Bechtle
Annual Report 2022

Plain-text annual report

Black Cat Syndicate Limited ABN 63 620 896 282 ANNUAL REPORT For the year ended 30 June 2022 TABLE OF CONTENTS Corporate Directory Chairman’s Letter Review of Operations Directors’ Report Auditor’s Independence Declaration PAGE 3 4 6-24 27-42 43 Consolidated Statement of Profit or Loss and Other Comprehensive Income 44 Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Audit Report ASX Additional Information Tenement Information 45 46 47 48-79 80 81-85 86-88 89-93 A N N U A L R E P O R T 2 0 2 2 Page 2 of 93 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 Securities 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.bc8.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 2 Page 3 of 93 CHAIRMAN’S LETTER Dear Fellow Shareholder, We are pleased to present the 2022 Annual Report for Black Cat Syndicate Limited (“Black Cat” or “the Company”). The past year has been significant for Black Cat: • At Kal East we grew Resources by 9% to 1,294koz @ 2.1g/t Au. • We committed to prepare Kal East for development and did so. This culminated in a Pre-Feasibility Study and initial Ore Reserve. Despite the favorable outcomes of the Pre-Feasibility Study, a decision was made to defer the planned development and build of Kal East. This decision was not taken lightly, however the constraints on labour supply, engineering and construction materials around Kalgoorlie caused the Company to wait for improved conditions. That said, we are continuing to progress a number of discussions regarding the Myhree/Boundary open pits. • We also acquired two high-grade gold operations being Coyote and Paulsens. Both operations have camps and processing facilities and are on care and maintenance. In addition, the potential to substantially increase Resources is considered high while the capital required to bring the existing infrastructure back into operation is relatively low. • We have identified significant, multi-metal, potential regionally at both operations with previous owners primarily focused on near mine gold. • We have gathered and integrated all the geological data for both operations. This is a time consuming, low cost and high value-add exercise. As a consequence of applying new eyes, we have identified numerous, high quality opportunities - both near mine and regionally. This has borne fruit as demonstrated by drilling at Coyote where our revised interpretation has seen gold in every drill hole. Similar success at Paulsens would have significant ramifications given the close proximity to underground infrastructure. Gold in US dollar terms and consequently gold equities came under pressure in 2022. A mix of rising interest rates, strong US dollar and no shortage of geo-political issues all played their part in this. However, Australian dollar gold is strong and we remain convinced that owning high-grade gold operations with significant growth potential will win out. • So, we have the key pillars in place for building a new multi-operation gold miner with projects strategically located across WA which include high-grade open pit and underground Resources of 2Moz. As we move to 2023, other opportunities and challenges will present themselves. We will continue to build our already strong Resource base: • At Paulsens, adding near mine ounces at Apollo and/or the Gabbro Veins with a relatively low capital start up cost could see us rapidly progress into production. Our Lower Gabbro target could literally be “another Paulsens” in its own right. • At Coyote, our new geological model and drilling success has us increasingly convinced that Coyote has both grade and scale potential. • Regional targets around Coyote and Paulsens will begin to be tested and offer significant upside given the already identified potential but with lack of follow through. • Toll treating at Myhree/Boundary remains in progress and we will continue to monitor the development/building environment around Kalgoorlie. 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 2 Page 4 of 93 REVIEW OF OPERATIONS A N N U A L R E P O R T 2 0 2 2 Page 5 of 93 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 towards the goal of becoming a multi-operation gold miner with three WA-based projects. During the 2022 Financial year, Black Cat: • Successfully completed the acquisition of Coyote and Paulsens Gold Operations from Northern Star Resources (“Northern Star”). This transformational acquisition: - Includes two strategically located, regionally significant processing plants, associated mining infrastructure and camps. - Contains existing Resources of 706,000oz @ 3.4g/t Au with significant exploration upside. - Provides a clear pathway to sequentially restart operations in a low cost and low risk manner. • Completed 71,382m of drilling largely focused on Resource upgrades and Reserve definition: - Drilling focused primarily on the Kal East Gold Project with drilling commencing at the Coyote Gold Operation just after acquisition in June 2022 - Restart study work commenced at Paulsens in preparation for underground drilling to commence in October 2022 • Increased JORC 2012 Mineral Resources (“Resource” or “Resources” as applicable) by 168% to 24.5Mt @ 2.5 g/t Au for 2,000,000oz1 through both extensional drilling at Kal East and acquisitions of the Coyote and Paulsens operations. • Took further steps towards production at the Kal East Gold Project (“Kal East”) with the completion of a Pre-Feasibility Study providing a robust base case 5.5-year mine plan, producing 302koz and including the approved construction of an 800ktpa processing facility. • Continued to expand organisational capability through a number of senior management appointments. • Successfully raised $35M by way of a placement to institutional and sophisticated investors. The placement was strongly supported by existing shareholders and new. Directors continued to participate with the total amount invested by directors at ~$7.5M. • Maintained a strong balance sheet with cash of $18.2M at 30 June 2022 At 30 June 2022, key metrics of the Company included: • 2.0Moz at 2.50g/t Au (total Resources) • 1,770km2 total landholding in prime gold regions of WA • ~$140M estimated infrastructure replacement cost • 750ktpa of installed milling capacity across Coyote and Paulsens • Planned 800ktpa milling capacity at Kal East (potentially expandable with spare 700ktpa mill) 2 • 243koz initial Ore Reserves at Kal East • Potential operating cashflow of $105.9M from Kal East base case production plan (refer PFS) • $7.5M invested by Directors to date, who together own ~12% 3 Figure 1: Location map of Black Cat’s projects in regionally strategic locations across WA. 1 See ASX announcement 25 May 2022 A N N U A L R E P O R T 2 0 2 2 Page 6 of 93  REVIEW OF OPERATIONS (CONTINUED) OUR STRATEGY The Board of Directors of Black Cat are committed to executing the Company’s strategy in a safe and responsible manner. Black Cat’s three 100% owned operations are: Coyote Gold Operation: Coyote is located in Northern Australia, ~20km on the WA side of the WA/NT border. Coyote consists of an open pit and an underground mine, 300,000tpa processing facility, +180-person camp and other related infrastructure. The operation is currently on care and maintenance. The project has a current Resource of 3.0Mt @ 5.1g/t Au for 488koz and has numerous near mine targets with strong potential for Resource growth. The greater project contains significant discovery opportunity with geochemical, structural and geophysical targets across the 440km2 tenement package. Paulsens Gold Operation: Paulsens is located 180km west of Paraburdoo in WA. Paulsens consists of an underground mine, 450,000tpa processing facility, +110-person camp and other related infrastructure. The operation is currently on care and maintenance. The project contains a combined Resource of 2.7Mt @ 2.5g/t Au for 217koz with high priority targets near mine that have strong potential for significant Resource growth. The 530km2 tenement package is under-explored with numerous surface anomalies ready for drill testing. Kal East Gold Project: Kal East is located <50km east of the world class mining centre of Kalgoorlie, WA. The Company has approved plans to construct a central processing facility near the Majestic Mining Centre, ~50km east of Kalgoorlie. The 800,000tpa processing facility will be a traditional carbon-in-leach gold plant which is ideally suited to free milling ores located around Kalgoorlie. Kal East contains a Resource of 18.8Mt @ 2.1g/t Au for 1,294koz, including a preliminary JORC 2012 Reserve of 3.7Mt @ 2.0g/t Au for 243koz. The 800km2 tenement package contains numerous untested and undertested prospects with significant discovery potential. Key pillars are in place to build a multi-operation gold business and the Board has set Key Performance Indicators (“KPI’s for potential operations) in respect of performance rights issued to its senior leadership team, as follows: • Coyote Gold Operation Annual sustained production rate of 40,000 to 50,000oz of gold • Paulsens Gold Operation Annual sustained production rate of 60,000 to 70,000oz of gold • Kal East Gold Project Annual sustained production rate of 50,000 to 60,000oz of gold Additional to the future production targets, the Company is also planning to: • Undertake substantial drilling targeting Resource growth to >3Moz over the next 5 years • Leverage the dominant underexplored ground position to target additional discoveries Commensurate with building an organisation to operate three WA projects, several senior positions commenced during the year, including: • Michael Bourke joined as General Manager Projects in May 2022. Michael has held a number of operational, commercial, remote area and planning roles during his extensive career of more than 25 years in the resources industry. He has significant experience working for public companies and their stakeholders. • Matt Anderson joined as Project Manager in April 2022. Matt has extensive experience in project management and has held senior management positions over the past 25 years spanning form Corporate to Site based, encompassing feasibility studies, engineering, design, procurement construction and commissioning of mineral processing plants and mine infrastructure. • Erryn Hewitt joined as Health Safety and Environment (HSE) Manager in July 2022. Erryn has over 20 years’ experience working as a safety professional in the mining industry, working predominantly in leading the implementation of occupational health and environment requirements across a range of departments and sectors. A N N U A L R E P O R T 2 0 2 2 Page 7 of 93  REVIEW OF OPERATIONS (CONTINUED) DRILLING ACTIVITIES Black Cat was extremely active with 71,382m of drilling completed during the year ended 30 June 2022. A large proportion of this drilling was undertaken to upgrade Resources for definition of initial Reserves at Kal East, which total 242,900 ounces, and were released in May 2022. The company also added 109,000 ounces to the Resource base at Kal East in the 9 months since the previous Annual Resource calculation. The recent acquisitions of the Coyote and Paulsens operations will see additional drilling areas targeting Resource growth and discovery. The first drilling at Coyote for almost a decade commenced during the last week of June 2022. Summary of Drilling July 2021 to June 2022 Target Objective # RC Holes Total RC (m) # DD Holes Total DD (m) Majestic Mining Centre Resource Definition & Discovery 327 27,633 26 2,875 Fingals Mining Centre Resource Definition, Geotechnical & Discovery 190 24,821 Myhree Mining Centre Grade Control & Sterilisation Trojan Area Discovery Coyote Total Resource Definition & Discovery Mineral Resources at 30 June 2022 254 10,503 39 3 3,924 531 5 0 4 0 420 0 675 0 813 67,412 35 3,970 Resources by Project Tonnes (‘000) Grade (g/t Au) Contained (‘000) Oz Kal East Coyote Paulsens TOTAL 18,836 2,968 2,651 24,456 2.1 5.1 2.5 2.5 1,294 488 217 2,000 A N N U A L R E P O R T 2 0 2 2 Page 8 of 93  REVIEW OF OPERATIONS (CONTINUED) A N N U A L R E P O R T 2 0 2 2 Page 9 of 93  REVIEW OF OPERATIONS (CONTINUED) KAL EAST GOLD PROJECT Kal East Gold Project activities includes: • Resource upgrade drilling was undertaken at Majestic, Fingals and Jones Find during the year to extend and upgrade Resources and define initial Reserves. Results from this drilling included 2: - - - - - - - - - - - - - - 8m @ 5.81g/t Au from 68m (21IMDD002) 2m @ 25.87g/t Au from 64m (21FIRC119) 2m @ 6.53g/t Au from 81m and 2m @ 16.75 g/t Au from 118m (21FIRC131) 3m @ 19.36g/t Au from 120m 3m @ 8.57 g/t Au from 148m (21FIRC142) 0.41m @ 108.00g/t Au from 401.15m (21IMDD006) 0.98m @ 33.70g/t Au from 374.6m & 0.82m @ 83.50 g/t Au from 391.8m (21IMDD015) 1.08m @ 28.17g/t Au from 360.51m (21IMDD025) 13m @ 37.43g/t Au from 151m (incl. 5m @ 91.58 g/t Au from 152m) (21FIRC157) 8m @ 4.74g/t Au from 152m (21FIRC158) 3m @ 9.96g/t Au from 109m and 4m @ 3.28 g/t Au from 114m (21FIRC145) 7m @ 11.65g/t Au from 43m (21JFRC015) 2m @ 18.62g/t Au from 45m (21FRRC078) 2m @ 26.81g/t Au from 69m (21FRRC086) 4m @ 8.43g/t Au from 10m (21JLRC004) • Completion of final grade control drilling at the Myhree open pit in preparation for potential mining and toll treatment3 was also completed. Drilling results included: - - - - - - 4m @ 17.47g/t Au from 46m (22MYGC064) 4m @ 11.62g/t Au from 30m (22MYGC056) 3m @ 10.73g/t Au from 22m (22MYGC107) 6m @ 5.87g/t Au from 38m (22MYGC078) 2m @ 10.11g/t Au from 52m (22MYGC064) 7m @ 4.69g/t Au from 18m (22MYGC057) • Open pit Ore Reserves of 0.7Mt @ 2.2g/t Au for 51,000oz have been defined at Myhree/Boundary. • The Myhree open pit is fully approved and mining can commence once a processing solution is secured. Discussions with interested parties are ongoing. • Completion of the Pre-Feasibility Study for Kal East Gold Project (“Kal East”) containing a robust base case 5.5-year mine plan producing 302koz and includes the approved construction of an 800ktpa processing facility. The base case plan has the potential to generate $106M in cashflow over the initial mine life with substantial future growth opportunities.4 - Total production of 301.7koz @ 1.9g/t Au including initial Ore Reserves of 242.9koz @ 2.0g/t Au (A$2,300/oz gold price). - 84% of initial production plan based on high confidence Ore Reserves (80%) and Indicated Resources (4%). - Resources of only 8.2Mt @ 2.3g/t Au for 599koz included in the Study with a production plan conversion ratio of 50%, with potential to increase with ongoing drill programs. 2 ASX announcement 14 July, 16 & 28 September, 5 & 21 October, 16 November & 13 December 2021 & 18 January & 1 February 2022. 