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HalfYearlyReport
31December2017CokalLimitedACN0822541437HalfYearlyReportfortheperiodended31December2017
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ContentsCorporateInformation 1
Directors'Report 2
InterimConsolidatedStatementofComprehensiveIncome 7
InterimConsolidatedStatementofFinancialPosition 8
InterimConsolidatedStatementofChangesinEquity 9
InterimConsolidatedStatementofCashFlows 10
NotestotheCondensedInterimConsolidatedFinancialStatements 11
DeclarationbyDirectors 21
Auditor’sIndependenceDeclaration 22
IndependentAuditor’sReviewReport 23
CompetentPersonStatement:
The Total Coal Reserve estimate is based on information compiled by Robert de Jongh who is a member of the AustralasianInstituteofMining andMetallurgy andanemployeeofASEAMCOPty Ltd. Mrde Jongh is aqualifiedminingengineer andhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandthetheactivitywhichheisundertaking,toqualifyasaCompetentPersonasdefinedinthe2012Editionofthe“AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves.”
The Total Coal Resources estimatewas announced on 29 April 2016, titled “Updated JORC Resource Statement for BBM”. TheinformationinthereportrelatingtoMineralResourcesIsbasedoninformationcompiledbyYogaSuryanegarawhoisaMemberoftheAustralianInstituteofMiningandMetallurgyandafulltimeemployeeofCokalLimited.Mr.Suryanegaraisaqualifiedgeologistandhassufficientexperience,whichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the “Australian Code forReportingofExplorationResults,MineralResourcesandOreReserves”.
The Company confirms that it is not aware of any new information or datamaterially affects the information included in theannouncementmadeon29April2016andthatallmaterialassumptionsandtechnicalparametersunderpinningtheestimatesintheannouncementmadeon29April2016continuetoapplyandhavenotmateriallychanged.
TheinformationinthisreportrelatingtoExplorationResultsisbasedoninformationcompiledbyPatrickHannawhoisafellowoftheAustralasianInstituteofMiningandMetallurgyandisaconsultant(throughHannaConsultingServices)toCokalLimited.MrHanna is a qualified geologist andhas sufficient experiencewhich is relevant to the style ofmineralisation and typeof depositunderconsiderationandtotheactivitywhichtheyareundertaking,toqualifyasCompetentPersonsasdefinedinthe2012Editionof the“AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves”.MrHannaconsentstotheinclusioninthereportofthemattersbasedontheinformation,intheformandcontextinwhichitappears.
CorporateInformation DIRECTORSPatHannaDomenicMartinoGerhardusKielenstynCOMPANYSECRETARIESLouisaYouensTeukuJuliansyah(CFO)REGISTEREDOFFICEANDPRINCIPALBUSINESSOFFICELevel5,56PittStreet,SydneyNSW2000Phone:+61288233179Fax:+61288233188
COUNTRYOFINCORPORATIONAustraliaSOLICITORSThomsonGeerLawyersLevel16,WaterfrontPlace1EagleStreetBrisbaneQLD4000Phone:+61733387500Fax:+61733387599SHAREREGISTRYAdvancedShareRegistryServices110StirlingHighwayNedlandsWA6009Phone:+61893898033Fax:+61892623723
AUDITORSErnst&Young111EagleStreetBrisbaneQLD4000Phone:+61730113333Fax:+61730113100STOCKEXCHANGELISTINGAustralianSecuritiesExchangeLtdASXCode:CKAINTERNETADDRESSwww.cokal.com.auAUSTRALIANBUSINESSNUMBERABN55082541437
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Directors'ReportThedirectorsherebypresentthefollowinghalf-yearreportfortheperiodended31December2017.Thefollowingpersonsweredirectorsofthecompanyduringthewholeofthehalf-yearanduptothedateofthisreport,unlessotherwisestated:
-DomenicMartino–Non-ExecutiveDirector(appointed24December2010)andNon-ExecutiveChairman(appointed31January2017);
-PatHanna–Non-ExecutiveDirector(appointed24December2010);
- Gerhardus (Garry) Kielenstyn – Executive Director (appointed 27 January 2017) and Chief Operating Officer(appointed24June2016).
PRINCIPALACTIVITIESThe principal activities of the consolidated entity during the financial period were focused on the identification anddevelopmentofcoalprojectswithinthehighlyprospectiveCentralKalimantancokingcoalbasininIndonesia.OPERATINGRESULTSFor the half-year ended 31 December 2017, the loss for the consolidated entity after providing for income tax wasUS$4,433,086(31December2016:US$10,138,455).DIVIDENDSPAIDORRECOMMENDEDTherewerenodividendspaidorrecommendedduringthefinancialperiod.CHANGESINCAPITALTherehasbeenanincreaseinsharecapitalinthecurrentfinancialperiodasdiscussedbelow.
SharePlacementDuringJuly2017,19,444,445shareswereissuedatAU$0.036pershareaspartoftheCompany’scapitalraisingstrategy.
ConvertibleNotesOn 20October 2017, the Company issued 1,577,234 Convertible Notes toMEF I, L.P. During the half-year, 1,280,000ConvertibleNoteswereconvertedto41,792,086shares.
SharesIssuedonConversionofDebtDuringthehalf-yearended31December2017,875,000shareswereissuedinpaymentofinvoices.
OptionsExercisedandSharesIssuedDuring the half-year ended 31 December 2017, no ordinary shareswere issued on exercise of options (31 December2016:Nil).At31December2017,therewere655,204,235sharesonissue,and56,000,000unexpiredoptions.
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Directors'Report(Continued)REVIEWOFOPERATIONSBBMProjectBBM’sProduction IUP (mining licence)coversanareaof14,980hectares (ha), immediatelyadjacent to Indomet’s Juloitenement, straddling theBaritoRiverandhasmultipleseamsofhighqualitymetallurgicalcoal.BBMhasall regulatoryapprovalsinplace,including:
• MiningLicense–20yearswithtwofurtherextensionsof10yearseach• EnvironmentalApprovalforatotalof6milliontonnesperannum• PortConstructionApproval• ForestryPermittocommenceminingactivity.
