Catalyst Metals Limited
Annual Report 2012

Plain-text annual report

ABN 54 118 912 495 ANNUAL REPORT AND FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2012 CATALYST METALS LIMITED CONTENTS PAGE CORPORATE DIRECTORY CHAIRMAN’S REVIEW DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDIT REPORT CORPORATE GOVERANCE STATEMENT ADDITIONAL INFORMATION 2 3 4 19 20 21 22 23 24 46 47 49 53 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 1 CATALYST METALS LIMITED CORPORATE DIRECTORY DIRECTORS AUDITORS Stephen Boston (Non-Executive Chairman) Robin Scrimgeour (Non-Executive Director) Gary Schwab (Non-Executive Director) Bruce Kay (Non-Executive Director) RSM Bird Cameron Partners 8 St Georges Terrace Perth, Western Australia 6000 COMPANY SECRETARY SHARE REGISTRY Frank Campagna REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS Level 3 50 Colin Street West Perth, Western Australia 6005 Telephone: +618 9383 2825 +618 9284 5426 Facsimile: admin@catalystmetals.com.au Email: www.catalystmetals.com.au Website: Security Transfer Registrars Pty Ltd 770 Canning Hwy Applecross, Western Australia 6153 Telephone: +618 9315 2333 +618 9315 2233 Facsimile: registrar@securitytransfer.com.au Email: www.securitytransfer.com.au Website: STOCK EXCHANGE LISTING Catalyst Metals Limited is listed on ASX Limited Home Exchange – Perth ASX code: CYL Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 2 CATALYST METALS LIMITED CHAIRMAN’S REVIEW Dear Shareholders I am pleased to report that the exploration during the last 12 months at the Four Eagles Gold Project has advanced significantly towards the objective of discovering a major new gold deposit concealed beneath Murray Basin sediments about 70 kms north of Bendigo, Victoria. Major drilling campaigns during 2012 have extended the gold zones with the Eagle 3 structure now extending for almost six kilometres. High grade gold intersections were also recorded on two other structures, namely the Eagle 2 and Eagle 4 zones. In the next 12 months the objective of our exploration programmes is to define continuity of these gold zones so that an ore resource can be estimated. A high priority of the Company is to gain a pathway to cash flow as soon as possible. Aircore and diamond drilling has upgraded three prospects which all lie on three separate trends. Further drilling will be required to test the defined prospects at Boyd’s Dam, Hayanmi and Discovery. In addition there continues to be expansive prospective untested shallow areas present that will require reconnaissance aircore drilling to be conducted in 2013. These successful explorations have been funded by a number of recapitalisations of the Company (via Placement and a Share Purchase Plan). The Company has also been able to exercise its option to proceed to Phase 2 of the Four Eagles Gold Project Earn-In, and enter into an Option to Purchase Agreement with Unity Mining Limited over a number of assets it owns in Bendigo. During the financial year the Company raised a total of $1,934,710 in equity funds through a private placement of 1,256,143 ordinary fully paid shares at a subscription price of $0.35 per share in October 2011, a Share Purchase Plan of 2,462,500 ordinary fully paid shares at a subscription price of $0.40 per share in April 2012 and private placement of 1,214,429 ordinary fully paid shares at a subscription price of $0.42 per share in June 2012. In May 2012 the Company issued 5,607,182 bonus options on a 1:8 basis which are listed and exercisable at $0.50 per share and expire on 15 January 2013. In January 2012, the Company advised its Earn-In Partner of its intention to proceed to Phase 2 of the Heads of Agreement which was executed on the 24 December 2010 for the Four Eagles Gold Project. The Company’s wholly owned subsidiary Kite Gold Pty Ltd had satisfied Phase 1 of the Heads of Agreement by spending $450,000 on exploration within the first 12 months from completion on the 20 January 2011. Phase 2 of the Heads of Agreement with our Earn-In Partner involved issuing an additional 750,000 ordinary fully paid shares in the Company and paying $100,000 in cash in March 2012. These payments entitle the Company to earn a 50% interest in the tenements by spending a total of $2.1 million on the Four Eagles Gold Project before 20 January 2014. The Company had spent approximately $1.8 million of this commitment at the end of the 2012 financial year. The Company also announced in January 2012 that it had executed an Option to Purchase Agreement with Unity Mining Limited, which provided the Company with the right to acquire a 600,000 tonne per annum gold plant within 12 months. The Company will pay up to $450,000 to Unity Mining Limited during the Option period. The Board would like to extend a warm welcome to all our new shareholders who joined the share register during the year. The Board would also like to thank our incredibly loyal and supportive shareholder base who have continued to support the Company during another formative year. The Board would also like to acknowledge the dedication and continued support of its consultants during what was a very eventful year for our Company. Your Board remains committed to adding value for the benefit of all shareholders and looks forward to 2013 and the opportunities that it will bring. Stephen Boston Chairman 21 September 2012 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 3 CATALYST METALS LIMITED DIRECTORS’ REPORT The Directors of Catalyst Metals Limited present their report on the consolidated entity for the year ended 30 June 2012. DIRECTORS The names of the Directors in office at any time during or since the end of the financial year are: Stephen Boston Robin Scrimgeour Gary Schwab Bruce Kay Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. COMPANY SECRETARY Frank Campagna FINANCIAL POSITION The net assets of the Group are $1,533,736 as at 30 June 2012 (2011: $2,167,638). CORPORATE STRUCTURE Catalyst Metals Limited is a company limited by shares that is incorporated and domiciled in Australia. PRINCIPAL ACTIVITIES The principal activity of the Group during the financial year was mineral exploration and evaluation. There was no significant change in the nature of the activities during the year. RESULTS OF OPERATIONS The operating loss after income tax of the Group for the year ended 30 June 2012 was $3,507,052 (2011: $1,276,945). DIVIDENDS No dividend has been paid during or is recommended for the financial year ended 30 June 2012. REVIEW OF OPERATIONS During the year Catalyst conducted several drilling campaigns at the Four Eagles Gold Project (Four Eagles) in Victoria and considerably enhanced the prospectivity of the area. There are now three identified mineral structures at Four Eagles that contain high grade gold intersections, the longest of which extends for almost six kilometres. Field programmes were also undertaken at the Minnie Creek tungsten and uranium project in Western Australia. No activity was possible at the Everton molybdenum project in Victoria. Four Eagles Gold Project (Victoria) In December 2010, Catalyst Metals Limited entered into a formal heads of agreement with a private company, Providence Gold and Minerals Pty Ltd (Providence Gold) to form a joint venture to further explore and develop the Four Eagles Gold Project (EL4525 and EL5295). The Four Eagles Gold Project is located generally along strike of the Bendigo Goldfield and west of the towns of Mitiamo and Raywood in central Victoria, extending from 20 to 70 kilometres north of Bendigo (Figure 1). As part of Phase 1 of this farm-in agreement, Catalyst was required to spend $450,000 on exploration before 20 January 2012 as well as satisfying some other specific conditions. This was achieved and Catalyst exercised its option to proceed to Phase 2 and earn a 50% equity in the project. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 4 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) At the end of the 2012 financial year, Catalyst had spent approximately $1.8 million on exploration at Four Eagles and will need to spend a further $300,000 before January 2014 to earn its 50% interest. Figure 1 – Four Eagles Gold Project Location and tenements of other North Bendigo Explorers Exploration during the 2011 financial year had discovered several new zones of gold mineralisation which contained high grade gold mineralisation totally concealed beneath the overlying Murray Basin sediments. In 2012, these zones have been significantly expanded in size and the interpretation now shows five potential “lines of lode”, the largest of which is now about 6 kilometres long (Eagle 3 Structure)(Figure 2). Closer spaced drilling on portions of two of these structures this year has shown further high gold grades in a 50 metre wide corridor over a strike length of up to 1 km, but the nature of the mineralisation and the continuity have still not been established. Three advanced prospects (Hayanmi, Boyd’s Dam and Discovery) have now been defined but will require angled diamond or RC drilling to fully understand the nature of the mineralisation. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 5 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 2 – Four Eagles Gold Project Drilling Locations & Results An important aspect of the gold mineralisation at Four Eagles is that it appears to show much less variability (or “nugget effect”) compared to the Bendigo gold field. Initial assays are undertaken on a small 25 gram sample taken from 2 – 3 kilogram of total material. Anomalous samples (>0.5g/t Au) are then re-assayed by cyanide leaching of the total 2-3 kilogram sample. The correlation between the two assays is very good (>90%) indicating that gold is finely dispersed throughout the sample. Bulk leach samples are generally higher by an average of 9%. Another significant difference to Bendigo is that there appears to be much less massive vein quartz at Four Eagles (except perhaps at Eagle 2) with gold occurring in shear zones or mineralised structures with quartz veinlets, brecciation and alteration. This means that if the area is gold endowed as at Bendigo, the grade predictability may be much better. All assays on the attached tables and diagrams have now been adjusted to use the bulk leach gold values where they are available. During 2012, the Company completed 156 air-core holes for a total metreage of 13,742 metres, 8 reverse circulation (RC) holes for a total of 556.5 metres and 6 diamond drill/rotary mud holes for a total of 887.7 metres. Aircore drilling was undertaken on the northern EL 5295 for the first time ever and produced some minor intersections of alluvial gold (maximum 3 metres @ 0.4g/t Au from 93 metres in FE473). Only 21 aircore holes at very wide spacing were drilled on this tenement as a first pass reconnaissance exercise and further drilling is necessary. The remainder of the aircore programme was undertaken on EL 4525 and was designed to extend the mineralised zones and provide infill on some sections of the Eagle 3 and Eagle 4 Structures. This has produced many more gold intersections and identified three prospects where mineralisation shows broad continuity along strike as shown by the following intercepts and diagrammatically on Figures 3 and 4. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 6 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 3 – Hayanmi Prospect Drilling Locations & Results              Eagle 3 Structure (includes Hayanmi Prospect shown by asterisk) 3.0 metres @ 9.71g/t Au from 120 metres (FE380) 3.0 metres @ 0.59g/t Au from 126 metres (FE331) 3.0 metres @ 0.8g/t Au from 90 metres (FE402)* 6.0 metres @ 0.66g/t Au from 135 metres (FE333) 3.0 metres @ 9.1g/t Au from 108 metres (FE608)* 3.0 metres @ 1.39g/t Au from 102 metres (FE606)* 3.0 metres @ 1.2g/t Au from 75 metres (FE492)* 3.0 metres @ 0.53g/t Au from 87 metres (FE599)* 3.0 metres @ 2.33g/t Au from 126 metres (FE595)* 3.0 metres @ 0.51g/t Au from 93 metres (FE594)* 3.0 metres @ 14.7g/t Au from 87 metres (FE591)* 3.0 metres @ 1.46g/t Au from 93 metres (FE591)* 9.0 metres @ 7.9g/t Au from 87 metres (FE592)* Incl. 3.0 metres @ 1.26g/t Au from 87 metres* Incl. 3.0 metres @ 20.5g/t Au from 90 metres* Incl. 3.0 metres @ 1.94g/t Au from 93 metres* 1.0 metres @ 1.2g/t Au from 99 metres (FEDD005)* 3.0 metres @ 1.42g/t Au from 66 metres (FE399)* 3.0 metres @ 5.96g/t Au from 75 metres (FE471)* 3.0 metres @ 1.33g/t Au from 81 metres (FE471)* 3.0 metres @ 3.34g/t Au from 111 metres (FE343) 3.0 metres @ 1.23g/t Au from 36 metres (FE469) 3.0 metres @ 0.83g/t Au from 33 metres (FE623) 3.0 metres @ 0.8g/t Au from 45 metres (FE619) 3.0 metres @ 0.45g/t Au from 66 metres (FE391)          Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 7 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 4 – Boyd’s Dam Prospect Drilling Locations & Results Eagle 4 Structure (includes Boyd’s Dam Prospect)                    3.0 metres @ 0.93g/t Au from 54 metres (FE541) 3.0 metres @ 36.6g/t Au from 57 metres (FE415) 6.0 metres @ 2.60g/t Au from 45 metres (FE415) 3.0 metres @ 1.2g/t Au from 45 metres (FE472) 3.0 metres @ 1.2g/t Au from 51 metres (FE472) 3.0 metres @ 2.32g/t Au from 63 metres (FE472) 3.0 metres @ 0.92g/t Au from 56 metres (FEDD003) 2.0 metres @ 1.8g/t Au from 67 metres (FERC002) 1.0 metres @ 18.3g/t Au from 127 metres (FERC002) 2.0 metres @ 6.2g/t Au from 49 metres (FERC003) 3.0 metres @ 1.37g/t Au from 63 metres (FE535) 6.0 metres @ 0.8g/t Au from 63 metres (FE537) 3.0 metres @ 0.99g/t Au from 69 metres (FE532) 3.0 metres @ 2.1g/t Au from 96 metres (FE532) 9.0 metres @ 0.76g/t Au from 48 metres (FE572A) Incl. 3.0 metres @ 1.74g/t Au from 51 metres (FE572A) 3.0 metres @ 4.9g/t Au from 66 metres (FE575) 3.0 metres @ 0.65g/t Au from 78 metres (FE576) 3.0 metres @ 1.14g/t Au from 60 metres (FE578) 33.0 metres @ 0.96g/t Au from 48 metres (FE579) Incl. 9.0metres @ 2.33g/t Au from 48 metres (FE579) Incl. 3.0 metres @ 1.23g/t Au from 78 metres (FE579) Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 8 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Eagle 2 Structure (includes Discovery Prospect)            6.0 metres @ 82.70g/t Au from 123 metres (FE328) 6.0 metres @ 1.85g/t Au from 135 metres (FE328) 0.8 metres @ 17.50g/t Au from 173 metres (FEDD001) 0.4 metres @ 8.4 g/t Au from 167.7 metres (FEDD007) 0.8 metres @ 15.3g/t Au from 170.4 metres (FEDD007) 0.4 metres @ 152.0g/t Au from 150 metres (FEDD008) 3.0 metres @ 1.03g/t Au from 126 metres (FE299) 3.0 metres @ 0.9g/t Au from 117 metres (FE584) 6.0 metres @ 0.44g/t Au from 102 metres (FE326) 1.5 metres @ 1.81g/t Au from 114 metres (FE326) 3.0 metres @ 0.5g/t Au from 66 metres (FE446) Aircore drilling is an excellent first pass drilling technique to establish the presence of gold and gold bearing zones under cover but produces a lower quality sample compared to diamond drilling. For this reason, it is appropriate and economically sensible that drill samples are composited at the drill site into minimum sample intervals of 3 metres. Aircore drilling is unable to provide information on strike or dip of the basement lithologies and intersections are unlikely to be true width. For example, a three metre mineralised zone may include narrower intervals of much higher grade. Assays above 0.5 g/t Au are considered very significant as drilling has shown that these values are often in close proximity to high grade gold intersections. Most aircore drilling has been vertical and has limited penetration of hard rock such as massive quartz veins. It is therefore highly encouraging that the Company has been able to intersect so many assumed sub-vertical gold bearing structures at such a wide drill spacing. During 2012, the Company was more successful at establishing the methodology of diamond drilling through the overlying sands and clays of the Murray basin sequence in order to core the basement below. Whereas the first diamond drill programme in December 2011 achieved poor recoveries and progress, the final holes in June 2012 were able to achieve much better performance. These holes were drilled on the Discovery Prospect which lies within the Eagle 2 structure and both holes intersected high grade gold mineralisation as listed below and shown on the cross section in Figure 6:     0.5 metres @ 1.59g/t Au from 160.3 metres (FEDD007) 0.4 metres @ 8.4g/t Au from 168 metres (FEDD007) 0.75 metres @ 15.3g/t Au from 170 metres (FEDD007) 0.4 metres @ 152g/t Au from 150 metres (FEDD008) In summarising the progress at Four Eagles during the 2012 year, since January 2011, the aircore drilling programme has discovered further high grade gold mineralisation and showed broad continuity of gold mineralisation at the Hayanmi and Boyd’s Dam prospects. At the Discovery prospect diamond drilling has shown a broad zone of brecciation and shearing with quartz veinlets and alteration which contains narrow intervals of high grade gold mineralisation up to 152g/t Au. The key objective in 2013 will be to further test the shallow areas to the northeast for potential open-pittable gold deposits and better define the nature of gold mineralisation at Hayanmi and Boyd’s Dam by angled diamond or RC drilling. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 9 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 5 – Four Eagles Gold Project Diamond Drilling Cross Section Everton Project (Victoria) EL4866 No activity was possible at Everton during 2012 because of landowner access issues. The Company continues to communicate with the land-owner and the relevant statutory authorities in order to undertake further sampling of the old quarry area where high grade molybdenite ore was mined historically. Minnie Creek Project (Western Australia) The Minnie Creek Project area is located within the Gascoyne Mineral Field of Western Australia and lies approximately 240 km northeast of Carnarvon (Figure 6). Minnie Creek is prospective for both molybdenum and tungsten mineralisation in two separate prospects about 20kms apart and also contains areas of strong uranium anomalism. Previous diamond drilling has intersected molybdenum mineralisation at the Minnie Creek prospect with intersections including 62m@ 0.15%MoS2 and 31m@ 0.18%MoS2. Field activity resumed in March, 2012 following a detailed compilation and assessment by the Company’s consulting geologist. Sampling was undertaken on the Nina tungsten prospect and confirms a zone of tungsten mineralization about 400 metres long with assays exceeding 1% WO3. This area will require shallow RC drilling during the 2013 year. A ground radiometric survey was carried out on the Bluebush Well tenement E09/1303 and has confirmed the presence of anomalous uranium in calcrete overlying oxidized granitic rocks. Shallow test pits produced scintillometer readings for uranium of 500 ppm U. The airborne radiometric data show a number of other uranium anomalies that will require follow up. A new exploration licence was granted in March (E09/1776) and covers the area surrounding E09/1174. Both E09/1174 Eudamullah and E09/1303 Bluebush Well were renewed for periods of two years and five years respectively. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 10 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 6 – Minnie Creek Project Tenements SIGNIFICANT CHANGES IN STATE OF AFFAIRS Significant changes in the state of affairs of the Group during the financial year were as follows: (a) On 1 February 2012, Catalyst finalised a 12 month Option to Purchase Agreement with Unity Mining Ltd (“Unity”) to acquire its Kangaroo Flat Gold Plant and associated assets. As part of that transaction Catalyst issued 1,000,000 ordinary fully paid shares to Unity and agreed to pay four $100,000 quarterly option payments. At the date of this report 3 of the option payments have been paid. (b) On 23 January 2012, in accordance with the Heads of Agreement (“HoA”) signed on 24 December 2010 with Providence Gold & Minerals Pty Ltd (“Providence Gold”), Catalyst notified Providence Gold that it had satisfied Phase 1 of the HoA by spending $450,000 on exploration within the first 12 months from completion and that it intended to proceed to Phase 2 by issuing 750,000 ordinary fully paid shares and paying $100,000 which was completed on 16 March 2012. (c) During the year the Group raised $1,934,710 in equity funds through a private placement of 1,256,143 ordinary shares at a subscription price of $0.35 per share in October 2011; a Share Purchase Plan of 2,462,500 ordinary shares at a subscription price of $0.40 per share in April 2012; and a private placement of 1,214,429 ordinary shares at a subscription price of $0.42 per share in June 2012. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 11 CATALYST METALS LIMITED DIRECTORS’ REPORT FUTURE DEVELOPMENTS During the course of the next financial year, the Group will continue its mineral exploration activities and will investigate additional resources projects in which the Group may participate. In the opinion of the Directors there is no additional information available as at the date of this Group and the expected results of those operations in subsequent years. SUBSEQUENT EVENTS There have been no subsequent events since the end of the financial year. INFORMATION ON DIRECTORS Stephen Boston (Non-Executive Chairman) Mr Boston is the Principal of a Perth based private investment group specialising in the Australian resources sector. Mr Boston previously worked as a stockbroker from 1984 to 1998 in Perth and Sydney. Mr Boston holds a Bachelor of Arts from the University of Western Australia. Memberships: Senior Associate – Financial Services Institute of Australia Member - Australian Institute of Company Directors Special Responsibilities: Chairman Other Directorships: None Interests in securities: Direct: Indirect: Nil 5,447,947 Ordinary Shares; and 680,995 Options exercisable at $0.50 by 15 January 2013 (held by Trapine Pty Ltd, Elshaw Pty Ltd and Merewether Pty Ltd, companies in which Mr Boston holds a relevant interest) Robin Scrimgeour (Non-Executive Director) Mr Scrimgeour spent 17 years working for Credit Suisse in London, Tokyo, Hong Kong and Singapore. His most recent experience has been providing structured hybrid financing for corporates in Asia for project and acquisitions concentrated in the primary resources sector. Mr Scrimgeour’s previous experience was as a senior equity derivatives trader involved in the pricing of complex structured equity derivative instruments for both private and corporate clients focused in Asia. Mr Scrimgeour holds a Bachelor of Economics with Honours from the University of Western Australia. Special Responsibilities: Member of audit committee. Other Directorships: Interests in securities: None Direct: 4,001,278 Ordinary Shares; and 500,160 Options exercisable at $0.50 by 15 January 2013 Indirect: Nil Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 12 CATALYST METALS LIMITED DIRECTORS’ REPORT Gary Schwab (Non-Executive Director) Mr Schwab is a Certified Practicing Accountant with over 40 years of business experience, including 20 years in the resources sector. Mr Schwab was previously Executive Director for a privately owned commodities group. In that role, Mr Schwab was responsible for managing a long term wealth creation strategy (in conjunction with the principal and owner) which culminated in the creation of what is currently one of Australia’s wealthiest unlisted private commodities companies. Special Responsibilities: Chairman of audit committee. Other Directorships: None Interests in securities: Direct: Nil Indirect: Nil Bruce Kay (Non-Executive Director) Mr Kay is a qualified geologist and former head of worldwide exploration for Newmont Mining Corporation. He is a highly experienced geologist with a resource industry career spanning more than 30 years in international exploration, mine, geological, project evaluation and corporate operations. Mr Kay retired from Newmont in 2003. Based in Denver, Colorado, USA, he managed worldwide exploration for that Group. Prior to this appointment Mr Kay was group executive and managing director of exploration at Normandy Mining Limited where he was responsible for managing its global exploration program. Special Responsibilities: Technical Director. Other Directorships: None, however, in the last 3 years Mr Kay was the Chairman of Heemskirk Consolidated Ltd and was a non-executive director of North Queensland Metals Ltd. Interests in securities: Direct: 678,808 Ordinary Shares; 84,852 Options exercisable at $0.50 by 15 January 2013; 250,000 Options exercisable at $0.25 by 30 June 2014; 250,000 Options exercisable at $0.30 by 30 June 2015; and 700,000 Performance Rights Indirect: Nil Information on Company Secretary Frank Campagna B.Bus (Acc), CPA Company Secretary of Catalyst Metals Limited since November 2009. Mr Campagna is a Certified Practising Accountant with over 20 years’ experience as a Company Secretary, Financial Controller and Commercial Manager for listed resources and industrial companies. He currently operates a corporate consultancy practice which provides corporate secretarial services to both listed and unlisted companies. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 13 CATALYST METALS LIMITED DIRECTORS’ REPORT 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 9 9 9 9 9 9 7 9 - 2 2 - - 2 2 - Stephen Boston Robin Scrimgeour Gary Schwab Bruce Kay ENVIRONMENTAL REGULATIONS The Group is subject to significant environmental regulation in respect to its mineral exploration activities. These obligations are regulated under relevant government authorities within Australia and overseas. The Group is a party to exploration and mining licences. Generally, these licences and agreements specify the environmental regulations applicable to exploration and mining operations in the respective jurisdictions. The Group aims to ensure that it complies with the identified regulatory requirements in each jurisdiction in which it operates. Compliance with environmental obligations is monitored by the Board of Directors. No environmental breaches have been notified to the Group by any government agency during the year ended 30 June 2012. The Group’s operations are subject to State and Federal laws and regulation concerning the environment. PROCEEDINGS ON BEHALF OF THE GROUP No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. SHARE OPTIONS As at the date of this report, there were 7,758,988 unissued ordinary shares under option. The terms of these options are as follows: Options over ordinary fully paid shares exercisable: - at 50 cents each on or before 15 January 2013 - at 20 cents each on or before 30 June 2014 - at 30 cents each on or before 30 June 2015 Number 5,758,988 1,000,000 1,000,000 7,758,988 No person entitled to exercise the options has any right by virtue of the option to participate in any share issue of the parent entity or any other corporation. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 14 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) This report sets out the current remuneration arrangements for directors and executives of the Group. For the purposes of this report, key management personnel is defined as those persons having authority and responsibility for planning, directing and controlling major activities of the Group, including any director of the Group, and includes the executives in the consolidated entity receiving the highest remuneration. The information provided in this report includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party Disclosures. Principles used to determine the nature and amount of remuneration Directors and executives remuneration Overall remuneration policies are determined by the Board and are adapted to reflect competitive market and business conditions. Within this framework, the Board considers remuneration policies and practices generally, and determines specific remuneration packages and other terms of employment for any executive directors and senior management. Executive remuneration and other terms of employment are reviewed annually by the Board having regard to performance, relevant comparative information and expert advice. The Group’s remuneration policy for any executive directors and senior management is designed to promote superior performance and long term commitment to the Group. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Group’s operations. Executive directors and senior executives receive a base remuneration which is market related, together with performance based remuneration linked to the achievement of pre-determined milestones and targets. The Group’s remuneration policies are designed to align executives’ remuneration with shareholders’ interests and to retain appropriately qualified executive talent for the benefit of the Group. The main principles of the policy are: - - reward reflects the competitive market in which the Group operates; and individual reward should be linked to performance criteria. The structure of remuneration packages for any executive directors and other senior executives comprises: - a fixed sum base salary plus superannuation benefits; - short term incentives through eligibility to participate in a performance bonus scheme if deemed appropriate; and long term incentives through any executive directors being eligible to participate in share option schemes with the prior approval of shareholders. - Fixed and variable remuneration is established for each executive director by the Board. The objective of short term incentives is to link achievement of the Group’s operational targets with the remuneration received by executives charged with meeting those targets. The objective of long term incentives is to reward executives in a manner which aligns this element of their remuneration with the creation of shareholder wealth. Performance incentives may be offered to any executive directors and senior management through the operation of performance bonus schemes. A performance bonus, based on a percentage of annual salary, may be payable upon achievement of agreed operational milestones and targets. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 15 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (Continued) Non-executive directors’ remuneration In accordance with current corporate governance practices, the structure for the remuneration of non- executive directors and senior executives is separate and distinct. Shareholders approve the maximum fees payable to non-executive directors, with the current approved limit being $200,000 per annum. The Board is responsible for determining actual payments to directors. Non-executive directors are entitled to statutory superannuation benefits. The Board approves any consultancy arrangements for non-executive directors who provide services outside of and in addition to their duties as non-executive directors. Non-executive directors may be entitled to participate in equity based remuneration schemes. Shareholders must approve the framework for any equity based compensation schemes and if a recommendation is made for a director to participate in an equity scheme, that participation must be specifically approved by the shareholders. All directors are entitled to have premiums on indemnity insurance paid by the Group. Details of Remuneration for Year Ended 30 June 2012 Details of the remuneration for each director and key management personnel (as defined in AASB 124 Related Party Disclosures) of the Group during the year are set out in the following tables. 2012 Name Short-term employment benefits Cash salary and fees Other Post- employment benefits Superannuation Share-based payments Shares Total Non-executive directors S Boston R Scrimgeour G Schwab B Kay Total key management personnel compensation 30,000 38,150 38,150 15,000 121,300 - - - - - 19,050 - - 23,150 42,200 - - - 154,736 154,736 49,050 38,150 38,150 192,886 318,236 2011 Name Short-term employment benefits Cash salary and fees Other Post- employment benefits Superannuation Share-based payments Options Total Non-executive directors S Boston R Scrimgeour G Schwab B Kay Total key management personnel compensation 30,000 32,700 32,700 12,530 107,930 - - - - - 2,700 - - - 2,700 - - - 12,500 12,500 32,700 32,700 32,700 25,030 123,130 Letters of appointment have been entered into with each director of the Company. No duration of appointment or termination benefits are applicable. Effective from 1 January 2012, Non-executive directors receive remuneration of $40,000 per annum plus statutory superannuation, whilst the Chairman receives remuneration of $60,000 per annum plus statutory superannuation. Prior to 1 January 2012, remuneration of $30,000 plus statutory Non-executive directors and the Chairman superannuation. Directors are permitted to salary sacrifice their fees. received Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 16 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (Continued) The company secretary is deemed to be an executive by virtue of being an officer of the parent entity. The role performed by the company secretary does not meet the definition of key management person under AASB 124, hence this officer has been excluded from the key management personnel disclosures in the financial report. The company secretary has an