ANNUAL REPORT
For the year ended 30 June 2022
ABN 33 150 026 850
CONTENTS
CORPORATE DIRECTORY ................................................................................................................................................... 2
CHAIRMAN’S LETTER .......................................................................................................................................................... 3
REVIEW OF ACTIVITIES ....................................................................................................................................................... 5
DIRECTORS’ REPORT ......................................................................................................................................................... 29
AUDITOR’S INDEPENDENCE DECLARATION ........................................................................................................... 42
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022 ......................................................................................................................... 43
CONSOLOIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 ...................................... 44
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022 ......... 45
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022 ......................... 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
30 JUNE 2022 ....................................................................................................................................................................... 47
DIRECTORS’ DECLARATION............................................................................................................................................ 78
INDEPENDENT AUDITOR’S REPORT ............................................................................................................................ 79
ADDITIONAL SHAREHOLDER INFORMATION AS AT 16 SEPTEMBER 2022 ................................................. 82
TENEMENT SCHEDULE ..................................................................................................................................................... 84
CORPORATE DIRECTORY
DIRECTORS
Luke Reinehr
Angus Middleton Non-Executive Director
Paul Adams
Executive Director
Executive Chairman / Chief Executive Officer
COMPANY SECRETARY
Bernard Crawford
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
16 Douro Place
West Perth, WA 6005
Telephone:
Facsimile:
Email:
Web:
AUDITOR
1300 782 988
+61 (8) 6500 1225
admin@kzr.com.au
www.kzr.com.au
Grant Thornton Audit Pty Ltd
Chartered Accountants
Collins Square, Tower 5
727 Collins Street
Melbourne, VIC 3008
SHARE REGISTRY
Advanced Share Registry
110 Stirling Highway
Nedlands, WA 6009
SECURITIES EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Ltd (“ASX”) and the Frankfurt Stock
Exchange (“FRA”)
Home Exchange: Perth, Western Australia
KZR
ASX Code:
KR1
FRA Code:
ANNUAL REPORT 2022
Page 2 of 85
CHAIRMAN’S LETTER
Dear Fellow Shareholders,
It is with great pleasure that I present to you Kalamazoo Resources Limited’s (“Kalamazoo”) 2022 Annual
Report, which details the extensive exploration programs and major acquisitions we completed during
the year, as we continue our journey to create shareholder value.
In the Pilbara, we have made excellent progress with our plans for the Ashburton Gold Project to
increase the existing 1.65Moz gold resource and advance project development. This included the
completion of a 14,722m Phase II RC and AC drill program, IP survey, field work and the commencement
of an updated Resource Model and Project Developing Scoping Study.
After lengthy delays in government and related approvals, we completed our first 2,500m drilling
program at Mallina West (previously named The Sisters), along strike from De Grey’s world-class 9Moz
Mallina Gold Project.
In Victoria, we have completed regional geochemical soil sampling programs across our Castlemaine,
South Muckleford, and Myrtle Gold Projects, as an important step in the planning for upcoming drill
programs.
Although, Kalamazoo did not secure exploration ground in the much-delayed North Central Victorian
Goldfields land release, we did acquire the highly prospective Mt Piper Gold Project to the south of the
world-class Fosterville and Costerfield goldmines. This acquisition was made on excellent terms and has
increased Kalamazoo’s Victorian land holding to more than 2,000km2, consolidating our position as a
prominent explorer in this incredibly rich gold province.
In a very positive development, during the year we identified significant pegmatite-hosted lithium
mineralisation potential at our DOM’s Hill and Marble Bar gold projects in the Pilbara. In late 2021,
Kalamazoo entered a Joint Venture arrangement with the leading Chilean lithium producer, SQM, to
sole fund $12m of exploration expenditure which we are managing across these projects. This
exploration program commenced immediately on signing of the JV with geochemical soil sampling,
field work and an initial 4,000m RC drill program. We also expanded our lithium exploration to the east
coast of Australia with the grant of the 900km2 Jingellic Lithium Project located in the Lachlan Fold Belt,
southern NSW. The project geology is highly prospective for lithium and tin mineralisation and early
exploration activities have commenced.
Your directors recognise that all stakeholders expect companies within the resources industry to take a
stronger, more public commitment to Environmental, Social and Governance programs and “Licence-
to-Operate” issues. As such, in an important initiative, Kalamazoo in 2022 became the first gold and
lithium explorer operating in Australia to be certified carbon neutral for its business operations under
the Federal Government’s Climate Active Program.
ANNUAL REPORT 2022
Page 3 of 85
CHAIRMAN’S LETTER
Global political, economic and COVID issues have dominated everyone’s attention over the last 12
months and like most junior explorers on the ASX, Kalamazoo’s share price has also been impacted.
We are, however, well-funded with fantastic projects and are confident this will soon be reflected
positively in the share price. I encourage you to review our portfolio of projects in greater detail as
described in this annual report and thank you for your continued support.
Yours sincerely,
Luke Reinehr
Executive Chairman and CEO
ANNUAL REPORT 2022
Page 4 of 85
REVIEW OF ACTIVITIES
The 2021/2022 reporting period was a busy period for the Company’s exploration portfolio with project
locations spanning Western Australia, Victoria, and New South Wales. The activities conducted included
large geochemical soil sampling programs both in Victoria and Western Australia, the Phase II drilling
program at Ashburton Gold Project, acquisition of multiple new projects as well as the formation of a
new exploration joint venture with major Chilean lithium producer Sociedad Química y Minera de Chile
S.A. (“SQM”).
Figure 1: Kalamazoo Project Locations
WEST ERN A USTRALIA
ASHBURTON GOLD PROJECT
The Ashburton Gold Project is located 35km SE of Paraburdoo townsite and within the prospective
Nanjilgardy Fault Zone following the southern margin of the Pilbara Craton (Figure 2). The project
covers 217km2 and consists of Mining Leases M52/639, M52/640, M52/734 and M52/735 that produced
350,000oz of gold between 1998-2004, and Exploration Licences 52/1941, 52/3024, 52/3025 and
application E52/4052. The project has a current Mineral Resource Estimate (JORC Code (2012)) of
20.8Mt @ 2.5g/t Au for 1.65Moz1 hosted largely in down plunge extensions of the historical mined open
pits.
1 ASX: KZR 23 June 2020
ANNUAL REPORT 2022
Page 5 of 85
REVIEW OF ACTIVITIES
Figure 2: Pilbara Craton Location Map showing Kalamazoo’s Pilbara Gold Projects
During the year, Kalamazoo completed the Phase II drilling program (Figure 3) which was designed to
test targets within a 5km radius of the 1.08Moz Au Mt Olympus resource that demonstrate the potential
to host additional shallow, oxide, and non-refractory primary gold mineralisation, consistent with
Kalamazoo’s focus on materially increasing the shallow oxide resource base.
ANNUAL REPORT 2022
Page 6 of 85
REVIEW OF ACTIVITIES
Figure 3: Locations of the Phase II drilling program at the Ashburton Gold Project
Both the Phase I and Phase II drilling programs were designed to target potential extensions and
upgrades to the existing oxide and primary gold resources (i.e., resource or “brownfields” exploration)
at the West Olympus, Peake, and Zeus Prospects as well as identifying and investigating the new
greenfields prospects.
These results support Kalamazoo’s key objectives for the Ashburton Gold Project, which include defining
new oxide gold resources such as that targeted at the West Olympus and Peake Deposits to support a
stand-alone conventional gold processing facility. Kalamazoo is also focused on the addition of
significant fresh (sulphide) resources, such as the newly identified plunging trend of gold mineralisation
at West Olympus, which has the potential to contribute significant additional gold mineralisation to the
existing Mt Olympus sulphide resource.
ANNUAL REPORT 2022
Page 7 of 85
REVIEW OF ACTIVITIES
Figure 4: Solid Geology plan map showing 2021 Phase II RC holes targeting the West Olympus Fault, the Au-As
anomalous pebbly quartzite and sandstone package and the Zoe Fault. Gram-metres Au intercepts (Au grade x
intercept length) are shown as gm Au coloured squares
During the reporting period, Kalamazoo also undertook a detailed, project-wide structural geology
interpretation and analysis led by Dr Brett Davis2. Dr Davis is the Director of Olinda Gold Pty Ltd, a
world-renowned consultancy that specialises in providing structural and economic geology expertise
to the mining industry.
Kalamazoo engaged Dr Davis to identify the key controls on gold mineralisation within the project area
and assist with additional exploration target generation. The outcome of this review delivered a new
model of the controls on the gold mineralisation and identified 12 high priority brownfields and
greenfields targets for follow-up investigation.
Kalamazoo also undertook a detailed Induced Polarisation (IP) geophysical survey that extends an
historical IP survey west of the Mt Olympus resource and over the first of the new high priority targets.
This survey targeted new lodes to the south and north of the prospective Zoe Fault and the inferred
structural (fault) linkage or “stepover” between known gold mineralised faults at the end of the Mt
Olympus Pit and the nearby West Olympus Pit (Figure 5).
2 ASX: KZR 29 June 2022
ANNUAL REPORT 2022
Page 8 of 85
REVIEW OF ACTIVITIES
Figure 5: Satellite imagery of Mt Olympus Pit and West Olympus Pit, historical drill intercepts, the outline of the
IP survey and location of the Stepover Target
The IP survey technique is particularly well suited to detecting structurally controlled sulphide
mineralisation typical of the Ashburton Gold Project. Importantly, this IP survey is located adjacent to
the existing Mt Olympus Resource of 15.2Mt @ 2.2 g/t (1.08Moz) that forms the bulk of the overall
1.65Moz Mineral Resource at the Ashburton Gold Project.
The five regional gold prospects targeted during the Phase II program were:
o Annie Oakley Prospect located approximately 800m NW of the 68koz @ 3.6g/t Au Waugh
Resource
o Petra Prospect located approximately 3km NW of the 1.08Moz @ 2.2g/t Au Mt Olympus
Resource
o St Helens Prospect located approximately 1km W of the Mt Olympus Resource
o Triple M Prospect located 1km SE of the 72koz @ 2.2g/t Au Zeus Resource
o Mae West Prospect located 750m north of the 399Koz @ 3.4g/t Au Peake Resource
The results of these exciting greenfields prospects are being fed into the design of the Phase III drilling
program scheduled for the 2022 field season.
ANNUAL REPORT 2022
Page 9 of 85
REVIEW OF ACTIVITIES
Metallurgical testwork was also carried out during the year on several zones within the Company’s Mt
Olympus gold deposit3. The aim of the test work was to determine whether the Mt Olympus resource
would be amenable to the production of a high-grade gold sulphide concentrate via an industry
standard crush-grind-float processing circuit, commonly used world-wide on many refractory style gold
deposits. The test work was also used to confirm results from previous work completed by the previous
owners, Northern Star Resources Ltd (ASX: NST) (“Northern Star”) in 2011-12.
The initial results indicate, subject to completion of a robust financial business case, production of a
high-grade gold concentrate is likely to represent the most straight forward, technically least
challenging, and lowest capital-intensive method of extracting significant value from the Ashburton
Gold Project.
Gold in concentrate grades of up to 45g/t were achieved as a result of this test work. These grades,
which averaged 30g/t gold over the four composites tested, were significantly higher than that achieved
by previous tests as a result of employing a cleaner circuit to the rougher float concentrate, thereby
removing a significant amount of gangue from the final concentrate.
The company is very encouraged by these results and as at the end of June 2022 had embarked on a
resource model rebuild for the Mt Olympus and Peake deposits, with a view to the completion of an
initial Scoping Study by Q4 2022.
The material in this report that relates to the Mineral Resources for the Ashburton Gold Project is based
on information announced to the ASX on 23 June 2020. The Company confirms that it is not aware of
any new information or data that materially affects the information included in the relevant market
announcements, and that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply.
ASHBURTON GOLD PROJECT MINERAL RESOURCES
INDICATED
INFERRED
TOTAL
Tonnes
(000’s)
Grade
(g/t)
Ounces
(000’s)
Tonnes
(000’s)
Grade
(g/t)
Ounces
(000’s)
Tonnes
(000’s)
Grade
(g/t)
Ounces
(000’s)
Cut off
Grade
Mt Olympus
6,038
Peake
Waugh
Zeus
Romulus
TOTAL
RESOURCES
2.3
5.2
3.6
2.1
-
448
9,138
19
40
34
-
3,544
240
532
329
2.2
3.3
3.6
2.2
2.6
632
380
28
38
27
15,176
3,657
587
1,040
329
2.2
3.4
3.6
2.2
2.6
1,080
0.7 g/t Au
399
0.9 g/t Au
68
72
27
0.9 g/t Au
0.9 g/t Au
0.9 g/t Au
113
347
508
-
7,006
2.4
541
13,783
2.5
1,105
20,789
2.5
1,646
Table 1: Ashburton Gold Project (JORC Code 2012) Mineral Resources
3 ASX: KZR 11 March 2022
ANNUAL REPORT 2022
Page 10 of 85
REVIEW OF ACTIVITIES
MALLINA WEST GOLD PROJECT
The Mallina West Gold Project (E47/2983, E47/4489, E47/4490, E47/4491 and E47/4342) covers 240km2
in the Pilbara region of WA. The Mallina West Gold Project area is considered prospective for “Hemi-
style” high magnesium intrusion related gold mineralisation as well as additional styles of mineralisation
associated with the Wohler Shear Zone, a prospective splay of the Tabba, Mallina, Withnell and
Berghaus Shear Zone complex (Figure 6).
Figure 6: Mallina West Gold Project tenement location
Kalamazoo conducted a ~2,500 maiden RC drilling program4 during the year which focussed on six
high priority drill targets5.
4 ASX: KZR 9 May 2022
5 ASX: KZR 5 November 2020
ANNUAL REPORT 2022
Page 11 of 85
REVIEW OF ACTIVITIES
Figure 7: Drilling at Mallina West Gold Project, May 2022
WESTERN AUSTRALIA LITHIUM PROJECTS
Kalamazoo entered into an exploration/development option and earn-in agreement with the leading
Chilean lithium producer Sociedad Química y Minera de Chile S.A. (“SQM”) in respect of Kalamazoo’s
100% owned DOM’s Hill and Marble Bar Lithium Projects in the East Pilbara, WA (Figure 8), during the
reporting period. SQM has been granted the right to earn an initial 30% interest (to a maximum of
70%) in all mineral rights at Kalamazoo’s DOM’s Hill and Marble Bar Lithium Projects, by sole funding a
minimum of A$12 million of exploration and development activities over the next four years.