Asaforeigninvestmentcompany(PMA),theIUP-OPforBBMhasbeentransferredbytheMurungRayaRegencytotheCentral Government (ESDM Jakarta) as required by recent changes in the mining regulations. Its decree adjustmentprocess has now been completed. The new decree of BBM as “IUP-OP PMA” has been issued and signed byHead ofInvestmentCoordinationBoard(BKPM)JakartaonbehalfofESDMMinister,dated22September2017andwillbevaliduntil29April2033.BBM-AnakProjectProgressIn October 2017 Cokal apointed a Mine Operation Manager, Reynold Immanuel. As Mine Operation Manager, MrImmanuelwillimplementthemineplanandensureBBMAnakoperatesefficientlyandwithahighlevelofsafetymeetinginternationalstandards.Mr Immanuelhasastrongbackground inmanagingminingoperations inKalimantan, includingProjectManager,PutraBorneo Mandiri Sejahtera coal mine (South Kalimantan), Engineering Manager, Kalimantan Prima Energy Group coalminingprojectinEastKalimantan,andMineOperationManager,IndomuroKencanagoldmine(CentralKalimantan).TheCompanycontinued to improve the facilitiesat theminesite suchasdrainage, sedimentpits,haul road, stockpileareasandloadingfacilities.OngoingimprovementoftheinfrastructuresisoneoftheCompany’skeyprioritiestoensureoperationalefficienciesandsustanabilityofminingactivity.InDecember,theCompanyestablishedalocalsaleforthe10,000tonnesofcoalattheISP.Thehalfyearto31December2017isregardedasthe“wetseason”inKalimantanandsincecommencementofbarginginAugust2017,theBaritoRiverheightwasabnormallyhigherthanexpected.However,frommid-December,therewasveryfewdaysofrainandtheriverheightwastoolowforbarging.
Cokal’s BBM Anak Coal Loaded onto 5,000-tonne Barge
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Directors'Report(Continued)BBMPCIProjectDuring thehalf-yearCokal initiateddiscussionswithamajorminingcontractor inpreparation for theconstructionandoperationof thenextstageofmining, theBBMPCIproject.Cokal’s technical teamprovideddatato thecontractor fortheirassessmentoftheprojectintermsofminingcosts.BBMWestBlockExplorationIPPKHExtensionSincetheissueoftheBorrowtoUsePermit–Exploitation(IPPKH-OP)fortheEasternBlockoftheBBMproject,CokalhasproceededwiththeapplicationforaBorrowtoUsePermit–ExplorationfortheWesternBlockofBBM.ThisareaconsistsofPCIandAnthracitecoalsclosetotheBaritoRiver.TheapplicationiscurrentlywiththePlanologyDept.attheMinistryofEnvironmentandForestry.BBPProjectCokal owns 60% share in Borneo Bara Prima (BBP) project, which covers 13,050Ha inMurung Raya Regency, CentralKalimantan.BBP has been granted an Exploration Forestry Permit (IPPKH), and has been confirmed on the Central Government’sCleanandClearlist.TheIUPwastransferredtotheCentralGovernmentwhereitnowawaitsapprovaltobeupgradedtoamininglicense(ProduksiIUP).NoexplorationactivitywasconductedonBBPduringthehalf-year.TBARProjectTBAR’sExplorationIUP(No.188.45/204/2012)coversanareaof18,850hectares(ha),immediatelyadjacenttothesouthof BBM’s tenement. TBAR’s IUP (tenement license) is on the Clean and Clear List (CNC) with over 80% of the leaseassignedaseitherproductionorlimitedproductionforestrylease,thatis,itisavailableforexplorationactivitysubjecttotheissuanceofanexplorationforestrypermit.Theapplicationofexplorationforestrypermitwassubmitedin2014andcontinuestobeprocessedbytheEnvironmentandForestryMinistryofIndonesia.Following its transfer process from Murung Raya to Provincial Government, Cokal continues its efforts to acquireregulatory approval for the IUP (exploration license) upgrade process application to a Production and Operation IUP(equivalenttoamininglicense).AAKProjectCokalhasa75%shareofAnugerahAlamKatingan(AAK)projectsalsolocatedinCentral,Kalimantan,Indonesia.TheAAKprojectareacomprisesof5,000ha.ApplicationsfortheExplorationForestryPermit(IPPKH)andCleanandClearCertificatescontinuetobeprocessed.CokalcontinuestomonitortheprogressoftheregulatoryupgradeapprovalsforAAK.MiningTenementsheldat31December2017andtheirLocation
Tenement Name Location % Ownership
PT Bumi Barito Mineral (BBM) Central Kalimantan, Indonesia 60%
PT Borneo Bara Prima (BBP) Central Kalimantan, Indonesia 60%
PT Tambang Benua Alam Raya (TBAR) Central Kalimantan, Indonesia 75%
PT Anugerah Alam Katingan (AAK) Central Kalimantan, Indonesia 75%
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Directors'Report(Continued)
Locality Plan of the Central Kalimantan Coal Projects on the Island of Kalimantan
- Cokal’s Coal concession areas are shown in blue CorporateSocialResponsibilityCokalhascontinuedwiththeimplementationofitsCommunityDevelopmentprograms.Cokalhasundertakenprograms,whichcoveredhealth,education,environmentalawareness,andcommunityempowermentaspects.CORPORATENoticeofAnnualGeneralMeetingTheAnnualGeneralMeetingofShareholdersofCokalLimitedwasheldon29November2017.DebtRestructuring–ConversionofLoanstoPlatinumPartnerstoaRoyaltyArrangementOn22July2016,theCompanyannouncedthatithadreachedanagreementtoconvertcertainloansoutstandingintoaproductionroyalty,subjecttothepreparationofdefinitiveagreements(“DebtRestructureTransaction”).The Company entered into a definitive royalty deed on 29 April 2017 under which the Company will be granted adischargeand releaseof itsobligations in respectof the loans inexchange foraproduction royalty, subject to certainconditionsbeingsatisfied.ShareholdersapprovedtheDebtRestructureTransactionattheCompany’s2017AnnualGeneralMeeting.The Company is working through the conditions of the Debt Restructure Transaction required for the release anddischargeoftheloans.ConvertibleNotesInOctober 2017 theCompanyentered into aConvertibleNoteAgreementwithMEF I, L.P. (“Magna”),wherebyCokalcouldraiseuptoAUD4,000,000throughtheissueofConvertibleNotesinthreetranches.ThefirsttranchetotalingAUD2,000,000wasdrawn inOctober2017,with1,577,234ConvertibleNotes issued.Asat31December2017,Magnahadconverted1,280,000ConvertibleNotestoshares,with297,234ConvertibleNotesremaining.CokaldecidednottodrawdownthesecondandthirdtranchesundertheConvertibleNoteAgreement(togethertotalingAUD2,000,000),whichhavenowlapsed.
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Directors'Report(Continued)
CoalOfftakeFinanceLetterofIntentDuringthehalf-yeartheCompanywasinnegotiationwithRenjianInternationalTrading(Shanghai)CoLtd(“Renjian”)inrespectofacoalofftakearrangement.Asreportedon16January2018,asaconsequenceofintensivenegotiationswithRenjian,theoutcomefromextensivefinancialmodelingdemonstratedthattheproposeddiscountsrequestedbyRenjiantosecurepre-fundingprovedtobeunacceptabletoCokal.
