ABN 54 118 912 495
ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2007
CONTENTS
PAGE
CORPORATE DIRECTORY
CHAIRMAN’S REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
BALANCE SHEET
INCOME STATEMENT
STATEMENT OF CHANGES IN EQUITY
CASH FLOW STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
CORPORATE GOVERANCE STATEMENT
ASX ADDITIONAL INFORMATION
2
3
4
13
14
15
16
17
18
34
35
37
42
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
1
CORPORATE DIRECTORY
DIRECTORS
AUDITORS
Nathan McMahon (Non Executive Chairman)
Bryan Dixon (Non Executive Director)
Mark Thompson (Non Executive Director)
RSM Bird Cameron Partners
8 St Georges Terrace
Perth WA 6000
COMPANY SECRETARY
Lisa Wynne
SHARE REGISTRY
Security Transfer Registrars
770 Canning Hwy
Applecross WA 6153
Telephone: +618 9315 2333
Facsimile: +618 9315 2233
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
Level 1
22 Oxford Close
West Leederville, Western Australia 6007
+618 93882967
Phone:
Facsimile: +618 9380 5911
Email:
info@catalystmetals.com
Website: www.catalystmetals.com
STOCK EXCHANGE LISTING
The Company is listed on Australian Stock
Exchange Limited
Home Exchange – Perth
ASX Codes:
CYL
CYLO
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
2
CHAIRMAN’S REPORT
Dear Shareholder,
The past twelve months has been significant for the company in that two of the founding
directors were replaced following an Extraordinary General Meeting on 27th July 2007. The
current Board acknowledges the strong support by shareholders.
Since that time the Company has been active in planning a drill programme at Minnie
Springs were the molybdenum target is yet to be adequately tested. A consultant geologist
with specific expertise in porphyry mineralisation has planned a diamond drill programme
which will be implemented in the forthcoming months. The Company will also investigate the
tungsten, uranium, gold and copper potential of the project area.
World consumption of molybdenum has
to
approximately 200,000 tonnes per annum. Over the past two years molybdenum prices have
steadily climbed with molybdenum oxide peaking at a 25 year-high of US$40.00 per lb in May
2005. The current price is approximately US$32.25/lb. This is in stark contrast to the price
of US$3 to US$5 paid during the 1990s.
increased 400% since
the mid-1960s
The distribution of molybdenum reserves and production is concentrated in only a few
countries in the world, with China, USA, Chile and Canada holding nearly 90% of the
reserves. USA, Chile and China are the main producers (75%) with each having outputs in
2003 of approximately 30,000 tonnes.
The roles for molybdenum are varied and increasing across developing and industrialised
nations; from stainless steel alloy infrastructure, to catalysts for the production of ultra low
sulphur diesel(ULSD), and high temperature pipes for nuclear plants. On the back of strong
growth in iron ore and steel minerals markets, world demand for molybdenum continues
growing at an estimated 4-6% per annum. The world molybdenum market is now worth well
over US$10 billion annually.
Accordingly, the Company believes that the economic fundamentals of molybdenum
remain very strong.
The current Board has a strong track record of acquiring significant mineral assets and
providing capital growth for shareholders and we remain committed to a thorough
programme of project generation.
Yours sincerely,
Nathan McMahon
Chairman
28 September 2007
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
3
DIRECTORS’ REPORT
The Directors present their report on Catalyst Metals Limited for the year ended 30 June 2007.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Nathan McMahon (Appointed 27 July 2007)
Mark Thompson
Bryan Dixon (Appointed 27 July 2007)
Howard Dawson (Removed 27 July 2007)
James Malone (Removed 27 July 2007)
Malcolm Carson (Resigned 3 August 2007)
Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
COMPANY SECRETARY
Lisa Wynne was appointed as Company Secretary 1 August 2007 following the resignation of Michael
Higginson.
CORPORATE STRUCTURE
Catalyst Metals Ltd is a company limited by shares that is incorporated and domiciled in Australia.
Catalyst Metals Ltd had no controlled entities during the financial year.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Company during the year was exploration of its Minnie Creek Project north
east of Carnarvon in Western Australia.
RESULTS OF OPERATIONS
The operating loss after income tax of the Company for the year ended 30 June 2007 was $168,832
(2006: $47,310).
The Company’s basic loss per share for the year was 0.8 cents (2006: 3.0 cents).
DIVIDENDS
No dividend has been paid during or is recommended for the financial year ended 30 June 2007.
EMPLOYEES
The Company employed 3 employees as at 30 June 2007 (2006: 3).
REVIEW OF OPERATIONS
The Company was admitted to the Official List of the ASX during July 2006 following the closure of an
initial public offer of 16 million shares to raise $3,200,000.
The Company drilled the Minnie Springs prospect and reported results in January 2007.
In July 2007 a resolution was put to shareholders to remove Mr Howard Dawson and Mr Jim Malone from
office and appoint Mr Nathan McMahon and Mr Bryan Dixon. The resolution was passed by
shareholders at a general meeting held 27 July 2007.
A more detailed review of the Company’s operations during the financial year is set out in the
Chairman’s Report.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
4
DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 19 July 2006 the Company completed an initial public offering of 16 million shares to raise $3,200,000
and was admitted to the Official List of the ASX.
On 12 October 2006 the company issued a prospectus offering shareholders the opportunity to
participate in a 1 for 2 non-renounceable entitlements issue for a total of 11,500,000 options at 1 cent
each to raise $115,000 before costs of the issue.
On 30 May 2007, the Company received a notice pursuant to section 249D of the Corporations Act to
convene a general meeting to seek shareholders approval to replace Howard Dawson and Jim Malone
as directors of the company with Bryan Garrie Kenneth Dixon and Nathan Bruce McMahon.
On 27 July at a meeting of shareholders, the shareholders approved the resolutions to re-structure the
board and Messers Dixon and McMahon were appointed.
There were no other significant changes in the state of affairs of the Company during the financial year.
FUTURE DEVELOPMENTS
Likely future developments in the operations of the Company are referred to in the Chairman’s Report.
Other than as referred to in this report, further information as to likely developments in the operations of
the Company and expected results of those operations would, in the opinion of the Directors, be
speculative and prejudicial to the interests of the Company and its shareholders.
SUBSEQUENT EVENTS
There has not been any matter or circumstance that has arisen since 30 June 2007, which has
significantly affected, or may significantly affect the operations of the Company, the result of those
operations, or the state of affairs of the Company in subsequent financial years, other than:
On 30 May 2007, the Company received a notice pursuant to section 249D of the Corporations Act to
convene a general meeting to seek shareholders approval to replace Howard Dawson and Jim Malone
as directors of the company with Bryan Garrie Kenneth Dixon and Nathan Bruce McMahon. On 27 July
at a meeting of shareholders, the shareholders approved the resolutions to re-structure the board and
Messers Dixon and McMahon were appointed.
In July 2007, 347,500 options were exercised and converted to ordinary shares raising $69,500 in funds.
FINANCIAL POSITION
The Company’s working capital, being current assets less current liabilities was $2,592,498 at 30 June
2007 (2006:$125,690).
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
5
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
Nathan McMahon (Non Executive Chairman – Appointed 27 July 2007)
Mr. McMahon has provided tenement management advise to the mining industry for approximately 14
years to in excess of 20 public listed mining companies. Mr. McMahon has specialised in native title
negotiations, joint venture negotiations and project acquisition due diligence. He is a director of several
unlisted mining and exploration companies with interests in platinum group elements, base metals,
industrial minerals and diamond exploration.
