Interim / Quarterly Report • Mar 12, 2019
Interim / Quarterly Report
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ABN 23 008 677 852
Mr Ian Middlemas Chairman Mr Benjamin Stoikovich Director and CEO Mr Todd Hannigan Alternate Director
Ms Carmel Daniele Non-Executive Director Mr Thomas Todd Non-Executive Director Mr Mark Pearce Non-Executive Director
Mr Dylan Browne Company Secretary
PD Co sp. z. o.o. (Warsaw): Ul. Wspolna, 35 lok. 4 00-519 Warsaw
Karbonia S.A. (Czerwionka – Leszczyny): Ul. 3 Maja 44, 44-230 Czerwionka - Leszczyny
Unit 3C, 38 Jermyn Street London SW1Y 6DN United Kingdom Tel: +44 207 487 3900
Level 9, BGC Centre 28 The Esplanade Perth WA 6000 Tel: +61 8 9322 6322 Fax: +61 8 9322 6558
Poland: DLA Piper Wiater sp.k. United Kingdom:
DLA Piper UK LLP Australia: DLA Piper Australia
Poland: Ernst & Young Audyt Polska sp. z. o.o. Australia: Ernst & Young – Perth
Poland: Bank Zachodni WBK S.A. – Santander Group Australia: Australia and New Zealand Banking Group Ltd
United Kingdom: Computershare Investor Services PLC The Pavilions, Bridgewater Road Bristol BS99 6ZZ Tel: +44 370 702 0000
Australia:
Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000 Tel: +61 8 9323 2000
Poland: Warsaw Stock Exchange – GPW Code: PDZ United Kingdom: London Stock Exchange (Main Board) – LSE Code: PDZ Australia: Australian Securities Exchange – ASX Code: PDZ
| CONTENTS ZAWARTOŚĆ | Page Strona |
|---|---|
| Directors' Report | 1 |
| Directors' Declaration | 9 |
| Consolidated Statement of Profit or Loss and other Comprehensive Income | 10 |
| Consolidated Statement of Financial Position | 11 |
| Consolidated Statement of Changes in Equity | 12 |
| Consolidated Statement of Cash Flows | 13 |
| Notes to the Consolidated Financial Statements | 14 |
| Auditor's Independence Declaration | 23 |
| Independent Auditor's Review Report | 24 |
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 during the half-year ended 31 December 2018 ("Consolidated Entity" or "Group").
The names and details of the Company's Directors in office at any time during the half-year and until the date of this report are:
| 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 shown, all Directors were in office from the beginning of the half-year until the date of this report.
Highlights during, and subsequent to, the end of the half-year include:
• Cash on hand of \$8.6 million and CD Capital's right to invest a further \$68 million as a cornerstone investor.
(Continued)
The Debiensko Mine ("Debiensko") is a permitted, 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 Jastrzębska Spółka Węglowa SA ("JSW"), Europe's leading producer of hard coking coal.
The Debiensko mine was originally opened in 1898 and was 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 Ministry of Environment ("MoE") granted a 50-year mining concession 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. Prairie has proven expertise in defining commercially robust projects and applying international standards in Poland. The fact that Debiensko is a former operating mine and its proximity to two neighbouring coking coal producers in the same geological setting, reaffirms the significant potential to successfully bring Debiensko back into operation.
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. Prairie has now received a final "second instance" decision from the MoE that has denied the Company's amendment application. Not meeting the production timeframe stipulated in the concession does not automatically infringe on the validity and expiry date of the Debiensko mining concession, which is June 2058. Prairie also holds a valid environmental consent decision enabling mine construction and continues to have valid tenure and ownership of land at Debiensko. In accordance with Polish law, the concession authority is required to provide an achievable and reasonable timeframe to remedy any non-compliance taking into account the nature of the non-compliance. Nevertheless, the second instance decision may result in the commencement of proceedings by the MoE to limit or withdraw the Debiensko mining concession.
Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, which includes an appeal that has been filed with Poland's Administrative Court. Furthermore, Prairie has 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, the UK-Poland Bilateral Investment Treaty and the Australia-Poland Bilateral Investment Treaty.
The Company advises that it is not in a position to comment on the potential size of the claim that may be made against the Polish Government should the dispute not be resolved amicably. Prairie will update the market when it is in a position to do so.
Prairie can confirm that it is taking all necessary actions to preserve its rights and protect its investments in Poland. We remain hopeful that the dispute with the Polish Government can be resolved amicably. The Company will consider any other actions necessary to ensure its rights are preserved.
Prairie will continue to update the market in relation to this matter as required.
(Continued)
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 Lubelski Węgiel BOGDANKA S.A.'s ("Bogdanka") Bogdanka coal mine which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe.
Prairie's use of modern exploration techniques continues to transform Jan Karski with latest drill results re-affriming the capability of the 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:
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. This complaint was brought against the MoE by Prairie in 2015.
The Court's ruling will now be passed back to the MoE, and the MoE is obliged to promptly reassess the original decision taking into account the court's verdict i.e., to issue a positive decision approving Addendum No.3.
The significance of this Supreme Administrative Court decision is that Bogdanka's 2018 application for a mining concession over K-6-7 is now entirely inadmissible under Polish law (Bogdanka's application was suspended following an injunction awarded in Prairie's favour (see news release dated 26 April 2018) and requires the MoE to reject Bogdanka's mining concession application).
