NuCoal Resources : Interim Report 31 December 2021

For personal use only

NuCoal Resources Limited

ABN 29 060 352 990

Interim report

for the half-year ended 31 December 2021

For personal use only

NuCoal Resources Limited ABN 29 060 352 990

Interim report - 31 December 2021

Contents

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2021 and any announcements made by NuCoal Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

For personal use only

NuCoal Resources Limited

Directors' Report

31 December 2021

Directors' report

Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of NuCoal Resources Limited (referred to hereafter as the Company) and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.

Directors

The following persons were directors of NuCoal Resources Limited during the whole of the half-year up to the date of this report, unless otherwise noted, are:

Financial Overview

The consolidated statement of comprehensive income shows a net loss from ordinary activities for the half-year of $162,693 compared with a net loss from ordinary activities of $222,215 for the half-year ended 31 December 2020.

Net cash outflows from operating, investing and financing activities for the half-year ended 31 December 2021 were $44,413 compared to net cash outflows of $223,544 for the half-year ended 31 December 2020.

Operational Highlights

Savoy Hill Coal Project (100%)

The application for renewal of the Savoy Hill tenement, Exploration Licence 6812 (EL 6812) is pending approval and following the standard department process for approval. The application was lodged with the Department of Planning and Environment, Resources and Geosciences, on 19 June 2018.

In accordance with the licence conditions of EL 6812, an Annual Report was completed and lodged with the DRG on Friday 16 July 2021.

Expropriation of Doyles Creek Exploration Licence 7270 (EL 7270)

On 31 January 2014, the NSW Government passed the Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW) (Mining Amendment Act), cancelling Exploration Licence 7270 (EL 7270) with no compensation payable to NuCoal. The legislation was passed following an inquiry by the Independent Commission Against Corruption (ICAC).

It has been nearly eight years since the NSW Parliament cancelled EL 7270, and two full years since the Parliament's Law and Justice Committee recommended, after consideration of a Private member's Bill which sought to resolve our compensation matter, "that the NSW Government address the outstanding matters raised during this inquiry, where appropriate, including the issue of compensation for innocent shareholders."

Despite this lapse in time, the Company's energy level in pursuing what is right and fair is undiminished. The Company is a long-term going concern, with substantial cash reserves of approximately $3.5m and an ongoing cost base which is minimal. The Company remains committed and will continue to seek every opportunity to push our case with all and every person relevant. We can go on for a decade pursuing our rights (if necessary) without even having to call for additional funds from shareholders.

Domestic Efforts

The Standing Committee on Law and Justice (Standing Committee) considered a bill introduced by the Hon. Rev Fred Nile, the Mining Amendment (Compensation for Cancellation of Exploration Licence) Bill 2019 (Compensation Bill), during the second half of 2019. Following a detailed process, the Standing Committee tabled its report with the Clerk of the Parliaments on 30 October 2019. The report was made publicly available via the Standing Committee website on the same day.

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For personal use only

NuCoal Resources Limited

Directors' Report

31 December 2021

Directors' report (continued)

As outlined in the report, the Committee provided the following recommendations:

• Recommendation 1 - That the Mining Amendment (Compensation for Cancellation of Exploration Licence) Bill 2019 not proceed in its current form.
• Recommendation 2 - That the NSW Government address the outstanding matters raised during this inquiry, where appropriate, including the issue of compensation for innocent shareholders.

As is standard protocol, the NSW Government was required to formally respond to Parliament within 6 months of the Standing Committee's report being published. On 30 April 2020, NuCoal received a copy of a letter from the NSW Attorney General, Mark Speakman, addressed to the Clerk of the Parliaments. The letter acknowledges the Standing Committee for their efforts, notes that the Government supports the Standing Committee with respect to Recommendation 1 (as noted above) and further notes that the position of the Government is reserved with respect to Recommendation 2 (also noted above).

Since receiving the correspondence NuCoal has continued its representations to the NSW Government. A follow-up letter was sent to the NSW Attorney General, Mark Speakman, dated 8 May 2020 asking what the next steps will be in this matter. Further letters and requests to relevant members of NSW Parliament have continued since then and are still being made. All representations request an opportunity to meet and discuss the matter with a view to obtaining a mutually agreed compensation position. The Government maintains that it is still considering the matter.

Committee on the Independent Commission Against Corruption

On 8 May 2020, the Committee on the Independent Commission Against Corruption commenced an inquiry into the reputational impact on an individual being adversely named in the ICAC's investigations. The terms of reference for the Committee are noted below:

"That the Committee on the Independent Commission Against Corruption (ICAC) inquire into and report on the reputational impact on an individual being adversely named in the ICAC's investigations, with particular reference to:

• whether the existing safeguards and remedies, and how they are being used, are adequate, and
• whether additional safeguards and remedies are needed, and
• whether an exoneration protocol should be developed to deal with reputational impact, and
• relevant practices in other jurisdictions, and
• any other related matters."

The Committee accepted public submissions until Friday 31 July 2020 and NuCoal provided a submission on that date. The submission pointed out that damage to the reputation of individuals is only one impact of ICAC's investigations, with NuCoal's shareholders having incurred huge financial loss as a result of the fundamentally flawed Acacia investigation and ICAC's recommendations. Accordingly, an exoneration protocol that only deals with reputational damage to individuals is totally inadequate. NuCoal's view is that damage caused by ICAC can only be corrected by providing damages commensurate with the damage done and in an appropriate form and quantum.

A public hearing was held at Parliament House on Friday 18 September 2020 however, the public was not able to attend as Parliament House was closed. The hearing was livestreamed on the Parliament's website. A further public hearing was held on Wednesday 2 December 2020 and NuCoal volunteered to attend to provide further information regarding its submission, but the Committee did not extend an invitation to NuCoal.

The Committee handed down its report in November 2021 and noted the following recommendation:

"the Legislative Council Standing Committee on Law and Justice's inquiry on the Mining Amendment (Compensation for Cancellation of Exploration Licence) Bill 2019, recommended for the Government to address the outstanding matters in relation to NuCoal, including the issue of compensation for 'innocent stakeholders'. The Government's response reserves its position this matter. Given the time that has passed since then, the Committee urges the NSW Government to respond to the Legislative Council's Law and Justice report as a matter of urgency."

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