Kindred Biosciences Inc Annual Report 2014

Plain-text annual report

2014 Annual Report ASX Code: KIN Contents Chairman's Letter Review of Operations Corporate Information Directors’ Report Corporate Governance Statement Auditor’s Independence Declaration Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Additional Securities Exchange Information 1 2 19 20 29 32 33 34 35 36 37 53 54 56 Chairman’s Letter Dear Shareholder, ASX Code: KIN KIN Mining floated on the Australian Securities Exchange in October last year, bringing to market an exceptional portfolio of highly prospective gold exploration properties in the Leonora region – one of Western Australia’s most prolific gold-producing regions. While the Company has already delivered some very encouraging results from a number of prospects within this portfolio, we quickly recognised that, in order to build a gold business of scale and substance, we needed to aggressively search for and acquire an advanced project which could fast-track our transition to production. From our team’s deep knowledge and understanding of this area, we identified the truly extraordinary opportunity presented by the Leonora Gold Project – which is without doubt one of the largest and most attractive undeveloped gold projects in Australia. Significant planning and development work has already been completed at all of these deposits, including pit optimisation studies for each of the key deposits and metallurgical test work which returned 95% plus recoveries. A Pre-Feasibility Study was completed in 2009 by the previous owner, Navigator Resources Ltd, for 97% of these ounces, confirming an economically viable project. The remarkable feature of this project is that none of the key deposits have ever been drilled to target their depth potential, yet we know that several other deposits in the region extend to significant depths. This is a huge opportunity for our exploration team moving forward. It is fair to say that such an extraordinary opportunity would not have become available except for the fact that the gold market – and the junior resource sector generally – is currently at a historically low point in the investment cycle. It is for this reason that we moved quickly and decisively to conclude an agreement with the Administrator of Navigator Resources Ltd to acquire this project, notwithstanding the current negative sentiment in the gold sector. The purchase price represents an acquisition cost of approximately $3.60 per resource ounce, which is well below what it would cost to define such ounces if we were fortunate to make such a discovery. This compares with an independent valuation by Optiro Pty Ltd which equates to a valuation of $11.30 per resource ounce. Good assets are nothing without the right team of people in place with the passion, focus, experience and ability to unlock their value. From all the companies I’ve been involved with, I can tell you that KIN Mining brings together a board and senior management team with a depth of experience and capability for junior start-up gold company which, in my 35 -year career in the global mining and exploration industry, I have rarely seen. Most importantly, our overarching objective is to deliver value for our shareholders – through capital growth. We have a clear strategy to grow a substantial Australian gold group. Our management team is not of the “steady as she goes” variety. Rather, they comprise a unique group of individuals who have worked for many years in the Leonora region – doing the “hard yards” through some of the toughest times the industry has ever seen, often without pay. This team has identified what they believe to be some exceptional opportunities and are moving quickly to seize and capitalise on the existing highly prospective assets. We are all determined and committed to make this work and our ultimate goal is to achieve gold production and substantial shareholder returns. Yours faithfully, Terry Grammer Chairman 1 ASX Code: KIN Review of Operations Murrin Murrin During the year three Reverse Circulation (RC) drilling campaigns were conducted at Murrin Murrin (P39/5179) for an advance of 2,909m. The drill programmes intercepted supergene and primary gold intersections. The down hole geology displayed quartz veining, occasionally carbonated, in mafic gabbro associated with regional thrust faults. Sulphides, dominantly pyrite, are associated with the host rock and low percentages of sulphides were observed with the quartz veining. The most significant primary gold intersection (MM13RC013) is positioned beneath weathered clayey regolith (35-40m deep) in an area of no outcrop; however the unit is interpreted to strike north-easterly and dip south easterly. Best assay results (>1g/t Au) are tabulated below. Significant intersections include:       MM13RC013 - 31m @ 4.29 g/t Au (64-95m) including 2m @ 34.23g/t Au (87-89m) MM14RC022 - 23m @ 1.00 g/t Au (13-36m) MM14RC021 - 11m @ 2.56 g/t Au (20-31m) MM14RC023 - 4m @ 4.62 g/t Au (84-88m) MM14RC027 - 10m @ 1.31 g/t Au (30-40m) MM14RC028 - 9m @ 1.90 g/t Au (33-42m) The drilling of the scissor hole MM14RC023, was aimed at following up on previous significant intersections including the high grade intersection encountered in MM13RC013, which returned 2m @ 34.23g/t Au from 87m down-hole. Figure 1: Murrin Murrin Eastern Gabbro Prospect (P39/5179) annotated drill hole location plan displaying down hole gold intercepts 2 Drill hole MM14RC023 intersected a mineralised ore zone, interpreted to represent the high grade shoot encountered in MM13RC013; however the geometry and orientation of the mineralised envelope intersected in MM13RC017 and MM13RC013 has not yet been fully determined. Originally, 4m composite samples were collected and assayed; results considered anomalous were analysed via fire assay at 1m intervals. All RC drill samples, including re-splits at one metre intervals, have been received from the Murrin Murrin Eastern Gabbro Prospect (P39/5179). ASX Code: KIN Table 1 - TABLE of DRILLING RESULTS – Significant RC drill Intersections (>1g/t Au) Drill Hole ID Drill Type Easting Northing Total RL Dip Azim From To Width Au GDA 94 zone 51 Depth (nominal) (m) (m) (m) (ppm) MM13RC002 MM13RC003 MM13RC005 MM13RC006 MM13RC007 MM13RC008 MM13RC009 MM13RC010 MM13RC011 MM13RC013 RC RC RC RC RC RC RC RC RC RC 385495 385525 385465 385495 385525 385495 385525 385495 385525 385605 6800150 6800150 including 6800130 6800130 including 6800130 6800170 6800170 6800110 6800110 6800210 including 60 102 60 60 80 66 102 60 60 130 420 420 420 420 420 420 420 420 420 424 -60 -60 -60 -60 -60 -60 -60 -60 -60 -60 270 270 270 270 270 270 270 270 270 270 MM13RC017 RC 385565 6800190 80 423 -60 270 including MM14RC019 RC 385649 6800214 170 420 -58 266 MM14RC021 MM14RC022 MM14RC023 MM14RC027 MM14RC028 RC RC RC RC RC 385467 385503 385527 385463 385500 including 6800078 6800080 including 6800214 6800065 6800059 87 128 180 84 126 420 420 240 240 240 -60 -60 -60 -60 -60 267 267 087 267 267 19 85 85 44 13 15 23 47 14 55 7 1 64 87 4 12 12 15 29 20 13 22 84 30 33 4m composite samples, Acid digest – 1m intervals, Fire Assay 50g charge 20 89 86 46 20 18 24 48 16 56 9 4 95 89 36 20 18 17 30 31 36 28 88 40 42 1 4 1 2 7 3 1 1 2 1 2 3 31 2 32 8 6 2 1 11 23 6 4 10 9 1.38 1.07 2.73 1.60 1.42 2.88 2.23 1.32 2.12 1.71 2.92 1.34 4.29 34.23 1.29 3.75 1.60 4.17 4.05 2.56 1.0 2.04 4.62 1.31 1.90 3 ASX Code: KIN Iron King Four RC drill holes were drilled at Iron King for an advance of 370m. The holes targeted three separate gold prospects (the Reeds United, Crystal Ridge and Blue Spec Prospects). Several anomalous results (>0.2g/t Au) were returned from Crystal Ridge with a best result of 1m @ 1.64g/t Au from 29m in hole XR14RC001 (see Table 2). Five new contiguous Prospecting Licences have been granted at Iron King, one of the prospects, following reconnaissance sam- pling, the“32 Prospect” returned a peak rock chip assay of 25.2g/t Au. The Reeds United workings are located between Iron King and Crystal Ridge, and have returned rock chips assaying over 20 g/t Au from old workings spoils and mullock dumps, 14.97g/t Au from a nearby shallow prospecting pit and 3.89g/t Au from a cos- tean immediately west of the Iron King open cut were obtained during recent rock chip sampling (Figure 4). The anomalous assay locations at Reeds United were tested with RC drilling in February 2014. No significant assay results were returned from the drill programme. The Crystal Ridge area has been explored by several companies in the past (Dominion, Jubilee, Forsayth and Dakota), with a small gold deposit being defined. The mineralisation remains open down dip and along strike. A small amount of additional drilling is required to assess the potential of the prospect. The initial RC drill programme was terminated early due to the results of the first RC drill hole Within the Iron King project area there are several targets that warrant additional exploratory work. Planning for some of these has been completed, while for the majority, detailed planning is yet to be completed. The location presents drill and soil sampling target areas particularly on the new ground. Table 2 - Table of Iron King RC Drilling at Blue Spec & Crystal Ridge and Reeds United (Significant Intersections) Drill Hole Project Site Easting Northing Total RL Dip Azimuth From To Width Au ID Area Type GDA 94 Zone 51 Depth (nominal) degrees degrees (m) (m) (m) (ppm) BS14RC001 Iron King XR14RC001 Iron King RC RC 311049 6843171 88 313134 6843398 130 419 456 -60 -60 315 183 No Significant Assays 29 33 39 61 81 99 109 30 35 40 64 82 100 111 1 2 1 3 1 1 2 1.64 0.56 0.54 0.35 0.88 0.42 0.30 RU14RC001 Iron King RU14RC002 Iron King RC RC 312790 6842775 313034 6842825 75 75 436 444 -60 -60 161 153 No Significant Assays 25 27 2 0.72 4 ASX Code: KIN Leonora Gold Project Throughout the period Kin have been negotiating with the Deed Administrator of Navigator Resources Ltd to complete the acquisition of the Leonora Gold Project (LGP). Located 15km to 40km north-east of Leonora, the LGP comprises an extensive well-endowed and prospective tenement package covering an area of 308km2 (Figure 2). The LGP is located in the Eastern Goldfields Province of WA in a district that hosts several (+3Moz) gold deposits. The current Indicated and Inferred Gold Resource, as reported by Navigator in their June 2012 Quarterly Report, of 12.29Mt @ 1.9g/t Au for 745,000oz (JORC 2004) is contained within 19 separate gold deposits that occur within four project areas namely: Mertondale (395,000oz), Cardinia (199,000oz), Raeside (134,000oz) and Gambier Lass (17,000 oz). Navigator defined an additional 282,000oz of gold has been identified outside of and adjacent to the currently optimised pit shells. Figure 2: The Leonora Gold Project displaying gold resource locations and KIN’s current tenement package Despite the presence of several multi-million ounce gold deposits in the Leonora region, the depth potential of the LGP gold deposits remains largely untested. At the end of the financial year Kin were in a position to acquire the LGP for a total consideration of $2.7 million, equating to an acquisition cost of $2.63 per resource ounce of which a $200,000 deposit has already been paid. For an updated statement with respect to the transaction see KIN ASX announcement of the 21st October 2014. Over 70% of the resources are classified in the upper Indicated category and extensive mine planning and development work has already been finalised with pit optimisations completed for each of the key deposits. Pre-feasibility studies conducted by Navigator have been completed for the majority of the total Mineral Resource, demonstrating an economically viable project utilising low risk open pit development of near-surface, oxide ore with the flexibility of higher grade “starter pits” i.e. Bruno Lewis (Cardinia) and Tonto (Mertondale). Upon settlement, Kin plans to immediately re-evaluate the existing resources, determine the depth potential and upgrade the JORC 2004 resource to 2012 JORC compliance as soon as the acquisition of the LGP has been completed. 