Black Cat Syndicate Limited ABN 63 620 896 282 2 0 21 ANNUAL R E P O R T Contents CHAIRMAN’S LETTER ........................................................................................................................... 4 REVIEW OF OPERATIONS ................................................................................................................... 6 DIRECTORS’ REPORT ........................................................................................................................ 23 AUDITOR’S INDEPENDENCE DECLARATION .................................................................................. 35 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME36 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .............................................................. 37 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .............................................................. 38 CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................... 39 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 40 DIRECTOR’S DECLARATION ............................................................................................................. 65 INDEPENDENT AUDITOR’S REPORT ............................................................................................... 66 ASX ADDITIONAL INFORMATION ...................................................................................................... 71 A N N U A L R E P O R T 2 0 2 1 Page 2 of 73 CORPORATE DIRECTORY Non-Executive Chairman Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Directors Paul Chapman Gareth Solly Les Davis Tony Polglase Philip Crutchfield Joint Company Secretaries Mark Pitts Dan Travers Principal Office Level 3, 52 Kings Park Road WEST PERTH WA 6005 PO Box 184 WEST PERTH WA 6872 T: +61 (0) 458 007 713 Registered Office Level 3, 52 Kings Park Road WEST PERTH WA 6005 PO Box 184 WEST PERTH WA 6872 T: +61 (0) 458 007 713 Auditor Crowe Perth Level 5, 45 St Georges Terrace PERTH WA 6000 Share Registry Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace PERTH WA 6000 T: (08) 9323 2000 Stock Exchange Listing The Company’s shares are quoted on the Australian Securities Exchange. The home exchange is Perth, Western Australia. ASX Code BC8 – Ordinary shares Australian Business Number 63 620 896 282 Website www.blackcatsyndicate.com.au Company Information The Company was incorporated and registered under the Corporations Act 2001 in Western Australia. The Company is domiciled in Australia. A N N U A L R E P O R T 2 0 2 1 Page 3 of 73 CHAIRMAN’S LETTER Dear Fellow Shareholder We are pleased to present the 2021 Annual Report for Black Cat Syndicate Limited (“Black Cat” or “the Company”). We believe Black Cat offers the following opportunity to investors: • • • • • • • We are committed to building an organisational culture that executes the Company’s strategy and operations in a safe and responsible manner; We have maintained a tight capital structure and are well funded; We generate strong news flow with numerous acquisitions made over the past year and ~95,000m of drilling in 2021; We offer scale potential as we look to define and grow Resources from multiple mining centres and exceeded our target of >1 million ounces during 2021; We are undertaking studies with a view to a decision to develop mines and to construct a processing facility in 2022, the milling facility and much of the infrastructure has already been acquired; We are in an excellent location being close to infrastructure, suppliers and a local workforce; and We have an experienced team that can transition from exploration to production. Dealing with each of these principles in turn. Black Cat is committed to building an organisational culture that executes the Company’s strategy and operations in a safe and responsible manner: Despite an active year across multiple fronts, including the relocation of the two mills, only two lost time injuries (LTIs) occurred during the year. We have maintained a tight capital structure and we are well funded: Black Cat completed two capital raisings during the year to raise $10.0M at $0.82 and $20.0M @ $0.67. These raisings were strongly supported and were based on performance and delivering on what we said we would do. Directors continued to participate with the total amount invested by directors now at ~$5.5M. We continue to be efficient with shareholder funds. At 30 June 2021, we had raised a total of $45.8M from shareholders and had converted that into a market capitalisation of $89.0M. Inception to date we have drilled ~177,000m. Our drilling has been highly efficient equating to ~3.5oz of Resource per metre drilled. In addition, discovery and acquisition costs amount to ~$15oz. We generate strong news flow with numerous acquisitions made over the past year and ~95,000m of drilling in 2021: Since Black Cat’s last Annual Report, we have issued 36 market sensitive announcements at the rate of ~3 per month. This reflects the ongoing upgrade of our Resource base, numerous acquisitions we have made, and our drive towards transitioning to mining. We offer scale potential as we look to define and grow Resources from multiple mining centres and exceeded our target of >1 million ounces during 2021: During the year, we exceeded our target of >1 million ounces in Resource. We are now targeting three years of Ore Reserves as well as ongoing Resource growth. For quite some time now, we have had at least two drill rigs operating. A N N U A L R E P O R T 2 0 2 1 Page 4 of 73 CHAIRMAN’S LETTER (CONTINUED) We are undertaking studies with a view to a decision to develop mines and to construct a processing facility in 2022; the milling facility and much of the infrastructure has already been acquired: We remain on track to make a decision to develop mines and to construct a processing facility in 2022. We are in an excellent location being close to infrastructure, suppliers and a local workforce: Being less than 50kms east of Kalgoorlie lowers cost and risk while increasing the likelihood of a deposit being economic. Major players in the area include Northern Star/Saracen and Evolution, ensuring that Kalgoorlie remains a long-term hub for mining and exploration services. We now sit as one the top five landholders within 50kms from Kalgoorlie. This is an enviable position, particularly with the current gold price and have rapidly increased our footprint in the area with a number of strategic acquisitions. We have an experienced team that can transition from exploration to production: Commensurate with building an organisation to transition to production, several senior positions commenced during the year. As we move to 2022, other opportunities and challenges will present themselves. By focussing on the above principles, we are confident of another successful year for Black Cat. In closing, we would like to thank our local communities, employees, suppliers and other business partners. We also would like to take this opportunity to thank our fellow shareholders for your support. Yours sincerely Paul Chapman Chairman A N N U A L R E P O R T 2 0 2 1 Page 5 of 73 REVIEW OF OPERATIONS OVERVIEW Black Cat Syndicate Limited (“Black Cat” or “the Company”) performed strongly across all operational areas during the year and made significant progress on bringing the Kal East Gold Project (“Kal East”) into production in 2022 including: • • • • • • • Increased landholding at Kal East by 160% to ~800km2 after the completion of several significant transactions. Completed ~89,000m of drilling to grow JORC 2012 Mineral Resources (“Resource” or “Resources” as applicable) by 167% to 17.5Mt @ 2.1 g/t Au for 1,185,000oz 1. Advanced towards production through the completion of ongoing open pit and underground mining studies at the Myhree, Majestic, Fingals and Trojan Mining Centres. Acquired, safely relocated and commenced refurbishment of two ball mills (capable of a combined throughput of 1.5Mtpa) and associated infrastructure. Expanded organisational capability through a number of senior management appointments. Completed two capital raisings during the year with $10M (12.2m shares @ $0.82) in July 2020 and $20M (27.6m shares @ $0.67) in May 2021. Directors continued to participate with the total amount invested by directors at ~$5.5M. Maintained a strong balance sheet with cash of ~$16M at 30 June 2021. SAFETY AND SUSTAINABILITY Black Cat is committed to building an organisational culture that executes the Company’s strategy and operations in a safe and responsible manner. Despite an active year across multiple fronts, including the relocation of the two mills, only two lost time injuries (LTIs) occurred during the year. 1 See ASX announcement 2 September 2021 A N N U A L R E P O R T 2 0 2 1 Page 6 of 73 REVIEW OF OPERATIONS (CONTINUED) BACKGROUND ON KAL EAST Kal East has a history of complex, unconsolidated ownership and small scale, high-grade production primarily around the turn of the 20th century. Black Cat’s consolidation of the project has continued through the year with strategic acquisitions (three transactions completed to acquire eight projects). Extensive field pegging has also been undertaken. The Company with ~800km2 of highly prospective ground is now the 5th largest landholder within 50kms of the world class gold centre of Kalgoorlie, WA. Kal East currently contains four main mining areas being the Myhree, Majestic, Fingals, and Trojan Mining Centres. Start-up operations at Kal East are planned to include an underground mine at Majestic in conjunction with an open pit at Myhree. Mining at Fingals is planned to follow completion of the Myhree open pit. OUR STRATEGY Black Cat is committed to operating in a safe and responsible manner and is: • • • • Targeting continual Resource growth above the current 1.185Moz; Defining Ore Reserves – targeting >3 years of mill feed; Leveraging a dominant ground position east of Kalgoorlie to make additional discoveries; and Establishing a strategically located gold processing facility servicing Kal East and the greater region. During the March 2021 quarter, Mr Alex Hewlett resigned as an independent Non-Executive Director of the Company 2. During the June 2021 quarter, Mr Philip Crutchfield was appointed as an independent Non-Executive Director of Black Cat 3. Commensurate with building an organisation to transition to production, several senior positions commenced during the year, including: • • • • David Sanders joined as Chief Financial Officer in August 2020. David has over 20 years’ industry experience as a Chartered Accountant with strong analytical capabilities and a solid understand of the value drivers in mining. Karen Johnson joined as Human Resources Manager in April 2021. Karen has worked locally in the goldfields for over 25 years’ and is a strong advocate for building local workforce and community. Peter Bayliss joined as Environment and Stakeholder Engagement Lead in June 2021. With a career spanning more than 30 years’ Peter has extensive experience in environmental management, government approval processes and building community relationships. Alex Aedo joined as Processing Manager in July 2021. Alex has both mineral and mechanical engineering qualifications and over 20 years’ experience working in predominantly gold processing plants in the goldfields of Western Australia. 2 Refer ASX announcement 29 January 2021 3 Refer ASX announcement 6 April 2021 A N N U A L R E P O R T 2 0 2 1 Page 7 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS Summary of Drilling July 2020 to June 2021 Target Objective # RC Holes Total RC (m) # DD Holes Total DD (m) Majestic Mining Centre Resource Definition & Discovery 81 19,943 18 2,580 Fingals Mining Centre Resource Definition & Discovery Myhree Mining Centre Grade Control, Resource Definition, Sterilisation & Discovery Trojan Area Discovery Bulong Regional Resource Definition & Discovery Wombola Regional Discovery Rowe’s Find Resource Definition & Discovery Tailings Storage Facility Sterilisation 377 37,608 248 13,087 30 17 24 25 2,136 1,034 2,016 2,609 130 7,442 3 4 - 2 - - - 303 457 - 171 - - - Total 932 85,875 27 3,511 A N N U A L R E P O R T 2 0 2 1 Page 8 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Figure 2: RC drilling at Rowe’s Find during December 2020 Mineral Resources at 30 June 2021 Resources by Mining Centre Tonnes (‘000) Grade (g/t Au) Contained (‘000) Oz Myhree Fingals Majestic Trojan Other TOTAL 2,880 3,681 7,313 2,115 1,461 17,450 2.8 1.9 2.0 1.7 2.5 2.1 259 222 472 115 117 1,185 A N N U A L R E P O R T 2 0 2 1 Page 9 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Majestic Mining Centre (M25/360, M25/350, P25/2323) 100% The Majestic Mining Centre produced ~1.4Mt @ 2.5 g/t Au for 113,000 oz from multiple open pits between 2016 and 2018. The area contains a stripped profile and most historical drilling has not been deep enough to test for new discoveries. The current Resources (7.3Mt @ 2.0 g/t Au for 472,000 oz) remain open along strike and at depth. Planned start-up operations at Kal East include an underground mine at Majestic. Accordingly, drilling occurred at Majestic focused on Resource growth and mine start up. In total, 99 holes for 22,523m were completed. Results included 4: • • • • • • • • • • • • • • 6m @ 7.01 g/t Au from 167m & 4m @ 9.11 g/t Au from 178m & 2m @ 15.4 g/t Au from 184m & 2m @ 7.36 g/t Au from 223m (20IMRC002) 6m @ 6.59 g/t Au from 53m (20IMRC003) 5m @ 5.04 g/t Au from 71m (20IMRC004) 10m @ 3.36 g/t Au from 57m (20IMRC005) 8m @ 5.23 g/t Au from 48m & 1m @ 14.70 g/t Au from 228m (21IMRC002) 8m @ 2.25 g/t Au from 36m (21IMRC015) 4m @ 18.40 g/t Au from 96m (21IMRC022) 2m @ 8.68 g/t Au from 130m (21IMRC029) 4m @ 5.44 g/t Au from 68m (21IMDD001) 8m @ 5.81 g/t Au from 68m 2.21m @ 24.53 g/t Au from 369.34m (20IMDD002) 1.13m @ 30.23 g/t Au from 259.68m (20IMDD003) 0.28m @ 30.3 g/t Au from 362.94m (20IMDD005) 1.00m @ 15.9 g/t Au from 147.00m & 2.16m @ 5.81 g/t Au from 347.45m (20IMDD013) 0.48m @ 40.23 g/t Au from 413.43m (20IMDD014) Imperial Majestic Sovereign Figure 3: Resources at the Majestic Mining Centre 4 Refer ASX announcements 23 September, 30 October & 12 November 2020 and 5 March & 25 May 2021 A N N U A L R E P O R T 2 0 2 1 Page 10 of 73 Figure 4: Long section showing Majestic and Imperial. Existing