agreement on normal commercial terms for the provision of services at the rate of $5,000 per month effective from 1 January 2012 ($3,500 per month prior to 1 January 2012). SHARE-BASED COMPENSATION Options Options over shares in the Company are granted under the Catalyst Metals Limited Employee Share Option Plan (“Option Plan”). The purpose of the Option Plan is to provide employees, directors, executive officers and consultants with an opportunity, in the form of options, to subscribe for ordinary shares in the Group. The Directors consider the Option Plan enables the Group to retain and attract skilled and experienced employees, board members and executive officers and provide them with the motivation to contribute to the growth and future success of the Group. During the financial year no options were issued as compensation, however in the 2011 financial year the following options were issued: Options over ordinary fully paid shares exercisable: - at 20 cents each on or before 30 June 2014 - at 30 cents each on or before 30 June 2015 Number 1,000,000 1,000,000 2,000,000 Of the above options Mr Bruce Kay received 250,000 of the 20 cent options expiring on 30 June 2014 and 250,000 of the 30 cent options expiring on 30 June 2015. These options were granted to Mr Kay in July 2010 in his capacity as a consultant to the Group prior to his appointment as a director in February 2011. Performance Rights Performance Rights over shares in the Company are granted under the Catalyst Metals Limited Performance Rights Plan (“Performance Rights Plan”). The objective of the Performance Rights Plan is to attract, motivate and retain employees, Directors and consultants (“Eligible Participants”) of the Company by providing performance related incentives and rewards. Subject to certain criteria being satisfied, the Board may offer Eligible Participants performance rights which upon vesting will entitle the holder to one ordinary fully paid share in the Company for each performance right held. During the financial year Mr Bruce Kay was awarded Performance Rights with the following conditions: (a) 300,000 Performance Rights will vest on the date that the Company, through its wholly owned subsidiary Kite Gold Pty Ltd elects to continue after Phase 1 of the Four Eagles Heads of Agreement, as evidenced by satisfaction of the relevant condition precedents to Phase 2, being the issue and allotment of a further 750,000 Catalyst shares and payment of a further $100,000 in cash to Providence Gold & Minerals Pty Ltd; and (b) 700,000 Performance Rights will vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to the transfer of a 50% interest in each of the exploration licences EL4525 and EL5295 under the Four Eagles Heads of Agreement. On 19th March 2012, Mr Kay was issued with 300,000 ordinary fully paid shares in the Company when the vesting condition for 300,000 Performance Rights was satisfied on 16th March 2012. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 17 CATALYST METALS LIMITED DIRECTORS’ REPORT INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Group has entered into indemnity agreements with each of the directors and officers of the Group. Under the agreements, the Group will indemnify those officers against any claim or for any expenses or costs which may arise as a result of work performed in their respective capacities as officers of the Group or any related entities. 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 any non-audit services 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. No fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2012. AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the year ended 30 June 2012 has been received and immediately follows the Directors’ Report. This report is made in accordance with a resolution of the Directors. Stephen Boston Chairman Perth, Western Australia 21 September 2012 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 18 RSM Bird Cameron Partners 8 St George’s Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Catalyst Metals Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) (ii) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. RSM BIRD CAMERON PARTNERS Perth, WA Dated: 21 September 2012 J A KOMNINOS Partner Liability limited by a scheme approved under Professional Standards Legislation Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036 RSM Bird Cameron Partners is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm which practises in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2012 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 2012 $ 2011 $ 6 7 8 9 10 1,774,000 1,918,840 104,395 67,675 - 120 1,878,395 1,986,635 3,952 7,629 - 283,537 3,952 291,166 TOTAL ASSETS 1,882,347 2,277,801 Current Liabilities Trade and other payables Total Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity Share-based payments reserve Accumulated losses 11 348,611 110,163 348,611 110,163 348,611 110,163 1,533,736 2,167,638 12 13 13 8,216,958 5,407,344 185,145 121,609 (6,868,367) (3,361,315) TOTAL EQUITY 1,533,736 2,167,638 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 20 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Year Ended 30 June 2012 Revenue Expenses Occupancy costs Professional fees Administration costs Personnel Corporate Exploration costs written off Loss before income tax expense Income tax expense Loss for the year Other comprehensive income Total comprehensive loss for the year Total comprehensive income attributable to members of the Parent entity Basic loss per share (cents per share) Diluted loss per share (cents per share) Note 2012 $ 2011 $ 2 100,290 113,378 (1,500) - (143,615) (102,494) (39,904) (54,151) (318,271) (149,630) (297,531) (117,471) (2,806,521) (966,577) (3,507,052) (1,276,945) - - (3,507,052) (1,276,945) - - (3,507,052) (1,276,945) (3,507,052) (1,276,945) (8.5) (8.5) (3.6) (3.6) 3 5 4 4 The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 21 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2012 Contributed Equity $ Accumulated losses $ Share-based payments reserve $ Total $ Balance at 30 June 2010 4,025,455 (2,084,370) 82,609 2,023,694 Total comprehensive loss for the year Transactions with owners in their capacity as owners: Issue of options Issue of shares Share issue expenses Balance at 30 June 2011 Total comprehensive loss for the year Transactions with owners in their capacity as owners: Issue of performance rights Issue of shares Share issue expenses Balance at 30 June 2012 - - 1,400,000 (18,111) 5,407,344 (1,276,945) - (1,276,945) - - - 39,000 - - (3,361,315) 121,609 39,000 1,400,000 (18,111) 2,167,638 - (3,507,052) - (3,507,052) 91,200 2,752,210 (33,796) 8,216,958 - - - 63,536 154,736 - - 2,752,210 (33,796) 1,533,736 (6,868,367) 185,145 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 22 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended 30 June 2012 Cash Flows from Operating Activities Payments for exploration and evaluation Payments to suppliers, contractors and employees Interest received Note 2012 $ 2011 $ (1,512,196) (760,335) (642,269) (400,099) 109,221 97,280 Net cash flows used in operating activities 14 (2,045,244) (1,063,154) Cash Flows from Investing Activities Payments for property, plant and equipment Payments for exploration tenement acquired (510) - - (8,260) Net cash flows used in investing activities (510) (8,260) Cash Flows from Financing Activities Proceeds from issue of shares and other equity securities 1,934,710 1,235,000 Share issue expenses (33,796) (18,111) Net cash flows from financing activities 1,900,914 1,216,889 Net increase in cash and cash equivalents (144,840) 145,475 Cash and cash equivalents at the beginning of the financial year 1,918,840 1,773,365 Cash and cash equivalents at the end of the financial year 6 1,774,000 1,918,940 The above Consolidated Statement of Cash Flows should be read accompanying notes. in conjunction with the Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 23 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (a) Statement of Compliance This financial report of Catalyst Minerals Limited (‘the Company’) for the year ended 30 June 2012 comprises of the company and its controlled entities (collectively referred to as ‘the consolidated entity’ or ‘group’). The separate financial statements of the parent entity, Catalyst Metals Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. The Company is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The financial report was authorised for issue in accordance with a resolution of directors dated 21 September 2012. (b) Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (c) Consolidation A controlled entity is any entity Catalyst Metals Limited has the power to control the financial and operating policies so as to obtain benefits from its activities. All inter-Group balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiary have been changed where necessary to ensure consistencies with those policies applied by the parent entity. Where controlled entities have entered or left the consolidated entity during the year, their operating results have been included/ excluded from the date control was obtained or until the date control ceased. (d) Revenue Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. (e) Impairment At each reporting date, the Group 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 24 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (f) 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. (g) Trade and other receivables Trade receivables, loans, and other receivables are recorded at amortised cost less impairment. (h) 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 transaction 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 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 Group 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 25 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (h) Financial instruments (Continued) 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. (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. (i) Exploration and Evaluation Expenditure Exploration and evaluation expenditure incurred by or on behalf of the Group 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. 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 Group 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 26 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (i) Exploration and Evaluation Expenditure (Continued) Expenditure is not carried forward in respect of any area of interest unless the Group’s right of tenure to that area of interest is current. Expenditures incurred before the Group 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. (j) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (k) 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. (l) 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. (m) 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 27 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (m) Income tax (Continued) 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 Group 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 Group 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. (n) 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. (o) Equity based payments The Group 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. (p) Earnings per share Basic earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the financial year. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 28 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (q) 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. (r) Property, Plant and Equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised in profit or loss. A formal assessment of recoverable amount is made when impairment indicators are present. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets, but excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the consolidated group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Computer equipment Furniture, fittings and equipment 25%-33.33% 33.33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 29 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (s) 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 Group. Significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below: Exploration and evaluation The Group'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 Group 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. (t) Adoption of New and Revised Accounting Standards The Group has adopted the following new and revised Australian Accounting Standards issued by the AASB which are mandatory to apply to the current financial year. Disclosures required by these Standards that are deemed material have been included in this financial report on the basis that they represent a significant change in information from those previously made available. In the current year, the group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised Standards and Interpretations has not resulted in a significant or material change to the consolidated entity’s accounting policies. New standards issued but not yet effective At the date of this financial report the following standards, which may impact the entity in the period of initial application, have been issued but are not yet effective: Reference Title Summary AASB 9 Financial Instruments AASB 124 Related Party Disclosures Replaces the requirements of AASB 139 for the classification and measurement of financial assets. This is the result of the first part of Phase 1 of the IASB’s project to replace IAS 39. Revised standard. The definition of a related party is simplified to clarify its intended meaning and eliminate inconsistencies from the application of the definition Application date (financial years beginning) 1 January 2013 Expected Impact No expected impact on the entity 1 January 2011 Disclosure only The group has decided against early adoption of these standards. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 30 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 2. Revenue Interest received Other revenue 3. Expenses 2012 $ 2011 $ 98,325 1,965 100,290 113,378 - 113,378 Loss before income tax includes the following specific expenses: Directors fees Exploration written off (refer note 1(i)) Share based payments (refer note 17) Depreciation 4. Earnings per Share 163,535 2,806,521 154,736 4,187 110,630 966,577 39,000 4,956 2012 No. of Shares 2011 No. of Shares Weighted average number of ordinary shares for basic and diluted earnings per share (i) 41,324,460 35,082,747 (i) In 2012 diluted earnings per share were calculated after classifying all options on issue remaining unconverted at 30 June 2012 as potential ordinary shares. As at 30 June 2012, the Group had 7,758,988 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. 5. Income tax Loss before tax Prima facie tax on operating loss before income tax at 30% Tax effect of: - non deductible items - deductible capital raising expenditure Deferred tax asset not brought to account at the reporting date as realisation of the benefit is not probable Income tax attributable to operating loss Unrecognised deferred tax balances 2012 $ 2011 $ (3,507,052) (1,276,945) 1,052,116 383,084 (52,100) - (17,779) - (1,000,016) (365,305) - - The Group has $6,908,678 (2011: $3,575,291) tax losses arising in Australia that are available indefinitely for offset against future profit of the companies in which the losses arose. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 31 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 5. Income tax (Continued) The potential deferred tax asset of $2,072,603 (2011: $1,072,587), 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 Group derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised; the relevant Group continues to comply with the conditions for deductibility imposed by tax legislation; and no changes in tax legislation adversely affect the relevant Group in realising the benefit from the deduction for the losses. 6. Cash and cash equivalents Cash at bank 7. Trade and other receivables Sundry debtors 2012 $ 2011 $ 1,774,000 1,918,840 104,395 67,675 Fair value and credit risk Due to the short term nature of the receivables, their carrying value is assumed to approximate their fair value. 2012 $ 2011 $ 8. Financial assets at fair value through profit or loss Current Securities in listed corporations - at fair value - 120 Listed securities 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 2012 Opening net book amount 1 July 2011 Additions Disposals Depreciation charge Closing net book amount 30 June 2012 At 30 June 2012 Cost or fair value Accumulated depreciation Net book amount Computer equipment $ Furniture, fittings and equipment $ 7,629 510 - (4,187) 3,952 - - - - - Total $ 7,629 510 - (4,187) 3,952 20,602 (16,650) 3,952 11,572 (11,572) - 32,174 (28,222) 3,952 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 32 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 9. Property, plant and equipment (Continued) Computer equipment $ Furniture, fittings and equipment $ Year ended 30 June 2011 Opening net book amount 1 July 2010 12,403 Additions Disposals Depreciation charge Closing net book amount 30 June 2011 At 30 June 2011 Cost or fair value Accumulated depreciation Net book amount - - (4,774) 7,629 20,092 (12,463) 7,629 10. Exploration and evaluation expenditure Opening balance Additions Total $ 12,585 - - (4,956) 7,629 182 - - (182) - 11,572 (11,572) - 31,664 (24,035) 7,629 2012 $ 283,537 2,522,984 2011 $ 275,277 974,837 Exploration written off (refer note 1(i)) (2,806,521) (966,577) Closing balance - 283,537 11. Trade and other payables Current Payables Trade creditors Accruals 322,866 25,745 348,611 46,495 63,668 110,163 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 33 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 12. Contributed Equity (a) Share capital Ordinary shares Fully paid (b) Other equity securities Options - Listed Options – Unlisted Performance Rights - Unlisted Total contributed equity (c) Movements in Ordinary Shares Details Balance at 30 June 2010 Issue of shares Issue of shares – Four Eagles Gold Project Issue of shares Share issue expenses Balance at 30 June 2011 Issue of shares Issue of shares – Unity Mining Ltd Issue of shares – Four Eagles Gold Project Issue of shares – B Kay Performance Rights Issue of shares – Share Purchase Plan Issue of shares Share issue expenses Balance at 30 June 2012 (d) Movements in other equity securities Details Listed Options Balance at 30 June 2010 Issue of options Balance at 30 June 2011 Issue of options Balance at 30 June 2012 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 2012 Number 2012 $ 2011 Number 2011 $ (c) 46,071,298 8,216,958 39,088,226 5,407,344 (d) (d) (d) 5,578,988 2,000,000 700,000 - - - 2,000,000 - - 8,263,758 5,407,344 Number of Shares 30,588,226 4,500,000 750,000 3,250,000 - 39,088,226 1,256,143 Issue Price $ 4,025,455 $0.13 585,000 $0.22 $0.20 - 165,000 650,000 (18,111) 5,407,344 $0.35 439,650 1,000,000 $0.45 450,000 750,000 $0.49 367,500 300,000 $0.30 91,200 2,462,500 1,214,429 - 46,071,298 $0.40 $0.42 985,000 510,060 (33,796) 8,216,958 Number of Options Issue Price - - - 5,758,988 5,758,988 - $ - - - - - 34 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 12. Contributed Equity (Continued) (d) Movements in other equity securities (Continued) Details Unlisted Options Balance at 30 June 2010 Issue of options Balance at 30 June 2011 Issue of options Balance at 30 June 2012 Details Performance Rights Balance at 30 June 2010 Issue of performance rights Balance at 30 June 2011 Issue of performance rights Vested during period Balance at 30 June 2012 (e) Ordinary shares Number of Options Issue Price - 2,000,000 2,000,000 - 2,000,000 - Number of Rights Issue Price - - - - 1,000,000 (300,000) 700,000 $ - - - - - $ - - - - - 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) Options Listed Options Options over ordinary fully paid shares exercisable: - at 50 cents each on or before 15 January 2013 Unlisted Options Options over ordinary fully paid shares exercisable: - at 20 cents each on or before 30 June 2014 - at 30 cents each on or before 30 June 2015 Number 5,758,988 Number 1,000,000 1,000,000 2,000,000 (g) Performance Rights 700,000 Performance Rights will vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to the transfer of a 50% interest in each of exploration licences EL4525 and EL5295 under the Four Eagles Heads of Agreement. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 35 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 12. Contributed Equity (Continued) (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 2012 and no dividends are expected to be paid in 2013. There is no current intention to incur debt funding on behalf of the Group as on-going exploration expenditure will be funded via cash reserves, equity or joint ventures with other companies. The Group is not subject to any externally imposed capital requirements. (i) Details of subsidiaries Details of the Group’s subsidiaries at 30 June 2012 are: Name of subsidiary Principal activity Place of incorporation and operation Proportion of ownership interest and voting power held Silkfield Holdings Pty Ltd Mineral Exploration Australia Kite Gold Pty Ltd Mineral Exploration Australia 100% 100% 13. Reserves & Accumulated Losses (a) Reserves Share-based payments reserve Balance at the beginning of the year Transfer to contributed equity Share-based payments expense Balance at the end of the year 2012 $ 121,609 (91,200) 154,736 185,145 2011 $ 82,609 - 39,000 121.609 The share-based payments reserve records the value of share options issued by the Group. (b) Accumulated 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 2012 (3,361,315) (3,507,052) (6,868,367) (2,084,370) (1,276,945) (3,361,315) 36 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 14. Notes to the Cash Flow Statement (a) Reconciliation of net cash used in operating activities to operating loss after income tax 2012 $ 2011 $ Operating loss after tax (3,507,052) (1,276,945) Add non cash items: Depreciation (Gain)/loss on fair value of other financial assets Share based payment Exploration paid in shares Changes in net assets and liabilities Increase/(decrease) in receivables Increase/(decrease) in payables (Increase)/decrease in exploration 4,187 120 154,736 817,500 (36,720) 238,448 283,537 4,956 - 39,000 165,000 (44,747) 49,582 - Net cash outflow from operating activities (2,045,244) (1,063,154) (b) Non-cash financing and investing activities The Group did not have any non-cash financing or investing activities during the year (2011: Nil), other than the payment for the Four Eagles Gold Project of $367,500 in ordinary fully paid shares; the payment to Unity Mining Ltd of $450,000 in ordinary fully paid shares. 