5 ASX Code: KIN Redcastle The Redcastle project is located NE of the historic Redcastle Mining Centre, 64km east of Leonora. Recent rock chip sampling (see Figure 4) at Redcastle returned two significance results, 4.64g/t Au and 2.69g/t Au, from copper-stained vein quartz at the Bellbird workings on P37/5105. An interpreted south easterly trending magnetic gabbro sill extends under cover from Bellbird into P39/5267, where the next highest gold value, 2.02g/t Au, was returned from the “White Shaft”. Both old workings are associated with a gabbro/tholeiitic volcanic contact on the eastern limb of the north plunging Redcastle Anticline. Historic drilling by Terrain Minerals in the vicinity of White Shaft gave a best intersection of 2 m @ 15.3 g/t Au which was never followed up. The recent purchase of the remaining equity in P39/4930 at Redcastle increases the company’s holding to 100% of the project. Mt Flora The Mt Flora Project is located 45km ENE of Leonora, the project area covers numerous historic gold workings associated with the intersection of the NNE trending Federation and Sligo Creek Faults with the WNW trending Randwick Fault. The project area is 7km NW off Glencore’s Murrin Murrin Ni-Co laterite mine and processing plant. Recent rock chip sampling at Mt Flora returned an extremely high grade gold result of 115.98g/t Au from an individual channel sample across the galena rich ore zone of an old historic shaft, this sample also assayed 50g/t Ag and 0.68% Pb (Figure 4). The working is 500m along strike from the high grade (>1oz/t Au) Spion Kop mine on P39/4619, which is associated with a swarm of NNE trending quartz veins interpreted to relate to the nearby Federation Fault on the eastern limb of the Mt Flora Syncline. Other significant results include 2.73g/t Au (mullock dump quartz) and 3.93g/t Au from (iron stained quartz veining) that are also associated with the NNE trending Federation Fault Zone. The Mt Flora Project covers a sequence of tightly folded NNE trending greenstones in contact with the large granitic Nambi Batholith to the north. The project area covers numerous alluvial gold detector patches and historic gold workings concentrated along narrow sulphidic quartz reefs. Historical drilling (20 angled RAB holes to 30m depth) with 4m composite sampling conducted by Sons of Gwalia Ltd (March 1988) on Kin’s recently granted P39/5463 returned best results of 4m @ 1.18g/t Au (24-28m) and 22m @ 0.53g/t Au (8-30m at EOH). The prospect presents as a walk-up drill target in an area that has only been previously tested to shallow depths. The project area remains under assessment with data base compilation, aeromagnetic structural interpretation and examination of historical gold workings (Figure 3). Randwick Randwick is situated on a major structural lineament, the Sandstone Mt Weld Lineament, between the Mertondale 1-4 Gold Mines and Mt Flora. The structure is considered to be an important structural control for gold mineralisation in the region, several major gold deposits in the Leonora-Laverton district occur along this craton scale tectonic feature including Mertondale, Granny Smith, Wallaby and Mt Morgan’s gold mines. Recent rock chip sampling of an old mullock dump at the Kauri Bore Prospect on P 39/8000 at Randwick returned assays of 4.16g/ Au and 0.89g/t Au (Figure 4). Randwick is a greenfields project that has been identified for its gold and base metal potential. 6 ASX Code: KIN Figure 3: Mt Flora Project Target Plan 7ASX Code: KIN Regional Rock Chip Sampling A rock chip sampling reconnaissance campaign was carried out during the period, which consisted of a total of 44 samples. The samples were taken from several of Kin’s project areas. Results were encouraging with a number of samples assaying >10 g/t Au. A full list of assay results is attached in Table 3. Table 3 - Table of Rock Chip sample results (Fire assay 50g charge) Sample Number KIN00074 KIN00075 KIN00076 KIN00077 KIN00078 KIN00079 KIN00080 KIN00081 KIN00082 KIN00083 KIN00084 KIN00085 KIN00086 KIN00087 KIN00088 KIN00089 KIN00090 KIN00091 KIN00092 KIN00093 KIN00094 KIN00095 KIN00096 KIN00097 KIN00098 KIN00099 KIN00100 KIN00101 KIN00102 KIN00103 KIN00104 KIN00105 KIN00106 KIN00107 KIN00108 KIN00109 KIN00110 KIN00111 KIN00112 KIN00113 KIN00114 KIN00115 KIN00116 KIN00117 Easting Northing GDA 94 (zone 51) 312273 312473 313446 397471 387715 311039 312790 312911 310924 313100 313100 313100 341342 341346 341358 341370 341370 341370 341384 341109 341109 384040 384038 385589 385589 385589 385590 385590 385589 310924 385448 312486 312486 312486 312486 312486 312536 312586 310923 310924 310956 310871 313435 313449 6842718 6842392 6842731 6796777 6801966 6843211 6843129 6843066 6842226 6843359 6843359 6843359 6775887 6775884 6775896 6775894 6775891 6775889 6775886 6776171 6776173 6819729 6819728 6800306 6800306 6800306 6800310 6800310 6800346 6842226 6800297 6842398 6842398 6842398 6842398 6842398 6842580 6842729 6842225 6842226 6842239 6842193 6842727 6842729 Project Area Iron King Iron King Iron King Redcastle Murrin Murrin Iron King Iron King Iron King Iron King Iron King Iron King Iron King Desdemona Desdemona Desdemona Desdemona Desdemona Desdemona Desdemona Desdemona Desdemona Mt Flora Mt Flora Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Murrin Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Iron King Tenement Number P37/7197 P37/7196 P37/7197 P39/5105 P39/4980 P37/7198 P37/7197 P37/7197 P37/8455 P37/7197 P37/7197 P37/7197 E40/283 E40/283 E40/283 E40/283 E40/283 E40/283 E40/283 E40/283 E40/283 P39/5183 P39/5183 ML39/279 ML39/279 ML39/279 ML39/279 ML39/279 ML39/279 ML39/279 ML39/279 P37/7196 P37/7196 P37/7196 P37/7196 P37/7196 P37/7196 P37/8455 P37/8455 P37/8455 P37/8455 P37/8455 P37/7197 P37/7197 Au (FA) ppm 3.65 37.20 9.21 12.40 0.05 1.34 2.06 2.27 9.66 0.01 0.02 0.01 0.48 0.20 1.28 1.59 0.09 9.14 0.23 0.58 0.25 0.05 4.19 0.03 0.03 15.40 2.65 5.34 3.89 10.20 4.65 3.66 4.92 4.17 0.84 14.90 0.07 1.14 1.91 4.03 17.00 1.84 2.47 25.20 8 ASX Code: KIN N Figure 4 - Plan of Kin tenements showing significant rock chips from recent sampling which assayed >1 g/t Au. 9 ASX Code: KIN Desdemona The Desdemona Project area overlies the western side of the Melita Greenstone Belt and the Mary Bore magnetic igneous complex in contact with the Raeside Granitic Batholith. The greenstone stratigraphy generally strikes north-south to northeast-southwest and is offset by several strike-slip faults. The Gwalia and Mt George Shear Zones form the margin between the granitoids (granite and granitic gneiss) to the west and the greenstones to the east (Figure 5). Figure 5 - Regional Geological Interpretation of the Desdemona Project highlighting target areas. 10 The project area overlies typical Archaean greenstones and meta-sediments intruded by sill-like bodies of mafic and ultramafic rocks. Mafic lavas, rhyolites and dacites predominate in the sequence, with dolerites and gabbros being the dominant intrusives. Historical drilling has shown that the contact between the base of an ultramafic unit and a rhyolitic footwall is highly prospective for Ni, Cu, PGEs and gold at the Kingfisher Prospect. In addition anomalous gold drill intercepts have been identified at a number of other places within the project area including Paradise North, Charcoal, Egret and the Gwalia Shear Zone (which encompasses the Annapurna, El Capitan, Gwalia South, Charcoal West and Anzac Prospects). ASX Code: KIN Kingfisher The prospect contains typical Archean volcanic assemblage intruded by sill-like bodies of basic and ultrabasic rock. Basic lavas and rhyoliThe prospect contains typical Archean volcanic assemblage intruded by sill-like bodies of basic and ultrabasic rock. Mafic volcanics and rhyolite to dacitic lavas and tuffs form most of the layered sequence and dolerites are the most abundant intrusives. The rocks form part of a large, open syncline with a northeasterly trending axis. Figure 6 - Cross section at Kingfisher highlighting a strong secondary nickel, copper, PGE enrichment zone at the weathering interface and the lack of drilling down dip along prospective basal contact Historical drilling, conducted in the 1970’s and 1980’s, at the Kingfisher Project (M40/330) identified a brecciated basal ultramafic-rhyolite contact. Significant bedrock intersections have delineated a strong 450m long strike of nickel, copper and PGE enrichment at the peridotite/rhyolite basal contact (Figure 6). The largest sulphide segregation was intersected in HWDD2 and consisted of 0.9m of strongly mineralised rhyolite breccia. Angular fragments of rhyolite are separated by up to 10cm of sulphide minerals and the fragments themselves often contain sulphide veinlets. 11 ASX Code: KIN The magnetic signature at Kingfisher indicates that the interpreted basal ultramafic contact extends over a strike length of at least 1.4km; the depth extensions of this contact are unknown and have never been tested by drilling. The vast majority of historical drilling has focused on the shallow hanging wall (western side) of the ultramafic sequence. KIN’s geological team has identified an extensive zone of strong secondary Ni-Cu-Co-PGE surface enrichment at Kingfisher correlating with the historical basal contact ore grade nickel and copper sulphide intersections with associated platinum and palladium. Figure 7 - Plan of Kingfisher displaying the bulls-eye magnetic signature, significant historic drill- ing and geophysical station reference points, a first pass MLEM survey using 200m loops and 200/400m line spacing is proposed. 12 Annapurna ASX Code: KIN The newly applied contiguous tenement applications (PLA37/8500, PLA37/8504, ELA37/1201 and ELA37/1203) cover the southern strike extensions of the Gwalia Shear Zone, a highly prospective broad zone of ductile deformation. The tenements cover the ultramafic and mafic volcanic sequences that host the Sons of Gwalia mine (+7Moz). The same greenstone package also encompasses the granite-ultramafic contact along the Gwalia Shear Zone that hosts both Tower Hill (1 Moz) and the King of the Hills mines (1.8Moz production). Figure 8 - Simplified geological interpretation of the Desdemona Project, South of Leonora , highlighting the prospective granite greenstone contact that hosts the Tower Hill and Harbour Lights gold mines, the Gwalia mine sequence and Kin’s tenement applications. 13ASX Code: KIN Exploration conducted by Sons of Gwalia (1999) along the Gwalia Shear Zone, identified a continuous sheared mafic/ ultramafic ± felsic porphyry units and an overlying felsic volcanic/sedimentary sequence and historic RAB and RC drilling has returned several significant gold intersections. Previous RC drill intersections within the application area, on the Gwalia Shear Zone at the Annapurna Prospect, returned a best intersection of 4m @ 15.13 g/t Au (170-174m) including 1m @ 45.83g/t Au in quartz veining on the prospective granite- ultramafic contact. This geological setting is similar to that found at Tower Hill and Harbour Lights (Figure 8). The Annapurna Prospect presents as a priority drill target that warrants follow up drill investigation. Geological evaluation, interrogation and compilation of historic data remain ongoing. Paradise North The Paradise Prospects, which are located on tenements P37/8439 and E37/1156, are characterised by a grouping of ore grade intercepts in historic drill holes, positioned on the western margin of the Paradise Shear Zone (see Table 4). On the eastern margin of this shear zone, a gossanous mylonite unit crops out over a strike length of around 850 meters and dips around 35° to the east. Several historic prospecting pits and shafts were noted in this area. Rock chip sampling of these old workings by KIN personnel in October 2013 returned assays of up to 1.12g/t Au (see ASX announcement 24th December 2013) and has identified the area as worthy of further investigation. Table 4 - Historic drill intersections > 0.5 g/t Au from the Paradise Shear Zone Hole ID Easting Northing Depth CWC781 339231 6791014 171 Dip -60° Azi 266° CWA728 339272 6790867 78 -90° vertical CWA757 339131 6791007 66 -90° vertical Interval 3m @ 0.60 g/t Au from 99m including 2m @ 1.04 g/t Au 3m @ 13.3 g/t Au from 42m and 3m @ 0.63 g/t Au from 51m 3m @ 4.40 g/t Au from 30m and 12m @ 2.04 g/t Au from 48m MEA394 339352 6789770 MER432 339273 6790165 36 29 MEC448 339441 6789794 151 -90° -90° -60° vertical vertical 275.75 6m @ 1.34 g/t Au from 21m 3m @ 0.54 g/t Au from 21m 4m @ 0.60 g/t Au from 63m Note: All co-ordinates are in the original AMG 94 (zone 51) format The Paradise North Prospect covers an area of extensive gold anomalism associated with a north-east trending aeromagnetic lineament parallel to the Butchers Flat Shear. In the northern part of the anomalous zone, gold mineralisation is hosted by quartz-sericite schist containing quartz-limonite-pyrite veins. In the southern part of the anomaly, chlorite-sericite-quartz schists constitute the host rock lithology. Potassic and carbonate alteration is associated with the gold anomalism. Previous aircore drilling defined a zone of supergene gold mineralisation, including a best historic gold intersection (Sons of Gwalia Ltd aircore drill program 1999) of 12m @ 3.57 g/t Au including 3m @ 13.3g/t Au from 42m in CWA728. Historical drilling around CWA728 is limited to two RC holes for 319m that are reported to be of low grade. Drilling was carried out on 150m line spacing’s north and south of the significant intersection in CWA728. Kin believes that there is scope to identify the source of the high-grade supergene gold enrichment. Geological analysis is planned over the coming months to further investigate the prospective host rock within the interpreted shear zone and to delineate future drill targets. 