Qualifications:
Bachelor of Commerce
Directorships:
Cazaly Resources Limited
Bannerman Resources Limited
South China Resources PLC
Hodges Resources Limited
Former Directorships:
Graynic Metals Limited (From 2005 to 2006)
Northern Mining Limited (From 2005 to 2006)
Special Responsibilities:
Member of both the Nomination and Remuneration Committee and a
member of the Audit Committee.
Interests in shares and options:
665,455 ordinary shares
Mark Thompson (Non Executive Director)
Mr Thompson has worked extensively throughout Africa, USA, South America and Australia on mineral
exploration, resource development and palaeontologic projects since 1989. Mr Thompson has worked
for companies including Western Mining Corp, Equatorial Mining Ltd, Panorama Resources Ltd and
Centenary International Mining Ltd. He has successfully vendored the lead properties for other
companies such as Image Resources NL and Meteoric Resources Ltd. Prior to returning to full time
exploration in 2005, Mr Thompson was based in America to help explore and develop palaeontology
resources in Montana and Wyoming. Mr Thompson is a member of the Society of Vertebrate
Palaeontology, the National Speakers Association of Australia and an Editorial Board member/author of
the Encyclopaedia of Anthropology. He brings to Catalyst a strong technical as well as practical
experience in the exploration for mineral deposits.
Special Responsibilities:
Mr Thompson’s role encompasses the management of all mineral
exploration, identification and operational functions of the company.
His responsibilities also include health, safety and environment
management.
Directorships:
None
Interests in shares and options:
1,140,250 ordinary shares
1,000,000 Class A incentive shares
1,000,000 Class B incentive shares
545,000 options over ordinary shares
1,050,000 unlisted options over ordinary shares
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
6
DIRECTORS’ REPORT
Bryan Dixon
(Non-Executive Director - Appointed 27 July 2007)
(Company Secretary – Resigned 1 February 2007)
Mr Dixon has substantial experience in the mining sector and in the management of public and listed
companies. Previously, Mr Dixon has been employed by KPMG, Resolute Samantha Limited, Société
Générale and Archipelago Resources Plc. Mr Dixon is a Chartered Accountant and brings additional
project development, project acquisition, financing and corporate skills to the Company. Bryan is a
member of Company Secretaries Australia and has been Company Secretary with a number of
resources companies.
Qualifications:
Bachelor of Commerce
Chartered Accountant
Graduate Diploma in Company Secretarial Practice
Special Responsibilities:
Ongoing business development, all capital raisings, investor relations,
ASX liaison, risk identification, corporate governance and financial
management of the Company. Mr Dixon is Chairman of both the Audit
Committee and a member of the Nomination and Remuneration
Committee.
Directorships:
Hodges Resources Ltd – Non Executive Director
Blackham Resources Ltd – Managing Director
Interests in shares and options:
510,000 ordinary shares
Lisa Wynne
(Company Secretary)
Ms Wynne performed this role from 11 October 2006 to 6 June 2007 following her resignation. Ms Wynne
was re-appointed as Company Secretary by the new management on 1 August 2007. Ms Wynne has a
Bachelor of Commerce and is a Chartered Accountant with 6 years experience working with listed
entities in senior financial roles responsible for management and financial reporting, taxation, and
ensuring continuous disclosure and compliance. Lisa presently works with a number of emerging ASX
and AIM listed resource companies and specialises in financial and company secretarial transaction
and corporate work.
DIRECTORS’ MEETINGS
The number of meetings attended by each of the Directors of the Company during the financial year
was:
Board Meetings
Audit Committee Meetings
Number held
and entitled to
attend
Number
Attended
Number held
and entitled to
attend
Number
Attended
Mark Thompson
Howard Dawson
(Removed 27 July 2007)
Jim Malone
(Removed 27 July 2007)
Malcolm Carson
(Resigned 1 August 2007)
13
13
13
1
13
12
12
1
2
2
2
-
2
2
1
-
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
7
DIRECTORS’ REPORT
ENVIRONMENTAL ISSUES
The Company’s operations are subject to State and Federal laws and regulation concerning the
environment. Details of the Company performance in relation to environmental regulation are as
follows:
The Company’s exploration activities are subject to the Western Australian Mining Act. The Company
has a policy of complying with or exceeding its environmental performance obligations. The Board
believes that the Company has adequate systems in place for the management of its environmental
requirements. The Company aims to ensure the appropriate standard of environmental care is
achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The
Directors of the Company are not aware of any breach of environmental legislation for the financial
year under review.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings.
SHARE OPTIONS
As at the date of this report, there were 12,202,500 unissued ordinary shares under option.
No person entitled to exercise any option referred to above have or had, by virtue of the option, a right
to participate in any share issue of any other body corporate.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
8
DIRECTORS’ REPORT
REMUNERATION REORT
This report details the type and amount of remuneration for each director of Catalyst Metals Limited,
and for the executives receiving the highest remuneration. The information provided in this report
includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party
Disclosures. These disclosures have been transferred from the financial report and have been audited.
Remuneration Policy
It is the company’s objective to provide maximum stakeholder benefit from the retention of a high
quality board by remunerating directors fairly and appropriately with reference to relevant employment
market conditions. To assist in achieving the objective the Board links the nature and amount of
executive directors’ emoluments to the company’s financial and operational performance. The
expected outcomes of this remuneration structure are:
•
•
Retention and Motivation of Directors
Performance rewards to allow Directors to share the rewards of the success of Catalyst Metals
Limited
The remuneration of an executive director will be decided by the Remuneration and Nomination
Committee. In determining competitive remuneration rates the Committee reviews local and
international trends among comparative companies and the industry generally. It also examines terms
and conditions for the employee share option plan.
The maximum remuneration of non-executive Directors is the subject of Shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable. The
appointment of non-executive Director remuneration within that maximum will be made by the Board
having regard to the inputs and value of the Company of the respective contributions by each non-
executive Director.
The Board may award additional remuneration to non-executive Directors called upon to perform extra
services or make special exertions on behalf of the Company.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-
executive directors.
All equity based remuneration paid to directors and executives is valued at the cost to the company
and expensed. Options are valued using the Black-Scholes methodology.
Performance Based Remuneration
The issue of options to directors in accordance with the Company’s employee share option plan to
encourage the alignment of personal and shareholder returns. The intention of this program is to align
the objectives of directors/executives with that of the business and shareholders. In addition all
directors and executives are encouraged to hold shares in the Company.
The Company has not paid bonuses to directors or executives to date.
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to maximise the commonality of goals between shareholders
and directors and executives. The method applied in achieving this aim to date being the issue of
options to directors to encourage the alignment of personal and shareholder interests. The company
believes this policy will be the most effective in increasing shareholder wealth.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
9
DIRECTORS’ REPORT
Details of Remuneration for Year Ended 30 June 2007
Details of the remuneration for each director and the key management personnel (as defined in AASB
124 Related Party Disclosures) of the Company during the year are set out in the following tables:
The key management personnel of the Company includes the directors as per page 4 above and the
following executive officer who’s remuneration must be disclosed under the Corporations Act 2001 as
they are one of the 5 highest remunerated executives:
•
2007
Name
Bryan Dixon – Company Secretary
(From 7 March 2006 to 1 February 2007)
Short-term
employment
benefits
Cash salary
and fees
Post-
employment
benefits
Superannuation Options
Share-based
payments
Total
Non-executive directors
J Malone #
M Carson (from 26 May 2006 to
3 Aug 2007)
H Dawson #
Executive directors
M Thompson
Total key management
personnel compensation
Other company officers
B Dixon (resigned 1 Feb 2007)
L Wynne (Appointed 11
October 2006, resigned 6 June
2007)
31,950
-
36,696
119,761
188,407
36,528
4,592
1,638
-
3,302
5,367
10,307
-
-
-
-
-
82,609
82,609
-
-
33,588
-
39,998
207,737
281,323
36,528
4,592
# On 27 July 2007, the shareholders voted to remove Messers Dawson and Malone from the board of the
Company.
