TIDMBKY
RNS Number : 7533N
Berkeley Energia Limited
26 September 2019
BERKELEY ENERGIA LIMITED
2019
ANNUAL REPORT | INFORME ANUAL
ABN 40 052 468 569
CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO
Directors Solicitors
Mr Ian Middlemas Chairman Spain
Mr Deepankar Panigrahi Non-Executive Uría Menéndez Abogados,
Director S.L.P
Mr Nigel Jones Non-Executive Director
Mr Adam Parker Non-Executive Director United Kingdom
Mr Robert Behets Non-Executive Bryan Cave Leighton Paisner LLP
Director
Australia
Company Secretary DLA Piper Australia
Mr Dylan Browne
Bankers
Madrid Head Office Spain
Calle Capitán Haya 1 Santander Bank
Planta 15. Edificio Eurocentro.
28020 Madrid Australia
Spain Australia and New Zealand Banking
Group Ltd
Project Office
Berkeley Minera Espana, S.A. Share Registry
Carretera SA-322, Km 30 Spain
37495 Retortillo IBERCLEAR
Salamanca Plaza de la Lealtad, 1, 28014 Madrid
Spain Spain
Telephone: +34 923 193 903
United Kingdom
Registered Office Computershare Investor Services
Level 9, BGC Centre PLC
28 The Esplanade The Pavilions, Bridgewater Road
Perth WA 6000 Bristol BS99 6ZZ
Australia Telephone: +44 370 702 0000
Telephone: +61 8 9322 6322
Facsimile: +61 8 9322 6558 Australia
Computershare Investor Services
Website and Email Pty Ltd
www.berkeleyenergia.com Level 11, 172 St Georges Terrace
info@berkeleyenergia.com Perth WA 6000
Telephone: +61 8 9323 2000
Auditor Facsimile: +61 8 9323 2033
Spain
Ernst & Young Espana Stock Exchange Listings
Spain
Australia Madrid, Barcelona, Bilboa and Valencia
Ernst and Young Australia - Perth Stock Exchanges (Code: BKY)
United Kingdom
London Stock Exchange - Main Board
(LSE Code: BKY)
Australia
Australian Securities Exchange
(ASX Code: BKY)
CONTENTS | CONTENIDO
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 are available in the full version of the
2019 Annual Report on the Company's website at www.berkeleyenergia.com:
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) and 2019 Corporate Governance Statement have been
released today and are also available on the Company's website.
The Directors of Berkeley Energia Limited submit their report on
the Consolidated Entity consisting of Berkeley Energia Limited
('Company' or 'Berkeley' or 'Parent') and the entities it
controlled at the end of, or during, the year ended 30 June 2019
('Consolidated Entity' or 'Group').
DIRECTORS' REPORT
30 JUNE 2019
OPERATING AND FINANCIAL REVIEW
Highlights
Highlights for and subsequent to the year end include:
-- Strategy Change:
o The Company's primary focus continues to be on progressing the
approvals required to commence construction of the Salamanca mine
and bring it into production
o The Company has now set up its head office in Madrid and will
ultimately seek to recruit a suitably qualified Spanish National
for the Managing Director and Chief Executive Officer ('CEO')
role
o Following on from the Company's successful listing on the
Spanish Stock Exchanges in 2018, these initiatives are aimed at
further enhancing the Company's strong engagement with its key
stakeholders in Spain
-- Management Changes:
o Subsequent to the end of year, Mr Paul Atherley resigned as
Managing Director and CEO to concentrate on his other investments
in the resource sector
o Mr Robert Behets, Non-Executive Director, has now assumed the
role of Acting Managing Director on an interim basis and will be
assisted in Spain by Mr Francisco Bellón, the Company's Chief
Operations Officer
-- Exploration:
o The Company will continue to advance the recently announced
battery and Electric Vehicle ('EV') metals exploration strategy
which includes an initial six-hole drill programme in licence areas
indicated to be prospective for the battery and EV metals lithium,
cobalt, tin, tungsten and rare earth elements
-- Permitting Update:
o The Company continues to await the Express Resolution on the
award of the Urbanism Licence from the local municipality
o The Company has provided the Nuclear Safety Council ('NSC')
with all requested documentation and continues to await their
recommendation report, the timing of which remains uncertain
o Subsequent to the end of the year, the Company withdrew its
legal challenge against the 2019 appointments to the Board of the
NSC
-- Uranium Market:
o The uranium price weakened during the year due to uncertainty
surrounding President Trump's decision on the Section 232
Petition
o However subsequent to the year, a decision by the President to
decline issuing quotas for US domestic uranium production was
announced. The decision is expected to contribute to improved
market conditions moving forward, as US utilities, in particular,
continue their recontracting cycle
Operations
Strategy and Management Changes
Subsequent to the year, the Company advised that Mr Paul
Atherley had resigned as Managing Director and CEO of the Company
to concentrate on his other investments in the resource sector.
Mr Atherley had been Managing Director and CEO of Berkeley
Energia since June 2015 and had been instrumental in its growth and
development.
The Company's focus continues to be on progressing the approvals
required to commence construction of the Salamanca mine and bring
it into production, as well as advancing the recently announced
battery and EV metals exploration strategy.
The Company has now established a head office in Madrid and will
ultimately seek to recruit a suitably qualified Spanish National
for the Managing Director and CEO role.
Following on from the Company's successful listing on the
Spanish Stock Exchanges in 2018, these initiatives are aimed at
further enhancing the Company's strong engagement with its key
stakeholders in Spain.
While the recruitment process for a suitable candidate for the
Managing Director and CEO position takes place, Mr Robert Behets,
Non-Executive Director, has assumed the role of Acting Managing
Director and will be assisted in Spain by Mr Francisco Bellón, the
Company's Chief Operations Officer.
Drill programme for critical battery and EV metals
During the year, the Company announced the commencement of its
initial (six hole) drill programme to test for critical battery and
EV metals across its large licence holding in Western Spain.
The targets have been generated through detailed exploration for
a wide range of minerals over the past two years and further
refined by the use of an innovative Ionic Leach programme.
The results from this drill programme will be fed back into the
database and more refined targets interpreted which will allow for
further analysis of the mineral and metal endowment across the
Company's large licence holding in this mineral rich province.
The Company was awarded with three new licenses during the year
covering an area of 266 km(2) , located 40 km from Retortillo.
Previous geochemical analysis using ionic leach methodology has
shown the licence areas to be prospective for the battery and EV
metals lithium, cobalt, tin, tungsten and rare earth elements.
The Company was also more recently awarded an additional 31
km(2) licence which includes some former lithium and titanium
operations and is adjacent to one of the areas being drilled in the
current programme.
Permitting Update
The Company has resubmitted its Urbanism Licence application to
the local municipality following the resolution of two outstanding
items and continues to await the Express Resolution on the award of
the licence.
The Company has provided the Nuclear Safety Council with all
requested documentation and continues to await their recommendation
report, the timing of which remains uncertain.
Subsequent to the end of the year, the Company withdrew its
legal challenge against the 2019 appointments to the Board of the
NSC.
