ABN 54 118 912 495
ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2008
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
38
39
41
47
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
22 Oxford Close
West Leederville, Western Australia 6007
Phone:
+618 9381 4360
Facsimile: +618 9380 5911
Email:
info@catalystmetals.com
Website: www.catalystmetals.com
SHARE REGISTRY
Security Transfer Registrars
770 Canning Hwy
Applecross WA 6153
Telephone: +618 9315 2333
Facsimile: +618 9315 2233
STOCK EXCHANGE LISTING
The Company is listed on Australian Stock
Exchange Limited
Home Exchange – Perth
ASX Codes:
CYL
CYLO
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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CHAIRMAN’S REPORT
Dear Shareholders
During the year Catalyst Metals Limited (ASX:CYL) completed exploration programs at the
company’s Minnie Creek Project in Western Australia, acquired the highly prospective
Everton Molybdenum Project in Victoria whilst also being successful in being admitted to the
pre-qualifying short list for a potentially significant copper-molybdenum project in South
America.
Catalysts’ projects now contain both significant historic production and new discoveries of
molybdenum, at a time when the steel-market metal is in growing demand and fetching high
prices.
Fieldwork continued at Minnie Creek Project including programs of diamond drilling, ground
radiometric surveys and soil geochemistry analysis. Metallurgical test work is currently being
undertaken and this will form the basis of future work.
The initial focus for the forthcoming year will be the Everton Molybdenum Project located in
the Lachlan fold belt of Victoria, approximately 25 kilometres east of Wangaratta. The
programs included preliminary geological reconnaissance of the 127 km2 project, research
and field visits to the historic mine workings, and preliminary assessment of the modern quarry.
The extensive nature of the mineralisation is encouraging that a significant and large scale
body of molybdenum may be present at Everton. Work to gain all statutory approvals for
access has been completed, to allow drill testing as soon as possible.
The Company has taken a firm view that the molybdenum market will remain strong and we
believe that we will be positioned to capitalise on the current and predicted strong prices.
During a difficult year in the equity markets we would like to express of thanks for the strong
support of the Company by all staff, contractors and shareholders.
Yours sincerely,
Nathan McMahon
Chairman
23 September 2008
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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DIRECTORS’ REPORT
The Directors present their report on Catalyst Metals Limited for the year ended 30 June 2008.
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 2008 was $130,431
(2007: $168,832).
The Company’s basic loss per share for the year was 0.6 cents (2007: 0.8 cents).
DIVIDENDS
No dividend has been paid during or is recommended for the financial year ended 30 June 2008.
EMPLOYEES
The Company employed 3 employees as at 30 June 2008 (2007: 4).
REVIEW OF OPERATIONS
During the December quarter, the Company received encouraging rock and soil geochemical results
from Minnie Creek project. Four new prospect areas were tested by soil geochemical surveys in the
Minnie Creek project area, along with further rock sampling and prospecting. Detailed multiple-
channel ground radiometric surveys and rock sampling of the prospective uranium targets within
Catalyst’ 1200km2 tenements was completed during the December quarter.
During the June quarter, Company completed a 6 diamond core hole drill programme for 968m to
confirm the grade and structural orientation of the Molybdenum mineralisation. Drilling intersected a
broad contiguous zone of molybdenum mineralization up to 75 metres wide extending over 700 metres
in length. Molybdenum mineralization remains open along strike to the southeast and at depth.
Catalyst has commenced first stage metallurgical test work to determine the expected recoveries of
molybdenum at Minnie Springs.
In February 2008 the Company announced the acquisition of the Everton Molybdenum Project in
Victoria. The project area of 127km2 includes the Everton Molybdenite Mine, one of the most significant
historic producers in Australia. Catalyst has the right to farm in to up to 90% of the project by spending
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
4
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
$250,000 on exploration over 2 years, including a minimum of 750m drilling to acquire a 51% interest in
the Project. Catalyst can earn a further 39% of the Project by spending and additional $500,000 for the
following 2 years.
Catalyst has pre-qualified for the right to bid on a government-owned molybdenum-copper project in
South America. The successful bidder at auction will acquire the right to treat an ongoing stream of
metallurgical waste (slag) from Chilean mining smelters including the right to reprocess accumulated
historic dups. Field visits, composite grab samples and preliminary petrography undertaken during June
2008.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 22 February 2008, the Company issued 210,637 as part consideration for the right to farm in to up to
90% of the Everton Project in Victoria.
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 2008, 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.
FINANCIAL POSITION
The Company’s working capital, being current assets less current liabilities was $1,990,052 at 30 June
2008 (2007: $2,592,498).
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 54 118 912 495 Annual Report 2008
5
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
Nathan McMahon (Non Executive Chairman – Appointed 27 July 2007)
Mr. McMahon has provided corporate and management advice 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
Universal Coal PLC (formerly 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:
On-going corporate and management advice, capital raisings,
investor relations, risk identification, corporate governance.
Member of the Audit Committee.
Interests in shares and options:
900,000 ordinary shares
Mark Thompson (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.
Memberships:
Member of the Australian Institute of Geoscientists
Member of the Society of Economic Geology
Special Responsibilities:
Mr Thompson’s role encompasses the management of all mineral
exploration, growth identification and operational functions of the
company. His responsibilities also include health, safety and
environment management.
Directorships:
None
Interests in shares and options:
1,265,250 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 54 118 912 495 Annual Report 2008
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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.
Qualifications:
Bachelor of Commerce
Chartered Accountant
Associate Member of the Chartered Secretaries Of Australia
Special Responsibilities:
Ongoing business development, capital raisings, investor relations, risk
identification, corporate governance and financial management of
the Company.
Mr Dixon is Chairman of the Audit Committee.
