TIDMPDZ
RNS Number : 8886N
Prairie Mining Limited
27 September 2019
PRAIRIE MINING LIMITED
2019
ANNUAL REPORT | ROCZNY RAPORT
ABN 23 008 677 852
CORPORATE DIRECTORY | ZBIÓR DANYCH KORPORACYJNYCH
DIRECTORS: AUDITOR:
Mr Ian Middlemas Chairman Poland:
Mr Benjamin Stoikovich Director Ernst & Young Audyt Polska sp.
and CEO z. o.o.
Ms Carmel Daniele Non-Executive Australia:
Director Ernst & Young - Perth
Mr Thomas Todd Non-Executive Director
Mr Mark Pearce Non-Executive Director BANKERS:
Mr Todd Hannigan Alternate Director Poland:
Bank Zachodni WBK S.A. - Santander
Group
Mr Dylan Browne Company Secretary Australia:
Australia and New Zealand Banking
PRINCIPAL OFFICES: Group Ltd
PD Co sp. z. o.o. (Warsaw):
Ul. Wspolna, 35 lok. 4 SHARE REGISTRIES:
00-519 Warsaw Poland:
Komisja Nadzoru Finansowego (KNF)
Plac Powstańców Warszawy
Karbonia S.A. (Czerwionka - Leszczyny): 1, skr. poczt. 419
Ul. 3 Maja 44, 00-950 Warszawa
44-230 Czerwionka - Leszczyny Tel: Tel: +48 22 262 50 00
United Kingdom:
London: Computershare Investor Services
Unit 3C, 38 Jermyn Street PLC
London SW1Y 6DN The Pavilions, Bridgewater Road
United Kingdom Bristol BS99 6ZZ
Tel: +44 370 702 0000
Australia (Registered Office): Australia:
Level 9, BGC Centre Computershare Investor Services
28 The Esplanade Pty Ltd
Perth WA 6000 Level 11, 172 St Georges Terrace
Tel: +61 8 9322 6322 Perth WA 6000
Fax: +61 8 9322 6558 Tel: +61 8 9323 2000
SOLICITORS: STOCK EXCHANGE LISTINGS:
Poland: Poland:
DLA Piper Wiater sp.k. Warsaw Stock Exchange - GPW Code:
United Kingdom: PDZ
DLA Piper UK LLP United Kingdom:
Australia: London Stock Exchange (Main Board)
DLA Piper Australia - LSE Code: PDZ
Australia:
Australian Securities Exchange
- ASX Code: PDZ
CONTENTS | ZAWARTO
Directors' Report
Consolidated Statement of Profit or Loss and other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
The following sections (as well as all illustrations and figures)
are available in the full version of the 2019 Annual Report on the
Company's website at http://www.pdz.com.au/company-reports
Notes to and Forming Part of the Financial Statements
Directors' Declaration
Auditor's Independence Declaration
Independent Auditor's Report
Corporate Governance
Mineral Resources and Ore Reserves Statement
ASX Additional Information
The Company also advises that an Appendix 4G (Key to
Disclosures: Corporate Governance Council Principles and
Recommendations), 2019 Corporate Governance Statement and Notice of
Annual General Meeting/Proxy Form have been released today and are
also available on the Company's website.
DIRECTORS' REPORT
30 JUNE 2019
The Directors of Prairie Mining Limited present their report on
the Consolidated Entity consisting of Prairie Mining Limited
("Company" or "Prairie") and the entities it controlled at the end
of, or during, the year ended 30 June 2019 ("Consolidated Entity"
or "Group").
OPERATING AND FINANCIAL REVIEW
Operations
Highlights during, and since the end of the financial year
include:
Debiensko Mine (Premium Hard Coking Coal)
-- In December 2016, following the acquisition of Debiensko,
Prairie applied to the Ministry of Environment to amend the 50-year
Debiensko mining concession to extend the time stipulated in the
mining concession for first production of coal from 2018 to 2025.
In January 2019, Prairie received a final "second instance"
decision from the MoE that has denied the amendment application
which the Company believes is fundamentally flawed and fails to
comply with Polish and international law.
-- Whilst the 50-year Debiensko mining concession remains in
place and despite Prairie holding a valid environmental consent
decision enabling mine construction, the actions of the Polish
government have effectively blocked any pathway to production for
Prairie at Debiensko. Prairie will continue to take relevant
actions to pursue its legal rights regarding the Debiensko
concession.
Jan Karski Mine (Semi-Soft Coking Coal)
-- During the year, an Appeal Court in Warsaw overturned the
District Court's injunction that was previously awarded in
Prairie's favour preventing the MoE from granting a mining usufruct
or exploration/mining concession to another party except Prairie.
Prairie believes that the Appeal Court's decision is fundamentally
flawed and will therefore continue to take relevant actions to
pursue its legal rights regarding Jan Karski.
Possible Co-operation between Prairie and JSW
-- Mr Daniel Ozon, CEO of JSW, was dismissed in June 2019,
following his appointment in 2017. Mr W odzimierz Here niak has
since been appointed as JSW's new CEO.
-- There has been no communication or discussion with JSW since
Daniel Ozon's dismissal. The Company will continue to comply with
its continuous disclosure obligations and will make announcements
to the market as required.
Corporate
-- Prairie remains in a financially strong position with cash reserves of A$7 million on hand.
-- In February 2019, the Company formally notified the Polish
Government that there exists an investment dispute between Prairie
and the Government that has arisen out of certain measures taken by
Poland in breach of the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty. Prairie will strongly
defend its position and continue to take relevant actions to pursue
its legal rights regarding both the Debiensko and Jan Karski
projects, including pursuing claims against Poland under the
relevant international treaties.
Debiensko Mine
The Debiensko Mine ("Debiensko"), is a hard coking coal project
located in the Upper Silesian Coal Basin in the south west of the
Republic of Poland. It is approximately 40 km from the city of
Katowice and 40 km from the Czech Republic.
Debiensko is bordered by the Knurow-Szczyglowice Mine in the
north west and the Budryk Mine in the north east, both owned and
operated by Jastrz bska Spó ka W glowa SA ("JSW"), Europe's leading
producer of hard coking coal.
The Debiensko mine was historically operated by various Polish
mining companies until 2000 when mining operations were terminated
due to a major government led restructuring of the coal sector
caused by a downturn in global coal prices. In early 2006 New World
Resources Plc ("NWR") acquired Debiensko and commenced planning for
Debiensko to comply with Polish mining standards, with the aim of
accessing and mining hard coking coal seams. In 2008, the Polish
Ministry of Environment ("MoE") granted a 50-year mine license for
Debiensko.
In October 2016, Prairie acquired Debiensko with a view that a
revised development approach would potentially allow for the early
mining of profitable premium hard coking coal seams, whilst
minimising upfront capital costs.
Update on Debiensko Concession
In December 2016, following the acquisition of Debiensko,
Prairie applied to the MoE to amend the 50-year Debiensko mining
concession.
The purpose of the concession amendment was to extend the time
stipulated in the mining concession for first production of coal
from 2018 to 2025. During the year, Prairie has now received a
final "second instance" decision from the MoE that has denied the
Company's amendment application. Despite Prairie holding a valid
environmental consent decision enabling mine construction, the
actions of the Polish government have effectively blocked any
pathway to production for Prairie therefore making it impossible
for the Company to continue with development at Debiensko.
Jan Karski Mine
The Jan Karski Mine ("Jan Karski") is a large scale semi-soft
coking coal project located in the Lublin Coal Basin in south east
Poland. The Lublin Coal Basin is an established coal producing
province which is well serviced by modern and highly efficient
infrastructure, offering the potential for low capital intensity
mine development. Jan Karski is situated adjacent to the Lubelski W
giel BOGDANKA S.A.'s ("Bogdanka") coal mine which has been in
commercial production since 1982 and is the lowest cost hard coal
producer in Europe.