The Salamanca mine is being developed to the highest
international standards and the Company's commitment to the
environment remains a priority. It holds certificates in
Sustainable Mining and Environmental Excellence which were awarded
by AENOR, an independent Spanish government agency. The Company has
been re-awarded both certificates following a consultation process
with the agency. The Company holds the relevant status for best
practices on Health and Safety at the Salamanca mine.
Uranium market
The uranium price weakened during the year due to uncertainty
surrounding President Trump's decision on the Section 232
Petition.
However subsequent to the end of the year, a decision by the
President to decline issuing quotas for US domestic uranium
production was announced.
The decision is expected to contribute to improved market
conditions moving forward, as US utilities, in particular, continue
their recontracting cycle.
The US Department of Commerce confirmed in July 2018 that it
would initiate a Section 232 trade investigation into uranium
imports which was the result of a petition in mid-January 2018 by
Energy Fuels and Ur-Energy (the only 2 substantive US uranium
producers) and came after a prolonged period of low prices.
The petitioners are seeking a mandated requirement that US
utilities purchase a minimum 25% of their requirements from US
producers. The petition is now under review by the US nuclear fuel
cycle working group which will make a recommendation to the
President by mid-October 2019.
Some market commentators expect that we are likely to see tax
credits offered to utilities for buying domestic uranium and there
may be some mandate to buy a certain amount. The resolution of this
issue is expected to end a period of uncertainty and provide a
boost for uranium prices
The Company has 2.75 million pounds of U(3) O(8) under contract
for the first six years, with a further 1.25 million pounds of
optional volume, at an average price above US$42.
The Company will continue to progressively build its offtake
book and has granted the Oman sovereign wealth fund the right to
match any future long-term offtake transactions.
Commitment to the community
The Company has invested more than EUR80 million developing the
Salamanca mine over the past decade and plans to invest an
additional EUR250 million over the life of the project.
The Company has signed Cooperation Agreements with the highly
supportive local municipalities, demonstrating its commitment to
fostering positive relationships with these communities.
To date, through these agreements, the Company has provided Wifi
networks for local villages, built play areas for children,
repaired sewage water plants, upgraded sports facilities, and
sponsored various sporting events and local festivals.
The Company has worked tirelessly over the past decade to
develop positive and mutually beneficial relationships with the
local communities and will continue to do so as construction
commences.
Balance Sheet
The Company is in a strong financial position with A$97 million
in cash.
Results of Operations
The Consolidated Entity's net profit after tax for the year
ended 30 June 2019 was $34,431,000 (2018: loss $4,748,000).
Significant items contributing to the year end profit and
substantial differences from the previous year (loss) include the
following:
(i) Exploration and evaluation expenses of $8,541,000 (2018:
$12,040,000), which is attributable to the Group's accounting
policy of expensing exploration and evaluation expenditure incurred
subsequent to the acquisition of the rights to explore and up to
the successful completion of definitive feasibility studies and
permitting for each separate area of interest.
(ii) Business development expenses of $1,295,000 (2018:
$1,989,000) which includes the Groups investor relations activities
including but not limited to public relations costs, marketing and
digital marketing, broker fees, travel costs, conference fees,
business development consultant fees and stock exchange admission
fees.
(iii) Non-cash share-based payment gain of $1,918,000 (2018:
expense of $545,000) was recognised in respect of incentive
securities granted to directors, employees and key consultants. The
Company's policy is to expense the incentive securities over the
vesting period (which for Performance Rights is generally the life
of the security). The gain during the year is due to 3.6 million
unvested performance rights expiring 31 December 2018 with the
previous expense recognised being reversed.
(iv) Non-cash fair value gain of $38,120,000 (2018: $15,881,000)
of the convertible note and unlisted options issued to SGRF ('SGRF
Options'). These financial liabilities increase or decrease in
value in correlation with the Company's share price. With the share
price decreasing substantially during the year, the size of
financial liability has decreased materially resulting in a large
fair value gain for the period. As the convertible note and SGRF
Options convert into shares, the liabilities will be reclassified
to equity and will require no cash settlement by the Company.
Commercially, the intentions of both SGRF and the Company prior
to completing the convertible note transaction was to enter into an
equity arrangement. The Company has however complied with the
accounting standards and accounted for the convertible note as a
financial liability.
Under the ASX Listing Rules, the convertible note and SGRF
Options are defined as equity securities.
Due to the conversion terms of the convertible note leading to
the issuance of a variable number of ordinary shares in the Company
in return for conversion of the convertible note, the Company is
required under the accounting standards to account for the
convertible note as a current financial liability at fair value
through profit and loss, despite the Company having no obligation
to extinguish the convertible note using its cash resources.
The Group also incurred one off costs in the prior year to issue
the convertible note and associated securities of $2,697,000.
(v) Recognition of interest income of $2,340,000 (2018:
$1,034,000). The large increase in interest income reflects the
larger cash position of the Group during the year.
Financial Position
At 30 June 2019, the Group is in an extremely good financial
position with cash reserves of $96,587,000.
The Group had net assets of $79,648,000 at 30 June 2019 (2018:
$46,780,000), an increase of 70% compared with the previous year.
This increase is consistent with the reduction in the value of the
financial liabilities at fair value through profit and loss (the
convertible note and SGRF Options) offset by a lower cash
balance.
Business Strategies and Prospects for Future Financial Years
Berkeley's strategic objective is to create long-term
shareholder value with the Company's primary focus continuing to be
on progressing the approvals required to commence construction of
the Salamanca mine and bring it into production.
To achieve its strategic objective, the Company currently has
the following business strategies and prospects:
-- Continue to progress permitting and maintain the required
licences to develop and operate at the Salamanca mine
-- Advance the Salamanca mine through the development phase into
the main construction phase and then into production;
-- Progress with seeking further offtake partners. The Company
has maintained its preference to combine fixed and market related
pricing across its contracts in order to secure positive margins in
the early years of production whilst ensuring the Company remains
exposed to potentially higher prices in the future;
-- Continue to explore the Company's portfolio of tenements in
Spain targeting further Zona 7 style deposits aimed at making new
discoveries and converting some of the 29.6 million pounds of
Inferred resources into the mine schedule with the objective of
maintaining annual production at over 4 million pounds a year on an
ongoing basis;
-- Assess other mine development opportunities at the Salamanca mine; and
-- Advance the Company's complementary battery and EV metals exploration program.
As with any other mining projects, all of these activities are
inherently risky and the Board is unable to provide certainty that
any or all of these activities will be able to be achieved.
The material business risks faced by the Company that are likely
to have an effect on the Company's future prospects, and how the
Company manages these risks, include but are not limited to the
following:
Mining licences and government approvals required - With the
mining licence, environmental licence and the authorisation of
exceptional land use already obtained at the Salamanca mine, the
next two major approvals for the mine includes the Urbanism Licence
by the relevant municipal authority and the Construction
Authorisation by the Ministry of Ecological Transition for the
treatment plant as a radioactive facility.