2006
No remuneration was paid to Directors or Executives during the financial year ended 30 June 2006.
Performance Income as a Proportion of Total Remuneration
1,050,000 options were issued to Mark Thompson in July 2006. 47 % of Mr Thompson’s remuneration for
the financial year consists of options.
Employment Contracts of Directors and Senior Executives
There were no formal contracts finalised as at the completion of the June 2007 financial year for Non-
executive Directors. Non-executive Directors are paid under the terms agreed to by a directors
resolution at rates detailed below:
Mr Dawson received director’s fees of $40,000 per annum inclusive of superannuation requirements.
Mr Malone received director’s fees of $30,000 per annum inclusive of superannuation requirements.
Mr McMahon will receive director’s fees of $35,000 per annum inclusive of superannuation requirements.
Mr Thompson will receive director’s fees of $30,000 per annum inclusive of superannuation requirements.
Mr Dixon will receive director’s fees of $30,000 per annum inclusive of superannuation requirements.
Mr Thompson had an employment agreement in place during the year whereby he receives up to
$100,000 per annum fully inclusive of superannuation requirements. Lateral Minerals Pty Ltd, a related
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
10
DIRECTORS’ REPORT
party of Mr Thompson, is engaged by the Company and receives $3,800 per month for the provision of
exploration and development services. These contracts were terminated on 31 May 2007.
The Company Secretary has a monthly agreement on ordinary commercial terms.
SHARE-BASED COMPENSATION
Options over shares in the Company are granted under the Catalyst Metals Limited Employee Incentive
Scheme (Scheme). The purpose of the Scheme is to give employees, directors, executive officers and
consultants of the Company an opportunity, in the form of options, to subscribe for ordinary shares in
the Company. The Directors consider the Scheme will enable the Company to retain and attract skilled
and experienced employees, board members and executive officers and provide them with the
motivation to make the Company more successful.
The terms and conditions of each grant of options affecting remuneration in the previous, this or future
reporting years are as follows:
Grant date
16 July 2006
16 July 2006
16 July 2006
Date vested and
exercisable
16 July 2006
16 July 2006
16 July 2006
Expiry date
Exercise price
16 July 2009
16 July 2009
16 July 2009
$0.25
$0.30
$0.35
Value per option
at grant date
$0.088
$0,078
$0.070
Details of options over ordinary shares in the Company provided as remuneration to each director and
each of the key management personnel of the Company are set out below. When exercisable, each
option is convertible into one ordinary share of Catalyst Metals Limited. Further information on the
options is set out in note 12 to the financial statements.
Number of options granted during the
year
Number of options vested during the
year
Name
Mark Thompson
2007
1,050,000
2006
-
2007
1,050,000
2006
-
The assessed fair value at grant date of options granted is allocated equally over the period from grant
date to vesting date, and the amount is included in the remuneration tables above. Fair values at
grant date are 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 interest
rate for the term of the options.
The model inputs for options granted during the year ended 30 June 2007 included:
a) options are granted for no consideration and vest immediately
b) exercise price $0.25, $0.30 and $0.35
c) grant date: 16 July 2007
d) expiry date: 16 July 2009
e) share price at grant date: $0.20
f)
risk-free interest rate: 5.5%
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
There are no insurance policies in place for Directors and Officers insurance. The Directors and Officers
have indemnities in place with the Company.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
11
DIRECTORS’ REPORT
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditors’ expertise and experience with the company are important. There were no
non-audit services provided by the Company’s external auditor during the year.
During the year the following fees were paid or payable for services provided by the auditor of the
Company, its related practices and non-related audit firms:
1.
Audit services
Audit and review of financial reports
16,750
5,000
2007
2006
2.
Non-audit services
AUDITOR’S INDEPENDENCE DECLARATION
-
5,000
The lead auditor’s independence declaration for the year ended 30 June 2007 has been received and
immediately follows the Directors’ Report.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of Catalyst Metals support and have adhered to the principles of sound corporate
governance.
The Board recognises the recent recommendations of the Australian Stock Exchange Corporate
Governance Council, and considers that Catalyst Metals is in compliance with those guidelines which
are of critical importance to the commercial operation of a junior listed resources company. During the
financial year, shareholders continued to receive the benefit of an efficient and cost-effective
corporate governance policy for the Company. The Company’s corporate governance statement
and disclosures are contained in the annual report.
This report is made in accordance with a resolution of the Directors.
Nathan McMahon
Non Executive Director
Perth, Western Australia
28 September 2007
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
12
BALANCE SHEET
As at 30 June 2007
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Total Non-Current Assets
Note
2007
2006
$
6
7
8
10
9
2,647,576
96,338
13,973
8,850
-
53,468
2,661,549
158,656
13,102
523,077
536,179
-
-
-
TOTAL ASSETS
3,197,728
158,656
Current Liabilities
Trade and other payables
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
11
69,051
32,966
69,051
32,966
3,128,677
125,690
12
13
13
3,262,210
173,000
82,609
-
(216,142)
(47,310)
3,128,677
125,690
The above balance sheet should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
14
INCOME STATEMENT
For the Year Ended 30 June 2007
Revenue
Occupancy costs
Professional fees
Administration costs
Exploration costs
Personnel
Other
Loss before income tax expense
Income tax expense
Net loss attributable to members of Company
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
2007
$
2006
$
2
3
3
3
3
3
3
5
4
4
171,684
1,009
(31,271)
(67,777)
(74,414)
(11,781)
(153,706)
(1,567)
(1,619)
(8,310)
(4,747)
(33,643)
-
-
(168,832)
(47,310)
-
-
(168,832)
(47,310)
(0.8 cents)
(0.8 cents)
(3.0 cents)
(3.0 cents)
The above income statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
15
STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2007
Issued Capital
Accumulated
Reserves
Total
Balance on
incorporation
Loss
Issue of shares
$
-
-
173,000
losses
$
-
(47,310)
-
Balance at 30 June 2006
173,000
(47,310)
Loss
Equity-based payments
Issue of shares
Issue of options
Share issue costs
Balance at 30 June 2007
-
-
3,200,000
115,000
(225,790)
3,262,210
(168,832)
-
-
-
-
$
$
-
-
-
-
-
82,609
-
-
-
-
(47,310)
173,000
125,690
(168,832)
82,609
3,200,000
115,000
(225,790)
(216,142)
82,609
3,128,677
The above statement of changes in equity should be read in conjunction with the accompanying
notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
16
CASH FLOW STATEMENT
For the Year Ended 30 June 2007
Cash Flows from Operating Activities
Payments for exploration and evaluation
Payments to suppliers, contractors and employees
Interest received
Note
2007
$
2006
$
(421,617)
(202,498)
165,684
(31,981)
(13,066)
1,009
Net cash flows used in operating activities
14
(458,431)
(44,038)
Cash Flows from Investing Activities
Payments for property, plant and equipment
Payments for exploration property
Proceeds from disposal of property, plant and equipment
Net cash flows used in investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares and other equity securities
Share issue expenses
(15,625)
(100,000)
1,090
(114,535)
-
-
-
-
3,315,000
(190,796)
173,000
(32,624)
Net cash flows from financing activities
3,124,204
140,376
Net increase cash and cash equivalents
2,551,238
96,338
Cash and cash equivalents at the beginning of the
financial year
96,338
-
Cash and cash equivalents at the end of the financial year
6
2,647,576
96,338
The above cash flow statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
17
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of Compliance
The financial report is a general purpose financial report that has been prepared in accordance
with Accounting Standards, including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Accounting Standards include Australian equivalents to International Financial Reporting
Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the financial statements and notes
of the Company comply with International Financial Reporting Standards (‘IFRS’).
