materially increase the scale of the Apollo Hill project. Your company
remains enthused by the developments at Apollo Hill and views its holding in Saturn as an important
investment.
It is my pleasure to welcome Mr Jim Simpson to Peel’s Board of Directors effective early September
2019. Jim is a mining engineer who has an extensive knowledge of underground base metal mining and
a strong background in mining company management. In view of the Company’s continued growth
towards mine development I look forward to his contribution to the ongoing success of Peel.
Finally on behalf of all shareholders, I would like to thank my fellow directors Graham Hardie and Rob
Tyson, and Company Secretary Ryan Woodhouse for their resolute commitment to Peel, and also to the
Company’s excellent team for the significant milestones achieved in the past year.
Yours sincerely
Simon Hadfield
Chairman
23 September 2019
1.
Information for the Saturn Metals Limited Apollo Hill Mineral Resource can been found on their website
(www.saturnmetals.com.au), or in Saturn Metals Limited’s ASX Market Release “Apollo Hill Gold Resource Jumps 36%
to 685,000oz”, dated 19 November 2018.
PAGE 3
Company Overview
Peel Mining Limited (“the Company”) 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 Superbasin since
March 2010. In that time, the Company has grown to become NSW’s predominant greenfield’s explorer,
with the largest single company holding of ~5,000 km2 in the Cobar Superbasin. The Company has made
three major discoveries in this time: the 100%-owned Wagga Tank-Southern Nights Lead-Zinc-Silver
discovery, the Mallee Bull Copper discovery (in Joint Venture with CBH Resources); and the Wirlong
Copper discovery (in Joint Venture with JOGMEC).
The Wagga Tank Project is located on the western edge of the Cobar Superbasin, ~130 km south of
Cobar or ~30km northwest of Mount Hope and is host to the namesake polymetallic VMS-type deposit.
Mineralisation straddles a broad zone of intense tectonic brecciation and hydrothermal alteration
(sericite-chlorite with local silicification) and occur as sub-vertical elongate shoots/lenses. Drilling to date
has focused on defining the geometry and extent of large-scale Zn-rich mineralisation at Wagga Tank-
Southern Nights.
The 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. The Company and CBH Resources Limited (a wholly owned subsidiary of Toho Zinc Co. Ltd.)
are in a 50:50 Joint Venture over the project tenements EL7461 and ML1361. Mallee Bull is interpreted
to be located in a favourable geological and structural position; it is situated in the suitably 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
hydrothermal breccia styles within a package of brecciated volcaniclastic and turbidite sediments
comprising siltstones and mudstone, and is interpreted to occurs as a shoot/lens-like structure dipping
moderately to the west. The deposit is split into three lenses; Silver Ray, Union and Mallee Bull Deeps.
The Cobar Superbasin Project (CSP) is under a Memorandum of Agreement with Japanese Oil Gas and
Metals National Corporation (JOGMEC) which has earnt the right to take up a 50% interest in the project
after spending $7 million on exploration expenditure. The project consists of 15 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. Both
parties to the agreement are now funding activities on a pro rata basis.
PAGE 4
Wagga Tank - Southern Nights (PEX 100%)
Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
The company’s primary focus during the year was at the Wagga Tank/Southern Nights prospect
following the successful discovery of the high grade Southern Nights deposit in the previous year. A
close spaced infill and extensional resource definition drilling programme was designed to better define
the geometry and scale of the mineralisation, in anticipation of completing a maiden Mineral Resource
Estimate.
The company drilled 87 holes for 25,669 metres at the project during the year and the drill programme
resulted in some exceptional drill assays:
• WTRCDD150 returning 18.2m @ 40.3% Zn, 15.7% Pb, 0.97% Cu, 356 g/t Ag and 2.77 g/t Au from
182m.
• WTRCDD153 intersected 20.65m @ 9.92% Zn, 4.83% Pb, 0.51 % Cu, 104 g/t Ag, 0.53 g/t Au from
355.35m including 8.29m @ 16.91% Zn, 10.26% Pb, 0.7% Cu, 210 g/t Ag, 0.63 g/t Au from 355.35m.
• WTRCDD157 intersected 53m @ 7.43% Zn, 3.46% Pb, 1.48% Cu, 114 g/t Ag, 1.47 g/t Au from
218m including 18.1m @ 20.37% Zn, 9.77% Pb, 0.36% Cu, 238 g/t Ag, 1.09 g/t Au from 218m and
18m @ 3.04% Cu, 2.49 g/t Au, 81 g/t Ag, 0.93% Zn, 0.06 % Pb from 252m.
• WTRCDD166 intersected 40m @ 10.2% Zn, 2.83 % Pb, 0.61% Cu, 49 g/t Ag, 1.04 g/t Au from 365m
including 16.21m @ 16.91% Zn, 5.01% Pb, 0.43% Cu, 87 g/t Ag, 0.98 g/t Au from 366.23m and 5.63m
@ 17.23% Zn, 3.75% Pb, 1.02% Cu, 49 g/t Ag, 1.44 g/t Au from 392.42m.
• WTRCDD189 intersected 9.0m @ 19.91% Zn, 9.55% Pb, 0.17% Cu, 220g/t Ag and 0.36g/t Au from
336m including 5.4m @ 29.26% Zn, 13.97% Pb, 0.22% Cu, 326g/t Ag and 0.45g/t Au from 337.2m.
• WTRCDD199 intersected 23.1m @ 22.54% Zn, 12.0% Pb, 0.25% Cu, 200g/t Ag and 1.42g/t Au from
224m including 16.35m @ 28.09% Zn, 15.77% Pb, 0.26% Cu, 270g/t Ag and 1.80g/t Au from
224.75m.
This drilling successfully delineated the approximate dimensions of the high-grade mineralisation
associated with the Southern Nights Central Zone and has also better outlined the broader mineralised
structure across the 700m of strike at Southern Nights. It has also identified stratigraphic continuity to
the high grade mineralisation, with the shallower zone of mineralisation (<~250m below surface) being
drilled at a nominal 20x20m drill spacing and the deeper zone of mineralisation (>~250m below surface)
being drilled on a 40x40m drill spacing to define the overall size and geometry of the high grade
mineralisation at depth. The drill density was designed to deliver some of the shallower mineralisation
into the Indicated mineral resource category.
Drilling resulted in the Company releasing its maiden JORC 2012 Indicated & Inferred Mineral Resource
Estimate (“MRE”) at Wagga Tank/Southern Nights, subsequent to year end. The Mineral Resource of
3.8Mt @ 5.5% Zn, 2.1% Pb, 75 g/t Ag, 0.27% Cu and 0.31 g/t Au for 206,000t contained Zn, 78,000t
contained Pb, 9.1Moz contained Ag, 10,000t contained Cu and 38,000 oz contained Au, or 9.2%
ZnEq for 348,000t contained ZnEq, was estimated using a 3.5% ZnEq cut-off. Approximately 30% of
the resource tonnage and 46% of the contained metal tonnage is classified at an Indicated level with
the respective balances being classified at an Inferred level. It was reported at a 3.5% ZnEq cut-off. The
MRE (see Table 1 below) for the Wagga Tank and Southern Nights deposits were reported in accordance
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(the JORC Code (2012)).
PAGE 5
Table 1 – Southern Nights and Wagga Tank Mineral Resource (3.5% ZnEq1 cutoff)
Mineral Resource Estimate for the Southern Nights Deposit
Tonnes
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
Resource
Classification
Indicated
Inferred
1,126,000
2,106,000
Total Resource
3,232,000
8.8
4.5
6.0
3.5
1.5
2.2
107
69
83
0.28
0.14
0.19
0.44
0.13
0.24
14.3
7.2
9.7
Mineral Resource Estimate for the Wagga Tank Deposit
Resource
Classification
Inferred
Total Resource
Tonnes (t)
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
532,000
532,000
2.4
2.4
1.2
1.2
31
31
0.74
0.74
0.77
0.77
6.6
6.6
Mineral Resource Estimate for the Southern Nights and Wagga Tank Deposit
Tonnes
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
Resource
Classification
Indicated
Inferred
1,126,000
2,638,000
Total Resource
3,764,000
8.8
4.0
5.5
3.5
1.4
2.1
107
62
75
0.28
0.26
0.27
0.44
0.26
0.31
14.3
7.1
9.2
Note: Tonnages and grades are rounded. Discrepancies in totals may exist due to rounding. 1 - Zinc equivalent (ZnEq) has been
calculated using assumptions regarding metal sale prices detailed in Table 2. It is Peel Mining Limited’s opinion that all elements
included in the metal equivalent calculation have a reasonable potential to be recovered and sold. See ASX announcement dated
12th July 2019 – “Robust Maiden resource Confirms Outstanding Mining & Growth Potential at Southern Nights-Wagga Tank”.