3 ASX announcement 10 June & 15 August 2022 4 ASX announcement 3 June 2022 A N N U A L R E P O R T 2 0 2 2 Page 10 of 93  REVIEW OF OPERATIONS (CONTINUED) - Forecast average production of 56kozpa at 0.8Mtpa processing rate over an initial period of 5.5 years. - Maximum cash drawdown including pre-production capital is A$82.7M (including contingency). - Forecast All-in Sustaining Cost of A$1,510/oz. - Operating cashflow (after all capital and before tax) of A$105.9M (A$2,500/oz gold price). • There is ample opportunity to build on the base case production plan in future studies prior to development: - Resources not included in the PFS (10.6Mt @ 2.0g/t Au for 694koz) and to be included in future studies will potentially increase Ore Reserves and mine life beyond 5.5 years. - The Study has focused primarily on open pits with limited consideration of their future underground potential. - Ongoing infill and extensional drilling programs targeting Ore Reserve and Resource growth and upgrades. For example, the large Fingals Fortune deposit remains open in all directions and at depth. - Future expansion of the processing facility from 0.8Mtpa to 1.5Mtpa by installing Black Cat’s already owned 0.7Mtpa expansion mill. • The Kal East Project is fully approved, and in the “Go Bay” with the final investment decision deferred until construction conditions improve. • Work will continue at Kal East to progress additional approvals over future open pit mines and drilling to support Resource upgrades and Ore Reserve increases. Figure 2: RC rig drilling Resource extensional holes at the Fingals Mining Centre (January 2022) Subsequent to the end of the Financial Year • Diamond drilling commenced at the Balagundi Cu-Zn-Pb-Au project, situated 5km west of the Myhree Mining Centre. Results are expected from this drilling in the December 2022 quarter. A N N U A L R E P O R T 2 0 2 2 Page 11 of 93  REVIEW OF OPERATIONS (CONTINUED) A N N U A L R E P O R T 2 0 2 2 Page 12 of 93  REVIEW OF OPERATIONS (CONTINUED) COYOYE GOLD OPERATION Coyote Gold Operation was acquired on 15 June 2022. Exploration activities targeting Resource growth and discovery began immediately and included: • Conversion of outstanding JORC 2004 Mineral Resources to JORC 2012 Mineral Resources5. Total JORC 2012 Resources now total 3Mt @ 5.1g/t Au for 488,000 ounces. • Commencement of both RC and diamond drilling to upgrade and extend existing Resources. • RC drilling commenced immediately on shallow mineralisation within the Axial Core Zone of the Coyote Anticline. Subsequent to the end of the financial year, initial drilling results included4: - - - - - - 3m @ 29.43g/t Au from 82m (22CYRC0002) 6m @ 8.33g/t Au from 152m (22CYRC0008) 2m @ 4.41g/t Au from 177m (22CYRC0004) 1m @ 11.40g/t Au from 100m (22CYRC0005) 4m @ 17.65 g/t Au from 161m (22CYRC007) 1m @ 13.30 g/t Au from 162m (22CYRC0006) • RC drilling will continue on shallow mineralisation at Coyote Central, near mine Resource growth at Bald Hill (198,000oz @ 3.6g/t Au) and then on to additional regional targets. Figure 3: RC Rig drilling at Coyote Central targeting shallow Resources around the potential Speedy open pit. • Subsequent to the end of the financial year, diamond drilling commenced on the deeper parts of the Axial Core Zone including around the Kavanagh lodes (77koz @ 13.5g/t Au). Assay results from the first infill diamond holes included6: - - - 2.48m @ 10.35g/t Au from 426.38m (22CYDD0001), and 0.80m @ 17.10g/t Au from 434.40m (22CYDD0001) 1.00m @ 114g/t Au from 388.00m (22CYDD0004) 5 ASX announcement 19 October 2022 6 ASX announcement 10 October 2022 A N N U A L R E P O R T 2 0 2 2 Page 13 of 93  REVIEW OF OPERATIONS (CONTINUED) - 1.68m @ 22.30g/t Au from 438.32m (22CYDD003a) • Infill and extensional diamond drilling is ongoing at Coyote Central, principally targeting the unmined Axial Core Zone of the system in both shallow and deeper areas. Results will be reported regularly as they become available. Figure 4: Diamond drilling the Kavanagh deposit at the Coyote Gold Operation • Drilling is expected to pause during November for the expected start of the wet season before recommencing around March 2023. • Other field activities have also commenced, including stockpile reviews and engineering assessments of processing plant and equipment. A N N U A L R E P O R T 2 0 2 2 Page 14 of 93  REVIEW OF OPERATIONS (CONTINUED) A N N U A L R E P O R T 2 0 2 2 Page 15 of 93  REVIEW OF OPERATIONS (CONTINUED) PAULSENS GOLD OPERATION • The Paulsens Gold Operation was acquired on 15 June 2022. Black Cat is undertaking an extensive geological review as part of its objective to find another +1Moz Paulsens-style deposit. This review includes new interpretations of Paulsens mineralisation and incorporation of all drilling intercepts into revised Resource models. Structural and 3D seismic reviews are underway to improve drill targeting. • Subsequent to the end of the Financial Year Black Cat released results from previously unreported diamond core assays drilled by previous operators in 2020. These include significant, near mine, high- grade results from outside of the current reported Resource highlight strong potential to extend the current underground Resource (89,000oz @ 5.8g/t Au)7: - - - - - - 1.42m @ 102.37g/t Au from 19.34m (PDU4518) 6.19m @ 15.86g/t Au from 23.72m (PDU4550) 0.94m @ 58.10g/t Au from 19.50m (PDU4544) 1.33m @ 26.07g/t Au from 22.02m (PDU4542) 1.26m @ 25.36g/t Au from 14.60m (PDU4491) 0.88m @ 36.77g/t Au from 7.62m (PDU4501) • Furthermore, thick, high-grade infill results emphasise the robust nature of the current Resource: - - - - - - 5.72m @ 35.32g/t Au from 36.78m (PDU4536) 5.99m @ 25.23g/t Au from 16.88m (PDU4537) 3.00m @ 42.68g/t Au from 1.00m (PDU4518) 4.20m @ 25.61g/t Au from 4.00m (PDU4539) 8.05m @ 11.09g/t Au from 59.96m (PDU4555) 2.00m @ 30.30g/t Au from 13.00m (PDU4524) • Paulsens is a dewatered, ventilated and well maintained high-grade underground mine which produced more than 900koz @ 7.3g/t Au until being placed on care and maintenance in 2017. • A program of ~7,000m of underground diamond drilling will commence in late October 2022, testing several opportunities to find “another Paulsens”, including: - An interpreted ‘Paulsens Repeat’ structural target located ~200m below and parallel to the mine workings as identified in a $2m, 3D seismic survey. Paulsens itself has a strike length of at least 2,200m and the analogous Paulsens Repeat target extends for ~1,250m. - Down plunge extensions of the near surface ‘Apollo lodes’, containing several high-grade intersections outside of current Resources, including: - Testing of the continuity and extent of the ‘Gabbro Veins’ which are located adjacent to the existing workings, with a potential strike extent of ~1,000m and contain high-grade intersections, including: • Additional to the near mine drilling, a detailed review of regional exploration data commenced in June 2022, following on from initial reviews. Several priority regional targets have been identified and initial exploration activities are being conducted in anticipation of a systematic exploration program the 2023 financial year. • Engineering study work will also be undertaken during the coming year to establish detailed restart requirements. 7 ASX announcement 8 July 2022 A N N U A L R E P O R T 2 0 2 2 Page 16 of 93  REVIEW OF OPERATIONS (CONTINUED) OUR APPROACH TO RESPONSIBLE OPERATING, NOW AND FOR THE FUTURE At Black Cat our goal is to do right by our people, our stakeholders, and the wider community, and leave a positive legacy for future generations. This means that we create value not just through our activities, but through the responsible management of our Environment, Social, and Governance (ESG) practices that are integrated into our operating framework. Black Cat is developing its Environmental and Social Management System (ESMS) as an integrated Health, Safety, Environment and Stakeholder Management System (“HSESMS”) framework to support delivery of our vision to be a multi-operation gold mining company creating value and opportunities for our stakeholders through creative thinking and responsible practises. ENIVRONMENTAL AND CULTURAL HERITAGE RESPONSIBILITY We recognise the impact that mining and exploration activities have on the natural environment, so we are committed to environmental stewardship, and aim to minimise our footprint on the land around us. This includes being aware of areas of cultural and heritage importance and treating them with sensitivity and respect. Eight heritage surveys were undertaken during the financial year. We have recently completed all environmental studies and approvals for a fully permitted mining operation located at the Kal East Gold Project. Technical studies are currently underway to support the development of the Paulsens and Coyote Gold Operations and the required approvals for recommencing operations at both sites. Rehabilitation of drilling sites was a focus this year, particularly in regional areas. In-depth discussions and the Department of coordination were completed with Biodiversity, Conservation and Attractions around the best way to rehabilitate drilling and legacy issue inherited within the Coonana Timber Reserve at the Rowes Find prospect. No environmental incidents were reported during FY2022. SOCIAL RESPONSIBILITY We advocate for the safety, health and social wellbeing of our people and the communities in which we operate, ensuring meaningful engagement with all stakeholders is undertaken. Safety and Health In FY2022 we achieved no LTI’s or MTI’s and effective management of COVID-19 through a Management Plan resulted in no disruption of activities. Black Cat increased its health, safety and environment capability through the appointment of a Health, Safety and Environment Manager. Additionally, we completed development and deployment of our Health and Safety Management System, Crisis and Emergency Management Plans which in early FY2022 will be supported through the implementation of a cloud based and mobile application system that will be used for health and safety, environment and stakeholder engagement, onboarding, rosters and compliance management. Social Wellbeing Progressing our commitment to build capability and diversity in the organisation as at end of FY2022 women represented 24% of the full-time positions. Our growing team is culturally diverse with a variety of backgrounds including England, New Zealand, China, Japan, Germany and Indigenous Australia providing a variety of perspectives promoting creativity and innovation. Black Cat is committed to creating a positive and inclusive workforce culture where personnel uphold our values and Code of Conduct, promoting fairness, equity, and respect for all aspects of diversity and an A N N U A L R E P O R T 2 0 2 2 Page 17 of 93  REVIEW OF OPERATIONS (CONTINUED) elimination of unfair treatment and inappropriate behaviour. To support our commitment activities undertaken in this reporting period included: • Involvement of our people in creating a Vision and Values framework that will help Black Cat shape the foundation of our organisational culture. • Supporting flexible working arrangements understanding how important flexibility and work-life balance is to our people. • Commencing appropriate workplace behaviour training with plans to continue in FY2022, including the revised Code of Conduct. • Development of key HR processes and procedures for recruitment, remuneration and employee relations. Stakeholder Engagement In recognising the importance of stakeholder engagement, an Environment and Heritage Specialist was appointed increasing our capability to demonstrate effective Stakeholder Engagement, as an ongoing process in a structured and culturally appropriate manner. We acknowledge the Traditional Custodians of the lands in which we operate, the Marlinyu Ghoorlie, Maduwongga, Kakarra Part A, PKKP, Tjurabalan and Jururru Peoples. Throughout FY2022 Black Cat consulted with Marlinyu Ghoorlie, Maduwongga and Kakarra Part A regarding exploration activities at Kal East Gold Project. With the recent acquisitions of Paulsens and Coyote Gold Operations, communication was initiated, and plans made for meetings in FY2023 with PKKP and Juurru (Paulsens) and Tjurabalan (Coyote) where new cooperation agreements for Paulsens and a review cooperation agreement for Coyote will be a focus. Welcoming ceremonies are planned for both sites in FY2023. In addition, extensive consultation throughout the year was held with other key stakeholders including various government departments (DMIRS, DWER, DPAW), local shires and pastoralists. GOVERNANCE RESPONSIBILITY We have put robust corporate governance measures in place which underpin strict operating practices across all our business functions. Our aim is to build an open, honest and transparent business, and lead by example. In addition to the already existing policies of Risk Management, Diversity and Whistle-blower, we developed the following policies: Safety, Health and Wellbeing Policy, Environment Policy, People Policy, Stakeholder Engagement Policy and Supply Chain Management Policy. The Code of Conduct was revised and underpins the policies driving company expectations of people associated with Black Cat to make and do the right decisions, actions and behaviours. The new policies and revised code of conduct are in line with the principles and objectives of the IFC Performance Standards and are outlined in our operating framework. A N N U A L R E P O R T 2 0 2 2 Page 18 of 93  REVIEW OF OPERATIONS (CONTINUED) Our operating framework sets out the way we do business and promotes high standards of corporate governance, encompassing all aspects of our business from health and safety, environment, people and stakeholder management including our investors and business partners. Continuing to integrate the operating framework into all the levels on how we operate is a key objective for FY2023. A N N U A L R E P O R T 2 0 2 2 Page 19 of 93  REVIEW OF OPERATIONS (CONTINUED) MINERAL RESOURCES & ORE RESERVES STATEMENT (BC8: 100%) Black Cat Syndicate’s total Measured, Indicated, and Inferred Resources at 30 June 2022 are 24.5M tonnes @ 2.5g/t Au containing 2,000,000 oz (refer below). Resources have been routinely reported throughout the year and represent a 67% growth in total Resources compared to Resources reported on 30 June 2021 of 17.5Mt @ 2.1 g/t Au containing 1,185,000 oz. Black Cat Syndicate’s total Probable Ore Reserves as at 30 June 2022 are 3.7M tonnes @ 2.0g/t Au containing 243,000 oz. This represents the maiden Reserves for Black Cat Syndicate that were announced during the year. Deposit Measured Resources Indicated Resources Inferred Resources Total Resources Table 1: Total Resources as at 30 June 2021 and 30 June 2022 30 June 2021 30 June 2022 Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) 13 7,278 10,155 17,450 3.2 2.2 2.0 2.1 1 522 661 365 11,133 12,957 1,185 24,456 5.6 2.5 2.5 2.5 66 881 1,055 2,000 Key changes announced to Resources during the year are outlined below: • Acquisition of the Coyote Gold Mine with 3.0Mt @ 5.1g/t Au containing 488koz Au and associated mine infrastructure8 • Acquisition of the Paulsens Gold Mine with 2.7Mt @ 2.5g/t Au containing 217koz Au and associated mine infrastructure8 • 24% increase in ounces at Fingals Mining Centre from 222koz to 275koz, including a 45% increase in Indicated Resources from 106koz to 194koz9 • 12% increase in ounces at Majestic Mining Centre from 472koz to 528koz, including a 35% increase in Indicated Resources from 204koz to 290koz10 Table 2: Total Reserves as at 30 June 2021 and 30 June 2022 Deposit Proven Reserves Probable Reserves Total Resources 30 June 2021 30 June 2022 Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Grade (g/t Au) Metal (‘000s oz) - - - - - - - - - - 3,725 3,725 - 2.0 2.0 - 243 243 Key changes announced to Reserves during the year are outlined below: • Announcement of the maiden Ore Reserves for Kal East Gold Project11 Aside from the changes detailed above, there were no other material changes to Resources or Reserves for the period from 30 June 2021 to 30 June 2022. 