open pits (brown) and Resources >2.0g/t Au are shown. Pink shadow indicates <2.0g/t Au mineralised structure which remains of interest in a high-grade nuggety system. Planned initial underground development is overlain A N N U A L R E P O R T 2 0 2 1 Page 11 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Majestic Mining Centre (M25/360, M25/350, P25/2323) 100% (Continued) Jones Find is located within the Majestic Mining Centre <2km east of the planned processing facility. Jones Find saw small scale workings in the 1930’s with little recent exploration. A maiden drill program at Jones Find was completed and intersected thick mineralised zones with results 5 including: • • 13m @ 4.98 g/t Au from 30m (20JFRC016) 13m @ 2.38 g/t Au from 26m (20JFRC013) Jones Find contains a current Resource of 775kt @ 1.3 g/t Au for 33,000oz. Crown is located on a granted mining lease 1.5km south of the planned processing facility and has seen no previous mining. Crown is a similar style of mineralisation to other deposits in the area (e.g. Imperial/Majestic and Sovereign) with a number of narrow stacked lodes that strike north, dipping steeply to the west. A maiden Resource of 1.4Mt @ 1.4 g/t Au for 62,000 oz has been calculated for Crown. Figure 5: Plan view of Resources in the Majestic Mining Centre, including Jones Find and Crown 5 Refer to ASX announcement 30 October 2020 A N N U A L R E P O R T 2 0 2 1 Page 12 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Fingals Mining Centre (M26/357, M26/148, M26/248 and M26/364) 100% The Fingals Mining Centre produced ~420,000t @ 2.7 g/t Au for 56,500 oz from multiple open pits in the early 1990’s, with only limited modern exploration since. Black Cat has drilled 380 holes for 37,911m which resulting in a 252% increase in Resources to 3.7Mt @ 1.9 g/t Au for 222,000 oz. These Resources remain open in all directions and at depth. Additionally, numerous new targets have been delineated in the region which have the potential to further grow Resources. Results during the year included 6: • • • • • • • • • • • • • • 3m @ 17.81 g/t Au from 69m (20FIRC003) - extensional 3m @ 40.99 g/t Au from 79m (20FIRC018) - extensional 5m @ 5.63 g/t Au from 172m (20FIRC073) - extensional 2m @ 19.20 g/t Au from 46m (20FIRC102) - extensional 7m @ 9.12 g/t Au from 18m (20FIRC105) - infill 5m @ 6.43 g/t Au from 202m (20FIRC140) - extensional 4m @ 9.00 g/t Au from 16m (21FRRC064) - new target, 4km north of Fingals Fortune 2.49m @ 12.43 g/t Au from 170.11m (20FIDD003) - extensional 3m @ 14.00 g/t Au from 78m (21FERC043) - Fingals East 6m @ 75.57 g/t Au from 49m (21FIRC042) - infill 4m @ 34.05 g/t Au from 122m (21FIRC041) - infill 2m @ 19.96 g/t Au from 106m (21FIRC053) - infill 2.49m @ 12.43 g/t Au from 170.11m (20FIDD0031) - extensional 5m @ 6.43 g/t Au from 202m (20FIRC140) - extensional Mining at Fingals is planned to follow completion of the Myhree open pit. Mining approvals for an open pit at Fingals are underway. Drilling at the Fingals Mining Centre is ongoing and focused on Resource conversion and follow up drilling to the recent positive regional program. Figure 6: Plan view of Fingals Mining Centre with recent regional drilling and Resources over conceptual pit design 6 Refer ASX announcements 3 September & 18 December 2020 and 21 January, 26 March, 12 April & 14 July 2021 A N N U A L R E P O R T 2 0 2 1 Page 13 of 73 Figure 8: Conceptual pit design at Fingals Fortune with Resource, which remains open in all directions and at depth A N N U A L R E P O R T 2 0 2 1 Page 14 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Myhree Mining Centre (M25/24, M25/091, M 25/129, P25/2286) 100% Along with an underground mine at Majestic, Myhree is expected to provide the initial feed for the proposed processing facility. Results 7 at Myhree and Trump during the year included: • • • • • 4m @ 5.40 g/t Au from 333m (20MYRC061) 3m @ 6.97 g/t Au from 421m (20MYRC060) 6m @ 11.93 g/t Au from 25m (21TRRC018) 3m @ 13.14 g/t Au from 49m (21TRRC019) 3m @ 8.66 g/t Au from 57m (21TRRC004) Grade control drilling (120 RC holes for 4,315m) occurred over the proposed Myhree open pit during the year. Drilling was designed on 7.5m hole spacing and 12.5m line spacing pattern with every second line drilled during this program. Initial results include: • • • 8m @ 4.55 g/t Au from 26m (21MYGC041) 6m @ 5.74 g/t Au from 32m (21MYGC047) 5m @ 11.51 g/t Au from 27m (21MYGC048) Figure 9: Conceptual open pit and underground at Myhree with Resource contained within the pit coloured by Au. Completed grade control displayed as grey lines 7 Refer ASX announcements 3 September 2020 and 26 March 2021 A N N U A L R E P O R T 2 0 2 1 Page 15 of 73 REVIEW OF OPERATIONS (CONTINUED) DRILLING PROGRAMS (CONTINUED) Trojan Mining Centre (M25/0104, E25/0571, E25/0558, E25/0526 and P25/2333) 100% The Trojan Mining Centre is located 10km east of the proposed Kal East processing facility. Open pit mining between 2000 and 2004 extracted 1.97Mt @ 1.97 g/t Au for 125,129 oz. Mining ceased when the gold price dropped to US$400 oz and little work has been undertaken since. The current Resource is 2.1Mt at 1.7 g/t Au for 115,000 oz and is open at depth and along strike. Black Cat completed its maiden 20 hole (2,156m) drilling program in May 2021 and targeted parallel shears in the area. Results were encouraging and included6F8: • • • • 7m @ 5.04 g/t Au from 61m (21TNRC001) - Trojan south extension 5m @ 2.11 g/t Au from 52m (21TNRC002) - Trojan south extension 4m @ 6.67 g/t Au from 84m (21TNRC006) - parallel shear, east of Trojan 4m @ 1.42 g/t Au from 72m (21TNRC018) - parallel shear, east of Trojan Previously, a cross cutting dolerite dyke was interpreted to close off the Trojan deposit. However, holes 21TNRC001 and 21TNRC002 were drilled 300m south of the dyke and provide validation that the Trojan deposit extends beyond the dyke. Holes 21TNRC006 and 21TNRC018 show evidence of a parallel shear zone 300m east of Trojan. Figure 10: Plan view at Trojan Mining Centre. Results highlight the possible extension of Trojan to the south of the dolerite dyke (green) and a possible parallel deposit to the southeast of Trojan OTHER DRILLING As well as Resource definition and discovery drilling at the Company’s four mining centres, drilling was also completed at a number of other areas. This included sterilisation of the Majestic tailings storage facility with 7,442m completed. Sterilisation drilling also occurred at the Myhree Mining Centre with 1,404m designed to test the planned waste dump for the Myhree open pit. 8 Refer ASX announcements 25 May 2021 and 14 July 2021 A N N U A L R E P O R T 2 0 2 1 Page 16 of 73 REVIEW OF OPERATIONS (CONTINUED) 1.5MTPA MILLING FACILITY AND INFRASTRUCTURE RELOCATION During the March 2021 quarter two Outokumpu ball mills and associated infrastructure were purchased. These were relocated to the Burgess BLA facility in Kalgoorlie during the June 2021 quarter. The larger of the two mills will undergo refurbishment and be ready for planned installation in 2022. The associated mill infrastructure has also been dismantled and removed to appropriate storage facilities ready for construction. Other pre-construction activities included engineering to integrate the larger Outokumpu ball mill into the previous design which will allow the operation to commence with a throughput of ~800,000 tpa along with engineering other parts of the processing facility including gravity, elution and gold room circuits. Steel for the manufacture of additional CIL tanks was procured and arrangements for tank manufacture have commenced. Progress was also made in securing additional high-quality components for construction, including structural steel, conveyors, feed chutes, pumps, construction offices and mobile crane 9. Figure 72: 1.85MW Outokumpu ball mill on the road to Kalgoorlie REOPTIMISATION OF MINE PLANS Mining studies at Kal East continued during throughout the year and included: • • Open pit studies reoptimised to incorporate larger mining equipment, allowing for larger volume waste stripping ahead of ore mining. Underground studies continued with designs well advanced to optimise several potential underground mines with a focus on Majestic and Imperial. These studies will be incorporated into maiden Ore Reserves to be completed in the December 2021 quarter. APPROVALS STATUS Approval for the development of the Majestic underground mine and the construction of the processing plant were received in the June 2021 quarter. This means that the two mines scheduled for initial development (Myhree open cut and Majestic underground) have full DMIRS approval. 9 Refer ASX announcement 8 July 2021 A N N U A L R E P O R T 2 0 2 1 Page 17 of 73 REVIEW OF OPERATIONS (CONTINUED) APPROVALS STATUS (CONTINUED) Approvals granted during the year are detailed below: Department Approved Application Purpose DMIRS Clearing Permit Clearing of native vegetation for Myhree on M25/024, M25/091, M25/129 DMIRS DMIRS DMIRS Mining Proposal Mining at Myhree Stage 2 Project - M25/024, M25/091, M25/129. Clearing Permit Clearing of native vegetation for Majestic on M25/350 Mining Proposal Imperial-Majestic underground mining and process plant construction DWER Groundwater licence 181140 Water abstraction from Majestic and borefield DWER Groundwater licence 176418 Water abstraction from Majestic and borefield MINERAL RESOURCES & ORE RESERVES STATEMENT (BC8: 100%) Black Cat Syndicate’s total Measured, Indicated, and Inferred Resources at 30 June 2021 are 17.5M tonnes @ 2.1 g/t Au containing 1,185,000 oz (refer below). Resources have been routinely reported throughout the year, with the comparable Resource on 10 October 2020 of 11.8Mt @ 2.3 g/t Au containing 884,000 oz. There are no Ore Reserves stated at 30 June 2021. Table 1: Total Resources as at 10 October 2020 and 30 June 2021 Deposit Measured Resources Indicated Resources Inferred Resources Total Resources 10 October 2020 30 June 2021 Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) 13 5,084 6,688 11,784 3.2 2.5 2.2 2.3 1 410 473 884 13 7,278 10,155 17,450 3.2 2.2 2.0 2.1 1 522 661 1,185 Key changes announced to Resources during the year are outlined below. Since 10 October 2020 Resource report: • • • • Fingals Mining Centre – 77% increase to the Fingals Fortune Resource (see ASX announcement “1 Million Ounce Resource in Sight”, released 28 January 2021). Majestic Mining Centre – 47% increase to the Imperial/Majestic Resources (see ASX announcement “1 Million Oz in Resource & New Gold Targets”, released 11 March 2021). Fingals Mining Centre – 42% increase to Fingals Mining Centre with maiden Resources at Fingals East (see ASX announcement “Strong Resource Growth Continues at Fingals”, released 31 May 2021). Majestic Mining Centre – Maiden Resources at Crown and Jones Find based on drilling up until 30 June 2021. (see ASX announcement “Maiden Resources Grow Kal East to 1.2Moz”, released 2 September 2021). Apart from the changes detailed above, there were no other material changes to Resources for the period from 10 October 2020 to 30 June 2021. A N N U A L R E P O R T 2 0 2 1 Page 18 of 73 REVIEW OF OPERATIONS (CONTINUED) MINERAL RESOURCES & ORE RESERVES STATEMENT (BC8: 100%) (CONTINUED) The in-situ, drill-defined and developed Resources as at 30 June 2021 for Kal East are listed below: Table 2: Mineral Resources as at 30 June 2021 Measured Resource Indicated Resource Inferred Resource Total Resource Deposit Tonnes (‘000s) Grade (g/t Au) Metal (000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) 270 39 61 - 633 191 - - 1.9 2.6 2.4 - 3.0 5.0 - - 17 3 5 - 61 31 - - 227 91 392 225 73 494 171 13 1,194 3.0 117 1,686 945 529 - - 1,138 99 - - 1.7 5.0 - - 1.5 4.5 - - 51 86 - - 54 14 - - 179 364 1,373 53 417 59 775 1,382 2,710 2.3 204 4,603 1,437 - 381 1,818 1.8 - 1.9 1.8 83 1,367 - 23 283 209 106 1,859 1.7 2.4 1.9 2.9 1.7 4.0 1.7 3.0 2.6 1.7 6.3 1.4 2.4 1.5 3.0 1.3 1.4 1.8 1.8 3.0 1.2 1.9 13 7 24 21 4 64 9 1 497 130 453 225 706 685 171 13 143 2,880 10 74 61 4 20 6 33 62 1,124 893 1,373 53 1,555 158 775 1,382 268 7,313 80 27 8 2,804 287 590 116 3,681 1.9 2.4 2.0 2.9 2.9 4.3 1.7 3.0 2.8 1.7 5.6 1.4 2.4 1.5 3.9 1.3 1.4 2.0 1.8 3.0 1.6 1.9 30 10 28 21 65 95 9 1 259 60 159 61 4 73 20 33 62 472 163 28 31 222 1,356 1,356 1.8 1.8 79 79 760 760 1.5 1.5 36 36 2,115 2,115 1.7 1.7 115 115 Myhree Mining Centre Boundary OP Boundary UG Trump OP Trump UG Myhree OP Myhree UG Strathfield OP Strathfield UG Sub Total Majestic Mining Centre Majestic OP Majestic UG Sovereign OP Sovereign UG Imperial OP Imperial UG Jones Find OP Crown OP Sub Total Fingals Mining Centre Fingals Fortune OP Fingals Fortune UG Fingals East OP Sub Total Trojan Mining Centre Trojan OP Sub Total Other Resources Queen Margaret OP Queen Margaret UG Melbourne United OP Melbourne United UG Anomaly 38 OP Anomaly 38 UG 36 2.2 3 154 - - - - - - - - - - - - - - - 72 67 29 295 120 350 148 13 11.7 1.7 2.4 2.8 3.0 1.5 3.0 2.4 3.5 2.5 2.0 9 6 6 3 14 5 12 27 17 99 190 72 67 29 295 1.8 2.4 2.8 3.0 1.5 13 11.7 297 350 148 1,461 2.8 2.4 3.5 2.5 2.1 661 17,450 12 6 6 3 14 5 27 27 17 117 1,185 Wombola Dam OP 13 3.2 1 164 2.6 14 Hammer and Tap OP Rowe’s Find OP Sub Total TOTAL RESOURCE - - 13 13 3.2 3 1 1 200 7,278 - - 2.6 2.2 - - 17 1,248 522 10,156 A N N U A L R E P O R T 2 0 2 1 Page 19 of 73 REVIEW OF OPERATIONS (CONTINUED) MINERAL RESOURCES & ORE RESERVES STATEMENT (BC8: 100%) (CONTINUED) Notes on Resources: 1. The preceding statement of Mineral Resources conforms to the ‘Australasian Code for Reporting of Exploration Results Mineral Resources and Ore Reserves (JORC Code) 2012 Edition’. 2. All tonnages reported are dry metric tonnes. 3. Data is rounded to thousands of tonnes and thousands of ounces gold. Discrepancies in totals may occur due to rounding. 