The MRE includes a high-grade estimate of 1.7Mt @ 9.3% Zn, 3.7% Pb, 119 g/t Ag, 0.18% Cu and 0.29 g/t
Au, or 14.7% ZnEq, using a 7% ZnEq cut-off.
Zinc Equivalents
For the reporting of the Mineral Resource Estimate, a 3.5% Zinc Equivalent cut-off grade has been used
for an assumed underground mining resource. The Zinc Equivalent grades have been calculated for
both the zinc dominated and copper dominated material which contains potentially economic
quantities of zinc, lead, copper, gold and silver. The formulas used have been based on the following
price assumptions (in Australian dollars): Zinc - $3,450/t; Lead - $2,685/t; Silver - $20/oz; Copper -
$8,350/t; Gold – $1,880/oz. The Zinc Equivalent values have been calculated for each estimated block.
The Zinc Equivalent formula is:
ZnEq % = (Zn_ppm + (2.18*Cu_ppm) + (0.70*Pb_ppm) + (15,768*Au_ppm) + (168*Ag_ppm))/10000
Table 2 – Zinc Equivalent Assumptions
Metal
Price A$
Unit
Zinc
Lead
3,450
2,685
Silver
20
Copper
Gold
8,350
1,880
t
t
oz
t
oz
Metallurgical
Recovery
90%
81%
81%
81%
81%
ZnEq
Factor
1
0.7
168
2.18
15,768
PAGE 6
Metallurgical Testwork
During the year the Company performed preliminary “early warning or fatal flaw” metallurgical testwork
at ALS Burnie. This showed good recoveries for the primary economic metals of interest (zinc and lead)
given the cursory nature of the work. Zinc returned an 81% recovery to 47% Zn concentrate whilst lead
yielded a 71% recovery to 50% Pb concentrate. New metallurgical testwork at ALS Burnie is underway
and it is anticipated that improvements upon the initial testwork will be made. Encouraging findings
regarding copper, silver and gold are also anticipated. This testwork remains ongoing, and is considered
early in nature, and will be reported in due course.
Existing Cobar Basin Mining Operations
Available data (public and private) for existing operational Cobar Basin base metal mines indicates
metallurgical recoveries of primary economic metals (by value) range from approximately 80% to up to
99%. The Hera Au-Zn-Pb-Ag mine bares the most similarities in terms of mineralisation and deposit
style, to that at Southern Nights-Wagga Tank. The most recent full year (FY2018) data of steady state
production for Hera showed recoveries of approximately 90% for the primary economic metals sought:
89.4% Au, 88.2% Ag, 89.5% Pb, and 89.8% Zn. Based on the limited yet encouraging metallurgical
testwork completed to date, and the recoveries achieved at other Cobar Basin base metal mines, the
Company has assumed 90% recovery for zinc, and 81% recovery for all other elements included in the
metal equivalent calculation. It is the Company’s opinion that all elements included in the metal
equivalent calculation have a reasonable potential to be recovered and sold.
Figure 1 – Wagga Tank-Southern Nights Indicated & Inferred Resource long section showing >4% Zn domains.
Planned Activities
The MRE provides the Company with a solid foundation to immediately commence Scoping Studies to
advance the potential development scenarios at Wagga Tank-Southern Nights. Activities underway at
the time of reporting include detailed metallurgical testwork, ongoing geotechnical studies, pre-
development environmental baseline work, new geophysical surveys and drill targeting of potential
extensions to mineralisation. The Wagga Tank-Southern Nights mineral system remains open along
strike and down dip.
PAGE 7
Figure 2: Wagga Tank-Southern Nights Drill Plan
PAGE 8
Mallee Bull Joint Venture Project (PEX 50%; CBH 50%).
Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
Mallee Bull
During the year, the Company and CBH Resources Limited agreed to seek regulatory approval to
establish an exploration decline which will enable definition drilling and exploration from underground
of the deeper portions of the deposit, as well as to obtain a bulk sample of the Silver Ray zinc-lead-silver
lens for potential processing at CBH’s Endeavor Mine. Exploration declines are a common method of
de-risking underground mining developments, particularly in NSW. Current examples include Aurelia
Metals and Evolution Mining, with both groups announcing plans to construct exploration declines at
their respective Peak and Lake Cowal operations.
Following the finalisation of development studies into the project’s advancement, an exploration decline
has been deemed by the Company and CBH as a low risk path to unlock the value of the multitude of
high-grade base metals-rich drill intercepts recorded at Mallee Bull. Deeper drilling at the project has
returned many exceptional intercepts highlighting the project’s strong economic potential, with better
intercepts including:
• 72m @ 2.11% Cu, 41 g/t Ag, 1.13 g/t Au from 363m in MBDD002.
• 53m @ 4.08% Cu, 42 g/t Ag, 0.22 g/t Au from 470m in MBDD009W1.
• 69m @ 3.48% Cu, 34 g/t Ag, 0.14 g/t Au from 533m in MBDD009.
• 84m @ 4.42% Cu, 38 g/t Ag, 0.14 g/t Au from 575m in MBDD009W2W1.
The project has been designed to have minimum surface impact with less than 10 hectares of
disturbance planned. The joint venture proposes to develop a box cut to ~30m below surface, to provide
a suitable portal for the establishment of an exploration decline to ~300m below surface (~2,000m in
length), along with a ventilation rise, escapeway and all other necessary infrastructure, including: waste,
ore and topsoil stockpiles; water storage dam; water diversion drains and settling ponds/sumps;
workshop facilities; explosive magazine; fuel storage; power generator; site office, ablution blocks and
car park; heavy vehicle parking and laydown areas; haul and access roads; waste storage facilities; and
an accommodation camp for approximately 30 personnel.
After the exploration decline reaches approximately 130m below surface, a bulk sample of up to 20,000t
(5,600m3) of material is to be excavated from the Silver Ray Lode, which lies between approximately
60m and 130m below surface. The bulk sample is for the primary purpose of confirming the
metallurgical characteristics (including mineral recovery rates) using conventional sulphide flotation
processing methods. Metallurgical testwork to date has yielded total recoveries of up to 90.3% Zn, 92.3%
Pb and 82.3% Ag, producing separate zinc and lead concentrates. The Silver Ray Lode is characterised
by high-grade zinc-lead-silver mineralisation, with intercepts including; 13.5m @ 21.1% Zn, 14.1% Pb,
268g/t Ag from 82m in MBDD028; 12m @ 20.3% Zn, 14.8% Pb, 308g/t Ag, 1.59g/t Au from 83m in
MBRC024; and 9m @ 20.8% Zn, 10.6% Pb, 338g/t Ag, 1.91g/t Au from 88m in MBRC085.
Successful underground exploration will see the JV seek approval for conversion to a full mining
operation, with the benefit of established infrastructure, sunk capital costs and a streamlined regulatory
approvals process. Regulatory approval for the exploration decline is anticipated to take between 6-12
months and is being sought via a Review of Environmental Factors (REF) which is being submitted to the
NSW Department of Planning and Environment. The high-grade bulk sample from the Silver Ray lens is
anticipated to contribute significantly towards offsetting of capital costs. Final development approval is
subject to JV agreement and project funding. In this regard, discussions between the Company and CBH
are ongoing.
PAGE 9
Figure 3: Proposed Mallee Bull Exploration Decline Development
May Day Deeps
The May Day Deeps prospect is located within Mining Lease 1361, part of the Mallee Bull JV, and is
defined as a significant IP and magnetic geophysical anomaly located in an assumed down plunge
position to the east of the historic May Day VMS deposit. In June 2019, a single drillhole was drilled
(MDRCDD011) from a collar position north-east of the historic May Day deposit, targeting this anomaly.
Several zones of minor mineralisation were observed with coinciding anomalous multi-element pXRF
geochemistry, however final assay results remained pending at the time of reporting.
Cobar Superbasin Project (PEX 100%; JOGMEC 50% earnt, unvested).
Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
Wirlong
Work on the Cobar Superbasin Project continued during the year with Japan Oil, Gas and Metals
National Corporation (JOGMEC) completing their $7 million earn-in to give them the option to take up a
50% interest. Work focused on the Wirlong prospect, located within EL8307, approximately 30km SW of
Nymagee and 80km SSE of Cobar. The Company 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.