(b)
Basis of preparation
The financial report covers Catalyst Metals Limited, which is a listed public company,
incorporated and domiciled in Australia. Catalyst Metals was admitted to the official list of the
Australian Stock Exchange in July 2006.
The financial report has been prepared on an accruals basis and is based on historical costs and
does not take into account changing money values or, except where stated, current valuations
of non-current assets. Cost is based on the fair values of the consideration given in exchange for
assets.
The following is a summary of the material accounting policies adopted by the Company in the
preparation of the financial report. The accounting policies have been consistently applied,
unless otherwise stated.
(c)
Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
(d)
Impairment
Assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. The impairment loss is recognised for the amount
by which the assets’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an assets fair value less costs to sell and value in use.
(e) Cash and cash equivalents
For the purpose of the cash flow statement, cash includes cash on hand and at call deposits with
banks or financial institutions and investments in money market instruments with less than 30 days
to maturity.
(f)
Trade and other receivables
Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
18
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
(g)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure
is
accumulated separately for each area of interest. Such expenditure comprises net direct costs
and an appropriate portion of related overhead expenditure. Each area of interest is limited to
a size related to a known or probable mineral resource capable of supporting a mining
operation.
incurred by or on behalf of the Company
Exploration expenditure for each area of interest is written off as incurred, except that it may be
carried forward provided that one of the following conditions is met:
• such costs are expected to be recouped through successful development and exploitation of
the area of interest or, alternatively, by its sale; or
• exploration activities in an area of interest have not, at balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves.
The Company performs impairment testing when facts and circumstances suggest the carrying
amount has been impaired. If it was determined that the asset was impaired it would be
immediately written off to the income statement.
Expenditure is not carried forward in respect of any area of interest unless the Company’s right of
tenure to that area of interest is current. Expenditures incurred before the Company has
obtained legal rights to explore a specific area is expensed as incurred. Amortisation is not
charged on areas under development, pending commencement of production.
(h)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the
end of the financial year which are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
(i)
Provisions
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the balance sheet date.
(j)
Employee entitlements
Provision is made for employee benefits accumulated as a result of employees rendering services
up to the reporting date. These benefits include wages and salaries, annual leave and long
service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits
expected to be settled within twelve months of the reporting date are measured at their nominal
amounts based on remuneration rates which are expected to be paid when the liability is settled.
All other employee benefit liabilities are measured at the present value of the estimated future
cash outflow to be made in respect of services provided by employees up to the reporting date.
In determining the present value of future cash outflows, the market yield as at the reporting
date on national government bonds, which have terms to maturity approximating the terms of
the related liabilities, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
• wages and salaries, non-monetary benefits, annual leave, long service leave and other leave
benefits, and
• other types of employee benefits are recognised against profits on a net basis in their
respective categories.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
19
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(k)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in
respect of the taxable profit or tax loss for the year. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting date. Current tax for current and
prior years is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect
of temporary differences arising from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than
as a result of a business combination) which affects neither taxable income nor accounting
profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary
differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
year(s) when the asset and liability giving rise to them are realised or settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the company intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in the income statement,
except when it relates to items credited or debited directly to equity, in which case the deferred
tax is also recognised directly in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of goodwill or excess.
(l)
Equity based payments
The Company determines the fair value of options issued to employees as remuneration and
recognises the expense in the income statement. This policy is not limited to options and also
extends to other forms of equity based remuneration.
Fair value is measured 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
interest rate for the term of the option. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions,
and behavioural considerations. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period.
(m)
Earnings per share
Basic earnings per share is determined by dividing the profit from ordinary activities after related
income tax expense by the weighted average number of ordinary shares outstanding during the
financial year.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
20
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(n) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of
cash flows arising from investing and financial activities, which are recoverable from, or payable
to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
(o) Critical accounting estimates and judgments
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic date, obtained
both externally and within the Company.
Examples of those areas which require accounting estimates and judgments include carrying
values of exploration expenditure and share–based payments.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
21
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
2.
Revenue
Interest received
3.
Expenses
Loss before income tax includes the following specific
expenses:
Directors fees
Audit fees
Web site costs
Exploration costs written off (refer note 1(g))
Depreciation
Share-based payments
Net loss on disposal of property, plant & equipment
4.
Earnings per Share
2007
$
2006
$
171,684
1,009
28,199
16,750
3,152
11,781
1,214
82,609
218
-
5,000
2,400
33,643
-
-
-
2007
No. of Shares
2006
No. of Shares
Weighted average number of ordinary shares outstanding
during the year used in calculation of earnings per share
Weighted average number of potential ordinary shares
outstanding during the year used in calculation of diluted
earnings per share
22,210,989
1,600,000
22,210,989
1,600,000
5.
Income taxes
(a) Income tax recognised in profit
No income tax is payable by the parent or consolidated entities as they both recorded
losses from income tax purposes for the year, as a tax consolidated group
(b) Numerical reconciliation between income tax expense and the loss before income tax
Loss before tax
Income tax benefit at 30% (2006:30%)
Tax effect of:
- non deductible expenses
- share based payments
- deductible capital raising expenditure
- deductible temporary differences
2007
$
(168,832)
2006
$
(47,310)
(50,650)
(14,193)
869
24,783
(13,547)
(155,123)
-
-
-
-
Deferred tax asset not recognised
193,669
14,193
Income tax benefit attributable to loss from ordinary
activities before tax
-
-
(c) Unrecognised deferred tax balances
Tax losses attributable to members of the tax
consolidated group
692,873
47,310
Net unrecognised deferred tax asset at 30%
207,862
14,193
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
22
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
6.
Cash and cash equivalents
Cash at bank
7.
Trade and other receivables
Sundry debtors
Provision for doubtful debtors
8.
Other current assets
Prepaid capital raising costs
9.
Exploration and Evaluation Expenditure
Written down value – opening
Exploration expenditure
Write downs (refer note 1(g))
2007
$
2006
$
2,647,576
96,338
13,973
-
13,973
-
-
534,858
(11,781)
8,850
-
8,850
53,468
-
33,642
(33,642)
Written down value – closing
523,077
-
10.
Property, plant and equipment
Year ended 30 June 2007
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2007
Cost or fair value
Accumulated depreciation
Net book amount
Computer
equipment
Furniture,
fittings and
equipment
-
5,044
(1,308)
(664)
3,072
3,590
(518)
3,072
-
10,580
-
(550)
10,030
10,580
(550)
10,030
Total
$
-
15,624
(1,308)
(1,214)
13,102
14,170
(1,068)
13,102
11.
Trade and other payables
Current Payables
Trade creditors
Accruals
Payments due to directors (see Note 14(e))
Trade liabilities are non-interest bearing and normally settled on 30-day terms.
18,809
50,242
-
69,051
25,903
5,000
2,063
32,966
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
23
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
12.