Directorships:
Hodges Resources Ltd – Non Executive Director
Blackham Resources Ltd – Managing Director
Interests in shares and options: Nil
Lisa Wynne
(Company Secretary)
Ms Wynne has a Bachelor of Commerce and is a Chartered Accountant with 7 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 TSX 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
Bryan Dixon
Nathan McMahon
Malcolm Carson
Jim Malone
Howard Dawson
10
7
7
4
3
3
8
7
4
3
3
3
-
2
2
-
-
-
-
2
2
-
-
-
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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 and Victorian Mining Acts.
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.
REMUNERATION REPORT
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 Board. 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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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DIRECTORS’ REPORT
REMUNERATION REPORT
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.
Details of Remuneration for Year Ended 30 June 2008
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:
•
2008
Name
Lisa Wynne – Company Secretary
(Appointed 1 August 2007)
Short-term employment
benefits
Cash salary
and fees
Other
Post-
employment
benefits
Superannuation
Share-based
payments
Options
Total
Non-executive directors
B Dixon (i)
N McMahon
J Malone
M Carson (from 26 May
2006 to 3 Aug 2007)
H Dawson (i)
Executive directors
M Thompson
Total key management
personnel compensation
Other company officers
L Wynne
30,694
16,175
2,750
-
6,875
3,058
14,437 (ii)
55,000
73,276 (iii)
114,552
87,713
-
14,474 (iv)
-
-
-
-
-
275
-
275
-
-
-
-
-
-
-
-
-
-
30,694
16,175
2,750
-
6,875
17,770
128,276
202,540
14,474
(i) Mr Dixon’s directors fees were paid to Warrior Strategic Pty Ltd, a company in which Mr Dixon
has a relevant interest.
(ii) HG & L Dawson Discretionary Trust, a trust in which Mr Dawson has a relevant interest, was paid
$14,437 for the provision of geological consulting services.
(iii) Red Dog Prospecting Pty Ltd was paid $73,276 for the provision of Mineral Exploration services.
(iv)
Mr Thomspon is a director of Red Dog Prospecting Pty Ltd.
Sila Consulting Pty Ltd was paid $14,474 for the provision of accounting, compliance and
company secretarial services.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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DIRECTORS’ REPORT
REMUNERATION REORT
2007
Name
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)
Short-term
employment
benefits
Cash salary
and fees
Post-
employment
benefits
Superannuation Options
Share-based
payments
Total
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
Employment Contracts of Directors and Senior Executives
There were no formal contracts finalised as at the completion of the June 2008 financial year for Non-
executive Directors. Directors are paid under the terms agreed to by a directors resolution at rates
detailed below:
Mr McMahon to receive director’s fees of $40,000 per annum inclusive of superannuation requirements.
Mr Thompson to receive director’s fees of $30,000 per annum inclusive of superannuation requirements
plus a daily rate for services on top of his director’s duties.
Mr Dixon to receive director’s fees of $30,000 per annum inclusive of superannuation requirements.
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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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DIRECTORS’ REPORT
REMUNERATION REORT
Number of options granted during the
year
Number of options vested during the
year
Name
Mark Thompson
2008
-
2007
1,050,000
2008
-
2007
1,050,000
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%
No options were issued during the 2008 financial period.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Directors and Officers have indemnities in place and in July 2008 the Company put in place
insurance policies for Directors and Officers insurance.
NON-AUDIT SERVICES
The board of directors, in accordance with advice from the audit committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following
reasons:
•
all non-audit services are reviewed and approved by the audit committee prior to
commencement to ensure they do not adversely affect the integrity and objectivity of the
auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by
the Accounting Professional and Ethical Standards Board.
•
There were no fees for non-audit services were paid/payable to the external auditors during the year
ended 30 June 2008:
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2008 has been received and
immediately follows the Directors’ Report.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
11
BALANCE SHEET
As at 30 June 2008
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Total Non-Current Assets
Note
6
7
8
2008
$
2007
$
2,028,119
2,647,576
14,179
13,973
3,160
-
2,045,458
2,661,549
9
10
15,933
13,102
1,086,761
523,077
1,102,694
536,179
TOTAL ASSETS
3,148,152
3,197,728
Current Liabilities
Trade and other payables
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Share-based payments reserve
Accumulated losses
11
55,406
69,051
55,406
69,051
3,092,746
3,128,677
12
13
13
3,356,710
3,262,210
82,609
82,609
(346,573)
(216,142)
TOTAL EQUITY
3,092,746
3,128,677
The above balance sheet should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
14
INCOME STATEMENT
For the Year Ended 30 June 2008
Revenue
2
163,589
171,684
Note
2008
$
2007
$
Occupancy costs
Professional fees
Administration costs
Exploration costs
Personnel
Corporate
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)
(27,096)
(94,815)
(99,784)
(8,853)
(31,271)
(67,777)
(74,414)
(11,781)
(43,616)
(153,706)
(18,846)
(1,010)
-
(1,567)
3
5
4
4
(130,431)
(168,832)
-
-
(130,431)
(168,832)
(0.6 cents)
(0.8 cents)
(0.6 cents)
(0.8 cents)
The above income statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
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STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2008
Issued Capital
Accumulated
$
losses
$
Share-based
payments
reserve
$
Total
$
Balance at 30 June 2006
173,000
(47,310)
Loss for the year
Share-based payments
Issue of shares
Issue of options
Share issue costs
Balance at 30 June 2007
Loss for the year
Issue of shares
Options exercised
during the year
Balance at 30 June 2008
-
-
3,200,000
115,000
(225,790)
3,262,210
-
25,000
69,500
(168,832)
-
-
-
-
-
-
82,609
-
-
-
(216,142)
82,609
(130,431)
-
-
-
-
-
125,690
(168,832)
82,609
3,200,000
115,000
(225,790)
3,128,677
(130,431)
25,000
69,500
3,356,710
(346,573)
82,609
3,092,746
The above statement of changes in equity should be read in conjunction with the accompanying
notes.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
16
CASH FLOW STATEMENT
For the Year Ended 30 June 2008
Cash Flows from Operating Activities
Payments for exploration and evaluation
Payments to suppliers, contractors and employees
Interest received
Note
2008
$
2007
$
(510,798)
(421,617)
(296,240)
(202,498)
167,149
165,684
Net cash flows used in operating activities
14
(639,889)
(458,431)
Cash Flows from Investing Activities
Payments for property, plant and equipment
Payments for exploration property
Payments for financial assets
Proceeds from disposal of property, plant and equipment
(9,128)
(15,625)
(60,900)
(100,000)
(4,040)
-
-
1,090
Net cash flows used in investing activities
(74,068)
(114,535)
Cash Flows from Financing Activities
Proceeds from issue of shares and other equity securities
94,500
3,315,000
Share issue expenses
-
(190,796)
Net cash flows from financing activities
94,500
3,124,204
Net increase cash and cash equivalents
(619,457)
2,551,238
Cash and cash equivalents at the beginning of the
financial year
2,647,576
96,338
Cash and cash equivalents at the end of the financial year
6
2,028,119
2,647,576
The above cash flow statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
17
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
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’).