PAGE 10
Better results from previous years’ drilling included:
• 27m @ 5.3% Cu, 23 g/t Ag from 286m in WLRC026
• 31m @ 3.19% Cu, 11 g/t Ag from 299m including 10m @ 8.83% Cu, 28 g/t Ag from 299m in
WLRC052
• 9m @ 8.0% Cu, 17g/t Ag, 0.21 g/t Au from 616m in WLDD001
• 17m @ 4.59% Cu, 8 g/t Ag from 738m in WLRCDD043
Wirlong Phase 6 drilling programme was completed during the year comprising two percussion pre-
collar drillholes with diamond tails. WLRCDD059 and WLRCDD060 were drilled to target magnetic high
and the interpreted down dip continuity of surface geochemical anomalies. Significant mineralised
intervals included:
• 1.2m @ 1.09% Cu and 6 g/t Ag from 523m; 0.65m @ 2.96% Cu, 0.17% Zn and 14 g/t Ag from
484.85m; and 2m @ 0.49% Cu and 0.3% Zn from 474m in WLRCDD059.
• 1.2m @ 0.93% Zn and 0.44% Pb from 463m; 11.1m @ 0.68% Cu from 604.9m (including 1m @
3.15% Cu from 615m; and 1m @ 0.68% Cu from 620m and 1m @ 0.37% Cu from 623m in
WLRCDD060.
Further drilling completed post year end at Wirlong targeted a DHEM conductor plate located between
WLRCDD028 and WLRCDD055. WLRCDD025 intersected strong chalcopyrite mineralisation over 3m
from 428m down hole, which explained the DHEM conductor. Assays and interpretation are remained
pending at the time of reporting. During the year a detailed structural study of the high-grade
mineralisation was undertaken. The interpretation showed the potential for high-grade mineralisation
to be at a different orientation (NW/SE vs N-S) than previously assumed. This interpretation will be
tested during the upcoming year by changing the azimuth of new drillholes in the main high-grade zone.
PAGE 11
Figure 4 – Wirlong Phase 6 Drill Plan.
PAGE 12
Bedooba
Two percussion drillholes (BERC005 and BERC006) were initially drilled to target an off-hole conductor
identified from the DHEM of the historic Bedooba drillhole CBD013DD11. Assays returned showed
minor mineralisation was encountered within these holes. BERC005 (300m) intersected 2m @ 0.18%
Zn, 0.1% Pb and 0.82% Cu from 127m and 3m @ 0.11% Cu from 134m. BERC006 (378m) intersected 1m
@ 0.11 % Cu from 205 and 1m @ 0.32% Cu from 295m. Additional DHEM was then conducted with a
very strong, off-hole, late time anomaly identified to the south of BERC006. Re-interpretation of the
previous DHEM from CBD013DD11 was conducted which supported the new location of the strong
conductor.
Two additional percussion drillholes (BERC007 and BERC008) were drilled to target the off-hole
conductor, identified from the DHEM of BERC006. These holes were dominantly comprised of
interbedded sediments exhibiting moderate alteration and minor disseminated to fracture filled
sulphide mineralisation. Assay results returned indicated minor copper mineralisation in both
drillholes. BERC007 (300m) intersected 10m @ 0.25% Cu from 239m and 1m @ 0.5% Cu from 283m.
BERC008 (192m) intersected 1m @ 0.4% Cu from 140m and 1m @ 0.4% Cu from 170m. A narrow zone
of massive pyrrhotite-rich sulphide material was intersected in a position close to the presumed
conductor position providing an explanation for the DHEM anomaly.
Corporate Activity
Royalty Purchase
On 10 August 2018, MMG notified the Company that it had received an offer from a TSX-listed royalty
streaming business to purchase the royalty interests associated with the tenements acquired from
MMG in 2016. Pursuant to the Company’s first right of refusal regarding the Royalty Deeds, MMG offered
to sell the royalty interests to the Company for $3,300,000 (incl GST) in cash. In accordance with the
terms of the relevant Royalty Deeds, the Company elected to exercise its right to acquire the royalty
interests. The acquisition delivers 100% encumbered ownership of these tenements to the Company.
Capital Raisings
In September 2018, the Company successfully completed a placement of 10 million shares at an issue
price of $0.36 each to raise a gross amount of $3,600,000. This was completed in conjunction with a
fully underwritten 1 for 8 rights issue to raise a further $8,736,119 at the same price as the
aforementioned placement. Funds from this raising were predominately used to purchase the MMG
royalty and undertake drilling to complete a maiden resource at the Company’s Wagga Tank – Southern
Nights.
In June 2019, the Company completed a $7,000,000 capital raising by way of placement of 22,580,646
fully paid ordinary shares at an issue price of $0.31. Funds raised under the Placement will enable the
Company to undertake mining scoping studies at the Wagga Tank-Southern Nights deposit and to
continue pre-development activities at the Mallee Bull deposit; continue to explore for new
mineralisation at Wagga Tank-Southern Nights to build on the maiden resource; continue CSP
programmes of work with JV Partner JOGMEC and advance exploration at some of the Company’s
exciting regional targets.
PAGE 13
Executive Director Appointment
Late in the year, the Company advised the appointment of Mr James (Jim) Simpson as Executive Director
Mining, effective 9 September 2019. Mr Simpson is a highly respected and experienced Mining Engineer
with significant public company board and management experience.
Mr Simpson has more than 30 years mining industry experience, specialising in underground
metalliferous mining. His previous roles include Chief Operating Officer & Executive Vice President for
Peak Gold Ltd; General Manager & Director at Goldcorp Asia Pacific, Peak Gold Mines; General Manager
Mining Lead Zinc at MIM Holdings, Mt Isa and most recently he was Chief Executive Officer and
Managing Director at Aurelia Metals Limited. During his time at Aurelia, the company market
capitalisation increased from sub $20m to over $800m at its peak, along the way repaying more than
$125m of debt and significantly increasing the production profile of the Company with the acquisition
of Peak Gold Mines in 2017/18.
Mr Simpson’s experience ranges from mine development and management through to corporate and
equity market participation. Mr Simpson holds a Bachelor of Engineering Mining (Hons) from University
of NSW and a Diploma of Business (Frontline Management) and is a member of the Australasian
Institute of Mining and Metallurgy. The appointment of Mr Simpson to the Board reflects the Company’s
significant exploration success in the Cobar Basin, and the commencement of the transformation from
an exploration to a mining development company.
R&D
Subsequent to the year’s end the Company received a $1,523,383 payment under the Research and
Development (R&D) Tax Incentive scheme for the 17/18 financial year.
PAGE 14
Figure 5: Cobar Tenements and Prospects
PAGE 15
Subsequent to year end, Peel Mining Limited released a maiden mineral resource estimated for its
Wagga Tank Southern Nights Project. 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 Wagga Tank-Southern Nights (post year end) 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 Wagga Tank Southern Nights Mineral Resource Estimate, released subsequent to year end, is
reported at a 3.5% ZnEq cut-off.
Mineral Resource Estimate for the Southern Nights Deposit
Resource
Classification
Tonnes
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
Indicated
1,126,000
Inferred
2,106,000
Total Resource
3,232,000
8.8
4.5
6.0
3.5
1.5
2.2
107
69
83
0.28
0.14
0.19
0.44
0.13
0.24
14.3
7.2
9.7
Mineral Resource Estimate for the Wagga Tank Deposit
Resource
Classification
Tonnes (t)
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
Inferred
532,000
Total Resource
532,000
2.4
2.4
1.2
1.2
31
31
0.74
0.74
0.77
0.77
6.6
6.6
Mineral Resource Estimate for the Southern Nights and Wagga Tank Deposit
Resource
Classification
Tonnes
Zn (%)
Pb (%)
Ag (g/t)
Cu (%)
Au (g/t)
ZnEq (%)
Indicated
1,126,000
Inferred
2,638,000
Total Resource
3,764,000
8.8
4.0
5.5
3.5
1.4
2.1
107
62
75
0.28
0.26
0.27
0.44
0.26
0.31
14.3
7.1
9.2
Note: Tonnages and grades are rounded. Discrepancies in totals may exist due to rounding. 1 - Zinc equivalent (ZnEq) has been calculated using
assumptions regarding metal sale prices It is Peel Mining’s opinion that all elements included in the metal equivalent calculation have a reasonable
potential to be recovered and sold. For further detail on the resource please see the ASX announcement “Robust Maiden Resource Confirms
Outstanding Mining & Growth Potential at Southern Nights-Wagga Tank” released on 12th July 2019.