The Supreme Administrative Court's rulings re-affirm, beyond doubt, that Bogdanka's claims over K-6-7 are without merit and inadmissible. The Board notes that Bogdanka's claims have been rejected by the Polish courts in multiple rulings. Furthermore, the Court's decision obliging the MoE to approve Addendum No.3 demonstrates that the MoE has acted illegally and failed to correctly implement Poland's own mining laws.
In April 2018, Prairie commenced legal proceedings against the MoE due to its failure to grant Prairie a Mining Usufruct Agreement over the concessions which form the Jan Karski Mine and in order to protect the Company's security of tenure over the project.
Pursuant to the initiated legal proceedings:
(Continued)
Discussions continued throughout the half-year and remain ongoing between Prairie and JSW. JSW's due diligence process at Jan Karski has confirmed that part of the "Lublin" deposit contains semi-soft coking coal (Type 34), which can be potentially utilised by JSW.
JSW has stated that due diligence at Debiensko has also indicated the technical feasibility and potential synergies of accessing initial seams at the Debiensko deposit utilising the existing infrastructure at JSW's adjacent Knurow-Szczyglowice mine. Exploiting those synergies would require modifications to project configuration and obtaining relevant approvals, including concession modifications. JSW estimates that access via the Szczyglowice mine potentially enables the production of hard coking coal (Type 35) from Debiensko in up to 18 months from the time that relevant administrative permits and concession amendments are granted.
Subsequent to the half-year end, Prairie and JSW signed an extension to an 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
There can be no certainty as to whether any transaction(s) or co-operation will be agreed, or the potential form of such transaction(s) or co-operation. It is emphasised that any potential transaction(s), should they occur, may be subject to a number of conditions including, but not limited to, obtaining 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.
The net loss of the Consolidated Entity for the half-year ended 31 December 2018 was \$2,274,344 (31 December 2017: \$5,297,797). Significant items contributing to the current half-year loss and the substantial differences from the previous half-year include to the following:
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; and
(v) Revenue of \$290,957 (31 December 2017: \$441,023) consisting of interest revenue of \$115,747 (31 December 2017: \$189,164) and the receipt of \$175,210 (31 December 2017: \$251,859) of gas and property lease income derived at Debiensko.
(Continued)
At 31 December 2018, the Group had cash reserves of \$8,582,124 (30 June 2018: \$11,022,333).
At 31 December 2018, the Company had net assets of \$10,037,917 (30 June 2018: \$12,445,698) a decrease of approximately 19% compared with 30 June 2018. This is largely attributable to the decrease in cash reserves following operating expenditure.
Prairie's strategy is to create long-term shareholder value by creating synergies and developing both Debiensko and Jan Karski in Poland.
To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently has the following business strategies and prospects:
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 preserve the Company's rights and protect 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:
• Risk of maintaining project concessions - The Company's mining exploration and development activities at Debiensko and Jan Karski are dependent upon the alteration of, or as the case may be, the maintenance of appropriate licences, concessions, leases, claims, permits and regulatory consents which may be withdrawn or made subject to limitations. The maintaining of concessions, obtaining renewals, or attaining concessions alterations, often depends on the Company being successful in obtaining required statutory approvals for its proposed activities and that the licences, concessions, leases, claims, permits or consents it holds will be renewed and altered as and when required. In this regard, in July 2015, Prairie announced that it had secured the Exclusive Right to apply for a Mining Concession for Jan Karski as a result of its Geological Documentation for the Jan Karski deposit being approved by Poland's MoE.
The approved Geological Documentation covers areas of all four original Exploration Concessions granted to Prairie (K-4-5, K-6-7, K-8 and K-9) and includes the full extent of the targeted resources within the mine plan for Jan Karski. As a result of the Exclusive Right, Prairie was the only entity with a legal right to lodge a Mining Concession application over Jan Karski for the period up and until 2 April 2018. Under the Polish GML, a Mining Concession application comprises the submission of a Deposit Development Plan ("DDP"), approval of a spatial development plan (rezoning of land for mining use) and an Environmental Consent decision. Prairie has previously announced that the DDP and spatial development plans for Jan Karski have already been approved. However, as of the date of this report, Prairie has not yet received the required Environmental Consent decision, which remains pending. Prairie completed an Environmental and Social Impact Assessment and made submissions to RDOS for an Environmental Consent decision in October 2017. Prairie has not been able to apply for a Mining Concession for Jan Karski due to the delay in the issuance of an Environmental Consent decision. However, the Environmental Consent proceedings continue to progress and the Company has received notice from the RDOS to provide supplementary information to the originally submitted Environmental & Social Impact Assessment. There are no assurances that the Environmental Consent Decision will be awarded to the Company.
The approval of Prairie's Geological Documentation in 2015 also conferred upon Prairie the legal right to apply for a Mining Usufruct Agreement over Jan Karski for an additional 12-month period beyond April 2018, which precludes any other parties being granted any licence over all or part of the Jan Karski concessions. Under Polish law, the MoE is strictly obligated, within three months of Prairie making an application for a Mining Usufruct Agreement, to grant the agreement. It should be noted that the MoE confirmed Prairie's priority right in two written statements (i.e. in a final administrative decision dated 11 February 2016 and in a formal letter dated 13 April 2016). Prairie applied to the MoE for a Mining Usufruct Agreement over Jan Karski in late December 2017. As of the date of this report the MoE has not made available to Prairie a Mining Usufruct Agreement for Jan Karski, therefore breaching the three-month obligatory period for the agreement to be concluded.