14 ASX Code: KIN Gwalia Shear Zone The Gwalia Shear Zone also encompasses the Gwalia South, Charcoal West and Anzac Prospects. The prospects lie within a package of sheared mafic and ultramafic rocks and sediments marginal to the Raeside Granitic Batholith. Gold anomalism is associated with the Gwalia Shear Zone (GSZ) along the granite-greenstone contact. Historical aircore drilling has intersected ultramafic schist, basalt and granite lithologies under approximately 20m of transported cover. This surficial cover deepens to the south and west, in places being more than 100m thick. Weak biotite, sericite and carbonate alteration has been encountered in previous drilling. A north-south trending chert near the base of this sequence forms a prominent ridge in the northern part of the project area and marks the Mt George/Gwalia Shear Zones. Gwalia South The Gwalia South Prospect has been under evaluation; data compilation is ongoing with a large portion of drill assays on E37/1152 and E40/283 still in the original paper format. This area is of particular interest as it is positioned along strike from the Tower Hill and Sons of Gwalia Gold mines. Multiple significant (>0.1 g/t Au) historical drill intercepts occur over a strike length of 5km under cover along or close to the interpreted position of the Gwalia Shear Zone (Table 5). A preliminary review indicates further work is required. Completion of data into digital format is of high priority to gain a better understanding of future drill targets. Table 5 - Historic drill intersections > 0.1 g/t Au from the Gwalia South Area A Report Hole ID Easting Northing Depth 42634 54364 54364 54364 54364 54364 57008 57008 57008 60246 60246 60246 60246 60246 60246 MBA135 336035 6789407 MBA151 335308 6789618 MBA158 335807 6789657 MBA180 336323 6790100 MBA195 336198 6790482 MBA197 336397 6790499 MBA310 334425 6787150 MBA299 335696 6787648 MBA403 336182 6790677 MBA419 335977 6790572 MBA442 336319 6790705 MBA422 336277 6790594 MBA441 336220 6790690 52 61 57 96 34 44 94 90 42 29 55 60 43 MBA453 MBC456 336225 336308 6790593 6790697 43 147 Dip -60° -90° -90° -90° -90° -90° -90° -90° -90° -90° -90° -90° -90° -90° -60° Azim 266° 360° 360° 360° 360° 360° 360° 360° 360° 360° 360° 360° 360° 360° 266° Interval Tenement 2m @ 0.12 g/t Au (50m to EOH) E37/1152 4m @ 0.22 g/t Au (57m to EOH) including 1m @ 0.56 g/t Au E37/1152 3m @ 0.43 g/t Au from 24m E37/1152 6m @ 0.31 g/t Au from 69m 7m @ 0.53 g/t Au (27m to EOH) including 2m @ 0.91 g/t Au 3m @ 0.11 g/t Au from 30m 6m @ 0.62 g/t Au from 54m including 3m @ 1.11 g/t Au 3m @ 0.15 g/t Au from 78m 6m @ 0.13 g/t Au from 30m E40/283 E40/283 E40/283 E40/320 E37/1152 E40/283 2m @ 0.19 g/t Au (27m to EOH) E/371152 3m @ 0.20 g/t Au from 39m 3m @ 0.63 g/t Au from 51m 3m @ 0.52 g/t Au from 33m 5m @ 0.22 g/t Au from 36m 12m @ 0.22 g/t Au from 43m including 1m @ 0.83 g/t Au and 4m @ 0.25 g/t Au from 89m including 1m @ 0.61 g/t Au E40/283 E40/283 E40/283 E40/283 E40/283 15 ASX Code: KIN Anzac RC Drilling (hole numbers DS13RC001-DS13RC035) was carried out at the Anzac Prospect on E40/283 in November 2013 for an advance of 2,490 m. Although all but one assay returned low tenor gold results, the drilling intersected a sequence of strongly deformed, often highly sulphidic (pyrite and pyrrhotite) mafic to felsic volcanics where previous mapping had depicted granitic rocks. The drill program targeted an historic Induced Polarisation (IP) anomaly, which could be explained by the amount of sulphides encountered. The vast majority of assays returned values <0.01g/t Au. Drill hole DS13RC027 positioned at the most north western extent of the drilling grid returned an anomalous re-split assay of 1m @ 1.12g/t Au (from 89-90m) at the end of the hole. This drill hole also returned anomalous silver from 16m to the end of the hole (>0.6g/t Ag) peaking at 4.70g/t Ag (88-90m) and 3.10g/t Ag (84-88m). The results may represent the edge of a mineralisation halo coincident with the eastern edge and the southern extensions of the regional Gwalia Shear Zone to the west. This highly prospective structure extends into KIN’s E40/323 granted on the 13 th December 2013 and represents a target for further drilling. As well as gold, the Anzac Prospect is also considered prospective for volcanic hosted massive base metal sulphide (VMS) deposits. Pelican Drilling at the Pelican Prospect (E40/283) was completed during the period with 3 RC holes drilled for a total of 404m. Aqua regia assay results have been previously announced (20/03/2014), and fire assays of selected intervals are presented in the attached table 6. PL14RC003 reported several intervals with anomalous gold assays, with a best result of 3m @ 1.04 g/t Au from 109m. Table 6 – RC Drill intersections > 0.2 g/t Au from the Pelican Prospect Drill Hole Project Site Easting Northing Total RL Dip Azimuth From To Width Au ID Area Type GDA 94 Zone 51 Depth (nominal) degrees degrees (m) (m) (m) (ppm) PL14RC001 Desdemona RC 340265 6779215 150 PL14RC002 Desdemona RC 339799 6778901 100 PL14RC003 Desdemona RC 339943 6779059 154 358 374 376 -60 -60 -60 270 270 270 No Significant Assays 25 32 35 39 60 69 26 33 36 40 62 71 104 105 109 112 116 117 128 129 1 1 1 1 2 2 1 3 1 1 0.2 0.29 0.21 0.21 0.37 0.82 0.38 1.04 0.27 0.71 Mary Bore An RC drilling programme has been completed at the Mary Bore Prospect (E40/320), located within Kin’s Desdemona Project area. This was co-funded in conjunction with the WA Department of Mines and Petroleum (DMP) as part of the Royalties for Regions Exploration incentive scheme. Under the scheme, half of all drilling costs are matched by the Department. The programme is complete and funds have been reimbursed to Kin. 16 ASX Code: KIN During April 2014, four RC holes (MB14RC001-004) were drilled at Mary Bore. The prospect area covers a distinct, elliptical aeromagnetic anomaly under soil cover that had never been previously drill tested (Figure 9). Initially this was considered by Kin to be a possible mafic-ultramafic complex prospective for nickel; however Kin’s drilling has shown this magnetic anomaly to be related to quartz-feldspar-magnetite-hornblende granite. The 7.5km by 5km intrusive feature has been named the Mary Bore magnetic igneous complex. The drilling programme was primarily designed to investigate and define the rock type responsible for the strong magnetic anomaly and also test structural lineaments within it for shear-related gold mineralisation. Drill hole MB14RC001 was drilled vertically to 250m; the remaining holes were orientated west (-60°) and were drilled to depths of 144m to 150m. No significant gold or base metals were encountered in the drilling except for slightly elevated composite silver intersections:-   MB14RC003 4m @ 1.31g/t Ag (60-64m) MB14RC004 5m @ 0.45g/t Ag (115-120m) Figure 9 - Mary Bore Geological Interpretation, Displaying drill hole locations 17ASX Code: KIN Competent Persons Statement The information in this report relates to Exploration Results based on information compiled by Paul Maher who is a member of the AusIMM and an employee of the company and fairly represents this information. Mr Maher has sufficient experience of relevance to the styles of mineralisation and the types of deposit under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 edition of the JORC Australian code for reporting of Exploration Results, Mineral Resources and Ore Reserves. The Leonora Gold Project reserve and resource information has not been updated to comply with the JORC 2012 Code on the basis that the information has not materially changed since it was last reported. Historic exploration results reported in this document were originally obtained by other companies and sourced from open file WAMEX reports; they have not been independently verified. The original samples are no longer available; assay methodologies vary and have not been subject to current QA/QC protocols. Further details regarding historic drill results can be found on Kin ASX announcements that were reported during the September Quarter. Mr Maher consents to the inclusion in the report of the matters based on information in the form and context in which it appears. 18 CORPORATE INFORMATION Kin Mining NL ABN 30 150 597 541 Directors Terry Grammer Trevor Dixon Marvyn (Fritz) Fitton Giuseppe (Joe) Graziano Company secretary Giuseppe (Joe) Graziano Registered office Ground Floor 342 Scarborough Beach Road OSBORNE PARK WA 6017 Principal place of business Ground Floor 342 Scarborough Beach Road OSBORNE PARK WA 6017 Tel: (08) 9242 2227 Share register Advanced Share Registry PO Box 1156 NEDLANDS WA 6909 Tel: (08) 9389 8033 Solicitors Thompson Downey Cooper Level 15/251 Adelaide Terrace PERTH WA 6000 Auditors HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000 Securities Exchange Listing Kin Mining NL shares are listed on the Australian Securities Exchange (ASX: KIN) 19Kin Mining NL DIRECTORS’ REPORT The directors of Kin Mining NL (“the Company”) submit herewith the annual financial report of the company for the financial year ended 30 June 2014. In order to comply with the provisions of the Corporations Act, the directors report as follows: Directors The names of the directors in office at any time during or since the end of the year are as follows. Directors were in office for the entire period unless otherwise stated. Terrence Ronald Grammer Trevor John Dixon o o o Marvyn (Fritz) John Fitton o Giuseppe (Joe) Paolo Graziano Terrence Ronald Grammer, Non-Executive Chairman Mr Grammer is a geologist with over 35 years’ experience in mining and mineral exploration with extensive experience in Australia, Africa, east Asia & New Zealand. He has been based in Western Australia since 1988 and has extensive professional experience in the exploration of gold, base metals and some industrial minerals. He was a founder and promoter of the successful nickel miner Western Areas NL in 1999, and was the exploration manager of the company from 2000 until retiring in 2004. Special Responsibilities: - Nil Directorships held in other listed companies in the past 3 years: - Fortis Mining Ltd - South Boulder Mines Ltd - Sirius Resources NL - Stratum Metals Ltd (Appointed February 2013) Mr Trevor John Dixon, Managing Director Mr Dixon is a businessman with over 25 years’ experience within the mining and exploration industry as an earthmoving contractor to the industry and as a private individual identifying prospective mineral areas and subsequently acquiring project areas of interest. He has been a founding vendor to a number of companies including Jubilee Mines NL (now Xstrata Plc), Terrain Minerals Ltd (ASX:TMX) and Regal Resources Ltd (ASX:RER). Special Responsibilities: - Nil Directorships held in other listed companies in the past 3 years: - Nil Marvyn (Fritz) John Fitton, Non-Executive Director Between 1969 and 1987, Mr Fitton worked as senior geologist for several international mining corporations, and was involved in several world class mineral discoveries. In 1987, Mr Fitton founded a Geological & Mining consulting firm Maprock Pty Ltd based in Perth WA. Since its formation, Maprock has been responsible for the preparation of numerous independent geological reports for inclusion in prospectuses for successful initial public offerings such as Jubilee Mines NL, Berkeley Resources Ltd, Trafford Resources