SQM is one of the world’s largest producers of lithium carbonate and lithium hydroxide accounting for
approximately 19% of global lithium chemicals sales volumes in 20206. SQM’s main asset in Australia is
its 50% joint venture interest in the Mt Holland Lithium Project in Western Australia.
The Pear Creek Lithium Project was acquired during the year and covers ~147km2 of highly prospective
lithium and gold geology located between Kalamazoo’s Marble Bar and DOM’s Hill Lithium Projects
(Figure 8). The Pear Creek Lithium Project area is 100% owned by Kalamazoo and is not currently
included within the SQM Joint Venture. All three projects are considered highly prospective for both
pegmatite-hosted lithium-caesium-tantalum (“LCT”) mineralisation as well as gold.
6 SQM 2020 Annual Report, Form 20-F https://ir.sqm.com/English/financials/annual-reports/default.aspx
ANNUAL REPORT 2022
Page 12 of 85
REVIEW OF ACTIVITIES
Figure 8: Location of Kalamazoo’s lithium exploration projects at DOM’s Hill,
Marble Bar and Pear Creek Projects, East Pilbara Region WA. Note that Kalamazoo
has gold rights only in respect of E45/4724.
During the reporting period, Kalamazoo completed three soil sampling programs across several
tenements within the Marble Bar, DOM’s Hill, and Pear Creek Lithium Projects.7 At the DOM’s Hill and
Marble Bar projects project-wide soil sampling was conducted using detailed 200m x 100m grids across
E45/4722, E45/4887, E45/4919, E45/5146, E45/4700, E45/5970 and E45/5970.
Following the completion of the above-mentioned programs, the soil sampling crew mobilised to
Kalamazoo’s nearby 100%-owned Pear Creek Lithium Project and completed an initial ~2,300 soil
sampling program undertaken on a detailed 200m x 200m grid in late June 2022. This soil sampling
program focused on the “Goldilocks Zone”, being approximately 4km wide zone from the Granite-
Greenstone contact.
7 ASX: KZR 11 May 2022
ANNUAL REPORT 2022
Page 13 of 85
REVIEW OF ACTIVITIES
Figure 9: Location of Kalamazoo’s Lithium Projects with respect to the Pilgangoora and Wodgina lithium mines
and the Archer lithium deposit on a background WA regional-scale aeromagnetic image8. The interpreted
“Goldilocks Zone” is defined as a 4km wide zone located along the Archaean granite-greenstone contact area.
DOM’S HILL PROJECT
The DOM’s Hill Project in the East Pilbara WA comprises exploration licences E45/4722, E45/4887,
E45/4919, E45/5146, E45/5943 as well as two licence applications E45/5934 and E45/5935 covering
125km2. Both E45/5934 and E45/5935 were granted post reporting period.
Prior to the above-mentioned soil sampling program Kalamazoo completed pXRF analyses of 732 soil
sample pulps, previously collected within E45/5146 for gold exploration purposes for indications of
potential LCT pegmatite mineralisation. The results of the pXRF Lithium Index analyses identified highly
prospective areas-of-interest, possibly related to potential LCT pegmatite mineralisation, three of which
are considered high priority. These results provided encouragement for Kalamazoo to engage surface
sampling contractors for further investigation. Significantly, the project contains a similar geological
setting and target host rocks strongly analogous to that of the nearby world class Pilgangoora and
Wodgina pegmatite-hosted lithium deposits (Figure 9).
The results of these programs were used for target identification and an approximately 1,600m drill
program at the DOM’s Hill Lithium project completed post reporting period.
8 Western Australian Department of Mines, Industry Regulation and Safety website: Lithium in Western Australia, June
2021
ANNUAL REPORT 2022
Page 14 of 85
REVIEW OF ACTIVITIES
MARBLE BAR PROJECT
The Marble Bar Project is located just 10km from the Marble Bar township in the Pilbara and consists of
exploration licences E45/4724, E45/4700 and E45/5970 for a total landholding of 125km2. Kalamazoo
has the gold rights only in respect of E45/4724 and is not considered part of the Lithium project
portfolio.
Kalamazoo considers this area to be highly prospective for lithium mineralisation due to its favourable
proximity along the margin of the Moolyella tin and tantalum alluvial field, which includes known
cassiterite-bearing pegmatites. In addition, within these tenements, there are historical reports of
mapped pegmatites and lithium occurrences. Whilst the known lithium occurrences are largely
comprised of lithium micas (i.e., lepidolite) this area demonstrates the positive characteristics and
empirical evidence favourable for the presence of spodumene-bearing pegmatites.
Parallel with the soil sampling program Kalamazoo undertook field mapping and rock chip sampling
activities, aimed at verifying previously reported, highly encouraging pXRF soil geochemistry anomalies
(Figure 10). These programs were designed to identify prospective pegmatite dykes for reconnaissance
exploration drill testing. To date, numerous outcrops of pegmatite dykes have been found coincident
with the soil geochemistry anomalies, some of which contain visible amounts of lepidolite (lithium mica)
(Figure 11a, 11b and 11c). Lepidolite is a common accessory mineral found associated with many lithium
deposits and its presence demonstrates that favourable lithium enrichment processes have occurred in
the area.
Of note is a significant ~1.6km x 1.2 km pXRF soil geochemistry anomaly in E45/4700 that is open to the
west and north (Figure 10). Field reconnaissance of this area has found this soil geochemistry anomaly
closely associated with numerous outcropping pegmatite dykes, some of which contain visible lepidolite
mineralisation. Additional outcropping lepidolite-mineralised pegmatite dykes in E45/4700 have been
observed trending into the adjacent, newly granted tenement E45/5970 significantly extending the area
of known mineralised pegmatite dykes closely associated with the largest pXRF Li Index soil
geochemistry anomaly to >2km2 (Figure 10). This also supports historical exploration reports of several
occurrences of lithium mineralised (lepidolite) pegmatite dykes known to occur within E45/5970
(Lithium Australia NL E45/4766 2019 Annual Report).
The results of these programs were used for target identification and an approximately 2,500m maiden
drill program was completed at the Marble Bar Lithium Project post reporting period.
ANNUAL REPORT 2022
Page 15 of 85
REVIEW OF ACTIVITIES
E45/5970
E45/4700
Figure 10: Project-wide 200m x 100m soil sampling grid with pXRF Li Index analysis results on background
Google Earth Image. Note that the pegmatite locations marked are from mapping completed mainly by
previous explorers as well as Kalamazoo and is largely limited to the northern section of the project.
ANNUAL REPORT 2022
Page 16 of 85
REVIEW OF ACTIVITIES
Figure 11a: Photo of lepidolite-mineralised pegmatite dyke outcrop in E45/4700 near the eastern boundary of
E45/5970. Note Geologist at far end of outcrop for scale.
Figure 11b and 11c: Photographs of purple coloured lepidolite (lithium mica) contained within same pegmatite
outcrop
ANNUAL REPORT 2022
Page 17 of 85
REVIEW OF ACTIVITIES
PEAR CREEK LITHIUM PROJECT
The Pear Creek Lithium Project consists of three exploration licences (E45/3856, E45/4616 and E45/5813)
and is located in the East Pilbara region, WA, covering ~147km2 of highly prospective lithium and gold
geology located between Kalamazoo’s existing DOM’s Hill and Marble Bar Lithium Projects9 (Figure 8).
The project includes ~25km strike of Archaean granite-greenstone contact which is highly prospective
for LCT mineralisation. On acquiring the project in December 2021, Kalamazoo increased its lithium
and gold exploration tenure in the Marble Bar region to 348km2.
The Pear Creek Lithium Project is, and has historically been, considered prospective for a range of gold,
nickel, cobalt and base metal deposits. Despite its close proximity to two of the world’s largest hard-
rock lithium mines (Pilgangoora and Wodgina), there has been no known previous exploration for
lithium undertaken at Pear Creek. Furthermore, like the nearby DOM’s Hill Lithium Project, the Pear
Creek Lithium Project area contains a geological setting with target host rocks strongly analogous to
that of the nearby world class Pilgangoora and Wodgina pegmatite-hosted lithium deposits.
A ~2,300m soil sampling program on a detailed 200m x 200m grid was completed in late June 2022.
This soil sampling program initially focused on the “Goldilocks Zone”, being approximately a 4km wide
zone from the Granite-Greenstone contact across all three tenements. Initial analysis of these soil
samples utilising the pXRF Lithium Index has been completed post reporting period and will be the
focus of follow-up field reconnaissance mapping and surface sampling.
NEW SOUTH WALES
JINGELLIC LITHIUM PROJECT
During the year, Kalamazoo acquired the Jingellic Lithium Project which is located in the Lachlan Fold
Belt of southern NSW, consisting of one granted exploration licence EL9403 covering 990km2 (granted
10 May 2022). The project lies in a mix of state forest, timber plantation, cleared and uncleared farmland
and increased Kalamazoo’s total lithium holding country wide to ~1,328km2.
The project is a “first mover” play covering an area that hosts highly fractionated S-type granites
associated with numerous alluvial and hard rock tin-tungsten occurrences, including outcropping tin-
tungsten bearing pegmatite dykes and historical mine workings (Figures 12 and 13). These are critically
favourable features of Kalamazoo’s LCT-pegmatite exploration model.
9 ASX: KZR 14 December 2021
ANNUAL REPORT 2022
Page 18 of 85
REVIEW OF ACTIVITIES
Figure 12: Location of Kalamazoo’s NSW Jingellic Lithium Project with respect to Dart Mining’s Dorchap LCT
Pegmatite Project and Kalamazoo’s Central Victorian Goldfields tenements
Following the acquisition of this Project, Kalamazoo immediately undertook an initial field
reconnaissance exercise which confirmed the presence of several historical tin-tungsten mine workings
and numerous outcropping pegmatite dykes located within the project area. Following an initial
community engagement process, a “low impact” exploration program will commence consisting of soil
sampling, geological mapping and rock chip sampling during the 2022/2023 reporting year.
ANNUAL REPORT 2022
Page 19 of 85
REVIEW OF ACTIVITIES
Figure 13: Jingellic Lithium Project (EL9403) on NSW Geological Survey solid
basement geology map plus tin-tungsten (Sn-W) mineral occurrences and
pegmatite dykes
VICTORIA
CASTLEMAINE GOLD PROJECT
The Castlemaine Gold Project consists of three exploration licences, EL006679 (“Wattle Gully”, 70km2),
EL006752 (“Wattle Gully South”, 218km2) and EL007112 (“Queens”, 22km2) for a total of 310km2.
EL006679 lies immediately east and south of the town of Castlemaine and covers almost the entire
historic Castlemaine Goldfield whilst EL006752 lies to the east and south of EL006679 and covers
regional geological structures known to be associated with gold potential. EL007112 lies adjacent and
to the east of EL006752 (Figure 14).
It was a relatively quiet year for field activity at Castlemaine due to a focus on the company’s Western
Australia’s gold and lithium projects. A regional scale soil sampling program was completed over the
entire project whilst Novo Resources continues to operate the Queens Project JV.
ANNUAL REPORT 2022
Page 20 of 85
REVIEW OF ACTIVITIES
As part of its regional-scale soil sampling program, Kalamazoo identified an encouraging significant
~800m long Au and As in soil anomaly within the hanging-wall of the regional-scale Taradale Fault in
EL6752. This significant linear Au (peak assay 68ppb) and As (peak assay 560ppm) in soil anomaly is
along strike of historical mine workings located nearby in the adjacent “Queens” Kalamazoo
Resources/Novo Resources Joint Venture Project (EL7112). Note that the Queens Project JV encircles
the Malmsbury goldfield and covers multiple structural extensions of the primary lode Au gold deposits
of this important high-grade gold camp (Figure 15). The Malmsbury goldfield is currently being drilled
as part of the GBM Resources Limited’s (ASX: GBZ) and Novo Resources Joint Venture (ASX: GBZ 17
December 2021). This significant soil geochemistry anomaly will be the focus of further field
investigations.
Figure 14: Castlemaine and South Muckleford Gold Project locations
ANNUAL REPORT 2022
Page 21 of 85
REVIEW OF ACTIVITIES
Figure 15: Castlemaine Gold Project EL006752 – Ultrafine+ Au and As in soil assay results. Note the significant
coincident Au and As in soil anomaly (dashed blue polygon) directly to the north of the Malmsbury goldfield.
SOUTH MUCKLEFORD GOLD PROJECT
The South Muckleford Gold Project (161km2) is located 10km west of Kalamazoo’s Castlemaine Gold
Project and contains a highly prospective goldfield with proven endowment and historical high-grade
gold production. In particular, it covers the regional Muckleford Fault and adjacent historical workings
to the west (i.e. hanging-wall position), numerous historical alluvial and hard rock gold mines and the
southern strike extent of the Union Hill Gold Mine, at Maldon.
Following a concerted program of historical research, field mapping and rock chip and soil sampling
conducted throughout the reporting period, three prospects were identified and confirmed the
existence of a broad epizonal, high grade gold. Following this, Kalamazoo completed its maiden RC
drilling program at the Fentiman’s Reef, Smith’s Reef and Charcoal Gully prospects within EL006959
with the results confirming the existence of several shallow epizonal gold-antimony-arsenic reef
structures at the three tested prospects (Figure 16).
ANNUAL REPORT 2022
Page 22 of 85
REVIEW OF ACTIVITIES
Figure 16: RC drilling at Fentiman’s Reef prospect, South Muckleford Gold Project
Assay results from this program confirmed the existence of several shallow epizonal gold-antimony-
arsenic reef structures in the eastern section of the South Muckleford Project (EL6959). Assays and
visual inspections from these reef intersections have shown rock textures and widespread gold-
antimony-arsenic mineralisation typical of a shallow epizonal style of mineralisation with peak 1m RC
composite samples assays up to 1.4g/t gold, 0.25% antimony (including visible stibnite) and 0.5%
arsenic10.