WhiletheproposeddiscountsdiscussedareworkableinthecurrentPCImarketwherethePlattsLVPCIpriceiscurrentlyUS$151/tonne (FOBAustralia),Cokal’sBoardwasconcerned that thisunusuallyhighprice ismost likelyunsustainable.Consequently,CokalbelievedthattheextensivediscountswouldleavetheCompanyexposedtolossesoverthe50monthperiodofthecontracttosupplycoaltoRenjian.WiththisinmindtheBoardwasoftheviewthatitisintheCompany’sandshareholders’bestinterestsnottoproceedwiththetermsdiscussedwithRenjian,andtocontinuediscussionswithseveralotherpartieswhohaveengagedwiththeCompany.
TBARProjectSettlementDuringthehalfyear,CokalreachedacommercialsettlementwiththevendorsofPTTambungBenuaAlamRaya(TBAR)inrespectof theCompany’s75%ownership inTBAR.TBAR istheownerofExplorationLicense IUP188.45/204/2012(theTBARProject),whichcoversanareaofapproximately18,850haand is locatedadjacenttothesoutheastof theCokal’sBBMProject.
Consequently,Cokalhasnowclearedalloutstandingvendormatterspertainingtoits75%interestinTBAR.CokalowedUSD$2,750,000 in vendorpayments. Thepaymentswere subject to a numberof post-completion requirements. Cokalandthevendorscouldnotagreeontheexecutionof therespectivepost-completionrequirementsandhavethereforeagreed on a substantially discounted settlement to remove all of these vendor liabilities from Cokal’s 75% interest inTBAR.Cokal is now in aposition to take controlof these requirements andprogress theadministrative approvals in amoretimelymanner.
TheCompanyhasissued25millionsharestothevendorsofTBARatanissuepriceofAUD$0.10pershareinfullandfinalsatisfaction of all post-completion amounts outstanding in respect of the acquisition. The settlement provides thevendorswiththeabilitytoparticipate inthesuccessfuldevelopmentoftheTBARProjectthroughtheirshareholding inCokal.
InitialCoalSalesInDecember2017theCompanycompletedasalescontractinrespectofitsmaidensaleof10,000tonnesofcoaltolocalbuyers,with50%ofthetotalsalevaluereceivedinDecember2017.Afurther30%ofthetotalsalevaluewasreceivedinearlyJanuary2018whentheloadingofbargeswascompletedandtheremaining20%ofthetotalsalevaluewasreceivedoncethecargowasreceivedbythecustomerattheendofJanuary.
SUBSEQUENTEVENTSTO31DECEMBER2017On2January2018,theCokalissued25millionordinarysharestothevendorsofTBARinfullandfinalsatisfactionofallpost-completionamounts,owingbytheCompany,isrespectofitsacquisitionofTBAR.Coincidentwiththeissueofsharetothevendor,theliabilityofUS$1,560,000istransferredtosharecapitalissue.
On2February2018,Cokalsuccessfullycompletedacapital raisingtotaling$1,507,300(before issuecosts) throughtheissueof34,495,557sharesatanissuepriceof$0.045pershare,tosophisticatedandprofessionalinvestors.
AUDITOR’SINDEPENDENCEDECLARATIONTheAuditor’sIndependenceDeclarationformspartoftheDirectors’Reportandcanbefoundonpage22.
DomenicMartinoChairman
Sydney16March2018
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CokalLimitedInterimConsolidatedStatementofComprehensiveIncomeForthehalf-yearended31December2017
Note31December
201731December
2016US$ US$
Otherincome 2 58 58,076
Employeebenefitsexpenses (576,353) (532,924)
Depreciation (16,031) (39,648)
Arrangementfee 12 (996,198) -
Productionexpenses (1,595,391) -
Financecosts 3 (583,583) -
Legalexpenses (34,818) (101,442)
Explorationexpendituresderecognised - (9,177,568)
Administrationandconsultingexpenses (630,770) (344,949)
Lossbeforeincometaxexpense (4,433,086) (10,138,455)
Incometaxexpense - -
Lossfortheperiod 3 (4,433,086) (10,138,455)
Othercomprehensiveincome - -
Totalcomprehensivelossfortheperiod (4,433,086) (10,138,455)
LosspershareforlossattributabletoownersofCokalLtd Note Cents Cents
BasicLossperShare 4 (0.72) (1.75)
DilutedLossperShare 4 (0.72) (1.75)
TheaboveInterimConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwiththeaccompanyingnotes.
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CokalLimitedInterimConsolidatedStatementofFinancialPositionasat31December2017
Note
31December2017
30June2017
US$ US$
CurrentAssets
Cashandcashequivalents 78,094 28,264
Shorttermdeposits 138,916 138,916
Inventory 652,074 -
Accountsreceivable 27,011 163,878
Othercurrentassets 6,849 6,849
TotalCurrentAssets 902,944 337,907
Non-CurrentAssets
Property,plantandequipment 6 1,434,864 1,450,895
Explorationandevaluationassets 7 25,020,617 23,460,617
Othernon-currentassets 35,362 35,362
TotalNon-CurrentAssets 26,490,843 24,946,874
TOTALASSETS 27,393,787 25,284,781
CurrentLiabilities
Accountspayableandothers 3,856,782 1,937,079
Revenueinadvance 478,093
Sharescommittedbutnotissued 1,560,000 -
Convertiblenotes 8 364,109 -
Interestbearingloans 9 13,892,302 13,892,302
TotalCurrentLiabilities 20,151,286 15,829,381
TOTALLIABILITIES 20,151,286 15,829,381
NETASSETS 7,242,501 9,455,400
Equity
Issuedcapital 10 86,928,201 84,752,154
Reserves 11 4,951,554 4,907,414
Accumulatedlosses (84,637,254) (80,204,168)
TOTALEQUITY 7,242,501 9,455,400
TheaboveInterimConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththeaccompanyingnotes.
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CokalLimitedInterimConsolidatedStatementofChangesinEquityForthehalf-yearended31December2017
Issuedcapital Reserves Accumulatedlosses Total
US$ US$ US$ US$
At1July2017 84,752,154 4,907,414 (80,204,168) 9,455,400
Totalcomprehensivelossfortheperiod
Lossfortheperiod - - (4,433,086) (4,433,086)
Othercomprehensiveincome - - - -
- - (4,433,086) (4,433,086)
Transactionswithownersintheircapacityasowners
Issueofsharecapital 2,176,047 - - 2,176,047
Sharebasedpayments - 44,140 - 44,140
2,176,047 44,140 - 2,220,187
At31December2017 86,928,201 4,951,554 (84,637,254) 7,242,501
At1July2016 83,622,140 4,851,794 (68,350,423) 20,123,511
Totalcomprehensivelossfortheperiod
Lossfortheperiod - - (10,138,455) (10,138,455)
Othercomprehensiveincome - - - -
- - (10,138,455) (10,138,455)
Transactionswithownersintheircapacityasowners
Issueofsharecapital 1,130,014 - - 1,130,014
Costsassociatedwithissueofsharecapital - 42,879 - 42,879 1,130,014 42,879 - 1,172,893
At31December2016 84,752,154 4,894,673 (78,488,878) 11,157,949
TheaboveInterimConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanyingnotes.