With the use of modern exploration techniques including latest
drill results, Prairie has affirmed the capability of the project
to produce high value ultra-low ash semi-soft coking coal ("SSCC"),
known as Type 34 coal in Poland whilst confirming Jan Karski as a
globally significant SSCC / Type 34 coking coal deposit with the
potential to produce a high value ultra-low ash SSCC with a coking
coal product split of up to 75%.
Key benefits for the local community and the Lublin and Chelm
regions associated with the development, construction and operation
of Jan Karski have been recognised as the following:
-- creation of 2,000 direct employment positions and 10,000
indirect jobs for the region once operational;
-- increasing skills of the workforce through the implementation
of International Standard training programmes;
-- stimulating the development of education, health services and
communications within the region; and
-- building a mine that creates new employment for generations
to come and career paths for families to remain in the region.
Positive Rulings in Supreme Administrative Court
Poland's Supreme Administrative Court has finally and fully
rejected Bogdanka's administrative complaints against Poland's MoE
regarding the refusal of Bogdanka's 2013 application for a mining
concession over the K-6-7 deposit at Jan Karski.
This Supreme Administrative Court decision is final, cannot be
appealed and has upheld the 2016 Regional Administrative Court
decision that confirms the original 2015 decision, which denied
Bogdanka's mining concession application. It has been concluded
that granting a mining concession to Bogdanka would be a serious
violation of the provisions of Poland's Geological and Mining Law
("GML") and would be contrary to the rule of law as embodied in the
Polish constitution.
In a second ruling, the Supreme Administrative Court has upheld
the 2016 Regional Administrative Court decision that obliged the
MoE to approve Prairie's submitted Addendum No.3 for the K-6-7
deposit. Addendum No.3 is a detailed resource estimate for the
K-6-7 deposit according to Polish geological reporting standards
and is based on the results of Prairie's exploration program at the
deposit.
The Court's ruling has been passed back to the MoE, and the
Company is now waiting on the MoE to reassess the original decision
taking into account the court's verdict.
The Supreme Administrative Court's rulings re-affirm, beyond
doubt, that Bogdanka's 2013 claims over K-6-7 are without merit and
inadmissible.
Injunction against Poland's Ministry of Environment has been
over-turned
In April 2018, Prairie filed a civil law claim against the MoE
due to its failure to grant Prairie a mining usufruct agreement
over the Jan Karski concessions in order to protect the Company's
security of tenure over the project.
The Company had been awarded the Priority Right to apply for a
mining concession at Jan Karski in 2015 following its full
compliance with Poland's GML.
Subsequent to Prairie's filing of the civil law claim discussed
above, the Polish District Court granted Prairie an injunction
preventing the MoE from granting prospecting, exploration or mining
concessions and concluding usufruct agreements with any other party
until full court proceedings were concluded.
In April 2019, an Appeal Court in Warsaw overturned the District
Court's decision and lifted the injunction. Prairie believes that
the Appeal Court's decision is fundamentally flawed. The Appeal
Court's decision is further evidence of the unfair and inequitable
treatment faced by Prairie as a foreign investor in Poland and
these and other measures directed against Prairie by the Polish
government, with respect to the Company's permitting process and
licenses, have blocked Prairie's pathway to any future production
from Jan Karski. The Company is therefore considering all actions
necessary to pursue its legal rights regarding Jan Karski.
Corporate
Possible Co-Operation between Prairie and JSW
During the year, Prairie and JSW signed an extension to a
Non-Disclosure Agreement ("NDA"), with the term of the NDA now
ending on 28 September 2019, in order to discuss a deal structure
and commercial terms for any co-operation or transaction and for
the adaption of mine plans for both Debiensko and Jan Karski to
align with JSW's development concepts and to maximise potential
synergies at Debiensko.
In June 2019, Mr Daniel Ozon, CEO of JSW, was dismissed
following his appointment in 2017. Mr W odzimierz Here niak has
since been appointed as the new CEO of JSW. There has been no
communication or discussion with JSW since Daniel Ozon's dismissal.
The Company will continue to comply with its continuous disclosure
obligations and will make announcements to the market as
required.
Dispute with the Polish Government
In February 2019 Prairie formally notified the Polish government
that there exists an investment dispute between Prairie and the
Polish government.
Prairie's notification calls for prompt negotiations with the
government to amicably resolve the dispute and indicates Prairie's
right to submit the dispute to international arbitration in the
event the dispute is not resolved amicably. The dispute arises out
of certain measures taken by Poland in breach of the Energy Charter
Treaty and Australia-Poland Bilateral Investment Treaty. The
Company remains open to resolving the dispute with the Polish
government amicably. As of the date of this report, no amicable
resolution of the dispute has occurred, since the Polish government
has declined to participate in substantive discussions related to
the dispute.
Prairie can confirm that it is taking all necessary actions to
pursue its legal rights regarding its investments in Poland.
Prairie will continue to update the market in relation to this
matter as required.
Results of Operations
The net loss of the Consolidated Entity for the year ended 30
June 2019 was $3,550,672 (2018: $19,382,454). Significant items
contributing to the current year loss and the substantial
differences from the previous financial year include:
(i) Non-cash exploration expenditure impairment expense of
$2,721,198 (2018: nil) has been recognised during the year
following an Appeal Court in Warsaw decision which overturned the
District Court's injunction that was previously awarded in
Prairie's favour which prevented the MoE from granting a mining
usufruct or exploration/mining concession to another party except
Prairie at Jan Karski. Furthermore, a final "second instance"
decision was received by the Company from the MoE that denied the
Debiensko Mining Concession amendment application which was
submitted in 2016. The Company believes that these actions and
others by the Polish Government are evidence of the discriminatory
treatment faced by Prairie as a foreign investor in Poland with
respect to Debiensko and Jan Karski effectively blocked any pathway
to production for Prairie at both Jan Karski and Debiensko. For
this and other reasons, Prairie has formally notified the Polish
government that there exists an investment dispute between Prairie
and the Polish Government that has arisen out of certain measures
taken by Poland in breach of the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty. Accordingly, the
Company has recognised an impairment expense for the total amount
of exploration and evaluation assets previously capitalised;
and
(ii) Non-cash fair value loss of nil (2018: $9,884,328)
attributable to the conversion right of the original CD Capital
convertible loan note ("Loan Note 1") accounted for as a financial
liability at fair value through profit and loss which was
derecognised during the prior year following the conversion of Loan
Note 1. The instrument was a non-cash derivative liability which
was settled during the prior year via the issue of 44,776,120
Ordinary Shares and 22,388,060 unlisted options exercisable at
$0.60 each on or before 30 May 2021 ("CD Options") to CD Capital
pursuant to the investment agreement completed in September
2015.
In 2018, the Company did not pay any cash to settle the
liability with the Company's cash reserve unaffected by the
derecognition of the conversion right
The commercial intentions of both CD Capital and the Company
were to always enter into an equity type arrangement however to be
in compliance with the accounting standards, the conversion right
has, up and until derecognition, been accounted for as a financial
liability with the non-cash fair value movements being recognised
in profit and loss.