As a follow-up to the 29 x RC drill hole program completed in Q1 2021, an additional small diamond
drilling program at the South Muckleford Project was completed during August/September 2021. This
program involved one surface diamond hole and one diamond tail hole at the Fentiman’s Reef prospect,
plus two surface diamond holes at the Smith’s Reef North prospect for a total of 652.1m. All four drill
holes were designed to test interpreted structural targets within their respective reef structures. All four
drill holes reached their target zones and intersected significant quartz vein and fault structures which
were subsequently sampled and sent for laboratory assay analysis. Whilst geochemically anomalous the
samples returned only low levels of gold in assays (Table 2). Kalamazoo remains encouraged by the
drilling results to date with the current focus on further 3D structural geology modelling, geochemical
vectoring investigations and targeting exercises, with the aim of identifying extensional and/or deeper
targets along these defined reef structures.
10 ASX: KZR 22 July 2021
ANNUAL REPORT 2022
Page 23 of 85
REVIEW OF ACTIVITIES
Hole ID
SM21DD001
SM21DD002
SM21DD003
SM21RC003DT
Prospect
Smith’s Reef
Nth
Smith’s Reef
Nth
Fentiman’s
Reef
Fentiman’s
Reef
Easting (m) Northing (m)
242464
5900109
242469
5900098
242586
5901321
242594
5901381
Dip
-50
-50
-85
-84
Azimuth
(magnetic)
Depth (m)
Au (ppm)
098
140
130
031
101.5
200.5
297.1
239.6
NSA
NSA
NSA
NSA
Table 2: Summary of South Muckleford Diamond Drill Holes (minimum assay cut off 0.5ppm Au)
MYRTLE GOLD PROJECT
The Myrtle Gold Project is located within the prospective hanging-wall of the Axe Creek Fault, a major
northwest trending structure which strikes sub-parallel to the Fosterville fault, located approximately
25km to the north (Figure 17). The Myrtle Gold Project is considered prospective for both Fosterville-
style epizonal orogenic Au as well as intrusion related Au ± Mo deposits.
Kalamazoo conducted an Ultrafine+TM multi-element soil geochemistry program (~780 samples) across
key parts of the project during the year along with desktop studies. The soil assay results were received
post reporting period.
ANNUAL REPORT 2022
Page 24 of 85
REVIEW OF ACTIVITIES
Figure 17: Location of the Myrtle Gold Project (EL7323) with respect to the
major, regional-scale Axe Creek and Redesdale Faults and Fosterville Gold
Mine
TARNAGULLA GOLD PROJECT
The Tarnagulla Gold Project (EL6780) is located ~180km NE of Melbourne.
The previously completed regional scale soil sampling program, conducted in conjunction with the
CSIRO using their Ultrafine+TM multi-element analyses, has revealed a significant 1.4km long linear gold
in soil anomaly (>100 ppb Au) that is coincident with a trend of historical high-grade hard rock mine
workings. This includes the historic “Poverty Reef” Mine, located approximately 1km along strike to the
south which had reported production of 360,000oz @ 92 g/t Au11.
11 Ebsworth, G.B. & Krokowski De Vickerod, J., 2002. Central Maldon Goldfield 1:5000 map area geological report, Victorian
Initiative for Minerals and Petroleum Report 75, Department of Natural Resources and Environment
ANNUAL REPORT 2022
Page 25 of 85
REVIEW OF ACTIVITIES
Kalamazoo also completed the planning for an ~900m RC/diamond drilling program at Tarnagulla to
test highly prospective, coincident structural and soil geochemistry targets during the year. This drilling
program is now fully permitted and is scheduled to be completed in the coming reporting period.
Figure 18: Map of the Kalamazoo’s gold exploration projects in the Bendigo Zone, Central Victoria
ANNUAL REPORT 2022
Page 26 of 85
REVIEW OF ACTIVITIES
R espo n se to C OVI D - 19
Kalamazoo has been proactively managing the potential impact of COVID-19 and has developed systems and policies to
ensure the health and safety of its employees and contractors, and of limiting risk to its operations. These systems and policies
have been developed in line with the formal guidance of State and Federal health authorities and with the assistance of its
contractors and will be updated should the formal guidance change. Kalamazoo’s first and foremost priority is the health and
wellbeing of its employees and contractors.
To ensure the health and wellbeing of its employees and contractors, Kalamazoo has implemented a range of measures to
minimise the risk of infection and rate of transmission to COVID-19 whilst continuing to operate. All operations and activities
have been minimised only to what is deemed essential. Implemented measures include employees and contractors completing
COVID-19 risk monitoring, increased hygiene practices, the banning of non-essential travel for the foreseeable future,
establishing strong infection control systems and protocols across the business and facilitating remote working arrangements,
where practicable and requested. Kalamazoo will continue to monitor the formal requirements and guidance of State and
Federal health authorities and act accordingly.
C o mp e ten t Pe rso ns S ta t e men t
The information for the Victorian Projects, Mallina West Gold Project as well as the Lithium Projects in both New South Wales
and Western Australia is based on information compiled by Dr Luke Mortimer, a competent person who is a Member of The
Australian Institute of Geoscientists. Dr Mortimer is an employee engaged as the Exploration Manager for the Company and
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration results, Mineral Resources and Ore Reserves’. Dr Mortimer consents to the inclusion in this document
of the matters based on his information in the form and context in which it appears.
The information in this release relating to the exploration data for the Ashburton Gold Project is based on information compiled
by Mr Matthew Rolfe, a competent person who is a Member of The Australasian Institute of Geoscientists. Mr Rolfe is an
employee of Kalamazoo Resources Ltd and is engaged as Exploration Manager Ashburton Gold Project for the Company. Mr
Rolfe has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Rolfe consents to the inclusion in this document
of the matters based on his information in the form and context in which it appears.
The information in this announcement that relates to the estimation and reporting of mineral resources at the Ashburton
Project is based on information compiled by Dr Damien Keys, a competent person who is a Member of Australian Institute of
Geoscientists. Dr Keys is an employee of Complete Target Pty Ltd who is engaged as a consultant to Kalamazoo Resources
Limited. Dr Keys has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Keys consents to the
inclusion in this document of the matters based on his information in the form and context in which it appears.
The information in this report that relates to the Mineral Resources for the Ashburton Project is based on information
announced to the ASX on 23 June 2020. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the relevant market announcements, and that all material assumptions and
technical parameters underpinning the estimates in the relevant market announcement continue to apply.
ANNUAL REPORT 2022
Page 27 of 85
REVIEW OF ACTIVITIES
Mi n e ra l Re so u rc e a nd O re Res erv e Go ve rna nce C o n tro l s
Kalamazoo ensures that the Mineral Resources quoted are subject to governance arrangements and internal controls. Internal
and external reviews of Mineral Resource estimation procedures and results are carried out by a team of experience technical
personnel that is comprised of highly competent and qualified professionals. These reviews have not identified any material
issues.
Kalamazoo reports its Mineral Resources on at least an annual basis in accordance with the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code), 2021 or 2004 Edition as stated. Competent
Persons named in this report are Members or Fellows of the Australasian Institute of Mining and Metallurgy and/or the
Australian Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code.
Kalamazoo’s procedures for drilling, sampling techniques and analysis are regularly review and audited by independent
experts. Assays are undertaken by independent, internationally accredited laboratories with a QA/QC program delivering
acceptable levels of accuracy and precision.
F o r wa r d L o o ki ng St at em en ts
Statements regarding Kalamazoo’s plans with respect to its mineral properties and programmes are forward-looking
statements. There can be no assurance that Kalamazoo’s plans for development of its mineral properties will proceed as
currently expected. There can also be no assurance that Kalamazoo will be able to confirm the presence of additional
mineral resources/reserves, that any mineralisation will prove to be economic or that a mine will successfully be developed
on any of Kalamazoo’s mineral properties. The performance of Kalamazoo may be influenced by a number of factors which
are outside the control of the Company and its Directors, staff and contractors.
ANNUAL REPORT 2022
Page 28 of 85
DIRECTORS’ REPORT
Your Directors present their report on Kalamazoo Resources Limited (“the Company”) at the end of the
year ended 30 June 2022.
DIRECTORS
The following persons were Directors of the Company during the whole of the financial year and up to
the date of this report unless noted otherwise:
• Luke Reinehr, Executive Chairman / Chief Executive Officer
• Angus Middleton, Non-Executive Director
• Paul Adams, Executive Director
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year were:
•
•
•
to carry out exploration on its mineral tenements;
to seek extensions of areas held and to seek out new areas with mineral potential; and
to evaluate new opportunities for joint venture or acquisition.
FINANCIAL RESULTS
The loss of the Company after providing for income tax for the year ended 30 June 2022 was $1,385,254
(2021: loss of $445,828).
DIVIDENDS
No dividends have been paid or declared since the start of the financial year. No recommendation for
the payment of a dividend has been made by the Directors.
OPERATIONS AND FINANCIAL REVIEW
Information on the operations of the Company and its prospects is set out in the “Review of Activities”
section of this Annual Report.
FINANCIAL
As at 30 June 2022 the Company had net assets of $19,118,002 (2021: $17,959,128) including cash and
cash equivalents of $2,817,825 (2021: $5,850,997) and capitalised exploration and evaluation assets of
$16,361,189 (2021: $11,636,910). Exploration and evaluation costs totalling $28,493 (2021: $90,754) were
expensed during the year in accordance with the Company’s accounting policy.
ANNUAL REPORT 2022
Page 29 of 85
DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the financial year were as follows:
In December 2021 the Company completed the acquisition of three exploration licences (E45/3856,
E45/4616 and E45/5813) in the East Pilbara region of Western Australia (“Pear Creek Lithium Project”).
This Project covers approximately 47km2 of highly prospective lithium and gold geology and is located
between the Company’s DOM’s Hill and Marble Bar Lithium Projects.
In December 2021 the Company entered into an exploration/development option and earn-in with the
leading Chilean lithium producer Sociedad Química y Minera de Chile S.A. (“SQM”) in respect of
Kalamazoo’s 100% owned DOM’s Hill and Marble Bar Lithium Projects in the East Pilbara WA. SQM was
granted the right to earn an initial 30% interest (to a maximum of 70%) in all mineral rights at the
Company’s DOM’s Hill and Marble Bar Lithium Projects, by sole funding a minimum of A$12 million of
exploration and development activities over four years
During the financial year 2,000,000 Options with an exercise price of $0.30 and expiring on 10 July 2021
and 8,900,000 Options with an exercise price of $0.25 and expiring on 30 November 2021 were exercised
raising a total of $2.825 million (before costs).
There were no other significant changes in the state of affairs of the Company during the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
In August 2022, the Company entered into an Agreement with New York based Lind Global Fund II, LP,
(“Lind”) whereby Lind invested $3.0 Million (before costs) via a placement of Kalamazoo ordinary fully
paid shares (“Placement Shares”) and 6 million unlisted options. The Placement Shares will be issued
to Lind during the term of the Agreement (expiring 31 July 2024) with the price being not less than
$0.50 until 31 January 2023 and then at a calculated VWAP subscription price.
On 19 September 2022, the Company announced that it had completed the acquisition of the 1,609km2
Mt Piper Gold Project in Victoria from Coda Minerals Limited (“Coda”) (ASX:COD). The Project consists
of exploration licences EL6775, EL7331, EL7337, EL7366, EL7380 and application ELA7481. Kalamazoo
will pay Coda $300,000 and 1,525,000 fully paid ordinary shares in Kalamazoo, escrowed for 12 months
from issue. Coda retains a 1% Net Smelter Royalty on any minerals extracted from the tenements.
There has not arisen in the interval between the end of the financial year and the date of this report any
other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors,
to affect significantly the operations, the results of those operations, or the state of affairs of the
Company in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors are not aware of any developments that might have a significant effect on the operations
of the Company in subsequent financial years not already disclosed in this report.
ANNUAL REPORT 2022
Page 30 of 85
DIRECTORS’ REPORT
ENVIRONMENTAL REGULATION
The Company is subject to significant environmental regulation in respect of its exploration activities.
Tenements in Victoria, Western Australia and New South Wales are granted subject to adherence to
environmental conditions with strict controls on clearing, including a prohibition on the use of
mechanised equipment or development without the approval of the relevant Government agencies,
and with rehabilitation required on completion of exploration activities. These regulations are controlled
by the Department of Jobs, Precincts and Regions (Victoria), the Department of Mines, Industry
Regulation and Safety (Western Australia) and the NSW Department of Industry.
The Company conducts its exploration activities in an environmentally sensitive manner and is not aware
of any breach of statutory conditions or obligations.
Greenhouse Gas and Energy Data Reporting Requirements
The Directors have considered compliance with the National Greenhouse and Energy Reporting
Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The
Directors have assessed that there are no current reporting requirements for the year ended
30 June 2022, however reporting requirements may change in the future.
INFORMATION ON DIRECTORS
Luke Reinehr LL.B, B.A. (Executive Chairman / Chief Executive Officer), Director since 23 March 2011
Experience and expertise
A co-founder of Kalamazoo, Luke was the Company’s managing director
from January 2013 until 31 July 2016 and was primarily responsible for driving
Kalamazoo’s early growth and path towards an initial public offer. Luke has
been the Executive Chairman of Kalamazoo since 1 August 2016 and was
appointed as Chief Executive Officer in July 2019. Luke’s core legal experience
complements mining and resources, project development and information
technology skills. Working across all levels of management, Luke has
extensive partnership, director, CEO and chairman experience with
companies in Australia and internationally.
Luke holds a Bachelor of Law and a Bachelor of Arts degree from the
University of Melbourne and Monash University respectively.
Other current directorships
Former directorships in last
three years
None.
None.
Special responsibilities
Chair of the Board
Interests in shares and options Ordinary shares – Kalamazoo Resources Limited
Unlisted options – Kalamazoo Resources Limited
Performance Rights – Kalamazoo Resources Limited
4,931,246
3,000,000
2,000,000
ANNUAL REPORT 2022
Page 31 of 85
DIRECTORS’ REPORT
Angus Middleton SA Fin, MSAA (Non-Executive Director), Director since 5 February 2014
Experience and expertise
Angus is a fund manager and former stockbroker who has extensive
experience in the capital markets sector in Australia. He is currently a Director
of SA Capital Pty Ltd, a corporate advisory firm specialising in equity raisings
and underwriting, and the Managing Director of SA Capital Funds
Management Limited, an Adelaide based investment fund that has been
involved in advising and raising equity for corporations in the form of venture
capital, seed capital, private equity, pre-initial public offerings and initial
public offerings.