Ltd, Athena Resources Ltd and Scotgold Resources Ltd. Special Responsibilities: - Nil Directorships held in other listed companies in the past 3 years: - Nil 20DIRECTORS’ REPORT (continued) Giuseppe (Joe) Paolo Graziano, Non-Executive Director/Company Secretary Mr Graziano is a Chartered Accountant with corporate and company secretarial experience. He has experience in capital raisings, ASX compliance and regulatory requirements. Mr Graziano has had 24 years’ experience in business, financial and taxation advice to listed and unlisted companies including mining, resources, banking and finance. Kin Mining NL Special Responsibilities: - Nil Directorships held in other listed companies in the past 3 years: - Oz Brewing Ltd - Lithex Resources Ltd Interests in the shares and options of the Company. The following relevant interests in shares and options of the Company were held by the directors as at the date of this report. Fully paid ordinary shares Number 35,000 6,602,501 1,000,000 5,000,001 Share options Number 17,500 3,301,251 500,000 2,500,001 Directors T Grammer T Dixon M Fitton G Graziano Principal Activities The principal activity of the Company during the year was gold and base metals exploration. Review of operations The Company listed on the Australian Securities Exchange on 2 October 2013 and subsequently commenced an intensive exploration program on three of its six project areas. Furthermore, in April 2014 the company embarked on a strategy to become a significant gold producer focusing on Australia’s prolific Leonora region by executing a binding term sheet to acquire the Leonora Gold Project from the Deed Administrator of Navigator Resources Limited (subject to deed of company arrangement) (“Navigator”). Leonora Gold Project The project is strategically located in the north-east Goldfields, approximately 35km north-east of Leonora and 700km north- east of Perth, and includes a number of historical gold mines in close proximity to Kin’s existing assets. Together these mines boast total historical production of over 316,000oz at an exceptional head grade of 4.92g/t gold. Navigator completed a pre-feasibility study for the Leonora Gold Project in 2009 based on 97% of the total mineral resource, which demonstrated a robust project with considerable upside. In addition Navigator also completed a successful trial mining campaign at the Bruno and Mertondale 2 pits, which underpinned substantial planning and development work. Pit optimisation studies have been completed for each of the key deposits, metallurgical testwork has been completed with recoveries of +95%, and potential high grade starter pits were defined to help secure project finance and reduce the capital payback period. Based on the strength of the work already completed, Kin Mining is targeting near term production from Leonora, with a decision to mine expected in the fourth quarter of 2015. 21Kin Mining NL DIRECTORS’ REPORT (continued) Regional Exploration Activity Desdemona    24km exposure to the Gwalia Shear Zone which hosts 13Moz of gold along 35km of strike to north. Kin Mining has been acquiring strategic tenements in this region as they become available; The tenement boundary is only 2.5kms south along strike from the 7Moz Sons of Gwalia Mine; Large (1500m x up to 400m) gold in saprock soil anomaly (380ppb Au) at the Pelican Prospect; o Best historic drill intercept of 8m @ 22g/t Au  Magmatic Nickel-Copper-PGE target identified at Kingfisher Prospect – Geophysical survey to commence mid September to test for possible conductors beneath the known mineralisation. Historic drill intercepts include: o o o 0.9m @ 2.0% Ni and 1.5% Cu from 101.2m in HWDD2 1.8m @ 1.55g/t Pt and 6.51g/t Pd in HWDD2 0.3m @ 1.33% Ni and 0.25% Cu from 111.9m in HWDD3 Murrin Murrin   o RC drilling by Kin at the Eastern Gabbro Prospect returned significant results during the drilling campaign as follows: 31m @ 4.29g/t Au (64-95m) incl. 5m @ 17.20g/t Au (87-92m) incl. 2m @ 34.23g/t Au (+1oz Au) (87-89m) in MM13RC013; 8m @ 3.52g/t Au from 28m (supergene zone) incl. 2m @ 12.94g/t Au from 29m in MM13RC17 o Historic drilling by Ashton Mining at the Eastern Gabbro Prospect in the early 1990’s returned best results of: o o o 9m @ 3.95g/t Au from 25m; 10m @ 2.34g/t Au from 35m; 6m @ 3.42g/t Au from 34m Iron King    Several high grade historic gold mines represent immediate walk up drill targets. Recent sampling of the Mullock dumps at the Reeds United workings returned up to 25.73g/t Au; Crystal Ridge Prospect presents a walk up drill target; o Best Historic drill intercept of 46m @ 1.83g/t Au Twelve gold and base metals prospects delineated within the project area Recastle    Eight groups of historic hard rock workings including Bellbird, which returned a recent rock chip sample of 5.29g/t Au and 0.62% Cu. Numerous metal detecting patched have produced some significant alluvial gold nuggets; Best Historic drill intercept of 2m @ 15.3g/t Au from 20m. Mt Flora and Randwick  Greenfields projects located close to Murrin Murrin with gold and base metal potential.   Recent rock chip sampling at Mt Flora returned up to 115.98g/t Au, 50g/t Ag and 0.68% Pb. Approval for reconnaissance drilling has been received from the Department of Mines and Petroleum. Operating results for the year The net loss for the year after providing for income tax amounted to $615,749 (2013: $97,424). Review of financial conditions Risk management The Directors identify and manage risk and consider the business of mineral exploration, by its nature, contains elements of risk, with no guarantees of success. 22DIRECTORS’ REPORT (continued) The success of these activities is, amongst other things, dependent upon: Kin Mining NL The discovery and/or acquisition of economically recoverable reserves; Access to adequate capital; Securing and maintaining title to interests;     Obtaining consents and approvals to undertake exploration and associated activities; and  Access to appropriately qualified and experienced operational management, contractors and other personnel. The Directors have identified and disclosed specific risks related to the Leonora Gold Project acquisition in the Non- Renounceable Rights Issue Prospectus as announced on 10 June 2014 and the Supplementary Prospectus as announced on 9 September 2014. Significant changes in the state of affairs Significant changes in the state of affairs of the Company during the financial year were as follows: The Company listed on the Australian Securities Exchange on 2 October 2013; The Company acquired six projects from various vendors as part of the Initial Public Offering;    On 2 April 2014, 6,120,000 fully paid ordinary shares were released from voluntary escrow;  On 8 April 2014, the Company announced that it had executed a binding term sheet with the Administrator of Navigator Resources Limited (subject to deed of company arrangement) to acquire the Leonora Gold Project for $2.7m subject to the satisfaction of certain conditions;  On 28 April 2014, Kin Mining successfully completed financial and legal due diligence on the Leonora Gold Project and paid the Deed administrator a non-refundable deposit of $200,000.  On 27 May 2014, the Company entered into a share sale agreement with Navigator Resources Limited (subject to a deed of Company arrangement), to purchase all of the shares of Navigator Mining Pty Ltd (subject to a deed of company arrangement). Completion under the share sale agreement remains conditional upon shareholder approval being obtained and the Company raising up to $5,000,000, the latter condition being able to be waived at Kin’s discretion.  On 10 June 2014, Kin Mining announced a Non-Renounceable Rights Issue to shareholders to raise up to $5.8m to assist the company with the acquisition of the Leonora Gold Project and working capital to progress the project into production. Significant events after balance date  At a general meeting of shareholders on 4 July 2014, the company received approval to a “change of scale of activities” from shareholders in accordance with the proposed acquisition of the Leonora Gold Project from the Deed Administrator of Navigator Resources Limited (subject to deed of company arrangement).  On 21 July 2014, the company announced that it had secured $3m from a cornerstone investor enabling the company to complete the acquisition of the Leonora Gold Project. The Company entered into a Share Subscription Agreement, subject to certain conditions precedent as announced.  On 8 September 2014, the share sale agreement was varied by deed of variation to extend the date for satisfaction of the conditions precedent to 31 October 2014. In consideration for the extension, the Company has agreed to issue Waterton Global Value L.P., the secured creditor of Navigator Mining Pty Ltd (subject to deed of company arrangement), 1,500,000 fully paid ordinary shares in Kin Mining.  On 9 September 2014, the Company issued a supplementary prospectus revising the terms of the Non- Renounceable Rights Issue to shareholders. Options Details of unissued ordinary shares in the Company under options as at the date of this report are as follows: Bonus Options (unlisted) 19,326,512 No. Exercise price $0.30 Expiry date 31/01/2015 Likely developments and expected results Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Therefore, this information has not been presented in this report. Environmental legislation The Company is not subject to any significant environmental legislation. 23Kin Mining NL DIRECTORS’ REPORT (continued) Dividends No dividends have been paid or declared since the start of the financial year and the directors do not recommend the payment of a dividend in respect of the financial year. Indemnification and insurance of Directors and Officers The Company has agreed to indemnify all the directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. During the financial year the Company paid a premium in respect of a contract insuring the directors and officers of the Company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Remuneration report (audited) This report, which forms part of the directors’ report, outlines the remuneration arrangements in place for the key management personnel (“KMP”) of Kin Mining NL for the financial year ended 30 June 2014. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001. The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company. Key Management Personnel The directors and other key management personnel of the Company during or since the end of the financial year were: Directors: T Grammer T Dixon M Fitton G Graziano Chairman (non-executive) Managing Director Non-executive Director Non-executive Director/Company Secretary Except as noted, the named persons held their current positions for the whole of the financial year. Remuneration philosophy The performance of the Company depends upon the quality of the directors and executives. The philosophy of the Company in determining remuneration levels is to:    set competitive remuneration packages to attract and retain high calibre employees; link executive rewards to shareholder value creation; and establish appropriate, demanding performance hurdles for variable executive remuneration. Remuneration governance The Company has not formed a remuneration committee. The role of a remuneration committee is instead carried out by the full Board in accordance with the Nomination and Remuneration Committee charter. Non-executive director remuneration The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process. Each director receives a fee for being a director of the Company. An additional fee is also paid for each Board committee on which a director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by directors who serve on one or more sub committees. 