During the year the Company resubmitted its Urbanism Licence
application to the local municipality following the resolution of
two outstanding items and continues to await the Express Resolution
on the award of the licence. However, the timing of the award of
the Urbanism Licence continues to remain uncertain and is outside
of the Company's control. During the year the Company appealed
against the procedure for the appointment of the new Nuclear Safety
Council board, however subsequent to the end of the year, this
appeal has been withdrawn.
Various appeals have also been made against a number of permits
and approvals discussed above, as allowed for under Spanish law,
and the Company expects that further appeals will be made against
these and future authorisations and approvals in the ordinary
course of events. Whilst none of these appeals have been finally
determined, no precautionary or interim measures have been granted
in relation to the appeals regarding the award of licences and
authorisations at the Salamanca mine to date. However, the
successful development of the Salamanca mine will be dependent on
the granting of all permits and licences necessary for the
construction and production phases, in particular the award of the
Urbanism Licence and Construction Authorisation which will allow
for the construction of the plant as a radioactive facility with
both approvals currently outstanding.
The Company has received more than 120 favourable reports and
permits for the development of the mine to date, however with any
development project, there is no guarantee that the Company will be
successful in applying for and maintaining all required permits and
licences to complete construction and subsequently enter into
production. If the required permits and licences are not obtained,
then this could have a material adverse effect on the Group's
financial performance, which may lead to a reduction in the
carrying value of assets and may materially jeopardise the
viability of the Salamanca mine and the price of its Ordinary
Shares.
Further, The Company's exploration and any future mining
activities are dependent upon the maintenance and renewal from time
to time of the appropriate title interests, licences, concessions,
leases, claims, permits, environmental decisions, planning consents
and other regulatory consents which may be withdrawn or made
subject to new limitations. The maintaining or obtaining of
renewals or attainment and grant of title interests often depends
on the Company being successful in obtaining and maintaining
required statutory approvals for its proposed activities. The
Company closely monitors the status of its mining permits and
licences and works closely with the relevant Government departments
in Spain to ensure the various licences are maintained and renewed
when required. However, there is no assurance that such title
interests, licenses, concessions, leases, claims, permits,
decisions or consents will not be revoked, significantly altered or
not renewed to the detriment of the Company or that the renewals
and new applications will be successful;
The Company's activities are subject to Government regulations
and approvals - Any material adverse changes in government policies
or legislation of Spain that affect uranium mining, processing,
development and mineral exploration activities, income tax laws,
royalty regulations, government subsidies and environmental issues
may affect the viability and profitability of the Salamanca mine.
No assurance can be given that new rules and regulations will not
be enacted or that existing rules and regulations will not be
applied in a manner which could adversely impact the Group's
mineral properties;
Additional requirements for capital - The issue of the US$65
million Convertible Note and SGRF Options to SGRF has provided the
Company the funds to complete the upfront capital items at the
Salamanca mine, subject to the SGRF Options being exercised early.
Due to the delays in the receipt of final permits as discussed
above (the receipt of express resolution on the Urbanism Licence
and the Construction Authorisation) the Company has been funding
its ongoing working capital requirements which has reduced the
amount available to fund full construction. This position will
continue for so long as the final permits remain outstanding,
unless the SGRF Options are exercised early. As a result of these
delays, the Company expects that following receipt of the permits
and in order to fully fund the full construction of the Salamanca
mine into steady state production, it will be required to raise
additional funding in order to meet the capital costs of the mine
development and to fund working capital until positive cash flows
are achieved. As a result, it is expected that the Salamanca mine
will not reach steady state production prior to 2020 and that fully
funding full construction and reaching steady state production will
be dependent on the SGRF Options being exercised or alternative
funding being secured;
The Company may be adversely affected by fluctuations in
commodity prices - The price of uranium has fluctuated widely since
the Fukushima nuclear power plant disaster in March 2011 and is
affected by further numerous factors beyond the control of the
Company. Future production, if any, from the Salamanca mine will be
dependent upon the price of uranium being adequate to make these
properties economic. The Company currently does not engage in any
hedging or derivative transactions to manage commodity price risk,
but as the Company's Project advances, this policy will be reviewed
periodically;
The Group's projects are not yet in production - As a result of
the substantial expenditures involved in mine development projects,
mine developments are prone to material cost overruns versus
budget. The capital expenditures and time required to develop new
mines are considerable and changes in cost or construction
schedules can significantly increase both the time and capital
required to build the mine; and
Global financial conditions may adversely affect the Company's
growth and profitability - Many industries, including the mineral
resource industry, are impacted by these market conditions. Some of
the key impacts of the current financial market turmoil include
contraction in credit markets resulting in a widening of credit
risk, devaluations and high volatility in global equity, commodity,
foreign exchange and energy markets, and a lack of market
liquidity. A slowdown in the financial markets or other economic
conditions may adversely affect the Company's growth and ability to
finance its activities.
DIRECTORS
The names of Directors in office at any time during the
financial year or since the end of the financial year are:
Mr Ian Middlemas Chairman
Mr Paul Atherley Managing Director and CEO (resigned effective 11 July 2019)
Mr Deepankar Panigrahi Non-Executive Director
Mr Nigel Jones Non-Executive Director
Mr Adam Parker Non-Executive Director
Mr Robert Behets Non-Executive Director
Unless otherwise disclosed, Directors held their office from 1
July 2018 until the date of this report.
CURRENT DIRECTORS AND OFFICERS
Ian Middlemas
Chairman
Qualifications - B.Com, CA
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 and Chairman of Berkeley
Energia Limited on 27 April 2012. 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), Prairie Mining Limited (August
2011 - 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).
Robert Behets
Acting Managing Director, Non-Executive Director
Qualifications - B.Sc (Hons), FAusIMM, MAIG
Mr Behets is a geologist with over 30 years' experience in the
mineral exploration and mining industry in Australia and
internationally. He was instrumental in the founding, growth and
development of Mantra Resources Limited, an African focused uranium
company, through to its acquisition by ARMZ for approximately A$1
billion in 2011. Prior to Mantra, Mr Behets held various senior
management positions during a long career with WMC Resources
Limited.
Mr Behets has a strong combination of technical, commercial and
managerial skills and extensive experience in exploration, mineral
resource and ore reserve estimation, feasibility studies and
operations across a range of commodities, including uranium, gold
and base metals. He is a Fellow of The Australasian Institute of
Mining and Metallurgy, a Member of the Australian Institute of
Geoscientists and was also previously a member of the Australasian
Joint Ore Reserve Committee ('JORC').
Mr Behets was appointed a Director of the Company on 27 April
2012. During the three year period to the end of the financial
year, Mr Behets has held directorships in Constellation Resources
Limited (June 2017 - present), Apollo Minerals Limited (October
2016 - present), Equatorial Resources Limited (February 2016 to
present), Piedmont Lithium Limited (February 2016 to May 2018) and
Cradle Resources Limited (May 2016 to July 2017).
Deepankar Panigrahi
Non-Executive Director
Qualifications - MS, MBA
Mr Panigrahi is an Investment Manager in the Private Equity
division of SGRF and has extensive experience across a variety of
sectors and geographies covering all stages of the private equity
process, including post investment management. Mr Panigrahi holds
an Undergraduate and Master's degree in Economics with Distinction
and Honours from the University of Michigan followed by an MBA from
Cambridge University.
