Catalyst Metals Limited
Annual Report 2013

Plain-text annual report

ABN 54 118 912 495 ANNUAL REPORT AND FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2013 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 GOVERNANCE 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 2013 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 2013 2 CATALYST METALS LIMITED CHAIRMAN’S REVIEW The 2013 financial year proved to be another busy and formative year for the Company which saw the early termination of an Option Agreement (which had been negotiated in the previous year) with Unity Mining Limited in October 2012, the exercise by a number of shareholders and directors of 381,735 listed options (which expired on 15 January 2013) at $0.50 each to raise an additional $191,000 for the Company, a number of necessary changes were effected to the Heads of Agreement with our Joint Venture Partner on the Four Eagles Gold Project which resulted in an Amendment and Restatement Deed being executed in April 2013, the completion of a successful angled aircore drilling programme at Four Eagles which intersected additional high grade gold mineralisation 600 metres north of the Hayanmi Prospect, and in May 2013 (with the Company having spent in excess of $2.2 million on the Four Eagles Gold Project) become entitled to a 50% direct interest in the project. Some two and a half years ago the Company identified what is now known as the Four Eagles Gold Project, which lies 60 km’s to the north of Bendigo in Victoria. Extensive drilling during the intervening period has confirmed a new gold discovery covered by Murray Basin sediments, which vary in depth from 10 to 120 metres. Gold mineralisation (currently) occurs within an area 6 km’s by 2.5 km’s in size with three separate ore structures already confirmed and multiple intersections of up to and greater than 10 grams of gold per tonne (with some intersections as high as 150 grams of gold per tonne). Analysis of assay results has shown that both fine and coarse grained gold can be present at Four Eagles but more significantly that assays are reproduceable and differ from the nuggetty gold distribution that caused problems in estimating ore resources at Bendigo. The Company sees this as being very significant, as it should enable the Company to more reliably estimate a gold resource, once additional and more substantial drilling has been undertaken in the future. The large size of the gold footprint at Four Eagles will require an extensive angled drilling campaign and to this end the Company has been actively considering various funding strategies including a potential cornerstone investor who could assist the Company in funding the next stage of drilling and accelerating the potential development at the Four Eagles Gold Project. In October 2012, the Company terminated the Option Agreement with Unity Mining Limited to acquire its Kangaroo Flat gold processing plant, associated infrastructure and mining tenements. This decision was based on a review of alternative processing options in the Bendigo region which have the potential to provide better economic returns and may be more appropriate for the type of mineralisation now known to be present at the Four Eagles Gold Project. After several months of discussion an Amendment and Restatement Deed of the Heads of Agreement was executed with the Company’s Joint Venture partner on 10 April 2013, which included modifications to a number of clauses in the Heads of Agreement. In May 2013 the Company announced that it had become entitled to a 50% direct equity interest in the Four Eagles Gold Project. The Board would like to acknowledge the dedication and continued support of its consultants during what was another very busy year for our Company. The Board would again like to thank all its shareholders who continue to support the long term ambitions of the Company going forward. Your Board remains committed to adding value for the benefit of all shareholders and looks forward to 2014 and the opportunities that it will bring. Stephen Boston Chairman 25 September 2013 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 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 2013. 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 $877,482 as at 30 June 2013 (2012: $1,533,736). 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 2013 was $1,007,381 (2012: $3,507,052). DIVIDENDS No dividend has been paid during or is recommended for the financial year ended 30 June 2013. REVIEW OF OPERATIONS Exploration by Catalyst Metals Limited (Catalyst or Company) during the year was focussed on the Four Eagles Gold Project (Four Eagles) in Victoria where an aircore drilling programme was undertaken during April 2013 in the area north of the Hayanmi Prospect. This has extended the strike length of the prospect to 2.6 kilometres. No field work was undertaken at the Minnie Creek tungsten and molybdenum project in Western Australia or at the Everton molybdenum project in Victoria. Four Eagles Gold Project (Victoria) In December 2010, Catalyst entered into a formal heads of agreement with private company, Providence Gold and Minerals Pty Ltd (Providence) 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). Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 4 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) In May 2013, Catalyst completed its initial expenditure obligations of $2.1million and has earned a 50% equity in the Four Eagles Gold Project. Providence has elected not to contribute to the next stage of expenditure so Catalyst can now proceed to earn an 75% equity for the further sole expenditure of $2.1 million before 20 January 2016 (subject to a Providence right to contribute after Catalyst has earned 60% equity). At the end of the 2013 financial year, Catalyst had spent approximately $2.2 million on exploration at Four Eagles and will need to spend a further $740,000 to earn its 60% interest. Figure 1 – Four Eagles Gold Project Location and tenements of other North Bendigo Explorers Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 5 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Extensive drilling has been undertaken at the project during the past two years and has delineated a large “gold footprint” about 6 kilometres by 2.5 kilometres which contains numerous intersections of gold mineralisation, often high grade. Further reconnaissance drilling could increase the size of this footprint. These gold zones have been significantly expanded in size and the interpretation now shows five potential gold structures, the largest of which is about 6 kilometres long (Eagle 3 Structure) (Figure 2). 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. Figure 2 – Four Eagles Gold Project Drilling Locations & Results During the June 2013 quarter an aircore drilling programme at the Four Eagles Gold Project intersected high grade gold mineralisation 600 metres north of the Hayanmi Prospect. Angled aircore hole FE626 intersected 1.5 metres @ 12.9 g/t Au from 52.5 metres in an area where basement depth is about 43 metres. The same hole also contained low grade gold mineralisation in the 0.5 to 0.7 g/t Au range. This traverse is 600 metres north of the previous drilling on the Hayanmi Prospect where high grade gold mineralisation had been discovered in shallow drilling during 2012, including:     3.0m @ 14.7g/t Au (FE591) 3.0m @ 5.96g/t Au (FE471) 9.0m @ 7.9g/t Au including 3.0m @ 20.5g/t Au (FE592) 3.0m @ 9.1g/t Au (FE608) Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 6 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Another traverse drilled 1.2 kilometres north of the Hayanmi Prospect also returned low grade gold mineralisation with two intervals in FE648 (1.5 metres @ 0.8g/t Au from 64.5 metres and 1.5 metres @ 1.0g/t Au from 82.5 metres) and FE649 (1.5 metres @ 1.21g/t Au from 97.5 metres and 1.5 metres @ 1.59 g/t Au from 100.5 metres). These are angled holes drilled at 60 degrees towards the west where the basement depth is about 50 metres. These intervals are significant in this style of drilling and confirm the extension of the Hayanmi Prospect to the north along the Eagle 3 Structure. As shown on Figure 3, Hayanmi is now confirmed to be 2.6 kilometres long but has only received detailed drilling over a 600 metre section. This total strike length will require infill angled drilling similar to the drill programmes that were undertaken at Hayanmi and Boyds Dam which resulted in much higher gold grades (>20 g/t Au) being intersected. Figure 3: Hayanmi Prospect Extended showing drilling results For the first time at the Four Eagles Gold Project, angled aircore drilling was successfully used and all holes were able to penetrate both the Murray Basin cover sequence and the oxidised basement rocks. The location of the recent drillholes is shown on Figure 3 which covers a 2.6 kilometre zone north of the Hayanmi Prospect. Some areas were inaccessible due to irrigation flooding. Samples were taken every 1.5 metres downhole in basement and were sent for assay. Initial assays were obtained from a 30gm portion of the bulk sample by Aqua Regia digest and AAS analysis. If a sample recorded an anomalous gold value, the total bulk sampled was digested with cyanide (Leachwell Assay) to provide a more accurate analysis. As before, the correlation between these assays has been very good with a slight increase in the assay generally obtained. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 7 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) The drilling confirmed a large area where basement depths are less than 30 metres. 28 holes were drilled for a total metreage of 2046.8 metres and basement depths range from 18 to 58 metres. This campaign represents the first stage of a large drilling programme that will be required to test shallow areas north of Eagle1, Eagle 2 and Eagle 3 (Figure 4). The timing of these programmes is uncertain and depends on status of the grain crop, weather conditions and Company priorities. The Eagle Structures have now been established as semi continuous broad zones that contain gold mineralisation (Figure 2). The mineralised corridors appear to be about 50 metres wide but the true nature of the mineralisation is still not well understood because most data is from vertical aircore holes. Significant intersections in each of the Eagle Structures is summarised below: 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) Eagle 3 Structure (includes Hayanmi Prospect )                          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) 1.5 metres @ 12.9g/t Au from 52.5 metres (FE626) 1.5 metres @ 0.8g/t Au from 64.5 metres (FE648) 1.5 metres @ 1.0g/t Au from 82.5 metres (FE648) 4.5 metres @ 1.0g/t Au from 97.5 metres (FE649) Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 8 