Contributed Equity
(a)
Share capital
Ordinary shares
Fully paid
Incentive shares
Class A
Class B
(b) Other equity securities
Options – Listed
Options - Unlisted
2007
Number
2007
$
2006
Number
2006
$
(c) 23,000,000
3,151,432
7,000,000
165,000
4,000,000
4,000,000
4,000
4,000
4,000,000
4,000,000
4,000
4,000
31,000,000
3,159,432
15,000,000
173,000
(d) 11,500,000
102,778
1,050,000
-
-
-
-
-
Total contributed equity
43,550,000
3,262,210
15,000,000
173,000
(c) Movements in Ordinary Shares
Details
Balance at beginning of
year
Number of
Shares
7,000,000
Issue price
$’000
165,000
Share placement at 0.20 cents
16,000,000
$0.20
3,200,000
Less: Transaction costs
Balance at end of year
23,000,000
(213,568)
3,151,432
(d) Movements in other equity securities
Details
Listed Options
Balance at beginning of
year
Number of
Shares
Issue price
$’000
-
Entitlement issue at 1 cent
11,500,000
$0.01
Less: Transaction costs
Balance at end of year
Unlisted Options
Balance at beginning of
year
Issued
Balance at end of year
(e) Ordinary shares
11,500,000
-
1,050,000
1,050,000
-
-
115,000
(12,222)
102,778
-
-
-
On 27 March 2006 the Company completed an initial public offering and raised $3,200,000
through the issue of 16,000,000 ordinary shares at $0.20 per share.
On a show of hands, every member present in person or by proxy shall have one vote and,
upon a poll, each share shall have one vote.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
24
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
12.
Contributed Equity (cont)
(f) Incentive Shares
Class A Incentive Shares
•
•
•
•
The Class A Incentive shares are a separate class of shares that will be convertible into
ordinary shares. They do no carry any voting rights in the company or rights to
participate in new issues (whether bonus or rights) in the Company.
Each incentive share will convert into one ordinary share upon the earlier of:
(i)
(ii)
(iii)
the volume weighted average price for 30 days of Catalyst Metals Limited
ordinary shares exceeds $0.50 or;
the Company directly or indirectly secures an asset with JORC measured,
indicated and inferred resources exceeding 150,000 gold equivalent ounces;
a takeover bid becoming unconditional; entering into and the Court approving
a solvent scheme of arrangement or reconstruction which as the effect of
changing the control of the Company.
If the above do not occur, within 3 years from the date the Company’s ordinary shares
are admitted to quotation of ASX, each 100,000 incentive shares will convert into one
ordinary share (with any fractional entitlement being rounded up to the nearest whole
full paid share.
The incentive shares are unlisted and non transferable.
Class B Incentive Shares
•
•
•
•
The Class B Incentive shares are a separate class of shares that will be convertible into
ordinary shares. They do no carry any voting rights in the company or rights to
participate in new issues (whether bonus or rights) in the Company.
Each incentive share will convert into one ordinary share upon the earlier of:
(i)
(ii)
(iii)
the volume weighted average price for 30 days of Catalyst Metals Limited
ordinary shares exceeds $0.75 or;
the Company directly or indirectly secures an asset with JORC measured,
indicated and inferred resources exceeding 225,000 gold equivalent ounces;
a takeover bid becoming unconditional; entering into and the Court approving
a solvent scheme of arrangement or reconstruction which as the effect of
changing the control of the Company; and
conditional on the Minnie Creek Project being the main focus of the Company
at the time of the (i), (ii) and (iii) above.
If the above do not occur, within 3 years from the date the Company’s ordinary shares
are admitted to quotation of ASX, each 100,000 incentive shares will convert into one
ordinary share (with any fractional entitlement being rounded up to the nearest whole
full paid share.
The incentive shares are unlisted and non transferable.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
25
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
12.
Contributed Equity (cont)
(g)
Options
1,050,000 options over ordinary shares in the Company were issued to Mark Thompson in July
2006. The options entitle the holders to subscribe for fully paid ordinary shares in the
Company and the Option may be exercised at any time until 31 December 2008. The options
were issued as three different series, with strike price of $0.25, $0.30 and $0.35 respectively. The
Options will lapse at 5.00pm WST on 16 July 2009.
On 7 December 2006 the Company completed a non-renounceable entitlement issue of
options and raised $115,000 through the issue of 11,500,000 options over ordinary shares in the
Company.
The options entitle the holders to subscribe for fully paid ordinary shares in the Company and
the Option may be exercised at any time until 31 December 2008 at an exercise price of twenty
cents (20c) per Option exercised. The Options will lapse at 5.00pm WST on 31 December 2008.
2007
$
2006
$
13.
Reserves & Retained Profits
a)
Reserves
Share-based payments reserve
Balance at the beginning of this year
Option expense
Balance at the end of the year
b)
Retained losses
Balance at the beginning of this year
Loss for the year
Balance at the end of the year
-
82,609
82,609
47,310
168,832
216,142
-
-
-
-
47,310
47,310
14.
Notes to the Cash Flow Statement
(a) Reconciliation of net cash used in operating activities
to operating loss after income tax
Operating loss after tax
(168,832)
(47,310)
Add non cash items:
Depreciation
Net loss on disposal of non-current assets
Share-based payments expense
Changes in net assets and liabilities
Increase in receivables
Increase in payables
Increase in exploration
1,214
218
82,609
-
-
-
(7,492)
56,929
(523,077)
(8,850)
12,122
-
Net cash outflow from operating activities
(558,431)
44,038
(b) Non-cash financing and investing activities
The Company did not have any non-cash financing or
investing activities during the year (2006: Nil)
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
26
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
15.
Key Management Personnel Compensation
(a) Directors and Specified Executives
The names and positions held by key management personnel in office at
any time during the year are:
Directors
M Thompson
H Dawson
J Malone
M Carson
Executives & Officers
Executive Director
Non-Executive Chairman (From 21 March 2006 to 27 July 2007)
Non-Executive Director (From 21 March 2006 to 27 July 2007)
Non-Executive Director (From 29 May 2007 to 3 August 2007)
B Dixon
Company Secretary (From 21 March 2006 to 1 February 2007)
All of the above persons were also key management persons during the year ended 30 June
2006, except M Carson.
(b)
Key management personnel remunerations
Short-term employee benefits
Post-employment benefits
Share based payments
2007
229,167
10,307
82,609
322,443
2006
-
-
-
-
The Company has taken advantage of the relief provided by Corporations Regulation 2M.6.04
and has transferred the detailed remuneration disclosures to the directors’ report. The relevant
information can be found in the remuneration report on pages 9 to 11 of the directors report.
(d)
Equity instrument disclosures relating to key management personnel
(i)
Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and share issued on the exercise of such
options, together with terms and conditions of the options, can be found in
the remuneration report on pages 9 to 11 of the directors report.
ii)
Option holdings
The numbers of options over ordinary shares in the company held during the year by
each director of the Company and other key management personnel,
including their personally related parties, are set out below:
2007
Directors
M Thompson
J Malone
H Dawson
M Carson
Balance at
beginning of
year
-
-
-
-
Other key management personnel
Bryan Dixon #
-
Granted as
compensation
Exercised
Other
changes
Balance at
end of year
Vested and
exercisable
1,050,000
-
-
-
-
-
-
-
-
-
-
545,000
457,500
395,000
10,000
-
1,595,000
1,595,000
457,500
395,000
10,000
457,500
395,000
10,000
220,000
220,000
220,000
# Bryan Dixon resigned as company secretary of the Company on 1 February 2007
2006
There were no options held during the 2006 financial year by directors and other key
management personnel.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
27
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
15.
Key Management Personnel Compensation (cont)
(d)
Equity instrument disclosures relating to key management personnel
(iii)
Shareholdings
Ordinary Shares
The numbers of ordinary shares in the company held during the financial year by each
director and other key management personnel of the Company, including their
personally related parties, are set out below. There were no shares granted during the
year as compensation.