24Kin Mining NL DIRECTORS’ REPORT (continued) Remuneration report (continued) Fixed Remuneration Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary. Employment Contracts Details of employment contracts currently in place with respect to directors’ employment with the company are as follows: Trevor Dixon, Managing Director    Term of employment agreement is unlimited from the date Kin Mining NL is listed on the official list of ASX Limited, unless otherwise terminated in accordance with the agreement. Annual salary of $120,000 plus statutory superannuation and a director’s fee of $36,000 per annum. The Company may terminate the agreement without cause by providing the Director with ninety days’ notice, while the Director may terminate the agreement without cause by providing the Company with sixty days’ notice. Marvyn (Fritz) Fitton, Non- Executive Director     Term of consultancy agreement is unlimited from the date Kin Mining NL is listed on the official list of ASX Limited, unless otherwise terminated in accordance with the agreement. Daily rate of $750 excluding GST plus a reasonable vehicle allowance. Either party may terminate the agreement without cause by providing the other party with one months’ notice in writing. Upon termination of this agreement by either party, the Consultant is entitled to the service fees payable to the Consultant for work in progress up to and including the date of termination. The Consultant is not entitled to claim any compensation or damages from the Company in relation to that termination. Remuneration of Key Management Personnel Key Management Personnel remuneration for the years ended 30 June 2014 and 30 June 2013: Short-term employee benefits Salary & fees $ Consulting $ Non- monetary benefits $ Post- employment benefits Other $ Superannuation $ Equity Share options $ 37,500 110,500 27,000 - 175,000 - - 54,093** 99,550*** 153,643 - - - - - - 24,303* - - 24,303 3,468 10,221 2,497 - 16,186 Total $ - - - - - 40,968 145,024 83,590 99,550 369,132 30 June 2014 Directors T Grammer T Dixon M Fitton G Graziano * Mr T Dixon received $24,303 for equipment hire (GST inclusive). ** Consulting fees paid to Mr M Fitton were paid to Maprock Pty Ltd for geological consulting services during the period. Mr Fitton is the sole director and shareholder of Maprock Pty Ltd (GST inclusive). *** Consulting services rendered by Mr Graziano were via Crowe Horwath Perth and Pathways Corporate Pty Ltd for Company Secretarial, Accounting and Taxation services during the period (GST inclusive). 25Kin Mining NL DIRECTORS’ REPORT (continued) Remuneration report (continued) Short-term employee benefits Salary & fees $ Consulting $ Non- monetary benefits $ Post- employment benefits Other $ Superannuation $ Equity Share options $ - 4,500 - - 4,500 - - 5,000* 10,230** 15,230 - - - - - - - - - - - - - - - Total $ - 4,500 5,000 10,230 19,730 - - - - - 30 June 2013 Directors T Grammer T Dixon M Fitton G Graziano * Consulting fees paid to Mr M Fitton were paid to Maprock Pty Ltd for geological consulting services during the period. Mr Fitton is the sole director and shareholder of Maprock Pty Ltd. ** Consulting services rendered by Mr Graziano were via Crowe Horwath Perth for Accounting and Taxation services during the period. Shareholdings of key management personnel 2014 Balance at 01/07/13 Shares Purchased Shares Transferred In No. No. No. Shares Vendor Acquisition No. Shares Disposed Balance at 30/06/14 No. No. Directors T Grammer T Dixon M Fitton G Graziano 2013 Directors T Grammer T Dixon M Fitton G Graziano Options on issue 2014 Directors T Grammer T Dixon M Fitton G Graziano - 2,000,001 1,000,000 5,000,001 8,000,002 35,000 10,000 - - 45,000 - - - - - - 4,592,500 - - 4,592,500 - - 35,000 6,602,501 1,000,000 - 5,000,001 - 12,637,502 Balance 01/07/12 at Shares Purchased No. No. Shares Issued No. Shares Vendor Acquisition No. Shares Disposed Balance at 30/06/13 No. No. - 2,000,001 1,000,000 5,000,001 8,000,002 - - - - - - - - - - - - - - - - - - 2,000,001 - 1,000,000 - 5,000,001 - 8,000,002 Balance at 01/07/13 No. Options Purchased No. Options Disposed No. Options Issued No. Options Expired No. Balance at 30/06/14 No. - - - - - - - - - - - - - - - 17,500 3,301,251 500,000 2,500,001 6,318,752 - - - - - 17,500 3,301,251 500,000 2,500,001 6,318,752 There were no option holdings held by KMP during the 30 June 2013 financial year. 26DIRECTORS’ REPORT (continued) Remuneration report (continued) No member of key management personnel appointed during the period received a payment as part of his or her consideration for agreeing to hold the position. Kin Mining NL No cash bonuses were granted during 2014 or 2013. No share based payments were granted as compensation during the reporting period. No amounts were unpaid on options exercised during the year. Share options No share options were granted to Directors as compensation or remuneration during the period. Other transactions with Key Management Personnel During the year, the Company acquired various interests in mining tenements from a director, Mr Trevor Dixon (or his related entities), for the following consideration Issue of vendor shares - - Cash (i) (i) 4,592,500 shares at the IPO issue price of 20c per share. END OF REMUNERATION REPORT 2014 $ 918,500 26,500 945,000 2013 $ - - - Directors’ Meetings The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows: Number of meetings held: Number of meetings attended: T Grammer T Dixon M Fitton G Graziano Directors’ meetings 5 4 5 5 5 Proceedings on behalf of the Company No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. Non-Audit Services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 14 to the financial statements. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110: Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board. 27Kin Mining NL DIRECTORS’ REPORT (continued) Auditor Independence and Non-Audit Services Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 15 and forms part of this directors’ report for the year ended 30 June 2014. Signed in accordance with a resolution of the directors. Giuseppe Paolo Graziano Director PERTH, WESTERN AUSTRALIA 30 September 2014 28Kin Mining NL CORPORATE GOVERANCE STATEMENT The Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs. To the extent they are applicable, the Company has adopted the Eight Essential Corporate Governance Principles and Best Practice Recommendations (“Recommendations”) as published by ASX Corporate Governance Council. The Company’s Corporate Governance policies and its Securities Trading Policy are available on the Company’s website. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance structures will be given further consideration. Principle 1 – Lay solid foundations for management and oversight The Board and management have formalised their respective roles and responsibilities and the functions reserved to the Board and management. The Board has established and adopted a Board Charter for this purpose. The Board is responsible for oversight of the management and the overall corporate governance of the Company including its strategic direction, establishing goals for management and monitoring the achievement of those goals with a view to optimising company performance and the protection and enhancement of long-term shareholder value. The Board has also established a Nomination and Remuneration Committee Charter which, amongst other functions, guides the Board in its evaluation of the performance of senior executives and encourages an appropriate mix of skills, experience, expertise and diversity on the Board. The role of management is the efficient and effective operation of the activities of the Company in accordance with the objectives, strategies and policies determined by the Board. The performance of senior management is reviewed annually in a formal process with the executive’s performance assessed against the company and personal benchmarks. Benchmarks are agreed with the executives and reviews are based upon the degree of achievement against those benchmarks. Principle 2 – Structure the Board to add value The Board has been formed such that it has effective composition, size and commitment to adequately discharge its responsibilities and duties. Directors are appointed based on the specific skills required by the Company and on their experience, decision-making and judgement skills. The Company has adopted a Nomination and Remuneration Committee Charter which encourages a transparent Board selection process in searching for and selecting new directors to the Board and having regard to any gaps in the skills and experience of the directors of the Board and ensuring that a diverse range of candidates is considered. The Board composition is reviewed on an ongoing basis with regard to the activities of the Company and the skills sets required to support those activities. A separate nomination committee has not been formed. The role of the nomination committee is carried out by the full Board in accordance with the Nomination and Remuneration Committee Charter. The Board considers that at this stage, no efficiencies or other benefits would be gained by establishing a separate committee. The composition of the Board is determined using the following principles:   A minimum of three directors, with a broad range of expertise Directors should bring characteristics which allow a mix of qualifications, skills, experience, expertise and diversity to the Board The skills, experience, expertise and tenure of each director are disclosed in the Directors’ Report within this Annual Report. In assessing the independence of directors, the Board follows the ASX guidelines and will consider whether the director:      Is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company Is employed, or has previously been employed in executive capacity by the Company or another group member, and there has not been a period of at least three years between ceasing such employment and serving the on board Has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another group member, or an employee materially associated with the service provided Is a material supplier or customer of the Company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer Has a material contractual relationship with the Company or another group member other than as director of the Company 29Kin Mining NL CORPORATE GOVERANCE STATEMENT (continued) The Board does not have a majority of independent directors. It is comprised of three non-executive directors and the Board is confident that each non-executive director brings independent judgement to the Board’s decisions. The Board considers the existing structure and skill sets of the directors’ appropriate given the small scale of the Company’s enterprise and the associated economic restrictions the scale of operations places on the Company. The existing structure is aimed at maximising the financial position of the Company by keeping its operating costs to a minimum. Where additional skills are considered necessary for specific purposes, access is made to independent professional advice at the expense of the Company. Principle 3 – Promote ethical and responsible decision making All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. The Board has established a Code of Conduct to guide the Directors, managers, employees and officers of the Company with respect to matters relevant to the Company’s legal and ethical obligations and the expectations of stakeholders. The Code of Conduct requires officers and employees to avoid or ensure proper management of conflicts of interest, to not use confidential information for personal gain and to act in fair, honest and respectful manner. The Board has procedures in place for reporting any matters that give rise to unethical practices or conflicts between the interests of a director or senior executive and those of the Company. Securities Trading Policy The Board encourages directors and employees to hold shares in the Company to align their interest with the interests of all Shareholders. The Company has adopted a Securities Trading Policy which guides directors, employees or contractors in trading the Company’s securities in accordance with ASX Listing Rules. Trading the Company’s shares is prohibited under certain circumstances and a director, employee or contractor must not deal in the Company’s securities at any time when he or she is in possession of information which, if generally available, may affect the price of the Company’s shares. The Policy sets out the following information: (a) closed periods in which directors, employees and contractors of the Company must not deal in the Company’s securities; (b) trading in the Company’s securities which is not subject to the Company’s Trading Policy; and (c) the procedures for obtaining written clearance for trading in exceptional circumstances. Principle 4 – Safeguard integrity in financial reporting The Directors require the Managing Director and external