(Continued)
Advice provided to Prairie concludes that failure of the MoE to grant Prairie the Mining Usufruct Agreement is a breach of Polish law. Accordingly, the Company commenced legal proceedings against the MoE through the Polish courts in order to protect the Company's security of tenure over the Jan Karski concessions. Since the MoE has not provided a decision within three months from submission of Prairie's Mining Usufruct application, the Polish civil court has the power to enforce conclusion of a Usufruct Agreement in place of the MoE. In the event that a Mining Usufruct Agreement is not made available to the Company on acceptable terms or the Company does not enter into a Mining Usufruct Agreement for any other reason, other parties may be able to apply for exploration or mining rights for all or part of the Jan Karski concession area. However, given that the Civil Court has approved Prairie's motion for an injunction against the MoE, as described above, the MoE is now prevented from entering into a Usufruct agreement or concession with any other party besides Prairie until the full court proceedings are concluded.
Under the terms of the Debiensko Mining Concession issued in 2008 by the MoE (which is valid for 50 years from grant date), commencement of production was to occur by 1 January 2018. 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. Prairie has now received a final "second instance" decision from the MoE that has denied the Company's amendment application. However, Prairie does still continue to have valid tenure and ownership of land at Debiensko. Not meeting the production timeframe stipulated in the concession does not automatically infringe on the validity and expiry date of the Debiensko mining concession, which is June 2058. Prairie also holds a valid environmental consent decision enabling mine construction. In accordance with Polish law, the concession authority is required to provide an achievable and reasonable timeframe to remedy any non-compliance taking into account the nature of the non-compliance. Nevertheless, the second instance decision may result in the commencement of proceedings by the MoE to limit or withdraw the Debiensko mining concession. Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, including an appeal that has been filed with Poland's Administrative Courts and pursuing safeguards and protections under international law. Preliminary advice obtained by Prairie indicates that the MoE's decision is fundamentally flawed, fails to comply with Polish, EU and international law, and demonstrates yet further evidence of the discriminatory treatment faced by Prairie as a foreign investor in Poland.
The MoE's negative "second instance" decision may lead to the commencement of proceedings by the MoE to limit or withdraw the Debiensko concession. Prairie has also filed an appeal to Poland's administrative courts. For this and other reasons, Prairie has formally notified the Polish government that there exists an investment dispute between Prairie and the Polish Government. The dispute arises out of certain measures taken by Poland in breach of the Energy Charter Treaty, the UK-Poland Bilateral Investment Treaty and the Australia-Poland Bilateral Investment Treaty. Prairie's notification calls for prompt negotiations with the government to amicably resolve the dispute, and indicates Prairie's right to submit the dispute and lodge a claim to international arbitration in the event the dispute is not resolved amicably.
There is however no assurance that any such appeals, legal proceedings, disputes, financial claims, applications (or renewals or alterations) of the Company concessions will be successful or that such applications, renewals, alterations, rights and title interests will not be revoked or significantly altered. If such appeals, legal proceedings, disputes, claims, applications, renewals or alterations of concessions applied for are not successful or granted or are in fact revoked as the case may be in the future, there is a risk that this may have a material adverse effect on the financial performance and operations at Jan Karski, Debiensko, the Company and on also the value of the Company's securities.
• Co-operation between Prairie and JSW may not occur – The Company and JSW have been in discussions for over 12 months in relation to a co-operation transaction with the current intention to continue negotiations over the coming months, with areas covered including potential deal structure and commercial terms for any co-operation or transaction and adaption of mine plans for both Debiensko and Jan Karski to align with JSW's development concepts and maximise potential synergies. 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 non-occurrence of a transaction could also have a material impact on the value of the Company's securities.
(Continued)
• The Company's activities will require further capital in future years – At the date of this report, the Company has cash of approximately \$8.6 million. However, the ability of the Company to finance capital investment in future years for the construction and future operation of the Company's projects is dependent, among other things, on the Company's ability to raise additional future funding either through equity or debt financing. Any failure to obtain sufficient financing in the future may result in delaying or indefinite postponement of any future construction of the projects or even a loss of property interest (in the future). The key items which the Company would require further funding in future years would be for the construction of the mines at each project. In this regard, and pursuant to the CD Capital investment agreement, CD Capital has a first right to invest a further \$55 million in any future fund raise conducted by the Company, plus CD Capital will have the ability to inject a further \$13 million through the exercise of their \$0.60 CD Options. There is however no guarantee that CD Capital would take up this right in the future (or exercise their options). There is also a risk that the Company's obligation to offer CD Capital a first right of refusal on any future fund raising could prejudice the Company's ability to raise funds from investors other than CD Capital. However, the Company considers that it would not be necessary to undertake such development actions until it has secured financing to do so and the timing for commencement of such actions would accordingly depend on the date that such financing is secured. If, in the unlikely event that future financing cannot be secured, the Group has the flexibility and ability to significantly reduce its ongoing expenditure. Furthermore, the Company's board of directors has a successful track record of fundraising for natural resources projects, including large scale coal projects, and has completed successful financing transactions with strategic partners, large institutional fund managers, off-take partners and traders and project finance lenders. There is however no guarantee that the then prevailing market conditions will allow for a future fundraising or that new investors will be prepared to subscribe for ordinary shares or at the price at which they are willing to do so in the future. Failure to obtain sufficient future financing may result in delaying or indefinite postponement of appraisal and any development of the Company's projects in the future, a loss of the Company's personnel and ultimately a loss of its interest in the projects. There can be no assurance that additional future capital or other types of financing will be available, if needed, or that, if available, the terms of such future financing will be favourable to the Company.