8 ASX announcements 19 April 2022 and 25 May 2022 9 ASX announcement 23 November 2021 10 ASX announcements 2 September 2021, 25 January 2022, and 4 March 2022 11 ASX announcement 3 June 2022 A N N U A L R E P O R T 2 0 2 2 Page 20 of 93  REVIEW OF OPERATIONS (CONTINUED) The in-situ, drill-defined and developed Resources as at 30 June 2022 are listed below: Table 3: Mineral Resources as at 30 June 2022 Measured Resource Indicated Resource Inferred Resource Total Resource Mining Centre 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) Kal East Boundary Trump Myhree Strathfield Majestic Sovereign Imperial Jones Find Crown Fingals Fortune Fingals East Trojan Queen Margaret Melbourne United Anomaly 38 Wombola Dam Hammer and Tap Rowe’s Find - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13 3.2 - - - - Total Resource Kal East 13 3.2 Coyote Coyote Sandpiper Kookaburra Pebbles Stockpiles Total Resource Coyote Paulsens Coyote Sandpiper Kookaburra Pebbles Stockpiles Total Resource Paulsens - - - - - - 341 11 - - - - - - - - - 5.8 1.6 - - - - - - - - - - - - - - - - - - 1 - - 1 - - - - - - 64 1 - - - 309 61 824 - 2.0 2.4 3.5 - 20 5 92 - 2,167 2.8 196 - - 1,237 1.7 532 - 2,539 381 1,356 36 - - - - - - - 2.1 1.9 1.8 2.2 - - - - - - 68 26 - 171 23 79 3 - - - - - 318 617 567 184 427 1,426 476 766 1,382 837 209 760 226 96 308 297 350 148 9,441 2.2 682 9,396 1.9 2.2 3.7 1.8 4.2 1.4 1.7 1.2 1.4 2.7 1.2 1.5 1.9 2.9 1.9 2.8 2.4 3.5 2.0 20 44 68 11 58 65 25 29 62 73 8 36 15 9 19 27 27 17 627 678 1,391 184 2,594 1,426 1,713 1,299 1,382 3,376 590 2,115 262 96 308 297 350 148 612 18,836 2.0 2.3 3.6 1.8 3.0 1.4 1.7 1.3 1.4 2.3 1.6 1.7 2.0 2.9 1.9 2.8 2.4 3.5 2.1 243 253 341 - 375 1,212 88 - 10.0 3.3 2.5 - 1.4 3.8 5.6 - 129 3.1 - - - - 797 10.4 79 27 27 - 17 553 773 353 76 - 10.6 4.9 2.1 2.5 - 189 121 24 6 - 1,026 694 76 375 150 1,755 6.0 340 2,968 16 - 13 - - 43 - 111 523 862 6.6 - 4.8 1.4 1.8 9 - 17 24 51 473 11 240 523 862 4.5 2.3 2.5 1.4 5.1 5.8 1.6 3.9 1.4 1.8 40 49 160 11 254 65 93 55 62 244 31 115 18 9 19 27 27 17 1,294 267 148 51 6 17 488 89 1 30 24 51 352 5.7 65 315 3.4 34 1,983 1.9 118 2,651 2.5 217 TOTAL Resource 365 5.6 66 11,133 2.5 881 12,957 2.5 1,055 24,456 2.5 2,000 Notes on Resources: 1. 2. 3. 4. 5. The preceding statements of Mineral Resources conforms to the ‘Australasian Code for Reporting of Exploration Results Mineral Resources and Ore Reserves (JORC Code) 2012 Edition’. All tonnages reported are dry metric tonnes. Data is rounded to thousands of tonnes and thousands of ounces gold. Discrepancies in totals may occur due to rounding. Resources have been reported as both open pit and underground with varying cut-offs based off several factors discussed in the corresponding Table 1 which can be found with the original ASX announcements for each Resource Resources are reported inclusive of any Reserves The announcements containing the Table 1 Checklists of Assessment and Reporting Criteria relating for the 2012 JORC compliant Resources are: 1. Kal East: o Boundary – Black Cat ASX announcement on 9 October 2020 “Strong Resource Growth Continues including 53% Increase at Fingals Fortune”. o Trump – Black Cat ASX announcement on 9 October 2020 “Strong Resource Growth Continues including 53% Increase at Fingals Fortune”. A N N U A L R E P O R T 2 0 2 2 Page 21 of 93  REVIEW OF OPERATIONS (CONTINUED) 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”. o Majestic – Black Cat ASX announcement on 25 January 2022 “Majestic Resource Growth and Works Approval Granted”; o Sovereign – Black Cat ASX announcement on 11 March 2021 “1 Million Oz in Resource & New Gold Targets”; o Imperial – Black Cat ASX announcement on 11 March 2021 “1 Million Oz in Resource & New Gold Targets”; o Jones Find – Black Cat ASX announcement 04 March 2022 “Resource Growth Continues at Jones Find” o Crown – Black Cat ASX announcement on 02 September 2021 “Maiden Resources Grow Kal East to 1.2Moz” o Fingals Fortune – Black Cat ASX announcement on 23 November 2021 “Upgraded Resource Delivers More Gold at Fingals Fortune”. o Fingals East – Black Cat ASX announcement on 31 May 2021 “Strong Resource Growth Continues at Fingals”. o Trojan – Black Cat ASX announcement on 7 October 2020 “Black Cat Acquisition adds 115,000oz to the Fingals Gold Project”. 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 Anomaly 38 – Black Cat ASX announcement on 31 March 2020 “Bulong Resource Jumps by 21% to 294,000 oz”. o Wombola Dam – Black Cat ASX announcement on 28 May 2020 “Significant Increase in Resources - Strategic Transaction with Silver Lake”. o Hammer and Tap – Black Cat ASX announcement on 10 July 2020 “JORC 2004 Resources Converted to JORC 2012 Resources”. o Rowe’s Find – Black Cat ASX announcement on 10 July 2020 “JORC 2004 Resources Converted to JORC 2012 Resources”. Coyote Gold Operation o Coyote UG – Black Cat ASX announcement on 19th April 2022 “Funded Acquisition of Coyote & Paulsens Gold Operations - Supporting Documents” o Sandpiper OP&UG – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” o Kookaburra OP – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” o Pebbles OP – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” o Stockpiles SP (Coyote) – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” Paulsens Gold Operation: o Paulsens UG – Black Cat ASX announcement on 19th April 2022 Funded Acquisition of Coyote & Paulsens Gold Operations - Supporting Documents o Paulsens SP – Black Cat ASX announcement on 19th April 2022 Funded Acquisition of Coyote & Paulsens Gold Operations - Supporting Documents o Belvedere OP – Black Cat ASX announcement on 19th April 2022 Funded Acquisition of Coyote & Paulsens Gold Operations - Supporting Documents o Mt Clement – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” o Merlin – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed” o Electric Dingo – Black Cat ASX announcement on 25th May 2022 “Coyote & Paulsens High-Grade JORC Resources Confirmed 2. 3. The in-situ, drill-defined and developed Ore Reserves for Kal East as at 30 June 2022 are listed below: Table 4: Ore Reserves as at 30 June 2022 Mining Centre Open Pit Reserves Myhree Boundary Jones Find Fingals Fortune Fingals East Sub Total Underground Reserves Majestic Sub Total TOTAL Reserve Notes on Reserve: Proven Reserve Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Probable Reserve Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) Total Reserve Grade (g/t Au) Metal (‘000s oz) Tonnes (‘000s) - - - - - - - - - - - - - - - - - - - - - - - - - - - 585 120 350 2,039 195 3,288 437 437 3,725 2.4 1.5 1.5 1.7 1.9 1.8 3.6 3.6 2.0 46 6 17 113 12 193 50 50 585 120 350 2,039 195 3,288 437 437 243 3,725 2.4 1.5 1.5 1.7 1.9 1.8 3.6 3.6 2.0 46 6 17 113 12 193 50 50 243 1. Cut-off Grade: o o Open Pit - The Ore Reserves are based upon an internal cut-off grade greater than or equal to the break-even cut-off grade. Underground - The Ore Reserves are based upon an internal cut-off grade greater than the break-even cut-off grade. The commodity price used for the Revenue calculations was AUD $2,300 per ounce. The Ore Reserves are based upon a State Royalty of 2.5% and a refining charge of 0.2%. 2. 3. 4. Mineral Resources are reported as inclusive of Ore Reserves. 5. Tonnes have been rounded to the nearest 100 t for open pit and 1000 t for underground, grade has been rounded to the nearest 0.1 g/t, ounces have been rounded to the nearest 100 oz. Discrepancies in summations may occur due to rounding. This Ore Reserve statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Minera Resources and Ore Reserves (The JORC Code – 2012 Edition). 6. The announcements containing the Table 1 Checklists of Assessment and Reporting Criteria relating for the 2012 JORC compliant Resources are: 1. Kal East: o Black Cat ASX announcement on 03 June 2022 “Robust Base Case Production Plan of 302koz for Kal East”. A N N U A L R E P O R T 2 0 2 2 Page 22 of 93  REVIEW OF OPERATIONS (CONTINUED) 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 processes 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. All Ore Reserves have been reported from Measured and Indicated Resources only. All Ore Reserves have been generated from design studies using appropriate cost, geotechnical, slope angle, stope span, dilution, cut-off grade and recovery parameters. Mining approvals are in place for all Ore Reserve-related projects. A maximum A$2,300/oz gold price has been used to estimate Ore Reserves and determine appropriate cut-offs. Mining, milling and additional overhead costs are based on current tenders for the Reserve operations. Mill recoveries for all ore types are based upon metallurgical test work. COMPETENT PERSONS’ STATEMENTS The information in this Annual Ore Reserves and Mineral Resources Statement is based on and fairly represents information and supporting documentation prepared by the competent persons named in the relevant sections of this report. This Ore Reserve and Mineral Resource 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)”. The information in this report that relates to all geology, exploration results, planning, and the estimation and reporting of Resources were compiled by Mr. Iain 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 Open Pit Ore Reserves is based on and fairly represents information compiled by Mr. Alistair Thornton. Mr Thornton is a full-time employee of Black Cat Syndicate Pty Ltd. Mr Thornton has confirmed that he has read and understood the requirements of the 2012 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Thornton is a Competent Person as defined by the JORC Code 2012 Edition, having more than five years' experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity for which he is accepting responsibility. Mr Thornton is a Member of the AusIMM and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to the Underground Ore Reserves is based on and fairly represents information compiled or reviewed by Dr. Kelly Fleetwood. Dr Fleetwood is a full-time employee of Black Cat Syndicate Pty Ltd. Dr Fleetwood has confirmed that he has read and understood the requirements of the 2012 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Fleetwood is a Competent Person as defined by the JORC Code 2012 Edition, having more than five years' experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity for which he is accepting responsibility. Dr Fleetwood is a Member of the AusIMM and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. A N N U A L R E P O R T 2 0 2 2 Page 23 of 93  REVIEW OF OPERATIONS (CONTINUED) 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. Where the Company refers to the exploration results, Mineral Resources, and Reserves in this report (referencing previous releases made to the ASX), it confirms that it is not aware of any new information or data that materially affects the information included in that announcement and all material assumptions and technical parameters underpinning the Mineral Resource and Reserve estimates with that announcement continue to apply and have not materially changed. The Company confirms that all material assumptions underpinning the production target at Kal East Gold Project, or the forecast information derived from the production target, included in the original ASX announcement dated 3 June 2022 continue to apply and have not materially changed End of Review of Operations A N N U A L R E P O R T 2 0 2 2 Page 24 of 93  REVIEW OF OPERATIONS (CONTINUED) A N N U A L R E P O R T 2 0 2 2 Page 25 of 93 Black Cat Syndicate Limited ABN 63 620 896 282 CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2022 A N N U A L R E P O R T 2 0 2 2 Page 26 of 93 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 2022. 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) Meeka Metals Limited (ASX:MEK) and Dreadnought Resources Limited (ASX:DRE) and a non-executive director of Sunshine Gold Limited (ASX:SHN). Gareth Solly (Managing Director) B.Sc (Geology) First Class Honours, Dip. Business (Appointed 1 January 2018) 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 (Non-Executive Director) B. Comm, LL.B (Hons), LL.M LSE (Appointed 6 April 2021) Philip is a prominent and highly respected barrister specialising in commercial law. 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. Philip was Non- Executive Chairman of financial services company Zip Co Limited (ASX:Z1P) and is currently a non-executive director of Applyflow Limited (ASX:AFW), Hamelin Gold Limited (ASX:HMG) and Encounter Resources Limited (ASX:ENR). A N N U A L R E P O R T 2 0 2 2 Page 27 of 93 DIRECTORS’ REPORT (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. 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 is a non-executive director of New World Resources Limited (ASX:NWC) and Bravo Mining Corp. (TSXV:BRVO). 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 9,029,687 1,527,222 6,020,977 8,253,526 100,557 100,000 1,572,778 - 200,000 250,000 Included in the Directors’ interests in Unlisted Options, there are 2,122,778 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 2 Page 28 of 93 DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ MEETINGS The number of meetings of the Company’s Directors held during the period ended 30 June 2022, and the number of meetings attended by each Director are as follows: Director P Chapman G Solly L Davis P Crutchfield T Polglase Board of Directors’ Meetings Eligible to Attend Attended 8 8 8 8 8 8 8 7 7 8 PRINCIPAL ACTIVITIES 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. In addition, the Company undertook extensive due diligence on the eventual acquisition of the Coyote and Paulsens Gold Projects from Northern Star Limited, which was completed on 15 June 2022. 