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 S Boston R Scrimgeour G Schwab B Kay Non-Executive Chairman (appointed 1 September 2009) Non-Executive Director (appointed 1 September 2009) Non-Executive Director (appointed 8 December 2009) Non-Executive Director (appointed 9 February 2011) All of the above persons were also key management persons during the year ended 30 June 2012. (b) Key management personnel remunerations Short-term employee benefits Post-employment benefits Share based payments 2012 121,300 42,200 154,736 318,236 2011 107,930 2,700 12,500 123,130 Detailed remuneration disclosures are provided in the Remuneration Report section of the Director’s Report. 37 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 15. Key Management Personnel Compensation (Continued) (c) Equity instrument disclosures relating to key management personnel (i) (ii) 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 section of the Directors’ Report. Option holdings The number 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: 2012 Directors S Boston R Scrimgeour G Schwab B Kay Balance at beginning of year - - - 500,000 Granted as compensation Exercised Other changes (i) Balance at end of year Vested and exercisable - - - - - - - - 680,995 500,160 - 680,995 500,160 - 680,995 500,160 - 84,852 584,852 584,852 (i) Options issued under the Bonus Option Issue on 18 April 2012. 2011 Directors S Boston R Scrimgeour G Schwab B Kay (i) Balance at beginning of year Granted as compensation Exercised Other changes Balance at end of year Vested and exercisable - - - - - - - - - - - - - - - - - - - - - 500,000 500,000 500,000 (i) Options were issued to Mr Kay prior to his appointment as a director. (iii) Shareholdings Ordinary Shares The number of ordinary shares in the Group held during the financial year by each director and other key management personnel of the Group, including their personally related parties, are set out below. There were no shares granted during the year as compensation. 2012 Directors S Boston R Scrimgeour G Schwab B Kay (i) Balance at beginning of year Purchased Other changes (i) Balance at end of year 4,375,085 3,963,778 - 292,308 1,072,862 37,500 - - - - 86,500 300,000 5,447,947 4,001,278 - 678,808 This represents the shares issued to Mr Kay after performance rights vested on 19 March 2012. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 38 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 15. Key Management Personnel Compensation (Continued) (c) Equity instrument disclosures relating to key management personnel (Continued) (iii) Shareholdings (Continued) 2011 Directors S Boston R Scrimgeour G Schwab B Kay (i) Balance at beginning of year Purchased Other changes (i) Balance at end of year 3,819,628 1,870,561 - - 555,457 2,093,217 - - - - - 292,308 4,375,085 3,963,778 - 292,308 This represents the shares held by Mr Kay prior to his appointment as a director of the Company. Performance Rights (iv) The number of performance rights in the Company held during the financial year by each personally related parties, are set out below: 2012 Directors S Boston R Scrimgeour G Schwab B Kay 2011 Directors S Boston R Scrimgeour G Schwab B Kay Balance at beginning of year Granted as compensation Vested Other changes Balance at end of year Vested and exercisable - - - - - - - - - - 1,000,000 (300,000) - - - - - - - 700,000 - - - - Balance at beginning of year Granted as compensation Vested Other changes (ii) Balance at end of year Vested and exercisable - - - - - - - - - - - - - - - - - - - - - - - - 16. Related Party Disclosures Key Management Personnel Mr Scrimgeour’s directors’ fees of $38,150 (2011: $32,700) were paid to Culloden Capital Pte Ltd, a company in which Mr Scrimgeour has a relevant interest. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 39 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 17. Share based payments The Company has adopted an Employee Share Option Plan that allows for share options to be granted to eligible employees and officers of the Group. 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 options issued under the plan are at the discretion of the Board. No options were granted during the financial year. Consultant options The company has issued equity based payments to key corporate and strategic consultants of the company to provide an incentive for their future involvement and commitment. 2012 2011 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ Opening amount Granted during the year - Consultant options Closing amount 2,000,000 0.25 - - - 2,000,000 - 0.25 2,000,000 2,000,000 0.25 0.25 2012 Issue date Expiry date Balance at start of year Number issued during year Number exercised during year 2 July 2010 2 July 2010 30 Jun 2014 30 Jun 2015 1,000,000 1,000,000 - - - - 2011 Issue date Expiry date 2 July 2010 2 July 2010 30 Jun 2014 30 Jun 2015 Balance at start of year Number issued during year Number exercised during year - - 1,000,000 1,000,000 - - Number expired during year - - Number expired during year - - Balance at end of year 1,000,000 1,000,000 Number exercisable at end of year 1,000,000 1,000,000 Balance at end of year 1,000,000 1,000,000 Number exercisable at end of year 1,000,000 1,000,000 The following table gives the assumptions made in determining the fair value of the options granted: Expiry date Type Dividend yield (%) Expected price volatility (%) Risk-free interest rate (%) Expected life of options (years) Option exercise price ($) Share price at grant date Number of options issued 30 Jun 2014 Consultant - 50% 5.50% 4 $0.20 $0.09 1,000,000 30 Jun 2015 Consultant - 50% 5.50% 5 $0.30 $0.09 1,000,000 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 40 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 17. Share based payments (Continued) Performance Rights The Company has adopted a Performance Rights Plan which allows for performance rights to be granted to employees, Directors and consultants of the Group,(“Eligible Participants”) of the Company by providing performance related incentives and rewards. Subject to certain criteria being satisfied, the Board may offer Eligible Participants performance rights which upon vesting will entitle the holder to one ordinary fully paid share in the Company for each performance right held. During the financial year Mr Bruce Kay was awarded Performance Rights with the following conditions: a. 300,000 Performance Rights will vest on the date that the Company, through its wholly owned subsidiary Kite Gold Pty Ltd elects to continue after Phase 1 of the Four Eagles Heads of Agreement, as evidenced by satisfaction of the relevant condition precedents to Phase 2, being the issue and allotment of a further 750,000 Catalyst shares and payment of a further $100,000 in cash to Providence Gold & Minerals Pty Ltd; and b. 700,000 Performance Rights will vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to the transfer of a 50% interest in each of the exploration licences EL4525 and EL5295 under the Four Eagles Heads of Agreement. On 19th March 2012, Mr Kay was issued with 300,000 ordinary fully paid shares in the Company when the vesting condition for the 300,000 Performance Rights was satisfied on 16th March 2012. The Performance Rights have been valued at $0.304 each based on the following assumptions:      Each Performance Right will vest (otherwise the Performance Rights have a nil value) The initial undiscounted value of each Performance Right is effectively the value of an underlying share in the Company and the valuation is based on the price range that Catalyst shares traded on ASX during July 2011 No discount is applied for the vesting conditions, as these are not market based performance conditions A discount of 20% is applied to general restrictions, such as non-listed status, non-voting rights, no dividend rights and no rights to surplus on a winding-up, which result in a lesser value than an ordinary share Vesting periods have not been taken into account. Unity Mining Ltd On 1 February 2012, Catalyst finalised a 12 month option agreement with Unity Mining Ltd (“Unity”) to acquire its Kangaroo Flat Gold Plant. As part of that transaction Catalyst issued 1,000,000 ordinary fully paid shares to Unity. Providence Gold & Minerals Pty Ltd On 16 March 2012, in accordance with the Heads of Agreement (“HoA”) signed on 24 December 2010 with Providence Gold & Minerals Pty Ltd (“Providence Gold”), Catalyst satisfied the Phase 2 condition precedents by issuing 750,000 ordinary fully paid shares to Providence Gold and paying $100,000. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 41 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 18. Auditors’ Remuneration Amounts received or due and receivable by the auditors for: Auditing accounts Other services 19. Commitments There were no outstanding commitments, which are not disclosed in the financial statements as at 30 June 2012 other than: (a) Tenement commitments No later than 1 year Later than 1 year but not later than 5 years 20. Financial Instruments 2012 $ 2011 $ 19,500 - 19,500 19,000 - 19,000 2012 $ 2011 $ 249,500 139,500 - - 249,500 139,500 Notes Floating Interest Rate $ 1 year or less Over 1-5 years Non interest bearing $ $ $ Total $ 2012 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 8 11 5.54% 1,774,000 - - - - 1,774,000 - - Net financial assets/(liabilities) 1,774,000 - - - - - - - - 1,774,000 104,395 104,395 - - 104,395 1,878,395 348,611 348,611 348,611 348,611 (244,216) 1,529,784 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 42 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 20. Financial Instruments (Continued) Notes Floating Interest Rate $ 1 year or less Over 1-5 years Non interest bearing $ $ $ Total $ 2011 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 8 11 5.66% 1,918,840 - - - - 1,918,840 - - Net financial assets/(liabilities) 1,918,840 Reconciliation of net financial assets to net assets Net Financial Assets Property, plant & equipment Exploration expenditure Net Assets - - - - - - - - 1,918,840 67,675 67,675 120 120 67,795 1,986,635 110,163 110,163 110,163 110,163 (42,368) 1,876,472 2012 $ 2011 $ 1,529,784 1,876,472 3,952 - 7,629 283,537 1,533,736 2,167,638 The Group’s principal financial instruments comprise cash, short-term deposits and financial assets at fair value through comprehensive income. The main purpose of these financial instruments is to finance the Group’s operations. The Group 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 Group’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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 43 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 20. Financial Instruments (Continued) Market Risks Interest rate risks The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s short-term deposits with a floating interest rate. These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Group does not engage in any hedging or derivative transactions to manage interest rate risk. Interest rate sensitivity At 30 June 2012, 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 $17,740 (2011: $19,188) 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 Group 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 Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Liquidity risk The responsibility for liquidity risk management rests with the Board of Directors. The Group 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. 