PAGE 16
The tables below set out Mineral Resource estimates for 2019, which are unchanged from 2018.
Mallee Bull Mineral Resource estimate at 30 June 2018 based on 1% copper equivalent (CuEq) cut-off
grade
Mineral Resource - as at 30 June 2019
Category
Indicated
Inferred
Total
Kt
1,340
5,420
6,760
CuEq % Cu % Ag g/t
0.91
2
1.8
2.15
2.7
2.6
30
31
31
Au g/t
0.4
0.4
0.4
Pb %
0.96
0.5
0.6
Zn %
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 2019
WO3equivalent cut-off
0.2
Mt
1.29
WO3Eq % WO3 %
0.73
0.61
Mo %
0.05
Note: The figures in the above table are rounded to reflect the precision of the estimates and include rounding errors.
PAGE 17
Competent Persons Statements
Wagga Tank Southern Nights Deposits
The information in this announcement and Appendix that relate to data and geological modelling
included in Mineral Resource estimates is based on information reviewed by Mr Jason McNamara who
is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr McNamara is a full time employee
of Peel Mining and has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they are undertaking to qualify as a Competent
Person as defined in the 2012 edition of the “Australasian Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves”. Mr McNamara consents to the inclusion in the documents of the
matters based on this information in the form and context in which it appears.
The information in this announcement and Appendix that relates to grade estimation and Mineral
Resource estimates is based on information reviewed by Mr Jason McNamara, who is a Fellow of The
Australasian Institute of Mining and Metallurgy. Mr McNamara is a full time employee of Peel Mining
and has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2012 edition of the “Australasian Code for Reporting Exploration Results, Mineral Resources and
Ore Reserves”. Mr McNamara consents to the inclusion in the documents of the matters based on this
information in the form and context in which it appears. This release may include aspirational targets.
These targets are based on management’s expectations and beliefs concerning future events as of the
time of the release of this document. Targets are necessarily subject to risks, uncertainties and other
factors, some of which are outside the control of Peel Mining that could cause actual results to differ
materially from such statements. Peel Mining makes no undertaking to subsequently update or revise
the forward-looking statements made in this release to reflect events or circumstances after the date
of this release.
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'.
PAGE 18
Mr Hutton consented to the inclusion of the matters based on his information in the form and context
in which it appears.
Exploration Results
The information in this report that relates to Exploration Results is based on information compiled by
Mr 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.
PAGE 19
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
Gromit
Bilpa
Cymbric Vale
Comarto
Devon
Thunderdome
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
EL8872
EL8721
EL8722
EL8790
EL8791
EL8877
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 Mining Ltd
Peel Far West Pty 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%
100%
100%
PAGE 20
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 2019
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.
Robert Tyson
Simon Hadfield
Graham Hardie
James Simpson (appointed 9 September 2019)
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
R Tyson
S Hadfield
G Hardie
J Simpson
Principal activities
Number of Shares Directly and Indirectly Held
Number of Options
7,245,000
4,312,564
16,000,890
Nil
4,000,000
1,500,000
1,500,000
2,000,000
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 $2,870,270
(2018: $1,672,686).
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 15 in this report.
PAGE 21
Significant changes in the state of affairs
On 24 June 2019, the board of Peel Mining Limited announced the appointment of Mr James (Jim)
Simpson as the Executive Director of Mining of the Company effective September 2019. Mr Simpson is
highly respected and experienced Mining Engineer with significant board and management experience.
Mr Simpson was previously the Chief Executive Officer and Managing Director at Aurelia Metals Limited,
Chief Operating Officer & Executive Vice President for Peak Gold Limited; General Manager & Director
at Goldcorp Asia Pacific; and General Manager Mining Lead Zinc at MIM Holdings, Mt Isa. Mr Simpson’s
experience ranges from mine development and management through to corporate and equity market
participation.
Contributed equity increased during the financial year by $19,722,569 through the issue of:
(i) 10,000,000 new ordinary shares at $0.36 each as part of a placement to new and existing
shareholders.
(ii) 24,266,996 new ordinary shares at $0.36 each as part of a rights entitlement offer to new and
existing shareholders.
(iii) 22,580,646 new ordinary shares at $0.31 each as part of a placement to new and existing
professional shareholders.
(iv) 1,000,000 new ordinary shares issued at $0.216 cents on the exercise of Simon Hadfield and
Graham Hardie’s options.
(v) 850,000 new ordinary shares issued on the exercise of employee share options raising $170,450.
Details of the changes in contributed equity are disclosed in note 11 to the financial statements.
The directors are not aware of any other significant changes in the state of affairs of the Group occurring
during the financial year, other than as disclosed in this report.
Events occurring after balance date
Mr James Simpson started his role as the Executive Director of Mining of the Company on 9 September
2019. Upon his commencement, on 9 September 2019, he was issued 2,000,000 options exercisable at
$0.31 of which 1,000,000 vested on 9 September 2019 and 1,000,000 will vest 12 months after
commencement.
Post year-end, a Research and Development (R&D) Tax Incentive Scheme refund for $1,523,383, for the
30 June 2018 tax year was receipted from the ATO. Peel accounts for funds received from the ATO
under the R&D Tax Incentive Scheme as an offset to the Exploration and Evaluation asset, where the
initial expenses to which it relates were capitalised.
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.
There is an intention as well to pursue exploration decline in Mallee Bull JV. These activities are
inherently risky and there are no certainties that the group will successfully achieve its objectives.
PAGE 22
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 4,312,564 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 7,245,000 shares in Peel Mining Limited and 4,000,000 share options.
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 16,000,890 shares in Peel Mining Limited and 1,500,000 share options.
James Simpson – Executive Director Mining
Appointed 9 September 2019
Mr Simpson is an experienced Mining Engineer with significant board and management experience. Mr
Simpson was previously the Chief Executive Officer and Managing Director at Aurelia Metals Limited,
Chief Operating Officer & Executive Vice President for Peak Gold Limited; General Manager & Director
at Goldcorp Asia Pacific; and General Manager Mining Lead Zinc at MIM Holdings, Mt Isa. Mr Simpson’s
experience ranges from mine development and management through to corporate and equity market
participation. No other directorships were held in the past 3 years.
Mr Simpson holds nil shares in Peel Mining Limited and 2,000,000 share options.
Ryan Woodhouse - Company Secretary
Mr Woodhouse has 12 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.
PAGE 23
Meetings of directors
Director’s attendance at directors’ meetings are shown in the following table:
Director
R Tyson
S Hadfield
G Hardie
Number held whilst in office
Number attended
8
8
8
8
8
8
PAGE 24
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.
PAGE 25
Peel Mining Limited listed on 11 May 2007 at $0.20 per share and the share price at 30 June 2019 was
$0.32 (2018: $0.47). 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.
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 2019
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
Payment1
Superannuation
$
Long-service
leave
$
$
Total
$
Performance
Related
%
30 June 2019
Directors
R Tyson
S Hadfield
G Hardie
Total
30 June 2018
Directors
R Tyson
S Hadfield
G Hardie
Total
0%
0%
0%
0%
1. Note Share Based Payment amounts are not cash payments made to directors. The amounts represent the value ascribed by
the Black and Scholes valuation method to options granted. Further information about options granted can be found within the
annual report.
238,846
50,004
50,004
338,854
550,969
189,211
189,211
929,391
279,027
134,457
134,457
547,941
10,405
-
-
10,405
22,691
4,750
4,750
32,191
*Mr Simpson was only a Director effective 9 September 2019 and therefore was not remunerated during the 30 June 2019
financial year.
Short-Term
Employment
Benefits
Cash salary
and fees
$
Post-
Employment
Long-Term
Benefits
Share Based
Payment1
Superannuation
$
Long-service
leave
$
$
Total
$
Performance
Related
%
0%
0%
0%
0%
1. Note Share Based Payment amounts are not cash payments made to directors. The amounts represent the value ascribed by
the Black and Scholes valuation method to options granted. Further information about options granted can be found within the
annual report.
230,000
50,000
50,000
330,000
557,747
218,837
218,837
995,421
300,911
164,087
164,087
629,085
23,006
4,750
4,750
32,506
3,830
-
-
3,830
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:
Simon 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 Chairman.
Mr Hadfield received cash payments and share options totalling $189,211 (2018: $218,837) in his role
as Chairman of the Company.
PAGE 26
Graham 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 $189,211 (2018: $218,837) in his role as a
Non-executive Director of the Company.