Mr Panigrahi was appointed a director of the Company on 30
November 2017. Mr Panigrahi has not been a Director of another
listed company in the three years prior to the end of the financial
year.
Nigel Jones
Non-Executive Director
Qualifications - MA
Mr Jones has thirty years' experience in the international
mining sector. He has considerable corporate development and
marketing expertise, including being responsible for the
negotiation of key uranium supply agreements for Rio Tinto.
Mr Jones has spent two decades at Rio Tinto, where he currently
holds the position of Managing Director of the Simandou iron ore
project. In previous roles he was Global Head of Business
Development, Managing Director of Rio Tinto Marine, Head of
Investor Relations and Marketing Director, Uranium.
From 2017 to 2019, Mr Jones held the role of Head of Private
Side Capital Markets at ICBC Standard Bank, leading the investment
banking division of the global markets subsidiary of Industrial and
Commercial Bank of China, the world's largest bank by assets.
Mr Jones holds a Master's degree in Modern Languages from Oxford
University and is an alumnus of London Business School where he
completed its Corporate Finance Programme.
Mr Jones was appointed a Director of Berkeley Energia Limited on
7 June 2017. Mr Jones has not been a Director of another listed
company in the three years prior to the end of the financial
year.
Adam Parker
Non-Executive Director
Qualifications - MA.Chem (Hons), ASIP
Mr Parker joined the Company after a long and successful career
in institutional fund management in the City of London spanning
almost three decades, including being a co-founder of Majedie Asset
Management, which today manages assets of approximately GBP14
billion.
Mr Parker began his career in 1987 at Mercury Asset Management
(subsequently acquired by Merrill Lynch and now part of BlackRock)
and left in 2002 when he co-founded Majedie Asset Management.
Mr Parker was instrumental in building Majedie Asset Management
into the successful investment boutique that it is today. He
managed funds including the Majedie UK Opportunities Fund, the
Majedie UK Smaller Companies Fund and a quarter of the Majedie UK
Focus Fund.
Mr Parker was appointed a Director of Berkeley Energia Limited
on 14 June 2017. Mr Parker has not been a Director of another
listed company in the three years prior to the end of the financial
year.
Dylan Browne
Company Secretary
Qualifications - B.Com, CA, AGIA
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, Prairie Mining 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. Mr Browne was appointed Company Secretary of
the Company on 29 October 2015.
OTHER KMP
Francisco Bellón del Rosal (Francisco Bellón)
Chief Operations Officer
Qualifications - M.Sc, MAusIMM
Mr Bellón is a Mining Engineer specialising in mineral
processing and metallurgy with over 20 years' experience in
operational and project management roles in Europe, South America
and West Africa. He held various senior management roles with TSX
listed Rio Narcea Gold Mines during a 10 year career with the
company, including Plant Manager for El Valle/Carles process
facility and Operations Manager prior to its acquisition by Lundin
Mining in 2007. During this period, Mr Bellón was involved in the
development, construction, commissioning and production phases of a
number of mining operations in Spain and Mauritania including El
Valle-Boinás / Carlés (open pit and underground gold-copper mines
in northern Spain), Aguablanca (open pit nickel-copper mine in
southern Spain) and Tasiast (currently Kinross' world class open
pit gold mine in Mauritania). He subsequently joined Duro Felguera,
a large Spanish engineering house, where as Manager of the Mining
Business, he managed the peer review, construction and
commissioning of a number of large scale mining operations in West
Africa and South America in excess of US$1 billion. Mr Bellón
joined Berkeley Energia Limited in May 2011.
Sean Wade
Chief Commercial Officer
Qualifications - MA
Mr Wade is an experienced corporate executive with broad
experience across natural resources and emerging markets. He
commenced his career at Cazenove & Co and spent 20 years in a
variety of roles in capital markets where he was involved in
numerous transactions involving mining and other resource
companies.
He subsequently led the communications strategy for Asia
Resource Minerals (previously Bumi PLC) and more recently oversaw a
wide-ranging communications portfolio for TBC Bank PLC, Georgia's
largest universal bank.
Mr Wade holds a Masters degree in Social Anthropology from
Cambridge University
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the
year consisted of mineral exploration and development. There was no
significant change in the nature of those activities.
DIVIDS
No dividends have been declared, provided for or paid in respect
of the financial year ended 30 June 2019 (2018: nil).
EARNINGS PER SHARE
2019 2018
Cents Cents
--------------------------------------- ------- -------
Basic and diluted earnings/(loss) per
share 9.58 (1.51)
--------------------------------------- ------- -------
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed below, there were no significant changes
in the state of affairs of the Consolidated Entity during the
year.
(i) On 23 January 2019, the Company announced that it had
received a number of favourable assessments from various regulatory
bodies including two from the Nuclear Safety Council relating to
the pre-operational Surveillance Plan for Radiological and
Environmental Affections and the pre-operational Surveillance Plan
for the Control of the Underground Water.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
(i) On 11 July 2019, Mr Paul Atherley resigned as Managing
Director and CEO to concentrate on his other investments in the
resource sector.
Other than as outlined above, as 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.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity'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
Consolidated Entity during the financial year.
In September 2012, Berkeley qualified for certification in
accordance with ISO 14001 of Environmental Management, which sets
out the criteria for an environmental management system, and UNE
22480 of Sustainable Mining Management, which allows for the
systematic monitoring and tracking of sustainability indicators,
and is useful in the establishment of targets for constant
improvement. These certificates are renewed following completion of
audits established by the regulations, with the most recent audit
successfully completed in July 2017. In addition, the Company
obtained the certification on the OHSAS 18001 in September 2018,
which set up the criteria for the health and safety management
system at the Salamanca project site.
INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF
BERKELEY
Interest in Securities at the Date of this Report
Current Directors Ordinary Shares(i) Incentive Options(ii) Performance Rights(iii)
--------------------- ------------------- ---------------------- ------------------------
Ian Middlemas 9,300,000 - -
Deepankar Panigrahi - - -
Nigel Jones 35,000 - -
Adam Parker 200,000 - -
Robert Behets 2,490,000 - 240,000
--------------------- ------------------- ---------------------- ------------------------
Notes
(i) 'Ordinary Shares' means fully paid ordinary shares in the capital of the Company.
(ii) 'Incentive Options' means an unlisted option to subscribe
for one Ordinary Share in the capital of the Company
(iii) 'Performance Rights' means the right to subscribe to one
Ordinary Share in the capital of the Company upon the completion of
specific performance milestones by the Company.