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CokalLimitedInterimConsolidatedStatementofCashFlowsForthehalf-yearended31December2017
Note
31December2017
31December2016
US$ US$
CashFlowsfromOperatingActivities
Receiptsfromcustomers 478,093 -
Paymentstosuppliersandemployees (2,007,072) (1,236,423)
Interestandotherincomereceived 58 203
Financecostspaid (181,304) -
Paymentofarrangementfee 12 (496,198) -
Netcashoutflowfromoperatingactivities (2,206,423) (1,236,220)
CashFlowsfromInvestingActivities
Withdrawalindepositsmaturingafterthreemonths - 4,039
Proceedsfromleasedeposit 136,868 -
Netcash(outflow)/inflowfrominvestingactivities 136,868 4,039
CashFlowsfromFinancingActivities
Proceedsfromconvertiblenotesissued 1,567,177 -
Proceedsfromtheissueofshares 552,208 1,130,014
Netcashinflowfromfinancingactivities 2,119,385 1,130,014
Net(decrease)/increaseincashandcashequivalents 49,830 (102,167)
Cashandcashequivalentsatbeginningofperiod 28,264 462,770
Netforeignexchangedifferences - 18,572
Cashandcashequivalentsatendofperiod 78,094 379,175
TheaboveInterimConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththeaccompanyingnotes.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017NOTE1 GENERALINFORMATIONANDSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESa)GeneralInformationThe consolidated financial statements of Cokal Limited for the half-year ended31December 2017were authorised for issue inaccordance with a resolution of the directors on 16 March 2018 and cover the consolidated entity (the “Group”, “Cokal” or“Company”)consistingofCokalLimitedanditssubsidiaries.Cokal Limited (the parent and ultimate parent of the Group) is a company limited by shares, incorporated and domiciled inAustralia,whosesharesarepubliclytradedontheAustralianSecuritiesExchange.ThenatureoftheoperationsandprincipalactivitiesoftheGrouparedescribedinthedirector’sreport.b)BasisofpreparationThis interimfinancialreport forthehalf-yearended31December2017hasbeenprepared inaccordancewithAASB134 InterimFinancialReportingandtheCorporationsAct2001.The interimconsolidated financial statementsdonot includeall the informationanddisclosures required in theannual financialstatements,andshouldbereadinconjunctionwiththeannualreportfortheyearended30June2017togetherwithanypublicannouncementsmadebytheGroupduringthehalf-yearended31December2017inaccordancewiththecontinuousdisclosureobligationsoftheASXlistingrules.Inaddition,resultsforthehalf-yearended31December2017arenotnecessarilyindicativeoftheresultsthatmaybeexpectedforthefinancialyearending30June2018.ThefinancialstatementsarepresentedintheUSDollars.Apartfromthechangesinaccountingpoliciesnotedbelow,theaccountingpoliciesandmethodsofcomputationarethesameasthoseadoptedinthemostrecentannualfinancialreport.c)GoingconcernAt 31 December 2017, the Group’s current liabilities exceed the current assets by US$19,248,342 (30 June 2017:US$15,491,474). Thisposition is in largepartdue to theclassificationof theGroup’sdebtwithPlatinumPartners (refernote 9) of US$13,892,302 and the Group’s shares committed but not issued of US$1,560,000 at 31 December 2017 ascurrentliabilities.On22July2016,CokalannouncedithadreachedanagreementwithPlatinumPartnersfortheconversionofalloutstandingloansowingtothemtoproductionroyalties.Theroyaltieswillbepayableon1%oftherealisedsellingpriceofcoal(FOB)fromtheBumiBaritoMineralProject (BBM)andPTTambangBenuaAlamRaya (TBAR)projectsup toamaximumofUS$40million.Under thearrangement,nominimumroyaltyispayableandtheroyaltyisonlypayableasandwhencoalisminedandsold.On29April2017,theGroupenteredintoaRoyaltyDeedwithPlatinumPartners(refernote9)toconvertofalloutstandingloansowingtothemtoproduction royalties (this formalised the agreement on 22 July 2016). The Royalty Deed is subject to a number of substantiveconditionsprecedentwhichwerenotsatisfiedat31December2017oratthedateofthisreport.Asaconsequence,thePlatinumPartnersdebtisstilldueandpayableat31December2017.On2January2018,Cokal issued25millionordinarysharestothevendorsofPTTambungBenuaAlamRaya(“TBAR”) infullandfinalsatisfactionofallpost-completionamounts,owingbytheCompany,isrespectofitsacquisitionofTBAR.Coincidentwiththeissueofsharetothevendor,theliabilityofUS$1,560,000istransferredtosharecapitalissue.On2 February2018,Cokal successfully completeda capital raising totaling$1,507,300 (before issue costs) through the issueof34,495,557sharesatanissuepriceof$0.045pershare,tosophisticatedandprofessionalinvestors.Thefinancialreporthasbeenpreparedonagoingconcernbasiswhichcontemplatesthecontinuityofnormalbusinessactivitiesandtherealisationofassetsanddischargeofliabilitiesintheordinarycourseofbusiness.TheabilityoftheGrouptocontinuetoadoptthegoingconcernassumptionwilldependuponanumberofmattersincluding:
• SatisfactionofallconditionsprecedentandcompletionoftheRoyaltyDeedwithPlatinumPartnersandtheconversionofallassociateddebttoaroyaltyoncoalsold;
• Thesuccessfulcompletionofadditionalcapital raising (throughdebtorequity)prior to June2018to fundtheGroup’sworking capital requirements associated with the continuation of production at BBM Anak project (being a start-upoperationatthelargerBBMproject);
• ContinuedproductionattheBBMAnakprojectandreceiptoftheassociatedcashinflows;
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued) NOTE1 GENERALINFORMATIONANDSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(Continued)
• The continued financial support ofmanagement and directorswho have provided short term loans to theGroup andcontinuedwillingnessofcreditorstoextendpaymenttermstotheGroupuntilsuchtimeascashflowaregeneratedbytheBBMAnakproject;and
• Thesuccessfulraisingofsufficientfunding,throughdebt,equityorotherarrangements(oracombinationoftransactions)to progress the development of the larger BBM project, including meeting capital expenditure, tenement purchasecommitments(refernote12)andworkingcapitalrequirements,untilsuchtimeastheproject’s is inproductionanditsrevenuesfromcoalsalesaresufficienttomeetitscashoutflows.