4. Resources have been reported as both open pit and underground with varying cut-offs based on several factors discussed in the corresponding Table 1 which can be found with the original ASX announcements for each Resource. The announcements containing the Table 1 Checklists of Assessment and Reporting Criteria relating for the 2012 JORC compliant Resources are: 1. Myhree Mining Centre: Boundary – Black Cat ASX announcement on 9 October 2020 “Strong Resource Growth Continues including 53% Increase at Fingals Fortune”; o o Trump – Black Cat ASX announcement on 9 October 2020 “Strong Resource Growth Continues including 53% Increase at Fingals Fortune”; o Myhree – Black Cat ASX announcement on 9 October 2020 “Strong Resource Growth Continues including 53% Increase at Fingals Fortune”; o Strathfield – Black Cat ASX announcement on 31 March 2020 “Bulong Resource Jumps by 21% to 294,000 oz”; 2. Majestic Mining Centre: Sovereign – Black Cat ASX announcement on 11 March 2021 “1 Million Oz in Resource & New Gold Targets”; Imperial – Black Cat ASX announcement on 11 March 2021 “1 Million Oz in Resource & New Gold Targets”; Jones Find - Black Cat ASX announcement on 3 September 2021 “Maiden Resource Growth in the Shadow of the Mill”; Crown Black Cat ASX announcement on 3 September 2021 “Maiden Resource Growth in the Shadow of the Mill”; o Majestic – Black Cat ASX announcement on 11 March 2021 “1 Million Oz in Resource & New Gold Targets”; o o o o Fingals Mining Centre: o o Trojan Mining Centre: o Fingals Fortune – Black Cat ASX announcement on 31 May 2021 “Strong Resource Growth Continues at Fingals”; Fingals East – Black Cat ASX announcement on 31 May 2021 “Strong Resource Growth Continues at Fingals”; Trojan – Black Cat ASX announcement on 7 October 2020 “Black Cat Acquisition adds 115,000oz to the Fingals Gold Project”; and 3. 4. 5. Other Resources: Anomaly 38 – Black Cat ASX announcement on 31 March 2020 “Bulong Resource Jumps by 21% to 294,000 oz”; o Queen Margaret – Black Cat ASX announcement on 18 February 2019 “Robust Maiden Mineral Resource Estimate at Bulong”; o Melbourne United – Black Cat ASX announcement on 18 February 2019 “Robust Maiden Mineral Resource Estimate at Bulong”; o o Wombola Dam – Black Cat ASX announcement on 28 May 2020 “Significant Increase in Resources - Strategic Transaction with Silver Lake”; o o Hammer and Tap – Black Cat ASX announcement on 10 July 2020 “JORC 2004 Resources Converted to JORC 2012 Resources”; Rowe’s Find – Black Cat ASX announcement on 10 July 2020 “JORC 2004 Resources Converted to JORC 2012 Resources”. GOVERNANCE Black Cat Syndicate ensures that the Mineral Resource estimates quoted are subject to governance arrangements and internal controls activated at a site and corporate level. All aspects of the Mineral Resource process follow a high level of industry standard practices. Contract RC and diamond drilling is overseen by experienced Black Cat employees, with completed holes subject to downhole gyroscopic survey and collar coordinates surveyed with RTK GPS. Geological logging and sampling are completed by Black Cat geologists. Black Cat employs field quality control (QC) procedures, including addition of standards, blanks and duplicates ahead of assaying which is undertaken using industry standard fire assay at Bureau Veritas laboratories in Kalgoorlie. All drilling information is continually validated and managed by a database consultant. Geological models and wireframes are built using careful geological documentation and interpretations, all of which are validated by peer review. Resource estimation is undertaken by qualified Black Cat employees under the direct supervision of the Competent Person. Estimation techniques are industry standard and include block modelling using Ordinary Kriging. Application of other parameters including cut off grades, top cuts and classification are all dependent on the style and nature of mineralisation being assessed. All Resources are reported under JORC 2012. No Ore Reserve estimation has been completed or announced to date at Kal East. A N N U A L R E P O R T 2 0 2 1 Page 20 of 73 REVIEW OF OPERATIONS (CONTINUED) COMPETENT PERSONS’ STATEMENTS This Resources Statement as a whole has been approved by Mr Iain Levy. Mr Levy is a holder of shares and options in, and is a full-time employee of, the Company. Mr Levy is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the AIG with sufficient experience with the style of mineralisation, deposit type under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code)”. Mr Levy has approved this Resources and Ore Reserves Statement as a whole and consents to its inclusion in the Annual Report in the form and context in which it appears. The information in this report that relates to all geology, exploration results and planning were compiled by Mr. Iain Levy. Additionally, the estimation and reporting of Mineral Resources for Trump, Myhree, Boundary, Anomaly 38, Strathfield, Imperial, Majestic, Sovereign, Jones Find, Crown, Fingals Fortune, Fingals East, Wombola Dam, Hammer and Tap, Trojan, and Rowe’s Find deposits were compiled by Mr. Levy. Mr. Levy has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Levy consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The information in this report that relates to the estimation and reporting of Resources for Queen Margaret and Melbourne United deposits has been compiled by Mr Matthew Karl BSc/MSc. Mr Karl is a full-time employee of Mining Plus Pty Ltd and has acted as an independent consultant on the Queen Margaret and Melbourne United Deposits’ Mineral Resource estimation. Mr Karl is a Member of the Australasian Institute of Mining and Metallurgy and of the Australian Institute of Geologists and has sufficient experience with the style of mineralisation, deposit type under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code)”. Mr Karl consents to the inclusion in this report of the contained technical information relating the Resource estimation in the form and context in which it appears. In relation to Resources and Ore Reserves, the Company confirms that it is not aware of any new information or data that materially affects the information in the original reports, and that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the original reports. A N N U A L R E P O R T 2 0 2 1 Page 21 of 73 CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 A N N U A L R E P O R T 2 0 2 1 Page 22 of 73 DIRECTORS’ REPORT The Directors present their report on Black Cat Syndicate Limited (“Black Cat” or “the Company”) and the entity it controlled (“the Group”) at the end of, and during the year ended 30 June 2021. DIRECTORS The names and details of the Directors of Black Cat during the financial year and until the date of this report are: Paul Chapman (Non-Executive Chairman) B.Comm, ACA, Grad Dip Tax, MAICD, MAusIMM (Appointed 4 August 2017) Paul is a chartered accountant with over 30 years’ experience in the resources sector gained in Australia and the United States. Paul has experience across a range of commodity businesses including gold, nickel, uranium, manganese, bauxite/alumina and oil/gas and has held managing director and other senior management roles in public companies. Paul was a founding shareholder/director of the following ASX listed companies: Reliance Mining; Encounter Resources; Rex Minerals; Silver Lake Resources and Paringa Resources. Paul is currently non-executive chair of Encounter Resources Limited (ASX:ENR) and Dreadnought Resources Limited (ASX:DRE) and a non-executive director of Sunshine Gold Limited (ASX:SHN). Paul resigned as non-executive director of Brazilian copper/gold producer Avanco Resources Limited (ASX:AVB) on 10 August 2018 following a successful takeover by OZ Minerals Limited. Gareth Solly (Appointed 1 January 2018) (Managing Director) B.Sc (Geology) First Class Honours, Dip. Business Gareth has 20 years’ mining industry experience covering numerous orebody types in both underground and surface environments with a proven ability in leading mine geology, resource development and near mine exploration teams. This includes 11 years’ senior management experience in roles of Registered Manager, Chief Geologist and Group Geology Manager in organisations including Saracen Gold Mines Limited (ASX:SAR), Silver Lake Resources Limited (ASX:SLR) and Norilsk Nickel. Of particular relevance, Gareth was the Chief Geologist and later Resident Manager at Mount Monger which is similar in many ways to Bulong and involved managing a workforce of approximately 200. Les Davis (Non-Executive Director) M.Sc (Min Econs) (Appointed 4 August 2017) Les has a Master’s Degree in Mineral Economics from Curtin University of Western Australia and over 38 years’ mining industry experience including 17 years’ hands-on experience in mine development and narrow vein mining. Les' career incorporates over 20 years’ senior management and executive experience including roles as Mine Manager, Technical Services Manager, Concentrator Manager, Resident Manager and General Manager Expansion Projects with organisations including WMC Resources Limited, Reliance Mining Limited and Consolidated Minerals Limited and was the founding Managing Director of ASX listed Silver Lake Resources Limited (ASX:SLR) until his resignation on 22 November 2019 and was a director of Spectrum Metals Limited (ASX:SPX) between 2 February 2019 and 18 March 2020. Les is currently a non-executive director of Sunshine Gold Limited (ASX:SHN). Philip Crutchfield (Appointed 6 April 2021) (Non-Executive Director) B. Comm, LL.B (Hons), LL.M LSE Philip is a prominent and highly respected barrister specialising in commercial law. Philip was Non- Executive Chairman of highly successful financial services company Zip Co Limited (ASX:Z1P) and is a non-executive director of Applyflow Limited (ASX:AFW) and Encounter Resources Limited (ASX:ENR). Philip is a board member of the Geelong Grammar School Council, Bell Shakespeare Theatre Company and the Victorian Bar Foundation Limited. Philip is also a former partner of Mallesons Stephen Jaques (now King & Wood Mallesons). Philip is a senior barrister practising in commercial law and was admitted to practice in 1988. A N N U A L R E P O R T 2 0 2 1 Page 23 of 73 DIRECTORS’ REPORT (CONTINUED) DIRECTORS (CONTINUED) Tony Polglase (Non-Executive Director) B.Eng (Hons) First Class Honours (Appointed 25 May 2020) Tony has more than 40 years of multi-disciplined mining experience across ten different countries and is qualified in mechanical and electrical engineering with an honours degree in metallurgy. Tony has significant experience in the development and operation of mining projects, having been responsible for, or closely involved with, the commissioning of more than seven mines. Most recently, Tony was a director of Avanco Resources until its acquisition by OZ Minerals Ltd for ~$430m. Tony’s operational experience involves both open-pit and underground mines as well as processing and maintenance management. Tony was a director of Metals X Limited (ASX:MLX) between 24 October 2019 and 10 July 2020 and a director of New World Resources Limited (ASX:NWC) from 17 October 2019. FORMER DIRECTORS Alex Hewlett (Non-Executive Director) B.Sc, MAusIMM (Resigned 28 February 2021) COMPANY SECRETARIES Mark Pitts (Joint Company Secretary) BBus, FCA, GAICD (Appointed 9 November 2017) Mark has over 30 years’ experience in business administration and corporate compliance. Having started his career with KPMG, Mark has worked at a senior management level in a variety of commercial and consulting roles including mining services, healthcare and property development. The majority of the past 15 years’ has been spent working for, or providing services to, publicly listed companies in the junior resources sector. Mark is a registered company auditor and holds a Bachelor of Business Degree from Curtin University, is graduate of the Australian Institute of Company Directors and is a Fellow of Chartered Accountants Australia and New Zealand. Dan Travers (Joint Company Secretary) BSc (Hons), FCCA (Appointed 23 November 2017) Dan is a Fellow of the Association of Chartered Certified Accountants with over 10 years’ experience in the administration and accounting of publicly listed companies following significant public practice experience. Dan holds undergraduate degrees with honours in both Mathematics and Accounting and is an employee of Endeavour Corporate, which specialises in the provision of company secretarial and accounting services to ASX listed entities in the mining and exploration industry. DIRECTORS’ INTERESTS As at the date of this report the Directors’ interests in shares and unlisted options of the Company are as follows: Director P Chapman G Solly L Davis P Crutchfield T Polglase Directors’ Interests in Ordinary Shares Directors’ Interests in Unlisted Options 8,345,142 1,427,222 5,670,977 5,274,261 82,375 100,000 1,672,778 250,000 200,000 250,000 Included in the Directors’ interests in Unlisted Options, there are 2,472,778 options that are vested and exercisable as at the date of signing this report. A N N U A L R E P O R T 2 0 2 1 Page 24 of 73 DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ MEETINGS The number of meetings of the Company’s Directors held during the period ended 30 June 2021, and the number of meetings attended by each Director are as follows: Director P Chapman G Solly L Davis A Hewlett (resigned 28/2/21) P Crutchfield (appointed 6/4/21) T Polglase PRINCIPAL ACTIVITIES Board of Directors’ Meetings Eligible to Attend Attended 10 10 10 6 2 10 10 10 10 5 2 10 The principal activity of the Company during the financial period was undertaking mineral exploration and economic studies at the Company’s Kal East Gold Project (“Kal East”) in Western Australia. There were no significant changes in these activities during the financial period. RESULTS OF OPERATIONS Financial Position and Performance The consolidated net loss after income tax for the financial period was $2,324,794 (2020: $1,397,501). At the end of the financial period the Group had $16,049,091 (2020: $2,868,148) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure at the end of the financial year was $29,124,255 (2020: $10,030,732). Included in capitalised exploration costs for 30 June 2021 is an amount of $7,660,345 being acquisition costs settled in the form of 8,417,962 ordinary fully paid shares issued to Silver Lake Resources Limited at $0.91 per share for the acquisition of the Majestic, Fingals and Rowe’s Find properties. During the year the Company raised a total of $29,895,747 before costs from the issue of placement shares and a further $518,326 from the issue of shares on the exercise of unlisted options. REVIEW OF ACTIVITIES Exploration Activities for the financial period have been primarily focused at the Company’s Kal East near Kalgoorlie, Western Australia. Whilst undertaking various exploration programs targeting future resource growth and commencing economic studies to assess Kal East’s economic potential. Acquisitions During the financial period the Company completed the acquisition of the Majestic, Fingals and Rowe’s Find properties from Silver Lake Resources Limited, the Yarri East property from Newmont Corporation and the Trojan, Slate Dam and Clinker properties from Aruma Resources Limited. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Company and Group during or since the end of the financial period other than as stated in this report. A N N U A L R E P O R T 2 0 2 1 Page 25 of 73 DIRECTORS’ REPORT (CONTINUED) OPTIONS OVER UNISSUED CAPITAL Unlisted Options As at 30 June 2021 13,283,147 unissued ordinary shares of the Company are under option as follows: Number of Options Granted Exercise Price Expiry Date 9,541,147 1,450,000 700,000 250,000 187,000 625,000 530,000 20 cents 40 cents 60 cents 62 cents 120 cents 98 cents 100 cents 25 January 2023 25 June 2023 2 August 2023 18 May 2024 21 July 2024 10 December 2024 28 March 2025 All options on issue at the date of this report are unlisted, vested and exercisable, subject to separate ASX and voluntary restrictions. During the financial period, the Company granted 1,342,000 options over unissued shares to directors and employees pursuant to shareholder approval and/or the terms and conditions of the Black Cat Syndicate Incentive Option Plan. During the financial period, a total of 2,151,631 options exercisable at 20 cents and expiring 25 January 2023, and 400,000 options exercisable at 22 cents and expiring 31 July 2022 were exercised into shares. No options were cancelled during the financial period. Since the end of, the financial period: • • • no options have been issued to employees; no options have been cancelled; and no shares have been issued on the exercise of options. Options do not entitle the holder to: • • participate in any share issue of the Company or any other body corporate; and any voting rights until the options are exercised into ordinary shares. ISSUED CAPITAL Ordinary fully paid shares Number of Shares on Issue 2021 140,807,811 2020 87,497,952 The Company has not issued any shares since the end of the financial period. DIVIDENDS No dividend has been paid and no dividend is recommended for the financial periods ended 30 June 2020 and 30 June 2021. A N N U A L R E P O R T 2 0 2 1 Page 26 of 73 DIRECTORS’ REPORT (CONTINUED) MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has resulted in manageable delays to certain exploration and feasibility study programs, it has not materially financially impacted the Group up to 30 June 2021. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. Other than the above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Company expects to maintain exploration and feasibility programs at Kal East. Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors, to do so would be likely to prejudice the business activities of the Group and is dependent upon the results of the future exploration and evaluation. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group holds various exploration licences to regulate its exploration activities in Australia. These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities. So far as the Directors are aware, all exploration activities have been undertaken in compliance with all relevant environmental regulations. REMUNERATION REPORT (AUDITED) Remuneration paid to Directors and Officers of the Company is set by reference to such payments made by other ASX listed companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the financial position of the Company and the specific skills and experience of the Directors and Officers. Details of the nature and amount of remuneration of each Director, and other Key Management Personnel if applicable, are disclosed annually in the Company’s Annual Report. Remuneration Committee The Board has adopted a formal Remuneration Committee Charter which provides a framework for the consideration of remuneration matters. The Company does not have a separate Remuneration Committee and as such all remuneration matters are considered by the Board as a whole, with no Member deliberating or considering such matter in respect of their own remuneration. In the absence of a separate Remuneration Committee, the Board is responsible for: 1) 2) Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key Management Personnel; and Implementing employee incentive and equity-based plans and making awards pursuant to those plans. Non-Executive Remuneration The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same industry, for their time, commitment and responsibilities. Non-Executive remuneration is not linked to the performance of the Company, however, to align Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term incentives. A N N U A L R E P O R T 2 0 2 1 Page 27 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Non-Executive Remuneration (Continued) 1) 2) 3) 4) Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s annual general meeting; Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits; Non-Executive superannuation benefits are limited to statutory superannuation entitlements; and Participation in equity-based remuneration schemes by Non-Executive Directors is subject to consideration and approval by the Company’s shareholders. The maximum Non-Executive Directors’ fees payable in aggregate, are currently set at $350,000 per annum. Executive Director and Other Key Management Personnel Remuneration Executive remuneration consists of base salary, plus other performance incentives to ensure that: 1) 2) Remuneration packages incorporate a balance between fixed and incentive pay, reflecting short and long-term performance objectives appropriate to the Company’s circumstances and objectives; and A proportion of remuneration is structured in a manner to link reward to corporate and individual performances. Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies) and are reviewed regularly to ensure market competitiveness. To date, the Company has not engaged external remuneration consultants to advise the Board on remuneration matters. Incentive Plans The Company provides incentives to Directors and Employees pursuant to the Black Cat Syndicate Incentive Option Plan, which was approved by shareholders on 25 November 2020. The Board, acting in remuneration matters: 1) 2) 3) Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when those targets are achieved; Reviews and approves existing incentive plans established for employees; and Approves the administration of the incentive plans, including receiving recommendations for, and the consideration and approval of grants pursuant to such incentive plans. Engagement of Non-Executive Directors Non-Executive Directors conduct their duties under the following terms: 1) 2) A Non-Executive Director may resign from his/her position and thus terminate their contract on written notice to the Company; and A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their period of office (if applicable). Payment is made in lieu of any notice period if termination is initiated by the Company, except where termination is initiated for serious misconduct. In consideration of the services provided by Paul Chapman as Non-Executive Chairman, the Company will pay $60,000 inclusive of statutory superannuation per annum. In consideration of the services provided by Les Davis, Tony Polglase and Philip Crutchfield as Non- Executive Directors, the Company will pay each $40,000 inclusive of statutory superannuation per annum. A N N U A L R E P O R T 2 0 2 1 Page 28 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Engagement of Non-Executive Directors (Continued) Messrs Chapman, Davis, Polglase and Crutchfield are also entitled to fees for other amounts as the Board determines where they perform special duties or otherwise perform extra services or make special exertions on behalf of the Company. There were no such fees paid during the financial period ended 30 June 2021. Engagement of Executive Director The Company has entered into an executive service agreement with Gareth Solly in respect of his engagement as Managing Director on the following material terms and conditions: • • is effective for three years from 1 January 2021 and receives a base salary of $250,000 per annum plus statutory superannuation and may also receive an annual short term performance- based bonus which may be calculated as a percentage of current base salary, the performance criteria, assessment and timing of which is negotiated annually with the Non-Executive Directors; and subject to shareholder approval, may participate in the Black Cat Syndicate Incentive Option Plan and other incentive plans adopted by the Board. Short Term Incentive Payments Non-Executive Directors set the Key Performance Indicators (“KPI’s”) for the Executive Director and other senior employees. The KPI’s are chosen to align the reward of the individual Executive to the strategy and performance of the Company. Performance objectives, which may be financial or non-financial, or a combination of both, are weighted when calculating the maximum Short-Term Incentives (“STI”) payable to Executives. At the end of the specified measurement period, the Non-Executive Directors will assess the actual performance of the Executives against the set Performance Objectives. The maximum amount of the STI, or a lesser amount depending on actual performance achieved is paid to the Executives as either a cash payment or in unlisted options. Refer to the Details of Performance Related Remuneration section of this Remuneration Report for specific details of KPI’s set and/or measured during the period. No STI’s are payable to Executives where it is considered that the actual performance has fallen below the minimum requirement. Shareholding Qualifications The Directors are not required to hold any shares in Black Cat under the terms of the Company’s constitution. However, as shown above, all Directors have chosen to hold interests in Black Cat shares. Group Performance In considering the Company’s performance, the Board provides the following indices in respect of the current financial periods and previous financial periods: 2021 $ 2020 $ 2019 $ 2018 $ Profit/(Loss) for the period attributable to shareholders (2,324,794) (1,397,501) (1,131,029) (749,702) Closing share price at 30 June 0.62 0.81 0.265 0.255 As an exploration company, the Board does not consider the profit/(loss) attributable to shareholders as one of the performance indicators when implementing STI payments. A N N U A L R E P O R T 2 0 2 1 Page 29 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Group Performance (Continued) In addition to technical and economic exploration success (including the publication of JORC 2012 Resources), the Board considers the effective management of safety, environmental and operational matters and the acquisition and consolidation of high-quality landholdings, as more appropriate indicators of management performance. Voting at the Group’s 2020 Annual General Meeting (AGM) At the 2020 AGM 99.6% of the votes directed by shareholders, or their nominated proxy, supported the adoption of the Remuneration Report for the period ended 30 June 2020. The Group did not receive any specific feedback at the AGM regarding its remuneration practices. Remuneration Disclosures The Key Management Personnel of the Company have been identified as: • • • • • • • Paul Chapman Non-Executive Chairman Gareth Solly Managing Director Les Davis Non-Executive Director Philip Crutchfield Non-Executive Director (appointed 6 April 2021) Tony Polglase Non-Executive Director Alex Hewlett Non-Executive Director (resigned 28 February 2021) David Sanders Chief Financial Officer (appointed 13 August 2020) The details of the remuneration of each member of Key Management Personnel is as follows: Short Term Base Salary $ Short Term Incentive $ 2021 Post Employ- ment Superann- uation Contribu- tions $ Other Long Term Value of Options $ Total $ Value of Options as Proportion of Remunerati on P Chapman 54,795 - 5,205 - 60,000 G Solly L Davis P Crutchfield T Polglase A Hewlett D Sanders Total 250,000 50,0001,2 26,125 30,7991 356,924 36,530 8,717 40,000 24,353 176,984 591,379 - - - - 3,470 828 - 2,314 - 53,220 - - 35,2102 85,210 16,813 57,102 54,755 141,121 40,000 62,765 40,000 26,667 286,109 872,465 - 8.6% - 84.8% - - 19.9% A N N U A L R E P O R T 2 0 2 1 Page 30 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Remuneration Disclosures (Continued) Short Term Base Salary $ Short Term Incentive $ 54,795 250,000 36,529 36,529 4,069 - 50,0001 - - - Post Employ- ment Superann- uation Contribu- tions $ 5,205 23,750 3,471 3,471 - 381,922 50,000 35,897 Other Long Term Value of Options $ - - - - 49,370 49,370 Value of Options as Proportion of Remun- eration - - - - 92.4% Total $ 60,000 323,750 40,000 40,000 53,439 517,189 2020 P Chapman G Solly L Davis A Hewlett T Polglase Total 1 In the tables above an amount of $50,000 was accrued in respect of short-term incentive bonus payable to the Managing Director as at 30 June 2020. This was satisfied by the payment of $25,000 in cash in July 2020 and $30,799 paid in the form of unlisted options in September 2020 following shareholder approval (based on the valuation of the options at the date of grant). An amount of $30,799 has been recognised in total share-based payments, and a corresponding reduction of $25,000 in short- term employment benefits for the year ended 30 June 2021. 