If the Company obtains debt financing in the future, it will be exposed to the risk of leverage and its activities could become subject to restrictive loan and lease covenants and undertakings. If the Company obtains future equity financing other than on a pro rata basis to existing Shareholders, the future percentage ownership of the existing Shareholders may be reduced, Shareholders may then experience subsequent dilution and/or such securities may have preferred rights, options and pre-emption rights senior to the Ordinary Shares. There can be no assurance that the Company would be successful in overcoming these risks in the future or any other problems encountered in connection with such financings.
(Continued)
The opinion concerned two drafts recently submitted by the Polish President to the Sejm (Polish Parliament), to amend the Act on the National Council of the Judiciary and the Act on the Supreme Court, as well as recently already adopted amendments to the Act on Ordinary Courts. Additionally, and during the half-year, the European Commission formally notified Poland that it had initiated infringement proceedings against the country because of the adoption of the controversial amendments to the Supreme Court Act.
• The Company may be adversely affected by fluctuations in coal prices and/or foreign exchange – The price of coal fluctuates widely and is affected by numerous factors beyond the control of the Company. Coal prices are currently high compared to previous levels but there is no guarantee that prices will remain at this level in the future. Future production, if any, from the Company's mineral properties and its profitability will be dependent upon the price of coal being adequate to make these properties economic. Current and planned development activities are predominantly denominated in Euros and the Company's ability to fund these activates may be adversely affected if the Australian dollar continues to fall against the Euro. The Company currently does not engage in any hedging or derivative transactions to manage commodity price or foreign exchange risk. As the Company's operations change, this policy will be reviewed periodically going forward.
Other than the above, there were no significant events occurring after balance date requiring disclosure.
Section 307C of the Corporations Act 2001 requires our auditors, Ernst and Young, to provide the Directors of Prairie Mining Limited with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is on page 23 and forms part of this Directors' Report.
Signed in accordance with a resolution of the Directors.
BEN STOIKOVICH Director
12 March 2019
This report 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.
In accordance with a resolution of the Directors of Prairie Mining Limited, I state that:
In the reasonable opinion of the Directors and to the best of their knowledge:
On behalf of the Board
BEN STOIKOVICH Director
12 March 2019
| Note | Half-Year Ended 31 December 2018 \$ |
Half-Year Ended 31 December 2017 \$ |
|
|---|---|---|---|
| Revenue | 4(a) | 290,957 | 441,023 |
| Exploration and evaluation expenses | (1,820,738) | (4,047,621) | |
| Employment expenses | (216,730) | (260,878) | |
| Administration and corporate expenses | (138,566) | (270,671) | |
| Occupancy expenses | (293,288) | (234,274) | |
| Share-based payment expenses | 162,766 | (200,422) | |
| Business development expenses | (228,795) | (512,267) | |
| Other expenses | (29,950) | - | |
| Fair value movements | 5 | - | (212,687) |
| Loss before income tax | (2,274,344) | (5,297,797) | |
| Income tax expense | - | - | |
| Net loss for the period | (2,274,344) | (5,297,797) | |
| Net loss attributable to members of Prairie Mining Limited | (2,274,344) | (5,297,797) | |
| Other comprehensive income | |||
| Items that may be reclassified subsequently to profit or loss: |
|||
| Exchange differences on translation of foreign operations | 68,214 | 42,842 | |
| Total other comprehensive income/(loss) for the period | 68,214 | 42,842 | |
| Total comprehensive loss for the period | (2,206,130) | (5,254,955) | |
| Total comprehensive loss attributable to members of Prairie Mining Limited |
(2,206,130) | (5,254,955) | |
| Basic and diluted loss per share (cents per share) | (1.04) | (3.16) |
The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.