The Board considers Angus Middleton to be an independent Director as he
is not a member of management and is free of any interest, position,
association or relationship that might influence, or reasonably be perceived
to influence, in a material respect his capacity to bring an independent
judgement to bear on issues before the Board.
Other current directorships
None.
Former directorships in last
three years
Torian Resources Limited (19 September 2019 to 21 April 2020)
Special responsibilities
None.
Interests in shares and options Ordinary shares – Kalamazoo Resources Limited
Unlisted options – Kalamazoo Resources Limited
Performance Rights – Kalamazoo Resources Limited
2,371,905
1,500,000
750,000
Paul Adams B.SC., GradDipAppFin (Executive Director), Director since 2 July 2018
Experience and expertise
Paul has an Honours degree in Geology and has 20 years’ experience in the
mining industry in exploration, open pit, underground and operational roles,
both in Australia and overseas. He was Chief Mine Geologist and Evaluations
Manager at Placer Dome’s Granny Smith Mine in Western Australia, 2IC and
production coordinator at the giant Porgera Gold Mine in Papua New Guinea
and has held senior geology roles at Australian Gold Fields Ltd and Dominion
Mining. He has an additional 12 years’ experience as Director – Head of
Research and Natural Resources at DJ Carmichael Pty Ltd, a Perth-based
stockbroking and wealth management company, specialising in small to mid-
cap resource companies. Paul has experience in evaluating and valuing a
range of projects and companies across a range of commodities. Paul holds
a Graduate Diploma in Applied Finance and Investment from the Financial
Services Institute of Australia.
Other current directorships
Meeka Metals Limited (appointed 15 February 2021) formerly Latitude
Consolidated Limited
Former directorships in last
three years
Spectrum Metals Limited (25 May 2018 to 6 May 2020)
Special responsibilities
Heading the exploration team for the Ashburton Gold Project.
Interests in shares and options Ordinary shares – Kalamazoo Resources Limited
Unlisted options – Kalamazoo Resources Limited
Performance Rights – Kalamazoo Resources Limited
1,000,000
1,500,000
1,000,000
ANNUAL REPORT 2022
Page 32 of 85
DIRECTORS’ REPORT
COMPANY SECRETARY
Bernard Crawford B.Com, CA, MBA, AGIA ACG (appointed 12 August 2016)
Mr Crawford is a Chartered Accountant with over 30 years’ experience in the resources industry in Australia and
overseas. He has held various positions in finance and management with NYSE, TSX and ASX listed companies.
Mr Crawford is the CFO and/or Company Secretary of a number of public companies. He holds a Bachelor of
Commerce degree from the University of Western Australia, a Master of Business Administration from London
Business School and is a Member of the Institute of Chartered Accountants in Australia and the Governance
Institute of Australia.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors held during the year ended 30 June 2022,
and the numbers of meetings attended by each Director were:
Board of Directors
B
A
Luke Reinehr
Angus Middleton
Paul Adams
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office.
6
6
6
6
6
6
RETIREMENT, ELECTION AND CONTINUATION IN OFFICE OF DIRECTORS
Mr Luke Reinehr, being the Director retiring by rotation who, being eligible, will offer himself for
re-election at the 2022 Annual General Meeting.
REMUNERATION REPORT (AUDITED)
The Directors present the Kalamazoo Resources Limited 2022 Remuneration Report, outlining key
aspects of the Company’s remuneration policy and framework, and remuneration awarded this year.
The report contains the following sections:
a) Key management personnel covered in this report
b) Remuneration governance and the use of remuneration consultants
c) Executive remuneration policy and framework
d) Relationship between remuneration and the Company’s performance
e) Non-executive director remuneration policy
f) Voting and comments made at the Company’s last Annual General Meeting
g) Details of remuneration
h) Service agreements
i) Details of share-based compensation and bonuses
j) Equity instruments held by key management personnel
k) Loans to key management personnel
l) Other transactions with key management personnel.
ANNUAL REPORT 2022
Page 33 of 85
DIRECTORS’ REPORT
a) Key management personnel covered in this report
Non-Executive and Executive Directors (see pages 31 to 32 for details about each director)
Name
Position
Luke Reinehr
Angus Middleton
Paul Adams
Executive Chairman / Chief Executive Officer
Non-Executive Director
Executive Director
Other key management personnel
Name
Position
Bernard Crawford
Chief Financial Officer and Company Secretary
b) Remuneration governance and the use of remuneration consultants
The Company does not have a Remuneration Committee. Remuneration matters are handled by
the full Board of the Company. In this respect the Board is responsible for:
•
•
the over-arching executive remuneration framework;
the operation of the incentive plans which apply to executive directors and senior executives
(the executive team), including key performance indicators and performance hurdles;
•
remuneration levels of executives; and
• non-executive director fees.
The objective of the Board is to ensure that remuneration policies and structures are fair and
competitive and aligned with the long-term interests of the Company.
In addition, all matters of remuneration are handled in accordance with the Corporations Act 2001
requirements, especially with regard to related party transactions. That is, none of the Directors
participate in any deliberations regarding their own remuneration or related issues.
Independent external advice is sought from remuneration consultants when required, however no
advice was sought during the period ended 30 June 2022.
c) Executive remuneration policy and framework
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
• competitive and reasonable, enabling the Company to attract and retain key talent;
• aligned to the Company’s strategic and business objectives and the creation of shareholder
value;
•
transparent and easily understood; and
• acceptable to shareholders.
All executives receive consulting fees or a salary, part of which may be taken as superannuation,
and from time to time, options. The Board reviews executive packages annually by reference to the
executive’s performance and comparable information from industry sectors and other listed
companies in similar industries.
All remuneration paid to specified executives is valued at the cost to the Company and expensed.
Options are valued using the Black Scholes option pricing model.
ANNUAL REPORT 2022
Page 34 of 85
DIRECTORS’ REPORT
d) Relationship between remuneration and the Company’s performance
Emoluments of Directors are set by reference to payments made by other companies of similar size
and industry, and by reference to the skills and experience of Directors. Fees paid to Non-Executive
Directors are not linked to the performance of the Company. This policy may change once the
exploration phase is complete and the Company is generating revenue. At present the existing
remuneration policy is not impacted by the Company’s performance including earnings and
changes in shareholder wealth (e.g. changes in share price).
The Board has not set short term performance indicators, such as movements in the Company’s
share price, for the determination of Non-Executive Director emoluments as the Board believes this
may encourage performance which is not in the long-term interests of the Company and its
shareholders. The Board has structured its remuneration arrangements in such a way it believes is
in the best interests of building shareholder wealth. The Board believes participation in the
Company’s Incentive Option Plan motivates key management and executives with the long-term
interests of shareholders.
Income
Net profit / (loss) before tax
Net profit / (loss) after tax
Share price at start of year
Share price at end of year
30 June 2022
($’000)
167
(2,445)
(2,445)
30 June 2021
($’000)
2,184
(1,112)
(1,112)
30 June 2020
($’000)
473
(3,313)
(3,313)
30 June 2019
($’000)
2,369
1,158
1,158
30 June 2018
($’000)
745
(234)
(234)
30 June 2022 30 June 2021 30 June 2020 30 June 2019 30 June 2018
$0.12
$0.82
$0.82
$0.365
$0.365
$0.16
$0.105
$0.09
$0.09
$0.12
Basic earnings / (loss) per share
(0.99) cps
(0.34) cps
(3.00) cps
1.29 cps
(0.27) cps
Diluted earnings / (loss) per share
(0.99) cps
(0.34) cps
(3.00) cps
0.97 cps
(0.27) cps
e) Non-executive director remuneration policy
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and
terms, including remuneration relevant to the office of Director.
The Board policy is to remunerate Non-Executive Directors at commercial market rates for
comparable companies for their time, commitment and responsibilities. Non-Executive Directors
receive a Board fee but do not receive fees for chairing or participating on Board committees.
Board members are allocated superannuation guarantee contributions as required by law, and do
not receive any other retirement benefits. From time to time, some individuals may choose to
sacrifice their salary or consulting fees to increase payments towards superannuation.
The maximum annual aggregate Non-Executive Directors’ fee pool limit is $250,000 as disclosed in
the Company’s Prospectus dated 3 October 2016.
Fees for Non-Executive Directors are not linked to the performance of the Company. Non-Executive
Directors’ remuneration may also include an incentive portion consisting of options, subject to
approval by shareholders.
ANNUAL REPORT 2022
Page 35 of 85
DIRECTORS’ REPORT
f) Voting and comments made at the Company’s last Annual General Meeting
Kalamazoo Resources Limited received more than 99% of “yes” votes on its remuneration report
for the 2021 financial year. The Company did not receive any specific feedback at the Annual
General Meeting or throughout the year on its remuneration practices.
g) Details of remuneration
The following table shows details of the remuneration received by the Company’s key management
personnel for the current and previous financial year.
Short-term benefits
Post-employment
benefits
Share-based
payments
Salary & fees
$
Bonus
$
Non-
monetary
benefit
$
Superannuation
$
Options
$
Total
$
Options
%
2022
Directors
L Reinehr
A Middleton
P Adams
Executives
B Crawford
TOTALS
2021
Directors
L Reinehr
A Middleton
P Adams
Executives
B Crawford
TOTALS
306,305
39,000
132,750
173,176
651,231
297,855
36,000
174,938
147,695
656,488
h) Service agreements
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,900
600
-
4,500
-
3,420
3,420
-
6,840
-
-
-
-
-
-
-
-
-
-
306,305
42,900
133,350
173,176
655,731
297,855
39,420
178,358
147,695
663,328
-
-
-
-
-
-
-
-
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and
terms of appointment, including compensation relevant to the office of Director. Remuneration
and other terms of employment for other members of key management personnel are formalised
in service agreements as summarised below.
L Reinehr, Chief Executive Officer / Executive Chairman
Mr Reinehr is remunerated pursuant to a formalised Executive Services Agreement (“Agreement”).
Under the Agreement, the Company has agreed to employ Mr Reinehr as Chief Executive Officer
of the Company. The Company may terminate the Agreement without cause by providing twelve
months’ written notice. Mr Reinehr may terminate the Agreement without cause by providing three
months’ written notice. Should the Company terminate the Agreement, it may pay Mr Reinehr in
lieu of notice or may require him to serve out up to three months’ notice or part thereof.
Termination payments are generally not payable on resignation or dismissal for serious misconduct.
In the instance of serious misconduct, the Company can terminate employment at any time.
ANNUAL REPORT 2022
Page 36 of 85
DIRECTORS’ REPORT
P Adams, Executive Director
Mr Adams is remunerated pursuant to a formalised Consultancy Agreement (“Agreement”). Under
the Agreement, the Company has agreed to engage Mr Adams as a Consultant Geologist to the
Company. The Company may terminate the Agreement without cause by providing twelve months’
written notice. Mr Adams may terminate the Agreement without cause by providing three months’
written notice. Should the Company terminate the Agreement, it may pay Mr Adams in lieu of
notice or may require him to serve out up to three months’ notice or part thereof. Termination
payments are generally not payable on resignation or dismissal for serious misconduct. In the
instance of serious misconduct, the Company can terminate employment at any time.
B Crawford, Chief Financial Officer
Mr Crawford is remunerated pursuant to an Executive Services Agreement (“Agreement”). Under
the Agreement, the Company agrees to employ Mr Crawford as Chief Financial Officer and
Company Secretary. The Company may terminate the Agreement without cause by providing
twelve months’ written notice. Mr Crawford may terminate the Agreement without cause by
providing three months’ written notice. Should the Company terminate the Agreement, it may pay
Mr Crawford in lieu of notice or may require him to serve out up to three months’ notice or part
thereof. Termination payments are generally not payable on resignation or dismissal for serious
misconduct. In the instance of serious misconduct, the Company can terminate employment at any
time.
i) Details of share-based compensation
Options
Options over ordinary shares in Kalamazoo Resources Limited are granted under the Incentive
Option Plan (“IOP”). Participation in the IOP and any vesting criteria are at the Board’s discretion
and no individual has a contractual right to participate in the IOP or to receive any guaranteed
benefits. During the financial year no Options were issued to employees. All Options vested
immediately and were not subject to performance conditions as the grant of Options is considered
as a cost effective and efficient reward and incentive as opposed to other alternative forms of
incentive.
The fair value of options at grant date are independently determined using an option pricing model
that takes into account the exercise price, the term of the option, 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.
ANNUAL REPORT 2022
Page 37 of 85
DIRECTORS’ REPORT
The terms and conditions of each grant of options affecting remuneration in the current or future
reporting periods are set out below:
Option
series
Number
granted
Grant
date
Vesting
date
Expiry
date
Exercise
price
Directors
L Reinehr
L Reinehr
A Middleton
A Middleton
P Adams
P Adams
Executives
B Crawford
B Crawford
H(i)
M
H(i)
M
H(i)
M
G(i)
L
i) Exercised during the period
4,000,000
3,000,000
2,000,000
1,500,000
1,000,000
1,500,000
14 Nov 2018
13 Nov 2019
14 Nov 2018
13 Nov 2019
14 Nov 2018
13 Nov 2019
14 Nov 2018 30 Nov 2021
13 Nov 2019 30 Nov 2022
14 Nov 2018 30 Nov 2021
13 Nov 2019 30 Nov 2022
14 Nov 2018 30 Nov 2021
13 Nov 2019 30 Nov 2022
$0.25
$0.42
$0.25
$0.42
$0.25
$0.42
1,000,000
750,000
17 Jul 2018
15 Oct 2019
30 Nov 2021
17 Jul 2018
15 Oct 2019 30 Nov 2022
$0.25
$0.42
$57,320
$101,100
Value of
options at
grant date
$218,280
$496,800
$109,140
$248,400
$54,570
$248,400
Further information on the fair value of share options and assumptions is set out in Note 24 to the
financial statements.