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 $3,944,906 (2021: $2,324,794). At the end of the financial period the Group had $18,172,023 (2021: $16,049,091) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure at the end of the financial year was $92,508,166 (2021: $29,124,255). Included in capitalised exploration costs for 30 June 2022 is an amount of $51,412,076 which represents the excess of the fair value of the consideration paid by the Company over the fair value of the net assets acquired in relation to the Coyote and Paulsens Gold Project acquisitions. This excess is considered to be in the nature of exploration and evaluation expenditure and has been accounted for in accordance with AASB 6. The consideration for the acquisitions was $32,419,000 and comprises cash ($14,500,000), deferred cash consideration ($15,000,000) and shares (fair value at time of acquisition of $2,919,000). During the year the Company raised a total of $35,000,000 before costs from the issue of placement shares and a further $220,000 from the issue of shares on the exercise of unlisted options. REVIEW OF ACTIVITIES Exploration Exploration activities for the financial period have been primarily focussed 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 Coyote and Paulsens Gold Projects in Western Australia from Northern Star Limited. A N N U A L R E P O R T 2 0 2 2 Page 29 of 93 DIRECTORS’ REPORT (CONTINUED) 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. OPTIONS OVER UNISSUED CAPITAL Unlisted Options As at 30 June 2022 14,677,147 unissued ordinary shares of the Company are under option as follows: Number of Options Granted Exercise Price 8,941,147 1,200,000 700,000 250,000 129,000 468,000 330,000 1,499,000 1,160,000 20 cents 40 cents 60 cents 62 cents 120 cents 98 cents 100 cents 83 cents 65 cents Expiry Date 25 January 2023 25 June 2023 2 August 2023 18 May 2024 21 July 2024 10 December 2024 28 March 2025 8 November 2025 15 May 2026 All options on issue at the date of this report are unlisted, vested and exercisable. During the financial period, the Company granted 2,879,000 options over unissued shares to employees pursuant to the terms and conditions of the Black Cat Syndicate Incentive Option Plan. During the financial period, a total of 600,000 options exercisable at 20 cents and expiring 25 January 2023, and 250,000 options exercisable at 40 cents and expiring 25 June 2023 were exercised into shares. 635,000 employee options were cancelled during the financial period on cessation of employment with the Company. Since the end of, the financial period: - - - 1,298,000 options exercisable at 51 cents expiring 28 July 2026 have been issued to employees; no options have been cancelled; and 360,000 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. Performance Rights No performance rights were issued during the financial year. Subsequent to the end of the financial year the Company issued a total of 4,198,389 performance rights to employees expiring 30 June 2027. A N N U A L R E P O R T 2 0 2 2 Page 30 of 93 DIRECTORS’ REPORT (CONTINUED) ISSUED CAPITAL Ordinary fully paid shares Number of Shares on Issue 2022 213,634,175 2021 140,807,811 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 2022 and 30 June 2021. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD Subsequent to 30 June 2022 the Company issued a total of 4,198,389 performance rights expiring 30 June 2027 to senior employees. Details of the 2022 LTI awards have been disclosed in the remuneration report. 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 its Coyote, Paulsens and Kal East Gold Projects. 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. A N N U A L R E P O R T 2 0 2 2 Page 31 of 93 DIRECTORS’ REPORT (CONTINUED) 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. 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. 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. A N N U A L R E P O R T 2 0 2 2 Page 32 of 93 DIRECTORS’ REPORT (CONTINUED) Engagement of Non-Executive Directors (Continued) 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. 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 2022. 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. 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 $280,000 per annum plus statutory superannuation (increased to $320,000 per annum effective 1 July 2022) 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. A N N U A L R E P O R T 2 0 2 2 Page 33 of 93 DIRECTORS’ REPORT (CONTINUED) Incentive Option Plan 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. Long Term Incentive Plan (LTI) Under the Company’s LTI plan, grants of options or performance rights are made to certain executives to align remuneration with the creation of shareholder value over the long term, whilst also attracting, motivating and retaining key executives. Performance targets, whilst challenging, represent key milestones in respect of the progression of the Company, and considered consistent with sustained growth in shareholder value. The LTIs issued subsequent to the end of the financial year (2022 LTI Awards) represent the first such awards made under the Company’s LTI Plan. The 2022 LTI Awards proposed to be issued to the Managing Director are subject to shareholder approval. Details of the 2022 LTI Awards are as follows: Eligibility Awards Members of the Senior Leadership Team who are responsible for setting the strategic direction of the Company The 2022 LTI Awards are in the form of Performance Rights. Performance rights are issued for nil consideration and if Vesting Conditions are satisfied, may be exercised before the Expiry Date into ordinary fully paid shares in the Company. 2022 LTI Awards are issued pursuant to the terms and conditions of the Company’s Incentive Option Plan Performance Period The Vesting Conditions of the 2022 LTI Awards are measured, and can be achieved, at any time prior to the Expiry Date Expiry Date 2022 LTI Awards expire 30 June 2027, unless lapsing earlier in accordance with the terms and conditions of the Company’s Incentive Option Plan Vesting Conditions (Key Performance Indicators (KPIs)) 2022 LTI Awards are measured from 1 July 2022, may vest and become exercisable in three equal tranches based on the following specific performance conditions (KPIs) relating to production of gold from its three distinct gold projects as follows: • 1/3 vest on achieving a sustained production rate of 40,000 to 45,000 ounces per annum at the Coyote Gold Project • 1/3 vest on achieving a sustained production rate of 60,000 to 70,000 ounces per annum at the Paulsens Gold Project • 1/3 vest on achieving a sustained production rate of 50,000 to 60,000 ounces per annum at the Kal East Gold Project A N N U A L R E P O R T 2 0 2 2 Page 34 of 93 DIRECTORS’ REPORT (CONTINUED) Long Term Incentive Plan (Continued) A total of 5,254,173 2022 LTI Awards issued, or proposed to be issued by the Company, include to the following Key Management Personnel (KMP): Name of KMP Position of KMP Value of 2022 LTI Awards2 Value of 2022 LTI Awards as % of total Base Salary1 Total Number of 2022 LTI Awards3 Gareth Solly Managing Director $320,000 100% Michael Bourke David Sanders General Manager - Projects Chief Financial Officer $290,000 100% $250,000 100% 1,055,784 Performance Rights4 956,804 Performance Rights 824,831 Performance Rights 1 Base Salary relates to the annual fixed remuneration (exclusive of superannuation) payable to the respective KMP as at the 2022 LTI Awards grant date of 1 July 2022. 2 The value of 2022 LTI Awards equates to 100% of the respective KMP’s Base Salary at grant date. 3 The number of 2022 LTI Awards has been calculated based on the total value of the respective KMP’s Base Salary at the grant date, divided by the underlying share price of the Company’s shares (calculated as the 5-day VWAP to 30 June 2022). 4 Notionally awarded subject to approval of the Company’s shareholders prior to the issue of the underlying performance rights. LTI Outcomes The 2022 LTI Awards represent the first award pursuant to the Company’s LTI Plan, and as such no securities have been issued during the 2022 financial year in respect of the vesting of LTI awards. Accordingly, no cancellation of LTI awards has occurred during the 2022 financial year in respect of LTI awards for which vesting conditions have not been achieved or become incapable of being achieved. Short Term Incentive Plan (STI) STI Outcomes – 2022 Financial Year The Company has determined STI cash bonuses payable in respect of the financial year ended 30 June 2022 totalling $98,700 to executives and senior employees, including to the following KMP: Name of KMP Position of KMP Maximum FY2022 STI Bonus Achievable1 Actual FY2022 STI Bonus Achieved2 Gareth Solly Managing Director David Sanders Chief Financial Officer $56,000 $40,000 $19,600 $14,000 1 Maximum STI bonus achievable calculated as 20% of base salary at 30 June 2022. 2The Company set performance criteria for maximum STI bonuses achievable for the financial year ended 30 June 2022 which included resource growth, initial ore reserves, completion of economic studies, advancement of the Kal East Gold Project and share price performance. Based on a review of actual performance, the STI bonus achieved was calculated to 35% of maximum bonus achievable. STI Targets – 2023 Financial Year The Company has determined performance criteria for maximum STI bonuses achievable for the financial year ending 30 June 2023, including safety and environmental, exploration success, completion of economic studies, commencement of production, debt repayment and share price performance. A N N U A L R E P O R T 2 0 2 2 Page 35 of 93 DIRECTORS’ REPORT (CONTINUED) STI Targets – 2023 Financial Year (Continued) Eligibility for participation in the FY2023 STI bonus scheme has been determined as follows: Eligible participant Managing Director, GM-Projects, CFO Mine Study Manager, Resource Development Manager, Project Manager - Coyote HR Manager, Environmental Lead, Project Mining Engineer Max % Base Salary Achievable 40% 30% 20% 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: 2022 $ 2021 $ 2020 $ 2019 $ 2018 $ Profit/(Loss) for the period attributable to shareholders (3,944,906) (2,324,794) (1,397,501) (1,131,029) (749,702) Closing share price at 30 June 0.30 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. Refer to STI disclosures above for appropriate performance measures. Voting at the Group’s 2021 Annual General Meeting (AGM) At the 2021 AGM 98.7% of the votes directed by shareholders, or their nominated proxy, supported the adoption of the Remuneration Report for the period ended 30 June 2021. 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: Directors • 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 Other KMP • Michael Bourke General Manager – Projects (appointed 29 April 2022) • David Sanders Chief Financial Officer The details of the remuneration of each member of Key Management Personnel is as follows: A N N U A L R E P O R T 2 0 2 2 Page 36 of 93 DIRECTORS’ REPORT (CONTINUED) Remuneration Disclosures (Continued) Short Term Post-Employment Other Long Term Name Base Salary $ Short Term Incentive $ 2022 Directors P Chapman 54,545 - 280,000 19,6003 G Solly L Davis P Crutchfield T Polglase 36,364 36,364 39,333 2022 Other KMP M Bourke 33,013 - - - - D Sanders 200,000 14,0003 Total 679,619 33,600 2021 Directors P Chapman 54,795 - G Solly L Davis P Crutchfield T Polglase A Hewlett 2021 Other KMP 250,000 50,0001,2 36,530 8,717 40,000 24,353 - - - - D Sanders 176,984 35,2102 Total 591,379 85,210 Superannuation Contributions $ Value of Options $ Total $ Value of Options as Proportion of Remuneration 5,455 35,500 3,636 3,636 - 3,301 23,521 75,049 5,205 26,125 3,470 828 - 2,314 16,813 54,755 - - - - - 60,000 335,100 40,000 40,000 39,333 - - - - - 41,4124 77,726 53.3% - 237,521 41,412 829,680 - 60,000 30,7991 356,924 - 40,000 - - 8.6% - 53,220 62,765 84.8% - - 40,000 26,667 - - 57,102 286,109 19.9% 141,121 872,465 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, with the full amount paid in October 2021. 3 STI bonus $19,600 and $14,000 accrued for G Solly and D Sanders respectively at 30 June 2022. 4 Includes $41,412 value of Options granted as remuneration on 16 May 2022. A N N U A L R E P O R T 2 0 2 2 Page 37 of 93 DIRECTORS’ REPORT (CONTINUED) Details of Performance Related Remuneration During the financial period, the Company paid a cash short term bonus to the Managing Director and Chief Financial Officer of $75,000 and $35,210 respectively pursuant to the 2021 STI and as accrued at 30 June 2021. Options Granted as Remuneration to KMP The following options were issued as remuneration to Key Management Personnel during the period ended 30 June 2022: KMP Number of Options Grant Date Expiry Date Exercise Price Volatility Interest Rate Value of Options M Bourke 300,000 16 May 2022 15 May 2026 65 cents 52.1% 3.11% $41,412 The following options were issued as remuneration to Key Management Personnel during the period ended 30 June 2021: KMP Number of Options Grant Date Expiry Date Exercise Price Volatility Interest Rate Value of Options G Solly 1 75,000 22 Jul 2020 21 July 2024 P Crutchfield 200,000 29 Mar 2021 28 Mar 2025 D Sanders 180,000 14 Dec 2020 10 Dec 2024 $1.20 $1.00 $0.98 79.3% 64.7% 75.0% 0.26% 0.69% $30,799 $53,220 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. Exercise of Options Granted as Remuneration A total of 250,000 ordinary shares were issued to Mr Les Davis in respect of the exercise of options, exercisable at $0.40 each and expiring 25 June 2023 previously granted as remuneration. A N N U A L R E P O R T 2 0 2 2 Page 38 of 93 DIRECTORS’ REPORT (CONTINUED) 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: Name Balance at Start of the Period Received During 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 2022 Directors P Chapman 100,000 G Solly L Davis P Crutchfield T Polglase 2022 Other KMP M Bourke D Sanders 2021 Directors P Chapman G Solly L Davis 1,672,778 250,000 200,000 250,000 180,000 100,000 1,647,778 1,400,000 - 300,000 P Crutchfield - 200,0001 T Polglase A Hewlett 2021 Other KMP 250,000 2,710,000 - - - - - - - - - - 100,000 100,000 (100,000) 1,572,778 1,572,778 (250,000) - - - - - - - - 200,000 250,000 300,000 180,000 - 200,000 250,000 300,000 180,000 100,000 100,000 250,000 200,000 250,000 250,000 200,000 250,000 (100,000) 2,610,0002 2,610,0002 75,000 (50,000) 1,672,778 1,672,778 - (1,150,000) D Sanders - 180,000 - 180,000 180,000 1 Option holdings at date of appointment as director/KMP. 2 Option holdings at date of ceasing to be a director/KMP. A N N U A L R E P O R T 2 0 2 2 Page 39 of 93 DIRECTORS’ REPORT (CONTINUED) Equity Instrument Disclosures Relating to Key Management Personnel (Continued) 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. Name Balance at Start of the Year Received During the Year on Exercise of Options Other Changes During the Period Balance at the End of the Year 2022 Directors P Chapman G Solly L Davis P Crutchfield T Polglase 2022 Other KMP D Sanders M Bourke 2021 Directors P Chapman G Solly L Davis T Polglase A Hewlett 2021 Other KMP 8,435,142 1,427,222 5,670,977 5,274,261 82,375 37,313 - 7,522,224 1,377,222 - 100,000 250,000 - - - - - 50,000 594,545 - 100,000 9,029,687 1,527,222 6,020,977 2,979,265 8,253,526 18,182 100,557 45,455 - 912,918 - 82,768 - 8,435,142 1,427,222 5,670,977 4,448,977 1,150,000 72,000 P Crutchfield 3,781,7241 - - 48,255 3,050,000 100,000 1,492,537 5,274,261 34,120 - 82,375 3,150,0002 D Sanders -1 - 37,313 37,313 1 Shares held on appointment as director/officer. 