2007
Directors
H Dawson
J Malone
M Thompson
M Carson
Other key management personnel
Bryan Dixon #
Ordinary Shares
Balance at
beginning of year
Received during
the year on
exercise of
options
Other changes
Balance at end
of year
1,040,000
915,000
1,000,000
-
415,000
-
-
-
-
-
-
50,000
90,000
20,000
1,040,000
965,000
1,090,000
20,000
-
415,000
# Bryan Dixon resigned as company secretary of the Company on 1 February 2007
2006
Directors
H Dawson
J Malone
M Thompson
Ordinary Shares
Balance at
beginning of year
Received during
the year on
exercise of
options
Other changes
Balance at end
of year
-
-
-
-
-
-
1,040,000
915,000
1,000,000
1,040,000
915,000
1,000,000
Incentive shares
The numbers of incentive shares in the company held during the financial year by each
personally related parties, are set out below:
2007
Directors
H Dawson
J Malone
M Thompson
Class A Incentive Shares
Class B Incentive Shares
Balance at
beginning of
year
Other
changes
Balance at
end of year
Balance at
beginning of
year
Other
changes
Balance
at end of
year
600,000
900,000
1,000,000
-
-
-
600,000
900,000
600,000
900,000
1,000,000
1,000,000
-
-
-
600,000
900,000
1,000,000
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
28
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
15.
Key Management Personnel Compensation (cont)
2006
Directors
H Dawson
J Malone
M Thompson
Class A Incentive Shares
Class B Incentive Shares
Balance at
beginning of
year
Other
changes
Balance at
end of year
Balance at
beginning of
year
Other
changes
Balance
at end of
year
-
-
-
600,000
600,000
900,000
900,000
1,000,000
1,000,000
-
-
600,000
900,000
600,000
900,000
- 1,000,000
1,000,000
(e)
Loans to key management personnel
Amounts payable to Directors and Director related entities
at the end of the financial year, included in current liabilities
(f)
Other transactions with key management personnel
2007
$
2006
$
-
2,063
Messers Dawson and Malone are directors and shareholders of Discovery Capital Limited.
Catalyst Metals Limited had an agreement based on normal commercial terms and conditions
to reimburse for office rental.
Messers Dawson and Malone are directors of Latin Gold Limited . Catalyst Metals Limited had
an agreement based on normal commercial terms and conditions to reimburse for office and
administrative expenses.
Mr Thompson, is a related party of Lateral Minerals Pty Ltd. Catalyst Metals Limited has entered
into a contract with Lateral Minerals Pty Ltd during the year for the provision of exploration and
development services and vehicle hire.
Messers Dawson and Malone are directors of Latin Gold Limited, Discovery Capital Limited and
Uranium King Limited, all of whom had an agreement based on normal commercial terms and
conditions to reimburse the Company for secretarial services.
Aggregate amounts of each of the above types of other transactions with key management
personnel of Catalyst Metals Limited:
Purchases
Rent of office building
Administrative and office overheads
Exploration services and vehicle hire
Sales
Reimbursements for secretarial services
2007
$
43,227
21,282
39,996
12,254
2006
$
-
-
-
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
29
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
16.
Related Party Disclosures
Key Management Personnel
Red Dog Option and Joint Venture Agreement (Red Dog Agreement)
Red Dog Prospecting Pty Ltd, a company which Mr Thompson is both a director and shareholder,
entered into an Option and Joint Venture Agreement with Catalyst on 25 May 2006. Red Dog
granted Catalyst an option to purchase a 90% interest in Tenements E09/1187, E09/1174 and
E09/1291 for a purchase price of $100,000 (Option). Catalyst exercised the Option in July 2006.
On the exercise of the Option by Catalyst, a joint venture was established between the parties
(with Catalyst having a participating share of 90% and Red Dog having a participating share of
10%) for the purposes of prospecting, exploring and, if so decided by the parties, mining of
marketable minerals and other commodities. Catalyst will be required to sole fund all exploration
costs up to completion of a feasibility study. Catalyst will be Manager of the joint venture and,
whilst it is solely funding exploration costs, it will have conduct of the joint venture operations as it
sees fit.
17.
Equity-based payments
The Company has entered into an Employee Share Option Plan that allows for share options to
be granted to eligible employees and officers of the Company. The number of share options that
can be issued under the plan cannot exceed 5% of the total number of shares on issue. The terms
and conditions of the share option issued under the plan are at the discretion of the Board
however, the maximum term of the share option is five years.
During the year 1,050,000 share options were granted to directors.
All options granted to directors and key management personnel are ordinary shares in Catalyst
Metals Limited, which confer a right of one ordinary share for every option held
18.
Auditors’ Remuneration
Amounts received or due and receivable by the auditors for:
Auditing accounts
Other services
19.
Commitments
There were no outstanding commitments, which are not
disclosed in the financial statements as at 30 June 20067
other than:
(a) Remuneration Commitments
No later than 1 year
Later than 1 year but not later than 5 years
(b) Tenement commitments
No later than 1 year
Later than 1 year but not later than 5 years
2007
$
2006
$
16,750
-
5,000
5,000
16,750
10,000
-
-
-
105,600
105,600
211,200
312,586
123,500
-
312,586
312,586
-
123,500
334,700
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
30
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
20.
Financial Instruments
Notes
Floating
Interest
Rate
$
1 year or
less
Over 1-5
years
$
$
Non
interest
bearing
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
6.21%
2,600,000
-
2007
Financial assets
Cash
equivalents
and
Trade
receivables
and
cash
other
6
7
Total financial assets
Financial liabilities
Trade
payables
and
other
10
Total financial liabilities
Net financial assets/(liabilities)
2006
Financial assets
Cash
equivalents
and
Trade
receivables
and
cash
other
6
7
5.35%
-
Total financial assets
Financial liabilities
Trade
payables
and
other
10
Total financial liabilities
Net financial assets
Reconciliation of net financial assets to net assets
Net Financial Assets
Prepayments
Property, plant & equipment
Exploration
Net Assets
Interest rate risks
-
-
-
-
-
-
-
-
-
-
-
-
47,576
2,647,576
13,973
13,73
61,549
2,661,549
69,051
69,051
69,051
69,051
(7,502)
2,592,498
96,338
96,338
8,850
8,850
105,188
105,188
32,966
32,966
32,966
32,966
72,222
72,222
2007
$
2,592,498
-
13,102
523,077
2006
$
72,222
53,468
-
-
3,128,677
125,690
The Company’s exposure to interest rate risk is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates. The Company does not have a formal
policy in place to mitigate such risks.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
31
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
20.
Financial Instruments (cont)
Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision
of doubtful debts) of those assets as disclosed in the balance sheet and notes to the financial
statements. The Company has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating
the risk of financial loss from defaults. The Company’s exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions
concluded are spread amongst approved counterparties.
Net fair value
The net fair value of all assets approximates their carrying value.
21.
Segment Information
The Company operates within one mineral exploration segment in Australia.
22.
Subsequent Events
There has not been any matter or circumstance that has arisen since 30 June 2007, which has
significantly affected, or may significantly affect the operations of the Company, the result of those
operations, or the state of affairs of the Company in subsequent financial years, other than:
On 30 May 2007, the Company received a notice pursuant to section 249D of the Corporations Act
to convene a general meeting to seek shareholders approval to replace Howard Dawson and Jim
Malone as directors of the company with Bryan Dixon and Nathan McMahon.
On 27 July at a meeting of shareholder, the shareholders approved the resolutions to re-structure the
board and Messers Dixon and McMahon were appointed.
In July 2007, 347,500 options were exercised and converted to ordinary shares raising $69,500 in
funds.