company auditors to state in writing to the Board, that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards. A separate audit committee has not been formed. However, the Company has adopted an Audit Committee Charter. The role of the audit committee is carried out by the full Board in accordance with the Audit Committee Charter. The Board considers that given its size, no efficiencies or other benefits would be gained by establishing a separate audit committee. Principle 5 – Make timely and balanced disclosure The Directors are committed to keeping the market fully informed of material developments to ensure compliance with the ASX Listing Rules and the Corporations Act. The Directors have established a written policy and procedure to ensure compliance with the disclosure requirements of the ASX Listing Rules. At each meeting of the directors, consideration is given as to whether notice of material information concerning the Company, including its financial position, performance, ownership and governance has been made to all investors. Under the policy the Company’s employees and contractors must disclose any relevant information which comes to their attention and is believed to potentially be material to the Company Secretary or Executive Director. Principle 6 – Respect the rights of Shareholders The Directors have established a communications strategy to promote effective communication with Shareholders and encourage effective participation at general meetings. As well as ensuring timely and appropriate access to information for all investors via announcements to the ASX, the Company will also ensure that all relevant documents are released on the Company’s website. Communication with Shareholders is achieved through the distribution of the following information:   The Annual Report is distributed to Shareholders; The Half Yearly Report is available on the Company’s website 30Kin Mining NL CORPORATE GOVERANCE STATEMENT (continued)    Regular reports and announcements are released through the ASX The Annual General Meeting and other meetings called by the Company to obtain Shareholder approval as appropriate Investor information released through the Company’s website Principle 7 – Recognise and manage risk The Board is responsible for overseeing the risk management function and ensuring that risks and opportunities are identified on a timely basis. The Directors have established a Risk Management Policy regarding the oversight and management of material business risks. Responsibility for the control and risk management is delegated to the appropriate level of management within the Company, with the Executive Director having ultimate responsibility to the Board for monitoring the risk management and control framework. Risk analysis and evaluation occurs on an ongoing basis in the course of the activities of the Company. Management is responsible for the development of risk mitigation plans and the implementation of risk reduction strategies. The Executive Director reports on a regular basis to the Board on the areas of their responsibility, including material business risks and provides an annual written report to the Board summarising the effectiveness of the Company’s management of material business risks. Principle 8 – Remunerate fairly and responsibly A separate remuneration committee has not been formed. However, the Company has adopted a Nomination and Remuneration Committee Charter. The role of the remuneration committee is carried out by the full Board in accordance with the Nomination and Remuneration Committee charter. The charter details how the Board fulfils its duties in regards to the Company’s remuneration plans, policies and practices, including the compensation of non-executive directors, executive directors and management. The Board considers that at this stage, no efficiencies or other benefits would be gained by establishing a separate committee. The Board has provided disclosure within this Annual Report in relation to Directors’ remuneration and remuneration policies in accordance with the ASX Listing Rules and the Corporations Act. There are no retirement schemes or retirement benefits other than statutory benefits for non-executive directors. The Company has a policy to prohibit its directors and employees, who participate in an equity-based incentive plan of the Company, from entering into transactions which would have the effect of hedging or otherwise transferring to any other person the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities. Directors and employees are encouraged to take sufficient professional advice in relation to their individual financial position. The payment of bonuses, options and other incentive payments are reviewed by the Board annually as part of the review of executive remuneration. All bonuses, options and incentives must be linked to predetermined performance criteria. The Board can exercise its discretion in relation to approving incentives, bonuses and options, given they are justified by reference to measurable performance criteria. The Company’s Share Trading Policy is available on its website. 31 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of Kin Mining NL for the year ended 30 June 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 30 September 2014 L Di Giallonardo Partner HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. 32STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014 Continuing operations Revenue Interest income Other income Depreciation expense Administration expenses Consultant expenses and professional costs Employment expenses Occupancy expenses Travel expenses Loss before income tax expense Income benefit Loss after tax from continuing operations Loss for the year Other comprehensive income, net of income tax Other comprehensive income for the year, net of tax Kin Mining NL Notes 2014 $ 2013 $ 2 2 3 38,984 34,974 (10,826) (141,560) (197,300) (277,840) (41,416) (20,765) (615,749) - (615,749) (615,749) - - 10,271 14,213 (2,463) (90,433) (5,250) - (23,762) - (97,424) - (97,424) (97,424) - - Total comprehensive loss for the year (615,749) (97,424) Basic loss per share (cents per share) 4 (1.79) (0.051) The accompanying notes form part of these financial statements 33 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014 Assets Current assets Cash and cash equivalents Trade and other receivables Prepaid IPO costs Other Total current assets Non-current assets Property, plant and equipment Capitalised exploration and evaluation expenditure Investments Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Total current liabilities Total Liabilities Net assets Equity Issued capital Accumulated losses Total equity The accompanying notes form part of these financial statements Kin Mining NL Notes 2014 $ 2013 $ 5 6 7 8 9 10 11 173,355 77,377 - 90,475 341,207 39,629 2,993,636 226,053 3,259,318 155,306 14,247 197,827 - 367,380 8,081 314,592 - 322,673 3,600,525 690,053 190,250 190,250 190,250 3,410,275 30,996 30,996 190,250 659,057 4,145,082 (734,807) 3,410,275 778,115 (119,058) 659,057 34Kin Mining NL STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014 Balance at 1 July 2012 Loss for the year Total comprehensive loss for the year Shares issued during the year Share issue costs Balance as at 30 June 2013 Balance at 1 July 2013 Loss for the year Total comprehensive loss for the year Shares issued during the year Share issue costs Balance as at 30 June 2014 Issued capital $ 809,719 - - - (31,604) 778,115 778,115 - - 3,940,600 (573,633) 4,145,082 Accumulated losses $ Total equity $ (21,634) (97,424) (97,424) - - (119,058) (119,058) (615,749) (615,749) - - (734,807) 788,085 (97,424) (97,424) - (31,604) 659,057 659,057 (615,749) (615,749) 3,940,600 (573,633) 3,410,275 The accompanying notes form part of these financial statements 35STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014 Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Net cash (outflows) from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for exploration and evaluation expenditure Payments for acquisition of investment and related costs Net cash (outflows) from investing activities Cash flows from financing activities Proceeds from issue of shares Payments for share issue costs Capitalised IPO costs Net cash inflows/(outflows) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The accompanying notes form part of these financial statements Kin Mining NL Notes 2014 $ 2013 $ 34,974 (493,905) 38,984 (419,947) (42,374) (1,184,576) (542,848) (1,769,798) 2,583,600 (375,806) - 2,207,794 18,049 155,306 173,355 14,213 (318,533) 10,271 (294,049) (7,086) (124,260) - (131,346) - (3,604) (28,000) (31,604) (456,999) 612,305 155,306 5 5 36Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation (a) These financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements of the law. The financial statements comprise the financial statements of Kin Mining NL. For the purposes of preparing the financial statements, the Company is a for-profit entity. The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial statements have been prepared on a historical cost basis. Historical cost is based on the fair values of the consideration given in exchange for goods and services. The financial statements are presented in Australian dollars The Company is a listed public Company, incorporated in Australia and operating in Australia. The Company’s principal activity is gold and base metals exploration. Adoption of new and revised standards (b) Standards and Interpretations applicable to 30 June 2014 In the year ended 30 June 2014, the directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period. As a result of this review, the directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Company accounting policies. Standards and Interpretations in issue not yet adopted The directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2014. As a result of this review the directors have determined that there is no material impact, of the new and revised Standards and Interpretations on the Company and, therefore, no change is necessary to Company accounting policies. Statement of compliance (c) The financial report was authorised for issue on 30 September 2014. The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). Critical accounting estimates and judgements (d) 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. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences when management considers that it is probable that sufficient future tax profits will be available to utilise those temporary differences. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits. 37 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Going concern (e) The Company has a working capital surplus at balance date of $150,957, including a cash balance of $173,355. Subsequent to year end, the Company announced that it had secured a $3m cornerstone investment which would assist it in completing the acquisition of the Leonora Gold Project. The investment is subject to shareholder approval and is also conditional upon the company raising a minimum of $1m via the current non-renounceable rights issue. These funds will enable the Company to meet the balance of the acquisition cost of the Leonora Gold Project, namely $2.5m, and for working capital. The Company is seeking to raise a maximum of $5.8m via the rights issue. The Company is dependent on the rights issue being successful to the extent of raising the minimum amount required to secure the cornerstone investment and for required working capital to fund ongoing exploration expenditure and general overheads. The Company is confident that this will be achieved. Should the required funds not be raised to the extent necessary, there is a material uncertainty that may cast significant doubt as to whether the Company will continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. Segment reporting (f) Operating segments are identified on the basis of internal reports about components of the Company that are reviewed by the chief operating decision maker (deemed to be the Board of Directors) in order to allocate resources to the segment and assess its performance. During the year, the Company operated predominantly in one business and geographical segment being mineral exploration in Australia. Accordingly, under the “management approach” outlined, only one operating segment has been identified and no further disclosure is required in the notes. Revenue recognition (g) Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Interest income Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable Government grants (h) Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of assets are deducted from the carrying amount of that asset. Income tax (i) The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. 