(iii) Exploration and Evaluation expenses of $3,319,878 (2018:
$6,774,136), which is attributable to the Group's accounting policy
of expensing exploration and evaluation expenditure incurred by the
Group subsequent to the acquisition of rights to explore and up to
the commencement of a bankable feasibility study for each separate
area of interest;
(iv) Business development expenses of $408,948 (2018: $738,097)
which includes expenses in relation to the Group's investor
relations activities, including brokerage fees, public relations,
digital marketing, travel costs, attendances at conferences and
business development consultant costs;
(v) Non-cash share-based payment reversal of $1,599,118 (2018:
expense $1,316,624) due to incentive securities issued to key
management personnel and other key employees and consultants of the
Group as part of the long-term incentive plan to reward key
management personnel and other key employees and consultants for
the long term performance of the Group. The expense/reversal
results from the Group's accounting policy of expensing the fair
value (determined using an appropriate pricing model) of incentive
securities granted on a straight-line basis over the vesting period
of the options and rights. The change from an expense in 2018 to a
reversal in 2019 is attributable to the forfeiture of 3.1 million
unvested performance rights following the impairment of exploration
and evaluation, it was deemed that the performance rights with
vesting conditions milestones relating to Debiensko and Jan Karski
are now unachievable resulting in a $3.4 million being reversed
from the reserve to profit and loss;
(vi) Revenue of $557,400 (2018: $826,883) consisting of interest
income of $203,160 (2018: $333,291) and the receipt of $354,170
(2018: $493,592) of gas and property lease income derived at
Debiensko; and
(vii) Other income of $1,945,800 (2018: nil) relating to the
gain on extinguishment of the contingent consideration related to
the Karbonia acquisition following the receipt of a final "second
instance" decision from the MoE that denied the Mining Concession
amendment application at Debiensko which was a condition for
Prairie to pay the contingent consideration.
Financial Position
At 30 June 2019, the Company had cash reserves of $6,628,371
(2018: $11,022,333) placing it in a strong financial position.
At 30 June 2019, the Company had net assets of $7,308,588 (2018:
$12,445,698), a decrease of 42% compared with the previous year.
This is largely attributable to the net loss for the year.
Business Strategies and Prospects for Future Financial Years
Prairie's strategy is to create long-term shareholder. This is
likely to now include pursuing various claims against Poland
through international arbitration.
As discussed throughout this report, various measures directed
against Prairie by the Polish government in breach of Polish and
international law with respect to the Company's permitting process
and licenses, have blocked Prairie's pathway to any future
production from its Polish projects.
To achieve its objective, the Group currently has the following
business strategies and prospects:
-- Continue to assess its options for international arbitration
in relation to the investment dispute between Prairie and the
Polish Government that has arisen out of certain measures taken by
Poland in breach of the Energy Charter Treaty, and the
Australia-Poland Bilateral Investment Treaty;
-- To continue to work with Prairie's lawyers (including
international arbitration legal experts) to prepare submissions and
finalise funding arrangements for the international arbitration
claim(s);
-- Continue to assess corporate options for Prairie's investments in Poland; and
-- Identify and assess other suitable business opportunities in the resources sector.
All of these activities are inherently risky and the Board is
unable to provide certainty of the expected results of these
activities, or that any or all of these likely activities will be
achieved. Furthermore, Prairie will continue to take all necessary
actions to pursue the Company's legal rights regarding its
investments in Poland, if and as required. The material business
risks faced by the Group that could have an effect on the Group's
future prospects, and how the Group manages these risks, include
the following:
-- Litigation risk - All industries, including the mining
industry, are subject to legal and arbitration claims.
Specifically, in February 2019, the Company formally notified the
Polish Government that there exists an investment dispute between
Prairie and the Government that has arisen out of certain measures
taken by Poland in breach of the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty. Prairie will strongly
defend its position and continue to take relevant actions to pursue
its legal rights regarding both the Debiensko and Jan Karski
projects, including pursuing claims against Poland under the
relevant international treaties. There is no certainty that any
claim, should it be made in the future, will be successful.
-- Co-operation between Prairie and JSW may not occur - The
Company and JSW have previously been in discussions for over 18
months in relation to a co-operation transaction however in June
2019 Mr Daniel Ozon, CEO of JSW, was dismissed following his
appointment in 2017. Following his dismissal there has been no
communication or discussion between Prairie and JSW. Any
transaction(s), should it/they occur, may be subject to a number of
conditions including, but not limited to, obtaining positive
evaluations and expert opinions, necessary corporate approvals,
consents and approvals related to funding, consents from Poland's
Office of Competition and Consumer Protection (UOKiK) if required,
and any other requirements that may relate to the strategy,
objectives and regulatory regimes applicable to the respective
issuers, and which could also prevent a transaction from occurring
or even completing.
-- The Company may be adversely affected by fluctuations in
foreign exchange - Current and planned activities are predominantly
denominated in Stirling and/or Euros and the Company's ability to
fund these activates may be adversely affected if the Australian
dollar continues to fall against these currencies. The Company
currently does not engage in any hedging or derivative transactions
to manage foreign exchange risk. As the Company's operations
change, this policy will be reviewed periodically going
forward.
-- The Company may not successfully acquire new projects - the
Company may pursue and assess other new business opportunities in
the resources sector. These new business opportunities may take the
form of direct project acquisitions, joint ventures, farm-ins,
acquisition of tenements/permits, or direct equity participation.
The Company's success in its acquisition activities depends on its
ability to identify suitable projects, acquire them on acceptable
terms, and integrate the projects successfully, which the Company's
Board is experienced in doing. However, there can be no guarantee
that any proposed acquisition will be completed or be successful.
If a proposed acquisition is completed the usual risks associated
with a new project and/or business activities will remain.
DIRECTORS
The names and details of the Group's Directors in office at any
time during the financial year or since the end of the financial
year are:
Directors:
Mr Ian Middlemas Chairman
Mr Benjamin Stoikovich Director and CEO
Ms Carmel Daniele Non-Executive Director
Mr Thomas Todd Non-Executive Director
Mr Mark Pearce Non-Executive Director
Mr Todd Hannigan Alternate Director
Unless otherwise stated, Directors held their office from 1 July
2018 until the date of this report.
CURRENT DIRECTORS AND OFFICERS
Mr Ian Middlemas B.Com, CA
Chairman
Mr Middlemas is a Chartered Accountant, a member of the
Financial Services Institute of Australasia and holds a Bachelor of
Commerce degree. He worked for a large international Chartered
Accounting firm before joining the Normandy Mining Group where he
was a senior group executive for approximately 10 years. He has had
extensive corporate and management experience, and is currently a
Director with a number of publicly listed companies in the
resources sector.
Mr Middlemas was appointed a Director of the Company on 25
August 2011. During the three year period to the end of the
financial year, Mr Middlemas has held directorships in
Constellation Resources Limited (November 2017 - present), Apollo
Minerals Limited (July 2016 - present), Paringa Resources Limited
(October 2013 - present), Berkeley Energia Limited (April 2012 -
present), Salt Lake Potash Limited (January 2010 - present),
Equatorial Resources Limited (November 2009 - present), Piedmont
Lithium Limited (September 2009 - present), Sovereign Metals
Limited (July 2006 - present), Odyssey Energy Limited (September
2005 - present), Cradle Resources Limited (May 2016 - July 2019)
and Syntonic Limited (April 2010 - June 2017).
Mr Benjamin Stoikovich B.Eng, M.Eng, M.Sc, CEng, CEnv
Director and CEO
Mr Stoikovich is a mining engineer and professional corporate
finance executive. He has extensive experience in the resources
sector gained initially as an underground Longwall Coal Mining
Engineer with BHP Billiton where he was responsible for underground
longwall mine operations and permitting, and more recently as a
senior executive within the investment banking sector in London
where he gained experience in mergers and acquisitions, debt and
off take financing.
He has a Bachelor of Mining Engineering degree from the
University of NSW; a Master of Environmental Engineering from the
University of Wollongong; and a M.Sc in Mineral Economics from
Curtin University. Mr Stoikovich also holds a 1st Class Coal Mine
Managers Ticket from the Coal Mine Qualifications Board (NSW,
Australia) and is a registered Chartered Engineer (CEng) and
Chartered Environmentalist (CEnv) in the United Kingdom.
Mr Stoikovich was appointed a Director of the Company on 17 June
2013. During the three year period to the end of the financial
year, Mr Stoikovich has not held any other directorships in listed
companies.