23.
Contingent Liabilities and Contingent Assets
The Company does not have any contingent liabilities or contingent assets at 30 June 2007.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
32
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2007
24.
New Accounting Standards and Interpretations
The following Australian Accounting Standards have been issued or amended and are
applicable to the Company but are not yet effective. They have not been adopted in
preparation of the financial statements as at 30 June 2007
Application
Date of
Standard
Application
Date for
Company
1 Jan 2007 1 July 2007
AASB
Amendment
Standards Affected
Outline of Amendment
AASB
2005–10:
Amendment
s to
Australian
Accounting
Standards
AASB 1: First time adoption of
AIFRS
AASB 4: Insurance Contracts
AASB 101: Presentation of
Financial Statements
AASB 114: Segment Reporting
AASB 117: Leases
AASB 133: Earnings per Share
AASB 1023: General Insurance
Contracts
AASB 1038: Life Insurance
Contracts
AASB 139: Financial Instruments:
Recognition and Measurement
The disclosure requirements of
AASB 132: Financial Instruments:
Disclosure and Presentation
have been replaced due to the
issuing of AASB 7: Financial
Instruments: Disclosures in
August 2005. These
amendments will involve
changes to financial instrument
disclosures within the financial
report. However, there will be
no direct impact on amounts
included in the financial report
as it is a disclosure standard.
AASB 132: Financial Instruments:
Disclosure and Presentation
As above
1 Jan 2007 1 July 2007
AASB 7:
Financial
Instruments:
Disclosures
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
33
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the financial position as at 30 June 2007 and of the
performance for the year ended on that date of the Company;
2.
the Chairman and Chief Financial Officer have each declared that:
(a) the financial records of the Company for the financial year have been properly maintained
in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting
Standards; and
(c) the financial statements and notes for the financial year give a true and fair view.
3.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Nathan McMahon
Chairman
Dated at Perth this 28th day of September 2007
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
34
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Catalyst Metals Limited is responsible for corporate governance of the
Company. The Board guides and monitors the business and affairs of Catalyst Metals Limited on behalf
of the shareholders by whom they are elected and to whom they are accountable.
For further information on corporate governance policies adopted by Catalyst Metals Limited, refer to
our website: www.catalystmetals.com
Board Objectives
The Board will develop strategies for the Company, review strategic objectives, and monitor the
performance against those objectives. The overall goals of the corporate governance process are to:
•
•
•
drive shareholders value;
assure a prudential and ethical base to the Company’s conduct and activities; and
ensure compliance with the Company’s legal and regulatory obligations.
Consistent with these goals, the Board assumes the following responsibilities;
•
•
•
•
•
developing initiatives for profit and assets growth;
reviewing the corporate, commercial and financial performance of the Company on a regular
basis;
acting on behalf of, and being accountable to, the Shareholders;
identifying business risks and implementing actions to manage those risks; and
developing and effecting management and corporate systems to assure quality.
The Company is committed to the circulation of relevant materials to Directors in a timely manner to
facilitate Directors’ participation in Board discussions on a fully informed basis.
Structure of the Board
The skills, experience and expertise relevant to the position of director held by each director in office at
the date of the annual report is included in the Directors’ Report.
Election of Board members is substantially the province of the Shareholders in general meeting.
However, the Company commits to the following principles:
•
•
the Board to comprise of Directors with a blend of skills, experience and attributes appropriate for
the Company and its business;
the principal criterion for the appointment of new Directors being their ability to add value to the
Company and its business.
The Board has accepted the ASX Corporate Governance Councils definition of an Independent
Director contained in their report titled “The Principles of Good Corporate Governance and Best
Practice Recommendations – March 2003”.
Given the size of the company and the industry in which is operates, the current Board structure is
considered to best serve the Company in meeting its objectives, given its small capitalisation, limited
resources and existing operations. The composition of the Board is reviewed on an annual basis to
ensure that the Board has the appropriate mix of expertise and experience.
There are procedures in place, as agreed by the board, to enable directors to seek independent
professional advice on issues arising in the course of their duties at the company’s expense.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
37
CORPORATE GOVERNANCE STATEMENT
The term in office held by each director in office at the date of this report is as follows:
Name
Term in office
Nathan McMahon
Bryan Dixon
Mark Thompson
2 months
2 months
19 months
Remuneration and Nomination Committee
The Board appointed a Remuneration and Nomination Committee which operates under a charter of
the Board. Mr Dixon and Mr McMahon are both members of the Remuneration and Nomination
Committee.
Nomination Arrangements
Where a vacancy is considered to exist, the Committee will select an appropriate candidate through
consultation with external parties and consideration of the needs of shareholders and the Company.
Such appointments will be referred to shareholders for re-election at the next annual general meeting.
All Directors, except the Managing Director, are subject to re-election by shareholders at least every
three years.
When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit
from the services of a new director with particular skills, the Board will determine the selection criteria for
the position based on the skills deemed necessary for the Board to best carry out its responsibilities. The
Board will then appoint the most suitable candidate (assuming one is available) who must stand for
election at the next annual general meeting.
Performance
During the reporting year the Company did not have a formal process for evaluation of Directors and
Executives due to their only being three in total. The Chairman will undertake an annual assessment of
the performance of the individual directors and meet privately with each director to discuss this
assessment.
Remuneration Arrangements
It is the company’s objective to provide maximum stakeholder benefit from the retention of a high
quality board by remunerating directors fairly and appropriately with reference to relevant employment
market conditions. To assist in achieving the objective the Board links the nature and amount of
executive directors’ emoluments to the company’s financial and operational performance. The
expected outcomes of this remuneration structure are:
•
•
Retention and motivation of Directors
Performance rewards to allow Directors to share the rewards of the success of Catalyst Metals
Limited
The remuneration of an executive director will be decided by the Remuneration and Nomination
Committee. In determining competitive remuneration rates the Committee reviews local and
international trends among comparative companies and the industry generally. It also examines terms
and conditions for the employee share option plan.
The maximum remuneration of non-executive Directors is the subject of shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable. The
appointment of non-executive Director remuneration within that maximum will be made by the Board
having regard to the inputs and value of the Company of the respective contributions by each non-
executive Director.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
38
CORPORATE GOVERNANCE STATEMENT
The Board may award additional remuneration to non-executive Directors called upon to perform extra
services or make special exertions on behalf of the Company.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-
executive directors.
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
Options are valued using the Black-Scholes methodology.
Audit Committee
The shareholders in a general meeting are responsible for the appointment of the external auditors of
the Company, and the Board from time to time will review the scope, performance and fees of those
external auditors.
The Board has established an audit committee in May 2006, which operates under a charter of the
Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within
the Company. This includes both internal controls to deal with both the effectiveness and efficiency of
significant business processes, the safeguarding of assets, the maintenance of proper accounting
records, and the reliability of financial and non information. The Board has delegated the responsibility
for the establishment and maintenance of a framework of internal control of the Company to the audit
committee.
The members of the audit committee at the end of the year and date of this report were:
N McMahon
B Dixon
L Wynne
Qualifications of audit committee members
Mr Dixon has a degree in Commerce and is a Chartered Accountant who has extensive experience as
an auditor in a big four firm. Mr Dixon is also a member of Chartered Secretaries Australia.
Mr McMahon brings to the Committee additional technical, financial and corporate skills.
Ms Wynne holds the office of Company Secretary. Ms Wynne has a degree in Commerce and is a
Chartered Accountant who has extensive experience in financial accounting and audit. Ms Wynne is
also a student member of Chartered Secretaries Australia.