Performance rights
Performance Rights over ordinary shares in Kalamazoo Resources Limited are granted under the
Incentive Option Plan (“IOP”). Participation in the IOP and any vesting criteria are at the Board’s
discretion and no individual has a contractual right to participate in the IOP or to receive any
guaranteed benefits. The Performance Rights vest once the specific milestones (outlined below)
have been met.
The Company believes that the issue of Performance Rights aligns the efforts of Directors and
employees in seeking to achieve growth in the Company’s share price and in the creation of
Shareholder value. The Board also believes that incentivising with Performance Rights is a prudent
means of conserving the Company's available cash reserves. During the financial year no
Performance Rights were issued.
Performance Rights with non-market based milestones can only be exercised following the
satisfaction of those milestones, a change of control or winding up occurring, or a takeover bid
becoming unconditional. Assuming that the milestones are met, the value of a Performance Right
is the value of an ordinary share as at the grant date. However, the milestones for the Performance
Rights were intentionally set as stretch targets and accordingly the Directors have determined that
it is more likely than not that the milestones will not be achieved. Therefore, in accordance with
AASB 2: Share-based Payment no expense has been recognised for the Performance Rights.
ANNUAL REPORT 2022
Page 38 of 85
DIRECTORS’ REPORT
The details of the outstanding Performance Rights are set out below:
Class
Number
granted
Grant
date
Expiry
date
Share price
at grant
date
Exercise
price
Value of
rights at
grant date (3)
Directors
L Reinehr
L Reinehr
A Middleton
A Middleton
P Adams
P Adams
Executives
B Crawford
B Crawford
A (1)
B (2)
A
B
A
B
A
B
1,000,000
1,000,000
375,000
375,000
500,000
500,000
18 Nov 2020 22 Nov 2023
18 Nov 2020 22 Nov 2025
18 Nov 2020 22 Nov 2023
18 Nov 2020 22 Nov 2025
18 Nov 2020 22 Nov 2023
18 Nov 2020 22 Nov 2025
$0.62
$0.62
$0.62
$0.62
$0.62
$0.62
250,000
250,000
18 Nov 2020 22 Nov 2023
18 Nov 2020 22 Nov 2025
$0.62
$0.62
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
The following milestones (vesting conditions) apply to the Performance Rights issued during the year:
(1) Class A Performance Rights: on announcing an increased Mineral Resource estimate of at least Inferred category on
any of the Company’s Projects of at least 500,000 ounces of gold or more, with a minimum cut-off grade of 1g/t Au
within 3 years.
(2) Class B Performance Rights: on announcing an increased Mineral Resource estimate of at least Inferred category on
any of the Company’s Projects of at least a further 500,000 ounces of gold or more (above Class A), with a minimum
cut-off grade of 1g/t Au within 5 years.
(3) Management have assessed the probability of the Performance Rights vesting conditions being achieved as less than
probable at this time and as such these have been accounted for at nil value.
j) Equity instruments held by key management personnel
The following tables detail the number of fully paid ordinary shares and options over ordinary
shares in the Company that were held during the financial year by key management personnel of
the Company, including their close family members and entities related to them.
Options
2022
Directors
L Reinehr
A Middleton
P Adams
Executives
B Crawford
TOTAL
Opening
balance at
1 July
7,000,000
3,500,000
2,500,000
1,750,000
14,750,000
Granted as
remuneration
Options
exercised
Net change
(other)
Balance at
30 June
Vested
but not
exercisable
Vested and
exercisable
Vested
during the
year
-
-
-
-
-
(4,000,000)
(2,000,000)
(1,000,000)
(1,000,000)
(8,000,000)
-
-
-
-
-
3,000,000
1,500,000
1,500,000
750,000
6,750,000
-
-
-
-
-
3,000,000
1,500,000
1,500,000
750,000
6,750,000
-
-
-
-
-
ANNUAL REPORT 2022
Page 39 of 85
DIRECTORS’ REPORT
Shareholdings
Opening balance
at 1 July
Granted as
remuneration
Options
exercised
Net change
(other)
Balance
at 30 June
2022
Directors
L Reinehr
A Middleton
P Adams
Executives
B Crawford
TOTAL
931,246
371,905
-
602,000
1,905,151
-
-
-
-
-
4,000,000
2,000,000
1,000,000
1,000,000
8,000,000
-
-
-
-
-
4,931,246
2,371,905
1,000,000
1,602,000
9,905,151
k) Loans to key management personnel
There were no loans to individuals or any key management personnel during the financial year or
the previous financial year.
l) Other transactions with key management personnel
There were no other transactions with key management personnel during the financial year or the
previous financial year.
END OF REMUNERATION REPORT (AUDITED)
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
23 September 2019
15 October 2019
13 November 2019
25 September 2020
9 March 2021
2 September 2022
TOTAL
Expiry date
30 November 2022
30 November 2022
30 November 2022
30 November 2023
15 March 2024
1 September 2025
Issue price of shares
$0.42
$0.42
$0.42
$1.04
$0.69
$0.375
Number under option
2,000,000
1,500,000
6,000,000
1,400,000
1,500,000
6,000,000
18,400,000
No option holder has any right under the options to participate in any other share issue of the Company
or any other entity.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
During the year the Company issued a total of 10,900,000 ordinary shares upon the exercise of options
having an exercise price of $0.25 and expiring on 30 November 2021.
CORPORATE GOVERNANCE STATEMENT
The Company’s 2022 Corporate Governance Statement has been released as a separate document and
is located on the Company’s website at http://www.kzr.com.au/corporate-governance/.
ANNUAL REPORT 2022
Page 40 of 85
DIRECTORS’ REPORT
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a
party, for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium to insure the Directors and Officers of the entity
against any liability incurred as a Director or Officer to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits the disclosure of the nature of the liabilities covered or the
amount of the premium paid.
The Company has not entered into any agreement with its current auditors indemnifying them against
claims by a third party arising from their position as auditor.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor’s expertise and experience with the Company are important.
Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Ltd) for audit and non-
audit services provided during the year are set out in Note 19. During the year ended 30 June 2022 no
amounts were paid or were payable for non-audit services provided by the auditor of the Company
(2021: $Nil).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations
Act 2001 is set out on the following page.
Signed in accordance with a resolution of the Directors.
Luke Reinehr
Chairman
Perth, 21 September 2022
ANNUAL REPORT 2022
Page 41 of 85
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Auditor’s Independence Declaration
To the Directors of Kalamazoo Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Kalamazoo Resources Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge
and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 21 September 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
w
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022
Other income
3(a)
166,935
2,184,394
Notes
2022
$
2021
$
Employee benefits expense
Depreciation expense
Exploration expenditure write-off
Finance costs
Other expenses
3(b)
9
(405,086)
(223,063)
(28,493)
(25,065)
3(c)
(870,482)
(1,388,657)
(206,264)
(90,754)
(32,219)
(912,328)
Loss from continuing operations before income tax
(1,385,254)
(445,828)
Income tax benefit
5
-
-
Loss after income tax for the period attributable to the
owners of Kalamazoo Resources Limited
(1,385,254)
(445,828)
Other comprehensive loss
Items that will not be reclassified to profit or loss
Financial assets at fair value through other comprehensive
income – fair value changes
10
(1,059,831)
(665,788)
Other comprehensive loss for the year (net of tax)
(1,059,831)
(665,788)
Total comprehensive loss for the year attributable to the
owners of Kalamazoo Resources Limited
Loss per share attributable to the owners of
Kalamazoo Resources Limited
Basic profit/(loss) per share
Diluted profit/(loss) per share
(2,445,085)
(1,111,616)
Cents
per share
Cents
per share
18
18
(0.99)
(0.99)
(0.34)
(0.34)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
ANNUAL REPORT 2022
Page 43 of 85
CONSOLOIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right of use assets
Exploration and evaluation assets
Financial assets at fair value through OCI
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Short-term provisions
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Long-term provisions
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Option reserve
Financial asset reserve
Accumulated losses
TOTAL EQUITY
Notes
2022
$
2021
$
6
7
8
9
10
11
12
13
14
13
14
2,817,825
463,412
84,566
5,850,997
353,802
72,356
3,365,803
6,277,155
254,895
253,414
16,361,189
304,549
30,124
351,007
290,440
11,636,910
1,364,380
30,124
17,204,171
13,672,861
20,569,974
19,950,016
1,061,302
114,344
121,481
1,624,958
70,037
108,299
1,297,127
1,803,294
13,990
140,855
154,845
-
187,594
187,594
1,451,972
1,990,888
19,118,002
17,959,128
15(b)
16(a)
16(b)
17
28,219,212
2,409,770
(1,725,619)
(9,785,361)
24,016,755
3,141,373
(665,788)
(8,533,212)
19,118,002
17,959,128
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
Page 44 of 85
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Issued
Capital
$
Option
Reserve
$
Financial
Asset Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2020
22,859,847
2,274,886
- (8,087,384) 17,047,349
Total comprehensive loss for the period
Other comprehensive loss
Total comprehensive loss for the period
(net of tax)
Transactions with owners in their
capacity as owners
Issue of shares
- Transaction costs of issuing shares
- Issue of options to employees
- Transfer from share option reserve:
-
-
-
1,021,875
(10,955)
-
-
-
-
-
-
1,012,475
- Due to exercise of options
145,988
(145,988)
-
(445,828)
(445,828)
(665,788)
-
(665,788)
(665,788)
(445,828) (1,111,616)
-
-
-
-
-
-
-
-
1,021,875
(10,955)
1,012,475
-
At 30 June 2021
24,016,755
3,141,373
(665,788) (8,533,212) 17,959,128
At 1 July 2021
24,016,755
3,141,373
(665,788) (8,533,212) 17,959,128
Total comprehensive loss for the period
Other comprehensive loss
Total comprehensive loss for the period
(net of tax)
-
-
-
-
-
-
(1,385,254)
(1,385,254)
(1,059,831)
-
(1,059,831)
- (1,059,831) (1,385,254) (2,445,085)
Transactions with owners in their
capacity as owners
Issue of shares
Transaction costs of issuing shares
Transfer from share option reserve:
- Due to exercise of options
- Due to expiry of options
3,625,000
(21,041)
-
-
598,498
(598,498)
-
(133,105)
-
-
-
-
-
-
-
133,105
3,625,000
(21,041)
-
-
At 30 June 2022
28,219,212
2,409,770 (1,725,619) (9,785,361) 19,118,002
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
Page 45 of 85
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Other income received
Payments to suppliers and employees
Interest received
Interest paid
Research and development tax rebate
Government grant received
Notes
2022
$
2021
$
60,829
-
(1,225,733)
(1,110,245)
11,201
(25,065)
72,682
-
48,837
(32,219)
-
57,710
NET CASH FLOWS USED IN OPERATING ACTIVITIES
25
(1,106,086)
(1,035,917)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for exploration activities
(8,001)
(4,757,563)
Proceeds from sale of Snake Well Gold Project
7
150,000
(280,024)
(5,737,072)
3,100,000
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(4,615,564)
(2,917,096)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from conversion of options
Share issue costs
Lease principal payments
2,825,000
(21,041)
(115,481)
1,021,875
(10,955)
(109,032)
NET CASH FLOWS FROM FINANCING ACTIVITIES
2,688,478
901,888
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
(3,033,172)
5,850,997
(3,051,125)
8,902,122
CASH AND CASH EQUIVALENTS AT END OF PERIOD
6
2,817,825
5,850,997
This Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
Page 46 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: CORPORATE INFORMATION
The financial report of Kalamazoo Resources Limited for the year ended 30 June 2022 was authorised
for issue in accordance with a resolution of the Directors on 21 September 2022.
Kalamazoo Resources Limited is a for-profit company incorporated in Australia and limited by shares
which are publicly traded on the Australian Securities Exchange and the Frankfurt Stock Exchange. The
nature of the operation and principal activities of the entity are described in the attached Directors’
Report.
The principal accounting policies adopted in the preparation of these financial statements are set out
below and have been applied consistently to all periods presented in the financial statements.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board, Australian Accounting Interpretations and the Corporations Act 2001.
Compliance with IFRS
The financial statements of Kalamazoo Resources Limited also comply with International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
New and amended accounting standards and interpretations adopted by the Company
No new standards or interpretations relevant to the operations of the Company have come into effect
for the reporting period.
New accounting standards and interpretations
There are no new or amended accounting standards and interpretations relevant to the operations of
the Group that come into effect in subsequent reporting periods at this time.
ANNUAL REPORT 2022
Page 47 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Basis of measurement
Historical cost convention
These financial statements have been prepared under the historical cost convention, except where
stated.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed where
appropriate.
b) Going concern
These financial statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and the settlement of liabilities
in the ordinary course of business.
The Directors have prepared a cash flow forecast, which indicates that the Company will have
sufficient cash flows to meet all commitments and working capital requirements for the 12 month
period from the date of this report. The cash flow forecast includes the placement with Lind Global
Fund II, LP, (“Lind”) whereby Lind invested $3.0 Million (before costs) via a placement of Kalamazoo
ordinary fully paid shares in August 2022.
Based on the cash flow forecast the directors are satisfied that the going concern basis of
preparation is appropriate. Given the Company’s history of raising capital to date, the Directors are
confident of the Company’s ability to raise additional funds as and when they are required.
ANNUAL REPORT 2022
Page 48 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c) Principles of Consolidation
These financial statements incorporate the assets and liabilities of the Company’s subsidiary at
30 June 2022 and the results of its subsidiary for the year then ended. The Company and its
subsidiary together are referred to in this financial report as the Group or the Consolidated Entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
investment with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
The acquisition method of accounting is used to account for business combinations by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position and
the Statement of Changes in Equity respectively.
d) Significant accounting judgements, estimates and assumptions
The application of accounting policies requires the use of judgements, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is revised if it affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
Exploration and evaluation expenditure carried forward
The recoverability of the carrying amount of exploration and evaluation expenditure carried
forward has been reviewed by the Directors. The recoverability of the carrying amount of the
exploration and evaluation assets is dependent on the successful development and commercial
exploitation, or alternatively, sale of the respective area of interest.
The Company reviews the carrying value of exploration and evaluation expenditure on a regular
basis to determine whether economic quantities of reserves have been found or whether further
exploration and evaluation work is underway or planned to support continued carry forward of
capitalised costs. This assessment requires judgement as to the status of the individual projects and
their estimated recoverable amount (Refer to Note 9).