Ms Carmel Daniele B.Ec, CA
Non-Executive Director
Ms Carmel Daniele is the founder and Chief Investment Officer of
CD Capital in London. Ms Daniele has over 20 years of global
natural resources investment experience, ten of which was spent
with Newmont Mining/Normandy Mining and acquired companies. As a
Senior Executive (Corporate Advisory) at Newmont she structured
cross-border M&As including the three-way merger between
Franco-Nevada, Newmont and Normandy. Post-merger Ms Daniele
structured the divestment of various non-core mining assets around
the world for the merchant banking arm, Newmont Capital. Ms Daniele
started off her career at Deloitte Touche Tohmatsu. Prior to
setting up CD Capital in London in 2006, Ms Daniele was an
investment advisor to RAB Capital's Special Situations Fund on
sourcing and negotiating natural resource private equity
investments. Ms Daniele holds a Master of Laws (Corporate &
Commercial) and Bachelor of Economics from the University of
Adelaide and is a Fellow of the Institute of Chartered
Accountants.
Ms Daniele was appointed a Director on 21 September 2015. During
the three year period to the end of the financial year, Ms Daniele
has not held any other directorships in listed companies.
Mr Thomas Todd B.Sc (Hons), CA
Non-Executive Director
Mr Todd was the Chief Financial Officer of Aston Resources from
2009 to November 2011. Prior to Aston Resources, Mr Todd was Chief
Financial Officer of Custom Mining, where his experience included
project acquisition and funding of project development for the
Middlemount project to the sale of the company to Macarthur Coal. A
graduate of Imperial College, Mr Todd holds a Bachelor of Physics
with first class Honours. He was a Chartered Accountant (The
Institute of Chartered Accountants in England and Wales) and a
graduate of the Australian Institute of Company Directors.
Mr Todd was appointed a Director on 16 September 2014. During
the three year period to the end of the financial year, Mr Todd has
held a directorship in Paringa Resources Limited (May 2014 -
Present).
Mr Mark Pearce B.Bus, CA, FCIS, FFin
Non-Executive Director
Mr Pearce is a Chartered Accountant and is currently a Director
of several listed companies that operate in the resources sector.
He has had considerable experience in the formation and development
of listed resource companies. Mr Pearce is also a Fellow of the
Institute of Chartered Secretaries and Administrators and a Fellow
of the Financial Services Institute of Australasia.
Mr Pearce was appointed a Director of the Company on 25 August
2011. During the three year period to the end of the financial
year, Mr Pearce has held directorships in Constellation Resources
Limited (July 2016 - present), Apollo Minerals Limited (July 2016 -
present), Salt Lake Potash Limited (August 2014 - present),
Equatorial Resources Limited (November 2009 - present), Sovereign
Metals Limited (July 2006 - present), Odyssey Energy Limited
(September 2005 - present), Piedmont Lithium Limited (September
2009 - August 2018) and Syntonic Limited (April 2010 - October
2016).
Mr Todd Hannigan B.Eng (Hons)
Alternate Director for Mr Thomas Todd
Mr Hannigan was the Chief Executive Officer of Aston Resources
from 2010 to 2011. During this time, the company significantly
progressed the Maules Creek project, including upgrades to the
project's resources and reserves, completion of all technical and
design work for the Definitive Feasibility Study, negotiation of
two major project stake sales and joint venture agreements,
securement of port and rail access and progression of planning
approvals to final stages. Mr Hannigan has worked internationally
in the mining and resources sector for over 18 years with Aston
Resources, Xstrata Coal, Hanson PLC, BHP Billiton and MIM.
Mr Hannigan was appointed as Alternate for Mr Thomas Todd on 16
September 2014. During the three year period to the end of the
financial year, Mr Hannigan has held a directorship in Paringa
Resources Limited (May 2014 - Present).
Mr Dylan Browne B.Com, CA, AGIA
Company Secretary
Mr Browne is a Chartered Accountant and Associate Member of the
Governance Institute of Australia (Chartered Secretary) who is
currently Company Secretary for a number of ASX and European listed
companies that operate in the resources sector. He commenced his
career at a large international accounting firm and has since been
involved with a number of exploration and development companies
operating in the resources sector, based from London and Perth,
including Apollo Minerals Limited, Berkeley Energia Limited and
Papillon Resources Limited. Mr Browne successfully listed Prairie
on the Main Board of the London Stock Exchange and the Warsaw Stock
Exchange in 2015 and recently oversaw Berkeley's listings on the
Main Board LSE and the Madrid, Barcelona, Bilboa and Valencia Stock
Exchanges. Mr Browne was appointed Company Secretary of the Company
on 25 October 2012.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year
consisted of the exploration and development of Debiensko and Jan
Karski. No significant change in nature of these activities
occurred during the year.
EARNINGS PER SHARE
2019 2018
Cents Cents
---------------------------------- ------- --------
Basic and diluted loss per share (1.63) (10.99)
---------------------------------- ------- --------
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group's operations are subject to various environmental laws
and regulations under the relevant government's legislation. Full
compliance with these laws and regulations is regarded as a minimum
standard for all operations to achieve.
Instances of environmental non-compliance by an operation are
identified either by external compliance audits or inspections by
relevant government authorities.
There have been no significant known breaches by the Group
during the financial year.
DIVIDS
No dividends were paid or declared since the start of the
financial year. No recommendation for payment of dividends has been
made (2018: nil).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the
Group during the year other than the following:
(i) On 18 January 2019, the Company announced that Poland's
Supreme Administrative Court had finally and fully rejected
Bogdanka's appeal against Poland's MoE regarding the rejection of
Bogdanka's 2013 application for a mining concession over the K-6-7
deposit at the Jan Karski;
(ii) On 18 January 2019, the Company announced that it had
received a final "second instance" decision from the MoE denying
the Company's amendment application to extend the time stipulated
in the Debiensko mining concession for first production of coal
from 2018 to 2025. Prairie will strongly defend its position and
continue to take relevant actions to pursue its legal rights
regarding the Debiensko concession.
(iii) On 13 February 2019, the Company announced that it had
formally notified the Polish government that there exists an
investment dispute between Prairie and the Government. Prairie's
notification calls for prompt negotiations with the government to
amicably resolve the dispute, and indicates Prairie's right to
submit the dispute to international arbitration in the event the
dispute is not resolved; and
(iv) On 9 April 2019, the Company announced that an Appeal Court
in Warsaw overturned the Civil Court's injunction that was
previously awarded in Prairie's favour preventing the MoE from
granting a mining usufruct or exploration/mining concession to
another party except Prairie. Prairie believes that the Appeal
Court's decision is fundamentally flawed and will continue to take
relevant actions to pursue its legal rights regarding Jan
Karski.
SIGNIFICANT EVENTS AFTER BALANCE DATE
At the date of this report, there are no matters or
circumstances, which have arisen since 30 June 2019 that have
significantly affected or may significantly affect:
-- the operations, in financial years subsequent to 30 June
2019, of the Consolidated Entity;
-- the results of those operations, in financial years
subsequent to 30 June 2019, of the Consolidated Entity; or
-- the state of affairs, in financial years subsequent to 30
June 2019, of the Consolidated Entity.
DIRECTORS' INTERESTS
As at the date of this report, the Directors' interests in the
securities of the Company are as follows:
Interest in securities at the date of this
report
-----------------------------------------------
Ordinary Shares(1) Options(2) Performance
Rights(3)
------------------------ -------------------- ----------- ------------
Mr Ian Middlemas 10,600,000 - -
Mr Benjamin Stoikovich 1,492,262 - 2,100,000
Ms Carmel Daniele(4) 44,776,120 22,388,060 -
Mr Thomas Todd 2,800,000 - -
Mr Mark Pearce 3,000,000 - -
Mr Todd Hannigan 3,504,223 - -
------------------------ -------------------- ----------- ------------
Notes:
(1) "Ordinary Shares" means fully paid Ordinary Shares in the capital of the Company.
(2) "Incentive Options" means an option to subscribe for one
Ordinary Share in the capital of the Company.
(3) "Performance Rights" means Performance Rights issued by the
Company that convert to one Ordinary Share in the capital of the
Company upon vesting of various performance conditions.