SHARE OPTIONS AND PERFORMANCE RIGHTS
At the date of this report the following unlisted securities
have been issued over unissued Ordinary Shares of the Company:
-- 4,943,000 Performance Rights expiring on 31 December 2019;
-- 100,000 Performance Rights expiring on 30 June 2020;
-- 100,000 Performance Rights expiring on 31 December 2020;
-- 600,000 Performance Rights expiring on 31 December 2021;
-- 60,000 share rights expiring 1 May 2020;
-- 70,000 share rights expiring 1 May 2021;
-- A convertible note with a principal amount US$65 million
convertible into shares 100,880,000 shares at a price of GBP0.50
per share expiring 30 November 2021 ('Convertible Note'); and
-- SGRF Options as follows:
-- 10,089,000 unlisted options exercisable at GBP0.60 each,
vesting on conversion of the Convertible Note and expiring the
earlier of 12 months after vesting or on 30 November 2022;
-- 15,133,000 unlisted options exercisable at GBP0.75 each,
vesting on conversion of the Convertible Note and expiring the
earlier of 18 months after vesting or on 30 May 2023; and
-- 25,222,000 unlisted options exercisable at GBP1.00 each,
vesting on conversion of the Convertible Loan Note and expiring the
earlier of 24 months after vesting or on 30 November 2023.
These securities do not entitle the holders to participate in
any share issue of the Company or any other body corporate. During
the year ended 30 June 2019, no Ordinary Shares were issued as a
result of the exercise or conversion of Performance Rights, the
Convertible Note or SGRF Options. Subsequent to the end of the
financial year and up and until the date of this report, no
Ordinary shares have been issued as a result of the exercise or
conversion of the Performance Rights, SGRF Options or Convertible
Note.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the
Company's Directors and the board committees held during the year
ended 30 June 2019, and the number of meetings attended by each
director. During the year the Board resolved to establish a
Remuneration and Nomination Committee.
The Board as a whole currently performs the functions of an
Audit Committee and Risk Committee, however this will be reviewed
should the size and nature of the Company's activities change.
Board Meetings Remuneration and Nomination Committee(i)
-------------------------------------------- --------------------------------------------
Current Directors Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended
--------------------- -------------------------- ---------------- -------------------------- ----------------
Ian Middlemas 3 3 - -
Paul Atherley 3 3 - -
Deepankar Panigrahi 3 3 - -
Nigel Jones 3 3 - -
Adam Parker 3 2 - -
Robert Behets 3 2 - -
--------------------- -------------------------- ---------------- -------------------------- ----------------
Notes
(i) Remuneration and Nomination Committee meetings are generally
considered and approved by means of written resolutions of
committee members.
REMUNERATION REPORT (AUDITED)
This report details the amount and nature of remuneration of
each director and executive officer of the Company.
Details of Key Management Personnel
The Key Management Personnel ('KMP') of the Group during or
since the end of the financial year were as follows:
Directors
Mr Ian Middlemas Chairman
Mr Paul Atherley Managing Director and CEO (resigned effective
11 July 2019)
Mr Deepankar Panigrahi Non-Executive Director
Mr Nigel Jones Non-Executive Director
Mr Adam Parker Non-Executive Director
Mr Robert Behets Non-Executive Director
Details of Key Management Personnel (Continued)
Current KMP
Mr Francisco Bellón Chief Operations Officer
Mr Dylan Browne Company Secretary
Mr Sean Wade Chief Commercial Officer
There were no other key management personnel of the Company or
the Group. Unless otherwise disclosed, the Key Management Personnel
held their position from 1 July 2018 until the date of this
report.
Remuneration Policy
The remuneration policy for the Group's 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 key management
personnel:
-- the Group is currently focused on undertaking development and construction activities;
-- risks associated with resource companies whilst exploring and developing projects; and
-- other than profit which may be generated from asset sales (if
any), the Group does not expect to be undertaking profitable
operations until sometime after the successful commercialisation,
production and sales of commodities from one or more of its current
projects, or the acquisition of a profitable mining operation.
Remuneration and Nomination Committee
The Board has established an independent Remuneration and
Nomination Committee ('Remcom') to oversee the Group's remuneration
and nomination responsibilities and governance. The remuneration
committee members consist of three independent non-executive
directors being Mr Parker (as Chair), Mr Jones and Mr Behets.
The Remcom's role is to determine the remuneration of the
Company's executives, oversee the remuneration of KMP, and approve
awards under the Company's long-term incentive plan ('LTIP').
The Remcom reviews the performance of executives and KMP and
sets the scale and structure of their remuneration and the basis of
their service/consulting agreements. In doing so, the Remcom will
have due regard to the interests of shareholders.
In determining the remuneration of executives and KMP, the
Remcom seeks to enable the Company to attract and retain executives
of the highest calibre. In addition, the Remcom decides whether to
grant incentives securities in the Company and, if these are to be
granted, who the recipients should be.
Remuneration Policy for Executives
The Group's remuneration policy is to provide a fixed
remuneration component and a performance based component (Incentive
Options, Performance Rights and cash bonuses, see below). The Board
believes that this remuneration policy is appropriate given the
considerations discussed in the section above and is appropriate in
aligning KMP 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 motor
vehicles, housing and health care benefits.
Fixed remuneration will be reviewed annually by the Remcom. 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
Some KMP are entitled to an annual cash bonus 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 completion of exploration activities
(e.g. completion of exploration programmes within budgeted
timeframes and costs), development activities (e.g. completion of
feasibility studies and initial infrastructure), corporate
activities (e.g. recruitment of key personnel and project
financing) and business development activities (e.g. project
acquisitions and capital raisings). On an annual basis, after
consideration of performance against KPI's, the Board determines
the amount, if any, of the annual cash bonus to be paid to each
KMP. During the financial year no bonus (2018: nil) is to be paid,
or is payable to KMP. If or when the approvals for the Urbanism
Licence and the Construction Authorisation for the plant are
forthcoming, the Remcom and Board will make an assessment on if any
bonuses are to be paid to KMP.
Performance Based Remuneration - Long Term Incentive
The Group has adopted a 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 the Performance Rights Plan ("Plan") in
July 2015.
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 Group 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. 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, 1,100,000 Performance Rights were
granted to KMP and key employees. No Performance Rights were
converted during the financial year. 3,603,000 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, Incentive Options granted to KMP are generally
only of benefit if the KMP perform to the level whereby the value
of the Group increases sufficiently to warrant exercising the
Unlisted Options granted.
Other than service-based vesting conditions (if any) and the
exercise price required to exercise the Incentive Options, there
are no additional performance criteria on the Unlisted Options
granted to executives, as given the speculative nature of the
Company's activities and the small management team responsible for
its running, it is considered 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 granted as part of their
remuneration package.
Performance Based Remuneration - Long Term Incentive
(ii) Incentive Options (Continued)
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. 3,500,000 Incentive Options previously
granted to KMP lapsed during the financial year.
Remuneration Policy for Non-Executive Directors
The Board policy is to remunerate Non-Executive Directors at
market rates for comparable companies for time, commitment and
responsibilities. Given the current size, nature and risks of the
Company, incentive options have been 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. The maximum aggregate amount that may be paid to
Non-Executive Directors in a financial year is $350,000, as
approved by shareholders at a Meeting of Shareholders held on 6 May
2009. Director's fees paid to Non-Executive Directors accrue on a
daily basis. Fees for Non-Executive Directors are not directly
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. Given the size, nature
and opportunities of the Company, Non-Executive Directors may
receive Incentive Options or Performance Rights in order to secure
and retain their services.
Fees for the Chairman were set at $50,000 per annum (2018:
$50,000) (including post-employment benefits).