| 31 December | 30 June | ||
|---|---|---|---|
| Note | 2018 \$ |
2018 \$ |
|
| ASSETS | |||
| Current Assets | |||
| Cash and cash equivalents Trade and other receivables |
6 | 8,582,124 778,122 |
11,022,333 |
| Total Current Assets | 9,360,246 | 953,528 | |
| 11,975,861 | |||
| Non-Current Assets | |||
| Property, plant and equipment | 7 | 2,402,928 | 2,363,151 |
| Exploration and evaluation assets | 8 | 2,758,785 | 2,656,968 |
| Total Non-Current Assets | 5,161,713 | 5,020,119 | |
| TOTAL ASSETS | 14,521,959 | 16,995,980 | |
| LIABILITIES | |||
| Current Liabilities | |||
| Trade and other payables | 676,593 | 865,265 | |
| Provisions | 10(a) | 448,905 | 532,820 |
| Other financial liabilities | 9 | 1,946,687 | 1,891,573 |
| Total Current Liabilities | 3,072,185 | 3,289,658 | |
| Non-Current Liabilities | |||
| Provisions | 10(b) | 1,411,857 | 1,260,624 |
| Total Non-Current Liabilities | 1,411,857 | 1,260,624 | |
| TOTAL LIABILITIES | 4,484,042 | 4,550,282 | |
| NET ASSETS | 10,037,917 | 12,445,698 | |
| EQUITY | |||
| Contributed equity Reserves |
11 12 |
75,486,915 | 75,525,800 |
| Accumulated losses | 3,488,922 | 3,583,474 | |
| TOTAL EQUITY | (68,937,920) | (66,663,576) | |
| 10,037,917 | 12,445,698 |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
| Contributed Equity |
Share-based Payments Reserve |
Foreign Currency Translation Reserve |
Accumulated Losses |
Total 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 period | - | - | - | (2,274,344) | (2,274,344) |
| Other comprehensive income for the half-year | |||||
| Exchange differences on translation of foreign operations |
- | - | 68,214 | - | 68,214 |
| Total comprehensive income/(loss) for the period |
68,214 | (2,274,344) | (2,206,130) | ||
| Share issue costs | (38,885) | - | - | - | (38,885) |
| Forfeiture of performance rights | - | (1,266,880) | - | - | (1,266,880) |
| Recognition of share-based payments | - | 1,104,114 | - | - | 1,104,114 |
| Balance at 31 December 2018 | 75,486,915 | 2,323,952 | 1,164,970 | (68,937,920) | 10,037,917 |
| Balance at 1 July 2017 | 58,477,713 | 1,529,894 | 728,445 | (47,640,922) | 13,095,130 |
| Net loss for the period | - | - | - | (5,297,797) | (5,297,797) |
| Other comprehensive income for the half-year | |||||
| Exchange differences on translation of foreign | |||||
| operations | - | - | 42,842 | - | 42,842 |
| Total comprehensive income/(loss) for the period |
- | - | 42,842 | (5,297,797) | (5,254,955) |
| Issue of convertible notes (Loan Note 2) (Note 11) | 2,627,430 | - | - | - | 2,627,430 |
| Convertible note issue costs | (27,418) | - | - | - | (27,418) |
| Share issue costs | (5,869) | - | - | - | (5,869) |
| Forfeiture of performance rights | - | (1,134,010) | - | - | (1,134,010) |
| Recognition of share-based payments | - | 1,334,432 | - | - | 1,334,432 |
| Balance at 31 December 2017 | 61,071,856 | 1,730,316 | 771,287 | (52,938,719) | 10,634,740 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
| Half-Year Ended 31 December 2018 \$ |
Half-Year Ended 31 December 2017 \$ |
|
|---|---|---|
| Cash flows from operating activities | ||
| Payments to suppliers and employees | (2,675,465) | (5,078,182) |
| Proceeds from property and gas sales | 122,475 | 248,859 |
| Interest revenue from third parties | 179,715 | 202,758 |
| Net cash outflow from operating activities | (2,373,275) | (4,626,565) |
| Cash flows from investing activities | ||
| Purchase of plant and equipment | - | (60,008) |
| Proceeds from sale of property | - | 495,008 |
| Net cash inflow from investing activities | - | 435,000 |
| Cash flows from financing activities | ||
| Proceeds from issue of convertible note | - | 2,627,430 |
| Payments for issue of convertible note | - | (54,611) |
| Payments for share issue costs | (66,934) | (61,342) |
| Net cash inflow/(outflow) from financing activities | (66,934) | 2,511,477 |
| Net decrease in cash and cash equivalents | (2,440,209) | (1,680,088) |
| Cash and cash equivalents at the beginning of the period | 11,022,333 | 16,826,854 |
| Cash and cash equivalents at the end of the period | 8,582,124 | 15,146,766 |
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
The interim consolidated financial statements of the Group for the half-year ended 31 December 2018 were authorised for issue in accordance with the resolution of the Directors.
This general purpose condensed financial report for the interim half-year reporting period ended 31 December 2018 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report of Prairie Mining Limited for the year ended 30 June 2018 and any public announcements made by the Group and its controlled entities during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets, labilities and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars.
The Group has updated the classification of expenses to make the Statement of Profit or Loss and other Comprehensive Income more relevant to users of the financial report. This has resulted in the reclassification of some items in the prior year, however, has not impacted the reported loss for the year or earnings per share.
The accounting policies and methods of computation adopted in the preparation of the consolidated half-year financial report are consistent with those adopted and disclosed in the company's annual financial report for the year ended 30 June 2018, other than as detailed below.
In the current period, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the "AASB") that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2018.
New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include:
The adoption of these new and revised standards has not resulted in any significant changes to the Group's accounting policies or to the amounts reported for the current or prior periods. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. A discussion on the impact of the adoption of AASB 9 is included below.
The accounting policies adopted in the preparation of the half-year financial report are consistent with those applied in the preparation of the Group's annual financial report for the year ended 30 June 2018, except for new standards, amendments to standards and interpretations effective 1 January 2018 as set out in this note 2(c). The Company has set out below the main changes due to the adoption of AASB 9.
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
The Company has adopted AASB 9 from 1 July 2018 which have resulted in changes to accounting policies and the analysis for possible adjustments to amounts recognised in the Interim Financial Reports. In accordance with the transitional provisions in AASB 9, the reclassifications and adjustments are not reflected in the balance sheet as at 30 June 2018 but recognised in the opening balance sheet as at 1 July 2018. As per the new impairment model introduced by AASB 9, the Company has not recognised a loss allowance on trade and other receivables.
On 1 July 2018, the Company has assessed which business models apply to the financial instruments held by the Company and have classified them into the appropriate AASB 9 categories. The main effects resulting from this reclassification are shown in the table below.
On adoption of AASB 9, the Company classified financial assets and liabilities as subsequently measured at either amortised cost or fair value, depending on the business model for those assets and on the asset's contractual cash flow characteristics. There were no changes in the measurement of the Company's financial instruments.