Robert 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.
• The Managing Director is required to give the Company 3 months’ notice of resignation.
• Other than for serious misconduct, the Company is required to give Mr Tyson 3 months’ notice
of termination, plus 3 months’ salary.
• The Managing Director may be invited to participate in the Company’s Employee Share Option
Plan.
Mr Tyson received cash payments, leave entitlements and share options totalling $550,969 (2018:
$557,747) in his role as a Managing Director of the Company.
James Simpson (Executive Director Mining)
Mr Simpson commences as the appointed Executive Director Mining on a part time basis on 9
September 2019.
The terms of his contract state:
• Part-time employee commencing 9 September 2019.
• Salary of $140,000 per annum (plus statutory superannuation) based on 16 hours per week.
• Participation in the Company’s Incentive Option Plan.
• Other than for serious misconduct, the Company is required to give Mr Simpson 3 months’
notice of termination, plus 3 months’ salary.
• Mr Simpson is required to give the Company 3 months’ notice of resignation.
Mr Simpson commenced his role on 9 September 2019 and therefore had not received any
remuneration during the 30 June 2019 financial year.
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
R Tyson
S Hadfield
G Hardie
2019
$
268,915
134,457
134,457
2018
$
328,174
164,087
164,087
Number of options
granted during year
2018
2019
Number of options vested
during year
2019
2018
1,000,000
500,000
500,000
1,000,000
500,000
500,000
1,000,000
500,000
500,000
500,000
500,000
500,000
*Mr Simpson was only a Director effective 9 September 2019 and therefore was not remunerated during the 30 June 2019
financial year.
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-
PAGE 27
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.
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
$
10 October 2016
10 October 2016 (50%)
10 October 2017 (50%)
10 October 2019
$0.203
$0.08
28 November 2016
28 November 2016 (67%)
28 November 2017 (33%)
28 November 2019
$0.223
$0.10
15 August 2017
15 August 2017 (50%)
15 August 2018 (50%)
15 August 2020
$0.260
$0.11
30 November 2017
30 November 2017 (67%)
30 November 2018 (33%)
30 November 2020
$0.783
$0.33
7 December 2018
7 December 2018
7 December 2021
$0.570
$0.28
7 December 2018
7 December 2018 (75%)
7 December 2019 (25%)
9 September 2019
9 September 2019 (50%)
9 September 2020 (50%)
7 December 2021
$0.641
$0.27
9 September 2021
$0.31
$0.22
(e) Option holdings of key management personnel (KMP)
30 June
2019
Balance
at the
start of
the
year
Directors
R Tyson
3,000,000
S Hadfield 1,500,000
1,500,000
G Hardie
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
-
-
-
-
(500,000)
(500,000)
- 4,000,000
- 1,500,000
- 1,500,000
3,500,000
1,500,000
1,500,000
500,000
-
-
*Mr Simpson was only a Director effective 9 September 2019 and therefore was not remunerated during the 30 June 2019
financial year.
PAGE 28
(f) Share holdings of Directors– Shares in Peel Mining Limited (number)
30 June 2019
Directors
G Hardie
R Tyson
S Hadfield
Balance at
1 July 2018
Received
during
the year on
the
exercise of
options
Other changes
during the
year
Balance at
30 June 2019
15,422,890
7,080,000
3,812,564
500,000
-
500,000
-
165,000
-
15,922,890
7,245,000
4,312,564
*Mr Simpson was only a Director effective 9 September 2019 and therefore was not remunerated during the 30 June 2019
financial year.
(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 2019 were $57,245 (2018: $58,055).
During the year the Company participated in conferences organised by RIU Conferences Pty Ltd, to the
value of $27,720 (2018: $15,840), 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.
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
2019
$
Consolidated
2018
$
57,245
27,720
84,965
58,055
15,840
73,895
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 2019, 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.
PAGE 29
Voting and comments made at the Company’s 2018 Annual General Meeting
Peel Mining Limited received 78% of “yes” votes on its remuneration report for the 2018 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
PAGE 30
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
Expiry date
10 October 2016
28 November 2016
5 August 2017
30 November 2017
7 December 2018
7 December 2018
9 September 2019
10 October 2019
28 November 2019
15 August 2020
30 November 2020
7 December 2021
7 December 2021
9 September 2021
Issue price of
shares
$
Number
under option
0.203
0.223
0.260
0.783
0.641
0.570
0.310
650,000
3,000,000
900,000
2,000,000
2,000,000
1,600,000
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
17 August 2018
25 September 2018
19 October 2018
22 November 2018
22 November 2018
30 November 2018
28 May 2019
Issue price of shares
2018
2019
$
$
Number of shares issued
2019
Number
2018
Number
0.19
0.203
0.26
0.07
0.19
0.19
400,000
100,000
50,000
1,000,000
100,000
100,000
1,750,000
100,000
100,000
500,000
500,000
500,000
100,000
50,000
1,850,000
0.19
0.26
0.19
0.216
0.216
0.203
0.203
Indemnification and Insurance of Directors and Officers
During the financial year the Company paid a premium of $58,706.82 (2018: of $28,650) 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.
PAGE 31
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:
Robert Tyson
Managing Director
Perth, Western Australia
23rd September 2019
PAGE 32
Operator management fee
Interest income
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
2019
Note $
2018
$
75,442
77,743
-
3,490
156,675
(905,335)
(99,120)
(693,737)
-
(955,697)
(373,056)
110,716
128,158
29,156
333,706
601,736
(753,776)
(64,878)
(461,613)
(673)
(687,333)
(306,149)
(2,870,270)
(1,672,686)
-
-
13
21
8
14
6
14
3
15
Loss from continuing operations after income tax
(2,870,270)
(1,672,686)
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
(2,870,270)
(1,672,686)
(0.014)
(0.009)
(0.014)
(0.009)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
PAGE 33
Current Assets
Cash and cash equivalents
Trade and other receivables
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
2019
$
2018
$
Note
5
7
7
8
8
3
6
9
10
11
12
12
6,950,662
368,616
7,319,278
2,291,570
341,941
2,633,511
521,866
840,487
459,747
3,320,796
37,128,536
42,271,432
485,866
840,487
376,975
3,693,852
24,585,053
29,982,233
49,590,710
32,615,744
1,024,513
1,024,513
1,110,533
1,110,533
6,881,670
6,881,670
7,906,183
6,363,688
6,363,688
7,474,221
41,684,527
25,141,523
48,774,396
(10,467,976)
3,378,107
41,684,527
30,266,457
(7,597,706)
2,472,772
25,141,523
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
PAGE 34
Consolidated
Balance at 1 July 2017
Loss for the year
Total comprehensive
loss for the year
Issue of share capital
Share issue expenses
Share based
payments
Loss for the year
Total comprehensive
loss for the year
Balance at 30 June
2018
Loss for the year
Total comprehensive
loss for the year
Issue of share capital
Share issue expenses
Share based
payments
Balance at 30 June
2019
Note
12
11
11
21
12
12
11
11
21
Contributed
Equity
$
Accumulated
Losses
$
Option
Reserve
$
Total
Equity
$
24,248,580
(5,925,020)
1,718,996
-
(1,672,686)
-
-
-
(1,672,686)
6,218,600
(200,723)
753,776
753,776
-
-
-
6,218,600
(200,723)
-
-
(1,672,686)
-
(1,672,686)
30,266,457
(7,597,706)
2,472,772
25,141,523
-
19,722,569
(1,214,630)
-
(2,870,270)
-
-
-
-
-
-
(2,870,270)
19,722,569
(1,214,630)
905,335
905,335
48,774,396
(10,467,976)
3,378,107
41,684,527
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
PAGE 35
Consolidated
Note
2019
$
2018
$
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
(1,703,902)
-
75,442
78,710
(1,549,750)
(12,588,015)
(36,000)
-
(193,064)
-
-
517,982
(12,299,097)
(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)
19,722,569
(1,214,630)
-
18,507,939
6,218,600
(200,724)
(1)
6,017,875
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
4,659,092
(3,615,413)
5
2,291,570
6,950,662
5,906,983
2,291,570
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
PAGE 36
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 25(b):
Name
Country of
Incorporation
Class of
Shares
Peel Environmental Services Limited
Apollo Mining Pty Ltd
Peel (CSP) Pty Ltd
Peel Far West Pty Ltd
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding
2019
%
100.00
100.00
100.00
100.00
Equity holding
2018
%
100.00
100.00
100.00
100.00
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 has earnt 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 $517,982 (2018: $945,147) for exploration on the project and
management fees (refer note 13) as part of pro rata funding. JOGMEC have currently earnt the right to
acquire 50% of the Project after completion of Stages 1 & 2 expenditure. The Company and JOGMEC
are currently funding, exploration activities prorata.