38 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Tax (continued) Deferred income tax liabilities are recognised for all taxable temporary differences except:   when the deferred income tax liability arises from the initial recognition of asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:   when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Other taxes (j) Revenues, expenses and assets are recognised net of the amount of GST except:   when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. 39 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Impairment of tangible and intangible assets other than goodwill (k) The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or the company’s assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Cash and cash equivalents (l) Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Trade and other receivables (m) Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods ranging from 30 days to 60 days. Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance. The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income. 40Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (n) Financial assets Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Company determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end. All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace. Financial assets at fair value through profit or loss Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss. Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process. If the Company were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale investments Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. Derecognition of financial assets and financial liabilities (o) Financial assets A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is derecognised when:    the rights to receive cash flows from the asset have expired; the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or the Company has transferred its rights to receive cash flows from the asset and either: 41 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Derecognition of financial assets and financial liabilities (continued) (o) Financial assets - - has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Company could be required to repay. When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Company’s continuing involvement is the amount of the transferred asset that the Company may repurchase, except that in the case of a written put option (including a cash-settled option or similar Derecognition of financial assets and financial liabilities (continued) provision) on an asset measured at fair value, the extent of the Company’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. Impairment of financial assets (p) The Company assesses at each balance date whether a financial asset or group of financial assets is impaired. Financial assets carried at amortised cost If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in profit or loss. The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. Financial assets carried at cost If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset. Such impairment loss shall not be reversed in subsequent periods. 42 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Impairment of financial assets (p) Available-for-sale investments If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the statement of comprehensive income. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss. Property, plant and equipment (q) Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment losses recognised after the date of the revaluation. The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their useful lives to the Company commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Office equipment Motor vehicles 10% to 50% 25% to 30% The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Impairment The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash- generating unit to which the asset belongs, unless the asset's value in use can be estimated to approximate fair value. An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. For plant and equipment, impairment losses are recognised in the statement of comprehensive income in a separate line item. Derecognition and disposal An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. Trade and other payables (r) Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months. 43 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Employee leave benefits (s) Wages, salaries, annual leave and long service leave Liabilities accruing to employees in respect of wages and salaries, annual leave and long service leave expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’ services up to the balance date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Liabilities accruing to employees in respect of wages and salaries, annual leave and long service leave not expected to be settled within 12 months of the balance date are recognised in non-current other payables in respect of employees’ services up to the balance date. They are measured as the present value of the estimated future outflows to be made by the Company. Long service leave The liability for long service leave 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 balance date. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the balance date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. Issued capital (t) 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. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase consideration. Earnings/loss per share (u) Basic earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted for:    costs of servicing equity (other than dividends) and preference share dividends; the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. Provision for restoration and rehabilitation (v) A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities and restoring the affected areas. The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each balance date. The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset. 44 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) Exploration and evaluation expenditure (w) Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:   the rights to tenure of the area of interest are current; and at least one of the following conditions is also met: - - the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or exploration and evaluation activities in the area of interest have not at the balance 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 initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. NOTE 2: REVENUE AND EXPENSES Revenue Other income Rental revenue  Secretarial   Other income Expenses   Depreciation of plant and equipment Depreciation of motor vehicle 2014 $ 4,400 985 29,589 34,974 7,360 3,466 10,826 2013 $ 7,400 6,813 - 14,213 2,463 - 2,463 45 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 3: INCOME TAX The prima facie income tax benefit on pre-tax accounting loss from operations reconciles to the income tax expense in the financial statements as follows: Accounting loss from continuing operations 2014 $ (615,749) 2013 $ (97,424) Income tax expense calculated at 30% (2013: 30%)   Effect of expenses that are not deductible in determining taxable profit Effect of unused tax losses and tax offsets not recognised as deferred tax assets 184,725 (37,944) 29,227 (300) (146,781) (28,927) Income tax benefit reported in the statement of comprehensive income - - The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in this tax rate since the previous reporting period. The Company’s tax benefit from losses arising in Australia of $275,076 (2013: $128,295) are available indefinitely for offset against future taxable profits. NOTE 4: LOSS PER SHARE Basic loss per share Continuing operations Total basic loss per share 2014 2013 Cents per share Cents per share (1.79) (1.79) (0.51) (0.51) The weighted average number of ordinary shares used in the calculation of basic loss per share is as follows: Weighted average number of ordinary shares for the purpose of basic loss per share NOTE 5: CASH AND CASH EQUIVALENTS Cash at bank Cash on hand Cash at bank earns interest at floating rates based on daily bank deposit rates. 2014 No. 2013 No. 34,368,143 18,950,003 2014 $ 173,313 42 173,355 2013 $ 155,037 269 155,306 46 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 5: CASH AND CASH EQUIVALENTS (continued) Reconciliation to the Statement of Cash Flows: For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: Cash and cash equivalents Reconciliation of loss for the year to net cash flows from operating activities Loss for the year Depreciation (Increase)/decrease in assets: Trade and other receivables Increase/(decrease) in liabilities: Trade and other payables Provisions Net cash from operating activities Non-cash financing and investing activities: 2014 $ 173,355 173,355 2013 $ 155,306 155,306 2014 $ (615,749) 10,826 2013 $ (97,424) 2,463 44,222 (180,176) 131,020 9,734 (419,947) (18,912) - (294,049) Acquisition of exploration assets via issue of vendor shares 1,357,000 - Note 6: Trade and Other Receivables Trade receivables (i) Other debtors (GST and fuel credit refundable) Other debtor (ATO receivable) Other debtor (credit card) (i) the average credit period on rendering of services and reimbursements is 7 days Ageing of past due but not impaired There are no past due amounts at balance date. 2014 $ 32,350 37,760 7,267 - 77,377 2013 $ 3,220 6,312 4,212 503 14,247 47 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 7: OTHER ASSETS Current Prepayment – drilling Prepayment – insurance Non-Current (i) Non-refundable deposit paid on acquisition of Navigator Mining Pty Ltd (subject to deed of company arrangement) Other expenses relating to the Leonora Gold Project Kin Mining NL 2014 $ 87,379 3,096 90,475 200,000 26,053 226,053 2013 $ - - - - - - (i) On successful completion of the acquisition of Navigator Mining Pty Ltd (subject to deed of company arrangement), this expenditure will be reclassified to capitalised exploration and evaluation expenditure. NOTE 8: PROPERTY, PLANT AND EQUIPMENT Opening net book value Balance at 1 July 2012 Additions Disposals Profit/ (loss) on sale Depreciation charge for the year Balance at 30 June 2013 Opening net book value Balance at 1 July 2013 Additions Disposals Profit/ (loss) on sale Depreciation charge for the year Balance at 30 June 2014 Office equipment Motor Vehicles Total $ 3,458 7,086 - - (2,463) 8,081 8,081 20,012 - - (7,360) 20,733 $ - - - - - - 22,362 - - (3,466) 18,896 $ 3,458 7,086 - - (2,463) 8,081 8,081 42,374 - - (10,826) 39,629 NOTE 9: CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE Costs carried forward in respect of area s of interest in the following phases: Exploration and evaluation phase – at cost Opening balance Current year expenditure - cash Closing balance – tenement acquisitions - issue of vendor shares 2014 $ 2013 $ 314,592 1,322,044 1,357,000 2,993,636 190,053 107,180 - 314,592 48Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 9: CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE COSTS (continued) The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is dependent on the successful development and commercial exploitation or sale of the respective areas. NOTE 10: TRADE AND OTHER PAYABLES Trade payables (i) Other payables and accrued expenses Annual leave (i) Trade payables are non-interest bearing and are normally settled on 30-day terms. NOTE 11: ISSUED CAPITAL Ordinary shares issued and fully paid 2014 $ 75,415 105,101 9,734 190,250 2013 $ 24,004 6,992 - 30,996 2014 $ 4,145,082 2013 $ 778,115 Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the Company does not have a limited amount of authorised capital. Movement in ordinary shares on issue 2014 2013 No. $ No. $ Movements in ordinary shares Balance at beginning of year Issue of shares Issue vendor shares Share issue costs Balance at end of year Movement in options on issue Balance at the beginning of the year Bonus options issued on 28/02/14 Balance at the end of the year 778,115 18,950,003 809,719 18,950,003 12,918,000 6,785,000 - 2,583,600 1,357,000 (573,633) - - - 38,653,003 4,145,082 18,950,003 2014 No. - 19,326,512 19,326,512 - - (31,604) 778,115 2013 No. - - - The unlisted options are exercisable at $0.30 on or before 31 January 2015. 