Shouldtheseavenuesbedelayedor fail tomaterialise, theGrouphastheabilitytoscaleback itsactivitiestohelptheGrouptomanagetomeet itsdebtsasandwhenthey falldue intheshort term.However, thismayresult in theGroupnotsatisfyingtheconditionprecedentcontainedintheRoyaltyDeed,whichmayrequirefurtherre-negotiationofthearrangementswithPlatinumPartners. The Directors are confident given the current permitting and financing processes undertaken and announced to themarketthattheGroupwillbesuccessfulinitsendeavoursandwillsatisfytheconditionsprecedentinthePlatinumPartnersRoyaltyDeed.ThefinancialreportdoesnotincludeanyadjustmentsrelatingtotherecoverabilityandclassificationofrecordedassetamountsortotheamountsandclassificationofliabilitiesshouldtheGroupbeunsuccessfulinraisingfundstoenableittorealiseitsassetsanddischargeitsliabilitiesintheordinarycourseofbusiness.d)ChangesinAccountingPoliciesThereareanumberofnewandamendedAccountingStandards issuedbytheAustralianAccountingStandardsBoard,whichareapplicableforreportingperiodsbeginningonorbefore1July2017asdetailedintheannualfinancialreportasof30June2017.TheGroup has adopted all themandatory new and amended Accounting Standards issued that are relevant to its operations andeffective for the current reporting period. There was no material impact on the half-year financial report as a result of themandatorynewandamendedAccountingStandardsadopted.TheGrouphasnotadoptedearlyanyotherstandard,interpretation,oramendmentthathasbeenissued,butisnotyeteffective.
NOTE2 OTHERINCOME
31December2017 31December
2016
US$ US$
Interestincome 58 203
Gainondisposalofnon-currentassets - 57,873
Totalotherincome 58 58,076
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)
NOTE3LOSSFORTHEPERIOD
31December2017 31December2016
US$ US$
Lossbeforeincometaxincludesthefollowingspecificexpenses:
Depreciationonplantandequipment 16,031 39,648
Salariesandwages 408,187 307,721
Share-basedpayments(options)–toemployees 2,416 42,879
Operatingleaseexpense–minimumleasepayment 46,097 116,859
Explorationexpenditurede-recognised - 9,177,568
Financecosts
Interestonborrowings 43,961 -
CapitalraisingandConvertibleNotecosts 497,897 -
Expenserelatingtooptionsissued 41,725 -NOTE4LOSSPERSHARE
31December2017 31December2016
LossattributabletoownersofCokalLimitedusedtocalculatebasicanddilutedlosspershare(US$)
(4,433,086) (10,138,455)
Weightedaveragenumberofordinarysharesusedasthedenominatorincalculatingbasiclosspershare
616,001,530 580,592,704
Adjustmentsforcalculationofdilutedearningspershare:- Options*
-
-
Weightedaveragenumberofordinarysharesandpotentialordinarysharesusedasthedenominatorincalculatingdilutedlosspershare
616,001,530 580,592,704
Basiclosspershare(centspershare)(US$) (0.72) (1.75)
Dilutedlosspershare(centspershare)(US$) (0.72) (1.75)*Optionsareconsideredanti-dilutiveastheGroupislossmaking.Optionscouldpotentiallydiluteearningspershareinthefuture.Asat31December2017,therewere56,000,000(30June2017:59,800,000)unlistedoptionsonissue.
NOTE5DIVIDENDSANDFRANKINGCREDITS
Therewerenodividendspaidorrecommendedduringthehalf-yearperiodended31December2017(30June2017:Nil).TherewerenofrankingcreditsavailabletotheshareholdersoftheGroup.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)
NOTE6 PROPERTY,PLANTANDEQUIPMENT
31December2017
Land Computerequipment
Furnitureandofficeequipment
Motorvehicles
CapitalWIP Total
US$ US$ US$ US$ US$ US$
Balanceat1July2017 31,526 1,816 258,542 - 1,159,011 1,450,895
Additions - - - - - -
Disposals/write-off - - - - - -
Depreciationexpense - (498) (15,533) - - (16,031)
Carryingamountat31December2017 31,526 1,318 243,009 - 1,159,011 1,434,864
30June2017
Balanceat1July2016 31,526 3,277 297,463 1,499 1,168,254 1,502,019
Additions - - - - - -
Disposals/write-off - - - - - -
Depreciationexpense - (1,461) (38,921) (1,499) (9,243) (51,124)
Carryingamountat30June2017 31,526 1,816 258,542 - 1,159,011 1,450,895
NOTE7 EXPLORATIONANDEVALUATIONASSETS
31December2017
US$ 30June2017US$
Non-Current Explorationandevaluationexpenditurecapitalised 25,020,617 23,460,617-explorationandevaluationphases Movementsincarryingamounts Balanceatthebeginningoftheyear 23,460,617 32,740,312Additions/(disposals)^ 1,560,000 (102,127)Explorationexpendituresderecognised* - (9,177,568)Carryingamountattheendoftheyear 25,020,617 23,460,617^Disposalduringtheyearended30June2017representsthesaleofPTSilangkopNusaRaya(SNR)projectandPTKenungauNusaRaya(KNR)project.AgainofUSD57,873isrecognisedinthestatementofcomprehensiveincomeinthatperiod.Theadditionsforthehalf-yearended31December2017representliabilitiesassociatedwiththeagreedissuanceof25millionordinarysharestothevendorsofTBARinfullandfinalsatisfactionofallpost-completionamounts,owingbytheCompany,inrespectofitsacquisitionofTBAR.Theshareswereissuedtothevendorssubsequentto31December2017.*Thecarryingamountofexplorationandevaluation(E&E)assetsat31December2017and30June2017representsonlyPTBumiBuritoMineral(BBM).TheGroupdeterminedrecoverableamountoftheBBMprojectusingtheFairValueLessCostofDisposal(FVLCD)methodologyconsideringtheentityasasinglecashgeneratingunit(consistentwiththeGroup’sprimaryfocusontheBBMprojectandthisbeingtheonlyassetinrespectofwhichE&Eiscarriedforward).TheFVLCDwasdeterminedusingEnterpriseValue(EV).EVisimpliedbyCokal’smarketcapitalisationplusacontrolpremium.At31December2017,theGroupassessedtheBBMproject'srecoverableamountanddeterminednofurtherimpairmentorimpairmentreversalwasrequired.At30June2017,theexcessofrecoverablevaluethanthecarryingvalueofE&Ewasde-recognisedintheincomestatementforthatperiod.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)NOTE8CONVERTIBLENOTES
31December
2017US$
30June2017US$
Current