There was no impact on the statement of comprehensive income or the statement of changes in equity on adoption of AASB 9 in relation to classification and measurement of financial assets and liabilities.
The following table summarises the impact on the classification and measurement of the Group's financial instruments at 1 July 2018:
| Presented in statement of financial position |
Financial Asset/liability |
AASB 139 | AASB 9 | Reported \$ | Restated \$ |
|---|---|---|---|---|---|
| Cash and cash equivalents | Bank deposits |
Loans and receivables |
Amortised Cost |
No change | No change |
| Trade and other receivables/payables | Loans and receivables |
Loans and receivables |
Amortised Cost |
No change | No change |
| Financial liabilities at amortised cost | Financial liability |
Amortised Cost |
Amortised Cost |
No change | No change |
The Company does not currently enter into any hedge accounting and therefore there is no impact to the Company's Interim Financial Reports.
AASB 9 introduces a new expected credit loss ("ECL") impairment model that requires the Company to adopt an ECL position across the Company's financial assets at 1 July 2018. The Company's receivables balance consists of GST refunds from the Australian Tax Office, interest receivables from recognised Australian banking institutions and gas and property income from a single customer. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, an impairment loss would be considered immaterial.
The loss allowances for financial assets are based on the assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Given the Company's receivables are from the Australian Tax Office, recognised Australian banking institutions and a single customer with no history of non-payment, the Company has assessed that the risk of default is minimal and as such, no impairment loss has been recognised against these receivables as at 31 December 2018.
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
AASB 15 established a comprehensive framework for determining whether, how much, and when revenue is recognised. It replaced AASB 118 Revenue and AASB 111 Construction Contracts and related interpretations. The Group has adopted AASB 15 from 1 July 2018 which has resulted in changes to its accounting policy. However, there have been no adjustments to amounts recognised in the half-year consolidated financial statements as revenue from customer contracts is considered to be immaterial.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Company for the reporting period ended 31 December 2018. Those which may be relevant to the Company are set out in the table below, but these are not expected to have any significant impact on the Company's financial statements:
| Standard/Interpretation | Application Date of Standard |
Application Date for Company |
|---|---|---|
| AASB 16 Leases | 1 January 2019 | 1 July 2019 |
| Interpretation 23 Uncertainty over Income Tax Treatments | 1 January 2019 | 1 July 2019 |
| AASB 2017-7 Amendments – Long-term Interests in Associates and Joint Venture Amendments to IAS 28 and Illustrative Example – Long-term Interests in Associates and |
||
| Joint Ventures AASB 2018-1 Amendments – Annual Improvements 2015-2017 Cycle |
1 January 2019 | 1 July 2019 |
| AASB 2018-2 Amendments – Plan Amendment, Curtailment or Settlement (AASB 119) | 1 January 2019 1 January 2019 |
1 July 2019 1 July 2019 |
AASB 16 Leases will replace existing accounting requirements for leases under AASB 117 Leases. Under current requirements, leases are classified based on their nature as either finance leases which are recognised on the Statement of Financial Position, or operating leases, which are not recognised on the Statement of Financial Position.
Under AASB 16 Leases, the Company's accounting for operating leases as a lessee will result in the recognition of a rightof-use ("ROU") asset and an associated lease liability on the Statement of Financial Position. The lease liability represents the present value of future lease payments, with the exception of short-term and low value leases. An interest expense will be recognised on the lease liabilities and a depreciation charge will be recognised for the ROU assets. There will also be additional disclosure requirements under the new standard.
Although the Company is yet to complete its assessment, the adoption of AASB 16 is expected to have an immaterial impact on the financial statements of the Company due to the minimal number, if any, of non-cancellable leases currently entered into by the Company which would not fall under a short-term or low value exception.
The Company will initially apply AASB 16 on 1 July 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019, with no restatement of comparative information.
When applying the modified retrospective approach to leases previously classified as operating leases under AASB 117, the Company can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Company is assessing the potential impact of using these practical expedients.
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
Although the Company is yet to complete its assessment, it is expected that the adoption of AASB 16 will have minimal impact if any on the financial statements of the Company. The actual impact of applying AASB 16 on the financial statements in the period of initial application will depend however on future economic conditions, including the Company's borrowing rate, the composition of the Company's lease portfolio, the extent to which the Company elects to use practical expedients and recognition exemptions, and the new accounting policies, which are subject to change until the Company presents its first financial statements that include the date of initial application.
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.
The Consolidated Entity operates in one segment, being mineral exploration. This is the basis on which internal reports are provided to the Chief Executive Officer for assessing performance and determining the allocation of resources within the Consolidated Entity.
| Half-Year ended 31 December 2018 \$ |
Half-Year Ended 31 December 2017 \$ |
||
|---|---|---|---|
| 4. | REVENUE AND OTHER INCOME | ||
| (a) | Revenue | ||
| Interest Income | 115,747 | 189,164 | |
| Gas and property lease income | 175,210 | 251,859 | |
| 290,957 | 441,023 |
| Half-Year ended 31 December 2018 \$ |
Half-Year Ended 31 December 2017 \$ |
|
|---|---|---|
| 5. FAIR VALUE MOVEMENTS |
||
| Fair value loss on financial liabilities at fair value through profit and loss1 |
- | (212,687) |
Notes:
1 The fair value movements were previously as result of the fair value measurements of the conversion rights (i.e. the right to receive Ordinary Shares and the CD Options) associated with Loan Note 1. During the 2018 financial year, Loan Note 1 was converted into Ordinary Shares, the Company issued the CD Options and the associated financial liabilities were reclassified from a liability to equity and required no cash settlement.