The financial report of Catalyst Metals Limited was authorised for issue in accordance with a
resolution of the Director’s on 23 September 2008.
(b)
Basis of preparation
The financial report covers Catalyst Metals Limited, which is a listed public company,
incorporated and domiciled in Australia.
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
At each reporting date, the Company reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such
an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the
asset's carrying value over its recoverable amount is expensed to the income statement.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(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 54 118 912 495 Annual Report 2008
18
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g)
Financial instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when
the entity becomes a party to the contractual provisions of the instrument. Trade date
accounting is adopted for financial assets that are delivered within timeframes established by
marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the
instrument is not classified as at fair value through profit or loss. Transaction costs related to
instruments classified as at fair value through profit or loss are expensed to profit or loss
immediately. Financial instruments are classified and measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity is no longer has any significant
continuing involvement in the risks and benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair
value through profit or loss’. Financial assets are classified as held for trading if they are acquired
for the purpose of selling in the near term. Derivatives are also classified as held for trading unless
they are designated as effective hedging instruments. Gains or losses on investments held for
trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Company has the positive intention and ability to hold to
maturity. Investments intended to be held for an undefined period are not included in this
classification. Investments that are intended to be held-to-maturity, such as bonds, are
subsequently measured at amortised cost. This cost is computed as the amount initially
recognised minus principal repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between the initially recognised amount and the
maturity amount. This calculation includes all fees and points paid or received between parties to
the contract that are an integral part of the effective interest rate, transaction costs and all other
premiums and discounts. For investments carried at amortised cost, gains and losses are
recognised in profit or loss when the investments are derecognised or impaired, as well as
through the amortisation process.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
19
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g)
Financial instruments (cont.)
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. After initial
recognition available-for sale investments are measured at fair value with gains or losses being
recognised as a separate component of equity until the investment is derecognised or until the
investment is determined to be impaired, at which time the cumulative gain or loss previously
reported in equity is recognised in profit or loss.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent
arm’s length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged
decline in the value of the instrument is considered to determine whether an impairment has
arisen. Impairment losses are recognised in the income statement.
(h)
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.
(i)
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.
(j)
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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
20
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(k)
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.
(l)
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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
21
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(m)
Intangibles
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred.
Development costs are capitalised only when technical feasibility studies identify that the project
will deliver future economic benefits and these benefits can be measured reliably.
Development costs have a finite life and are amortised on a systematic basis matched to the
future economic benefits over the useful life of the project.
(n)
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.
(o)
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.
(p) 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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
22
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(q) 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 data, obtained
both externally and within the Company.
Significant judgments, estimates and assumptions made by management in the preparation of
these financial statements are outlined below:.
Exploration and evaluation
The Company's accounting policy for exploration and evaluation is set out in note 1(h). The
application of this policy necessarily requires management to make certain estimates and
assumptions as to future events and circumstances, in particular the assessment of whether
economic quantities of reserves may be found. Any such estimates and assumptions may
change as new information becomes available. If, after having capitalised expenditure under
the Group’s policy, management concludes that the Company is unlikely to recover the
expenditure by future exploitation or sale, then the relevant capitalised amount will be written off
to the income statement.
Impairment of assets
In determining the recoverable amount of assets, in the absence of quoted market prices,
estimations are made regarding the present value of future cash flows using asset-specific
discount rates. For intangible assets, expected future cash flow estimation is based on, future
production profiles, commodity prices and costs.
(r)
New Accounting Standards and Interpretations Issued But Not Yet Effective
Certain new accounting standards and interpretations have been published that are not
mandatory for 30 June 2008 reporting periods. The economic entity’s assessment of the impact of
these new standards and interpretations is set out below.
The following Australian Accounting Standards and Interpretations that have recently been
issued but are not yet effective have not been adopted by the Company for the annual
reporting period ending 30 June 2008. Those that are relevant to the company are set out below:
(i) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting
Standards arising from AASB 8
AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or
after 1 January 2009. AASB 8 will result in a significant change in the approach to segment
reporting, as it requires adoption of a ‘management approach’ to reporting on financial
performance. The information being reported will be based on what the key decision
makers use internally for evaluating segment performance and deciding how to allocate
resources to operating segments. The economic entity has not yet decided when to adopt
AASB 8. Application of AASB 8 may result in different segments, segment results and
different types of information being reported in the segment note of the financial report.
However, at this stage, it is not expected to affect any of the amounts recognised in the
financial statements
.