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) 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) Figure 4: Depth to Basement plan showing Targets and Proposed Drilling at Four Eagles Gold Project Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 9 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) 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. Recently the Company processed aircore drill samples through a Knelson gravity concentration unit in conjunction with conventional gold panning and recovered both fine and coarse grained gold from three different holes at Discovery (FE328), Hayanmi (FE471) and Boyd’s Dam (FE415) Prospects. The location of these prospects and drillholes is shown on Figure 2 and photographs of the Knelsen concentrator and samples of gold obtained are shown in Figures 5a, 5b, and 5c. In addition to this work, all bulk Leachwell assay data from the recent drill programme confirm the good correlation between the small 30 gm sample and the bulk cyanide (± 2kg sample) that has been discussed previously. Even when coarse gold is present, the associated fine gold seems to provide assay consistency. This is very important in the estimation of ore resources as drill assays are repeatable and become a reliable estimator of grade. This is in stark contrast to the Bendigo Goldfield where gold often shows an erratic distribution because of the extreme nugget effect. Figure 6 below shows the comparison of assay data from Four Eagles. The current testing protocol is that a large 1kg to 3kg sample is taken from aircore or diamond drilling but only 30 grams is assayed using atomic absorption/mass spectrometry after an aqua regia leach. If an assay of greater than 0.5 g/t Au is obtained from the small assay sample, the total bulk sample is then analysed by a total cyanide leach (Leachwell) and AAS finish. Figure 6 shows that the correlation between these two samples is approximately 80%, indicating that gold particles are small and finely dispersed throughout the sample. The value of the Leachwell assay sample is usually higher than the small sample. Figure 5a. Processing Aircore samples with Knelson Concentrator Figure 5b. Fine grained gold obtained by conventional gold panning Figure 5c. Coarse grained gold from gravity separation in Knelson Concentrator In summarising the progress at Four Eagles during the 2013 year, the aircore drilling programme has discovered further high grade gold mineralisation on the Eagle 3 Structure and the Hayanmi Prospect is now 2.6kms long. The key objective in 2014 will be to undertake extensive angled drilling (Aircore/RC/Diamond Drilling) to define the continuity of the mineralisation in the three prospects both along strike and down dip. Reconnaissance testing of shallow areas on the northern extensions of the Eagle Structures will also be necessary. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 10 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) Figure 6: Assay Correlation between 30gm AAS and 2 kg bulk assay (Leachwell) Four Eagles Heads of Agreement After several months of discussion, an Amendment and Restatement Deed of the Heads of Agreement with Providence was signed by the parties on 10 April 2013 and also included some modifications to other clauses in the Heads of Agreement. Previously, Catalyst was required to issue 2,500,000 ordinary fully paid shares to Providence prior to earning additional equity above 50%, but this was modified to a series of cash and share payments (total 2,300,000 shares and $230,000 cash), conditional on equity levels of 50%, 60%, 70% and 75% being achieved. The first of the payments to Providence was due 60 days after achieving the 50% equity level and comprised a cash payment of $30,000 and the issue of 250,000 ordinary fully paid shares in Catalyst. A further cash payment of $50,000 will be made to Providence on the completion of a positive feasibility study on the first project. Everton Project (Victoria) EL4866 During the year the Company had several fruitful discussions with the Everton land-owner who holds the rights to the old quarry area where high grade molybdenite ore was mined historically, however, the Company was unable to reach a suitable agreement to access the property. The property will probably require a careful exploration programme over several years rather than the short time frame and high commitment requested by the land-owner. 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 7). Minnie Creek is prospective for both molybdenum and tungsten mineralisation in two separate prospects about 20 kilometres 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 11 CATALYST METALS LIMITED DIRECTORS’ REPORT REVIEW OF OPERATIONS (Continued) No field activity was undertaken during the year and the company made the decision to relinquish the Bluebush Well (E09/1303) and Wanna (E09/1776) tenements. The Company continues to hold Eudamullah (E09/1174) which contains the molybdenum and tungsten mineralization. SIGNIFICANT CHANGES IN STATE OF AFFAIRS Figure 7 – Minnie Creek Project Tenements There were no significant changes in the state of affairs of the Group during the financial year. 