21. Segment Information The Group operates predominantly in one business segment and in one geographical location. The operations of the Group consist of mineral exploration, within Australia. 22. Subsequent Events There were no subsequent events after 30 June 2012. 23. Contingent Liabilities and Contingent Assets The Group does not have any contingent liabilities or contingent assets at 30 June 2012. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 44 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2012 24. Parent Entity Disclosure Total current assets Total assets Total current liabilities Total liabilities Equity Contributed equity Share based payments reserve Accumulated losses Total equity 2012 $ 2011 $ 1,857,624 2,270,037 1,872,202 2,277,666 338,466 338,466 81,493 81,493 8,216,958 185,145 (6,868,367) 5,407,344 121,609 (3,332,780) 1,533,736 2,196,173 Loss for the year (3,535,587) (1,248,643) Total comprehensive income (3,535,587) (1,248,643) Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 45 CATALYST METALS LIMITED DIRECTORS’ DECLARATION The Directors of the Company declare that in the opinion of the Directors: 1. the financial statements and notes are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards and the Corporations Regulations 2001; and (b) give a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year then ended; the financial statements and notes thereto also comply with International Financial Reporting Standards, as disclosed in Note 1; the directors have been given the declarations required by s295A of the Corporations Act 2001; and there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. 2. 3. 4. This declaration is made in accordance with a circular resolution of the Board of Directors. Stephen Boston Chairman Dated at Perth this 21st day of September 2012 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2012 46 RSM Bird Cameron Partners 8 St George’s Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CATALYST METALS LIMITED Report on the Financial Report We have audited the accompanying financial report of Catalyst Metals Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Liability limited by a scheme approved under Professional Standards Legislation Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036 RSM Bird Cameron Partners is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm which practises in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Catalyst Metals Limited, would be in the same terms if given to the directors as at the time of this auditor's report. Opinion In our opinion: (a) the financial report of Catalyst Metals Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Report on the Remuneration Report We have audited the Remuneration Report contained within the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion the Remuneration Report of Catalyst Metals Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001. RSM BIRD CAMERON PARTNERS Perth, WA Dated: 21 September 2012 J A KOMNINOS Partner CATALYST METALS LIMITED CORPORATE GOVERNANCE STATEMENT A description of the Company’s main corporate governance practices is set out below. These practices, unless otherwise stated, were in place for the entire financial year. Copies of relevant corporate governance policies and charters are available in the corporate governance section of the Company’s web-site at www.catalystmetals.com.au. Good corporate governance will evolve with the changing circumstances of a company and must be tailored to meet these circumstances. Catalyst Metals Limited is a junior exploration company which currently operates with no permanent staff and no executive directors. BOARD OF DIRECTORS The Board is responsible for guiding and monitoring the Company on behalf of shareholders by whom they are elected and to whom they are accountable. The Board’s primary role is to formulate the strategic direction of the Company and to oversee the Company’s business activities and management. The Company has established functions reserved for the Board and those to be delegated to senior management, as set out in the Company’s Board charter. The charter states that the Board is responsible for: the overall strategic direction and leadership of the Company;   approving and monitoring management implementation of objectives and strategies;  approving the annual strategic plan and monitoring the progress of both financial and non-financial   performance; the corporate governance of the Company, and the establishment and maintenance of a framework of internal control and appropriate ethical standards for the management of the Company. Due to the level and nature of the Company’s current activities, there is presently no designated Managing Director position within the Company. A Managing Director will be appointed for the Company when the level of activities and circumstances warrant. Upon the appointment of a Managing Director, day to day management of the Company’s affairs and the implementation of corporate strategies will be formally delegated by the Board to the Managing Director. Board composition and independence The Board charter states that the Board is to comprise an appropriate mix of both executive and non- executive directors and where possible, the roles of Chairman and Managing Director are not to be combined. The Company has a four member Board comprising four non-executive directors, including the Chairman. Mr Boston and Mr Scrimgeour are not considered independent by virtue of their respective major shareholdings in the Company, neither is Mr Kay by virtue of financial remuneration during the year. Mr Schwab is considered an independent director based on the principles set out below. Board members should possess complementary business disciplines and experience aligned with the Company’s objectives, with a number of directors being independent and where appropriate, major shareholders being represented on the Board. Under present circumstances, there is not a majority of directors classified as being independent, according to ASX guidelines. Where any director has a material personal interest in a matter, the director must declare his interest and is not permitted to be present during discussions or to vote on the matter. The current composition of the Board is considered suitable for the Company’s current size and level of operations and includes an appropriate mix of skills, expertise and experience relevant to the Company’s business. Details of the experience, qualifications and term of office of directors are set out in the Directors’ Report. 49 CATALYST METALS LIMITED CORPORATE GOVERNANCE STATEMENT Having regard to the share ownership structure of the Company, it is considered appropriate by the Board that a major shareholder may be represented on the Board and if nominated, hold the position of Chairman. Such appointment would not be deemed to be independent under ASX guidelines. The Chairman is expected to bring independent thought and judgement to his role in all circumstances. Where matters arise in which there is a perceived conflict of interest, the Chairman must declare his interest and abstain from any consideration or voting on the relevant matter. The Board has adopted ASX recommended principles in relation to the assessment of directors’ independence, which identifies shareholdings, executive roles and contractual relationships which may affect independent status. Financial materiality thresholds used in the assessment of independence are set at 10% of the annual gross expenditure of the Company and/or 25% of the annual income or business turnover of the director. Directors have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company’s expense, subject to the prior written approval of the Chairman, which shall not be unreasonably withheld. Performance assessment The Board has adopted a policy for an annual self-assessment of its collective performance, the performance of individual directors and of Board committees. The Chairman meets with each non- executive director separately to discuss individual performance and the Board as a whole discusses and analyses its performance over the previous 12 months and examines ways in which the Board can better perform its duties. No formal assessment was undertaken during the year, however, the Chairman assesses the performance of the Board, individual directors and Board committees on an ongoing basis and undertakes informal appraisals with relevant directors. The performance of senior executives will be reviewed annually by the Board through a formal performance appraisal and interview. Currently, the Board is collectively responsible for the evaluation of any senior executives. Executive remuneration and other terms of employment will be reviewed annually by the Board having regard to performance, relevant comparative information and where appropriate, expert advice. The Company does not presently have any senior executive positions and accordingly, no formal evaluation of senior executive performance was undertaken during the year. BOARD COMMITTEES The Board has established a separate audit committee. Matters determined by the committee are submitted to the full Board as recommendations for Board consideration. Membership of the audit committee comprises two non-executive directors, Mr Schwab (chairman) and Mr Scrimgeour. Details of the qualifications of committee members and attendance at audit committee meetings are set out in the Directors’ Report. The audit committee operates in accordance with a written charter. The audit committee oversees accounting and reporting practices and is also responsible for:   reviewing and approving statutory financial reports and all other financial information distributed externally; co-ordination and appraisal of the quality of the audits conducted by the Company’s external auditor;  determination of the independence and effectiveness of the external auditor;  assessment of whether non-audit services have the potential to impair the independence of the external auditor; reviewing the adequacy of the reporting and accounting controls of the Company.  