2 STI bonus $75,000 and $35,210 accrued for G Solly and D Sanders respectively at 30 June 2021. Details of Performance Related Remuneration During the financial period, the Company paid a cash short term bonus to the Managing Director of $25,000 and 75,000 options exercisable at $1.20 each and expiring 21 July 2024 in respect of the amounts accrued at 30 June 2020 pursuant to the 2019 STI. Options Granted as Remuneration The following options were issued as remuneration to Key Management Personnel during the period ended 30 June 2021: Number of Options KMP Gareth Solly1 75,000 Grant Date 22 Jul 2020 Expiry Date Exercise Price Volatility Interest Rate Value of Options $ 21 July 2024 $1.20 79.3% 0.26% $30,799 Philip Crutchfield 200,000 David Sanders 180,000 29 Mar 2021 28 Mar 2025 14 Dec 2020 10 Dec 2024 $1.00 64.7% 0.69% $53,220 $0.98 75.0% 1.00% $57,102 1 Options issued pursuant to the 2019 STI award accrued at 30 June 2020. The fair value of options issued as remuneration is allocated to the relevant vesting period of the options. Options are provided at no cost to the recipients. A N N U A L R E P O R T 2 0 2 1 Page 31 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Remuneration Disclosures (Continued) Exercise of Options Granted as Remuneration During the year, no ordinary shares were issued in respect of the exercise of options previously granted as remuneration to Directors or Key Management Personnel of the Company. Equity Instrument Disclosures Relating to Key Management Personnel Option Holdings Key Management Personnel have the following interests in unlisted options over unissued shares of the Company: Balance at Start of the Period Received Suring the Period as Remuneration Other Changes During the Period Balance at the End of the Period Vested and Exercisable at the End of the Period Name 2021 P Chapman 100,000 - - 100,000 100,000 G Solly L Davis 1,647,778 75,000 (50,000) 1,672,778 1,672,778 1,400,000 - (1,150,000) 250,000 250,000 P Crutchfield - 200,0001 250,000 2,710,000 - - - - 200,000 200,000 250,000 250,000 (100,000) 2,610,0002 2,610,0002 - 180,000 - 180,000 180,000 1 Option holdings at date of appointment as director. 2 Option holdings at date of ceasing to be a director. Balance at Start of the Period Received Suring the Period as Remuneration Other Changes During the Period Balance at the End of the Period Vested and Exercisable at the End of the Period Name 2020 T Polglase A Hewlett D Sanders P Chapman 2,980,001 1,700,000 2,650,000 2,880,000 - - - - (2,880,001) 100,000 100,000 (52,222) 1,647,778 1,647,778 (1,250,000) 1,400,000 1,400,000 (170,000) 2,710,000 2,710,000 - 250,000 - 250,000 250,000 G Solly L Davis A Hewlett T Polglase Share Holdings The number of shares in the Company held during the financial period by Key Management Personnel of the Company, including their related parties are set out below. There were no shares granted during the reporting period as compensation. A N N U A L R E P O R T 2 0 2 1 Page 32 of 73 DIRECTORS’ REPORT (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Equity Instrument Disclosures Relating to Key Management Personnel (Continued) Name 2021 P Chapman G Solly L Davis P Crutchfield T Polglase A Hewlett D Sanders Balance at Start of the Year Received During the Year on Exercise of Options Other Changes During the Year Balance at the End of the Year 7,522,224 1,377,222 4,448,977 3,781,7241 48,255 3,050,000 -1 - 822,918 - 72,000 1,492,537 34,120 50,000 1,150,000 - - 100,000 - 8,345,142 1,427,222 5,670,977 5,274,261 82,375 - 3,150,0002 36,313 36,313 1 Shares held on appointment as director/officer. 2 Shares held at date of ceasing to be a director. Name 2020 P Chapman G Solly L Davis A Hewlett T Polglase Balance at Start of the Year Received During the Year on Exercise of Options Other Changes During the Year Balance at the End of the Year 4,216,502 1,325,000 3,000,000 2,880,000 - 2,880,001 52,222 1,250,000 170,000 - 425,721 - 198,977 - 48,2551 7,522,224 1,377,222 4,448,977 3,050,000 48,255 1 Shares held on appointment as director/officer. Loans Made to Key Management Personnel No loans were made to Key Management Personnel, including personally related entities during the reporting period. Other Transactions with Key Management Personnel During the year the Company paid Stone Poneys Nominees Pty Ltd, an entity associated with Paul Chapman, an amount of $6,233 in respect of the lease for the Group’s offices. (2020: $26,949). During the period the Company employed the spouse of Paul Chapman in an administrative role. Remuneration for the period ended 30 June 2021 was $16,151 (inclusive of superannuation) (2020: $79,148). During the period the Company employed the spouse of Gareth Solly in an administrative role. Remuneration for the period ended 30 June 2021 was $60,361 (inclusive of superannuation) (2020: $nil). End of Remuneration Report A N N U A L R E P O R T 2 0 2 1 Page 33 of 73 DIRECTORS’ REPORT (CONTINUED) OFFICERS’ INDEMNITIES AND INSURANCE During the period, the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the Directors named in this report. The Directors’ and Officers’ Liability insurance provides cover against costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy. The Company has not provided any insurance for an auditor of the Company. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or Group, or to intervene in any proceedings to which the Company or Group is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. NON-AUDIT SERVICES During the period, Crowe the Company’s auditor, has not performed any other services in addition to their statutory duties, other than as stated below. Total Remuneration Paid to Auditors During the Financial Period Audit and review of the Company’s financial statements Total 2021 $ 24,250 24,250 2020 $ 21,200 21,200 The board considers any non-audit services provided during the period by the auditor and satisfies itself that the provision of any non-audit services during the period by the auditor is compatible with, and does not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: • • All non-audit services are reviewed by the board to ensure they do not impact the impartiality and objectivity of the auditor; and The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. AUDITOR’S INDEPENDENCE DECLARATION A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on the following page. This report is made in accordance with a resolution of the Directors. Dated at Perth this 29th day of September 2021. Gareth Solly Managing Director A N N U A L R E P O R T 2 0 2 1 Page 34 of 73 AUDITOR’S INDEPENDENCE DECLARATION A N N U A L R E P O R T 2 0 2 1 Page 35 of 73 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Consolidated Note 5 6 20 Other income Interest income Total income Employee expenses Employee expenses – share based Employee expenses recharged to exploration Legal and professional Corporate advisory Marketing and promotion Depreciation and amortisation 6 Realised foreign exchange movements Administration and other expenses 7 Profit on disposal of fixed assets Exploration costs not capitalised Profit/(Loss) before income tax Income tax benefit Profit/(Loss) after tax Other comprehensive income Total comprehensive income/(loss) for the year Earnings per share for loss attributable to the ordinary equity holders of the Company 2021 $ 50,000 14,412 64,412 (2,429,991) (354,695) 1,338,742 (38,113) (71,188) (48,856) (25,071) (10,873) (371,966) 9,485 (386,680) (2,324,794) - 2020 $ 50,000 28,646 78,646 (1,400,659) (214,686) 879,061 (100,931) (125,476) (49,873) (16,313) - (219,319) - (227,951) (1,397,501) - (2,324,794) (1,397,501) - - (2,324,794) (1,397,501) Basic earnings/(loss) per share Diluted earnings/(loss) per share 30 30 (2.1) (2.1) (1.7) (1.7) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. A N N U A L R E P O R T 2 0 2 1 Page 36 of 73 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Note Consolidated 2021 $ Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Bonds and deposits Property, plant and equipment Capitalised mineral exploration and evaluation expenditure Right of use assets Total non-current assets Total assets Current liabilities Trade and other payables Employee entitlements Lease liabilities Total current liabilities Non-current liabilities Lease liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Accumulated losses Share based payments reserve Total equity 8 9 11 13 12 15 16 17 17 18 20 20 16,049,091 214,443 16,263,534 44,920 2,724,193 29,124,255 194,458 32,087,826 48,351,360 1,795,457 207,642 58,033 2,061,132 132,362 132,362 2,193,494 46,157,866 50,435,467 (5,573,706) 1,296,105 46,157,866 2020 $ 2,868,148 62,894 2,931,042 - 61,968 10,030,732 - 10,092,700 13,023,742 897,275 100,184 - 997,459 - - 997,459 12,026,283 14,395,187 (3,278,232) 909,328 12,026,283 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. A N N U A L R E P O R T 2 0 2 1 Page 37 of 73 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Consolidated Issued Capital $ Accumulated Losses $ Share Based Payments Reserve $ Total $ 8,106,341 (1,880,731) 694,642 6,920,252 - - 6,288,846 (1,397,501) - (1,397,501) - - 214,686 214,686 - 6,288,846 14,395,187 (3,278,232) 909,328 12,026,283 14,395,187 (3,278,232) 909,328 12,026,283 - - - (2,324,794) - (2,324,794) - 29,320 416,097 (29,320) 416,097 - 36,040,280 - - 36,040,280 50,435,467 (5,573,706) 1,296,105 46,157,866 2020 Balance at the start of the financial period Comprehensive income for the financial period Movement in equity remuneration reserve in respect of options vested Transactions with equity holders in their capacity as equity holders: Shares issued (net of costs) Balance at the end of the financial period 2021 Balance at the start of the financial period Comprehensive income for the financial period Movement in equity remuneration reserve in respect of options vested Transfer on exercise of options Transactions with equity holders in their capacity as equity holders: Shares issued (net of costs) Balance at the end of the financial period The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. A N N U A L R E P O R T 2 0 2 1 Page 38 of 73 CONSOLIDATED STATEMENT OF CASH FLOWS Consolidated Note Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ Cash flows from operating activities Other income Interest received Payments to suppliers and employees Net cash used in operating activities 29 Cash flows from investing activities Payments for bonds and security deposits Payments to acquire exploration assets Payments for exploration and evaluation Proceeds from government drilling grants Payments for plant and equipment 50,000 14,412 (1,363,460) (1,299,048) (44,920) (1,054,098) (10,772,027) - (2,012,526) 50,000 31,663 (836,308) (754,645) - (142,465) (4,732,875) 27,726 (42,278) Net cash used in investing activities (13,883,571) (4,889,892) Cash flows from financing activities Payments for lease liability principal Proceeds from the issue of shares Payments for share issue costs Net cash from financing activities Net increase/(decrease) in cash held Effect of foreign exchange rates on cash held Cash at the beginning of the financial period Cash at the end of the financial period 8 8 (5,500) 30,414,073 (2,034,138) 28,374,435 13,191,816 (10,873) 2,868,148 16,049,091 - 6,153,445 (349,299) 5,804,146 159,609 - 2,708,539 2,868,148 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. A N N U A L R E P O R T 2 0 2 1 Page 39 of 73 NOTES TO THE FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied throughout the reporting period, unless otherwise stated. The financial report includes financial statements for the consolidated entity consisting of Black Cat Syndicate Limited and its subsidiary (“the Group”). (a) Basis of Preparation This general-purpose financial report has been prepared in accordance with Australian Equivalents to International Financial Reporting Standards (“AIFRS”), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial report is presented in Australian dollars and all values are rounded to the nearest dollar. The separate financial statements of the parent entity have not been presented within this financial report as permitted by the Corporations Act 2001. The financial report of the Group was authorised for issue in accordance with a resolution of Directors on 28 September 2021. Statement of Compliance The consolidated financial report of Black Cat Syndicate Limited complies with Australian Accounting Standards, which include AIFRS, in their entirety. Compliance with AIFRS ensures that the financial report also complies with International Financial Reporting Standards (“IFRS”) in their entirety. Adoption of New and Revised Accounting Standards The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. The adoption of the Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group. New standards and interpretations not yet adopted The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application date for future reporting periods and which the Group has decided not to early adopt. Reporting Basis and Conventions These financial statements have been prepared under the historical cost convention, and on an accrual basis. Critical Accounting Estimates The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. Principles of Consolidation The financial statements of subsidiary companies are included in the consolidated financial statements from the date control commences until the date control ceases. The financial statements of subsidiary companies are prepared for the same reporting period as the parent company, using consistent accounting policies. The Consolidated Entity controls an entity when it is exposed to, or has rights to, variable returns from its investment with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Inter-entity balances resulting from transactions with or between controlled entities are eliminated in full on consolidation. Investments in subsidiary companies are accounted for at cost in the individual financial statements of the Company. A N N U A L R E P O R T 2 0 2 1 Page 40 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Segment Reporting Operating segments are identified and segment information disclosed, where appropriate, on the basis of internal reports reviewed by the Company’s board of directors, being the Group’s Chief Operating Decision Maker, as defined by AASB 8. (c) Revenue Recognition Interest Income Interest income is recognised using the effective interest method. (d) Income Tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantially enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (e) Lease liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. A N N U A L R E P O R T 2 0 2 1 Page 41 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) Impairment of Assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non- financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (g) Cash and Cash Equivalents For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (h) Government Grants Government grants are recognised at fair value where there is reasonable assurance that the grant will be received, and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are deducted from the carrying value of the relevant asset. Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims are recognised in the year in which the claim is lodged with the Australian Tax Office. Amounts receivable are allocated in the financial statements against the corresponding expense or asset in respect of which the research and development concession claim has arisen. (i) Right of Use Assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short- term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. (j) Property, Plant and Equipment Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. A N N U A L R E P O R T 2 0 2 1 Page 42 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j) Property, Plant and Equipment (Continued) Depreciation of property, plant and equipment is calculated using the straight line or diminishing value methods to allocate their cost, net of residual values, over their estimated useful lives, as follows: Asset Class Depreciation Rate Field equipment and vehicles Office equipment 20% 33% The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 1(f)). Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. (k) Mineral Exploration and Evaluation Expenditure Mineral exploration and evaluation expenditure are written off as incurred or accumulated in respect of each identifiable area of interest and capitalised. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: • • Such costs are expected to be recouped through the successful development and exploitation of the area of interest, or alternatively by its sale; or Exploration and/or evaluation activities in the area have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active or significant operations in, or in relation to, the area of interest is continuing. In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Immediate restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure. Exploration activities resulting in future obligations in respect of restoration costs result in a provision to be made by capitalising the estimated costs, on a discounted cash basis, of restoration costs and depreciating over the useful life of the asset. The unwinding of the effect of the discounting on the provision is recorded as a finance cost in the income statement. Farm-in arrangements (in the exploration and evaluation phase) For exploration and evaluation asset acquisitions (farm-in arrangements) in which the Group has made arrangements to fund a portion of the selling partner's (farmer’s) exploration and/or future development expenditures (carried interests), these expenditures are reflected in the financial statements as and when the exploration and development work progresses. Farm-out arrangements (in the exploration and evaluation phase) The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out arrangements but redesignates any costs previously capitalised in relation to the whole interest as relating to the partial interest retained. Monies received pursuant to farm-in agreements are treated as a liability on receipt and until such time as the relevant expenditure is incurred. (l) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and usually paid within 30 days of recognition. A N N U A L R E P O R T 2 0 2 1 Page 43 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Employee Benefits Wages, Salaries and Annual Leave Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long Service Leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future salaries, experience of employee departures and periods of service. Expected future payments are discounted at the corporate bond rate with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Share Based Payments Share based compensation payments are made available to Directors and employees. The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free rate for the term of the option. A discount is applied, where appropriate, to reflect the non- marketability and non-transferability of unlisted options, as the Black-Scholes option pricing model does not incorporate these factors into its valuation. The fair value of the options granted is adjusted to reflect market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital and the proceeds received, net of any directly attributable transaction costs, are credited to share capital. Upon the cancellation of options on expiry of the exercise period, or lapsing of vesting conditions, the balance of the share-based payments reserve relating to those options is transferred to accumulated losses. (n) Issued Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (o) (i) Earnings Per Share Basic earnings per share Basic earnings per share is calculated by dividing the earnings attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. A N N U A L R E P O R T 2 0 2 1 Page 44 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) (ii) Earnings Per Share (Continued) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. (p) Goods and Services Tax (“GST”) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as a part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flow. (q) Financial Instruments Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off. Impairment of financial assets The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12 month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss. (r) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. A N N U A L R E P O R T 2 0 2 1 Page 45 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (s) Current Versus Non-Current Classification The Group presents assets and liabilities in the statement of financial position based on a current or non-current classification. An asset is current when it is: • • • expected to be realized, or intended to be sold or consumed in the Group’s normal operating cycle; expected to be realized within 12 months after the reporting period; or cash or a cash equivalents (unless restricted for at least 12 months after the reporting period. A liability is current when it is: • • • • expected to be settled in the Group’s normal operating cycle; it is due to be settled within 12 months after the reporting date; there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period; or All other assets and liabilities are classed as non-current. NOTE 2 FINANCIAL RISK MANAGEMENT The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Company’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. The Board of Directors has the overall responsibility for the risk management framework and has adopted a Risk Management Policy. (a) Credit Risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from transactions with customers and investments. Trade and Other Receivables The current nature of the business activity of the Group does not result in trading receivables. The receivables that the Group does experience through its normal course of business are short term and the most significant recurring by quantity is receivable from the Australian Taxation Office, the risk of non-recovery of receivables from this source is considered to be negligible. Cash Deposits The Directors believe any risk associated with the use of predominantly only one bank is addressed through the use of at least an A-rated bank as a primary banker and by the holding of a portion of funds on deposit with alternative A-rated institutions. Except for this matter the Group currently has no significant concentrations of credit risk. (b) Liquidity Risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for liquid finance resources to finance the Company’s current and future operations, and consideration is given to the liquid assets available to the Company before commitment is made to future expenditure or investment. A N N U A L R E P O R T 2 0 2 1 Page 46 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 2 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising any return. Interest Rate Risk The Group has significant cash assets which may be susceptible to fluctuations in changes in interest rates. Whilst the Group requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future expenditure, which prevents the cash assets being committed to long term fixed interest arrangements; the Group does mitigate potential interest rate risk by entering into short to medium term fixed interest investments. Foreign Exchange Risk The Group does not have any direct contact with foreign exchange fluctuations other than their effect on the general economy and capital markets. NOTE 3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Accounting for Capitalised Exploration and Evaluation Expenditure The Group’s accounting policy is stated at Note 1(k). There is some subjectivity involved in the carrying forward as capitalised or writing off to the income statement exploration and evaluation expenditure. Key judgements are applied in determining expenditure directly related to exploration and evaluation activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Management give due consideration to areas of interest on a regular basis and are confident that decisions to either write off or carry forward such expenditure reflect fairly the prevailing situation. For the year ended 30 June 2021 the Group expensed unallocated and uncapitalised exploration expenditure of $386,680 (2020: $227,951). Accounting for Share Based Payments The values of amounts recognised in respect of share based payments have been estimated based on the fair value of the equity instruments granted. Fair values of options issued are estimated by using an appropriate option pricing model. There are many variables and assumptions used as inputs into the models. If any of these assumptions or estimates were to change this could have a significant effect on the amounts recognised. See Note 19 for details of inputs into option pricing models in respect of options issued during the reporting period. Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the Group’s activities, staffing and geographic regions in which the Group operates. Whilst there has been delays to the certain exploration and feasibility study programs, there does not currently appear to be direct material impact upon the financial statements as at the reporting date as a result of the Coronavirus (COVID-19) pandemic. A N N U A L R E P O R T 2 0 2 1 Page 47 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 4 SEGMENT INFORMATION The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics. The Group’s sole activity is mineral exploration and resource development wholly within Australia; therefore, it has aggregated all operating segments into the one reportable segment being mineral exploration. The reportable segment is represented by the primary statements forming these financial statements. NOTE 5 OTHER INCOME Operating Activities Cash flow assistance grant Consolidated Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ 50,000 50,000 50,000 50,000 NOTE 6 LOSS FOR THE YEAR Loss Before Income Tax Includes the Following Specific Expenses Depreciation and amortisation: Right of use assets (note 12) Motor vehicles and field equipment (note 11) Office equipment (note 11) Employee expenses: Wages and salaries Short term incentive bonus1 Non-Executive Directors’ fees Superannuation Payroll tax Other staff costs Movement in employee leave liability 5,557 11,501 8,013 25,071 1,667,647 233,2102 161,061 177,926 47,307 35,382 107,458 - 13,250 3,063 16,313 951,659 142,8041 131,922 102,552 13,829 - 57,893 1 Accrued short-term incentive bonus for 2019 STI. Settled by the payment of $81,402 cash in July 2020, $36,402 via the issue of options in lieu of cash payment in July 2020 and $25,000 via the issue of options in lieu of cash payment in September 2020 (following shareholder approval). 2 Accrued short-term incentive bonus as at 30 June 2021. 2,429,991 1,400,659 A N N U A L R E P O R T 2 0 2 1 Page 48 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 7 INCOME TAX (a) Income Tax Expense Current income tax: Current income tax charge (benefit) Current income tax not recognised Deferred income tax: Relating to origination and reversal of timing differences Deferred income tax benefit not recognised Income tax expense/(benefit) reported in the income statement Consolidated Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ (3,290,140) 3,290,140 (1,955,011) 1,995,011 (133,001) 133,001 - - - - (b) Reconciliation of Income Tax Expense to Prima Facie Tax Payable Profit/(Loss) from continuing operations before income tax expense Tax at 26% (2020: 27.5%) Tax effect of permanent differences: Non-deductible share-based payments Capital raising costs claimed Net deferred tax asset benefit not brought to account Tax (benefit)/expense (c) Deferred Tax – Balance Sheet Liabilities Capitalised exploration expenditure Assets Revenue losses available to offset against future taxable income Employee provisions Accrued expenses Deductible equity raising costs Net deferred tax asset not recognised (2,324,794) (1,397,501) (604,446) (384,313) 92,221 (199,885) 59,039 (99,539) 712,110 424,813 - - (4,992,847) (4,992,847) (2,379,413) (2,379,413) 4,934,625 2,664,734 53,987 174,381 571,523 5,734,516 741,669 27,551 39,271 256,525 2,988,081 608,668 A N N U A L R E P O R T 2 0 2 1 Page 49 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 7 INCOME TAX (CONTINUED) Consolidated Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ (d) Deferred Tax – Income Statement Liabilities Capitalised exploration expenditure (2,613,434) (1,372,443) Prepaid expenses - 830 Assets Deductible equity raising costs Accruals Increase in tax losses carried forward Employee provisions Deferred tax benefit/(expense) movement for the period not recognised 314,998 135,110 2,269,891 26,436 (3,482) 37,895 1,161,885 15,922 133,001 (159,393) The deferred tax benefit of tax losses not brought to account will only be obtained if: (i) (ii) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses to be realised; The Company continues to comply with the conditions for deductibility imposed by tax legislation; and (iii) No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses. All unused tax losses of $18,979,325 (2020: $9,689,940) were incurred by Australian entities. The Company received an allocation pursuant to the Junior Mineral Exploration Incentive (“JMEI”) Scheme for the financial year ended 30 June 2021 of $1,664,000. Subsequent to 30 June 2021, the Group may undertake a distribution of JMEI credits to qualifying shareholders which has not been quantified at the date of this report. The Company received a JMEI allocation for the financial year ending 30 June 2022 of $784,613. Consolidated 2021 $ 2020 $ NOTE 8 CURRENT ASSETS - CASH AND CASH EQUIVALENTS Cash at bank and on hand Deposits at call 6,049,091 10,000,000 16,049,091 1,068,148 1,800,000 2,868,148 A N N U A L R E P O R T 2 0 2 1 Page 50 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 8 CURRENT ASSETS - CASH AND CASH EQUIVALENTS (CONTINUTED) (a) Reconciliation to Cash at the End of the Year The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows: Cash and cash equivalents per statement of cash flows (b) Deposits at Call 16,049,091 2,868,148 Amounts classified as deposits at call are short term deposits depending upon the immediate cash requirements of the Group and earn interest at the respective short term interest rates. (c) Cash Balances Not Available for Use As at 30 June 2021 there is a bank guarantee amounting to $43,000 in respect of the lease of the Company’s offices (refer Note 12). There are no other amounts included in cash and cash equivalents above that are pledged as guarantees or otherwise unusable by the Group. NOTE 9 CURRENT ASSETS – RECEIVABLES (a) Trade and Other Receivables Other receivables GST recoverable - 214,433 214,433 3,405 59,489 62,894 Details of fair value and exposure to interest risk are included at Note 21. NOTE 10 NON-CURRENT ASSETS – INVESTMENT IN CONTROLLED ENTITY (a) Investment in Controlled Entity Subsidiary Company Country of Incorporation Ownership Interest Black Cat (Bulong) Pty Ltd Australia 2021 100% 2020 100% Black Cat (Bulong) Pty Ltd was incorporated in Western Australia on 4 August 2017. The ultimate controlling party of the group is Black Cat Syndicate Limited. A N N U A L R E P O R T 2 0 2 1 Page 51 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 11 NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT Motor Vehicles and Field Equipment $ Note Office Equipment $ Mill capital $ Total $ 80,624 71,103 (35,456) 12,070 63,864 - - 92,694 2,572,832 2,707,799 - (35,456) 116,271 75,934 2,572,832 2,765,037 (25,334) (5,392) (11,501) (8,013) 9,396 - (27,439) (13,405) 55,290 6,678 - - - - - (30,726) (19,514) 9,396 (40,844) 61,968 88,832 62,529 2,572,832 2,724,193 Cost at the start of the financial year Additions Disposed Cost at the end of the financial year Accumulated depreciation at the start of the financial year Depreciation expense for the financial year Depreciation on assets disposed Accumulated depreciation at the end of the financial year Net book value at the start of the financial year Net book value at the end of the financial year No items of property, plant and equipment have been pledged as security by the Group. Mill Capital relates to acquisition and related costs relating to mill and associated infrastructure acquired in respect of the Group’s Kal East Gold Project proposed processing plant. Consolidated 30 June 2021 $ 30 June 2020 $ NOTE 12 NON-CURRENT ASSETS – RIGHT OF USE ASSETS Leases Carrying value at the start of the year ROU assets recognised in the year Amortisation charged - 200,015 (5,557) 194,458 - - - - A N N U A L R E P O R T 2 0 2 1 Page 52 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 12 NON-CURRENT ASSETS – RIGHT OF USE ASSETS (CONTINUED) A right of use asset has been recognised in respect of the Group’s lease of its office at Level 3, 52 Kings Park Road, West Perth, Western Australia. Refer Note 26(b) for further details of the lease. Refer to Note 17 for details of the corresponding right of use liability arising from the abovementioned lease. The lease is for a term of two years commencing 1 June 2021 with an option to extend for one further year. Management have determined that based on all available information it is not reasonably certain that they will exercise the option to renew the lease at the end of the initial two-year term. Monthly lease costs of $8,050 per month are subject to 3% rent increases on each 12 month anniversary. A lease incentive of $3,220 per month applies until 30 April 2023. Consolidated 30 June 2021 $ 30 June 2020 $ NOTE 13 EVALUATION EXPENDITURE NON-CURRENT ASSETS – CAPITALISED MINERAL EXPLORATION AND In the Exploration and Evaluation Phase Capitalised exploration costs at the start of the period Total acquisition costs for the period (Note 14) Total exploration costs for the period Government drilling grants 10,030,732 8,714,444 10,765,759 - Total unallocated exploration expensed for the period (386,680) 4,592,835 596,700 5,096,874 (27,726) (227,951) Capitalised exploration costs at the end of the period 29,124,255 10,030,732 The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. The capitalised exploration expenditure written off includes expenditure written off on surrender of, or intended surrender of, tenements. NOTE 14 ACQUISITION OF EXPLORATION ASSETS During the period, the Group completed the acquisition of exploration assets pursuant to various acquisition agreements. Total acquisition costs for the period amounted to $8,714,444, which includes various acquisition and related costs and the following significant transactions: Cash Consideration (incl option fees) Share Based Consideration Total Consideration Acquisition of Majestic, Fingals and Rowe’s Find Acquisition of Yarri East Acquisition of Trojan, Slate Dam and Clinker Nil $7,660,3451 $7,660,3451 $200,000 $500,000 Nil Nil $200,000 $500,000 1During the financial period the Company completed the acquisition of the Majestic, Fingals and Rowe’s Find properties by the issue of 8,417,962 shares at a fair value of $0.91 each to Silver Lake Resources Limited. Note that the shares issued to acquire the Fingals and Rowe’s Find projects are recognised at fair value as at the date of settlement, which is considered to be the ‘measurement date for the purposes of AASB 2. The share price at the date of entering into the transactions was $0.49 per share. A N N U A L R E P O R T 2 0 2 1 Page 53 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) Consolidated 30 June 2021 $ 30 June 2020 $ NOTE 15 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES Trade payables and accruals Other payables 1,535,934 259,523 1,795,457 869,791 27,484 897,275 Liabilities are not secured over the assets of the Group. Details of fair value and exposure to interest risk are included at Note 21. Trade payables and accruals includes $233,210 (20210: $142,804) accrued short-term incentive bonuses (refer note 6). NOTE 16 CURRENT LIABILITIES – EMPLOYEE ENTITLEMENTS Liability for annual leave Liability for long service leave NOTE 17 LEASE LIABILITIES Leases Carrying value at the start of the year Lease liabilities recognised in the year Lease payments made Lease interest charged to profit or loss 181,721 25,921 207,642 - 200,015 (9,661) 41 190,395 Lease liabilities are split between current and non-current liabilities at the balance date as follows: Lease liabilities due < 1 year Lease liabilities due > 1 year 58,033 132,362 190,395 A right of use asset has been recognised in respect of the Group’s lease of its office at Level 3, 52 Kings Park Road, West Perth, Western Australia. Refer Note 26(b) for further details of the lease. Refer to Note 12 for details of the corresponding right of use asset arising from the abovementioned lease. Total cash outflows in relation to lease arrangements during the year was $5,505. NOTE 18 ISSUED CAPITAL (a) Ordinary Shares The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares respectively held by them. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. A N N U A L R E P O R T 2 0 2 1 Page 54 of 73 100,184 - 100,184 - - - - - - - - NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 18 ISSUED CAPITAL (CONTINUED) (a) Ordinary Shares (Continued) Ordinary shares have no par value. There is no limit to the authorised share capital of the Company. 30 June 2021 30 June 2020 Issue Price No $ No $ (b) Share Capital Issued share capital (c) Share Movements During the Period Balance at the start of the financial period - Shares issued on exercise of options Shares issued to acquire Balagundi JV Placement shares issued $0.20 $0.326 $0.43 Shares issued to acquire Black Hills $0.61 Shares issued to acquire South Three Shares issued to acquire Fingals and Rowes Find Placement shares issued Placement shares issued Shares issued on exercise of options Less share issue costs $0.70 $0.91 $0.82 $0.67 $0.22 - 140,807,811 50,435,467 87,947,952 14,395,187 87,947,952 14,395,187 69,760,002 8,106,341 2,151,631 430,326 5,767,223 1,153,445 - - - - - - - - 122,820 40,000 11,627,907 5,000,000 270,000 164,700 400,000 280,000 8,417,962 7,660,345 12,195,122 10,000,000 29,695,144 19,895,747 400,000 88,000 - (2,034,138) - - - - - - - - - (349,299) Balance at the end of the financial period 140,807,811 50,435,467 87,947,952 14,395,187 Refer note 14 for further details regarding the fair value of shares issued to acquire assets. NOTE 19 OPTIONS AND SHARE BASED PAYMENTS Incentive Option Plan The establishment of the Black Cat Syndicate Incentive Option Plan (‘the Plan”) was last approved by shareholders of the Company on 25 November 2020. All eligible Directors, executive officers and employees of Black Cat who have been continuously employed by the Company are eligible to participate in the Plan. The Plan allows the Company to issue options to eligible persons. The options can be granted free of charge and are exercisable at a fixed price in accordance with the Plan. A N N U A L R E P O R T 2 0 2 1 Page 55 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 19 OPTIONS AND SHARE BASED PAYMENTS (CONTINUED) Options on issue As at 30 June 2021, 13,283,147 (2020: 14,492,778) unissued ordinary shares of the Company are under option as follows: Number of Options Granted Exercise Price 9,541,147 1,450,000 700,000 250,000 187,000 625,000 530,000 20 cents 40 cents 60 cents 62 cents 120 cents 98 cents 100 cents Expiry Date 25 January 2023 25 June 2023 2 August 2023 18 May 2024 21 July 2024 10 December 2024 28 March 2025 All options on issue at 30 June 2021 are vested and exercisable, subject to separate voluntary restrictions. During the year ended 30 June 2021 the Company issued 1,342,000 options over unissued shares to directors and employees (2020: 950,000). During the financial period a total of 2,151,631 options exercisable at 20 cents and expiring 25 January 2023, and 400,000 options exercisable at 22 cents and expiring 31 July 2022 were exercised into shares. No options were cancelled during the financial year. Since the end of, the financial period: • • • No options have been issued to employees; No options have been cancelled; and No shares have been issued on the exercise of options. Options do not entitle the holder to: • • Participate in any share issue of the Company or any other body corporate; and Any voting rights until the options are exercised into ordinary shares. Reconciliation of Movement of Options Over Unissued Shares During the Period Including Weighted Average Exercise Price (“WAEP”) 2021 No WAEP (cents) 2020 No Options outstanding at the start of the period 14,492,778 24.7 19,310,001 Options issued during the period 1,342,000 101.9 950,000 Options exercised or cancelled during the period Options outstanding at the end of the period (2,551,631) 20.3 (5,767,223) 13,283,147 33.4 14,492,778 WAEP (cents) 21.54 60.5 20.0 24.7 A N N U A L R E P O R T 2 0 2 1 Page 56 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 19 OPTIONS AND SHARE BASED PAYMENTS (CONTINUED) Weighted Average Contractual Life The weighted average contractual life for un-exercised options is 18 months (2020: 32 months). Basis and Assumptions Used in the Valuation of Options The 1,342,000 options issued as remuneration during the financial year were valued using the Black- Scholes option valuation methodology: Date Granted Number of Options Granted Exercise Price (cents) Expiry Date Risk Free Interest Rate Used Volatility Applied Value of Options 22 Jul 2020 187,000 120 21 Jul 2024 0.26% 79.3% $76,792 14 Dec 2020 625,000 98 29 Mar 21 530,000 100 10 Dec 2024 28 Mar 2025 1.00% 75.0% $198,271 0.69% 64.7% $141,034 Consolidated 2021 2020 Accum- ulated Losses $ Equity Remuner- ation Reserve (i) $ Accum- ulated Losses $ Equity Remuner- ation Reserve (i) $ NOTE 20 RESERVES AND ACCUMULATED LOSSES Balance at the beginning of the year (3,278,232) 909,328 (1,880,731) 694,642 Profit/(Loss) for the period (2,324,794) - (1,397,501) Transfer on exercise of options 29,320 (29,320) Movement in equity remuneration reserve in respect of options issued - 416,097 - - Balance at the end of the year (5,573,706) 1,296,105 (3,278,232) - 214,686 909,328 (i) The equity remuneration reserve is used to recognise the fair value of options issued and vested but not exercised. The share-based payment expense included in profit and loss for the 2021 financial year is stated after the reversal of $61,402 accrued for share settled STI bonus payments as at 30 June 2020 and issued during the 2021 financial year. NOTE 21 FINANCIAL INSTRUMENTS Credit Risk The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level of credit risk, and as such no disclosures are made. Impairment Losses The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting date. No impairment expense or reversal of impairment charge has occurred during the reporting period. A N N U A L R E P O R T 2 0 2 1 Page 57 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 21 FINANCIAL INSTRUMENTS (CONTINUED) Interest Rate Risk At the reporting date the interest profile of the Group’s interest-bearing financial instruments was: 2021 $ 2020 $ Variable rate instruments Cash and cash equivalents 16,049,091 2,868,148 Cash Flow Sensitivity Analysis for Variable Rate Instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. Profit or loss Equity 1% Increase 1% Decrease 1% Increase 1% Decrease 2021 Variable rate