2 Shares held at date of ceasing to be a director. A N N U A L R E P O R T 2 0 2 2 Page 40 of 93 DIRECTORS’ REPORT (CONTINUED) 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 prior years the Company paid Stone Poneys Nominees Pty Ltd, an entity associated with Paul Chapman, in respect of the now terminated lease for the Group’s offices. Lease payments for the period ended 30 June 2022 was nil. (2021: $6,233). During the prior period the Company employed the spouse of Paul Chapman in an administrative role. Remuneration for the period ended 30 June 2022 was $nil (2021: $16,151). During the period the Company employed the spouse of Gareth Solly in an administrative role. Remuneration for the period ended 30 June 2022 was $74,913 (2021: $60,361). End of Remuneration Report 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. A N N U A L R E P O R T 2 0 2 2 Page 41 of 93 DIRECTORS’ REPORT (CONTINUED) 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 2022 $ 42,250 42,250 2021 $ 24,250 24,250 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 30th day of September 2022. Gareth Solly Managing Director A N N U A L R E P O R T 2 0 2 2 Page 42 of 93  AUDITOR’S INDEPENDENCE DECLARATION AUDITOR’S INDEPENDENCE DECLARATION In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Black Cat Syndicate Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. Crowe Perth Cyrus Patell Partner Signed at Perth dated this 30 September 2022 Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd. © 2022 Findex (Aust) Pty Ltd A N N U A L R E P O R T 2 0 2 2 Page 43 of 93 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPRENSIVE INCOME Total Income Note 5 6 22 5 6 Other income Interest income Employee expenses Employee expenses – share based Employee expenses recharged Legal and professional Corporate advisory Marketing and promotion Depreciation and amortisation Realised foreign exchange movements Interest expense Administration and other expenses (Loss)/Profit on disposal of fixed assets Exploration costs not capitalised Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 136,211 18,372 154,583 50,000 14,142 64,412 (4,345,242) (2,429,991) (402,271) 1,754,592 (150,647) (45,000) (36,588) (114,272) 8,456 (25,145) (655,103) (1,189) (87,080) (354,695) 1,338,742 (38,113) (71,188) (48,856) (25,071) (10,873) - (371,966) 9,485 (386,680) Profit/(Loss) before income tax (3,944,906) (2,324,794) Income tax benefit 7 - - Profit/(Loss) after tax (3,944,906) (2,324,794) Other comprehensive income Total comprehensive income/(loss) for the year - - (3,944,906) (2,324,794) Earnings per share for loss attributable to the ordinary equity holders of the Company Basic earnings/(loss) per share 33 Diluted earnings/(loss) per share 33 (2.6) (2.6) (2.1) (2.1) 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 2 Page 44 of 93 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated Note Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ Current assets Cash and cash equivalents Trade and other receivables Inventory Non-current assets Bonds and deposits Property, plant and equipment Total current assets 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 Loan – acquisition consideration Non-current liabilities Rehabilitation provisions Lease liabilities Total current liabilities 8 9 10 8 12 14 13 16 17 18 19 20 18 18,172,023 466,256 491,329 16,049,091 214,443 - 19,129,608 16,263,534 64,920 6,283,817 92,508,166 127,787 44,920 2,724,193 29,124,255 194,458 98,984,690 32,087,826 118,114,298 48,351,360 1,688,373 380,026 68,244 15,000,000 1,795,457 207,642 58,033 - 17,136,643 2,061,132 21,945,961 64,118 - 132,362 Total non-current liabilities 22,010,079 132,362 Equity Issued capital Accumulated losses Share based payments reserve Total liabilities Net assets 21 23 23 39,146,722 2,193,494 78,967,576 46,157,866 86,787,812 (9,325,236) 1,505,000 50,435,467 (5,573,706) 1,296,105 Total equity 78,967,576 46,157,866 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 2 Page 45 of 93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Consolidated Issued Capital $ Accumulated Losses $ Share Based Payments Reserve $ Total $ 2021 Balance at the start of the financial period 14,395,187 (3,278,232) 909,328 12,026,283 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) - - - (2,324,794) - (2,324,794) - 416,097 416,097 29,320 (29,320) - 36,040,280 - - 36,040,280 Balance at the end of the financial period 50,435,467 (5,573,706) 1,296,105 46,157,866 2022 Balance at the start of the financial period 50,435,467 (5,573,706) 1,296,105 46,157,866 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) - - - (3,944,906) - (3,944,906) - 402,271 402,271 193,376 (193,376) - 36,352,345 - - 36,352,345 Balance at the end of the financial period 86,787,812 (9,325,236) 1,505,000 78,967,576 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 2 Page 46 of 93 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows from operating activities Other income Interest received Payments to suppliers and employees Consolidated Note Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ - 18,372 (3,322,380) 50,000 14,412 (1,363,460) Net cash used in operating activities 32 (3,304,008) (1,299,048) Cash flows from investing activities Payments for bonds and security deposits Payments to acquire exploration assets Payments for exploration and evaluation Proceeds on disposal of assets Payments for plant and equipment (20,000) (14,500,000) (10,078,061) 1,189 (44,920) (1,054,098) (10,772,027) - (3,201,379) (2,012,526) Net cash used in investing activities (27,798,251) (13,883,571) Cash flows from financing activities Payments for lease liability principal Payments for insurance premium funding 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 (58,033) (202,371) 35,220,000 (1,742,861) 33,216,735 (5,500) - 30,414,073 (2,034,138) 28,374,435 2,114,476 8,456 13,191,816 (10,873) 16,049,091 2,868,148 18,172,023 16,049,091 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 2 Page 47 of 93 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 30 September 2022. 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. A N N U A L R E P O R T 2 0 2 2 Page 48 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. (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. A N N U A L R E P O R T 2 0 2 2 Page 49 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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. (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. A N N U A L R E P O R T 2 0 2 2 Page 50 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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. 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 Field equipment and vehicles Office equipment Depreciation Rate 20% 33% The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Assets under construction (work in progress) are not depreciated until they are ready for use. 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. A N N U A L R E P O R T 2 0 2 2 Page 51 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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 2 Page 52 of 93 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) Earnings Per Share i. 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. ii. 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. A N N U A L R E P O R T 2 0 2 2 Page 53 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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. Financial Instruments (q) 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 (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; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other assets and liabilities are classed as non-current. A N N U A L R E P O R T 2 0 2 2 Page 54 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Business Combinations (t) The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or business under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition- date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase. Where a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. These provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 9, or AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit or loss. A N N U A L R E P O R T 2 0 2 2 Page 55 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair value estimation (u) The nominal value less estimated credit adjustments of receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. Fair Value Measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Rehabilitation provisions (v) A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities and restoring the affected areas. The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each balance date. The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset. A N N U A L R E P O R T 2 0 2 2 Page 56 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 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. Credit Risk (a) 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. Liquidity Risk (b) 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. Market Risk (c) 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. A N N U A L R E P O R T 2 0 2 2 Page 57 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 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 2022 the Group expensed unallocated and uncapitalised exploration expenditure of $87,080 (2021: $386,680). 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. Provision for restoration and rehabilitation A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined as outlined in Note 20. The Group’s activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management's best estimate for assets retirement obligations and site rehabilitation in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Business Combinations As discussed in Note 35, business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation reported. 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. A N N U A L R E P O R T 2 0 2 2 Page 58 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 5 OTHER INCOME Operating Activities Income from lease of camp assets Cash flow assistance grant NOTE 6 LOSS FOR THE YEAR Loss Before Income Tax Includes the Following specific expenses Depreciation and amortisation: Right of use assets (Note 13) Motor vehicles and field equipment (Note 12) Office equipment (Note 12) Employee expenses: Wages and salaries3 Short term incentive bonus1 Non-Executive Directors’ fees Superannuation Payroll tax Other staff costs Movement in employee leave liability Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 136,211 - 136,211 - 50,000 50,000 66,671 31,061 16,540 114,272 2,988,881 114,4922 180,000 342,593 180,049 366,844 172,383 5,557 11,501 8,013 25,071 1,667,647 233,2101 161,061 177,926 47,307 35,382 107,458 1 Accrued short-term incentive bonus for 2021 STI. Settled cash in October 2021. 2 Accrued short-term incentive bonus as at 30 June 2022, inclusive of superannuation and payroll tax costs. 3 Increase year on year relates to a combination of increase in employee numbers as well as senior members of staff working on the acquisition, and therefore rechargeable hours were not increased in line with wage increases (further detail in Note 35). 4,345,242 2,429,991 A N N U A L R E P O R T 2 0 2 2 Page 59 of 93 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 Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ (4,958,400) 4,958,400 (3,290,140) 3,290,140 (66,487) 66,487 (133,001) 133,001 Income tax expense/(benefit) reported in the income statement - - b) Reconciliation of Income Tax Expense to Prima Facie Tax Payable Profit/(Loss) from continuing operations before income tax expense Tax at 25% (2021: 26%) 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 (3,944,906) (986,227) (2,324,794) (604,446) 100,568 (218,530) 1,167,189 - 92,221 (199,85) 712,110 - (8,644,932) (4,992,847) 8,507,312 95,007 136,093 714,676 9,453,088 4,934,625 53,987 174,381 571,523 5,734,516 Net deferred tax asset not recognised 808,156 741,669 A N N U A L R E P O R T 2 0 2 2 Page 60 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) d) Deferred Tax – Income Statement Liabilities Capitalised exploration expenditure Assets Deductible equity raising costs Accruals Increase in tax losses carried forward Employee provisions Deferred tax benefit/(expense) movement for the period not recognised Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ (3,652,085) (2,613,434) 143,153 (38,288) 3,572,687 41,020 314,998 135,110 2,269,891 26,436 66,487 133,001 The deferred tax benefit of tax losses not brought to account will only be obtained if: i. ii. iii. 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 No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses. All unused tax losses of $34,029,248 (2021: $18,979,325) 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 2022 of $784,613. Subsequent to 30 June 2022, the Group may undertake a distribution of JMEI credits to qualifying shareholders which has not been quantified at the date of this report. A N N U A L R E P O R T 2 0 2 2 Page 61 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 8 CASH AND CASH EQUIVALENTS Cash at bank and on hand Deposits at call a) Reconciliation to Cash at the End of the Year Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 18,122,023 50,000 18,172,023 6,049,091 10,000,000 16,049,091 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 16,049,091 18,172,023 b) Deposits at Call Amounts classified as deposits at call are short term deposits (capable of being converted into cash within 90 days) 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 There are no amounts included in cash and cash equivalents above that are pledged as guarantees or otherwise unusable by the Group d) Bonds and deposits As at 30 June 2022 there are cash backed bank guarantees amounting to $64,920 (2021: $43,000). These amounts are classified as non-current assets in the Statement of Financial Position. NOTE 9 CURRENT ASSETS – RECEIVABLES a) Trade and Other Receivables Trade receivables Other receivables: GST recoverable Details of fair value and exposure to interest risk are included at Note 24. NOTE 10 CURRENT ASSETS – INVENTORY Opening inventory Inventory recognised on acquisition (Note 35) Other movements in inventory for the period Details of fair value and exposure to interest risk are included at Note 24. 