FairValueofConvertibleNotesonissue 1,927,730 -ConvertibleNotesconvertedtoshares (1,563,622) - 364,109 -DuringOctober2017theCompanyissued1,577,234ConvertibleNotesuponthereceiptofUS$1,567,177(AUD$2,000,000) incashfromMEFI,L.P.(“Magna”).ThefacevalueofeachConvertibleNoteisUS$1.10.Thenotesareconvertibletoavariablenumberofordinarysharesattheoptionoftheholderofthenotesanytimeafterissue.Ifnotconvertedthenotesmatureandarerepayabletwelve (12)monthsafter the issuedate.Theconversionprice foreachconvertiblenote is the lowerofa fixedprice (beingAUS$0.10 per share) or a share price each to 90%of the the four (4) lowest dayVWAPs over the ten (10) daytrading period immediately prior to the conversion. At the time of issuance, the difference between the fair value of theConvertible Notes being US$1,927,740 and the proceeds received of US$1,567,177 was recorded as a finance cost in thestatementofcomprehensiveincome.Asat31December2017,Magnahadconverted1,280,000ConvertibleNotestoshares,with297,234ConvertibleNotesremaining.NOTE9INTERESTBEARINGLOANS
31December2017US$
30June2017US$
Current
PlatinumPartnersfacility 10,063,000 10,063,000BlumontGroupfacility 3,827,302 3,827,302TotalInterestbearingloans 13,892,302 13,892,302BlumontGroupFacilityOn5November2013,theGroupenteredintoaloanfacilityagreementwithBlumontGroupLimited(Blumont).Underthisfacility,the Group has drawn down US$3.4 million (30 June 2017: US$3.4m). The loan was repayable on demand on the third (3rd)anniversary of the loan drawdown date, being 5November 2016. On 7 April 2016,Wintercrest Advisors LLC (“Wintercrest”), asubsidiaryofPlatinumPartners,agreedaSettlementAgreementwithBlumont,pursuanttowhichtheBlumontloanwasassignedinfulltoWintercrest.Asaresult,WintercrestreplacedBlumontasthelenderunderitsfacilityagreement.PlatinumPartner/NorthrockFacilityUnder the terms of various short-term loan facility agreements and a bridging loan facility agreement dated August 2015, theGroup has borrowed a total of US$10,065,000 from various subsidiaries of Platinum Partners. At 31 December 2017, the fullamountoftheloanisdueandpayabletoNorthrockFinancialLLC(“Northrock”),beingsubsidiaryofPlatinumPartners.ConversionofloansfromNorthrockandWintercresttoroyaltiesOn22July2016,CokalannouncedithadreachedanagreementwithPlatinumPartnersfortheconversionofalloutstandingloansowingundertheWintercrestandNorfolkfacilitiestoproductionroyalties.Theroyaltieswillbepayableon1%oftherealisedsellingprice of coal (FOB) from the Bumi Barito Mineral Project (BBM) and PT Tambang Benua Alam Raya (TBAR) projects up to amaximumofUS$40million.Underthearrangement,nominimumroyaltyispayableandtheroyaltyisonlypayableasandwhencoalisminedandsold.On29April2017,theGroupenteredintoaRoyaltyDeedwithWintercrestandNorthrock(collectivelythe“Lenders”)toconvertofalloutstandingloansowingtothemtoproductionroyalties.TheRoyaltyDeedissubjecttoanumberofsubstantiveconditionsprecedent.Theconditionsprecedentinclude:
a)ThecompletionoflegalandcommercialduediligencebytheLenders’;
b)ApprovalbyCokal’sshareholders;
c)TheLendersbeingprovidedsecurityintheformofencumberingthetheoriginalminingtenementslodgedwiththeIndonesianAuthoritieswiththeroyaltyandprovidingachargeoverallofCokal’sinterestintheBBMandTBARprojects;
d)CokalevidencingtothesatisfactionoftheLenders(intheirsolediscretion)ithascompletedacapitalraising(debt,equityoracombination)tosupporttheproductionofatleast100ktpaofcoal;
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CokalLimited
NotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)NOTE9INTERESTBEARINGLOANS(Continued)
e)CokalevidencingtothesatisfactionoftheLenders(intheirsolediscretion)that:
i.Cokal’sproductionisnotlessthan8500tonnespermonthforaperiodofsix(6)consecutivemonths;ii.Cokal’sproduction for three (3)months fromthedateof firstproduction isnot less than themonthlyequivalentof100ktpa;
providedtheabovethreeandsixmonthperiodoccurwith18monthsoftheGroupsatisfyingtheconditionin(d)above;and
f)TheLendershavereceivedandapprovedallfinancialbudgetsanticipatedtomeettheproductiontargetsin(d)and(e)above.
At 31December2017, the Lendershad completedduediligenceandon29November2017Cokal’s shareholders approved thetransaction. As such conditions (a) and (b) were satisfied, but all of the other conditions precedent were outstanding.Consequently,theloansremaininforceandrepayableondemandat31December2017.During the half-year to 31 December 2017, the Group has successfully raised US$2,119,385 to fund the commencement ofproductionatBBM(beingBBMAnakproject).AstheGroupagreedinprincipaltotheconversionoftheWintercrestandNorthrockdebttoaroyaltyinJuly2016,nointerestexpensehasbeenrecordedforthehalf-yearended31December2017ortheyearended30June2017.Intheevent,theGroupisnotabletosatisfytheconditionsprecedentintheRoyaltyDeed,theLendersmayseektoretrospectively charge interest on amountsowing to them for theperiod.As such, theGrouphasdetermined it appropriate todisclosethedebtsasinterest-bearingliabilitiesat31December2017.
**ThesharewereissuedinfullsatisfactionoftradepayablesincurredbytheGroup.Theissuepriceoftheshareswasconsistentwiththemarketpriceatthetimeofissue.NOTE11RESERVES
NOTE10 ISSUEDCAPITAL
31December
2017 30June2017
US$ US$
655,204,235authorisedandfullypaidordinaryshares(30June2017:593,092,704)
85,304,362
84,752,154
31December2017 30June2017
Number US$ Number US$
Atthebeginningoftheperiod/year 593,092,704 84,752,154 499,342,704 83,622,140
Shareissuefromcapitalraising(netofcapitalraisingcosts)
19,444,445 552,208 93,750,000 1,130,014
Sharesissuedtoconsultants** 875,000 60,217 - -
Sharesissuedonconversionofconvertiblenotes
41,792,086
1,563,622
-
-
Attheendoftheperiod/year 655,204,235 86,928,201 593,092,704 84,752,154
31December
2017 30June2017
US$ US$
ShareBasedPaymentsOptionReserve 6,407,009 6,362,869
TranslationReserve (1,455,455) (1,455,455)
4,951,554 4,907,414OptionReserveTheoptionreserverecordsthevalueofoptionsissuedaspartofcapitalraisings,andconsultantservicesaswellasexpensesrelatingtodirector,executiveandemployeeshareoptions.Duringthehalf-yearended31December2017,MrGaryKielenstynwasissued5,000,000unlistedoptionsonthefollowingterms:
• 1,000,000optionswithanexercisepriceofAUD0.12andanexpirydateof22December2020,vestingwhentheCompanyhasproduced100,000tonnesofcoal;and
• 4,000,000optionswithanexercisepriceofAUD0.15andanexpirydateof22December2020,vestingwhentheCompanyisconsistentlyoperatingataproductionrateforthreemonthsof45,000tonnesofcoalpermonth.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued) NOTE11RESERVES(Continued) TranslationReserveTranslationreserverepresentsnetexchangedifferencesarisingfromthetranslationasaresultofchangeinpresentationcurrencytoUSDollarsfromAUDeffective1July2014.