These amounts have been included in the Group’s Consolidated Statement of Cash Flows and
Consolidated Statement of Financial Position (refer note 10), however per the Group’s accounting policy
(see note 25), 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. In the event JOGMEC does not take up its 50% interest, the full amount of deferred
income will be recognised in profit and loss as a gain.
Currently no cash held by Peel Mining Limited is restricted to be used on the Cobar Superbasin Project
under the terms of the JOGMEC arrangement.
PAGE 37
3. Interests in associate
Peel Mining Limited equity accounts for its sole associate of the group, Saturn Metals Limited, which at
30 June 2019 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
Nature of
relationship
% of
ownership
Interest
2019
%
2018
%
Method
Quoted fair value
Carrying amount
2019
$
2018
$
2019
$
2018
$
Saturn
Metals
Ltd
Total equity accounted investment
Aus
31.43 35.71
Associate
Equity
Method
6,000,000
4,000,000
3,320,796
3,693,852
3,320,796
3,693,852
Associate
2019
$
Associate
2018
$
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
Comprehensive loss for the year
Total comprehensive loss for the year
Reconciliation to carrying amounts:
Opening balance
Asset acquired during the year
Loss for the period at 31.43% (2018: 35.71%)
Closing carrying value
2,916,109
11,202,308
(572,957)
(572,957)
10,629,351
12,132,001
(2,044,439)
541,789
10,629,351
80,126
(1,267,245)
(1,187,119)
3,693,852
-
(373,056)
3,320,796
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
(884,654)
(857,320)
1
4,000,000
(306,149)
3,693,852
PAGE 38
4. 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.
Revenue from external sources
Reportable segment profit/(loss)
2019
$
Peel
75,442
75,442
2019
$
CSP
2019
$
Mallee Bull
-
-
-
-
2019
Total
75,442
75,442
Segment assets
Segment liabilities
27,725,027
-
8,060,810
(6,881,670)
5,963,729
-
41,749,566
(6,881,670)
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)
Reconciliation of reportable segment (loss)
Reportable segment profit/ (loss)
Interest & Other income
Unallocated expenses
Associate loss
Profit/(loss) before tax
Reconciliation of reportable net assets
Reportable segment assets
Reportable segment liabilities
Cash
Unallocated Assets
Unallocated liabilities
Total Net Assets
Consolidated
2019
$
Consolidated
2018
$
75,442
81,233
(2,653,889)
(373,056)
(2,870,270)
41,749,566
(6,881,670)
6,950,662
890,483
(1,024,514)
41,684,527
110,043
491,020
(1,967,600)
(306,149)
(1,672,686)
25,802,516
(6,363,688)
2,291,570
4,521,658
(1,110,533)
25,141,523
PAGE 39
5. 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
6. Exploration and evaluation assets
Consolidated
2019
$
Consolidated
2018
$
950,662
6,000,000
6,950,662
1,291,570
1,000,000
2,291,570
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.
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
nil exploration expenditure being written off during the year (2018: $673).
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
Impairment Expense
Research and development tax incentive grant
Closing balance
Consolidated
Consolidated
2019
$
2018
$
37,128,536
24,585,053
24,585,053
12,543,483
-
-
37,128,536
15,389,576
9,973,586
(673)
(777,436)
24,585,053
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.
PAGE 40
7. Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days and therefore are all
classified as current. Trade receivables are recognised initially at the amount of consideration that is
unconditional unless they contain significant financing components, when they are recognised at fair
value. The group holds the trade receivables with the objective to collect the contractual cash flows and
therefore measures them subsequently at amortised cost using the effective interest method.
The Company applies the AASB 9 simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade receivables. Other current receivables and prepayments
were previously presented together with trade receivables but are now presented as other financial
assets at amortised cost (receivables) and other current assets (prepayments) in the balance sheet, to
reflect their different nature.
In determining the recoverability of a trade or other receivable using the expected credit loss model,
the Company performs a risk analysis considering the type and age of the outstanding receivables, the
creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.
The Company has applied the new rules retrospectively from 1 July 2018, and no material provision for
credit losses was required to be recognised in the current period ending 30 June 2019.
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.
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
2019
$
Consolidated
2018
$
-
39,624
-
278,072
1,631
49,289
368,616
137,499
40,251
(137,499)
259,876
2,598
39,216
341,941
521,866
521,866
485,866
485,866
PAGE 41
8. 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
- Vehicles
- Office equipment
- Computer software
3-10 years
3-5 years
3-5 years
3-5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if
the asset’s carrying amount is 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.
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 2019 (2018: $nil).
PAGE 42
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
9. Trade and other payables
Consolidated
2019
$
Consolidated
2018
$
840,487
840,487
865,454
(405,706)
459,748
1,300,235
1,217,462
193,065
(99,120)
(11,172)
1,300,235
778,029
(401,054)
376,975
1,217,462
1,024,892
275,964
(64,878)
(18,516)
1,217,462
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
10. Deferred income
Consolidated
2019
$
Consolidated
2018
$
563,563
460,950
1,024,513
635,529
475,004
1,110,533
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 JOGMEC (above),
refer note 2, except the Management Fee of 10% on all expenditure, refer note 13, which is accrued as
cash calls are received.
Funds from farm-out of asset to JOGMEC
Total Deferred Income
Consolidated
2019
$
6,881,670
6,881,670
Consolidated
2018
$
6,363,688
6,363,688
PAGE 43
11. Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options for the acquisition of a business are not included in the
cost of the acquisition as part of the purchase consideration.
If the entity acquires its own equity instruments, e.g. as the result of a share buy-back, those instruments
are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the
profit or loss and the consideration paid including any directly attributable incremental costs (net of
income taxes) are recognised directly in equity.
(a) Share capital
Consolidated and Parent Entity
2018
2019
Number of
Shares
$
Number of
Shares
$
Authorised and issued, ordinary shares fully paid
242,733,611 48,774,396
184,035,969 30,266,457
(b) Movements in ordinary share capital
Opening balance, 1 July
Shares issued as a result of exercise of options
Shares issued as a result of share placements
Shares issued as a result of rights entitlement
Transaction costs on share issues
Closing balance, 30 June
184,035,969
1,850,000
32,580,646
24,266,996
-
242,733,611
30,266,457 167,285,969
1,750,000
15,000,000
386,450
10,600,000
8,736,119
(1,214,630)
-
48,774,396 184,035,969
24,248,580
218,600
6,000,000
(200,723)
30,266,457
(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.
(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.
PAGE 44
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
2019
$
Consolidated
2018
$
(7,597,706)
(2,497,214)
(373,056)
(10,467,976)
(5,925,020)
(1,366,537)
(306,149)
(7,597,706)
2,472,772
905,335
3,378,107
1,718,996
753,776
2,472,772
The share-based payment reserve represents the fair value of equity benefits provided to directors and
employees as part of their remuneration for services provided to the Company paid for by the issue of equity.
Share options and reserve movements
2019
2018
Number
$
Number
$
Opening balance
8,400,000
2,472,772
7,100,000
1,718,996
Issued to directors, employees and
contractors
Lapsed
Exercised
Closing balance
3,600,000
905,335
3,050,000
753,776
-
(1,850,000)
10,150,000
-
-
3,378,107
-
(1,750,000)
8,400,000
-
-
2,472,772
Exercisable at $0.190 each on or before 19
October 2018
Exercisable at $0.216 each on or before 7
December 2018
Exercisable at $0.203 each on or before 10
October 2019
Exercisable at $0.223 each on or before 28
November 2019
Exercisable at $0.260 each on or before 15 August
2020
Exercisable at $0.783 each on or before 30
November 2020
Exercisable at $0.641 each on or before 7
December 2021
Exercisable at $0.570 each on or before 7
December 2021
-
-
650,000
3,000,000
900,000
2,000,000
2,000,000
1,600,000
10,150,000
-
-
-
-
-
-
600,000
1,000,000
800,000
3,000,000
1,000,000
2,000,000
-
8,400,000
-
-
-
-
-
-
-
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).
PAGE 45
13. Other Revenue & 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. This revenue falls under the adoption of AASB 15 effective 1 July 2018 as
it is identified to be a single performance obligation and separately identifiable from the deferred
income (refer note 10). Management has assessed the impact and disclosures required and determined
nil impact to the financial statements, refer note 25.