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 report on any likely developments which may materially affect the operations of the Group and the expected results of those operations in subsequent years. SUBSEQUENT EVENTS On 15 August 2013 Catalyst paid Providence Gold and Minerals Pty Ltd $30,000 in cash and issued 250,000 fully paid ordinary shares in recognition of earning its 50% interest in the Four Eagles Gold Project tenements. Other than that there have been no other subsequent events since the end of the financial year. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 12 CATALYST METALS LIMITED DIRECTORS’ REPORT 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 5,504,135 Ordinary Shares (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: None Interests in securities: Direct: Indirect: Nil 4,587,500 Ordinary Shares 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 13 CATALYST METALS LIMITED DIRECTORS’ REPORT 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: 1,278,808 Ordinary Shares; 250,000 Options exercisable at $0.20 by 30 June 2014; and 350,000 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 25 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. 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 7 7 7 7 7 7 7 7 - 1 1 - - 1 1 - 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 2013. 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 14 CATALYST METALS LIMITED DIRECTORS’ REPORT SHARE OPTIONS As at the date of this report, there were 1,750,000 unissued ordinary shares under option. The terms of these options are as follows: 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 1,000,000 750,000 1,750,000 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. 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. - Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 15 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (Continued) 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. 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 $400,000 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 2013 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. 2013 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 60,000 40,000 40,000 40,000 - - - 60,000 180,000 60,000 5,400 3,600 3,600 3,600 16,200 - - - 85,260 85,260 65,400 43,600 43,600 188,860 341,460 In 2013, a component of Messrs Boston, Scrimgeour and Kay’s directors’ fees were accrued but have not been paid to assist in the preservation of cash for the Company. Details of accrued accounts are disclosed in Note 15 of the financial report. Included in the remuneration report also consists of payment to Mr Kay for geological consulting services that is outside the scope of his directors’ duties. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 16 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (Continued) 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 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. Directors are permitted to salary sacrifice their fees. 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. 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. 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 no performance rights were issue as compensation. In the 2012 financial year Mr Bruce Kay was granted Performance Rights with the following conditions: (a) 300,000 Performance Rights to vest on the date that the Company, through its wholly owned subsidiary Kite Gold Pty Ltd (Kite Gold) 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 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 17 CATALYST METALS LIMITED DIRECTORS’ REPORT REMUNERATION REPORT (Continued) (b) 700,000 Performance Rights will vest on the date that the Company, through Kite Gold, 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 15 April 2013 the Company agreed with Mr Kay to alter the Performance Rights conditions to reflect the Amendment and Restatement Deed of the Heads of Agreement that signed with Providence on 10 April 2013 (refer Directors’ Report). Under the terms of the revised Performance Rights, Mr Kay agreed to defer the vesting and issue of 350,000 Performance Rights until the granting of the extension of EL4525 from 20 January 2013 has been granted and Catalyst, through Kite Gold, becomes entitled to a 60% interest in the Four Eagles Gold Project. On 17 June 2013, Mr Kay was issued with 350,000 ordinary fully paid shares in the Company when Kite Gold became entitled to the transfer of a 50% interest in EL4525 and EL5295. 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 2013. AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the year ended 30 June 2013 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 25 September 2013 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 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 Ltd for the year ended 30 June 2013, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM BIRD CAMERON PARTNERS Perth, WA Dated: 25 September 2013 JAMES 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 2013 Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Property, plant and equipment Exploration and evaluation expenditure Total Non-Current Assets Note 2013 $ 2012 $ 6 7 8 9 1,114,656 1,774,000 33,488 104,395 1,148,144 1,878,395 714 - 714 3,952 - 3,952 TOTAL ASSETS 1,148,858 1,882,347 Current Liabilities Trade and other payables Total Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity Share-based payments reserve Accumulated losses 10 271,376 348,611 271,376 348,611 271,376 348,611 877,482 1,533,736 11 12 12 8,589,225 8,216,958 164,005 185,145 (7,875,748) (6,868,367) TOTAL EQUITY 877,482 1,533,736 