NOTE12CONTINGENTLIABILITIESANDCONTINGENTASSETS
TheGrouphasanumberofcontingent liabilities inrespectofdeferredpurchaseconsiderationfortheacquisition itsminingandexploration tenements. At 31 December 2017, the Group’s contingent liabilities total US$18.0m (30 June 2017: US$20.70m) inrespectofitsBBMandPTBorneoBaraPrima(BBP)projects.Theamountsarepayableontheachievementofcertainmilestones,includingbutnot limitedtotheestablishmentofcertainJORCInferredCoalResourcesandthe issuanceofproductionoperationIUPs(licences)andproductionforestrypermit.PaymentswhichmaybetriggeredbythecommencementofdevelopmentatBBMDeferredpurchaseconsiderationAspartoftheGroup’sacquisitionofitsinterestintheBBMproject,itwasagreedanamountofUS$10.0millionwouldbepayablewithin30daysoftheissueoftheProduction/OperationsIUP(mininglicensegrantedundertheIndonesianNewMiningLaw).On1May2013,theProduction/OperationsIUPwasgrantedbutthepaymenttothevendorwasdeferredpendingtheissuanceoftheForestryProductionPermit (required tocommence theconstructionandproduction).On15August2015,Cokal receivedBBM’sForestryProductionPermit.On 3March 2016, the Group executed a variation letter with the vendorwhereby the parties agreed the obligation for $10.0millionpaymentwouldtriggeredwhenCokalhadsufficientfundstocommencementoftheconstruction/developmentoftheBBMproject.AspartoftheDirectors’considerationoftheabilityoftheGrouptocontinueasagoingconcern(refernote1(c)),theDirectorsareawaresomeorallof thedeferredconsiderationmaybe triggeredby thecommencementat theBBMAnakproject.UncertaintyexistsastowhethercurrentactivityatBBMAnakmeetstheconditionofthefundingofthedevelopmentoftheBBMproject,asanticipated as part of the 3 March 2016 agreement between the parties. The Company remains of the view that thecommencementofproductionattheBBMAnakprojectdoesnottriggertheanyrequirementtopaytheabovementionedUS$10.0million.Given the potential uncertainty, the Company engagedwith the vendors of the BBMproject to clarify its interpretation of theagreementof3March2016. Aspartof thenegotiationsand ingood faith, theCompanyagreed topayanarrangement feeofUS$996,198tothevendorsforthemagreeingtocertainclarificationstotheagreementof3March2016.US$496,198waspaidatthetimeofexecutingthevariation(thisamountwaspaidduringthehalfyearended31December2017)andafurtherUS$500,000is payable, subject to certain conditions precedent including a capital raising. The full amount of the arrangement fee ofUS$996,198hasbeenrecordedasanexpenseinthestatementofcomprehensiveincomeduringthehalfyearended31December2017. The clarification to the 3 March 2016 agreement confirmed the Company’s view no further payments, including theabovementioned US$10.0 million, are due or payable until the Company had entered into a substantial funding arrangementand/orcommencedsubstantialproduction. No liability is recognisedasat31December2017 in respect thisdeferredpurchaseconsiderationastheGrouphadnotsecuredfundingtocommencetheconstruction/developmentoftheBBMproject.Atthistime,theGroupdoesnothavesufficientfundstodevelopthelargerBBMprojectorfundanyportionoftheUS$10.0milliondeferredconsiderationthatmaybepayable.Totheextentmoniesarerequiredtobepaid,theGroupwillneedtoraisecapitaltofundthesepayments.OthercommitmentsIn addition to the contingent liabilities fordeferredpurchase considerationdetailedabove, theGrouphasalsoexecuteda joint operatingagreementwithMeratusAdvanceMaritim(MAM),anIndonesianGroup,toengageintheownershipofpushtugsandbarges forshallowriveroperations.Thepartieswish toestablisha jointlyownedcompany for thisoperation.The jointlyownedcompanywillmanage thebargingoperation for theBBMproject shouldproduction commenceandother conditionsprecedenttake place. Once the jointly owned company is incorporated, Cokal will hold 49% interest by contributing an estimatedUS$11million (49%ordinary share capital of jointlyowned company, IndonesianRupiah200billion).No liability is recognisedas at31December 2017 in respect the acquisition consideration for the jointly owned company. Given the conditions precedent, theDirectorsdonot anticipate theestimatedUS$11millionwill bepayable in the coming12months. In theevent theamountdidbecomedueandpayable,theGroupwillneedtoraisecapitaltofundthesepayments. Thedirectorsarenotawareofanyothersignificantcontingentliabilitiesorcontingentassetsatthedateofthisreport.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued) NOTE13COMMITMENTS
31December2017
30June2017
US$ US$
(a)Operatingleasecommitments
Futureminimumrentalspayableundernon-cancellableoperatingleasesareasfollows:
Payable
-notlaterthan12months 46,097 188,927
-between12monthsand5years - -
-greaterthan5years - -
46,097 188,927
NOTE14OPERATINGSEGMENTS
AASB 8 requires operating segments to be identified on the basis of internal reports that are used by the chief operatingdecisionmakers(CODM)inordertoallocateresourcestothesegmentandtoassessitsperformance.TheCODMoftheGroupare the Board of Directors. For management purposes, the Group is organised into two main operating segments, whichinvolvestheexplorationofcoal in IndonesiaandAustralia. TheSingaporeoperationwasconsideredseparatelyforcorporateservices.