(ii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to
Australian Accounting Standards arising from AASB 101
A revised AASB 101 was issued in September 2007 and is applicable for annual reporting
periods beginning on or after 1 January 2009. It requires the presentation of a statement of
comprehensive income and makes changes to the statement of changes in equity, but
will not affect any of the amounts recognised in the financial statements. If an entity has
made a prior period adjustment or has reclassified items in the financial statements, it will
need to disclose a third balance sheet (statement of financial position), this one being as
at the beginning of the comparative period. The economic entity intends to apply the
revised standard from 1 July 2009.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
23
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
2.
Revenue
Interest received
3.
Expenses
Loss before income tax includes the following specific
expenses:
Directors fees
Audit fees
Exploration written off (refer note 1(h))
Depreciation
Share-based payments
Project costs
Net loss on disposal of property, plant & equipment
(Gain)/loss on fair value of other financial assets
4.
Earnings per Share
2008
$
2007
$
163,589
171,684
71,357
12,750
8,853
6,297
-
68,679
-
880
28,199
16,750
11,781
1,214
82,609
-
218
-
2008
No. of Shares
2007
No. of Shares
Weighted average number of ordinary shares for basic and
diluted earnings per share
23,406,711
22,210,989
(i)
(ii)
Diluted earnings per share are calculated after classifying all options on issue remaining
unconverted at 30 June 2008 as potential ordinary shares. As at 30 June 2008, the
Company has on issue 12,202,500 options over unissued capital and has incurred a net
loss. As the notional exercise prices of these options is greater than the current market
price of the shares, they have not been included in the calculations of the diluted
earnings per share as they are anti-dilutive for all periods presented.
There have been no transactions involving ordinary shares or potential ordinary shares
that would significantly change the number of ordinary shares or potential ordinary
shares outstanding between the reporting date and the date of completion of these
financial statements.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
24
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
5.
Income tax
Loss before tax
Prima facie tax on operating loss before income
tax at 30%
Tax effect of:
- non deductible expenses
- share based payments
- deductible capital raising expenditure
- deductible temporary differences
Deferred tax asset not brought to account at balance
date as realisation of the benefit is not probable
Income tax attributable to operating loss
Unrecognised deferred tax balances
The directors estimate that the potential deferred tax
benefits arising from tax losses not brought to account at
balance date is approximately:
Tax losses
Timing differences
2008
$
2007
$
(130,431)
(168,832)
(39,129)
(50,650)
124
-
-
(13,547)
869
24,783
(13,547)
(155,123)
52,552
193,669
-
-
355,700
1,008,324
1,364,024
180,526
512,347
692,873
Net unrecognised deferred tax asset at 30%
409,602
207,862
The potential deferred tax asset, arising from tax losses and temporary differences (as disclosed
above), has not been recognised as an asset because recovery of tax losses and temporary
differences is not considered probable.
The potential deferred tax asset will only be obtained if:
-
-
-
the relevant Company derives future assessable income of a nature and an amount
sufficient to enable the benefit to be realised;
the relevant Company continues to comply with the conditions for deductibility
imposed by tax legislation; and
no changes in tax legislation adversely affect the relevant Company in realising the
benefit from the deduction for the losses.
6.
Cash and cash equivalents
Cash at bank
7.
Trade and other receivables
2008
$
2007
$
2,028,119
2,647,576
Sundry debtors
14,179
13,973
Fair value and credit risk
Due to the short term nature of the receivables, their carrying value is assumed to approximate
their fair value.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
25
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
2008
$
2007
$
8.
Financial assets at fair value through profit or loss
Current
Shares - in listed corporation - at fair value
3,160
-
Listed shares at fair value
The fair value of listed investments has been determined directly by reference to published
price quotations in an active market. Changes in fair values of financial assets at fair value
through profit or loss are recorded in other income or other expense in the income statement.
9.
Property, plant and equipment
Year ended 30 June 2008
Opening net book amount 1 July 2007
Additions
Disposals
Depreciation charge
Closing net book amount 30 June 2008
At 30 June 2008
Cost or fair value
Accumulated depreciation
Net book amount
Computer
equipment
Furniture,
fittings and
equipment
3,072
3,710
-
(1,642)
5,140
7,302
(2,162)
5,140
10,030
5,418
-
(4,655)
10,793
15,997
(5,204)
10,793
Total
$
13,102
9,128
-
(6,297)
15,933
23,299
(7,366)
15,933
10.
Exploration and evaluation expenditure
Opening balance
Additions
Exploration written off (refer note 1(h))
2008
$
523,077
572,537
(8,853)
2007
$
-
534,858
(11,781)
Closing balance
1,086,761
523,077
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
26
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
11.
Trade and other payables
Current Payables
Trade creditors
Accruals
2008
$
2007
$
16,512
38,894
55,406
18,809
50,242
69,051
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value. Trade and other payables are non-interest bearing and normally settled on 30-day terms.
12.
Contributed Equity
(a)
Share capital
Ordinary shares
Fully paid
Incentive shares
Class A
Class B
(b) Other equity securities
Options – Listed
Options - Unlisted
2008
Number
2008
$
2007
Number
2007
$
(c) 23,558,141
3,249,407
23,000,003
3,151,432
4,000,000
4,000,000
4,000
4,000
4,000,000
4,000,000
4,000
4,000
31,558,141
3,257,407
31,000,003
3,159,432
(d) 11,152,500
1,050,000
99,303
11,500,000
102,778
-
1,050,000
-
Total contributed equity
43,760,637
3,356,710
43,550,003
3,262,210
(c) Movements in Ordinary Shares
Details
Balance at beginning of
year
Issue of shares
Exercise of options
Transfer from option reserve
Less: Transaction costs
Balance at end of year
(d) Movements in other equity securities
Details
Listed Options
Issue price
$’000
Number of
Shares
23,000,003
210,637
347,500
$0.1187
$0.20
-
-
3,151,432
25,000
69,500
3,475
-
23,558,141
3,249,407
Number of
Shares
Issue price
$’000
Balance at beginning of
11,500,500
102,778
year
Exercise of options
Less: Transaction costs
Balance at end of year
(347,500)
0.01
(3,475)
-
11,152,500
-
99,303
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
27
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
12.