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 2013 20 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Year Ended 30 June 2013 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 2013 $ 2012 $ 2 55,946 100,290 (1,050) (1,500) (162,058) (143,615) (29,590) (39,904) (281,460) (318,271) (164,053) (297,531) (425,116) (2,806,521) (1,007,381) (3,507,052) - - (1,007,381) (3,507,052) - - (1,007,381) (3,507,052) (1,007,381) (3,507,052) (2.2) (2.2) (8.5) (8.5) 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 2013 21 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2013 Contributed Equity $ Accumulated losses $ Share-based payments reserve $ Total $ Balance at 30 June 2011 5,407,344 (3,361,315) 121,609 2,167,638 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 Total comprehensive loss for the year Transactions with owners in their capacity as owners: Share based payments Issue of shares Share issue expenses - (3,507,052) - (3,507,052) 91,200 2,752,210 (33,796) 8,216,958 - - 372,267 - - - - 63,536 154,736 - - 2,752,210 (33,796) 1,533,736 (6,868,367) 185,145 (1,007,381) - (1,007,381) - - - (21,140) - - (21,140) 372,267 - Balance at 30 June 2013 8,589,225 (7,875,748) 164,005 877,482 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 2013 22 CATALYST METALS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended 30 June 2013 Cash Flows from Operating Activities Payments for exploration and evaluation Payments for option over Unity Mining gold plant Payments to suppliers, contractors and employees Interest received Note 2013 $ 2012 $ (504,505) (1,262,196) (100,000) (250,000) (377,483) (642,269) 56,776 109,221 Net cash flows used in operating activities 13 (925,212) (2,045,244) Cash Flows from Investing Activities Payments for property, plant and equipment Net cash flows used in investing activities Cash Flows from Financing Activities - - (510) (510) Proceeds from issue of shares and other equity securities 265,868 1,934,710 Share issue expenses - (33,796) Net cash flows from financing activities 265,868 1,900,914 Net increase in cash and cash equivalents (659,344) (144,840) Cash and cash equivalents at the beginning of the financial year 1,774,000 1,918,840 Cash and cash equivalents at the end of the financial year 6 1,114,656 1,774,000 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 2013 23 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 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 25 September 2013. (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 2013 24 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 25 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 26 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 27 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 28 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 Computer equipment Furniture, fittings and equipment Depreciation Rate 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 2013 29 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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) New, revised or amending Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2013. The consolidated entity’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below. AASB 10 Consolidated Financial Statements This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The standard has a new definition of 'control'. Control exists when the reporting entity is exposed, or has the rights, to variable returns from its involvement with another entity and has the ability to affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights that give it the current ability to direct the activities that significantly affect the investee’s returns. The consolidated entity will not only have to consider its holdings and rights but also the holdings and rights of other shareholders in order to determine whether it has the necessary power for consolidation purposes. The adoption of this standard from 1 July 2013 may have an impact where the consolidated entity has a holding of less than 50% in an entity, has de facto control, and is not currently consolidating that entity. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 30 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) AASB 2011-4 Amendments to Australian Accounting Standards to Remove Management Personnel Disclosure Requirement Individual Key These amendments are applicable to annual reporting periods beginning on or after 1 July 2013, with early adoption not permitted. They amend AASB 124 'Related Party Disclosures' by removing the disclosure requirements for individual key management personnel ('KMP'). The adoption of these amendments from 1 July 2014 will remove the duplication of information relating to individual KMP in the notes to the financial statements and the directors report. As the aggregate disclosures are still required by AASB 124 and during the transitional period the requirements may be included in the Corporations Act or other legislation, it is expected that the amendments will not have a material impact on the consolidated entity. 2. Revenue Interest received Other revenue 3. Expenses 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 2013 $ 2012 $ 55,946 - 55,946 98,325 1,965 100,290 196,200 425,116 85,260 3,238 163,535 2,806,521 154,736 4,187 2013 No. of Shares 2012 No. of Shares Weighted average number of ordinary shares for basic and diluted earnings per share (i) 46,396,568 41,324,460 (i) In 2013 diluted earnings per share were calculated after classifying all options on issue remaining unconverted at 30 June 2013 as potential ordinary shares. As at 30 June 2013, the Group had 1,750,000 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. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 31 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 $ 2012 $ (1,007,381) (3,507,052) 302,214 1,052,116 (55,950) - (52,100) - (246,264) (1,000,016) - - The Group has $7,906,905 (2012: $7,086,905) tax losses arising in Australia that are available indefinitely for offset against future profit of the companies in which the losses arose. The potential deferred tax asset of $2,372,072 (2012: $2,126,071), 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 2013 $ 2012 $ 1,114,656 1,774,000 33,488 104,395 Fair value and credit risk Due to the short term nature of the receivables, their carrying value is assumed to approximate their fair value. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 32 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 8. Property, plant and equipment Year ended 30 June 2013 Opening net book amount 1 July 2012 Additions Disposals Depreciation charge Closing net book amount 30 June 2013 At 30 June 2013 Cost or fair value Accumulated depreciation Net book amount 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 $ 3,952 - - (3,238) 714 20,602 (19,888) 714 7,629 510 - (4,187) 3,952 20,602 (16,650) 3,952 - - - - - 11,572 (11,572) - - - - - - 11,572 (11,572) - Total $ 3,952 - - (3,238) 714 32,174 (31,460) 714 7,629 510 - (4,187) 3,952 32,174 (28,222) 3,952 9. Exploration and evaluation expenditure Opening balance Additions Exploration written off (refer note 1(i)) Closing balance 10. Trade and other payables Current Payables Trade creditors Accruals 2013 $ - 2012 $ 283,537 425,116 2,522,984 (425,116) (2,806,521) - - 104,676 166,700 271,376 322,866 25,745 348,611 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 2013 33 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 11. 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 2013 Number 2012 $ 2012 Number 2012 $ (c) 47,053,033 8,589,225 46,071,298 8,216,958 (d) (d) (d) - 1,750,000 350,000 - - 5,578,988 2,000,000 700,000 - 8,589,225 8,216,958 Details 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 Issue of shares – Exercise of B Kay options Issue of shares – Exercise of listed options Issue of shares – B Kay Performance Rights Number of Shares 39,088,226 1,256,143 Issue Price $ 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) 8,216,958 250,000 $0.30 75,000 381,735 $0.50 190,867 350,000 $0.30 106,400 Balance at 30 June 2013 47,053,033 8,589,225 (d) Movements in other equity securities Details Listed Options Balance at 30 June 2011 Issue of options Balance at 30 June 2012 Exercise of options Expiryof options Balance at 30 June 2013 Number of Options Issue Price - - 5,758,988 5,758,988 381,735 5,377,253 - $ - - - - - - Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 34 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 11. Contributed Equity (Continued) (d) Movements in other equity securities (Continued) Details Unlisted Options Balance at 30 June 2011 Issue of options Balance at 30 June 2012 Exercise of options Balance at 30 June 2013 Details Performance Rights Balance at 30 June 2011 Issue of performance rights Vested during period Balance at 30 June 2012 Vested during period Balance at 30 June 2013 (e) Ordinary shares Number of Options Issue Price 2,000,000 - 2,000,000 (250,000) 1,750,000 - Number of Rights Issue Price - - 1,000,000 (300,000) 700,000 (350,000) 350,000 $ - - - - - $ - - - - - 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 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 1,000,000 750,000 1,750,000 (g) Performance Rights 350,000 Performance Rights will vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to a 60% 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 2013 35 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 11. 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 2013 and no dividends are expected to be paid in 2014. 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 2013 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 Kite Operations Pty Ltd Mine Operations Australia 100% 100% 100% 12. 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 2013 $ 185,145 (106,400) 85,260 164,005 2012 $ 121,609 (91,200) 154,736 185,145 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 2013 (6,868,367) (1,007,381) (7,875,748) (3,361,315) (3,507,052) (6,868,367) 36 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 13. Notes to the Cash Flow Statement (a) Reconciliation of net cash used in operating activities to operating loss after income tax 2013 $ 2012 $ Operating loss after tax (1,007,381) (3,507,052) Add non-cash items: Depreciation Loss on fair value of other financial assets Share based payment Exploration paid in shares Changes in net assets and liabilities Decrease/(Increase) in receivables (Decrease)/Increase in payables Decrease in exploration 3,238 - 85,260 - 70,906 (77,235) - 4,187 120 154,736 817,500 (36,720) 238,448 283,537 Net cash outflow from operating activities (925,212) (2,045,244) (b) Non-cash financing and investing activities The Group did not have any non-cash financing or investing activities during the year (2012: Nil). 14. 