For details on the number of meetings of the Audit Committee held during the year and the attendees
at those meetings, refer to the Directors’ Report.
Identification and Management of Risk
The Board’s collective experience will enable accurate identification of the principal risks which may
affect the Company’s business. Management of these risks will be discussed by the Board at periodic
(at least annual) strategic planning meetings. In addition, key operational risks and their management,
will be recurring items for deliberation at Board meetings.
Ethical Standards
The Board is committed to the establishment and maintenance of appropriate ethical standards to
underpin the Company’s operations and corporate practices.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
39
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Disclosures
During the financial year Catalyst Metals has complied with each of the 10 Essential Corporate
Governance Principles and the corresponding Best Practice Recommendations, other than in relation
to the matters specified below:
Best Practice Recommendation
Best Practice
Recommendation
Notification of
Departure
Explanation of Departure
2.1 Structure of the
Board
The majority of the
Board are not
independent
directors
2.2 The Chairperson
should
an
be
independent
director
The
chair, Mr
Nathan McMahon
is not considered
independent
an
director
The Board has determined that, consistent with the size of the
Company and its activities, the Board shall be comprised of
three Directors, two of whom, are non-executive.
The Board recognises that best practice occurs when the
Board comprises a majority of non-executive directors. The
Board continues to strive to meet the Principles of Good
Corporate Governance and Best Practice Recommendations
published by the ASX or other such principles and guidance as
the Board may consider appropriate from time to time,
however the Board also recognises that complying with the
ASX Corporate Governance Council Recommendation 2.1 “A
majority of the Board should be independent directors” is
impractical given the size of the company and the industry in
which is operates. The Board instead aims to assess the
independence of the Company’s non-executive Director on
an ongoing basis requiring full disclosure where conflicts of
interests arise.
refers to the criteria
The Board
independence as
recommended by the ASX in considering independence of
the Chairman.
for
In the
interests of disclosure, the Board notes that Mr
McMahon is shareholder in the Company. Furthermore, the
Board notes that Mr McMahon is not an executive and as
such, the Board considers that there is limited scope for Mr
those of
Mahon’s personal
shareholders.
to conflict with
interests
The Board (subject to members’ voting rights in general
meeting) is responsible for selection of new members and
succession planning, and has regard to a candidate’s
experience and competence in areas such as exploration,
finance and administration. The wide commercial experience
of Mr McMahon assists Catalyst Metals
its
corporate objectives and plans.
in meeting
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
40
CORPORATE GOVERNANCE STATEMENT
Best
Recommendation
Practice
Notification
Departure
of
Explanation of Departure
4.3 Structure of the
Audit Committee
Audit
Committee’s
Chairman
independent
is not
The Board has established an audit committee in May
2006, which operates under a charter of the Board and
consists of all Non-Executive Directors. The Board has
delegated the responsibility for the establishment and
maintenance of a framework of internal control of the
Company to the audit committee.
The Board recognises that best practice occurs when the
Audit committee comprises of only non-executive
directors; a majority of non-executive directors; an
independent chairperson who is not a chair of the board
and at least three members. The Board continues to strive
to meet the Principles of Good Corporate Governance
and Best Practice Recommendations published by the ASX
or other such principles and guidance as the Board may
consider appropriate from time to time, however the Board
also recognises that complying with the ASX Corporate
Governance Council Recommendation 4.3 is impractical
given the size of the company and the industry in which it
operates.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
41
ASX ADDITIONAL INFORMATION
Additional information required by Australian Stock Exchange Limited and not shown elsewhere in this
Annual Report is as follows. The information is made up to 20 September 2007.
DISTRIBUTION OF SHAREHOLDERS
Analysis of numbers of equity security holders by size of holding
Class of Equity Security Holders
Fully Paid Ordinary Shares
Options
1-1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
3
60
91
261
34
449
7
77
55
156
17
312
HOLDERS OF NONMARKETABLE PARCELS
There are no fully paid ordinary shareholders who hold less than a marketable parcel of shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest quoted equity security holders are:
Ordinary Shares
1
2.
3.
4.
5.
6.
7.
8.
9.
ANZ Nominees Ltd
Lateral Minerals PL
Howard G Dawson
Jodie Marwick
Kilkenny Enterprises Pty Ltd
Geraldton
Services
Agricultural
Sandy Louise Edwards
Widerange Corporation
Pty Ltd
Reads IT Pty Ltd
10. George Krstich
11.
12.
David John Sharp
LGD Investments WA Pty
Ltd
13. George Marias
14.
15.
16.
17.
Any Wu
Citicorp Nominees Pty Ltd
Lagbail Pty Ltd
Jonenderbee Investments
Pty Ltd
Number
Held
1,477,955
1,000,000
990,000
935,000
915,000
836,754
600,000
534,545
437,500
359,543
255,000
250,000
250,000
240,000
220,000
206,000
200,000
Options
% Held
6.33
4.28
4.24
4.00
3.92
3.58
2.57
2.29
1.87
1.54
1.09
1.07
1.07
1.03
0.94
0.88
0.86
Rober Colefax
Kilkenny Enterprises Pty Ltd
Lateral Minerals Pty Ltd
Asail Investmnets Pty ltd
Howard G Dawson
Reads It Pty Ltd
Sandy Louise Edwards
M & K Korkidas Pty Ltd
Diamond River Pty Ltd
David Sundance Vanzyl
Milan mirkovic
Geraldton Argicultural
Services
Byron R Ebert
Brian McCubbing
David J Sharp
Francis J Manners
Piew H Kueh
Jonenderbree Investments
Pty Ltd
Amber Management Pty
Ltd
Number
Held
1,000,000
687,500
500,000
400,000
395,000
268,750
228,000
175,000
173,044
170,000
163,246
163,000
162,500
127,500
117,620
116,000
100,000
100,000
100,000
% Held
8.97
6.16
4.48
3.59
3.54
2.41
2.04
1.88
1.57
1.55
1.52
1.46
1.46
1.46
1.14
1.05
1.04
0.90
0.90
18.
Tuck Lam Lee
200,000
0.86
19.
Colbern
Nominees
Fiduciary
200,000
0.86
20. Gecko Resources Pty Ltd
144,525
0.62
Phillip Nicolaou
10,251,822
43.90
5,357,160
0.90
48.02
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
42
ASX ADDITIONAL INFORMATION (continued)
UNQUOTED EQUITY SECURITIES
Class A Incentive Shares
Class B Incentive Shares
Options exercisable at 25 cents on or before 16 July 2009
Options exercisable at 30 cents on or before 16 July 2009
Options exercisable at 35 cents on or before 16 July 2009
* All unquoted options above are held by Mr Mark Thompson
SUBSTANTIAL SHAREHOLDERS
Number on
issue
Number of
holders
4,000,000
4,000,000
350,000
350,000
350,000
23
24
1*
1*
1*
Jodie Nicole Marwick holds 1,187,500 ordinary shares in the company (5.09% interest)
VOTING RIGHTS
a)
b)
c)
d)
Ordinary Shares
On a show of hands, every member present in person or by proxy shall have one vote and,
upon a poll, each share shall have one vote.
Class A Incentive Shares
No voting rights
Class B Incentive Shares
No voting rights
Options
No voting rights
TAX STATUS
The Company is treated as a public company for taxation purposes.
FRANKING CREDITS
The Company has nil franking credits.
TENEMENT SCHEDULE
Project
Eudamullah
Minnie Creek
Michelles Well
Bluebush Well
Koonana Hill
Tenements
E09/1174
E09/1187
E09/1291
E09/1303
E09/1438
Interest
90%
90%
90%
90%
Application
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2007
43