Fees for Non-Executive Directors' were set at $45,000 per annum
(2018: $45,000) (including 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 and Shareholder Wealth
During the Group's exploration and development phases of its
business, the Board anticipates that the Company will retain future
earnings (if any) and other cash resources for the operation and
development of its business. 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 does not directly base remuneration levels on the
Company's share price or movement in the share price over the
financial year and the previous four financial years. Discretionary
annual cash bonuses are based upon achieving various non-financial
KPIs as detailed under 'Performance Based Remuneration - Short Term
Incentive' and are not based on share price or earnings. As noted
above, a number of KMP have also been granted Performance Rights
and Incentive Options, which generally will be of greater value
should the value of the Company's shares increase (subject to
vesting conditions being met), and in the case of options, increase
sufficiently to warrant exercising the Incentive Options
granted.
Relationship between Remuneration of KMP and Earnings
As discussed above, the Group is currently undertaking
exploration and development activities, and does not expect to be
undertaking profitable operations until sometime after the
successful commercialisation, production and sales of commodities
from one or more of its current 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.
The maximum aggregate amount of fees that can be paid to
Non-Executive Directors is subject to approval by shareholders at a
General Meeting. 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 Non-Executive
Directors have received Performance Rights and Incentive Options in
order to secure their services and as a key component of their
remuneration.
General
Where required, KMP receive superannuation contributions (or
foreign equivalent), currently equal to 9.5% of their salary, and
do not receive any other retirement benefit. From time to time,
some individuals have chosen to sacrifice part of their salary to
increase payments towards superannuation.
All remuneration paid to KMP is valued at cost to the company
and expensed. Incentive Options and Performance Rights are valued
using an appropriate valuation methodology. The value of these
Incentive Options and Performance Rights is expensed over the
vesting period.
KMP Remuneration
Details of the nature and amount of each element of the
remuneration of each Director and other KMP of the Company or Group
for the financial year are as follows:
Short-term Benefits Non-Cash Percentage
---------------------------------- ------------
Post
Employ-ment Share-Based
Benefits Payments
of Total
Other Remunerat-ion
Non-Cash that Consists Percent-age
Salary Cash Benefits of Options/ Perform-ance
& Fees Incentive (2) (3) (1) Total Rights Related
2019 $ $ $ $ $ $ % %
------------ ---------- ---------- ---------- ------------ ------------ ---------- -------------- -------------
Directors
Ian
Middlemas 45,600 - - 4,332 - 49,932 - -
Paul
Atherley 497,372 - - - (620,817) (123,445) - -
Deepankar
Panigrahi 45,000 - - - - 45,000 - -
Nigel Jones 45,000 - - - - 45,000 - -
Adam Parker 60,000 - - - - 60,000 - -
Robert
Behets 41,096 - - 3,904 (135,262) (90,262) - -
Current KMP - -
Francisco
Bellón 308,134 - 50,442 23,446 (410,483) (28,461) - -
Sean Wade 328,909 - - - 309,821 638,730 48.6 48.6
Dylan Browne 106,775 - - 9,500 (139,774) (23,499) - -
Total 1,477,886 - 50,442 41,182 (996,515) 572,995
============ ========== ========== ========== ============ ============ ========== ============== =============
Notes
(1) Share-based payments are measured for by using a
Black-Scholes valuation method and are expensed over the vesting
period of the Performance Rights or Incentive Options issued.
Performance Rights are linked to the achievement by the Company of
certain performance conditions as determined by the Board from time
to time with the Performance Rights only of any value to the holder
if the performance conditions are satisfied prior to the expiry of
the respective Performance Rights. During the financial year,
3,603,000 Performance Rights previously granted to KMP were
forfeited and as such the previously recognised expense was
reversed.
(2) Other Non-Cash Benefits includes payments made for housing and car benefits.
(3) Contains statutory superannuation and social security.
KMP Remuneration (Continued)
Short-term Benefits Non-Cash Percentage
----------------------------------- ------------
Share-Based
Payments
of Total
Other Remunerat-ion
Non-Cash Post that Consists Percent-age
Salary Cash Benefits Employ-ment of Options/ Perform-ance
& Fees Incentive (7) Benefits (6) Total Rights Related
2018 $ $ $ $ $ $ % %
------------- ----------- ---------- ---------- ------------ ------------ ---------- -------------- -------------
Directors
Ian Middlemas 45,600 - - 4,332 - 49,932 - -
Paul Atherley 478,981 - - - 156,483 635,464 24.62 24.62
Deepankar
Panigrahi(1) 26,250 - - - - 26,250 - -
Nigel Jones 45,029 - - - - 45,029 - -
Adam Parker 58,500 - - - - 58,500 - -
Robert Behets 41,097 - - 3,903 14,333 59,333 24.16 24.16
Current KMP
Francisco
Bellón 299,978 - 47,244 21,398 94,461 463,081 20.40 20.40
Sean Wade(2) 48,922 - - - - 48,922 - -
Dylan Browne 125,088 - - - 36,935 162,023 22.80 22.80
Former KMP
Paul
Thomson(3) 252,633(4) - - - (24,980) 227,653 - -
Hugo
Schumann(5) 318,732(5) - - - 26,834 345,566 15.30 15.30
Total 1,740,810 - 47,244 29,633 304,066 2,121,753
============= =========== ========== ========== ============ ============ ========== ============== =============
Notes
(1) Mr Panigrahi was appointed a Director on 30 November 2017.
(2) Mr Wade was appointed as Chief Commercial Officer on 1 May 2018.
(3) Mr Thomson resigned as Chief Financial Officer on 5 April 2018.
(4) Includes three months' notice period.
(5) Mr Schumann ceased as Chief Commercial Officer (and KMP) on
1 January 2018. Includes a transaction payment of $170,196 paid to
Meadowbrook Enterprises Limited (A company Mr Schumann is a
shareholder of) following the completion of the SGRF fund raising
transaction completed during the year.
(6) Share-based payments are measured for by using a
Black-Scholes valuation method and are expensed over the vesting
period of the Performance Rights or Incentive Options issued.
Performance Rights are linked to the achievement by the Company of
certain performance conditions as determined by the Board from time
to time with the Performance Rights only of any value to the holder
if the performance conditions are satisfied prior to the expiry of
the respective Performance Rights.
(7) Other Non-Cash Benefits includes payments made for housing and car benefits.