231,532 227,685 7,039 466,256 - 146,075 345,254 491,329 - - 214,433 214,433 - - - - A N N U A L R E P O R T 2 0 2 2 Page 62 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 11 NON-CURRENT ASSETS – INVESTMENT IN CONTROLLED ENTITY a) Investment in Controlled Entity Subsidiary Company Country of Incorporation Black Cat (Kal East) Pty Ltd Black Cat (Paulsens) Pty Ltd Black Cat (Coyote) Pty Ltd Australia Australia Australia Ownership Interest 2022 100% 100% 100% 2022 100% - - Black Cat (Kal East) Pty Ltd formerly Black Cat (Bulong) Pty Ltd was incorporated in Western Australia on 4 August 2017. Black Cat (Paulsens) Pty Ltd was incorporated in Western Australia on 3 March 2022. Black Cat (Coyote) Pty Ltd formerly Northern Star (West Tanami) Pty Ltd was acquired from Northern Star Limited on 15 June 2022, and was incorporated in Western Australia on 16 February 1994. The ultimate controlling party of the group is Black Cat Syndicate Limited. NOTE 12 NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT Motor Vehicles and Field Equipment $ Office Equipment $ Mill and Project AUC capital $ Total $ Cost at the start of the financial year Additions Amounts recognised on acquisition (Note 35) Disposed 116,271 - 708,684 75,934 11,604 - - (31,000) 2,572,832 2,765,037 2,917,546 2,929,150 - - 708,684 (31,000) Cost at the end of the financial year 824,955 56,538 5,490,378 6,371,871 Accumulated depreciation at the start of the financial year Depreciation expense for the financial year (27,439) (13,405) (31,061) (16,540) Depreciation on assets disposed - 391 Accumulated depreciation at the end of the financial year (58,500) (29,554) - - - - (40,844) (47,601) 391 (88,054) Net book value at the start of the financial year Net book value at the end of the financial year 88,832 62,529 2,572,832 2,724,193 766,455 26,984 5,490,378 6,283,817 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. The Company announced a temporary deferral of construction on 21 April 2022. Ongoing storage and maintenance costs associated have been expensed from that date. A N N U A L R E P O R T 2 0 2 2 Page 63 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 13 NON-CURRENT ASSETS – RIGHT OF USE ASSETS Carrying value at the start of the year ROU assets recognised in the year Amortisation charged Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 194,458 - (66,671) 127,787 - 200,015 (5,557) 194.458 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 to Note 18 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 exercised 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. NOTE 14 NON-CURRENT ASSETS – CAPITALISED MINERAL EXPLORATION AND EVALUATION EXPENDITURE In the Exploration and Evaluation Phase Capitalised exploration costs at the start of the period Total acquisition costs for the period (Note 15) Total exploration costs for the period Total unallocated exploration expensed for the period Capitalised exploration costs at the end of the period 29,124,255 51,412,076 12,058,915 (87,080) 92,508,166 10,030,732 8,714,444 10,765,759 (386,680) 29,124,255 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 A N N U A L R E P O R T 2 0 2 2 Page 64 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 15 ACQUISITION OF EXPLORATION ASSETS During the period, the Group completed the acquisition of exploration assets. Total acquisition costs for the period amounted to $51,412,076, which includes various acquisition and related costs and the following significant transactions: Cash Consideration (incl option fees)1 Share Based Consideration1 Acquisition liability2 Fair value of net liabilities recognised on acquisition3 Total excess consideration over the fair value of net assets acquired $10,634,000 $2,140,734 $11,000,689 $13,003,481 $36,778,904 $3,866,000 $778,266 $3,999,311 $5,989,595 $14,633,172 Acquisition of Coyote Gold Project Acquisition of Paulsens Gold Project Total $14,500,000 $2,919,000 $15,000,000 $18,993,076 $51,412,076 1During the financial period the Company completed the acquisition of the Coyote and Paulsens Gold Projects by the issue of 8,340,000 shares at a fair value of $0.35 each and payment of cash consideration of $14,500,000 to Northern Star Resources Limited. 2In addition, an amount of $15,000,000 in deferred cash consideration is payable to Northern Star Resources Limited on or before 30 June 2023. 3Refer to Note 35 for further information regarding the assets and liabilities recognised on acquisition. The agreement to acquire the Coyote and Paulsens Gold Projects also provides for contingent consideration as follows: Milestone Contingent consideration payable A$ Production of 5,000 ounces of gold from Coyote Gold Project Production of 5,000 ounces of gold from Paulsens Gold Project Production of 50,000 ounces of gold from Coyote Gold Project (inclusive of initial 5,000 ounce production milestone) Production of 50,000 ounces of gold from Paulsens Gold Project (inclusive of initial 5,000 ounce production milestone) $2,500,000 $2,500,000 $2,500,000 $2,500,000 Directors have determined that the fair value of the Milestone consideration is nil as at the reporting date. Production from the Paulsens and Coyote gold projects is likely to be contingent upon further exploration success and as such the timing and likelihood of commencement of mining and production activities is uncertain. The Company will continue to assess the production outlook for the Paulsens and Coyote projects and contingent consideration may be recognised in future reporting periods, if required by accounting standards (refer Note 28). The above amounts of contingent consideration are included as a contingent liability of the Group at 30 June 2022 (refer Note 28). A N N U A L R E P O R T 2 0 2 2 Page 65 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 16 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES Trade payables and accruals Other payables Consolidated 30 June 2022 $ 30 June 2021 $ 1,568,682 119,691 1,688,373 1,535,934 259,523 1,795,457 Details of fair value and exposure to interest risk are included at Note 24. Trade payables and accruals includes $114,492 (2021: $233,210) accrued short-term incentive bonuses inclusive of superannuation and payroll tax (refer Note 6). NOTE 17 CURRENT LIABILITIES – EMPLOYEE ENTITLEMENTS Liability for annual leave Liability for long service leave 291,051 88,975 380,026 181,721 25,921 207,642 Refer to Note 35 for information regarding the amounts of leave liabilities recognised on the acquisition of assets. NOTE 18 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 190,395 - (58,443) 410 - 200,015 (9,661) 41 132,362 190,395 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 68,244 64,118 132,362 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 to Note 13 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 $58,033 (2021: $5,505). A N N U A L R E P O R T 2 0 2 2 Page 66 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) Consolidated 30 June 2022 $ 30 June 2021 $ NOTE 19 DEFERRED ACQUISITION CONSIDERATION Deferred acquisition consideration (note 15) 15,000,000 - Deferred acquisition liabilities are secured over the assets of Black Cat (Paulsens) Pty Ltd and Black Cat (Coyote) Pty Ltd (refer Note 15). Other liabilities are not secured over the assets of the Group. NOTE 20 REHABILITATION LIABILITIES Opening rehabilitation liabilities Liabilities recognised on acquisition (note 15) Other Movements for the period - 21,927,602 18,359 21,945,961 - - - - Refer to Note 35 for information regarding the amounts of rehabilitation liabilities recognised on the acquisition of net assets associated with the Coyote and Paulsens Gold Projects. NOTE 21 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. Ordinary shares have no par value. There is no limit to the authorised share capital of the Company. A N N U A L R E P O R T 2 0 2 2 Page 67 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 21 ISSUED CAPITAL (CONTINUED) 30 June 2022 30 June 2021 Issue Price No $ No $ b) Share Capital Issued share capital 213,634,175 86,787,812 140,807,811 50,435,467 c) Share Movements During the Period Balance at the start of the financial period - 140,807,811 50,435,467 87,947,952 14,395,187 Shares issued on exercise of options $0.20 600,000 120,000 2,151,631 430,326 Shares issued to acquire Fingals and Rowes Find Placement shares issued Placement shares issued $0.91 $0.82 $0.67 Shares issued on exercise of options $0.22 - - - - - - - - 8,417,962 7,660,345 12,195,122 10,000,000 29,695,144 19,895,747 400,000 88,000 Shares issued on exercise of options $0.40 250,000 100,000 Placement shares issued $0.55 63,636,364 35,000,000 Shares issued to acquire Paulsens and Coyote Gold Projects1 $0.35 8,340,000 2,919,000 Less share issue costs - - (1,786,655) - - - - - - - (2,034,138) Balance at the end of the financial period 213,634,175 86,787,812 140,807,811 50,435,467 1Refer note 15 for further details regarding the fair value of shares issued to acquire assets. NOTE 22 OPTIONS AND SHARE BASED PAYMENTS Options on issue As at 30 June 2022, 14,677,147 (2021: 13,283,147) unissued ordinary shares of the Company are under option as follows: Number of Options Granted Exercise Price 8,941,147 1,200,000 700,000 250,000 129,000 468,000 330,000 1,499,000 1,160,000 20 cents 40 cents 60 cents 62 cents 120 cents 98 cents 100 cents 83 cents 65 cents Expiry Date 25 January 2023 25 June 2023 2 August 2023 18 May 2024 21 July 2024 10 December 2024 28 March 2025 8 November 2025 15 May 2026 During the year ended 30 June 2022 the Company issued 2,879,000 options over unissued shares to employees (2021: 1,342,000). A N N U A L R E P O R T 2 0 2 2 Page 68 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 22 OPTIONS AND SHARE BASED PAYMENTS (CONTINUED) During the financial period a total of 600,000 options exercisable at 20 cents and expiring 25 January 2023, and 250,000 options exercisable at 40 cents and expiring 25 June 2023 were exercised into shares. 635,000 employee options were cancelled during the financial year on cessation of employment. Since the end of, the financial period; - - - 1,298,000 options have been issued to employees exercisable at 51 cents and expiring 28 July 2026; no options have been cancelled; and 360,000 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. Performance Rights No performance rights were issued during the financial year. Subsequent to the end of the financial year the Company issued a total of 4,198,389 performance rights to employees expiring 30 June 2027. Weighted Average Contractual Life The weighted average contractual life for un-exercised options is 16 months (2021: 18 months). Reconciliation of Movement of Options Over Unissued Shares During the Period Including Weighted Average Exercise Price (“WAEP”) 2022 2021 No WAEP (cents) No WAEP (cents) Options outstanding at the start of the period 13,283,147 33.4 14,492,778 24.7 Options issued during the period 2,879,000 75.7 1,342,000 101.9 Options cancelled during the period (635,000) 95.4 - Options exercised during the period (850,000) 25.9 (2,551,631) Options outstanding at the end of the period 14,677,147 39.4 13,283,147 - 20.3 33.4 A N N U A L R E P O R T 2 0 2 2 Page 69 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 22 OPTIONS AND SHARE BASED PAYMENTS (CONTINUED) Basis and Assumptions Used in the Valuation of Options The 2,879,000 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 9 Nov 2021 1,719,000 16 May 2022 1,160,000 83 65 8 Nov 2025 1.30% 47.7% $242,143 15 May 2026 3.11% 52.1% $160,128 2022 2021 Accumulated Losses $ Equity Remuneration Reserve (i) $ Accumulated Losses $ Equity Remuneration Reserve (i) $ NOTE 23 RESERVES AND ACCUMULATED LOSSES Balance at the beginning of the year (5,573,706) 1,296,105 (3,278,232) 909,328 Profit/(Loss) for the period (3,944,906) - (2,324,794) - Transfer on exercise and cancellation of options Movement in equity remuneration reserve in respect of options issued 193,376 (193,376) 29,320 (29,320) - 402,271 - 416,097 Balance at the end of the year (9,325,236) 1,505,000 (5,573,706) 1,296,105 (i) The equity remuneration reserve is used to recognise the fair value of options issued and vested but not exercised. A N N U A L R E P O R T 2 0 2 2 Page 70 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 24 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. Interest Rate Risk At the reporting date the interest profile of the Group’s interest-bearing financial instruments was: Number of Options Granted 2022 $ 2023 $ Variable rate instruments Cash and cash equivalents 18,172,023 16,049,091 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 181,720 (181,720) 181,720 (181,720) 160,491 (160,491) 160,491 (160,491) 2022 Variable Rate Instruments 2021 Variable Rate Instruments Liquidity Risk The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Consolidated 2022 Trade and other payables Carrying Amount Contractual Cash Flows < 6 Months 6-12 Months 1-2 Years 2-5 Years > 5 Years $ $ $ 1,688,373 1,688,373 1,688,373 $ - $ - $ $ Lease liabilities 132,362 153,198 30,429 37,366 85,402 Loan liabilities 15,000,000 15,000,000 - 15,000,000 - 2021 Trade and other payables 16,820,735 16,841,571 1,718,802 15,037,366 85,402 865,239 865,239 865,239 - - Lease liabilities 190,395 190,395 28,757 29,276 64,118 68,244 Insurance premium funding 208,745 208,745 113,861 94,884 - - 1,264,379 1,264,379 1,007,857 124,160 64,118 68,244 - - - - - - - - - - - - - A N N U A L R E P O R T 2 0 2 2 Page 71 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 24 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: Cash and cash equivalents Trade and other receivables Trade and other payables Lease liabilities Loan liabilities Consolidated 2022 2021 Carrying Amount $ Fair Value $ Carrying Amount $ Fair Value $ 18,172,023 18,172,023 16,049,091 16,049,091 466,256 466,256 (1,688,373) (1,688,373) (865,239) (865,239) (132,362) (132,362) (15,000,000) (15,000,000) - - - - 1,817,544 1,817,544 15,183,852 15,183,852 The Group’s policy for recognition of fair values is disclosed at Note 1(u). NOTE 25 DIVIDENDS No dividends were paid or proposed during the financial years ended 30 June 2021 or 30 June 2022. The Company has no franking credits available as at 30 June 2021 or 30 June 2022. A N N U A L R E P O R T 2 0 2 2 Page 72 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 26 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) (ii) (iii) Chairman – Non-Executive Paul Chapman Executive Director Gareth Solly, Managing Director Non-Executive Directors Les Davis Philip Crutchfield (appointed 6 April 2021) Alex Hewlett (resigned 28 February 2021) Tony Polglase (iv) Senior Executives Michael Bourke (GM-Projects) (appointed 29 April 2022) David Sanders (CFO) 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. (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 2022 $ Year Ended 30 June 2021 $ 713,219 41,412 75,049 676,5891,2 141,1211,2 54,755 829,680 872,465 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, with the full amount paid in October 2021. 3 STI bonus $19,600 and $14,000 accrued for G Solly and D Sanders respectively at 30 June 2022. 