(4) As founder and controller of CD Capital, Ms Daniele has an
indirect interest in the Ordinary shares and Options. CD Capital
also hold the right to acquire 5,711,804 Ordinary shares through
the issue of a $0.46 convertible note (Loan Note 2).
SHARE OPTIONS AND PERFORMANCE RIGHTS
At the date of this report the following Incentive Options and
Performance Rights have been issued over unissued Ordinary Shares
of the Company:
-- 200,000 Incentive Options exercisable at $0.50 each on or before 31 March 2020;
-- 900,000 Incentive Options exercisable at $0.60 each on or before 31 March 2020;
-- 700,000 Incentive Options exercisable at $0.80 each on or before 31 March 2020;
-- 22,388,060 CD Options exercisable at $0.60 each on or before 30 May 2021;
-- 9,425,000 Performance Rights with various vesting conditions
and expiry dates between 31 December 2019 and 31 December 2020;
and
-- Convertible loan note with a principal amount of $2,627,430,
convertible into 5,711,805 ordinary shares at a conversion price of
$0.46 per share with no expiry date (Loan Note 2).
During the year ended 30 June 2019, no Ordinary Shares have been
issued as a result of the exercise/conversion of Incentive Options,
CD options, Performance Rights and Loan Note 2. Subsequent to year
end and up until the date of this report, no Ordinary Shares have
been issued as a result of the exercise/conversion of CD options,
Performance Rights and Loan Note 2.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Constitution of the Company requires the Company, to the
extent permitted by law, to indemnify any person who is or has been
a Director or officer of the Company or Group for any liability
caused as such a Director or officer and any legal costs incurred
by a Director or officer in defending an action for any liability
caused as such a Director or officer.
During or since the end of the financial year, no amounts have
been paid by the Company or Group in relation to the above
indemnities.
During the financial year, an annualised insurance premium was
paid to provide adequate insurance cover for directors and officers
against any potential liability and the associated legal costs of a
proceeding.
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young, as part of the terms of
its audit engagement agreement against claims by third parties
arising from the audit (for an unspecified amount). No payment has
been made to indemnify Ernst & Young during or since the
financial year.
REMUNERATION REPORT (AUDITED)
This Remuneration Report, which forms part of the Directors'
Report, sets out information about the remuneration of Key
Management Personnel ("KMP") of the Group.
Details of Key Management Personnel
Details of the KMP of the Group during or since the end of the
financial year are set out below:
Directors
Mr Ian Middlemas Chairman
Mr Benjamin Stoikovich Director and CEO
Ms Carmel Daniele Non-Executive Director
Mr Thomas Todd Non-Executive Director
Mr Mark Pearce Non-Executive Director
Mr Todd Hannigan Alternate Director
Other KMP
Mr Miroslaw Taras Group Executive - Poland
Mr Simon Kersey Chief Financial Officer
Mr Dylan Browne Company Secretary
Unless otherwise disclosed, the KMP held their position from 1
July 2018 until the date of this report.
Remuneration Policy
The Group's remuneration policy for its KMP has been developed
by the Board taking into account the size of the Group, the size of
the management team for the Group, the nature and stage of
development of the Group's current operations, and market
conditions and comparable salary levels for companies of a similar
size and operating in similar sectors. In addition to considering
the above general factors, the Board has also placed emphasis on
the following specific issues in determining the remuneration
policy for KMP:
(a) the Group is currently focused on undertaking exploration,
appraisal and development activities;
(b) risks associated with small cap resource companies whilst
exploring and developing projects; and
(c) other than profit which may be generated from asset sales,
the Company does not expect to be undertaking profitable operations
until sometime after the commencement of commercial production on
any of its projects.
Executive Remuneration
The Group's remuneration policy is to provide a fixed
remuneration component and a performance-based component (short
term incentive and long term incentive). The Board believes that
this remuneration policy is appropriate given the considerations
discussed in the section above and is appropriate in aligning
executives' objectives with shareholder and business
objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, as well as
employer contributions to superannuation funds and other non-cash
benefits. Non-cash benefits may include provision of car parking
and health care benefits.
Fixed remuneration is reviewed annually by the Board. The
process consists of a review of company and individual performance,
relevant comparative remuneration externally and internally and,
where appropriate, external advice on policies and practices.
Performance Based Remuneration - Short Term Incentive
("STI")
Some executives are entitled to an annual cash incentive payment
upon achieving various key performance indicators ("KPI's"), as set
by the Board. Having regard to the current size, nature and
opportunities of the Company, the Board has determined that these
KPI's will include measures such as successful commencement and/or
completion of exploration activities (e.g. commencement/completion
of exploration programs within budgeted timeframes and costs),
establishment of government relationship (e.g. establish and
maintain sound working relationships with government and
officialdom), development activities (e.g. completion of
infrastructure studies and commercial agreements), corporate
activities (e.g. recruitment of key personnel and representation of
the company at international conferences) and business development
activities (e.g. corporate transactions and capital raisings).
These measures were chosen as the Board believes they represent the
key drivers in the short and medium-term success of the Company's
development. On an annual basis, and subsequent to year end, the
Board assesses performance against each individual executive's KPI
criteria. During the 2019 financial year, no cash incentive (2018:
$134,361) was paid, or is payable, to KMP.
Performance Based Remuneration - Long Term Incentive
The Group has adopted a long-term incentive plan ("LTIP")
comprising the grant of Performance Rights and/or Incentive Options
to reward KMP and key employees and contractors for long-term
performance of the Company. Shareholders approved the renewal of a
Performance Rights Plan" (the "Plan") in 17 August 2017.
To achieve its corporate objectives, the Group needs to attract,
incentivise, and retain its key employees and contractors. The
Board believes that grants of Performance Rights and/or Incentive
Options to KMP will provide a useful tool to underpin the Group's
employment and engagement strategy.
(i) Performance Rights
The Group has a Plan that provides for the issuance of unlisted
Performance Rights which, upon satisfaction of the relevant
performance conditions attached to the Performance Rights, will
result in the issue of an Ordinary Share for each Performance
Right. Performance Rights are issued for no consideration and no
amount is payable upon conversion thereof.
The Plan enables the Group to: (a) recruit, incentivise and
retain KMP and other key employees and contractors needed to
achieve the Group's business objectives; (b) link the reward of key
staff with the achievement of strategic goals and the long-term
performance of the Group; (c) align the financial interest of
participants of the Plan with those of Shareholders; and (d)
provide incentives to participants of the Plan to focus on superior
performance that creates Shareholder value.
Performance Rights granted under the Plan to eligible
participants will be linked to the achievement by the Company of
certain performance conditions as determined by the Board from time
to time. These performance conditions must be satisfied in order
for the Performance Rights to vest. The Performance Rights also
vest where there is a change of control of the Company. Upon
Performance Rights vesting, Ordinary Shares are automatically
issued for no consideration. If a performance condition of a
Performance Right is not achieved by the expiry date then the
Performance Right will lapse.
During the financial year, 900,000 Performance Rights were
granted to certain KMP. 1,100,000 Performance Rights previously
granted to KMP were forfeited during the financial year.
(ii) Incentive Options
The Group has also chosen to issue Incentive Options to some KMP
and key employees and contractors as part of their remuneration and
incentive arrangements in order to attract and retain their and to
provide an incentive linked to the performance of the Company.
The Board's policy is to grant Incentive Options to KMP with
exercise prices at or above market share price (at the time of
agreement). As such, any Incentive Options granted to KMP are
generally only of benefit if the KMP performed to the level whereby
the value of the Group increased sufficiently to warrant exercising
the Incentive Options granted.
Other than service-based vesting conditions (if any), there are
generally no additional performance criteria attached to any
Incentive Options granted to KMP, as given the speculative nature
of the Group's activities and the small management team responsible
for its running, it is considered that the performance of the KMP
and the performance and value of the Group are closely related.