Contributed Equity (cont’d)
Details
Unlisted Options
Number of
Shares
Issue price
$’000
Balance at beginning of
1,050,000
year
Issued
-
-
Balance at end of year
1,050,000
(e) 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.
(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 54 118 912 495 Annual Report 2008
28
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
12.
Contributed Equity (cont’d)
(g)
Options
Listed Options
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.
Unlisted Executive Options
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.
(h)
Capital risk management
When managing capital, management’s objective is to ensure the entity continues as a going
concern as well as to maintain optimal returns to shareholders and benefits for other
stakeholders. Management also aims to maintain a capital structure that ensures the lowest
cost of capital available to the entity.
In order to maintain or adjust the capital structure, the entity may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares, enter into joint
ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2008 and no dividends are expected to be paid in 2009.
There is no current intention to incur debt funding on behalf of the Company as on-going
exploration expenditure will be funded via cash reserves, equity or joint ventures with other
companies.
The Company is not subject to any externally imposed capital requirements.
2008
$
2007
$
13.
Reserves & Retained Profits
a)
Reserves
Share-based payments reserve
Balance at the beginning of the year
Share balance payments expense
Balance at the end of the year
82,609
-
82,609
-
82,609
82,609
The share-based payments reserve records the value of share options issued by the Company.
b)
Retained losses
Balance at the beginning of the year
Loss for the year
Balance at the end of the year
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
216,142
130,431
346,573
47,310
168,832
216,142
29
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
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
(130,431)
(168,832)
2008
$
2007
$
Add non cash items:
Depreciation
Net loss on disposal of non-current assets
Share-based payments expense
(Gain)/loss on fair value of other financial assets
Exploration written off
Changes in net assets and liabilities
Increase in receivables
Increase/(decrease) in payables
Increase in exploration
6,297
-
-
880
8,853
1,214
218
82,609
-
-
(206)
(13,644)
(511,638)
(7,492)
56,929
(423,077)
Net cash outflow from operating activities
(639,889)
(458,431)
(b) Non-cash financing and investing activities
The Company did not have any non-cash financing or investing activities during the year
(2007: Nil)
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
N McMahon
M Thompson
B Dixon
M Carson
H Dawson
J Malone
Executives & Officers
L Wynne
M Higginson
Non-Executive Chairman (Appointed 27 July 2007)
Executive Director
Non-Executive Director (Appointed 27 July 2007)
Non-Executive Director (From 29 May 2007 to 3 August 2007)
Non-Executive Chairman (From 21 March 2006 to 27 July 2007)
Non-Executive Director (From 21 March 2006 to 27 July 2007)
Company Secretary (Appointed 1 August 2007)
Company Secretary (From 6 June 2007 to 1 August 2007)
All of the above persons were also key management persons during the year ended 30 June
2008 except M Higginson.
(b)
Key management personnel remunerations
Short-term employee benefits
Post-employment benefits
Share based payments
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
2008
216,739
275
-
217,014
2007
229,167
10,307
82,609
322,443
30
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
15.
Key Management Personnel Compensation (cont’d)
The company has applied the provisions of AASB 2008-4 Amendments to Australian Accounting
Standard – Key Management Personnel Disclosures by Disclosing Entities, and has transferred
the detailed remuneration disclosures to the directors’ report. The relevant information can be
found in the remuneration report on pages 8 to 11.
(c)
Equity instrument disclosures relating to key management personnel
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 8 to 11 of the Directors’ Report.
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:
Granted as
compensation
Exercised
Other
changes
Balance at
end of year
Vested and
exercisable
-
-
-
-
-
-
-
(220,000)
-
-
1,595,000
1,595,000
-
-
-
-
(457,500) (i)
(395,000) (i)
(10,000) (ii)
-
-
-
-
-
9,375
-
-
-
-
-
Other key management personnel
On 27 July 2007, the shareholders voted to remove Messers Dawson and Malone from
the board of the Company.
On 3 August 2007, Mr Carson resigned from the board.
(i)
(ii)
2008
Directors
M Thompson
Bryan Dixon
Nathan McMahon
J Malone
H Dawson
M Carson
Lisa Wynne
(i)
(ii)
2007
Directors
M Thompson
J Malone
H Dawson
M Carson
Balance at
beginning of
year
1,595,000
220,000
457,500
395,000
10,000
9,375
Balance at
beginning of
year
-
-
-
-
Other key management personnel
Bryan Dixon (i)
-
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
(i)
Mr Dixon resigned as Company Secretary of the Company on 1 February 2007.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
31
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
15.
Key Management Personnel Compensation (cont’d)
(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.
2008
Directors
M Thompson
Bryan Dixon
Nathan McMahon
M Carson
H Dawson
J Malone
Balance at
beginning of
year
1,090,000
415,000
665,455
20,000
1,040,000
965,000
Other key management personnel
Lisa Wynne
-
Purchased
Other changes
Balance at end of year
175,250
145,000
-
(560,000) (iii)
1,001,098
(766,553) (iii)
1,265,250
-
900,000
-
-
-
-
(20,000) (ii)
(1,040,000) (i)
(965,000) (i)
-
-
-
-
-
(i)
(ii)
(iii)
On 27 July 2007, the shareholders voted to remove Messers Dawson and Malone from
the board of the Company.
On 3 August 2007, Mr Carson resigned from the board.