4 Includes $41,412 value of Options granted as remuneration on 16 May 2022. (c) Other Transactions with Key Management Personnel During the prior years the Company paid Stone Poneys Nominees Pty Ltd, an entity associated with Paul Chapman, in respect of the now terminated lease for the Group’s offices. Lease payments for the period ended 30 June 2022 was nil. (2021: $6,233). During the prior period the Company employed the spouse of Paul Chapman in an administrative role. Remuneration for the period ended 30 June 2022 was $nil (2021: $16,151). During the period the Company employed the spouse of Gareth Solly in an administrative role. Remuneration for the period ended 30 June 2022 was $74,913 (2021: $60,361). A N N U A L R E P O R T 2 0 2 2 Page 73 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 27 REMUNERATION OF AUDITORS Audit and review of the Company’s financial statements Total NOTE 28 CONTINGENCIES (i) Contingent Liabilities Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 42,250 42,250 24,250 24,250 There were no material contingent liabilities not provided for as at 30 June 2021 and 30 June 2022 other than: Royalties Kal East Gold project The Group is subject to a 1% gross revenue royalty in respect of minerals produced from the following tenements: E25/0499, E25/0512, E27/0532, P25/2287, P25/2288, P25/2293, P25/2377, P25/2378 and P25/2641. The Group is subject to a 1% net smelter royalty in respect of minerals produced from the following tenements: E25/0594, 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, P26/4117, P26/4118, P26/4119 and P26/4122. Coyote Gold Operations The Group is subject to a 1.75% gross royalty in respect of all minerals produced from the following tenements, with a scaled dollar/oz based on production above 300koz: E80/1737, M80/0560, M80/0561 and M80/0645. The Group is subject to a 1.5% gross royalty in respect of minerals produced from M80/0563. The Group is subject to a scaled dollar/oz based on production above 300koz: E80/1483, E80/3665 and M80/0559. Paulsens Gold Operations The Group is subject to a 2.5% net smelter royalty in respect of all production from E08/1649, with an additional 0.75% net smelter royalty in respect of all production over 250koz. The Group is subject to a 1.75% gross royalty in respect of all minerals produced from E08/1650. The Group is subject to a 1% net smelter royalty in respect of minerals produced from the following tenements: M08/0191, M08/0192 and M08/0193. 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. A N N U A L R E P O R T 2 0 2 2 Page 74 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 28 CONTINGENCIES (CONTINUED) Contingent Consideration Pursuant to the agreement to acquire the Coyote and Paulsens Gold Projects the Company may be liable to pay contingent consideration based on achieving production milestones from the respective projects as follows (refer Note 15): Milestone Contingent consideration payable A$ Production of 5,000 ounces of gold from Coyote Gold Project Production of 5,000 ounces of gold from Paulsens Gold Project Production of 50,000 ounces of gold from Coyote Gold Project (inclusive of initial 5,000 ounce production milestone) Production of 50,000 ounces of gold from Paulsens Gold Project (inclusive of initial 5,000 ounce production milestone) $2,500,000 $2,500,000 $2,500,000 $2,500,000 Directors have determined that the fair value of the Milestone consideration is nil as at the reporting date. Production from the Paulsens and Coyote gold projects is likely to be contingent upon further exploration success and as such the timing and likelihood of commencement of mining and production activities is uncertain. The Company will continue to assess the production outlook for the Paulsens and Coyote projects and contingent consideration may be recognised in future reporting periods, if required by accounting standards (refer Note 15). (ii) Contingent Assets There were no material contingent assets as at 30 June 2021 or 30 June 2022. NOTE 29 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 $3,802,600 (2021: $1,608,220). This includes $1,723,180 for Kal East, and $2,079,420 for tenements obtained as a part of the acquisition. (b) Contractual Commitments There are no material contractual commitments as at 30 June 2022 or 30 June 2021 not otherwise disclosed in the Financial Statements. NOTE 30 RELATED PARTY TRANSACTIONS Transactions with Directors during the period are disclosed at Note 26 – Key Management Personnel. There are no other related party transactions, other than those already disclosed elsewhere in this financial report. NOTE 31 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE Subsequent to 30 June 2022 the Company issued a total of 4,198,389 performance rights expiring 30 June 2027 to senior employees. Details of the 2022 LTI awards have been disclosed in the remuneration report. 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. A N N U A L R E P O R T 2 0 2 2 Page 75 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) Consolidated Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ NOTE 32 RECONCILIATION OF LOSS AFTER TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES 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 rehabilitation liability (Increase)/decrease in inventory Increase/(decrease) in payables Increase/(decrease) in employee leave liabilities (3,944,906) 114,272 1,189 87,080 (8,456) 402,271 (169,310) 18,359 (345,254) 447,912 92,835 (2,324,794) 25,071 (9,485) 386,680 10,873 416,097 (31,569) - 120,626 107,458 Net cash outflow from operating activities (3,304,008) (1,299,043) 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; 8,340,000 shares ($2,919,000) to acquire a 100% interest in the Coyote and Paulsens Gold Projects from Northern Star Resources Limited. Refer Note 15 for further details regarding acquisitions. NOTE 33 EARNINGS PER SHARE a) Basic Earnings Per Share Loss per share attributable to ordinary equity holders of the Company Cents (2.6) Cents (2.1) b) Diluted Earnings Per Share Loss per share attributable to ordinary equity holders of the Company (2.6) (2.1) c) Loss for year Loss used in calculation of basic and diluted loss per share ($3,944,906) ($2,324,794) d) Denominator Weighted Average Number of Shares Used as the No No Weighted average number of shares used as the denominator in calculating basic earnings per share 149,307,744 113,313,442 Weighted average number of shares used as the denominator in calculating diluted earnings per share 149,307,744 113,313,442 A N N U A L R E P O R T 2 0 2 2 Page 76 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 34 PARENT ENTITY INFORMATION Financial Position Assets Current assets Non- Current assets Total Assets Liabilities Current Liabilities Non- Current Liabilities Total Liabilities Equity Issued Capital Share based payments reserve Accumulated losses Year Ended 30 June 2022 $ Year Ended 30 June 2021 $ 18,322,746 76,713,544 15,935,880 31,778,588 95,036,290 47,714,468 16,004,596 64,118 598,728 132,362 16,068,714 731,090 NET ASSETS 78,967,576 46,983,378 86,787,812 1,505,000 (9,325,236) 50,435,467 1,296,105 (4,748,194) TOTAL EQUITY 78,967,576 46,983,378 Profit/(Loss) for the year Other comprehensive income (3,764,498) (2,324,794) - - Total comprehensive income (3,764,498) (2,324,794) 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 28. Commitments For full details of commitments see Note 29. A N N U A L R E P O R T 2 0 2 2 Page 77 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 35 BUSINESS COMBINATIONS Black Cat Syndicate Limited completed the acquisition of 100% of the high-grade Coyote and Paulsens Gold Operations (“Coyote”, “Paulsens”, together, “the Operations”) from the seller, Northern Star Resources Limited (“NSR” or “the seller”) and its controlled entities on 15 June 2022. Coyote: The operation is located approximately 20 km on the Western Australia (WA) side of the WA/ Northern Territory (NT) border, on the Tanami Highway. The operation consists of an open pit and an underground mine, 300,000 tpa processing facility, 180+ person camp and other related infrastructure, in addition to a well-maintained airstrip used by government and private enterprises. The operation is currently on care and maintenance and has a Resource of 3.0Mt @5.1g/t Au for 488koz with numerous high-grade targets in the surrounding area. BC8 acquired 100% of the issued shares in Black Cat (Coyote) Pty Ltd (formerly Northern Star (Western Tanami) Pty Ltd), which operates the Coyote Gold Mine, from the vendor. The business contributed revenues of $72,986 to the Group. Paulsens: The operation is located 180km west of Paraburdoo in WA. The operation consists of an underground mine, 450,000tpa processing facility, 110+ person camp, numerous potential open pits and related infrastructure. The operation is also currently on care and maintenance and has a Resource of 2.7Mt @2.5g/t Au for 217koz and significant exploration and growth potential. BC8, through its wholly owned subsidiary, obtained control of 100% of the legal and beneficial interest in the Paulsens Gold Mine, currently on care and maintenance, free from encumbrances (other than permitted encumbrances) from the vendor. The business contributed revenues of $111,211 to the Group. The Company has been unable to apply the revenue and loss contributions retrospectively on the basis it is impracticable to do so per the AASB 108 definition of ‘impracticable’. The Company does not have access to the seller’s calculations and The Company only held the Operations for two weeks prior to 30 June 2022. The acquisition of the Operations enables BC8 to focus on significant drilling campaigns at both operations to grow and upgrade the current high-grade Resources. With these two acquisitions, BC8 controls 1,770 km2 in three prime WA gold regions, being Tanami, Paraburdoo and Kalgoorlie. BC8 plans to construct a central processing facility near the Majestic Mining Centre, approximately 50km east of Kalgoorlie. The 800,0000tpa processing facility is proposed to be a traditional carbon-in-leach gold plan which will be suited to BC8’s resources as well as to third party free milling ores around Kalgoorlie, WA. The values identified in relation to the acquisition of both Coyote and Paulsens are provisional under AASB 3 Business Combinations as at 30 June 2022. A N N U A L R E P O R T 2 0 2 2 Page 78 of 93 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 35 BUSINESS COMBINATIONS (CONTINUED) Details of the acquisition are as follows: Inventory Plant and Equipment Exploration – mining rights and mine development assets Provision for rehabilitation Employee benefit entitlements Net assets acquired Exploration and Evaluation Expenditure Acquisition-date fair value of the total consideration transferred Representing: Cash consideration paid to vendor Deferred cash consideration1 BC8 shares issued to vendor2 Milestone payments3 Employee expenses / reduction in recharge Legal and professional Corporate development Administration and other expenses Acquisition costs expensed to profit or loss Coyote Fair Value $ - 534,815 1,242,286 Paulsens Fair Value $ 146,075 173,869 917,030 (14,774,507) (7,153,095) (6,075) (73,474) (13,003,481) (5,989,595) 36,778,904 23,775,423 14,633,172 8,643,577 10,634,000 11,000,689 2,140,734 - 3,866,000 3,999,311 778,266 - 23,775,423 8,643,577 283,966 80,995 66,009 89,828 520,798 103,236 29,446 23,998 32,657 189,337 1 Deferred cash consideration is payable by 30 June 2023 2 6,116,383 ordinary shares for Coyote acquisition and 2,213,237 ordinary shares for Paulsens acquisition, issued on 15 June 2022 at a price of $0.35 per share. 3 Represents management’s best estimate, based on timing and probability of commencement of operations and commercial production. Refer note 15 for further details regarding contingent consideration A N N U A L R E P O R T 2 0 2 2 Page 79 of 93 DIRECTORS DECLARATION In the opinion of the Directors of Black Cat Syndicate Limited (“the Company”) (a) the financial statements and notes set out on pages 44 to 79 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 2022 and of the performance for the period ended on that date of the Group. (b) 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. (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. (d) 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 2022. This declaration is made in accordance with a resolution of the Directors. Signed at Perth this 30th day of September 2022. Gareth Solly Managing Director A N N U A L R E P O R T 2 0 2 2 Page 80 of 93 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BLACK CAT SYNDICATE LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Black Cat Syndicate Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year then ended; and (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd. © 2022 Findex (Aust) Pty Ltd A N N U A L R E P O R T 2 0 2 2 Page 81 of 93 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BLACK CAT SYNDICATE LIMITED Key Audit Matter How we addressed the Key Audit Matter Valuation of capitalised mineral exploration and evaluation expenditure The consideration of impairment of the carrying value of the Group’s Capitalised Mineral Exploration and Evaluation Expenditure assets was material to our audit and represented an area of significant estimate and judgement within the financial report. This matter is considered a key audit matter due to: • • • • the degree of judgement required by the Directors to assess whether impairment indicators are present; the significance of the additions to capitalised exploration expenditure during the year of $12.05m; the significance of the acquisition costs during the year of $51.4m; and the materiality of the closing balance at year end of $92.5m. The related accounting policies, critical accounting estimates and judgements and disclosures are contained in Notes 1, 3, 14 and 15 of the financial report. Our procedures included, but were not limited to: • assessing the nature of the capitalised costs through testing on a sample basis and assessing whether the nature of the expenditure met the capitalisation criteria under AASB 6 Exploration for and Evaluation of Mineral Resources; • • conducting discussions with Management regarding the criteria used in their impairment assessment and ensuring that this was in line with the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources; reviewing evidence of exploration activities carried out during the year and Management’s future intentions for areas of interest the Group holds and to corroborate the representations made by management during our discussions; • assessing the Group’s right of tenure by obtaining and assessing third party information supporting the Group’s rights to tenure; and • considering the appropriateness of the disclosures in Notes 1,3,14 and 15 to the financial statements in accordance with the relevant requirements of Australian Accounting Standards. Business Combinations The acquisition of the Coyote and Paulsens Gold Operations during the year was material to our audit and represented an area of significant estimate and judgement within the financial report. This matter is considered a key audit matter due to: • the degree of judgement required by Management to assess the appropriate Our procedures included, but were not limited to: • reviewing the purchase/sale agreements executed between the Group and Northern Star Resources Limited, including verification of the purchase consideration; • obtaining and reviewing Management’s accounting position paper on the proposed accounting treatment to be adopted, to ensure compliance with the appropriate accounting standards; A N N U A L R E P O R T 2 0 2 2 Page 82 of 93 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BLACK CAT SYNDICATE LIMITED Key Audit Matter How we addressed the Key Audit Matter • • • reviewing the nature and content of the work performed by Management’s Expert including a review of the competency, capability and objectivity of Management’s Expert; concluding on the sufficiency and appropriateness of the work conducted by Management’s Expert as audit evidence; and considering the appropriateness of the disclosures in Notes 1,3,15 and 35 to the financial statements in accordance with the relevant requirements of Australian Accounting Standards. Business Combinations accounting standards to apply to the transactions; • • the degree of estimation and judgement required in determination of the appropriate fair values of the assets acquired and liabilities assumed; the significance of the cash and deferred cash consideration to be transferred under the acquisitions; and • The inclusion a series of contingent payments linked to future production post-sale completion, which is subject to a significant degree of estimation uncertainty in determining the appropriate fair values and resulting accounting treatment to be applied to these contingent components of the total consideration to be transferred to the vendors. The related accounting policies, critical accounting estimates and judgements and disclosures are contained in Notes 1, 3, 15 and 35 of the financial report. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard. A N N U A L R E P O R T 2 0 2 2 Page 83 of 93 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BLACK CAT SYNDICATE LIMITED Responsibilities of the Directors for the Financial Report The directors of the Group are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the disclosures in the financial report or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause an entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. A N N U A L R E P O R T 2 0 2 2 Page 84 of 93 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BLACK CAT SYNDICATE LIMITED • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the group financial report. The auditor is responsible for the direction, supervision and performance of the group audit. The auditor remains solely responsible for the audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We are also required to provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Black Cat Syndicate Limited for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Group are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Crowe Perth Cyrus Patell Partner Dated at Perth this 30 September 2022 A N N U A L R E P O R T 2 0 2 2 Page 85 of 93 ASX ADDITIONAL INFORMATION Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was applicable as at 29 September 2022. 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 Totals 228 841 528 920 254 2,771 144,317 2,330,612 4,249,387 30,759,327 176,510,532 213,994,175 % 0.07% 1.09% 1.99% 14.37% 82.48% 100.00% There are 392 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 Number of Shares % of Shares Franklin Resources Inc and its Associates 15,762,985 7.37% Issued Ordinary Shares C. Twenty Largest Shareholders The names of the twenty largest holders of quoted shares are listed below: Shareholder Name Issued Ordinary Shares Number of Shares % of Shares HSBC Custody Nominees (Australia) Limited 23,874,526 11.16 BNP Paribas Nominees Pty Ltd ACF Clearstream Northern Star Resources Limited Stone Poneys Nominees Pty Ltd Silver Lake Resources Limited Mr Leslie Brian Davis + Mrs Annette Fay Davis BNP Paribas Noms Pty Ltd P D Crutchfield Pty Ltd R W Associates Pty Limited J P Morgan Nominees Australia Pty Limited Briken Nominees Pty Ltd 9,090,910 8,340,000 7,367,463 6,757,126 6,020,977 5,532,342 4,165,621 4,100,000 3,982,690 2,626,430 4.25 3.90 3.44 3.16 2.81 2.59 1.95 1.92 1.86 1.23 A N N U A L R E P O R T 2 0 2 2 Page 86 of 93 ASX ADDITIONAL INFORMATION (CONTINUED) Ten Goals Pty Ltd Elefantino Pty Ltd Swanland Investment Ltd Sauron Capital Pty Ltd Citicorp Nominees Pty Limited Bond Street Custodians Limited Circumference Capital Ct Pty Ltd Mr Philip David Crutchfield Merrill Lynch (Australia) Nominees Pty Limited 2,590,221 2,555,257 2,433,600 2,150,800 1,951,548 1,939,701 1,818,182 1,800,000 1,763,049 1.21 1.19 1.14 1.01 0.91 0.91 0.85 0.84 0.82 Total 100,860,443 47.14% D. Unquoted Securities Options over Unissued Shares Number of Options Exercise Price $0.20 $0.40 $0.60 $0.62 $1.20 $0.98 $1.00 $0.83 $0.65 $0.51 8,581,147 1,200,000 700,000 250,000 129,000 468,000 330,000 1,499,000 1,160,000 1,298,000 15,615,147 Performance Rights Expiry Date 17 Jan 2023 25 Jun 2023 2 Aug 2023 18 May 2024 21 Jul 2024 10 Dec 2024 28 Mar 2025 8 Nov 2025 15 May 2026 28 Jul 2026 Number of Holders 23 5 2 1 3 4 2 12 6 14 Number of Rights Performance Condition Expiry Date Number of Holders 4,198,389 (a) 30 June 2027 7 a) The Performance Rights will become exercisable into Shares by the holder pursuant to the following specific performance conditions: (i) One third (1/3) on achieving a sustained production rate of 40,000 to 45,000 ounces per annum at the Coyote Gold Project; (ii) One third (1/3) on achieving a sustained production rate of 60,000 to 70,000 ounces per annum at the Paulsens Gold Project; and (iii) One third (1/3) on achieving a sustained production rate of 50,000 to 60,000 ounces per annum at the Kal East Gold Project. 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. A N N U A L R E P O R T 2 0 2 2 Page 87 of 93 ASX ADDITIONAL INFORMATION (CONTINUED) There are no voting rights in respect of options over unissued shares. F. Restricted Securities As at the date of this report there are a total of 8,340,000 ordinary fully paid shares subject to voluntary escrow until 30 June 2023. There are no other 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 2 Page 88 of 93 TENEMENT INFORMATION Lease Location Project Name Area (km2) Status % Interest at 30 Sep 2022 M25/0350 Majestic Mining Centre IMPERIAL/MAJESTIC M25/0360 Majestic Mining Centre CROWN M25/0374 Majestic Mining Centre IMPERIAL/MAJESTIC M25/0376 Majestic Mining Centre JONES FIND P25/2323 Majestic Mining Centre JONES FIND L25/0014 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0017 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0018 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0053 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0054 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0064 Majestic Mining Centre IMPERIAL/MAJESTIC L25/0067 Majestic Mining Centre IMPERIAL/MAJESTIC M25/0117 Fingals Mining Centre FINGALS FORTUNE M25/0136 Fingals Mining Centre FINGALS FORTUNE M26/0148 Fingals Mining Centre FINGALS FORTUNE M26/0197 Fingals Mining Centre FINGALS EAST M26/0248 Fingals Mining Centre FINGALS FORTUNE M26/0357 Fingals Mining Centre FINGALS FORTUNE M26/0364 Fingals Mining Centre FINGALS FORTUNE M26/0406 Fingals Mining Centre FINGALS FORTUNE M26/0409 Fingals Mining Centre FINGALS FORTUNE M26/0417 Fingals Mining Centre FINGALS FORTUNE M26/0635 Fingals Mining Centre FINGALS EAST L26/0162 Fingals Mining Centre FINGALS FORTUNE L26/0262 Fingals Mining Centre FINGALS FORTUNE L26/0296 Fingals Mining Centre FINGALS FORTUNE M25/0104 Trojan Mining Centre E25/0571 Trojan Mining Centre P25/2333 Trojan Mining Centre TROJAN TROJAN TROJAN M25/0024 Myhree Mining Centre MYHREE M25/0083 Myhree Mining Centre ANOMALY 38 M25/0091 Myhree Mining Centre TRUMP M25/0129 Myhree Mining Centre BOUNDARY M25/0372 Myhree Mining Centre P25/2286 Myhree Mining Centre TRUMP TRUMP L25/0062 Myhree Mining Centre HAMPTON HILL 9.9 1.3 9.9 0.7 0.7 0.1 0 0 0.6 0 0.4 0.2 3.7 0.8 0.1 0.9 3.5 4.7 1.3 0.1 0.4 0.7 0.1 0.1 0.2 0.1 8.7 24.5 0.1 4.9 0.7 0.8 1.8 1.2 1.2 0.3 LIVE LIVE PENDING PENDING LIVE LIVE LIVE LIVE LIVE LIVE PENDING PENDING LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% PENDING 0% LIVE LIVE LIVE LIVE LIVE LIVE LIVE 100% 100% 100% 100% 100% 100% 100% PENDING 0% LIVE LIVE 100% 100% A N N U A L R E P O R T 2 0 2 2 Page 89 of 93 TENEMENT INFORMATION (CONTINUED) M08/0099 Paulsens Mining Centre PAULSENS M08/0196 Paulsens Mining Centre PAULSENS M08/0222 Paulsens Mining Centre BELVEDERE M08/0515 Paulsens Mining Centre PAULSENS L08/0012 Paulsens Mining Centre PAULSENS L08/0013 Paulsens Mining Centre PAULSENS L08/0014 Paulsens Mining Centre PAULSENS L08/0015 Paulsens Mining Centre PAULSENS L08/0081 Paulsens Mining Centre PAULSENS L08/0091 Paulsens Mining Centre TIMBUCK WELL L08/0092 Paulsens Mining Centre PAULSENS L08/0103 Paulsens Mining Centre PAULSENS L08/0113 Paulsens Mining Centre SCARBOROUGH BORE L08/0168 Paulsens Mining Centre PAULSENS L08/0169 Paulsens Mining Centre PAULSENS M 80/0559 Coyote Mining Centre M 80/0560 Coyote Mining Centre M 80/0561 Coyote Mining Centre M 80/0563 Coyote Mining Centre COYOTE COYOTE COYOTE COYOTE 1.8 8.7 2.2 4.6 0 0 0.7 0.3 0.1 0 0 0.2 0 0.1 0.2 10 10 9.9 9.8 M 80/0645 Coyote Mining Centre BALD HILL 12.3 L 80/0045 Coyote Mining Centre L 80/0046 Coyote Mining Centre L 80/0051 Coyote Mining Centre COYOTE COYOTE COYOTE M08/0191 Other Mining Centre MT CLEMENT M08/0192 Other Mining Centre MT CLEMENT M08/0193 Other Mining Centre MT CLEMENT M26/0059 Other Mining Centre WOMBOLA DAM M26/0278 Other Mining Centre HAMMER & TAP M26/0352 Other Mining Centre HAMMER & TAP M26/0437 Other Mining Centre HAMMER & TAP M26/0440 Other Mining Centre HAMMER & TAP M26/0642 Other Mining Centre WOLBOLA DAM M26/0657 Other Mining Centre WOMBOLA DAM M26/0683 Other Mining Centre WOMBOLA DAM M26/0783 Other Mining Centre WOMBOLA DAM M26/0791 Other Mining Centre WOMBOLA DAM M26/0802 Other Mining Centre WOMBOLA DAM M26/0834 Other Mining Centre HAMMER & TAP M28/0164 Other Mining Centre ROWE’S FIND M28/0370 Other Mining Centre ROWE’S FIND 6.5 8.9 4 2.5 3.3 3.2 0 1.2 0.3 1.2 1.1 3.9 0.1 2.9 0.3 0 0 0 1.4 0.1 LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 100%" 100%" 100%" 100%" 100%" 100%" 100%" 100%" 0%" 0%" 0%" 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% A N N U A L R E P O R T 2 0 2 2 Page 90 of 93 TENEMENT INFORMATION (CONTINUED) E08/1649 Exploration MERLIN E08/1650 Exploration ELECTRIC DINGO E08/1745 Exploration PAULSENS E08/2499 Exploration MT STUART E08/2555 Exploration PAULSENS E08/2556 Exploration BELVEDERE NORTH E08/2558 Exploration PAULSENS EAST E08/2560 Exploration PAULSENS EAST E08/2655 Exploration MT STUART E08/2659 Exploration BADANA WELL E08/2755 Exploration MT MCGRATH E08/2791 Exploration MT MCGRATH E25/0499 Exploration MOUNT YOULE E25/0512 Exploration WOODLINE WEST E25/0520 Exploration E25/0526 Exploration E25/0534 Exploration E25/0553 Exploration E25/0556 Exploration E25/0558 Exploration E25/0568 Exploration BULONG TROJAN SLATE DAM SLATE DAM SLATE DAM TROJAN TROJAN E25/0594 Exploration HAMPTON HILL 48.2 27.5 36.3 24.1 0.1 6.9 3.4 3.4 6.9 34.8 10.3 34.8 9.8 10.1 8.3 16.4 31.8 74.1 58.9 27.5 13.9 14.7 LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE PENDING E25/0613 Exploration HAMPTON HILL 14.7 PENDING E26/0226 Exploration HAMPTON E27/0431 Exploration MT. MCLEAY E27/0449 Exploration NORTH DAM E27/0532 Exploration NORTH DAM E27/0558 Exploration BALAGUNDI E27/0600 Exploration HALFWAY HILL E27/0669 Exploration E27/0671 Exploration E27/0688 Exploration E27/0696 Exploration HAMPTON HAMPTON HAMPTON HAMPTON 3.5 157.8 10.3 18.4 40.6 41.4 68.1 59 3 59 LIVE LIVE LIVE LIVE LIVE PENDING PENDING PENDING PENDING E27/0698 Exploration HALFWAY HILL 41.4 PENDING E27/0699 Exploration HAMPTON 3 PENDING E28/2809 Exploration AVOCA DOWNS E28/3254 Exploration AVOCA DOWNS E47/1553 Exploration TOMBSTONE E47/3305 Exploration HORSE WELL 41.2 41.2 32 31 E47/3396 Exploration METAWANDY CREEK 17.2 PENDING PENDING LIVE LIVE LIVE 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 0%" 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 100% 100% 100%+ 0% 0% 0% 0% 0% 0% 0% 0% 0%" 0%" 0%" PENDING 0%# A N N U A L R E P O R T 2 0 2 2 Page 91 of 93 TENEMENT INFORMATION (CONTINUED) E80/1483 Exploration COYOTE EAST E80/1737 Exploration WESTERN TANAMI E80/3388 Exploration E80/3389 Exploration GREMLIN GREMLIN E80/3665 Exploration WESTERN TANAMI E80/5039 Exploration PEBBLES P25/2248 Exploration IMPERIAL/MAJESTIC P25/2249 Exploration IMPERIAL/MAJESTIC P25/2287 Exploration P25/2288 Exploration BULONG BULONG P25/2293 Exploration BULONG NORTH P25/2320 Exploration TROJAN P25/2324 Exploration BLACK HILLS P25/2325 Exploration BLACK HILLS P25/2326 Exploration BLACK HILLS P25/2327 Exploration BLACK HILLS P25/2328 Exploration BLACK HILLS P25/2331 Exploration BLACK HILLS P25/2357 Exploration BLACK HILLS P25/2358 Exploration BLACK HILLS P25/2367 Exploration P25/2368 Exploration P25/2369 Exploration BULONG BULONG BULONG P25/2377 Exploration VIRGIN DAM NORTH P25/2378 Exploration VIRGIN DAM WEST P25/2463 Exploration P25/2478 Exploration P25/2479 Exploration P25/2480 Exploration P25/2481 Exploration P25/2553 Exploration P25/2554 Exploration BULONG BULONG BULONG BULONG BULONG BULONG BULONG P25/2581 Exploration BLACK HILLS P25/2624 Exploration P25/2625 Exploration BULONG BULONG P25/2632 Exploration HAMPTON HILL P25/2648 Exploration P25/2674 Exploration P25/2683 Exploration P25/2684 Exploration HAMPTON HAMPTON HAMPTON HAMPTON 33 87.9 48.2 61 54.7 53.5 1.9 1.9 1.4 1 0.5 1.4 1.2 1.2 1.2 1.1 1.4 1.7 2 1.7 2 2 1.7 2 1.9 1.4 1.2 1.9 1.8 1.7 1.2 1.2 0.9 1.2 1.2 1.2 0.5 0.1 1.9 1.8 LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE 100%" 100%" 100%" 100%" 100%" 100%" 100%* 100%* 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% A N N U A L R E P O R T 2 0 2 2 Page 92 of 93 TENEMENT INFORMATION (CONTINUED) P25/2685 Exploration P25/2693 Exploration P25/2695 Exploration HAMPTON HAMPTON HAMPTON P25/2703 Exploration IMPERIAL/MAJESTIC P25/2719 Exploration P25/2720 Exploration HAMPTON HAMPTON P25/2724 Exploration IMPERIAL/MAJESTIC P25/2727 Exploration IMPERIAL/MAJESTIC P26/4090 Exploration FINGALS FORTUNE P26/4091 Exploration FINGALS FORTUNE P26/4117 Exploration BLACK HILLS P26/4118 Exploration BLACK HILLS P26/4119 Exploration BLACK HILLS P26/4122 Exploration BLACK HILLS P26/4176 Exploration FINGALS FORTUNE P26/4177 Exploration FINGALS FORTUNE P26/4179 Exploration FINGALS FORTUNE P26/4184 Exploration FINGALS FORTUNE P26/4550 Exploration P26/4551 Exploration P26/4552 Exploration P26/4553 Exploration P26/4554 Exploration P26/4555 Exploration P26/4556 Exploration P26/4557 Exploration P26/4558 Exploration P26/4559 Exploration P26/4560 Exploration P26/4561 Exploration P26/4562 Exploration HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON HAMPTON P26/4573 Exploration MT MONGER P26/4574 Exploration MT MONGER 1.5 2 1.2 0.1 1.2 1.2 8.6 1.4 1.9 2 2 1.9 1.9 0.6 2 2 1.6 1.3 1.9 2 1.9 1.7 1.9 2 1.9 2 1.8 0.7 0.1 1.8 1.9 0.1 0.1 P26/4653 Exploration FINGALS FORTUNE 1.87 P27/2326 Exploration HAMPTON HILL P27/2327 Exploration HAMPTON HILL P27/2328 Exploration HAMPTON HILL P80/1840 Exploration WESTERN TANAMI P80/1841 Exploration WESTERN TANAMI 1.8 1.8 1.6 1 0.5 PENDING 0% LIVE LIVE 100% 100% PENDING 0% LIVE LIVE PENDING PENDING LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE LIVE 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%" 100%" A N N U A L R E P O R T 2 0 2 2 Page 93 of 93 

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