The Company prohibits executives entering into arrangements to
limit their exposure to Incentive Options and Performance Rights
granted as part of their remuneration package.
During the financial year, no Incentive Options were granted to
KMP and key employees. No Incentive Options were exercised by KMP
during the financial year. No Incentive Options previously granted
to KMP lapsed during the financial year.
Non-Executive Director Remuneration
The Board's policy is for fees to Non-Executive Directors to be
no greater than market rates for comparable companies for time,
commitment and responsibilities. Given the current size, nature and
risks of the Company, Incentive Options may also be used to attract
and retain Non-Executive Directors. The Board determines payments
to the Non-Executive Directors and reviews their remuneration
annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to
Non-Executive Directors is subject to approval by shareholders at a
General Meeting. Director's fees paid to Non-Executive Directors
accrue on a daily basis. Fees for Non-Executive Directors are not
linked to the performance of the economic entity. However, to align
Directors' interests with shareholder interests, the Directors are
encouraged to hold shares in the Company and given the current
size, nature and opportunities of the Company, Non-Executive
Directors may receive Incentive Options in order to secure and
retain their services.
Fees for the Chairman were set at $36,000 per annum (2018:
$36,000) (excluding post-employment benefits).
Fees for Non-Executive Directors' were set at $20,000 per annum
(2018: $20,000) (excluding post-employment benefits). These fees
cover main board activities only. Non-Executive Directors may
receive additional remuneration for other services provided to the
Company, including but not limited to, membership of
committees.
During the 2019 financial year, no Incentive Options or
Performance Rights were granted to Non-Executive Directors.
The Company prohibits Non-Executive Directors entering into
arrangements to limit their exposure to Incentive Options granted
as part of their remuneration package.
Relationship between Remuneration of KMP and Shareholder
Wealth
During the Company's exploration and development phases of its
business, the Board anticipates that the Company will retain
earnings (if any) and other cash resources for the exploration and
development of its resource projects. Accordingly, the Company does
not currently have a policy with respect to the payment of
dividends and returns of capital. Therefore, there was no
relationship between the Board's policy for determining, or in
relation to, the nature and amount of remuneration of KMP and
dividends paid and returns of capital by the Company during the
current and previous four financial years.
The Board did not determine, and in relation to, the nature and
amount of remuneration of the KMP by reference to changes in the
price at which shares in the Company traded between the beginning
and end of the current and the previous four financial years.
Discretionary annual cash incentive payments are based upon
achieving various non-financial key performance indicators as
detailed under "Performance Based Remuneration - Short Term
Incentive" and are not based on share price or earnings. However,
as noted above, certain KMP may receive Incentive Options in the
future which generally will be of greater value to KMP if the value
of the Company's shares increases sufficiently to warrant
exercising the Incentive Options.
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking
exploration and development activities, and does not expect to be
undertaking profitable operations (other than by way of material
asset sales, none of which is currently planned) until sometime
after the successful commercialisation, production and sales of
commodities from one or more of its projects. Accordingly, the
Board does not consider earnings during the current and previous
four financial years when determining, and in relation to, the
nature and amount of remuneration of KMP.
Remuneration of Directors and other KMP
Details of the nature and amount of each element of the
remuneration of each Director and other KMP of Prairie Mining
Limited are as follows:
Short-term benefits Non-Cash
Share-based
payments
$
--------------------- ---------------- ------------- ---------- -------------
Cash
Salary Incentive Post-employment Perfor-mance
& fees Payments benefits Total related
$ $ $ $ %
--------------------- ------ ---------- ----------- ---------------- ------------- ---------- -------------
Directors
Ian Middlemas 2019 36,000 - 3,420 - 39,420 -
2018 36,000 - 3,420 - 39,420 -
---------------------------- ---------- ----------- ---------------- ------------- ---------- -------------
Benjamin Stoikovich 2019 453,972 - - (325,050) 128,922 19.2
2018 436,396 134,361 - 75,003 645,760 32.4
---------------------------- ---------- ----------- ---------------- ------------- ---------- -------------
Carmel Daniele(1) 2019 - - - - - -
2018 - - - - - -
--------------------- ------ ---------- ----------- ---------------- ------------- ---------- -------------
Thomas Todd 2019 20,000 - 1,425 - 21,425 -
2018 20,000 - 1,900 - 21,900 -
Mark Pearce 2019 20,000 - 1,900 - 21,900 -
2018 20,000 - 1,900 - 21,900
---------------------------- ---------- ----------- ---------------- ------------- ---------- -------------
Todd Hannigan 2019 - - - - - -
2018 - - - - - -
--------------------- ------ ---------- ----------- ---------------- ------------- ---------- -------------
Other KMP
Miroslaw Taras 2019 119,698 - - (203,689) (83,991) -
2018 117,213 - - 72,582 189,795 38.2
Simon Kersey 2019 290,566 - - (118,936) 171,630 -
2018 278,927 - - 107,455 386,382 27.8
---------------------------- ---------- ----------- ---------------- ------------- ---------- -------------
Dylan Browne(2) 2019 - - - (80,134) (80,134) -
2018 118,393 - - 14,133 132,526 10.7
---------------------------- ---------- ----------- ---------------- ------------- ---------- -------------
Total 2019 940,236 - 6,745 (727,809) 219,172
2018 1,026,929 134,361 7,220 269,173 1,437,683
============================ ========== =========== ================ ============= ========== =============
Notes:
(1) During the year Ms Daniele waived her Non-Executive Director remuneration.
(2) Company Secretary services are provided through a services
agreement with Apollo Group Pty Ltd ("Apollo Group") a company of
which Mr Mark Pearce is a Director and beneficial shareholder of.
During the year, Apollo Group was paid or is payable A$240,000
(2018: A$150,000) for the provision of serviced office facilities
and administrative, accounting, company secretarial and transaction
services to the Group.
Options and Performance Rights Granted to KMP
Details of the value of Incentive Options and Performance Rights
granted, exercised or lapsed for KMP of the Group during the year
ended 30 June 2019 are as follows:
Value
Value Value of rights
No. of No. of No. of of rights of rights included
rights rights rights granted(1) lapsed in remuneration
2019 granted vested lapsed $ $ $
-------------- --------- -------- ------------ ------------ ----------- -----------------
Other KMP
Benjamin
Stoikovich 500,000 - (2,100,000) 165,000 (930,880) (325,050)
Miroslaw
Taras 250,000 - (1,050,000) 93,750 (460,250) (203,689)
Simon Kersey - - (660,000) - (336,600) (118,936)
Dylan Browne 150,000 - (475,000) 56,250 (209,750) (80,134)
-------------- --------- -------- ------------ ------------ ----------- -----------------
Details of Incentive Options and Performance Rights granted as
part of remuneration by the Company to each KMP of the Group during
the financial year is as follows:
Grant
Date
Exercise Fair
Grant Price Value(1)
Expiry Vesting Number Number
2019 Security Date Date Date $ $ Granted Vested
-------------- ---------- -------- -------- -------- --------- ---------- --------- --------
Other KMP
Benjamin 5 Jun 30 Sep
Stoikovich Rights 19 20 -(2) - 0.330 500,000 -
Miroslaw 12 Apr 30 Sep
Taras Rights 19 20 -(2) - 0.375 250,000 -
12 Apr 30 Sep
Dylan Browne Rights 19 20 -(2) - 0.375 150,000 -
-------------- ---------- -------- -------- -------- --------- ---------- --------- --------
Notes:
(1) For details on the valuation of the Incentive Options and
Performance Rights, including models and assumptions used, please
refer to Note 19 to the financial statements.
(2) Vest on satisfaction of the Strategic Investor Milestone.
There were no Incentive Options granted or exercised by any KMP
of the Group during the 2019 financial year.