As disclosed in an ASX release on 29 April 2008, an involuntary sale of 1,326,553 ordinary
shares in April 2008 pursuant to the (purported) exercise of rights by a creditor of Opes
Prime Group Ltd. No consideration has been received by the Mr McMahon or Mr Dixon
at this time. Mr McMahon and Mr Dixon are pursuing actions against the major
financier of the Opes Prime Group Ltd.
2007
Directors
H Dawson
J Malone
M Thompson
M Carson
Other key management personnel
Bryan Dixon #
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
Incentive shares
The numbers of incentive shares in the company held during the financial year by each personally
related parties, are set out below:
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
32
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
15.
Key Management Personnel Compensation (cont’d)
(d)
Equity instrument disclosures relating to key management personnel
2008
Directors
M Thompson
B Dixon
N McMahon
M Carson
H Dawson
J Malone
Balance at
beginning of
year
1,000,000
-
-
-
Class A Incentive Shares
Class B Incentive Shares
Other
changes
Balance at
end of year
Balance at
beginning of
year
Other
changes
Balance at
end of year
-
-
-
-
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
-
-
-
-
-
600,000
(600,000) (i)
900,000
(900,000) (i)
600,000
(600,000) (i)
900,000
(900,000) (i)
On 27 July 2007, the shareholders voted to remove Messers Dawson and Malone from
the board of the Company.
(i)
2007
Directors
H Dawson
J Malone
M Thompson
M Carson
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
-
(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
2008
$
2007
$
-
2,063
(f)
Other transactions with key management personnel
Mr McMahon is a director and shareholder of Cazaly Resources Limited. Catalyst Metals
Limited had an agreement based on normal commercial terms and conditions to reimburse for
office rental and administration and overheads.
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 and exploration consulting services
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.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
33
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
15.
Key Management Personnel Compensation (cont’d)
Mr Thompson, is a related party of Red Dog Prospecting Pty Ltd. Catalyst Metals Limited has
agreed to engage Red Dog Prospecting Pty Ltd based on normal commercial terms and
conditions for the provision of exploration and development services and vehicle hire.
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
16.
Related Party Disclosures
Key Management Personnel
2008
$
29,806
3,804
83,589
2007
$
43,227
21,282
39,996
605
12,254
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.
No options were granted during the year.
18.
Auditors’ Remuneration
Amounts received or due and receivable by the auditors for:
Auditing accounts
Other services
2008
$
2007
$
12,750
16,750
-
-
12,750
16,750
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
34
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
19.
Commitments
There were no outstanding commitments, which are not
disclosed in the financial statements as at 30 June 2008
other than:
(a) Tenement commitments
No later than 1 year
Later than 1 year but not later than 5 years
2008
$
2007
$
310,000
312,586
-
310,000
310,000
-
312,586
312,586
20.
Financial Instruments
Notes
Floating
Interest
Rate
$
1 year or
less
Over 1-5
years
$
$
Non
interest
bearing
$
Total
$
2008
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Other financial assets
Total financial assets
Financial liabilities
Trade and other
payables
Total financial liabilities
6
7
11
7.30%
2,033,629
-
-
-
-
2,033,629
-
-
Net financial assets/(liabilities)
2,033,629
2007
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Total financial assets
Financial liabilities
Trade and other
payables
Total financial liabilities
6.21%
2,600,000
-
-
2,600,000
6
7
11
-
-
Net financial /(liabilities)
2,600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,510)
2,028,119
14,179
14,179
3,160
3,160
11,829
2,045,458
55,406
55,406
55,406
55,406
(43,577)
1,990,052
47,576
2,647,576
13,973
13,973
61,549
2,661,549
69,051
69,051
69,051
69,051
(7,502)
2,592,498
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
35
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
20.
Financial Instruments (cont’d)
Reconciliation of net financial assets to net assets
Net Financial Assets
Property, plant & equipment
Exploration expenditure
Net Assets
2008
$
2007
$
1,990,052
2,592,498
15,933
1,086,761
13,102
523,077
3,092,746
3,128,677
The Company’s principal financial instruments comprise cash, short-term deposits and financial
assets at fair value through profit or loss.
The main purpose of these financial instruments is to finance the company’s operations. The
company has various other financial assets and liabilities such as sundry receivables, and trade
payables, which arise directly from its operations.
The main risks arising from the company’s financial instruments are cash flow interest rate risk and
equity price risk. Other minor risks are either summarised below and Note 13 with respect to
capital risk management. The Board reviews and agrees policies for managing each of these
risks.
Interest rate risks
The company’s exposure to the risks of changes in market interest rates relates primarily to the
company’s short-term deposits with a floating interest rate. These financial assets with variable
rates expose the company to cash flow interest rate risk. All other financial assets and liabilities in
the form of receivables and payables are non-interest bearing. The company does not engage
in any hedging or derivative transactions to manage interest rate risk.
Interest rate sensitivity
At 30 June 2008, if interest rates had changed by 100 basis points during the entire year with all
other variables held constant, profit for the year and equity would have been $16,359
lower/higher, mainly as a result of lower/higher interest income from cash and cash equivalents.
A sensitivity of 100 basis points has been selected as this is considered reasonably possible in the
current economic environment. Based on the sensitivity analysis only interest revenue from
variable rate deposits and cash balances are impacted resulting in a decrease or increase in
overall income.
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.
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors. The Company
manages liquidity risk by maintaining sufficient cash or credit facilities to meet the operating
requirements of the business and investing excess funds in highly liquid short term investments.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
36
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2008
21.
Segment Information
The Company operates predominantly in one business segment and in one geographical location.
The operations of the Company consist of mineral exploration, within Australia.
22.
Subsequent Events
There has not been any matter or circumstance that has arisen since 30 June 2008, which has
significantly affected, or may significantly affect the operations of the Company, the result of those
financial years.
operations, or
state of affairs of
the Company
subsequent
the
in
23.