Incentive 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 of Value of
Value of options options
options & rights & rights
& rights exercised/ included
granted(1) lapsed(1) in remuneration
No. of
No. of No. of options
options options & rights
& rights & rights exercised/
2019 granted vested lapsed $ $ $
--------------- ---------- ---------- ------------ ------------ ------------ -----------------
Directors
Paul Atherley - - (3,850,000) - (974,500) (620,817)
Robert Behets - - (480,000) - (148,320) (135,262)
Other KMP
Francisco
Bellón - - (2,000,000) - (568,300) (410,483)
Sean Wade 690,000 (60,000) - 531,500 (51,000) 309,821
Dylan Browne - - (360,000) - (169,200) (139,774)
--------------- ---------- ---------- ------------ ------------ ------------ -----------------
Notes
(1) Values determined at the grant date per AASB 2. For details
on the valuation of Incentive Options and Performance Rights,
including models and assumptions used, please refer to Note 18 of
the financial statements
Details of Incentive Options, Performance Rights and Share
Rights granted by the Company to each KMP of the Group during the
financial year are as follows:
Grant
Exercise date fair
Price value(1)
Options Grant Expiry Vesting Number
2019 or Rights date date date $ $ granted
----------- ------------ -------- -------- --------- ---------- ----------- ---------
Other
KMP
Share 23 Mar 1 May 1 May
Sean Wade rights 2018 2019 2019 - 0.850 60,000
Share 23 Mar 1 May 1 May
rights 2018 2020 2020 - 0.850 60,000
Share 23 Mar 1 May 1 May
rights 2018 2020 2020 - 0.850 70,000
10 Aug 30 Jun
Rights(2) 2018 2020 - - 0.740 100,000
10 Aug 31 Dec
Rights(2) 2018 2020 - - 0.740 100,000
10 Aug 31 Dec
Rights(2) 2018 2021 - - 0.740 300,000
------------ -------- -------- --------- ---------------------- ----------- ---------
Notes
(1) For details on the valuation of Incentive Options and
Performance Rights, including models and assumptions used, please
refer to Note 18 of the financial statements.
(2) Performance Rights were issued to (a) recruit, incentivise
and retain the KMP to achieve the Group's business objectives; (b)
link the reward of the KMP with the achievement of strategic goals
and the long-term performance of the Group; (c) align the financial
interest of the KMP with those of Shareholders; and (d) provide
incentives to the KMP to focus on superior performance that creates
Shareholder value.
Employment Contracts with Directors and KMP
Current Directors
Mr Ian Middlemas, Non-Executive Chairman, has a letter of
appointment dated 29 June 2015 confirming the terms and conditions
of his appointment. Effective from 1 July 2013, Mr Middlemas has
received a fee of $50,000 per annum inclusive of
superannuation.
Mr Nigel Jones and Mr Panigrahi, Non-Executive Directors, have
letters of appointment with Berkeley Energia Limited dated 5 June
2017 and 30 September 2018 respectively confirming the terms and
conditions of his appointment. Both receive a fee of $45,000 per
annum.
Mr Adam Parker, Non-Executive Director, has a letter of
appointment with Berkeley Energia Limited dated 5 June 2017
confirming the terms and conditions of his appointment. Effective
from 28 August 2017, Mr Parker receives a fee of $45,000 per annum
for his Board duties and $15,000 for chairing the Remcom.
Mr Robert Behets, Non-Executive Director, has a letter of
appointment dated 29 June 2015 confirming the terms and conditions
of his appointment. Effective 1 July 2017, Mr Behets has received a
fee of $45,000 per annum inclusive of superannuation. Mr Behets
also has a services agreement with the Company dated 18 June 2012,
which provides for a consultancy fee at the rate of $1,200 per day
for management and technical services provided by Mr Behets. Either
party may terminate the agreement without penalty or payment by
giving two months' notice.
Current other KMP
Mr Francisco Bellón, has a contract of employment dated 14 April
2011 and amended on 1 July 2011, 13 January 2015 and 16 March 2017.
The contract specifies the duties and obligations to be fulfilled
by the Chief Operations Officer. The contract has a rolling term
and may be terminated by the Company giving six months' notice, or
12 months in the event of a change of control of the Company. In
addition to the notice period, Mr Bellón will also be entitled to
receive an amount equivalent to statutory unemployment benefits
(approximately EUR25,000) and statutory severance benefits
(equivalent to 45 days remuneration per year worked from 9 May 2011
to 11 February 2012, and 33 days remuneration per year worked from
12 February 2012 until termination). No amount is payable in the
event of termination for neglect of duty or gross misconduct. Mr
Bellón receives a fixed remuneration component of EUR190,000 per
annum plus compulsory social security contributions regulated by
Spanish law, as well as the provision of accommodation in Salamanca
and a motor vehicle.
Mr Sean Wade is engaged under a consultancy deed with Keysford
Limited ('Keysford') which specifies the duties and obligations to
be fulfilled by Mr Wade as the Chief Commercial Officer. Either
party may terminate the agreement with three months written notice.
No amount is payable in the event of termination for material
breach of contract, gross misconduct or neglect. Keysford receives
an annual consultancy fee of GBP180,000.
Mr Dylan Browne, Company Secretary, has an employment letter
dated 1 July 2018 confirming the terms and conditions of his
appointment. Mr Browne's employment is terminable by each party
giving the other party one's months written notice or by the
Company providing payment in lieu of the one months' notice. In the
event of serious misconduct, Mr Browne's employment may be
terminated without notice. Mr Browne receives a salary of $100,000
per annum plus the required statutory superannuation.
Equity instruments held by Key Management Personnel
Incentive Options and Performance Rights holdings of KMP
Vested Vested and
Held at Granted as securities Held at exerciseable at
2019 1 July 2018 Compen-sation exercised Expired 30 June 2019 30 June 2019
------------------ ------------- ----------------- ---------------- ------------ -------------- ----------------
Directors
Ian Middlemas - - - - - -
Paul Atherley 3,850,000 - - (2,800,000) 1,050,000 -
Deepankar -
Panigrahi - - - - -
Nigel Jones - - - - - -
Adam Parker - - - - - -
Robert Behets 480,000 - - (240,000) 240,000 -
Other KMP
Francisco
Bellón 2,000,000 - - (1,250,000) 750,000 -
Sean Wade - 690,000 (60,000) - 630,000 -
Dylan Browne 360,000 - - (180,000) 180,000 -
------------------ ------------- ----------------- ---------------- ------------ -------------- ----------------
Shareholdings of KMP
Held at Options Held at
1 July Granted exercised/Rights On market 30 June
2019 2018 as Compensation converted purchase/(sale) 2019
--------------- ---------- ----------------- ------------------ ----------------- ----------
Directors
Ian Middlemas 9,300,000 - - - 9,300,000
Paul Atherley 3,369,000 - - (175,378)(1) 3,193,622
Deepankar -
Panigrahi - - - -
Nigel Jones - - - 35,000 35,000
Adam Parker 200,000 - - - 200,000
Robert Behets 2,490,000 - - - 2,490,000
Other KMP
Francisco
Bellón 1,150,000 - - - 1,150,000
Sean Wade - - 60,000 - 60,000
Dylan Browne - - - - -
--------------- ---------- ----------------- ------------------ ----------------- ----------
Notes
(1) On market trade to meet personal liabilities following the
cost (GBP300,000) to exercise 2,000,000 GBP0.15 Incentive Options
at June 2018
End of Remuneration Report.
AUDITOR'S AND OFFICERS' INDEMNITIES AND INSURANCE
Under the Constitution the Company is obliged, to the extent
permitted by law, to indemnify an officer (including Directors) of
the Company against liabilities incurred by the officer in that
capacity, against costs and expenses incurred by the officer in
successfully defending civil or criminal proceedings, and against
any liability which arises out of conduct not involving a lack of
good faith.