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.
Recognition of 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.
All other items of income on the consolidated statement of profit or loss and other comprehensive
income are listed below:
Gain or of disposal of assets (Exploration & Evaluation)*
Gain on disposal of assets (De-recognition of subsidiaries)
Gain or (Loss) of disposal of assets (Property, Plant & Equipment)
Consolidated
2019
$
-
14,662
(11,172)
3,490
Consolidated
2018
$
332,221
-
1,485
333,706
* 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 and oncosts
Administration expenses
Corporate
Consultants
Consolidated
2019
$
437,779
100,008
155,950
693,737
791,551
164,146
955,697
Consolidated
2018
$
255,968
100,263
105,382
461,613
516,114
171,219
687,333
PAGE 46
15. Income tax
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
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.
The Group has total carried forward tax losses arising in Australia of $35,624,358 (2018: $21,138,327)
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 $1,056,528 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.
PAGE 47
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
(Increase) / decrease in receivables
Increase / (decrease) in payables
Loss after income tax
17. Financial risk management
Overview
Consolidated
2019
$
(1,549,750)
Consolidated
2018
$
(946,035)
(905,335)
(99,120)
-
3,490
(373,056)
(753,776)
(64,878)
(673)
330,765
(306,149)
(34,102)
87,603
(2,870,270)
130,789
(62,729)
(1,672,686)
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
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well
as credit exposures to wholesale and retail customers, including outstanding receivables. 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.
The Company applies the AASB 9 simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade receivables and contract assets. To measure the
expected credit losses, trade receivables and contract assets have been grouped based on shared credit
risk characteristics and the days past due.
Prepayments do not meet the definition of financial assets.
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.
PAGE 48
Risk management
The Company limits its exposure to credit risk in relation to cash and cash equivalents and other
financial assets by only utilising banks and financial institutions with acceptable credit ratings.
The Company operates in the mining exploration sector and does not have trade receivables from
customers.
Impairment losses
At 30 June 2019 no further impairment has been recognised by the Group on a receivable from its joint
venture partner. This impairment in prior years was in relation to expenses paid for by the Company
on 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 2019
Trade and other payables
30 June 2018
Trade and other payables
Interest rate risk
Note
9
9
Consolidated Financial
Obligations
$
1,024,513
1,110,533
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
1.65%
0.47%
Consolidated
Carrying Amount
2019
$
6,000,000
521,866
2018
$
1,000,000
485,866
Cash flow sensitivity analysis for variable rate instruments of the consolidated entity
At 30 June 2019 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 $69,507 lower/higher (2018: $14,858
lower/higher).
PAGE 49
Fair values
The carrying values of all financial assets and financial liabilities, as disclosed in the Consolidated
Statement of Financial Position, are the same as their fair values, due to their short-term nature.
18. Contingencies & Commitments
The Group had no contingent assets or liabilities as at 30 June 2019 (2018: $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 2019.
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 $141,080 (2018: $133,720).
19. Events after the reporting period
Mr James Simpson started his role as the Executive Director of Mining of the Company on 9 September
2019. Upon his commencement, he was issued 2,000,000 options exercisable at $0.31.
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.
Post year end, an application for June 2018 tax refund was approved. The refund amounted to
$1,523,383 and an interest component of $4,551.
Other than the above, there were no events occurring after balance date requiring separate disclosure.
PAGE 50
20. Related parties
(a) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2019
$
Consolidated
2018
$
338,854
32,191
10,406
547,941
929,392
330,000
32,506
3,830
629,085
995,421
(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 2019 were $57,245 (2018: $58,055).
During the year the Company participated in conferences, to the value of $27,720 (2018: $15,840)
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
2019
$
Consolidated
2018
$
57,245
27,720
84,965
58,055
15,840
73,895
Peel Mining Limited (PEX) holds 31.43% of Saturn Metals Limited (2018: 35.71%). Saturn Metals
Limited engaged Peel Mining Limited in a non-exclusive basis to perform and provide
administrative services and facilities through a service agreement.
Sale of Apollo Hill Gold Project
Proceeds from management services provided to associate
Consolidated
2019
$
-
153,238
Consolidated
2018
$
4,000,000
448,552
Outstanding balances arising from sale of services with related parties
Saturn Metals Limited
Consolidated
2019
$
Consolidated
2018
$
11,183
2,049
Other than the above, the Group had no other transactions with related parties.
PAGE 51
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
2019
Number
1,600,000
2019
$
2018
Number
2018
$
357,394
1,050,000
124,691
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 employee option granted during the 30 June 2019 financial year, is convertible
into one ordinary share at an exercise price of 57 cents.
Set out below are summaries of options granted under the plan.
30 June 2019
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
$
Number
Number
Number Number Number
Vested and
exercisable
at end of
the year
Number
7 Dec 18
7 Dec 21
0.570
-
1,600,000
-
15 Aug 17 15 Aug 20
0.260
1,000,000
10 Oct 16
10 Oct’19
0.203
800,000
19 Oct 15
19 Oct’18
0.190
600,000
-
-
-
(100,000)
(150,000)
(600,000)
-
-
-
-
1,600,000
800,000
900,000
900,000
650,000
650,000
-
-
PAGE 52
30 June 2018
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
$
Number
Number Number Number Number
Vested and
exercisable
at end of
the year
Number
15 Aug 17
15 Aug 20
0.260
-
1,050,000
(50,000)
10 Oct’16
10 Oct’19
0.203
1,000,000
19 Oct’15
19 Oct’18
0.190
1,100,000
-
-
(200,000)
(500,000)
-
-
-
1,000,000
475,000
800,000
800,000
600,000
600,000
Fair value of options granted
The assessed fair value at grant date of options granted to employees during the period ended 30
June 2019 was $0.28 per option (2018: $0.11).
The model inputs for options granted during the years ended 30 June 2019 and 30 June 2018 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
2019
50% vest immediately
50% vest in one year from
grant date
$0.57
7 Dec 2018
7 Dec 2021
$0.48
100%
0.00%
1.93%
2018
50% vest immediately
50% vest in one year from
grant date
$0.26
15 August 2017
15 August 2020
$0.20
100%
0.00%
1.92%
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:
2019
Number
2,000,000
Consolidated
2018
Number
2019
$
547,941
2,000,000
2018
$
629,085
Options granted to directors
Set out below are summaries of directors granted.
30 June 2019
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
7 Dec 18
7 Dec 21
0.641
-
2,000,000
30 Nov 17
30 Nov 20
0.783
2,000,000
28 Nov 16
28 Nov 19
0.223
3,000,000
7 Dec 15
7 Dec 18
0.216
1,000,000
-
-
-
-
-
-
-
- 2,000,000
1,500,000
- 2,000,000
2,000,000
- 3,000,000
3,000,000
(1,000,000)
-
-
PAGE 53
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
30 Nov 20
0.783
-
2,000,000
28 Nov 16
28 Nov 19
0.223
3,000,000
-
7 Dec 15
7 Dec 18
0.216
1,000,000
5 Dec 14
4 Dec 17
0.070
1,000,000
-
-
-
-
- 2,000,000
1,500,000
- 3,000,000
3,000,000
- 1,000,000
1,000,000
(1,000,000)
-
-
Fair value of options granted
The assessed fair value at grant date of options granted to directors during the period ended 30
June 2019 was $0.27 per option (2018: $0.33).
The model inputs for options granted during the years ended 30 June 2019 and 2018 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
(c) Acquisition – Share based payment
2019
Executive & Non-exec
Director Options
1,500,000 vest immediately
500,000 vest 7 Nov 19
2018
Executive & Non-exec
Director Options
1,500,000 vest immediately
500,000 vest 30 Nov 18
$0.641
7 December 2018
7 December 2021
$0.783
30 November 2017
30 November 2020
$0.475
100%
0.00%
1.93%
$0.580
100%
0.00%
1.88%
Peel Mining Limited made no acquisitions using share-based payments during the year.
(d) Weighted averages – Options
The weighted average exercise price $0.47 (2018: $0.36).
The weighted average fair value of options is $0.21 (2018: $0.15).
The weighted average remaining contractual life is 1.39 years (2018: 1.53 years).