49 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 12: FINANCIAL INSTRUMENTS Capital risk management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Company’s overall strategy remains unchanged from 2013. The capital structure of the Company consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings. Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as general administrative outgoings. Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the risks associated with each class of capital. Categories of financial instruments Financial assets Cash and cash equivalents Other Financial liabilities Trade and other payables 2014 $ 2013 $ 173,355 167,852 341,207 190,250 190,250 155,306 212,074 367,380 30,996 30,996 The fair values of the Company’s financial assets and liabilities approximate their carrying values Financial risk management objectives The Company is exposed to market risk (including fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company seeks to minimise the effect of these risks, by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non- derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by management on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. Market risk There has been no change to the Company’s exposure to market risks or the manner in which it manages and measures the risk from the previous period. Interest rate risk management The Company’s exposures to interest rate on financial assets and financial liabilities are detailed in the liquidity risk management section of this note. Equity price risk The Company is not exposed to any equity price risk as it has no investments in such assets. Credit risk management Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial information and its own trading record to rate its major customers. 50 Kin Mining NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 Note 12: Financial Instruments (continued) Credit risk management The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. The Company does not have any significant credit risk exposure to any single counterparty or any Company of counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents the Company’s maximum exposure to credit risk without taking account of the value of any collateral obtained. Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities The following table details the Company’s and the Company’s expected contractual maturity for its non-derivative financial liabilities. These have been drawn up based on undiscounted contractual maturities of the financial liabilities based on the earliest date the Company can be required to repay. The tables include both interest and principal cash flows. 30 June 2014 Variable interest rate instruments 30 June 2013 Variable interest rate instruments Weighted average interest rate % 2.0 Weighted average interest rate % 2.5 Less than 1 month $ 1 – 3 months $ 3 months – 1 year $ 1 – 5 years $ 5+ years $ - - - 173,355 173,355 - - Less than 1 month $ 1 – 3 months $ 3 months – 1 year $ 1 – 5 years $ 5+ years $ - - - - 156,306 156,306 - - - - - - NOTE 13: COMMITMENTS AND CONTINGENCIES Exploration expenditure commitments The Company has certain commitments to meet minimum expenditure requirements on the mineral exploration assets it has an interest in. Outstanding exploration commitments are as follows: Within one year After one year but not more than five years More than five years The Company has no contingent liabilities at the date of this report. 2014 $ 720,402 42,481 - 762,883 2013 $ 567,620 78,507 - 646,127 51 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 NOTE 14: AUDITOR’S REMUNERATION The auditor of Kin Mining NL is HLB Mann Judd. Audit or review of the financial statements IPO and ASX reporting Kin Mining NL 2014 $ 18,200 7,475 25,675 2013 $ 6,500 10,000 16,500 NOTE 15: KEY MANAGEMENT PERSONNEL DISCLOSURES The aggregate remuneration paid to directors and other key management personnel of the Company is set out below: Short-term employee benefits Post-employment benefits 2014 $ 352,946 16,186 369,132 2013 $ 19,730 - 19,730 NOTE 16: SIGNIFICANT EVENTS AFTER BALANCE DATE  At a general meeting of shareholders on 4 July 2014, the company received approval to a “change of scale of activities” from shareholders in accordance with the proposed acquisition of the Leonora Gold Project from the Deed Administrator of Navigator Resources Limited (subject to deed of company arrangement).  On 21 July 2014, the company announced that it had secured $3m from a cornerstone investor enabling the company to complete the acquisition of the Leonora Gold Project. The Company entered into a Share Subscription Agreement, subject to certain conditions precedent as announced.  On 8 September 2014, the share sale agreement was varied by deed of variation to extend the date for satisfaction of the conditions precedent to 31 October 2014. In consideration for the extension, the Company has agreed to issue Waterton Global Value L.P., the secured creditor of Navigator Mining Pty Ltd (subject to deed of company arrangement), 1,500,000 fully paid ordinary shares in Kin Mining.  On 9 September 2014, the Company issued a supplementary prospectus revising the terms of the Non- Renounceable Rights Issue to shareholders. NOTE 17: RELATED PARTY DISCLOSURE During the year, the Company acquired various interests in mining tenements from a director, Mr Trevor Dixon (or his related entities), for the following consideration Issue if vendor shares (i) - - Cash (i) 4,592,500 shares at the IPO issue price of 20c per share. 2014 $ 918,500 26,500 945,000 2013 $ - - - 52 Kin Mining NL DIRECTORS’ DECLARATION 1. In the opinion of the directors of Kin Mining NL (the ‘Company’): a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including: i. ii. giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its performance for the year then ended; and complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements. 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 financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. b. c. 2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2014. This declaration is signed in accordance with a resolution of the board of directors. Giuseppe Paolo Graziano Director ______________________________ Dated this 30th day of September 2014 53INDEPENDENT AUDITOR’S REPORT To the members of Kin Mining NL Report on the Financial Report We have audited the accompanying financial report of Kin Mining NL (“the company”), which comprises the statement of financial position as at 30 June 2014, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for Kin Mining NL. Directors’ responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. 54Auditor’s opinion In our opinion: (a) the financial report of Kin Mining NL is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c). Emphasis of matter Without qualifying our opinion, we draw attention to Note 1(e) to the financial report which states that the Company is dependent on the success of the current capital raising to raise the required funds in order to secure the cornerstone investment and for required working capital to fund ongoing exploration expenditure and general overheads. Should this capital raising not be successful in raising the required funds, there is a material uncertainty that may cast significant doubt as to whether the Company will continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. Report on the Remuneration Report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2014. 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. Auditor’s opinion In our opinion the remuneration report of Kin Mining NL for the year ended 30 June 2014 complies with section 300A of the Corporations Act 2001. HLB Mann Judd Chartered Accountants Perth, Western Australia 30 September 2014 L Di Giallonardo Partner 55Kin Mining NL ADDITONAL SECURITIES EXCHANGE INFORMATION (a) Distribution schedule and number of holders of equity securities at 22 September 2014 1 -1,000 1,001 - 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total Fully Paid Ordinary Shares (KIN) 107 Unlisted Options – 30c 31/1/2015 114 34 149 135 47 171 119 56 41 503 470 The number of holders holding less than a marketable parcel of fully paid ordinary shares at 22 September 2014 is 128. (b) 20 largest holders of quoted equity securities as at 22 September 2014 The names of the twenty largest holders of fully paid ordinary shares (ASX Code: KIN) as at 22 September 2014 are: Rank Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Trevor Dixon Giuseppe Graziano V M Drilling PTY LTD Marvyn Fitton Harmanis Holdings Botsis Holdings PTY LTD Partners & Friends PTY LTD Jim Moore Ross Crew Troca Enterprises PTY LTD Chin Nominees PTY LTD A & A Cannavo Nominees PTY LTD Rogue Investments PTY LTD Siat Yoon Chin Chemco Superannuation Fund PTY LTD Katherine Moya Kailis Consolidated PTY LTD Goldfire Enterprises PTY LTD Shelley Tanner CJC (QLD) PTY LTD < CJC Property A/C> Total Number Percentage 6,602,501 17.081% 5,000,001 12.936% 1,060,687 2.744% 1,000,000 2.587% 1,000,000 2.587% 1,000,000 2.587% 964,468 2.495% 797,250 2.063% 608,750 1.575% 500,000 1.294% 500,000 1.294% 500,000 1.294% 500,000 1.294% 500,000 1.294% 500,000 1.294% 480,000 1.242% 450,182 1.165% 406,702 1.052% 375,000 0.970% 375,000 0.970% 23,120,541 59.816% 56 Kin Mining NL ADDITONAL SECURITIES EXCHANGE INFORMATION (c) Substantial Shareholders Holder 1 Trevor Dixon 2 Giuseppe Graziano Shares Percent 6,602,501 17.081% 5,000,001 12.936% (d) Unquoted Securities The number of unquoted securities on issue at 22 September 2014: Unquoted Securities Number on Issue Exercise Price Unquoted Options 19,326,612 30c Expiry Date 31/01/2015 (e) Restricted Securities as at 22 September 2014 Holder 1 Trevor Dixon Restriction Period Shares Release Date 24 Months 6,572,500 02/10/2015 2 Giuseppe Graziano 24 Months 4,850,000 02/10/2015 3 Maryvn Fitton 4 Saruman Holdings PTY LTD 5 A & A Cannavo Nominees PTY LTD 24 Months 24 Months 24 Months Total 950,000 02/10/2015 475,000 02/10/2015 375,000 02/10/2015 13,222,500 (f) Tenement Schedule Tenement information as required by listing rule 5.3.3 DESDEMONA - 20 Kms South of Leonora Townsite Tenement ID E37/1152 E37/1156 E40/283 E40/285 E40/320 E40/323 M40/330 P37/8350 P37/8390 P37/8439 (Application) P37/8504(Application) P40/1263 P40/1283 P40/1284 P40/1285 P40/1286 P40/1287 Ownership Interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED WITHDRAWN GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED 57 Kin Mining NL IRON KING / VICTORY - 45 Kms North North West of Leonora Tenement ID P37/7175 P37/7176 P37/7177 P37/7194 P37/7195 P37/7196 P37/7197 P37/7198 P37/8455 (Application) P37/8458 (Application) P37/8459 (Application) P37/8460 (Application) P37/8461 (Application) Ownership Interest 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 0% 0% 0% MURRIN MURRIN - 50 Kms East of Leonora Tenement ID M39/279 P39/4913 P39/4914 P39/4915 P39/4916 P39/4980 P39/5112 P39/5113 P39/5164 P39/5165 P39/5176 P39/5177 P39/5178 P39/5179 P39/5180 Tenement ID P39/4528 P39/4550 P39/4593 P39/4834 P39/4839 P39/4930 P39/5097 P39/5098 P39/5099 P39/5100 P39/5101 P39/5102 P39/5103 P39/5105 P39/5267 Ownership Interest 66.66% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% REDCASTLE - 65 Kms South West of Laverton Ownership Interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED 58Kin Mining NL MT FLORA - 45 Kms East North East of Leonora Tenement ID P39/4617 P39/4618 P39/4619 P39/4620 P39/4621 P39/4912 P39/4960 P39/4961 P39/5181 P39/5182 P39/5183 P39/5185 P39/5463 Tenement ID P37/7283 P37/7284 P37/7806 P37/7995 P37/7996 P37/7997 P37/7998 P37/7999 P37/8000 P37/8001 Ownership Interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% RANDWICK - 45 Kms North East of Leonora Ownership Interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED Status GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED GRANTED 59

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