Contingent Liabilities and Contingent Assets
The Company does not have any contingent liabilities or contingent assets at 30 June 2008.
Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2008
37
CORPORATE GOVERNANCE
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/corporate_governance.
The Corporate Governance practices of Catalyst were in place throughout the reporting period and have
complied with each of the 10 Essential ASX Corporate Governance Principles and the corresponding Best
Practice Recommendations.
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.
Principle 1: Lay solid foundations for management and oversight
The board has adopted a Charter that sets out the roles and responsibilities of the board. This may be viewed
at www.catalystmetals.com.au. The Charter includes, amongst other things that the Board will:
•
•
•
•
•
•
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
reviewing the Company’s systems of risk management and internal compliance and control,
codes of conduct and legal compliance
•
ensuring the Company and its officers act legally, ethically and responsibly in all matters
ensuring that policies and procedures are in place consistent with the Company’s objectives,
and
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.
Principle 2: Structure the board to add value
Composition
The board currently consists of three non-executive directors, including the chairman. Details of their
experience, qualifications and committee memberships are set out below. All directors were in office at the
date of this report:
Nathan McMahon – Chairman
Independent non-executive Chairman since July 2007
Term in office – 14 months
Mr. McMahon has provided corporate and 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.
41
CORPORATE GOVERNANCE
Mark Thompson (Non Executive Director)
Non-executive director since May 2006
Term in office – 28 months
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.
Bryan Dixon
Independent Non-executive director since July 2007
Term in office – 14 months
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.
Appointment
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.
Board Independence
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”.
Mr McMahon and Mr Dixon have been assessed as Independent Directors. In reaching that determination,
the Board has taken into account:
•
•
The specific disclosures made in accordance with the Corporations Act, but each such director in
respect of any material contract or relationship
•
That no such director is, or is associated directly with, a substantial shareholder of the company
• Where applicable, the related party dealings referable to each such Director, noting that those
dealings are not material under accounting standar5ds. Full details of related party dealings are set
out in the notes to the financial statements
That no such non-executive Director has within the last three years been employed in an executive
capacity by the company
That no such non-executive Director is , or is associate with a supplier or customer of the company
which is material under accounting standards
That such non-executive Director’s are free from any interest and any business or other relationship
which could, or could reasonable be perceived to, materially interfere with the director’s ability to
act in the best interests of the Company.
•
•
42
CORPORATE GOVERNANCE
Under the accounting standards, a matter is considered to be material if it is equal to or greater than 10% of
the appropriate base amount.
Mr Thompson does not meet the Company’s criteria for independence. Mr Thompson is an executive and
has a material contractual relationship in the form of a 10% free-carry joint venture agreement. Mr
Thompson’s experience and knowledge of the Company make his contribution to the Board such that it is
appropriate for him to remain on the Board.
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.
Independent professional advice
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.
Remuneration and Nomination Committee
A Remuneration and Nomination Committee Charter has been established by the Board to assess and make
recommendations regarding membership of the Board, including proposed new appointments.
Given the size and scope of the operations of the Company, the full board has assumed those responsibilities
that are ordinarily assigned to a remuneration and nomination committee.
Where appropriate, independent consultants are engaged to identify possible new candidates for the Board.
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 Board undertakes an annual review of its own
performance with external advice as appropriate.
Principle 3: Promote ethical and responsible decision making
Code of Conduct
The Directors, officers and employees of the Company are required to conduct themselves in accordance
with
at
www.catalystmetals.com.au/corporate_governance.
Company’s
Conduct
viewed
which
Code
can
the
be
of
Share Trading Policy
The Company also has policies concerning trading in the Company’s securities by directors, officers and
employees. This policy can be viewed at www.catalystmetals.com.au/corporate_governance.
43
CORPORATE GOVERNANCE
Principle 4: Safeguard integrity of financial reporting
Audit Committee
The Board has established an audit committee in August 2007, which operates under a charter of the Board
and can be viewed at www.catalystmetals.com.au/corporate_governance.
Given the size and scope of the operations of the Company, the full board has assumed those responsibilities
that are ordinarily assigned to a audit committee.
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 members of the audit committee at the end of the year and date of this report were:
B Dixon (Chairman)
N McMahon
L Wynne (Secretary)
For details on member qualifications and attendance at meetings of the Audit Committee held during the
year refer to the Directors’ Report.
Appointment of auditor
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.
Principle 5: Make timely and balanced disclosure
The Board has designated the Company Secretary as the person responsible for overseeing and coordinating
disclosure of information to the ASX as well as communicating with the ASX. The Company has a Continuous
Disclosure
at
www.catalystmetals.com.au/corporate_governance.
Company’s
available
website
viewing
Policy
the
for
on
Principle 6: Respect the rights of shareholders
The Board of Catalyst is committed to open and effective communication, ensuring all shareholders is
informed of all significant development concerning the Company. The Company has in place an effective
Shareholder
at
Communications
www.catalystmetals.com.au/corporate_governance.
viewed
Policy.
policy
can
This
be
Principle 7: Recognise and manage risk
Identification and Management of Risk
The Board’s Charter clearly establishes that it is responsible for ensuring there is a good sound system for
overseeing and managing risk. Due to the size and scale of operations, risk management issues are
considered by the Board as a whole.
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.
A copy of the Company’s risk management policy can be viewed at
www.catalystmetals.com.au/corporate_governance.
44
CORPORATE GOVERNANCE
The Board has received assurance from the Financial Controller and a Mr Thompson that the declarations
made in accordance with section 295A of the Corporation Act 2001 are:
1.
2.
founded on a sound system of risk management and internal compliance and control which
implements the policies adopted by the board
the Company’s risk management and internal compliance and control system is operating
efficiently and effectively in all material respects.