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 2013. (b) Key management personnel remunerations Short-term employee benefits Post-employment benefits Share based payments 2013 240,000 16,200 85,260 341,460 2012 121,300 42,200 154,736 318,236 Detailed remuneration disclosures are provided in the Remuneration Report section of the Director’s Report. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 37 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 14. 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: 2013 Directors S Boston R Scrimgeour G Schwab B Kay (i) 2012 Directors S Boston R Scrimgeour G Schwab B Kay 2013 Directors S Boston R Scrimgeour G Schwab B Kay (i) Balance at beginning of year 680,995 500,160 - 584,852 Granted as compensation Exercised Other changes (i) Balance at end of year Vested and exercisable - - - - (20,000) (140,000) - (660,995) (360,160) - - - - - - - (250,000) (84,852) 250,000 250,000 Reflects listed options that expired on 15 January 2013. 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) (iii) Options issued under the Bonus Option Issue on 18 April 2012. 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. Balance at beginning of year Purchased Other changes (i) Balance at end of year 5,447,947 4,001,278 - 678,808 36,188 446,222 - - 20,000 140,000 - 5,504,135 4,587,500 - 600,000 1,278,808 This represents shares issued as a result of exercise of options during the financial year plus the vesting of Performance Rights to Mr Kay. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 38 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 14. Key Management Personnel Compensation (Continued) (c) Equity instrument disclosures relating to key management personnel (Continued) (iii) Shareholdings (Continued) 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. 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: 2013 Directors S Boston R Scrimgeour G Schwab B Kay 2012 Directors S Boston R Scrimgeour G Schwab B Kay Balance at beginning of year - - - 700,000 Balance at beginning of year Granted as compensation Vested Other changes (ii) Balance at end of year Vested and exercisable - - - - - - - 350,000 - - - - - - - 350,000 - - - - Granted as compensation Vested Other changes Balance at end of year Vested and exercisable - - - - - - - - - - 1,000,000 (300,000) - - - - - - - 700,000 - - - - 15. Related Party Disclosures Key Management Personnel (i) Mr Boston’s director fee of $65,400 (2012: $49,050) were accrued and outstanding at year end. (ii) Mr Schwab’s director fee of $32,700 (2012: $38,150) were accrued and outstanding at year end. (iii) Mr Kay’s director fee of $43,600 (2012: $38,150) were accrued and outstanding at year end. (iv) Mr Scrimgeour’s director’s fees of $43,600 (2012: $38,150) were accrued and outstanding to Culloden Capital Pte Ltd, a company in which Mr Scrimgeour has a relevant interest. These directors’ fees were not paid to preserve the Company’s cash. During the year, Mr Kay was paid $60,000 (2012: Nil) for geological consulting work that is outside the scope of his directors’ duties. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 39 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 16. 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. 2013 2012 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ Opening amount Exercised during the year - Consultant options Closing amount 2,000,000 0.25 2,000,000 0.25 (250,000) 1,750,000 0.30 0.24 - 2,000,000 - 0.25 2013 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 - - - (250,000) 2012 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 1,000,000 750,000 Number exercisable at end of year 1,000,000 750,000 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 2013 40 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 16. 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 2012 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 (Kite Gold) 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, 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 19 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 15 April 2013 the Company agreed with Mr Kay to alter the Performance Rights conditions to reflect the Amendment and Restatement Deed of the Heads of Agreement that signed with Providence on 10 April 2013 (refer Directors’ Report). Under the terms of the revised Performance Rights, Mr Kay agreed to defer the vesting and issue of 350,000 Performance Rights until the granting of the extension of EL4525 from 20 January 2013 has been granted and Catalyst, through Kite Gold, becomes entitled to a 60% interest in the Four Eagles Gold Project. On 17 June 2013, Mr Kay was issued with 350,000 ordinary fully paid shares in the Company when Kite Gold became entitled to the transfer of a 50% interest in EL4525 and EL5295. 