| 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|
| 6. TRADE AND OTHER RECEIVABLES |
||
| Trade receivables | 198,916 | 309,545 |
| Accrued interest | 31,686 | 38,414 |
| Deposits/prepayments | 355,856 | 437,402 |
| GST and other receivables | 191,664 | 168,167 |
| 778,122 | 953,528 |
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
| 7. PROPERTY, PLANT AND EQUIPMENT (a) Property, Plant and Equipment Gross carrying amount at cost 2,642,828 2,605,064 Accumulated depreciation (239,900) (241,913) 2,363,151 Carrying amount at end of the period 2,402,928 (b) Reconciliation Carrying amount at beginning of the period, net of accumulated depreciation 2,363,151 2,779,526 Additions - 65,450 |
31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|---|
| Depreciation charge (48,840) (106,716) Exchange differences on translation of foreign operations 103,888 82,870 2,363,151 Carrying amount at end of the period 2,402,928 |
Disposals/write-offs | (15,271) | (457,979) |
| 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|
| 8. EXPLORATION AND EVALUATION ASSETS |
||
| (a) Areas of Interest |
||
| Jan Karski Mine1 | 530,000 | 530,000 |
| Debiensko Mine2 | 2,228,785 | 2,126,968 |
| Carrying amount at end of the period3 | 2,758,785 | 2,656,968 |
| (b) Reconciliation |
||
| Carrying amount at beginning of the period | 2,656,968 | 2,603,172 |
| Exchange differences on translation of foreign operations | 101,817 | 53,796 |
| Carrying amount at end of the period3 | 2,758,785 | 2,656,968 |
Notes:
1
In July 2015, Prairie announced that it had secured the Exclusive Right to apply for a Mining Concession for Jan Karski as a result of its Geological Documentation for the Jan Karski deposit being approved by Poland's MoE. The approved Geological Documentation covers areas of all four original Exploration Concessions granted to Prairie (K-4-5, K-6-7, K-8 and K-9) and includes the full extent of the targeted resources within the mine plan for Jan Karski. As a result of the Exclusive Right, Prairie was the only entity with a legal right to lodge a Mining Concession application over Jan Karski for the period up and until 2 April 2018. Under the Polish GML, a Mining Concession application comprises the submission of a Deposit Development Plan ("DDP"), approval of a spatial development plan (rezoning of land for mining use) and an Environmental Consent decision. Prairie has previously announced that the DDP and spatial development plans for Jan Karski have already been approved.
However, as of the date of this report, Prairie has not yet received the required Environmental Consent decision, which remains pending. Prairie completed an Environmental and Social Impact Assessment and made submissions to RDOS for an Environmental Consent decision in October 2017. Prairie has not been able to apply for a Mining Concession for Jan Karski due to the delay in the issuance of an Environmental Consent decision. However, the Environmental Consent proceedings continue to progress and the Company has provided to RDOS supplementary information to the originally submitted Environmental & Social Impact Assessment, as requested by RDOS.
The approval of Prairie's Geological Documentation in 2015 also conferred upon Prairie the legal right to apply for a Mining Usufruct Agreement over Jan Karski for an additional 12-month period beyond April 2018, which precludes any other parties being granted any licence over all or part of the Jan Karski concessions. Under Polish law, the MoE is strictly obligated, within three months of Prairie making an application for a Mining Usufruct Agreement, to grant the agreement. It should be noted that the MoE confirmed Prairie's priority right in two written statements (i.e. in a final administrative decision dated 11 February 2016 and in a formal letter dated 13 April 2016). Prairie applied to the MoE for a Mining Usufruct Agreement over Jan Karski in late December 2017. As of the date of this report the MoE has not made available to Prairie a Mining Usufruct Agreement for Jan Karski, therefore breaching the three-month obligatory period for the agreement to be concluded. Advice provided to Prairie concludes that failure of the MoE to grant Prairie the Mining Usufruct Agreement is a breach of Polish law. Accordingly, the Company commenced legal proceedings against the MoE through the Polish courts in order to protect the Company's security of tenure over the Jan Karski concessions.
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
Since the MoE has not provided a decision within three months regarding Prairie's Mining Usufruct application, the Polish civil court has the power to enforce conclusion of a Usufruct Agreement in place of the MoE. In the event that a Mining Usufruct Agreement is not made available to the Company on acceptable terms or the Company does not enter into a Mining Usufruct Agreement for any other reason, other parties may be able to apply for exploration or mining rights for all or part of the Jan Karski concession area. However, given that the Civil Court has approved Prairie's motion for an injunction against the MoE, as described above, the MoE is now prevented from entering into a Usufruct agreement or concession with any other party besides Prairie until the full court proceeding has concluded (which is expected to take 12 months to conclude).