Employment Contracts with Directors and KMP
Mr Stoikovich has an appointment letter dated 21 June 2018,
under the terms of which he agrees to serve as a Director of the
Company. Mr Stoikovich's appointment letter is terminable, pursuant
to the Company's Constitution, by giving the Company notice in
writing. Under the updated appointment letter, Mr Stoikovich
receives a fixed fee of GBP25,000 per annum.
During the financial year, Selwyn Capital Limited, a company of
which Mr Stoikovich is a director and shareholder, had a consulting
agreement with the Company to provide project management and
capital raising services (CEO services) related to Debiensko and
Jan Karski. Under this agreement, Selwyn Capital Limited ("Selwyn")
is paid a fixed annual consultancy fee of GBP225,000 per annum and
an annual incentive payment of up to GBP100,000 payable upon the
successful completion of key project milestones as determined by
the Board. In addition, Selwyn, is entitled to receive a payment
incentive worth the aggregate fixed yearly directors fees and
consultancy fee in the event of a change of control clause being
triggered with the Company. The consulting contract can be
terminated by either Selwyn Limited or the Company by giving twelve
months' notice. No amount is payable to Selwyn in the event of
termination of the contract arising from negligence or incompetence
in regard to the performance of services specified in the
contract.
Mr Taras, was appointed as Group Executive - Poland on 13
October 2016. He has a consultancy agreement with the Company dated
1 March 2015 and amended effective 1 September 2015, which provides
for a consulting fee of PLN22,500 per month for strategic advisory
services. The contract may be terminated by either party by giving
one months' notice. Mr Taras also receives a fixed Management Board
fee for PD Co sp. z o.o. (Jan Karski) of PLN4,400 per month.
Mr Simon Kersey, Chief Financial Officer, is engaged under a
consultancy deed with Cheyney Resources Limited ("Cheyney") dated 1
April 2017. The agreement specifies the duties and obligations to
be fulfilled by Mr Kersey as the Chief Financial Officer. The
Company may terminate the agreement with six months written notice.
No amount is payable in the event of termination for material
breach of contract, gross misconduct or neglect. Cheyney receives
an annual consultancy fee of GBP160,000 and will be eligible for a
cash incentive of up to GBP50,000 per annum to be paid upon
successful completion of KPIs. In addition, Cheyney, will be
entitled to receive a payment incentive worth six months of the
annual consultancy fee in the event of a change of control clause
being triggered with the Company.
Mr Browne, Company Secretary, has a services agreement with the
Company to provide corporate and financial services with the
Company. Either party may terminate the agreement by giving one
month written notice. Under the services agreement, Mr Browne
receive cash and/or incentive securities in the Company. Mr Browne
is also entitled to receive a fee worth $100,000 in the event of a
change of control clause being triggered with the Company.
Loans from Key Management Personnel
No loans were provided to or received from Key Management
Personnel during the year ended 30 June 2019 (2018: Nil).
Other Transactions
Apollo Group Pty Ltd, a company of which Mr Mark Pearce is a
Director and beneficial shareholder, was paid or is payable
$240,000 (2018: $150,000) for the provision of serviced office
facilities and administration services. The amount is based on a
monthly retainer of $20,000 (2018: $12,500) due and payable in
advance, with no fixed term, and is able to be terminated by either
party with one month's notice. This item has been recognised as an
expense in the Statement of Profit or Loss and other Comprehensive
Income. At 30 June 2019, $20,000 (2018: $12,500) was included as a
current liability in the Statement of Financial Position.
As founder and controller of CD Capital, Ms Daniele has an
interest in 22,388,060 $0.60 CD Options (which may result in the
issue of an additional 22,388,060 Ordinary Shares) and an interest
for CD Capital to convert Loan Note 2 into 5,711,804 Ordinary
shares through the issue of the $0.46 convertible note.
Equity instruments held by KMP
Incentive Option and Performance Right holdings of Key
Management Personnel
Vested
Options and exercise-
Held at Exercised/ Held at able at
1 July Granted Rights Net Other 30 June 30 June
2019 2018 as Remuner-ation Converted Change 2019 2019
--------------------- ----------- ------------------ ------------ ------------- ----------- ---------------
Directors
Ian Middlemas - - - - - -
Benjamin Stoikovich 2,100,000 500,000 - (500,000)(1) 2,100,000 -
Carmel Daniele(2) 22,388,060 - - - 22,388,060 22,388,060
Thomas Todd - - - - - -
Mark Pearce - - - - - -
Todd Hannigan - - - - - -
Other KMP
Miroslaw Taras 1,050,000 250,000 - (450,000)(1) 850,000 -
Simon Kersey 660,000 - - - 660,000 -
Dylan Browne 475,000 150,000 - (150,000)(1) 475,000 -
--------------------- ----------- ------------------ ------------ ------------- ----------- ---------------
Notes:
(1) Forfeiture of Performance Rights on 31 December 2018
following the performance condition not being achieved prior to the
expiry date.
(2) As founder and controller of CD Capital, Ms Daniele is
deemed to have an interest in the CD Options.
Shareholdings of Key Management Personnel
Held at Options Exercised/ Held at
2019 1 July 2018 Granted as Remuneration Rights Converted Net Other Change 30 June 2019
--------------------- ------------- ------------------------ ------------------- ----------------- --------------
Directors
Ian Middlemas 10,600,000 - - - 10,600,000
Benjamin Stoikovich 1,500,000 - (7,738)(1) 1,492,262
Carmel Daniele(2) 44,776,120 - - - 44,776,120
Thomas Todd 2,800,000 - - - 2,800,000
Mark Pearce 3,000,000 - - - 3,000,000
Todd Hannigan 3,504,223 - - - 3,504,223
Other KMP
Miroslaw Taras 150,000 - - - 150,000
Simon Kersey - - - - -
Dylan Browne - - - - -
--------------------- ------------- ------------------------ ------------------- ----------------- --------------
Notes:
(1) Loss of shares following the Beaufort Securities Limited
("Beaufort") administration proceedings and the inability of
administrators to fully reconcile the ordinary shares (held as
depository receipts) Mr Stoikovich formerly held in the Beaufort
account. Mr Stoikovich now holds these ordinary shares in an
alternative broking account. Mr Stoikovich is likely to receive
compensation from the UK government for the loss of these shares
but the amount and timing of receipt of compensation is currently
unknown.
(2) As founder and controller of CD Capital, Ms Daniele is
deemed to have an interest in the 44,776,120 Ordinary Shares issued
to CD Capital on conversion of Loan Note 1 in 2018.
End of Remuneration Report
DIRECTORS' MEETINGS
The number of meetings of Directors held during the year and the
number of meetings attended by each Director was as follows:
Board Meetings
Number eligible to attend Number attended
---------------------------------------------- ------------------------- ---------------
Ian Middlemas 2 2
Benjamin Stoikovich 2 2
Carmel Daniele 2 1
Thomas Todd 2 2
Mark Pearce 2 2
Todd Hannigan (Alternate director to Mr Todd) - -
---------------------------------------------- ------------------------- ---------------
There were no Board committees during the financial year. The
Board as a whole currently performs the functions of an Audit
Committee, Risk Committee, Nomination Committee, and Remuneration
Committee, however this will be reviewed should the size and nature
of the Company's activities change.
NON-AUDIT SERVICES
Non-audit services provided by our auditors, Ernst & Young
and related entities, are set out below. The Directors are
satisfied that the provision of non-audit services is compatible
with the general standard of independence for auditors imposed by
the Corporations Act. The nature and scope of each type of
non-audit service provided means that auditor independence was not
compromised.
2019 2018
$ $
--------------------------------- ------ ------
Preparation of income tax return 11,000 11,124
--------------------------------- ------ ------
DIVIDS
No dividends have been declared, provided for or paid in respect
of the financial year ended 30 June 2019 (2018: nil).
AUDITOR'S INDEPENCE DECLARATION
The lead auditor's independence declaration for the year ended
30 June 2019 has been received and can be found on page 18 of the
Directors' Report.