Australia Indonesia Singapore Total
US$ US$ US$ US$
Segmentperformanceforthehalf-yearended31December2017
Revenue
Interestrevenue - 58 - 58
Totalsegmentincome - 58 - 58
Productionexpenses (29,024) (1,566,367) - (1,595,391)
Arrangementfee (996,198) - (996,198)
Depreciationexpenses (6,816) (9,215) - (16,031)
Financecosts (539,622) (43,961) - (583,583)
Otherexpenses (418,468) (822,976) (497) (1,241,941)
Totalsegmentexpenses (1,990,128) (2,442,519) (497) (4,433,144)
Segmentnetlossbeforetax (1,990,128) (2,442,461) (497) (4,433,086)
Segmentassetsandliabilitiesasat31December2017
Inventory - 652,074 - 652,074
Property,plantandequipment 168,888 1,265,976 - 1,434,864
Explorationandevaluationassets - 25,020,617 - 25,020,617
Othersegmentassets 17,407 268,825 - 286,232
Totalsegmentassets 186,295 27,207,492 - 27,393,787
Totalsegmentliabilities 15,312,927 4,772,585 65,774 20,151,286
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)NOTE14OPERATINGSEGMENTS(CONTINUED) Australia Indonesia Singapore Total
US$ US$ US$ US$
Capitalexpenditureforthehalf-yearended31December2017
Property,plantandequipment - - - -
Explorationandevaluationassets - - - -
Australia Indonesia Singapore Total
US$ US$ US$ US$
Segmentperformanceforthehalf-yearended31December2016
Revenue
Interestrevenue 11 192 - 203
Otherincome - 57,873 - 57,873
Totalsegmentincome 11 58,065 - 58,076
Depreciation (18,764) (20,884) - (39,648)
Explorationexpendituresderecognised
-
(9,177,568)
-
(9,177,568)
Otherexpenses (434,182) (502,997) (42,136) (979,315)
Totalsegmentexpenses (452,946) (9,643,384) (42,136) (10,196,531)
Segmentnetlossbeforetax (452,935) (9,643,384)) (42,136) (10,138,455)
Segmentassetsandliabilitiesasat30June2017
Property,plantandequipment 175,704 1,275,191 - 1,450,895
Explorationandevaluationassets - 23,460,617 - 23,460,617
Othersegmentassets 127,632 245,637 - 373,269
Totalsegmentassets 303,336 24,981,445 - 25,284,781
Totalsegmentliabilities 14,334,345 1,422,188 72,848 15,829,381
Capitalexpenditurefortheyearended31December2016
Property,plantandequipment - - - -
Explorationandevaluationassets - - - -
Theaccountingpoliciesappliedforinternalreportingpurposesareconsistentwiththoseappliedinthepreparationofthesefinancialstatements.
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CokalLimitedNotestotheCondensedInterimConsolidatedFinancialStatementsforthehalf-yearended31December2017(Continued)
NOTE15EVENTSAFTERTHEREPORTINGPERIOD
On2January2018,theCokalissued25millionordinarysharestothevendorsofTBARinfullandfinalsatisfactionofallpost-completionamounts,owingby theCompany, is respectof itsacquisitionofTBAR. Coincidentwith the issueof share to thevendor,theliabilityofUS$1,560,000atistransferredtosharecapitalissue.On2February2018,CokalsuccessfullycompletedacapitalraisingtotalingAU$1,507,300(beforeissuecosts)throughtheissueof34,495,557sharesatanissuepriceof$0.045pershare,tosophisticatedandprofessionalinvestors.
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DeclarationbyDirectorsInaccordancewitharesolutionofthedirectorsoftheCokalLimited,Istatethat:Intheopinionofthedirectors:
a) ThefinancialstatementsandnotesoftheGroupforthehalf-yearended31December2017areinaccordancewiththeCorporationsAct2001,including:
i. givingatrueandfairviewoftheconsolidatedentity’sfinancialpositionasat31December2017andofitsperformanceforthehalf-yearendedonthatdate;and
ii. complyingwithaccountingstandardsandtheCorporationsRegulations2001b) Thereare reasonablegrounds tobelieve that theCompanywillbeable topay itsdebtsasandwhen they
becomedueandpayable.OnbehalfoftheboardDomenicMartinoChairmanSydney16March2018
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A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation
Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au
Auditor’s Independence Declaration to the Directors of Cokal Limited
As lead auditor for the review of Cokal Limited for the half-year ended 31 December 2017, I declare tothe best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the review; and
b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Cokal Limited and the entities it controlled during the financial period.
Ernst & Young
Andrew CarrickPartner16 March 2018
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A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation
Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au
Independent Auditor's Review Report to the Members of Cokal Limited
Report on the Half-Year Financial ReportConclusionWe have reviewed the accompanying half-year financial report of Cokal Limited (the “Company”) andits subsidiaries (collectively the “Group”), which comprises the statement of financial position as at 31December 2017, the statement of comprehensive income, statement of changes in equity andstatement of cash flows for the half-year ended on that date, notes comprising a summary ofdescription of 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 tobelieve that the half-year financial report of the Group is not in accordance with the Corporations Act2001, including:
a) giving a true and fair view of the consolidated financial position of the Group as at 31 December2017 and of its consolidated financial performance for the half-year ended on that date; and
b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the CorporationsRegulations 2001.
Emphasis of Matter - Material Uncertainty Related to Going ConcernWe draw attention to Note 1 (c) in the half-year financial report, which describes the principalconditions that raise doubt about the Group’s ability to continue as a going concern. These events orconditions indicate that a material uncertainty exists that may cast significant doubt on the Group’sability to continue as a going concern and therefore whether it will realise its assets and extinguish itsliabilities in the normal course of business and at the amounts stated in the half-year financial report.The half-year financial report does not include any adjustments relating to the recoverability andclassification of recorded asset amounts or to the amounts and classification of liabilities that mightbe necessary should the entity not continue as a going concern. Our conclusion is not modified inrespect of this matter.
Directors’ Responsibility for the Half-Year Financial ReportThe directors of the Company are responsible for the preparation of the half-year financial report thatgives a true and fair view in accordance with Australian Accounting Standards and the CorporationsAct 2001 and for such internal control as the directors determine is necessary to enable thepreparation of the half-year financial report that is free from material misstatement, whether due tofraud or error.
Auditor’s ResponsibilityOur responsibility is to express a conclusion on the half-year financial report based on our review. Weconducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to statewhether, on the basis of the procedures described, anything has come to our attention that causes usto believe that the half-year financial report is not in accordance with the Corporations Act 2001including: giving a true and fair view of the Group’s consolidated financial position as at 31 December2017 and its consolidated financial performance for the half-year ended on that date; and complyingwith Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations2001. As the auditor of the Group, ASRE 2410 requires that we comply with the ethical requirementsrelevant to the audit of the annual financial report.
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A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation
A review of a half-year financial report consists of making enquiries, primarily of persons responsiblefor financial and accounting matters, and applying analytical and other review procedures. A review issubstantially less in scope than an audit conducted in accordance with Australian Auditing Standardsand consequently does not enable us to obtain assurance that we would become aware of allsignificant matters that might be identified in an audit. Accordingly, we do not express an auditopinion.
IndependenceIn conducting our review, we have complied with the independence requirements of the CorporationsAct 2001.
Ernst & Young
Andrew CarrickPartnerBrisbane16 March 2018
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