| 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|
| 9. OTHER FINANCIAL LIABILITIES |
||
| Financial liabilities at fair value through profit or loss: | ||
| Contingent consideration carried at amortised cost1 | 1,946,687 | 1,891,573 |
Notes:
1
In the 2017 financial year the Company acquired 100% of the shares of Karbonia for upfront cash consideration of €500,000 (\$742,367) and by agreeing to pay a contingent cash consideration component of €1,500,000 upon certain project specific milestones being achieved. As at the acquisition date, the fair value of the contingent consideration was estimated to be €1,200,000 (\$1,781,680) based on the probability of meeting the project milestones and being granted approval to amend the Debiensko Mining Concession. As at the reporting date, and due to fluctuations in the foreign exchange rates between the Euro and Australian Dollar, the carrying value of the contingent consideration was estimated to be \$1,946,687 (30 June 2018: 1,891,573) and is disclosed as an other financial liability. The loss arising from the remeasurement in the carrying value of the contingent consideration was \$25,164 for the half-year. Exchange differences on translation of foreign operations for the half-year amounted to \$29,950.
| 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|
| 10. PROVISIONS |
||
| (a) Current Provisions: |
||
| Provisions for the protection against mining damage at Debiensko1 | 181,412 | 195,463 |
| Annual leave provision | 42,098 | 122,251 |
| Other2 | 225,395 | 215,106 |
| 448,905 | 532,820 | |
| (b) Non-Current Provisions: |
||
| Provisions for the protection against mining damage at Debiensko1 | 1,411,857 | 1,260,624 |
| 1,411,857 | 1,260,624 |
Notes:
1 As Debiensko was previously an operating mine, Karbonia is required to pay out mining land damages to any surrounding land owner who makes a legitimate claim under Polish law.
2 In April 2012, Karbonia signed a power connection contract with the local power grid operator. The purpose of the contract was to connect Karbonia's future mining facilities at Debiensko to the power operator's power lines. The operator has incurred expenses amounting to PLN597,614 (\$225,395) of which Karbonia would owe to the operator in the event that the contract is terminated (which both parties are entitled to do), or if power is not purchased from Tauron prior to 30 November 2019.
| Note | 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|---|
| 11. CONTRIBUTED EQUITY |
|||
| (a) Issued and Unissued Capital |
|||
| 212,275,089 (30 June 2018: 212,275,089) fully paid ordinary shares |
11(b) | 66,679,410 | 66,718,295 |
| Loan Note 2 exchangeable into fully paid ordinary shares at \$0.46 per share, net of transaction costs1 |
2,600,012 | 2,600,012 | |
| Issue of CD Options2 | 6,207,493 | 6,207,493 | |
| Total Contributed Equity | 75,486,915 | 75,525,800 |
1 On 2 July 2017, Prairie and CD Capital completed an investment of US\$2.0 million (A\$2.6 million) in the form of the non-redeemable, non-interestbearing convertible Loan Note 2. The Loan Note 2 is convertible into ordinary shares of Prairie at an issue price of A\$0.46 per share.
Other key terms of the Loan Note 2 include the following:
| Date | Details | Number of Shares |
\$ |
|---|---|---|---|
| 1 Jul 18 | Opening Balance | 212,275,089 | 66,718,295 |
| Jul 18 to Dec 18 | Share issue costs | - | (38,885) |
| 31 Dec 18 | Closing Balance | 212,275,089 | 66,679,410 |
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
| Note | 31 December 2018 \$ |
30 June 2018 \$ |
|
|---|---|---|---|
| 12. RESERVES |
|||
| Share-based payments reserve | 12(a) | 2,323,952 | 2,486,718 |
| Foreign currency translation reserve | 1,164,970 | 1,096,756 | |
| 3,488,922 | 3,583,474 |
| Date | Details | Number of Incentive Options |
Number of Performance Rights |
\$ |
|---|---|---|---|---|
| 1 Jul 18 | Opening Balance | 1,800,000 | 10,675,000 | 2,486,718 |
| 31 Dec 18 | Forfeiture of Performance Rights | - | (3,075,000) | (1,266,880) |
| Jul 18 to Dec 18 | Share-based payments expense | - | - | 1,104,114 |
| 31 Dec 18 | Closing Balance | 1,800,000 | 7,600,000 | 2,323,952 |
The Incentive Options outstanding at the end of the half-year have the following exercise prices and expiry dates:
The Performance Rights outstanding at the end of the half-year have the following expiry dates:
The Company also has a number of other unlisted securities (not accounted for as share-based payments) on issue which includes the following:
There have been no changes to contingent assets or liabilities since the date of the last annual report.
The Group's financial assets and liabilities, which comprise of cash and cash equivalents, trade and other receivables, trade and other payables and other financial liabilities, may be impacted by foreign exchange movements. At 31 December 2018 and 30 June 2018, the carrying value of the Group's financial assets and liabilities approximate their fair value. Please refer to notes 5 and 9 for further disclosure.
No dividend has been paid or provided for during the half-year (31 December 2017: nil).
FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 (Continued)
Other than the above, there were no significant events occurring after balance date requiring disclosure.
Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au
As lead auditor for the review of the half-year financial report of Prairie Mining Limited for the half-year ended 31 December 2018, I declare to the best of my knowledge and belief, there have been:
This declaration is in respect of Prairie Mining Limited and the entities it controlled during the financial period.
Ernst & Young
T S Hammond Partner Perth 12 March 2019
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au
We have reviewed the accompanying half-year financial report of Prairie Mining Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2018, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001, including:
The directors of the Company are responsible for the preparation of the half-year 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 half-year financial report that is free from material misstatement, whether due to fraud or error.
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group's consolidated financial position as at 31 December 2018 and its consolidated financial performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the Group, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation TH:CT:PDZ:012
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.
Ernst & Young
T S Hammond Partner Perth 12 March 2019
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation TH:CT:PDZ:012
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