ANNUAL REPORT 2022
Page 49 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees and Directors by
reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined by utilising a Black Scholes model, using the assumptions detailed in Note 24.
The Company values Performance Rights by reference to its best available estimate of the number
of Performance Rights it expects to vest and revises that estimate, if necessary, if subsequent
information indicates that the number of Performance Rights expected to vest differs from previous
estimates. The vesting conditions for the Class A and Class B Performance Rights were intentionally
set as stretch targets and accordingly the Directors have determined that it is more likely than not
that the milestones will not be achieved. Therefore, in accordance with AASB 2: Share-based
Payment no value has been recognised for the Performance Rights.
Income tax
Deferred tax assets are recognised for unused tax losses and deductible temporary differences only
if it is probable that future taxable amounts will be available to utilise those temporary differences
and losses. No deferred tax asset has been recognised in the Consolidated Statement of Financial
Position in respect of the amount of either these losses or other deferred tax expenses.
e) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as
the Board of Directors of Kalamazoo Resources Limited.
f) Functional and presentation currency
The financial statements are presented in Australian dollars, which is the Company’s functional and
presentation currency.
g) Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to
the Company as lessee are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to profit or loss as incurred over the
period of the lease.
Leases in which a significant portion of the risks and rewards of ownership are transferred to the
Company as lessee are classified as finance leases. At the commencement date of a lease, the
Company recognises a liability to make lease payments (i.e. the lease liability) and an asset
representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset).
The Company separately recognises the interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
ANNUAL REPORT 2022
Page 50 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
h) Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items. Where parts
of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. The carrying amount of
any component accounted for as a separate asset is derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Depreciation is calculated using the straight line method to allocate their cost, net of their residual
values, over their estimated useful lives. 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 are included in profit or
loss.
i) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave expected to be settled within 12 months after the end of the period in which the
employees render the related service, are recognised in respect of employees’ services up to the
end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liability for annual leave and accumulating sick leave is recognised in the
provision for employee benefits. Liabilities for non-accumulating sick leave are recognised when
the leave is taken and measured at the rates paid or payable. All other short-term employee benefit
obligations are presented as payables.
The obligations are presented as current liabilities in the Statement of Financial Position if the entity
does not have an unconditional right to defer settlement for at least 12 months after the reporting
date, regardless of when the actual settlement is expected to occur.
ANNUAL REPORT 2022
Page 51 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Other long-term obligations
The liability for long service leave and annual leave which is not expected to be settled within
12 months after the end of the period in which the employees render the related service, is
recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the
reporting period using the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the end of the reporting period on high quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Share-based payments
The Company provides benefits to employees of the Company in the form of share options. The
fair value of options granted is recognised as an employee benefits expense with a corresponding
increase in equity. The fair value is measured at grant date and spread over the period during which
the employees become unconditionally entitled to the options. The fair value of the options
granted is measured using a Black Scholes option pricing model, taking into account the terms and
conditions upon which the options were granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, on a straight-line basis over the vesting period. The amount recognised as an expense is
adjusted to reflect the actual number that vest.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
Performance rights
The Company provides benefits to Directors and employees of the Company in the form of
Performance Rights. The Company values Performance Rights by reference to its best available
estimate of the number of Performance Rights it expects to vest and revises that estimate, if
necessary, if subsequent information indicates that the number of Performance Rights expected to
vest differs from previous estimates. The vesting conditions for the Class A and Class B Performance
Rights were intentionally set as stretch targets and accordingly the Directors have determined that
it is more likely than not that the milestones will not be achieved. Therefore, in accordance with
AASB 2: Share-based Payment no value has been recognised for the Performance Rights.
ANNUAL REPORT 2022
Page 52 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The
Company recognises termination benefits when it is demonstrably committed to either terminating
the employment of current employees according to a detailed formal plan without possibility of
withdrawal or providing termination benefits as a result of an offer made to encourage voluntary
redundancy. Benefits falling due more than 12 months after the end of the reporting period are
discounted to present value. No termination benefits, other than accrued benefits and entitlements,
were paid during the period.
j) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
ANNUAL REPORT 2022
Page 53 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 3: REVENUE AND EXPENSES
a) Other income
Interest revenue
Finance income
Gain on disposal of 50% interest in EL007112 (Note 10)
R&D tax rebate
Other income
2022
$
10,634
-
-
72,682
83,619
2021
$
41,435
114,793
1,921,192
-
106,974
Total other income
166,935
2,184,394
Revenue is recognised at an amount that reflects the consideration to which the Company expects to
be entitled in exchange for transferring services to a customer. Revenue and expenses are recognised
on an accrual’s basis. Interest income is recognised on a time proportion basis.
b) Employee benefits expense
Wages, salaries, directors’ fees and other remuneration expenses
Superannuation contributions
Share-based payments expense (Note 24)
Transfer to capitalised exploration expenditure
2022
$
1,367,576
101,163
-
(1,063,653)
2021
$
1,374,507
101,578
1,012,475
(1,099,903)
Total employee benefits expense
405,086
1,388,657
c) Other expenses
ASX
Conferences and investor relations
Corporate consultants
Legal
Occupancy costs
Secretarial, professional and audit costs
Travel and promotion
Other expenses
Total other expenses
NOTE 4: SEGMENT INFORMATION
2022
$
53,523
78,057
238,359
3,406
26,857
255,793
95,624
118,863
2021
$
60,399
88,293
341,035
18,377
10,011
230,457
31,548
132,208
870,482
912,328
The Company operates in one geographical segment, being Australia and in one operating category,
being mineral exploration. Therefore, information reported to the chief operating decision maker (the
Board of Kalamazoo Resources Limited) for the purposes of resource allocation and performance
assessment is focused on mineral exploration within Australia. The Board has considered the
requirements of AASB 8: Operating Segments and the internal reports that are reviewed by the chief
operating decision maker in allocating resources and have concluded at this time that there are no
separately identifiable segments.
ANNUAL REPORT 2022
Page 54 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: INCOME TAX
Statement of Profit or Loss and Other Comprehensive Income
Current income tax:
- Income tax expense
Income tax expense/(benefit) reported in the Statement of
Profit or Loss and Other Comprehensive Income
A reconciliation of income tax expense/(benefit) applicable to accounting
profit/(loss) before income tax at the statutory income tax rate to income tax
expense/(benefit) at the Company’s effective income tax is as follows:
2022
$
2021
$
-
-
-
-
Accounting profit/(loss) from continuing operations before income tax
At the statutory income tax rate of 25% (2021: 30%)
(1,385,254)
(346,313)
(445,828)
(133,748)
Add:
- Share-based payments
- Expenditure not allowable for income tax purposes
- Other deductible items
- Non-assessable items
- Net deferred tax asset not recognised due to not meeting recognition criteria
Income tax expense
Deferred income tax
Recognised on the Statement of Financial Position, deferred income tax at the
end of the reporting period relates to the following: (2022: 25%, 2021: 30%)
Deferred income tax liabilities:
- Accrued income
- Capitalised expenditure deductible for tax purposes
- Net book value for depreciable assets
- Prepayments
- Right of use assets
Deferred income tax assets:
- Accruals
- FBT payable
- Employee benefits
- Available for sale financial assets
- Legal costs
- Capital raising costs
- Tax losses available to offset DTL
Net deferred tax asset/(liability)
-
1,571
(8,990)
(18,170)
371,902
-
303,743
641
(40,791)
-
(129,845)
-
417
3,728,322
63,724
7,759
(2,231)
671
3,291,203
105,302
8,477
(1,636)
3,797,991
3,404,017
(7,875)
(30)
(32,084)
(431,405)
(168)
(9,792)
(3,316,637)
-
(6,002)
(126)
(21,011)
(199,736)
(2,223)
(14,403)
(3,160,516)
-
ANNUAL REPORT 2022
Page 55 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: INCOME TAX (Continued)
Kalamazoo Resources Ltd is considered a base rate entity for income tax purposes for the 2022 financial
year and is therefore subject to income tax at a rate of 25% (2021: 30%). At 30 June 2022, Kalamazoo
Resources Limited had $17,066,332 (2021: $11,802,307) of tax losses that are available indefinitely for
offset against future taxable profits subject to the satisfaction of the loss tests. No deferred tax asset
has been recognised in respect of either these tax losses or other deferred tax expenses because it is
not probable, at this time, that future taxable profits will be available which the Company can utilise.
The utilisation of tax losses is dependent on the Company satisfying the continuity of ownership test or
the same business test at the time the tax losses are applied against taxable income.
Tax Consolidation
During the year Kalamazoo Resources Limited incorporated a new wholly owned subsidiary being, Kali
Metals Pty Ltd and intends to form a tax consolidated group. The Australian Taxation Office will be
notified of this decision on lodgement of the 2022 tax consolidated income tax return effective from
the date of incorporation 31 August 2021. The head entity of the tax consolidated group is Kalamazoo
Resources Limited. The tax note has been prepared on the basis that Kalamazoo Resources Limited will
proceed with the election to form a tax consolidated group.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
2022
$
1,267,825
1,550,000
2021
$
800,997
5,050,000
2,817,825
5,850,997
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and
other short-term, highly liquid investments with maturities of three months or less.
The weighted average interest rate for the year was 0.24% (2021: 0.50%).
The Company’s exposure to interest rate risk is set out in Note 23.
ANNUAL REPORT 2022
Page 56 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 7: TRADE AND OTHER RECEIVABLES
Current
Debtors
GST receivable
Snake Well Gold Project sale proceeds receivable
2022
$
309,202
154,210
-
463,412
2021
$
-
203,802
150,000
353,802
Debtors at 30 June 2022 primarily relate to amounts due from Sociedad Química y Minera de Chile S.A.
(“SQM”) in respect of earn-in expenditure at Kalamazoo’s 100% owned DOM’s Hill and Marble Bar
Lithium Projects ($295,831).
In February 2019, the Company completed the sale of its Snake Well Gold Project (“Project”) to Adaman
Resources Pty Ltd (“Adaman”) for $7 million in cash to be paid in instalments. The final instalment of
$150,000 was paid during the period.
Trade and other receivables are normally due for settlement within 30 days. They are presented as
current assets unless collection is not expected for more than 12 months after the reporting date.
The Company’s financial risk management objectives and policies are set out in Note 23.
Due to the short-term nature of these receivables their carrying value is assumed to approximate their
fair value.
NOTE 8: OTHER CURRENT ASSETS
Prepayments
Deposits
Accrued interest
2022
$
31,034
51,863
1,669
84,566
2021
$
28,257
41,863
2,236
72,356
ANNUAL REPORT 2022
Page 57 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 9: EXPLORATION AND EVALUATION
Capitalised cost at the beginning of the year
Exploration and expenditure incurred during the year
Impairment of exploration and evaluation assets
2022
$
11,636,910
4,752,772
(28,493)
2021
$
5,446,083
6,281,581
(90,754)
Closing balance
16,361,189
11,636,910
Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are
capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the
Company has obtained the legal rights to explore an area are recognised in the Statement of Profit or
Loss and Other Comprehensive Income.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current
and either:
a) the expenditures are expected to be recouped through successful development and exploitation
or from sale of the area of interest; or
b) activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine
technical feasibility and commercial viability, and facts and circumstances suggest that the carrying
amount exceeds the recoverable amount. These assessments include (a) substantive exploration
expenditure on further exploration for, and evaluation of, mineral resources in the specific area is neither
budgeted nor planned; (b) exploration for and evaluation of mineral resources in the specific area has
not led to the discovery of commercially viable quantities of mineral resources and the Company has
decided to discontinue such activities in the specific area; and (c) sufficient data exists to indicate that,
although a development in the specific area is likely to proceed, the carrying amount of the exploration
and evaluation asset is unlikely to be recovered in full from successful development or by sale.
Management have undertaken a review of impairment indicators on each area of interest to determine
the appropriateness of continuing to carry forward costs in relation to that area of interest. Management
undertake impairment testing when impairment indicators are present. For the purposes of impairment
testing, exploration and evaluation assets are allocated to cash-generating units to which the
exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of minerals in an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested
for impairment and then reclassified to mineral property and development assets within property, plant
and equipment.
When an area of interest is abandoned or the Directors decide that it is not commercial, any
accumulated costs in respect of that area are written off in the financial period the decision is made.
ANNUAL REPORT 2022
Page 58 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 9: EXPLORATION AND EVALUATION (Continued)
Significant estimates and judgement
There is some subjectivity involved in the carry forward of capitalised exploration and evaluation
expenditure or, where appropriate, the write off to the Statement of Profit or Loss and Other
Comprehensive Income, however management give due consideration to areas of interest on a regular
basis and are confident that decisions to either write off or carry forward such expenditure fairly reflect
the prevailing situation.
NOTE 10: FINANCIAL ASSETS
Financial assets at fair value through other comprehensive income
Opening balance
Acquisition
Change in fair value
Closing balance
2022
$
1,364,380
-
(1,059,831)
2021
$
-
2,030,168
(665,788)
304,549
1,364,380
In September 2020 the Company granted Canadian listed gold explorer and developer Novo Resources
Corp (“Novo”) (TSX-V: NVO, OTCQX: NSRPF) an Option to earn an initial 50% interest, then earn a
further 20% interest, in the Company’s Queens Project (EL007112) in Victoria. The consideration for the
six-month Option was 24,883 Novo common shares. In March 2021 Novo exercised their Option to earn
their 50% interest and issued the Company with a further 584,215 Novo common shares. The Company
still holds the 609,098 Novo common shares.
Financial assets are recognised and derecognised on settlement date where the purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the timeframe
established by the market concerned. They are initially measured at fair value, net of transaction costs,
except for those financial assets classified as fair value through profit or loss, which are initially measured
at fair value. Transaction costs of financial assets carried at fair value through profit or loss are expensed
in profit or loss.
The Company classifies its financial assets at fair value though other comprehensive income (“FVOCI”).
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows. For investments in equity instruments, the classification depends
on whether the Company has made an irrevocable election at the time of initial recognition to account
for the equity investment at FVOCI.
