Atrum Coal NL: Full Year Statutory Accounts

Sydney - Atrum Coal NL (ASX:ATU) (OTCMKTS:ATRCF) directors present their report on the consolidated entity consisting of Atrum Coal NL and the entities it controlled at the end of, or during, the year ended 30 June 2016. Throughout the report, the consolidated entity is referred to as the group.


OPERATING AND FINANCIAL REVIEW

Review of Operations

A review of operations for the year, and the results of those operations is contained within the company review.

Operating Results

Consolidated loss after income tax for the year was $11,745,289 (2015: $19,206,333).

Financial Position

At 30 June 2016, the Group had cash reserves of $1,871,124 (2015: $253,058).

Additionally, pursuant to an Offset Loan Agreement with Lenark Pty Ltd, a related entity of non-executive director, Mr. James Chisholm, the Company has, subject to the approval of any cash calls by Lenark, a facility with a limit of $845,153.

Financing and Investing Activities

On 24 August 2015, 9,847,258 fully paid ordinary shares were issued under an Entitlement Offer.

On 8 September 2015, 200,000 fully paid ordinary shares and 1,150,000 options were issued as a fee for restructuring the Anglo Pacific Promissory Note.

On 11 September 2015, 6,162,743 fully paid ordinary shares were issued under a placement following the entitlement offer.

On 29 December 2015 1,000,000 options were issued as a fee for restructuring the Anglo Pacific Promissory Note.

On 30 December 2015, 200,000 fully paid ordinary shares were issued following hurdles being met on performance rights.

On 3 February 2016, 150,000 fully paid ordinary shares were issued following exercise of options.

On 23 March 2016, 340,000 fully paid ordinary shares were issued following conversion of convertible notes.

On 1 April 2016, 200,000 fully paid ordinary shares were issued as a fee for restructuring the Anglo Pacific Promissory Note.

On 23 March 2016, 3,184,786 and 3,524,786 fully paid ordinary shares were issued following conversion of convertible notes.

On 6 May 2016, 980,000 fully paid ordinary shares and 980,000 options were issued following conversion of convertible notes.

On 13 May 2016, 3,694,000 fully paid ordinary shares and 3,694,000 options were issued following conversion of convertible notes.

Dividends

No dividends were paid during the year and no recommendation is made as to dividends.


SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Group during the year are detailed in the Company review.

Other than as disclosed, there has been no matter or circumstance that has arisen that has significantly affected, or may significantly affect:

1. the Group's operations in future financial years, or

2. the results of those operations in future financial years, or

3. the Group's state of affairs in future financial years.

In the opinion of the directors, there were no other significant changes in the state of affairs of the Company that occurred during the period under review not otherwise disclosed in this report or in the financial report.


EVENTS SINCE THE END OF THE FINANCIAL YEAR

On 30 July 2016, Atrum Coal NL entered into a binding agreement relating to the proposed acquisition of a 26.68% interest in Atlantic Carbon Group PLC (incorporated in England and Wales) (ACG).

Atrum is intending to complete the acquisition of the interest in ACG ('Acquisition') shareholder approval was gained at an Extra-Ordinary General Meeting (EGM) on 29 September 2016.

Key Acquisition Terms

The binding agreement for the Acquisition has been entered into with Stephen Best (the current CEO of ACG) and persons and entities connected with Stephen Best, including Mayford Equities Limited, Mary Best, Willoughby (465) Limited, Lucy Best, Helen Frankland, Penn Carb Inc and Mount Charles (Mayfair) Limited (together, the Vendors).

Subject to the satisfaction of various conditions to completion (set out below), Atrum will acquire a total of 1,042,017,264 ACG shares and 576,000,000 warrants that are convertible into a similar number of ACG shares.

The exercise of the warrants would result in Atrum acquiring a total of 1,618,017,264 ACG shares (amounting to an interest of 26.68% of ACG's enlarged issued share capital).

The consideration for the Acquisition will consist of the following cash and scrip components payable on completion of the Acquisition:

- a cash payment of US$3,000,000;

- a cash payment of approximately US$1,130,000 for outstanding warrants and as a negative control premium, the payment of which is conditional on Atrum acquiring a minimum of 25.01% of ACG on a fully diluted basis; and

- such number of Atrum shares that is equal to US$3,000,000 (Consideration Shares).

When calculating the number of Consideration Shares to be issued, Atrum must use the volume weighted average price of Atrum shares during the 10 trading days immediately before completion of the Acquisition and applying the AUD/USD exchange rate for the business day before the day on which completion of the Acquisition is to occur.

The transaction is not expected to result in any changes to the Atrum board.

Conditions to Completion

Completion of the Acquisition is subject to a number of conditions being satisfied or waived. If required by Atrum during the due diligence process, the parties will be required to enter into a more detailed share purchase agreement documenting the terms of the Acquisition. The other conditions include:

- Atrum calling an EGM of its shareholders and obtaining all approvals necessary to enter into or obtain the benefit of the escrow agreement referred to below, issue the Consideration Shares to the Vendors, finance the Acquisition and otherwise complete the Acquisition.

- A condition relating to the financing of the Acquisition.

- The results of any due diligence investigation carried out by Atrum in relation to ACG and its subsidiaries being satisfactory to Atrum.

- The Vendors each signing an escrow agreement under which they agree not to sell or otherwise deal with any of the Consideration Shares to be issued to the Vendors for a period of 12 months following completion of the Acquisition (unless the dealing is part of a transfer arranged by Atrum and approved by the relevant Vendor).

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About Atrum Coal NL:

Atrum Coal NL (ASX:ATU) is an emerging metallurgical coal explorer and developer. The Company has a substantial coal position in British Columbia which, as a region boasts:

- Abundance of high quality PCI, coking and anthracite coals
- Well developed rail and port infrastructure with excess capacity
- Access to deep sea ports
- Competitive shipping distance to Asia
- Positive government stance on mining

The Company is building a quality portfolio of metallurgical coal assets suited to the Asian export market and the Board of Directors have a strong track record in identifying and developing world class coal assets in Australia and abroad.



Contact:

Atrum Coal NL

Robert W. Bell Executive Chairman
M: +1-604-763-4180
E: rbell@atrumcoal.com

Theo Renard Company Secretary
M: +61-430-205-889
E: trenard@atrumcoal.com

Nathan Ryan Investor Relations
M: +61-420-582-887
E: nathan@atrumcoal.com