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 in accordance with the Heads of Agreement (“HoA”) signed on On 16 March 2012, 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 2013 41 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 17. Auditors’ Remuneration Amounts received or due and receivable by the auditors for: Auditing accounts Other services 18. Commitments There were no outstanding commitments, which are not disclosed in the financial statements as at 30 June 2013 other than: (a) Tenement commitments No later than 1 year Later than 1 year but not later than 5 years 19. Financial Instruments 2013 $ 2012 $ 24,750 - 24,750 19,500 - 19,500 2013 $ 2012 $ 129,500 249,500 - - 129,500 249,500 Notes Floating Interest Rate 1 year or less Over 1-5 years Non-interest bearing Total $ $ $ $ 2013 Financial assets Cash and cash equivalents Trade and other receivables Total financial assets Financial liabilities Trade and other payables Total financial liabilities 6 7 10 3.71% 1,114,656 - - 1,114,656 - - Net financial assets 1,114,656 - - - - - - - 1,114,656 33,488 33,488 33,488 1,148,144 271,376 271,376 271,376 271,376 (237,888) 876,768 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 42 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 19. Financial Instruments (Continued) 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 Total financial assets Financial liabilities Trade and other payables Total financial liabilities 6 7 10 5.54% 1,774,000 - - 1,774,000 - - Net financial assets 1,774,000 Reconciliation of net financial assets to net assets Net Financial Assets Property, plant & equipment Exploration expenditure Net Assets - - - - - - - 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 2013 $ 2012 $ 876,768 1,529,784 714 - 3,952 - 877,482 1,533,763 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 2013 43 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013, 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 $11,146 (2012: $17,740) 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 2013 other than on 15 August 2013 Catalyst paid Providence Gold and Minerals Pty Ltd $30,000 in cash and issued 250,000 fully paid ordinary shares in recognition of earning its 50% interest in the Four Eagles Gold Project tenements. 23. Contingent Liabilities and Contingent Assets The Group does not have any contingent liabilities or contingent assets at 30 June 2013. Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 44 CATALYST METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS For The Year Ended 30 June 2013 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 2013 $ 2012 $ 1,138,042 1,857,624 1,138,858 1,872,202 261,376 338,466 261,376 338,466 8,589,225 164,005 (7,875,748) 8,216,958 185,145 (6,868,367) 877,482 1,533,736 Loss for the year (1,007,381) (3,535,587) Total comprehensive income (1,007,381) (3,535,587) Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 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 2013 and of its performance for the year then ended; 2. 3. 4. 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. This declaration is made in accordance with a circular resolution of the Board of Directors. Stephen Boston Chairman Dated at Perth this 25th day of September 2013 Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2013 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 LTD Report on the Financial Report We have audited the accompanying financial report of Catalyst Metals Ltd, which comprises the consolidated statement of financial position as at 30 June 2013, 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(a), 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 Ltd, 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 Ltd 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 2013 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(a). Report on the Remuneration Report We have audited the Remuneration Report contained within the directors’ report for the year ended 30 June 2013. 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 Ltd for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001. RSM BIRD CAMERON PARTNERS Perth, WA Dated: 25 September 2013 JAMES 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 2013. 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 35 36 38 103 59 290 31 Substantial shareholders The following shareholders have lodged a notice of substantial shareholding in the Group. 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 Kenneth Raymond Teagle Toby Mountjoy Chepalix Pty Ltd Providence Gold & Minerals Pty Ltd National Nominees Ltd Kimberley Downs Pty Ltd 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Vestcourt Pty Ltd 12. HSBC Custody Nominees (Australia) Ltd 13. 14. 15. 16. 17. 18. 19. Mining Tenement Management Pty Ltd 20. Mr P McClure& Mrs D McClure John Paul Sisterson Roger George Davis Lafferty AH ATF Bruce David Kay Elshaw Pty Ltd Lindway Investments Pty Ltd Number of shares % 5,484,135 4,587,500 3,873,625 3,424,294 2,928,126 Shares 4,766,273 4,587,500 3,873,625 3,280,000 3,423,448 2,395,995 2,375,600 1,775,000 1,575,962 887,063 787,500 715,500 699,731 688,625 654,998 650,000 582,096 537,500 535,000 500,000 35,291,416 11.59 9.70 8.19 7.24 6.19 % 10.08 9.70 8.19 6.93 7.24 5.07 5.02 3.75 3.33 1.88 1.66 1.51 1.48 1.46 1.38 1.37 1.23 1.14 1.13 1.06 74.61 53 CATALYST METALS LIMITED ADDITIONAL INFORMATION 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 30.06.15 750,000 John Arbuckle Frank Campagna 375,000 375,000 250,000 375,000 375,000 37.5 37.5 25.0 50.0 50.0 Performance Rights (i) 350,000 Bruce Kay 350,000 100.0 (i) Vest on the date that the Company, through Kite Gold Pty Ltd, becomes entitled to a 60% interest in each of exploration licences EL4525 and EL5295 under the Four Eagles Heads of Agreement. Tenement directory Project Tenement number Beneficial interest Western Australia Eudamullah Victoria Everton Four Eagles Four Eagles E09/1174 EL4866 EL4525 EL5295 90% 100% 50% 50% 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. 54 

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