Principle 8: Encourage enhanced performance
Performance
During the reporting year the Company did not conduct a formal process for evaluation of Directors and
Executives due to their only being three in total. The Board undertakes an annual review of its own
performance with external advice as appropriate.
Principle 9: Remunerate fairly and responsibly
Remuneration Arrangements
A Remuneration and Nomination Committee Charter has been established by the Board to assess and make
recommendations regarding membership of the Board, including proposed new appointments.
Given the size and scope of the operations of the Company, the full board has assumed those responsibilities
that are ordinarily assigned to a remuneration and nomination committee.
Given the size and scope of the operations of the Company, the full board has assumed those responsibilities
that are ordinarily assigned to a remuneration and nomination committee.
Where appropriate, independent consultants are engaged to appropriate levels of remuneration
.
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 remuneration paid to directors and executives is valued at the cost to the company and expensed.
Options are valued using the Black-Scholes methodology.
45
CORPORATE GOVERNANCE
Principle 10: Recognise the legitimate interest of stakeholders
Code of conduct
The Board is committed to the establishment and maintenance of appropriate ethical standards to underpin
the Company’s operations and corporate practices. The Directors, officers and employees of the Company
are required to conduct themselves in accordance with the Company’s Code of Conduct which can be
viewed at www.catalystmetals.com.au/corporate_governance.
Corporate Governance Disclosures – Explanation of departure
During the financial year Catalyst Metals has complied with each of the 10 Essential Corporate Governance
Principles and the corresponding Best Practice Recommendations.
Explanation of departure
During the financial year Catalyst has complied with each of the 10 Essential ASX Corporate Governance
Principles and the corresponding Best Practice Recommendations, other than in relation to the matters
specified below:
ASX Best Practice
Recommendation
Notification
Departure
of
Explanation of Departure
The
2.4
board
should establish a
nomination
committee
The Company
not
has
a
established
formal
nomination
committee
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 form time to time, however the Board also recognises that
complying the ASX Corporate Governance Council Recommendation
2.4.is impractical given the size of the company and the industry in
which it operates. The Directors believe, it is sufficient for the full board
to assume those responsibilities that are ordinarily assigned to a
remuneration and nomination committee.
The
9.2
board
should establish a
remuneration
The Company
not
has
established
a
formal
remuneration
committee
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 form time to time, however the Board also recognises that
complying the ASX Corporate Governance Council Recommendation
9.2.is impractical given the size of the company and the industry in
which it operates. The Directors believe, it is sufficient for the full board
to assume those responsibilities that are ordinarily assigned to a
committee.
remuneration
nomination
and
46
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 19 September 2008.
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
Holding less than a
marketable parcel
4
53
74
220
38
389
60
7
74
49
128
21
279
-
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.
10.
11.
12.
Equity West Ltd
Robin Scrimgeour
Lateral Minerals PL
Howard G Dawson
Jodie Marwick
Kilkenny Enterprises Pty Ltd
Widerange Corp Pty Ltd
Sandy Louise Edwards
Kingsreef Pty Ltd
Chepalix Pty Ltd
Kingsreef Pty Ltd
Reads IT Pty Ltd
13. Michael Tilley
14. Mark James Thompson
15.
16.
17.
18.
19.
20.
David John Sharp
Skink Resources Pty Ltd
Katie McMahon
Bruce Myles
Lagbail Pty Ltd
Joenderbee Inv Pty Ltd
Number
Held
1,403,500
1,403,500
1,000,000
990,000
935,000
915,000
534,545
500,000
400,000
450,000
400,000
387,000
293,000
265,250
255,000
237,000
224,184
210,637
206,000
200,000
Options
% Held
Number
Held
% Held
5.96
5.96
4.24
4.20
3.97
3.88
2.27
2.12
2.12
1.91
1.70
1.64
1.24
1.13
1.08
1.01
0.95
0.89
0.87
0.85
M&K Korkidas Pty Ltd
Lateral Minerals Pty Ltd
Robert Colefax
Asail Investmnets Pty ltd
Marc Boudames
Kilkenny Enterprises Pty Ltd
Luke Charles Anderson
Howard Dawson
Reads IT Pty Ltd
Kilkenny Enterprises Pty Ltd
Sandy Louise Edwards
Greyhound Investments
Pty Ltd
GV &WA Butcher
Millan Mirkovic
Luke Charles Anderson
Jacqueline Mason
David John Sharp
Hung Piew Kueh
Deshon Enterprises Pty Ltd
Craig Aylmore
956,956
500,000
500,000
500,000
467,620
457,500
450,000
395,000
268,750
230,000
228,000
221,144
186,000
170,000
150,000
130,000
127,500
116,000
110,000
106,000
8.58
4.48
4.48
4.48
4.19
4.10
4.03
3.54
2.41
2.06
2.04
1.98
1.67
1.52
1.34
1.17
1.14
1.04
0.99
0.95
11,309,616
47.99
6,270,470
56.19
47
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
Ordinary shareholders
Number
Percentage
Fully Paid
Robin Scrimgeour
VOTING RIGHTS
2.655.500
11.27
Number on
issue
Number of
holders
4,000,000
4,000,000
350,000
350,000
350,000
23
24
1*
1*
1*
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
Black Range
Tenements
E09/1174
E09/1187
E09/1291
E09/1303
E09/1438
E09/1501
Interest
90%
90%
90%
90%
90%
Application
Competent Persons Statement
The information in the directors report on pages 4 and 5 of this report that relates to Exploration Results is
based on information compiled by independent consultant Mr.Julian Bartlett, B.Sc (Hons) Geol. M.Sc.
(Econ.Geol.), RP.Geo, who has sufficient experience which is relevant to the style of mineralization and type
of deposit under consideration and to the activity to which he is undertaking, and consents to the inclusion in
the public release of the matters based on their information in the form and context in which it appears.
48