Financial assets at OCI
For assets measured at FVOCI, gains and losses will be recorded in other comprehensive income. There
is no subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments continue to be recognised in profit
or loss as other income when the Company’s right to receive payments is established. Impairment losses
(and reversal of impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value. The Company has elected to measure its listed equities at
FVOCI.
Assets in this category are subsequently measured at fair value. The fair values of quoted investments
are based on current bid prices in an active market.
ANNUAL REPORT 2022
Page 59 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 11: OTHER NON-CURRENT ASSETS
Deposits paid
NOTE 12: TRADE AND OTHER PAYABLES
Trade creditors
Other payables and accruals
2022
$
30,124
30,124
2022
$
834,798
226,504
2021
$
30,124
30,124
2021
$
1,194,564
430,394
1,061,302
1,624,958
These amounts represent liabilities for goods and services provided to the Company prior to the end
of the financial year and which are unpaid. Trade creditors are unsecured, non-interest bearing and are
normally settled on 30-day terms. The Company’s financial risk management objectives and policies
are set out in Note 23. Due to the short-term nature of these payables, their carrying value is assumed
to approximate their fair value.
NOTE 13: PROVISIONS
Short-term
Annual leave
Long-term
Long service leave
Total provisions
2022
$
114,344
114,344
13,990
13,990
128,334
2021
$
70,037
70,037
-
-
-
ANNUAL REPORT 2022
Page 60 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 14: LEASE LIABILITIES
Current
Lease liabilities
Non-current
Lease liabilities
Total lease liabilities
2022
$
121,481
121,481
140,855
140,855
262,336
2021
$
108,299
108,299
187,594
187,594
295,893
The Company has leases for its corporate offices and its core yard. The Company has elected not to
recognize a lease liability for ‘low-value’ and short-term leases.
Future minimum lease payments as at 30 June 2022 were as follows:
Within one year
$
One to two years
$
Two to five years
$
Total
$
30 June 2022
Lease payments
Finance charges
Net present values
30 June 2021
Lease payments
Finance charges
Net present values
142,270
(20,789)
121,481
132,746
(24,447)
108,299
118,252
(8,416)
109,836
111,070
(14,432)
96,638
32,066
(1,047)
31,019
95,718
(4,762)
90,956
292,588
(30,252)
262,336
339,534
(43,641)
295,893
ANNUAL REPORT 2022
Page 61 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: CONTRIBUTED EQUITY
a) Share capital
Ordinary shares fully paid
b) Movements in ordinary shares on issue
Balance at 30 June 2020
Exercise of options – various dates (1)
Transaction costs
Balance at 30 June 2021
Exercise of options – various dates (2)
Pear Creek Lithium Project acquisition (3)
Transaction costs
Balance at 30 June 2022
2022
Number
2021
Number
145,194,374
131,941,434
Number
$
127,853,934
22,859,847
4,087,500
1,167,863
-
(10,955)
131,941,434
24,016,755
10,900,000
3,423,498
2,352,940
-
800,000
(21,041)
145,194,374
28,219,212
(1) During the prior financial year a total of 4,087,500 Options with an exercise price of $0.25 and expiring on various
dates were exercised.
(2) During the financial year 2,000,000 Options with an exercise price of $0.30 and expiring on 10 July 2021 and 8,900,000
Options with an exercise price of $0.25 and expiring on 30 November 2021 were exercised.
(3) In December 2021, the Company, via its wholly owned subsidiary Kali Metals Pty Ltd, acquired the Pear Creek Lithium
Project for the issue of 2,352,940 Kalamazoo shares.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds. Ordinary shares
have the right to receive dividends as declared, and in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and
amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person
or by proxy, at a meeting of the Company.
ANNUAL REPORT 2022
Page 62 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: CONTRIBUTED EQUITY (Continued)
c) Movements in options on issue
Balance at the beginning of the financial year
Options granted
Options exercised
Options expired
2022
Number
43,650,000
-
(10,900,000)
(20,350,000)
2021
Number
44,487,500
3,250,000
(4,087,500)
-
Balance at the end of the financial year
12,400,000
43,650,000
(1) No options were issued during the financial year.
(2) During the financial year 2,000,000 Options with an exercise price of $0.30 and expiring on 10
July 2021 and 8,900,000 Options with an exercise price of $0.25 and expiring on 30 November
2021 were exercised.
NOTE 16: RESERVES
a) Share option reserve
Opening balance
Options granted
Options exercised
Options expired
2022
$
3,141,373
-
(598,498)
(133,105)
2021
$
2,274,886
1,012,475
(145,988)
-
Balance at the end of the financial year
2,409,770
3,141,373
b) Financial asset reserve
Opening balance
Financial assets at fair value through other comprehensive income
(Note 10)
Balance at the end of the financial year
2022
$
(665,788)
2021
$
-
(1,059,831)
(665,788)
(1,725,619)
(665,788)
ANNUAL REPORT 2022
Page 63 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 17: ACCUMULATED LOSSES
Balance at the beginning of the financial year
Net profit/(loss) attributable to members
Transfer from share option reserve
2022
$
(8,533,212)
(1,385,254)
133,105
2021
$
(8,087,384)
(445,828)
-
Balance at the end of the financial year
(9,785,361)
(8,533,212)
NOTE 18: EARNINGS PER SHARE
Basic profit/(loss) per share
Diluted profit/(loss) per share
2022
Cents
(0.99)
(0.99)
2021
Cents
(0.34)
(0.34)
The following reflects the income and share data used in the calculations of basic and diluted loss per
share:
2022
$
2021
$
Profit/(loss) used in calculating basic and diluted earnings per share
(1,385,254)
(445,828)
Weighted average number of ordinary shares used in
calculating basic profit/(loss) per share
Weighted average number of ordinary shares used in
calculating diluted profit/(loss) per share
Basic earnings per share
2022
Number
2021
Number
140,445,035
131,045,578
140,445,035
131,045,578
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares, and the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential ordinary shares.
The issue of potential ordinary shares is antidilutive when their conversion to ordinary shares would
increase earnings per share or decrease loss per share from continuing operations. The calculation of
diluted earnings per share has therefore not assumed the conversion, exercise, or other issue of
potential ordinary shares that would have an antidilutive effect on earnings per share.
ANNUAL REPORT 2022
Page 64 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 19: AUDITOR’S REMUNERATION
Audit services
Grant Thornton Audit Pty Ltd
- Audit and review of the financial reports
Total remuneration
NOTE 20: CONTINGENT ASSETS AND LIABILITIES
The Company had contingent liabilities in respect of:
Future payments
2022
$
52,000
52,000
2021
$
49,000
49,000
In April 2018, the Company entered into a Tenement Sale Agreement whereby it acquired between 80%
and 100% in three gold projects in WA’s Pilbara region. Should the Company achieve a 50,000oz Au
JORC Resource within five years on any of the tenements the subject of the Tenement Sale Agreement,
then the Company must pay $1,000,000 to the vendors. The Company may elect to issue its ordinary
shares to the value of $1,000,000 (at the then current 5-day VWAP less 20%) or cash or a combination
of both.
In August 2020, the Company completed the acquisition of the Ashburton Gold Project from Northern
Star Resources Limited (ASX: NST) (“Northern Star”) consisting of Mining Leases M52/639, M52/640,
M52/734 and M52/735 and Exploration Licences E52/1941, E52/3024 and E52/3025.
Under the terms of acquisition, Kalamazoo will pay Northern Star $5.0M on mining of the first 250,000
tonnes of Ore, a 2% Net Smelter Royalty (“NSR”) on the first 250,000oz of gold produced, with a 0.75%
NSR on any subsequent gold produced from the tenements. The same NSR’s will also apply on any
other metals produced from the tenements. A pre-existing 1.75% royalty on gold production (excluding
the first 250,000oz) is also applicable across M52/639, M52/640, M52/734 and M52/735 and E52/1941.
In December 2021 the Company acquired tenement E45/4616 as part of the acquisition of the Pear
Creek Lithium Project. As part of the acquisition the Company assumed an obligation to pay a 2% net
smelter royalty on all commodities produced from the tenement, capped at $250,000, to Mithril
Resources Limited.
None of these amounts have been recognised in the 30 June 2022 financial statements due to the high
level of uncertainty around future events in order to trigger these payments.
There are no other material contingent assets or liabilities as at 30 June 2022.
ANNUAL REPORT 2022
Page 65 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 21: EVENTS OCCURRING AFTER THE REPORTING PERIOD
In August 2022, the Company entered into an Agreement with New York based Lind Global Fund II, LP,
(“Lind”) whereby Lind invested $3.0 Million (before costs) via a placement of Kalamazoo ordinary fully
paid shares (“Placement Shares”) and 6 million unlisted options. The Placement Shares will be issued to
Lind during the term of the Agreement (expiring 31 July 2024) with the price being not less than $0.50
until 31 January 2023 and then at a calculated VWAP subscription price.
On 19 September 2022, the Company announced that it had completed the acquisition of the 1,609km2
Mt Piper Gold Project in Victoria from Coda Minerals Limited (“Coda”) (ASX:COD). The Project consists
of exploration licences EL6775, EL7331, EL7337, EL7366, EL7380 and application ELA7481. Kalamazoo
will pay Coda $300,000 and 1,525,000 fully paid ordinary shares in Kalamazoo, escrowed for 12 months
from issue. Coda retains a 1% Net Smelter Royalty on any minerals extracted from the tenements.
There have been no other events subsequent to the reporting date which are sufficiently material to
warrant disclosure.
NOTE 22: COMMITMENTS
In order to maintain an interest in the exploration tenements in which the Company is involved, the
Company is committed to meet the conditions under which the tenements were granted. The timing
and amount of exploration expenditure commitments and obligations of the Company are subject to
the minimum expenditure commitments required as per the Mineral Resources (Sustainable
Development) Act 1990 (Victoria), the Mining Act 1978 (Western Australia) and the Mining Act 1992
(NSW), and the and may vary significantly from the forecast based upon the results of the work
performed which will determine the prospectivity of the relevant area of interest.
These obligations are not provided for in the financial report and are payable as follows:
Exploration expenditure
Within one year
After one year but not more than five years
Greater than five years
2022
$
2021
$
1,803,820
4,572,292
6,955,827
848,145
2,072,814
3,164,070
13,331,939
6,085,029
If the Company decides to relinquish certain exploration tenements and/or does not meet these
obligations, assets recognised in the statement of financial position may require review to determine
the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third
parties will reduce or extinguish these obligations.
ANNUAL REPORT 2022
Page 66 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial Risk Management
Overview
The Company has exposure to the following risks from their use of financial instruments:
Interest rate risk
•
• Credit risk
• Foreign currency risk
• Commodity risk
• Liquidity risk
• Market risk
This note presents information about the Company’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework.
Risk management policies are established to identify and analyse the risks faced by the Company, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s
activities.
The Board oversees how management monitors compliance with the Company’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced by the Company.
ANNUAL REPORT 2022
Page 67 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
The Company’s principal financial instruments are tabled below:
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Non-current
Financial assets at fair value through OCI
Financial liabilities
Current
Trade and other payables
Lease liabilities
Non-current
Lease liabilities
Interest rate risk
2022
$
2021
$
2,817,825
463,412
3,281,237
5,850,997
353,802
6,204,799
304,549
304,549
1,364,380
1,364,380
1,061,302
121,481
1,182,783
1,624,958
108,299
1,733,257
140,855
140,855
187,594
187,594
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from
fluctuations in interest bearing financial assets and liabilities that the Company uses.
Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid
assets. It is the Company’s policy to settle trade payables within the credit terms allowed and therefore
not incur interest on overdue balances.
ANNUAL REPORT 2022
Page 68 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
The following table sets out the carrying amount, by maturity, of the financial instruments that are
exposed to interest rate risk:
Floating
interest
rate
$
Fixed interest rate maturing in
Over 1 to
5 years
$
More than
5 years
$
1 year or
less
$
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Weighted average interest rate
Financial liabilities
Trade and other payables
Lease liabilities
Weighted average interest rate
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Weighted average interest rate
-
Financial liabilities
Trade and other payables
Lease liabilities
Weighted average interest rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,550,000
-
1,550,000
0.36%
-
-
-
-
5,050,000
-
5,050,000
0.56%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-
interest
bearing
$
Total
$
1,267,825
463,412
1,731,237
2,817,825
463,412
3,281,237
-
-
1,061,302
262,336
1,323,638
1,061,302
262,336
1,323,638
-
-
800,897
353,802
1,154,699
5,850,997
353,802
6,204,799
-
-
1,624,958
295,893
1,920,851
1,624,958
295,893
1,920,851
-
-
ANNUAL REPORT 2022
Page 69 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
Sensitivity analysis for interest rate exposure
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below:
Impact on profit/(loss) and equity
Increase of 100 basis points
Decrease of 100 basis points
Credit risk
2022
$
43,482
(43,482)
2021
$
48,092
(48,092)
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Company’s receivables
from customers and investment securities. The Company trades only with recognised, creditworthy third
parties. It is the Company policy that all customers who wish to trade on credit terms are subject to
credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with
the result that the Company’s exposure to bad debts is not significant. The maximum exposure to credit
risk is the carrying value of the receivable, net of any provision for doubtful debts.
With respect to credit risk arising from the other financial assets of the Company, which comprise cash
and cash equivalents, the Company’s exposure to credit risk arises from default of the counter party,
with a maximum exposure equal to the carrying amount of these instruments. This risk is minimised by
reviewing term deposit accounts from time to time with approved banks of a sufficient credit rating
which is -AA and above.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date is tabled below.
Trade and other receivables
Foreign currency risk
2022
$
463,412
463,412
2021
$
353,802
353,802
The Company’s exposure to foreign currency risk is minimal at this stage of its operations.
Commodity price risk
The Company’s exposure to commodity price risk is minimal at this stage of its operations.
ANNUAL REPORT 2022
Page 70 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall
due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company’s reputation.
The Company’s objective is to maintain a balance between continuity of funding and flexibility. The
following are the contractual maturities of financial liabilities:
2022
Trade and other payables
Lease liabilities
2021
Trade and other payables
Lease liabilities
Less than
6 months
$
Total contractual
cash flows
$
Carrying
amount
$
1,061,302
58,866
1,061,302
262,336
1,061,302
262,336
1,120,168
1,323,638
1,323,638
1,624,958
1,624,958
1,624,958
56,284
295,893
295,893
1,681,242
1,920,851
1,920,851
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial
liabilities of the Company is equal to their carrying value.