Signed in accordance with a resolution of the Directors.
Benjamin Stoikovich
Director
26 September 2019
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on Prairie's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of Prairie, which could cause
actual results to differ materially from such statements. Prairie
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
Competent Person Statements
The information in this report that relates to Exploration
Results was extracted from Prairie's announcement dated 21 February
2018 entitled "Drill Results Affirm Jan Karski's Status As A
Globally Significant Semi-Soft (Type 34) Coking Coal Project" which
is available to view on the Company's website at
www.pdz.com.au.
The information in the original announcement that relates to
Exploration Results is based on, and fairly represents information
compiled or reviewed by Mr Jonathan O'Dell, a Competent Person who
is a Member of The Australasian Institute of Mining and Metallurgy.
Mr O'Dell is a part time consultant of the Company. Mr O'Dell has
sufficient experience that 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 of Exploration Results, Mineral Resources and Ore
Reserves'.
Prairie confirms that: a) it is not aware of any new information
or data that materially affects the information included in the
original announcements; b) all material assumptions and technical
parameters of the Exploration Results included in the original
announcements continue to apply and have not materially changed;
and c) the form and context in which the relevant Competent
Persons' findings are presented in this presentation have not been
materially modified from the original announcements.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2019
Audit Ind dec
2019 2018
$ $
--------------------------------------------- ------------ -------------
Revenue 557,330 826,883
Other income 1,945,080 -
Exploration and evaluation expenses (3,319,878) (6,774,136)
Employment expenses (426,446) (539,471)
Administration and corporate expenses (298,200) (380,021)
Occupancy expenses (506,410) (595,103)
Business development expenses (408,948) (738,097)
Share-based payment (expenses)/reversal 1,599,118 (1,316,624)
Exploration expenditure impairment
expense (2,721,198) -
Other expenses 28,880 18,443
Non-cash fair value movements - (9,884,328)
Loss before income tax (3,550,672) (19,382,454)
Income tax expense - -
---------------------------------------------- ------------ -------------
Net loss for the year (3,550,672) (19,382,454)
============================================== ============ =============
Net loss attributable to members of
Prairie Mining Limited (3,550,672) (19,382,454)
============================================== ============ =============
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations 47,067 368,311
Total other comprehensive income/(loss)
for the year, net of tax 47,067 368,311
---------------------------------------------- ------------ -------------
Total comprehensive loss for the year,
net of tax (3,503,605) (19,014,143)
============================================== ============ =============
Total comprehensive loss attributable
to members of Prairie Mining Limited (3,503,605) (19,014,143)
============================================== ============ =============
Basic and diluted loss per share from
(cents per share) (1.63) (10.99)
The above Consolidated Statement of Profit or Loss and other
Comprehensive Income should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
2019 2018
$ $
----------------------------------- ------------- -------------
ASSETS
Current Assets
Cash and cash equivalents 6,628,371 11,022,333
Trade and other receivables 827,478 953,528
Total Current Assets 7,455,849 11,975,861
------------------------------------ ------------- -------------
Non-current Assets
Property, plant and equipment 2,371,028 2,363,151
Exploration and evaluation assets - 2,656,968
Total Non-current Assets 2,371,028 5,020,119
------------------------------------ ------------- -------------
TOTAL ASSETS 9,826,877 16,995,980
------------------------------------ ------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 1,050,862 865,265
Provisions 286,006 532,820
Other financial liabilities - 1,891,573
Total Current Liabilities 1,336,868 3,289,658
------------------------------------ ------------- -------------
Non-Current Liabilities
Provisions 1,181,421 1,260,624
------------------------------------ ------------- -------------
Total Non-Current Liabilities 1,181,421 1,260,624
------------------------------------ ------------- -------------
TOTAL LIABILITIES 2,518,289 4,550,282
------------------------------------ ------------- -------------
NET ASSETS 7,308,588 12,445,698
==================================== ============= =============
EQUITY
Contributed equity 75,491,413 75,525,800
Reserves 2,031,423 3,583,474
Accumulated losses (70,214,248) (66,663,576)
------------------------------------ ------------- -------------
TOTAL EQUITY 7,308,588 12,445,698
==================================== ============= =============
The above Consolidated Statement of Financial Position should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Share- Foreign
Based Currency
Contributed Payments Translation Accumulated Total
Equity Reserve Reserve Losses Equity
$ $ $ $ $
----------------------------------- ------------ ------------ ------------- ------------- -------------
Balance at 1 July 2018 75,525,800 2,486,718 1,096,756 (66,663,576) 12,445,698
Net loss for the year - - - (3,550,672) (3,550,672)
Other comprehensive income:
Exchange differences on
translation of foreign
operations - - 47,067 - 47,067
Total comprehensive income/(loss)
for the period - - 47,067 (3,550,672) (3,503,605)
Share issue costs (34,387) - - - (34,387)
Forfeiture of unvested
Performance Rights - (1,266,881) - - (1,266,881)
Reversal of share-based
payments (2,158,464) (2,158,464)
Recognition of share-based
payments - 1,826,227 - - 1,826,227
----------------------------------- ------------ ------------ ------------- ------------- -------------
Balance at 30 June 2019 75,491,413 887,600 1,143,823 (70,214,248) 7,308,588
=================================== ============ ============ ============= ============= =============
Balance at 1 July 2017 58,477,713 1,529,894 728,445 (47,640,922) 13,095,130
Net loss for the year - - - (19,382,454) (19,382,454)
Other comprehensive income:
Exchange differences on
translation of foreign
operations - - 368,311 - 368,311
Total comprehensive income/(loss)
for the period - - 368,311 (19,382,454) (19,014,143)
Conversion right of Loan
Note 1 8,283,582 - - - 8,283,582
Share issue costs (43,000) - - - (43,000)
Issue of convertible note
(note 12(a)) 2,627,430 - - - 2,627,430
Convertible note issue
costs (27,418) - - - (27,418)
Issue of CD Options 6,207,493 - - - 6,207,493
Expiry of vested Incentive
Options - (359,800) - 359,800 -
Forfeiture of unvested
Performance Rights - (1,194,000) - - (1,194,000)
Recognition of share-based
payments - 2,510,624 - - 2,510,624
----------------------------------- ------------ ------------ ------------- ------------- -------------
Balance at 30 June 2018 75,525,800 2,486,718 1,096,756 (66,663,576) 12,445,698
=================================== ============ ============ ============= ============= =============
The above Consolidated Statement of Changes in Equity should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Note 2019 2018
$ $
-------------------------------------------- ----- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (4,979,226) (9,589,237)
Proceeds from property and gas sales 433,426 504,702
Interest received from third parties 218,838 370,106
NET CASH FLOWS USED IN OPERATING ACTIVITIES 15(a) (4,326,962) (8,714,429)
-------------------------------------------- ----- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment - (65,450)
Proceeds from sale of property 3,346 495,008
NET CASH FLOWS FROM IN INVESTING ACTIVITIES 3,346 429,558
-------------------------------------------- ----- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares - -
Payments for share issue costs (70,346) (92,469)
Proceeds from issues of convertible
note - 2,627,430
Payments for issue of convertible note - (54,611)
-------------------------------------------- ----- ----------- -----------
NET CASH FLOWS FROM FINANCING ACTIVITIES (70,346) 2,480,350
-------------------------------------------- ----- ----------- -----------
Net increase/(decrease) in cash and
cash equivalents (4,393,962) (5,804,521)
Net foreign exchange differences - -
Cash and cash equivalents at beginning
of year 11,022,333 16,826,854
-------------------------------------------- ----- ----------- -----------
CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR 15(b) 6,628,371 11,022,333
============================================ ===== =========== ===========
The above Consolidated Statement of Cash Flows should be read in
conjunction with the accompanying notes.
- ENDS -
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR PGUCUBUPBUCM
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September 27, 2019 02:01 ET (06:01 GMT)
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