The current size of the Board and the stage of development of the Company do not warrant the establishment of separate remuneration or nomination committees. The directors as a whole are responsible for the functions normally undertaken by these committees. In circumstances where the growth or complexity of the Company changes, the establishment of separate committees will be reconsidered. 50 CATALYST METALS LIMITED CORPORATE GOVERNANCE STATEMENT The Board reviews all remuneration policies and practices for the Company, including overall strategies in relation to executive remuneration policies and compensation arrangements for any executive directors and senior management, as well as all equity based remuneration plans. The structure for the remuneration of non-executive directors and senior executives is separate and distinct. Details of the Company’s remuneration policies are set out in the Remuneration Report section of the Directors’ Report. Board nomination procedures The current size of the full Board permits it to act as the nomination committee and to regularly review membership. When a Board vacancy occurs, the Board identifies the particular skills, experience and expertise that will best complement Board effectiveness and then undertakes a selection process to identify candidates who can meet those criteria. EXTERNAL AUDITORS RSM Bird Cameron was appointed as external auditors in May 2006. The current audit engagement partner has conducted the audit since December 2011 with rotation due no later than five years from that date. The performance of the external auditors is reviewed annually. The external auditors provide an annual declaration of their independence to the Board. The auditors are requested to attend annual general meetings and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report. Corporate reporting The chief executive officer (or equivalent) and chief financial officer provide a declaration to the Board that the Company’s external financial reports present a true and fair view of the Company’s financial condition and operational results and that the declaration in relation to the integrity of the Company’s external financial reports is founded on sound risk management and internal control systems and that those systems are operating effectively in relation to financial reporting risks. RISK MANAGEMENT The Board is responsible for the oversight of the Company’s risk management and control framework. Responsibility for control and risk management will be delegated in the future to the appropriate level of management within the Company with the Managing Director (or equivalent) having ultimate responsibility to the Board for the risk management and control framework. The Company’s risk management systems are evolving and it is recognised that the extent of the systems will develop with the growth in the Company’s activities. Internal controls are designed to manage 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-financial information. As the Board currently has responsibility for the monitoring of risk management it has not required a formal report regarding the material risks and whether those risks are managed effectively. CODE OF CONDUCT A formal code of conduct has been established and applies to all directors and employees, to guide compliance with the legitimate interests of all stakeholders. The code aims to encourage the appropriate standards of conduct and behaviour of the directors, employees and contractors of the Company. All personnel are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. The Company’s share trading policy prohibits the purchase or disposal of securities by directors, senior executives and other designated persons in the period of one week prior to the release of quarterly reports and the Company’s annual and half-year financial results. Any proposed transactions to be undertaken must be notified to the Chairman in advance. Directors are also required to immediately advise the Company of any transactions conducted by them in the securities of the Company. 51 CATALYST METALS LIMITED CORPORATE GOVERNANCE STATEMENT Where the Company grants securities under an equity based remuneration scheme, participants are prohibited from entering into arrangements for the hedging, or otherwise limiting their exposure to risk in relation to unvested shares, options or rights issued or acquired under the scheme. EMPLOYMENT DIVERSITY The Board recognises the benefits of achieving an appropriate mix of diversity on its Board and throughout the Company as a means of enhancing the Company's performance and organisational capabilities. However, due to the current size and stage of development of the Company and there being no permanent employees, the Board has elected not to establish a formal diversity policy at this stage. The Company aims to achieve an appropriate mix of diversity on its Board, in senior management and throughout the organisation. The Board has determined that no specific measurable objectives will be established until such time as the number of employees and level of activities of the Company increases to a level sufficient to enable meaningful and achievable objectives to be developed. The appropriate mix of skills and diversity for membership of the Board is considered as part of ongoing nomination and succession planning and which recognises the value of balanced gender representation. The Board currently comprises four directors, none of whom are female. The Company Secretary and the Chief Financial Officer are both male. There are no other officers or employees of the Company. CONTINUOUS DISCLOSURE AND SHAREHOLDER COMMUNICATIONS The Company has a formal written policy for the continuous disclosure of any price sensitive information concerning the Company. The Board has also adopted a formal written policy covering arrangements to promote communications with shareholders and to encourage effective participation at general meetings. The Chairman and Company Secretary have been nominated as the Company’s primary disclosure officers. All information released to the ASX is posted on the Company’s web-site immediately after it is disclosed to the ASX. When analysts are briefed on aspects on the Company’s operations, the material used in the presentation is released to the ASX and posted on the Company’s web-site. All shareholders are entitled to elect to receive a printed copy of the Company’s annual report. In addition, the Group makes all market announcements, media briefings, details of shareholders’ meetings, press releases and financial reports available on the Company’s web-site. 52 CATALYST METALS LIMITED ADDITIONAL INFORMATION The following information was reflected in the records of the Company as at 11 September 2012. Distribution of share and option holders 1 1,001 5,001 10,001 - 1,000 - 5,000 - 10,000 - 100,000 100,001 and over Including holdings of less than a marketable parcel Number of holders Fully paid shares Listed options 31 40 48 110 61 290 31 77 102 44 57 14 294 Substantial shareholders The following shareholders have lodged a notice of substantial shareholding in the Company. Shareholder Trapine Pty Ltd Robin Scrimgeour Gavin Caudle Kenneth Raymond Teagle Toby Mountjoy Twenty largest holders of fully paid shares Shareholder Trapine Pty Ltd Robin Scrimgeour Gavin Caudle Drill Investments Pty Ltd Toby Mountjoy Kenneth Raymond Teagle Chepalix Pty Ltd National Nominees Ltd Providence Gold & Minerals Pty Ltd 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Unity Mining Limited 11. 12. Vestcourt Pty Ltd 13. HSBC Custody Nominees (Australia) Ltd 14. 15. 16. 17. 18. 19. Mining Tenement Management Pty Ltd 20. John Paul Sisterson Lafferty AH & Boston SJ Elshaw Pty Ltd Roger George Davis Lindway Investments Pty Ltd Silverpeak Nominees Pty Ltd Kimberley Downs Pty Ltd Number of shares % 5,410,947 3,963,778 3,873,625 3,424,294 2,928,126 Shares 4,720,085 4,001,278 3,873,625 3,010,000 2,619,995 2,484,193 2,375,600 1,575,962 1,525,000 1,000,000 788,500 787,500 715,500 699,731 577,498 572,096 567,666 537,500 535,000 525,000 33,491,729 11.74 8.60 8.41 7.43 6.36 % 10.24 8.68 8.41 6.53 5.69 5.39 5.16 3.42 3.31 2.17 1.71 1.71 1.55 1.52 1.25 1.24 1.23 1.17 1.16 1.14 72.68 53 CATALYST METALS LIMITED ADDITIONAL INFORMATION Twenty largest holders of listed options exercisable at $0.50 each on or before 15 January 2013 Optionholder Trapine Pty Ltd Robin Scrimgeour Gavin Caudle Drill Investments Pty Ltd Toby Mountjoy Chepalix Pty Ltd Kenneth Raymond Teagle National Nominees Ltd Providence Gold & Minerals Pty Ltd 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Unity Mining Limited John Paul Sisterson 11. Kimberley Downs Pty Ltd 12. 13. Vestcourt Pty Ltd 14. HSBC Custody Nominees (Australia) Ltd 15. 16. 17. 18. 19. Mining Tenement Management Pty Ltd 20. Elshaw Pty Ltd Roger George Davis Lafferty AH & Boston SJ Lindway Investments Pty Ltd Silverpeak Nominees Pty Ltd Options 590,012 500,160 484,204 375,001 327,500 296,950 240,260 196,996 190,625 125,000 100,842 98,563 98,438 89,438 71,512 70,959 69,280 67,188 66,875 65,625 4,125,428 % 10.24 8.68 8.41 6.51 5.69 5.16 4.17 3.42 3.31 2.17 1.75 1.71 1.71 1.55 1.24 1.23 1.20 1.17 1.16 1.14 71.62 Classes of shares and voting rights At meetings of members or classes of members, each member entitled to vote may vote in person or by proxy or attorney. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and on a poll, every person present in person or by proxy has one vote for each ordinary share held. Unquoted securities The following classes of unquoted securities are on issue: Security on issue Name of holder Number % Number Holders of greater than 20% of each class of security Options over fully paid shares exercisable: - at 20 cents each on or before 30.06.14 1,000,000 John Arbuckle Frank Campagna Bruce Kay & Henriette Kay - at 30 cents each on or before 30.06.15 1,000,000 John Arbuckle Frank Campagna Bruce Kay & Henriette Kay 375,000 375,000 250,000 375,000 375,000 250,000 37.5 37.5 25.0 37.5 37.5 25.0 Performance Rights (i) 700,000 Bruce Kay 700,000 100.0 (i) Vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to the transfer of a 50% interest in each of exploration licences EL4525 and EL5295 under the Four Eagles Heads of Agreement. 54 CATALYST METALS LIMITED ADDITIONAL INFORMATION Tenement directory Project Tenement number Beneficial interest Western Australia Eudamullah Bluebush Well Wanna Victoria Everton Four Eagles Four Eagles E09/1174 E09/1303 E09/1776 EL4866 EL4525 EL5295 90% 90% 90% 100% Right to earn interest Right to earn interest Competent person statement The information in this report that relates to Exploration Results is based on information compiled by Mr Bruce Kay, who is a Fellow of the Australasian Institute of Mining and Metallurgy and is a non-executive director of Catalyst Metals Limited. Mr Kay has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr Kay consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. 55 

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