instruments 160,491 (160,491) 160,491 (160,491) 2020 Variable rate instruments 28,681 (28,681) 28,681 (28,681) Liquidity Risk The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Consolidated 2021 Trade and other payables Lease liabilities Insurance premium funding 2020 Trade and other payables Carrying Amount Contractual Cash Flows < 6 Months 6-12 Months 1-2 Years 2-5 Years > 5 Years $ $ $ 865,239 865,239 865,239 $ - $ - $ - 190,395 190,395 28,757 29,276 64,118 68,244 208,745 208,745 113,861 94,884 - - 1,264,379 1,264,379 1,007,857 124,160 64,118 68,244 726,987 726,987 726,987 726,987 726,987 726,987 - - - - - - $ - - - - - - A N N U A L R E P O R T 2 0 2 1 Page 58 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 21 FINANCIAL INSTRUMENTS (CONTINUED) Fair Values Fair values versus carrying amounts The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet are as follows: Consolidated Carrying Amount $ 2021 Fair Value $ Carrying Amount $ 2020 Fair Value $ Cash and cash equivalents 16,049,091 16,049,091 2,868,148 2,868,148 Trade and other payables (865,239) (865,239) (726,987) (726,987) 15,183,852 15,183,852 2,141,161 2,141,161 The Group’s policy for recognition of fair values is disclosed at Note 1(h). NOTE 22 DIVIDENDS No dividends were paid or proposed during the financial years ended 30 June 2021 or 30 June 2020. The Company has no franking credits available as at 30 June 2021 or 30 June 2020. NOTE 23 KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Directors and Key Management Personnel The following persons were considered Key Management Personnel of Black Cat during the financial year: (i) Chairman – Non-Executive Paul Chapman (ii) Executive Director Gareth Solly, Managing Director (iii) Non-Executive Directors Les Davis Philip Crutchfield (appointed 6 April 2021) Alex Hewlett (resigned 28 February 2021) Tony Polglase (iv) Senior Executives David Sanders, Chief Financial Officer (appointed 13 August 2020) There were no other persons employed by or contracted to the Company during the financial year, having responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly. A N N U A L R E P O R T 2 0 2 1 Page 59 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 23 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (b) Key Management Personnel Compensation A summary of total compensation paid to Key Management Personnel during the year is as follows: Total short-term employment benefits Total share-based payments Total post-employment benefits Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ 676,5891,2 141,1211,2 54,755 872,465 431,9221 49,370 35,897 517,189 1 In the tables above an amount of $50,000 was accrued in respect of short-term incentive bonus payable to the Managing Director as at 30 June 2020. This was satisfied by the payment of $25,000 in cash in July 2020 and $30,799 paid in the form of unlisted options in September 2020 following shareholder approval (based on the valuation of the options at the date of grant). An amount of $30,799 has been recognised in total share-based payments, and a corresponding reduction of $25,000 in short- term employment benefits for the year ended 30 June 2021. 2 Includes $75,000 for G Solly and $35,210 for D Sanders in relation to the short-term incentive bonus payable at 30 June 2021. (c) Other Transactions with Key Management Personnel During the year the Company paid Stone Poneys Nominees Pty Ltd, an entity associated with Paul Chapman, an amount of $6,233 in respect of the lease for the Group’s offices (2020: $26,949). During the period the Company employed the spouse of Paul Chapman in an administrative role. Remuneration for the period ended 30 June 2021 was $16,151 (inclusive of superannuation) (2020: $79,148). During the period the Company employed the spouse of Gareth Solly in an administrative role. Remuneration for the period ended 30 June 2021 was $60,361 (inclusive of superannuation) (2020: $nil). NOTE 24 REMUNERATION OF AUDITORS Audit and review of the Company’s financial statements Total Year Ended 30 June 2021 $ 24,250 24,250 Year Ended 30 June 2020 $ 21,200 21,200 A N N U A L R E P O R T 2 0 2 1 Page 60 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 25 CONTINGENCIES (a) Contingent Liabilities There were no material contingent liabilities not provided for as at 30 June 2021 and 30 June 2020 other than: Royalties The Group is subject to a 1% gross revenue royalty in respect of minerals produced from the following tenements: E25/499, E25/512, E27/532, P25/2287, P25/2288, P25/2293, P25/2377 and P25/2378, P25/2641 and E25/595. The Group is subject to a 1% net smelter royalty in respect of minerals produced from the following tenements: E25/594, P25/2685 and P25/2323. The Group is subject to a 1.5% gross royalty in respect of minerals produced from the following tenements: P25/2324, P25/2325, P25/2326, P25/2327, P25/2328, P25/2331, P25/2357, P25/2358, P25/4117, P25/4118, P25/4118, P25/4119 and P25/4122. In addition, there may be other historical agreements relating to certain other tenements of the Group, which may, or may not, create an obligation on the Group to pay royalties on some or all minerals derived from some tenements upon commencement of production. Native Title and Aboriginal Heritage Native title claims have been made with respect to certain areas which include tenements in which the Group has an interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Group or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Group has an interest. (b) Contingent Assets There were no material contingent assets as at 30 June 2021 or 30 June 2020. NOTE 26 COMMITMENTS (a) Exploration The Group has certain obligations to perform minimum exploration work on mineral leases held. These obligations may be varied as a result of renegotiations of the terms of the exploration licences or their relinquishment. The minimum exploration obligations are less than the normal level of exploration expected to be undertaken by the Group. As at balance date, total exploration expenditure commitment on tenements held by the Group which has not been provided for in the financial statements and which cover the following 12 month period amount to $1,608,220 (2020: $417,840). (b) Contractual Commitments There are no material contractual commitments as at 30 June 2021 or 30 June 2020 not otherwise disclosed in the Financial Statements. NOTE 27 RELATED PARTY TRANSACTIONS Transactions with Directors during the period are disclosed at Note 23 – Key Management Personnel. There are no other related party transactions, other than those already disclosed elsewhere in this financial report. NOTE 28 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has resulted in manageable delays to certain exploration and feasibility study programs, is has not materially financially impacted the Group up to 30 June 2021. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. A N N U A L R E P O R T 2 0 2 1 Page 61 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 28 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE (CONTINUED) Other than the above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. Consolidated Year Ended 30 June 2021 $ Year Ended 30 June 2020 $ NOTE 29 OPERATING ACTIVITIES RECONCILIATION OF LOSS AFTER TAX TO NET CASH INFLOW FROM Profit/(Loss) from ordinary activities after income tax Depreciation and amortisation Profit on disposal of fixed assets Exploration cost written off and expensed Realised foreign exchange losses Share based payments Movement in assets and liabilities: (Increase)/decrease in receivables (Increase)/decrease in accrued income Increase/(decrease) in payables Increase/(decrease) in employee leave liabilities Net cash outflow from operating activities (2,324,794) (1,397,501) 25,071 (9,485) 386,680 10,873 416,097 (31,569) - 120,626 16,313 - 227,951 - 214,686 (3,245) 3,017 126,151 107,458 (1,299,043) 57,983 (754,645) Non-Cash Investing and Financing Activities During the financial period the Company issued shares in part consideration for the acquisition of exploration assets as follows; 8,417,962 shares ($7,660,345) to acquire an interest in the Majestic, Fingals and Rowe’s Find properties. Refer note 14 for further details regarding acquisitions. A N N U A L R E P O R T 2 0 2 1 Page 62 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 30 EARNINGS PER SHARE (a) Basic Earnings Per Share Loss per share attributable to ordinary equity holders of the Company (b) Diluted Earnings Per Share Loss per share attributable to ordinary equity holders of the Company Consolidated Year Ended 30 June 2021 Year Ended 30 June 2020 Cents (2.1) Cents (1.7) (2.1) (1.7) Consolidated Year Ended 30 June 2021 Year Ended 30 June 2020 (c) Loss for year $ $ Loss used in calculation of basic and diluted loss per share (2,324,794) (1,397,501) (d) Weighted Average Number of Shares Used as the Denominator Weighted average number of shares used as the denominator in calculating basic earnings per share Weighted average number of shares used as the denominator in calculating diluted earnings per share No. No. 113,313,442 81,025,427 113,313,442 81,025,427 A N N U A L R E P O R T 2 0 2 1 Page 63 of 73 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 31 PARENT ENTITY INFORMATION Financial Position Assets Current assets Non-current assets Total Assets Liabilities Current liabilities Non-current liabilities Total Liabilities NET ASSETS Equity Issued Capital Share based payments reserve Accumulated losses TOTAL EQUITY Profit/(Loss) for the year Other comprehensive income Total comprehensive income 30 June 2021 $ 30 June 2020 $ 15,935,880 31,778,588 47,714,468 2,728,480 9,656,443 12,384,923 598,728 132,362 731,090 358,640 - 358,640 46,983,378 12,026,283 50,435,467 1,296,105 (4,748,194) 46,983,378 (2,324,794) - 14,395,187 909,328 (3,278,232) 12,026,283 (1,397,501) - (2,324,794) (1,397,501) Guarantees Entered into by the Parent Entity in Relation to the Debts of its Subsidiaries No guarantees have been entered into by the parent entity in relation to the debts of its subsidiary company. Contingencies For full details of contingencies see Note 25. Commitments For full details of commitments see Note 26. A N N U A L R E P O R T 2 0 2 1 Page 64 of 73 DIRECTOR’S DECLARATION In the opinion of the Directors of Black Cat Syndicate Limited (“the Company”). (a) the financial statements and notes set out on pages 18 to 47 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and giving a true and fair view of the financial position as at 30 June 2021 and of the performance for the period ended on that date of the Group. (b) (c) (d) the remuneration disclosures that are contained in the Remuneration Report in the Directors Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. the financial statements comply with International Financial Reporting Standards as set out in Note 1. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial period ended 30 June 2021. This declaration is made in accordance with a resolution of the Directors. Signed at Perth this 29th day of September 2021. Gareth Solly Managing Director A N N U A L R E P O R T 2 0 2 1 Page 65 of 73 INDEPENDENT AUDITOR’S REPORT A N N U A L R E P O R T 2 0 2 1 Page 66 of 73 INDEPENDENT AUDITOR’S REPORT (CONTINUED) A N N U A L R E P O R T 2 0 2 1 Page 67 of 73 INDEPENDENT AUDITOR’S REPORT (CONTINUED) A N N U A L R E P O R T 2 0 2 1 Page 68 of 73 INDEPENDENT AUDITOR’S REPORT (CONTINUED) A N N U A L R E P O R T 2 0 2 1 Page 69 of 73 INDEPENDENT AUDITOR’S REPORT (CONTINUED) A N N U A L R E P O R T 2 0 2 1 Page 70 of 73 ASX ADDITIONAL INFORMATION Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was applicable as at 1 October 2021. A. DISTRIBUTION OF EQUITY SECURITIES Analysis of numbers of shareholders by size of holding: Ordinary Fully Paid Shares Distribution Number of shareholders Securities held 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 More than 100,000 225 620 337 646 198 Totals 2,026 139,859 1,699,752 2,714,506 22,679,526 113,574,168 140,807,811 % 0.10% 1.21% 1.93% 16.10% 80.66% 100% There are 178 shareholders holding less than a marketable parcel of ordinary shares. B. SUBSTANTIAL SHAREHOLDERS An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below: Holder of Relevant Interest Silver Lake Resources Limited Franklin Resources Inc and its Associates Paul Chapman and related parties Issued Ordinary Shares Number of shares % of shares 9,482,272 9,402,985 8,435,142 6.73% 6.68% 5.99% A N N U A L R E P O R T 2 0 2 1 Page 71 of 73 ASX ADDITIONAL INFORMATION (CONTINUED) C. TWENTY LARGEST SHAREHOLDERS The names of the twenty largest holders of quoted shares are listed below: Ordinary Shares - Quoted Shareholder Name HSBC Custody Nominees (Australia) Limited Silver Lake Resources Limited Paul Chapman and related parties LB & AF Davis Super Fund Philip Crutchfield and related parties Elefantino Pty Ltd Briken Nominees Pty Ltd R W Associates Pty Ltd Sauron Capital Pty Ltd JP Morgan Nominees Australia Pty Ltd Swanland Investment Limited Bond Street Custodians Limited BNP Paribas Nominees Pty Ltd Ten Goals Pty Ltd Nameo Pty Ltd AEE Gold AG Gareth and Fiona Solly CS Third Nominees Pty Ltd Ivanhoe Investments Pty Ltd Hampshire Assets and Services Pty Ltd Number of shares 10,084,675 9,482,272 8,435,142 5,670,977 5,035,733 2,650,000 2,626,430 2,500,000 2,400,800 2,379,185 2,163,600 1,939,701 1,828,610 1,681,130 1,600,000 1,492,537 1,427,222 1,307,478 1,290,000 1,125,000 % of Shares 7.16% 6.73% 5.99% 4.03% 3.58% 1.88% 1.87% 1.78% 1.71% 1.69% 1.54% 1.38% 1.30% 1.19% 1.14% 1.06% 1.01% 0.93% 0.92% 0.80% Total 67,120,492 47.67% D. UNQUOTED SECURITIES Options over Unissued Shares Number of Options Exercise Price Expiry Date Number of Holders 9,541,147 1,450,000 700,000 250,000 187,000 625,000 530,000 13,283,147 $0.20 $0.40 $0.60 $0.62 $1.20 $0.98 $1.00 17 Jan 2023 25 Jun 2023 2 Aug 2023 18 May 2024 21 July 2024 10 Dec 2024 28 Mar 2025 24 5 2 1 4 6 3 A N N U A L R E P O R T 2 0 2 1 Page 72 of 73 ASX ADDITIONAL INFORMATION (CONTINUED) E. VOTING RIGHTS In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. There are no voting rights in respect of options over unissued shares. F. RESTRICTED SECURITIES There are no securities on issue which are subject to restrictions on trading. A N N U A L R E P O R T 2 0 2 1 Page 73 of 73