Market risk
Price risk
The Company’s exposure to equity securities price risk arises from investments held by the Company
and classified in the Statement of Financial Position as either derivative financial instruments, or financial
assets at FVOCI.
Sensitivity analysis for price risk
A change of 10% in the price of securities held at reporting date on the Company’s equity and/or profit
or loss by is shown below:
Impact on profit/(loss) and equity
Increase of 10%
Decrease of 10%
2022
$
30,454
(30,454)
2021
$
136,438
(136,438)
ANNUAL REPORT 2022
Page 71 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial
liabilities of the Company is equal to their carrying value.
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the Consolidated Statement of Financial
Position are grouped into three levels of a fair value hierarchy. The three levels are defined based on
the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
• Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at
fair value on a recurring basis at 30 June 2022 and 30 June 2021:
Level 1
$
Level 2
$
Level 3
$
Total
$
304,549
304,549
1,364,380
1,364,380
-
-
-
-
-
-
-
-
304,549
304,549
1,364,380
1,364,380
30 June 2022
Financial assets at FVOCI
30 June 2021
Financial assets at FVOCI
Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern in order to provide returns for shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce the cost of capital. The management of the
Company’s capital is performed by the Board.
The capital structure of the Company consists of net debt (trade and other payables and provisions
detailed in Notes 12 and 13 (offset by cash and bank balances) and equity of the Company (comprising
contributed equity and reserves, offset by accumulated losses detailed in Notes 15, 16 and 17).
The Company is not subject to any externally imposed capital requirements.
ANNUAL REPORT 2022
Page 72 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: SHARE-BASED PAYMENTS
Incentive Option Plan
The Company has an Incentive Option Plan (“IOP”) for executives and employees of the Company. In
accordance with the provisions of the IOP, executives and employees may be granted options at the
discretion of the Directors.
Each share option converts into one ordinary share of Kalamazoo Resources Limited on exercise. No
amounts are paid or are payable by the recipient on receipt of the option. The options carry neither
rights of dividends nor voting rights. Options may be exercised at any time from the date of vesting to
the date of their expiry.
Options issued to Directors are subject to approval by shareholders.
The following share-based payment arrangements were in existence during the reporting period:
Option
series
G (1)
H (1)
K
L
M
O (2)
P
Number
Grant date
Expiry date
Vesting date Exercise price
1,900,000
7,000,000
2,000,000
1,500,000
6,000,000
1,750,000
1,500,000
17 Jul 2018
14 Nov 2018
23 Sep 2019
15 Oct 2019
13 Nov 2019
25 Sep 2020
9 Mar 2021
30 Nov 2021
30 Nov 2021
30 Nov 2022
30 Nov 2022
30 Nov 2022
30 Nov 2023
15 Mar 2024
Immediate
Immediate
Immediate
Immediate
Immediate
Immediate
Immediate
$0.25
$0.25
$0.42
$0.42
$0.42
$0.69
$0.455
Fair value at
grant date
$0.057320
$0.054570
$0.1673
$0.1348
$0.1656
$0.3803
$0.2313
(1) These options were exercised during the year.
(2) 350,000 of these options lapsed during the year.
Fair value of share options granted during the year
No options were issued to executives or employees during the year.
ANNUAL REPORT 2022
Page 73 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: SHARE-BASED PAYMENTS (Continued)
Movements in share options during the year
Movement in the number of share options held by Directors and employees:
2022
2021
Number of
options
Weighted
average
exercise price
$
Number of
options
Weighted
average
exercise price
$
Outstanding at the beginning of the year
21,650,000
0.419
20,200,000
Granted and vested during the year
-
-
3,250,000
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
(8,900,000)
(350,000)
12,400,000
12,400,000
0.250
1.040
0.523
0.523
(1,800,000)
-
21,650,000
21,650,000
0.330
0.878
0.250
-
0.419
0.419
The weighted average remaining contractual life of share options outstanding at the end of the year
was 2.69 years (2021: 2.18 years).
Share options outstanding at the end of the year
Share options issued and outstanding at the end of the year have the following exercise prices:
Expiry date
30 November 2021
10 July 2021
24 August 2021
30 November 2022
30 November 2023
15 March 2024
Totals
Exercise price
$
0.25
0.30
0.80
0.42
1.04
0.69
2022
Number
-
-
-
9,500,000
1,400,000
1,500,000
12,400,000
2021
Number
8,900,000
2,000,000
20,000,000
9,500,000
1,750,000
1,500,000
43,650,000
ANNUAL REPORT 2022
Page 74 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 25: RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period
Non-cash flows in profit/(loss):
- Depreciation
- Exploration expenditure written off
- Share-based remuneration
- Government grants
- Gain on disposal of 50% interest in EL007112
- Finance income
Changes in assets and liabilities:
- Decrease/(Increase) in trade receivables
- Decrease/(Increase) in other current assets
- Increase/(Decrease) in trade and other payables
- Increase/(Decrease) in provisions
- Increase/(Decrease) in other non-current assets
2022
$
2021
$
(1,385,254)
(445,828)
223,063
28,493
-
-
-
-
(22,790)
(2,210)
(5,685)
58,297
-
206,264
90,754
1,012,475
(49,264)
(1,921,192)
(114,793)
-
20,778
144,032
35,857
(15,000)
Net cash used in operating activities
(1,106,086)
(1,035,917)
Non-cash investing and financing activities
There were no non-cash investing and financing activities during the year.
ANNUAL REPORT 2022
Page 75 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 26: RELATED PARTY DISCLOSURE
a) Parent entity
Kalamazoo Resources Limited
b) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Class
Country of
incorporation
Ordinary
Australia
2022
$
651,231
4,500
655,731
2021
$
656,488
6,840
663,328
Detailed remuneration disclosures are provided in the Remuneration Report on pages 33 to 40.
NOTE 27: SUBSIDIARIES
Details of the Company’s subsidiary are as follows:
Entity
Kali Metals Pty Ltd
Country of
Incorporation
Australia
2022
100%
2021
-
Principal Activities
Mineral exploration
Equity Interest
Kali Metals Pty Ltd was incorporated on 31 August 2021 and has share capital consisting solely of
ordinary shares that are held directly by Kalamazoo.
ANNUAL REPORT 2022
Page 76 of 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 28: PARENT ENTITY DISCLOSURE
FINANCIAL PERFORMANCE
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
ASSETS
Current assets
Other current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Option reserve
Financial asset reserve
Accumulated losses
TOTAL EQUITY
2022
$
2021
$
(1,385,254)
(1,059,831)
(445,828)
(665,788)
(2,445,085)
(1,111,616)
3,365,803
17,204,171
6,277,155
13,672,861
20,569,974
19,950,016
1,297,127
154,845
1,803,294
187,594
1,451,972
1,990,888
19,118,002
17,959,128
28,219,212
2,409,770
(1,725,619)
(9,785,361)
24,016,755
3,141,373
(665,788)
(8,533,212)
19,118,002
17,959,128
ANNUAL REPORT 2022
Page 77 of 85
DIRECTORS’ DECLARATION
The Directors of Kalamazoo Resources Limited declare that:
1)
in the Directors’ opinion, the financial statements and notes set out on pages 43 to 77 and the
Remuneration Report in the Director’s Report are in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the Company’s financial position as at 30 June 2022 and of its
performance, for the financial year ended on that date; and
b) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), Corporations Regulations 2001 and mandatory professional reporting
requirements.
2)
3)
the financial statements also comply with International Financial Reporting Standards as disclosed
in Note 2; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
by the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022.
Signed in accordance with a resolution of the Directors.
Luke Reinehr
Chairman
Perth, Western Australia
21 September 2022
ANNUAL REPORT 2022
Page 78 of 85
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Independent Auditor’s Report
To the Members of Kalamazoo Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Kalamazoo Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
w
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets – Note 9
At 30 June 2022, the carrying value of exploration and
evaluation assets was $ 16.361 million.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group is required
to assess at each reporting date if there are any
triggers for impairment which may suggest the carrying
value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each area
of interest involves an element of management
judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
•
•
•
•
•
•
obtaining the management reconciliation of
capitalised exploration and evaluation expenditure
and agreeing to the general ledger;
reviewing management’s area of interest
considerations against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
− tracing projects to statutory registers, exploration
licenses and the Department of Mines website to
determine whether a right of tenure existed;
− enquiry of management regarding their
intentions to carry out exploration and evaluation
activity in the relevant exploration area, including
review of management’s budgeted expenditure;
− understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale;
assessing the accuracy of impairment recorded for
the year as it pertained to exploration interests;
evaluating the competence and capabilities of
management in the evaluation of potential
impairment triggers; and
assessing the appropriateness of the related
financial statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
Grant Thornton Australia Limited
80
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ 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 gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 33 to 40 of the Directors’ report for the year
ended 30 June 2022.
In our opinion, the Remuneration Report of Kalamazoo Resources Limited, for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 21 September 2022
Grant Thornton Australia Limited
81
ADDITIONAL SHAREHOLDER INFORMATION AS AT 16 SEPTEMBER 2022
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere
in this report is as follows.
1. DISTRIBUTION OF HOLDERS OF EQUITY SECURITIES
Analysis of number of equity security holders by size of holding:
Shares held
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Shareholders
184
905
445
811
118
2,463
The number of holders of less than a marketable parcel of ordinary fully paid shares is 545.
2. SUBSTANTIAL SHAREHOLDERS
Substantial shareholders (i.e. shareholders who hold 5% or more of the issued capital):
Shareholder
Doux Argent Pty Ltd
Beatons Creek Pty Ltd
2176423 Ontario Ltd
3. VOTING RIGHTS
a) Ordinary Shares
Number of shares
39,044,234
10,000,000
10,000,000
Percentage held
26.51
6.79
6.79
Each shareholder is entitled to receive notice of and attend and vote at general meetings of
the Company. At a general meeting, every shareholder present in person or by proxy,
representative of attorney will have one vote on a show of hands and on a poll, one vote for
each share held.
b) Options
No voting rights.
4. QUOTED SECURITIES ON ISSUE
The Company has 147,294,374 quoted shares on issue. No options on issue by the Company are
quoted.
5. ON-MARKET BUY BACK
There is no current on-market buy back.
ANNUAL REPORT 2022
Page 82 of 85
ADDITIONAL SHAREHOLDER INFORMATION
6. UNQUOTED EQUITY SECURITIES
Unlisted options (exercisable at)
$0.42 on or before 30 Nov 2022
$1.04 on or before 30 Nov 2023
$0.69 on or before 15 Mar 2024
$0.375 on or before 1 Sep 2025
Number
on issue
9,500,000
1,400,000
1,500,000
6,000,000
7. TWENTY LARGEST HOLDERS OF QUOTED ORDINARY SHARES
Shareholder
Mutual Trust Pty Ltd
Citicorp Nominees Pty Ltd
Beatons Creek Gold Pty Ltd
BNP Paribas Nominees Pty Ltd
Mr Luke Reinehr
HSBC Custody Nominees (Australia) Ltd
Tornado Nominees Pty Ltd
Wandle River Pty Ltd
Mr Luke Reinehr (Reinehr Super Fund)
Mrs Terina Adams
Whale Watch Holdings Ltd
Calama Holdings Pty Ltd
Merrill Lynch (Australia) Nominees Pty Ltd
Mr Rupert James Graham Lowe
Mr Alan Conigrave
Mr Jonathan Ian Langton & Mrs Kerry Anne Langton
Mr Terence McMahon & Mrs Beverly Ann Mc Mahon
Elpacha Pty Ltd
Cleancare Nominees Pty Ltd
Mr Langtree Eric Chistopher Coppin
Total
Number of
shares
40,521,721
14,782,554
10,000,000
7,503,613
3,409,837
3,260,065
2,261,905
1,602,000
1,521,409
1,000,000
957,884
898,399
890,802
850,862
700,000
700,000
700,000
633,840
600,000
588,235
93,383,126
Number of holders
8
6
1
1
Percentage
held
27.51
10.04
6.79
5.09
2.30
2.21
1.54
1.09
1.03
0.68
0.65
0.61
0.60
0.58
0.48
0.48
0.48
0.43
0.41
0.40
63.40
ANNUAL REPORT 2022
Page 83 of 85
TENEMENT SCHEDULE
Project/Tenement
Location
Status
Interest
Notes
Mallina Project
E47/2983
E47/4342
E47/4489
E47/4490
E47/4491
Pear Creek Project
E45/3856-I
E45/4616-I
E45/5813
DOM’s Hill Project
E45/4722
E45/4887
E45/4919
E45/5146
E45/5934
E45/5935
E45/5943
Marble Bar Project
E45/4700
E45/4724
E45/5970
Snake Well North Project
E59/2580
Ashburton Project
E52/1941
E52/3024
E52/3025
M52/639
M52/640
M52/734
M52/735
ELA52/4052
Castlemaine Project
EL006679
EL006752
EL007112
Tarnagulla Project
EL006780
South Muckleford Project
EL006959
EL007021
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Victoria
Victoria
Victoria
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Granted
Granted
Granted
Granted
Granted
Granted
1
2
3
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
50%
100%
100%
100%
ANNUAL REPORT 2022
Page 84 of 85
ADDITIONAL SHAREHOLDER INFORMATION
Location
Victoria
Victoria
Victoria
Victoria
Project/Tenement
Myrtle Project
EL007323
Tallangatta Project
EL007784
EL007786
EL007787
Queens Birthday Project
EL007938
Mount Piper Project
EL006775
EL007331
EL007337
EL007366
EL007380
ELA007481
EL007787
Jingellic Project
EL9403
Status
Interest
Notes
Granted
100%
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Application
-
-
-
-
100%
100%
100%
100%
100%
100%
-
100%
New South Wales
Granted
Notes:
1. 80% interest minerals other than lithium.
2. 100% interest minerals other than lithium.
3. 50% interest held by Rocklea Gold Pty Ltd (a subsidiary of Novo Resources Corp.)
ANNUAL REPORT 2022
Page 85 of 85