PAGE 54
22. Remuneration of auditors
Amounts paid or due and payable to
PricewaterhouseCoopers
Audit and review of financial reports
Taxation services
Indirect taxation services
Total
23. Loss per share
Consolidated
2019
$
Consolidated
2018
$
52,100
52,100
9,000
-
9,000
52,911
52,911
22,440
58,661
81,101
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
2019
2018
(0.014)
(0.009)
(0.014)
(0.009)
(2,870,270)
(1,672,686)
Consolidated
Number of
Shares
2019
Number of
Shares
2018
212,232,696
177,513,640
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.
PAGE 55
24. 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
2019
$
7,084,805
42,569,890
(885,364)
(885,364)
41,684,526
48,731,233
3,378,107
(10,424,814)
41,684,526
2018
$
2,755,596
26,286,351
(1,141,876)
(1,144,826)
25,141,525
30,223,294
2,472,773
(7,554,542)
25,141,525
77,743
78,932
(3,026,946)
(2,870,271)
128,157
1,321,663
(2,273,749)
(823,929)
Commitments for the parent entity are the same as those for the consolidated entity and are set out in
note 18.
The Group had impaired values held by subsidiaries Apollo Hill Limited and Peel Environment Limited
as these companies are now being held dormant.
The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities
at year-end.
25. 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 2019 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.
PAGE 56
(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.
PAGE 57
(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 amendments
Certain new accounting standards and interpretations have been published that are mandatory for the
30 June 2019 reporting period. The company’s assessment of the impact of these new standards and
interpretations is set out below.
AASB 9 Financial Instruments
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 whilst introducing a new impairment model.
These latest amendments now complete the financial instruments standard.
Management completed a detailed assessment of its financial assets as at 1 July 2018. Most of the
requirements in AASB 139 for classification and measurement of the group’s financial assets were
carried forward in AASB 9. Hence, the Company’s accounting policy for financial assets did not change
except for the application of new impairment rules.
PAGE 58
In determining the recoverability of a trade or other receivable using the expected credit loss model,
the group performs a risk analysis considering the type and age of the outstanding receivables, the
creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.
The group has applied the new rules retrospectively from 1 July 2018, and no material provision for
credit losses was required to be recognised in the current period ending 30 June 2019.
AASB 15 Revenue from Contracts with Customers
The AASB issued a new standard for the recognition of revenue. This replaces AASB 118 which covers
contracts for goods and services and AASB111 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.
The Company has adopted AASB 15 from 1 July 2018. Management has assessed the impact of the new
standard, and its application to the Company’s financial statements, and determined there is nil effect
to the Company.
(i) New accounting standards and interpretations not yet adopted
AASB 16 Leases
AASB 16 replaces AASB 117 Leases and for the lessees eliminates the classifications of operating leases
and finance leases. Except for short-term leases and leases of low-value assets, rights-of-use assets and
corresponding lease liabilities are recognised in the statement of financial position. The right-of-use
asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis,
while the lease liability is reduced by an allocation of each lease payment. In the earlier periods of the
lease, the expense associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. For lessor accounting, the standard does not substantially change how a
lessor accounts for leases.
The Company has reviewed its contracts that were in place at 1 July 2019 or have been entered into
since and determined that there are no leases other than short-term leases which are exempt from the
requirements of AASB 16. As a result, no impact on the current or prior reporting periods is expected
upon adoption of AASB 16.
There are no other standards that are yet effective and that would be expected to have a material
impact on the entity in its current or future reporting periods and on any foreseeable future
transactions.
(j) 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.
PAGE 59
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
is uncertain.
ordinary course of business
tax determination
the ultimate
for which
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.
PAGE 60
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:
Robert Tyson
Managing Director
Perth, Western Australia
23rd September 2019
PAGE 61
Auditor’s Independence Declaration
As lead auditor for the audit of Peel Mining Limited for the year ended 30 June 2019, 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
23 September 2019
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 Group) 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 2019 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 2019
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income 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 (including Independence
Standards) (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 $500,000 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 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.
Key audit matter
How our audit addressed the key audit matter
Basis of preparation of the financial
report
The financial statements have been prepared by
the Group on a going concern basis, which
contemplates that the Group will continue to
meet its commitments, realise its assets and settle
its liabilities in the normal course of business.
The Group is in the exploration and evaluation
phase and generates a small amount of
management fee income from its JOGMEC
arrangement. It relies on funding from its
shareholders or other sources to continue as a
going concern. These funds are used to meet
expenditure requirements to maintain the good
standing of the Group’s tenements, progress
project feasibility studies, and to cover corporate
overheads.
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 basis of
preparation for the Group’s financial report was a
key audit matter due to its importance to the
financial report and the judgement involved in
forecasting future cash flows for a period of at
least 12 months from the date 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:
● 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 as a result
of the audit has been included.
● Inquired of management and the directors
whether they were aware of any events or
conditions, including beyond the period of
assessment that 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.
● 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.
Carrying value of exploration and
evaluation assets
(Refer to note 6)
As at 30 June 2019, the Group had capitalised
exploration and evaluation assets of $37,128,536
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.
We performed the following procedures, amongst
others:
● 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.
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.
● 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 2019, 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
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 on the other information that we obtained prior to the date of
this auditor’s report, 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 Group 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 25 to 30 of the directors’ report for the year
ended 30 June 2019.
In our opinion, the remuneration report of Peel Mining Limited for the year ended 30 June 2019 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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
23 September 2019
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
performance;
- Approving budgets, monitoring management and
financial
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.
PAGE 69
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.
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;
➢
PAGE 70
➢ 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
Industry Specific (Australia)
Competence
Accounting, Tax, Business Strategy, Corporate Financing, Financial
Literacy, Agreements/Fiscal Terms and Risk Management, Marketing
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
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.
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.
PAGE 71
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.
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.
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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.
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
Proportion of women
9 out of 25 (36%)
0 out of 2 (0%)
0 out of 4 (0%)
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REMUNERATION
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;
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
PAGE 74
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:
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.
PAGE 75
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 2019 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.
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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.
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.
PAGE 77
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
the Company website at
http://www.peelmining.com.au.
the corporate governance
information section of
in
PAGE 78
Information relating to shareholders at 20 September 2019
Distribution of shareholders
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 – 999,999,999
Total
Twenty largest shareholders
1. ST BARBARA LTD
2. POINT NOMINEES PTY LTD
3. PERTH CAPITAL PTY LTD
4. ARIKI INVESTMENTS PTY LIMITED
5. HAMPTON HILL MINING NL
6. WINCHESTER INVESTMENTS GROUP PTY LIMITED
7. BELGRAVIA STRATEGIC EQUITIES PTY LTD
8. PERTH CAPITAL PTY LTD
9. CITICORP NOMINEES PTY LIMITED
10. BNP PARIBAS NOMS PTY LTD
11. JAYLEAF HOLDINGS PTY LTD
12. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
13. WYTHENSHAWE PTY LTD
14. MR ROBERT MACLAINE TYSON
15. ARIKI INVESTMENTS PTY LIMITED
16. DENKEY PTY LTD
17. MR SIMON HADFIELD & MRS FIONA HADFIELD
Number of
Holders
80
246
183
660
222
Number of
Ordinary
Shares
27,235
721,443
1,501,331
26,134,712
214,348,890
%
0.01
0.30
0.62
10.77
88.31
1,391
242,733,611
100.00
Number of
Ordinary
Shares
%
39,093,750
16.11
15,422,890
13,608,814
11,692,884
10,350,000
8,500,000
6,791,594
5,920,000
3,897,547
3,841,942
3,682,928
3,340,914
3,110,000
2,877,625
2,585,053
2,520,202
2,195,560
6.35
5.61
4.82
4.26
3.50
2.80
2.44
1.61
1.58
1.52
1.38
1.28
1.19
1.06
1.04
0.90
0.85
0.85
0.82
147,555,453
60.79
PAGE 79
18. MR JONATHON TYSON & MR CHRIS TYSON & MR ROBERT TYSON
2,070,000
19. MR ANDREW LENOX HEWITT
20. WARRAMBOO HOLDINGS PTY LTD
2,053,750
2,000,000
Substantial shareholders
1.
2.
St Barbara Limited
Hampton Hill Mining NL and Associates
3. William Hodeson and Associated Companies
4.
Point Nominees Pty Ltd and Associates
Number of
Ordinary
Shares
%
39,093,750
16.10%
36,438,814
15.01%
17,246,548
7.10%
16,000,890
6.59%
PAGE 80
At the prevailing market price of $0.28 per share there were 126 shareholders with less than a
marketable parcel of shares at 20 September 2019.
At 20 September 2019 there were 1,391 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 12,150,000 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)”
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