During the financial year, the Company has paid an insurance
premium to insure Directors and officers of the Company against
certain liabilities arising out of their conduct while acting as a
Director or Officer of the Company. Under the terms and conditions
of the insurance contract, the nature of liabilities insured
against cannot be disclosed.
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.
NON-AUDIT SERVICES
During the year, the Company's auditor, Ernst & Young,
received, or is due to receive, $52,000 (2018: $118,000) for the
provision of non-audit services. The Directors are satisfied that
the provision of non-audit services is compatible with the general
standard and independence for auditors imposed by the Corporations
Act.
ROUNDING
The amounts contained in the financial report have been rounded
to the nearest $1,000 (where rounding is applicable) where noted
($000) under the option available to the Company under ASIC
Corporations (Rounding in Financial/Directors' Reports) Instrument
2016/191. The Company is an entity to which this legislative
instrument applies.
AUDITOR'S INDEPENCE DECLARATION
The auditor's independence declaration is on page 59 of the
Annual Financial Report on the website.
This report is made in accordance with a resolution of the
Directors made pursuant to section 298(2) of the Corporations Act
2001.
For and on behalf of the Directors
ROBERT BEHETS
Director
25 September 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2019
2019 2018
$000 $000
------------------------------------------------------------------------------------------- --- ------- --------
Revenue 2,340 1,034
Corporate and administration expenses (1,928) (1,588)
Exploration and evaluation expenses (8,541) (12,040)
Business development expenses (1,278) (1,989)
Share-based payment expenses 1,918 (545)
Listing expenses - (777)
Fair value movement on financial liabilities 38,120 15,881
Costs to issue convertible note - (2,697)
Foreign exchange movements 3,800 (2,027)
Profit/(Loss) before income tax 34,431 (4,748)
Income tax benefit/(expense) - -
------------------------------------------------------------------------------------------- --- ------- --------
Profit/(Loss) after income tax 34,431 (4,748)
------------------------------------------------------------------------------------------------ ------- --------
Other comprehensive income, net of income tax:
Items that may be classified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations 382 1,430
------------------------------------------------------------------------------------------------ ------- --------
Other comprehensive income, net of income tax 382 1,430
------------------------------------------------------------------------------------------------ ------- --------
Total comprehensive profit/(loss) for the year attributable to Members of Berkeley Energia
Limited 34,813 (3,318)
================================================================================================ ======= ========
Basic and diluted earnings/(loss) per share (cents per share) 9.58 (1.51)
------------------------------------------------------------------------------------------------ ------- --------
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
$000 $000
------------------------------ --- -------- ---------
ASSETS
Current Assets
Cash and cash equivalents 96,587 100,935
Trade and other receivables 1,661 1,849
Total Current Assets 98,248 102,784
----------------------------------- -------- ---------
Non-current Assets
Exploration expenditure 8,274 8,203
Property, plant and equipment 12,858 11,534
Other financial assets 540 527
----------------------------------- -------- ---------
Total Non-current Assets 21,672 20,264
----------------------------------- -------- ---------
TOTAL ASSETS 119,920 123,048
----------------------------------- -------- ---------
LIABILITIES
Current Liabilities
Trade and other payables 1,952 909
Provisions 564 550
Convertible note liability 35,972 69,552
Option liability 1,784 5,257
----------------------------------- -------- ---------
Total Current Liabilities 40,272 76,268
----------------------------------- -------- ---------
TOTAL LIABILITIES 40,272 76,268
----------------------------------- -------- ---------
NET ASSETS 79,648 46,780
=================================== ======== =========
EQUITY
Equity attributable to equity
holders of the Company
Issued capital 169,736 169,633
Reserves (531) 1,549
Accumulated losses (89,557) (124,402)
----------------------------------- -------- ---------
TOTAL EQUITY 79,648 46,780
=================================== ======== =========
The above Statement of Financial Position should be read in
conjunction with the accompanying Notes
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2019
Issued Share- Foreign Accumulated Total
Capital Based Currency Losses Equity
Payments Translation
Reserve Reserve
$000 $000 $000 $000 $000
As at 1 July 2018 169,633 2,803 (1,254) (124,402) 46,780
Total comprehensive
loss for the period:
Net profit/(loss) for
the year - - - 34,431 34,431
Other Comprehensive
Income:
Exchange differences
arising on translation
of foreign operations - - 382 - 382
---------------------------- -------- ---------- ------------- ------------ --------
Total comprehensive
income/(loss) - - 382 34,431 34,813
---------------------------- -------- ---------- ------------- ------------ --------
Issue of ordinary shares 130 - - - 130
Share issue costs (27) - - - (27)
Forfeiture of Performance
Rights - (3,162) - - (3,162)
Lapse of Incentive Options - (414) - 414 -
Share-based payments
expense - 1,114 - - 1,114
As at 30 June 2019 169,736 341 (872) (89,557) 79,648
============================ ======== ========== ============= ============ ========
As at 1 July 2017 168,051 2,791 (2,684) (119,691) 48,467
Total comprehensive
loss for the period:
Net loss for the year - - - (4,748) (4,748)
Other Comprehensive
Income:
Exchange differences
arising on translation
of foreign operations - - 1,430 - 1,430
Total comprehensive
income/(loss) - - 1,430 (4,748) (3,318)
Issue of ordinary shares 1,105 - - - 1,105
Exercise of Incentive
Options 479 (479) - - -
Share issue costs (2) - - - (2)
Adjustment for Performance
Rights forfeited - (212) - - (212)
Adjustment for Incentive
Options lapsed - (37) - 37 -
Share-based payments - 740 - - 740
As at 30 June 2018 169,633 2,803 (1,254) (124,402) 46,780
============================ ======== ========== ============= ============ ========
The above 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
2019 2018
$000 $000
-------------------------------------------- --- -------- --------
Cash flows from operating activities
Payments to suppliers and employees (10,612) (20,176)
Interest received 2,678 698
Net cash outflow from operating activities (7,934) (19,478)
------------------------------------------------- -------- --------
Cash flows from investing activities
Payments for property, plant and equipment (1,254) (1,461)
------------------------------------------------- -------- --------
Net cash outflow from investing activities (1,254) (1,461)
------------------------------------------------- -------- --------
Cash flows from financing activities
Proceeds from issue of securities - 1,088
Transaction costs from issue of securities (27) -
Proceeds from issue of convertible note
and options - 85,823
Transaction costs from issue of convertible
note and options - (2,697)
Net cash (outflow)/inflow from financing
activities (27) 84,214
------------------------------------------------- -------- --------
Net (decrease)/increase in cash and
cash equivalents held (9,215) 63,275
Cash and cash equivalents at the beginning
of the financial year 100,935 34,815
Effects of exchange rate changes on
cash and cash equivalents 4,867 2,845
------------------------------------------------- -------- --------
Cash and cash equivalents at the end
of the financial year 96,587 100,935
================================================= ======== ========
The above Statement of Cash Flows should be read in conjunction
with the accompanying Notes
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 GLGDCIDDBGCL
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September 26, 2019 02:55 ET (06:55 GMT)
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