2 0 1 8 A N N U A L R E P O R T
C O R P O R A T E I N F O R M A T I O N
ABN 30 150 597 541
Directors
Jeremy Kirkwood
Andrew Munckton
Trevor John Dixon
Brian Dawes
Giuseppe (Joe) Paolo Graziano
Company secretary
Stephen Jones
Registered office
First Floor
342 Scarborough Beach Road
Osborne Park WA 6017
Principal place of business
First Floor
342 Scarborough Beach Road
Osborne Park WA 6017
T (08) 9242 2227
Share register
Advanced Share Registry Services
PO Box 1156
Nedlands WA 6909
T (08) 9389 8033
Solicitors
Dominion Legal
104 Edward Street
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
1
KIN MINING NL C O N T E N T S
Corporate Information
Chairman’s Letter
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Securities Exchange Information
Tenement Table
-
2
4
35
36
37
38
39
40
41
68
69
74
76
1
2018 ANNUAL REPORT
CHAIRMAN’S LETTER
Jeremy Kirkwood
Chairman
F R O M T H E C H A I R M A N
Dear Kin Mining Shareholder,
Please find enclosed the FY2018 Annual Report for Kin Mining NL (Kin or the Company)
for what has been a transitional and, at times, difficult year for the business.
The Company began the year with expectations of commencing the Leonora Gold
Project (LGP). Following receipt of the Definitive Feasibility Study in October 2017 the
company secured debt funding and completed an equity raising in December 2017
enabling the Board to formally commence development of the LGP. Shortly following this
decision, Kin suffered instability at the Board and senior management with Don Harper
resigning as Managing Director and then David Sproule resigning as a Director. Brian
Dawes and myself were appointed Directors in late February 2018 and then Andrew
Munckton as Chief Executive in April. During this period, your Board made the decisions
to firstly curtail and then, in May 2018, to suspend, development of the LGP.
On behalf of the current Board and Management team, I would like to assure
shareholders that the decision taken to suspend development at the LGP was not taken
lightly. After careful consideration, it was your Board’s judgement that it was in the best
interests of shareholders and the Company to slow the LGP’s higher risk, fast-track to
production. The suspension of development was completed in a way that will allow the
future resumption of construction of the Cardinia plant.
The LGP remains a very valuable asset. It currently has more than 1 million ounces in
Mineral Resources defined in a premier gold mining region that hosts numerous multi-
million ounce gold deposits and highly profitable gold mining operations. I am grateful
to our debt provider, Sprott Private Resource Lending (Collector), LP (Sprott), who have
been understanding and constructive as we work through this recalibration of the LGP.
The Company retains the option of repaying Sprott in full or keeping the facility available
to support a recommencement of development of the LGP.
Our strategy is focussed on adding value to the LGP by testing the depth extensions of
known deposits, upgrading and expanding Mineral Resources, simplifying and de-risking
ore, water and power supply and completing a robust cost estimate and schedule for
development.
There is still some way to go on this journey but we are making progress. The results
from drilling of the Helens deposit within the Cardinia Mining Centre at the LGP have
been very encouraging. Drilling in the second half of FY18 has identified new zones of
mineralisation linking the Helens Main and Helens South zones. Significantly, the deepest
2
KIN MINING NL drill hole in the region returned a very encouraging 15.8m @ 3.77 g/t Au from 266m,
underscoring the depth potential at Helens and the wider tenement package which has
been subjected to very limited drilling below 100m.
This strategy of exploration, de-risking and project optimisation at the LGP will continue
into FY19.
I believe we have now stabilised the Board and Management team so that the Company
can focus on successfully executing our new strategy.
I thank all of Kin’s Directors, management team, staff and contractors for their
contribution during this demanding period. In particular, I extend my appreciation to
Managing Director Andrew Munckton who joined in April 2018 and has provided strong
leadership.
Finally, and most importantly, I would like to thank Kin shareholders for their patience
and support throughout the year. Your Board understands the frustration caused by the
development setback at the LGP. However, we are now on the way to building a more
robust and sustainable gold project with the aim of maximising the long-term value of the
LGP for our shareholders.
Yours sincerely,
Jeremy Kirkwood
Chairman
3
2018 ANNUAL REPORTCHAIRMAN’S LETTER DIRECTORS’ REPORT
D I R E C T O R S ’ R E P O R T
The Directors of Kin Mining NL (“Kin”
or “the Company”) submit herewith
the consolidated annual financial
report consisting of the Company
and its wholly owned subsidiaries
(together the “Group”) for the
financial year ended 30 June 2018. In
compliance with the provisions of the
Corporations Act 2001, the Directors
report as follows:
Jeremy Kirkwood
Chairman
4
DIRECTORS
The names of the directors in office during or since the end of the year are as follows.
Directors were in office for the entire period unless otherwise stated.
• Jeremy Kirkwood (Appointed 26 February 2018)
• Andrew Munckton (Appointed Managing Director 1 August 2018)
• Trevor John Dixon
• Giuseppe (Joe) Paolo Graziano
• Brian Dawes (Appointed 20 February 2018)
• Don Harper (Resigned 13 February 2018)
• David Sproule (Resigned 20 February 2018)
Mr Jeremy David Kirkwood, Chairman
Jeremy Kirkwood has extensive experience in corporate strategy, investment banking
and global capital market and provides strategic leadership and guidance to the
Company’s board and management team.
Jeremy is a principal of Pilot Advisory Group and was previously a Managing Director at
Credit Suisse, Morgan Stanley and Austock. He has primarily worked in public markets,
undertaking merger and acquisitions and capital raisings for companies principally in the
metals and mining, energy and infrastructure sectors.
Jeremy is currently the Chairman of Talisman Mining and previously served as a Director
of ASX listed Zenitas Ltd (formerly BGD Corporation). He is also the Chair of Geelong
Grammar School and a Director of Independent Schools Victoria.
Special Responsibilities:
– Nil
Directorships held in other Australian listed companies in the past 3 years:
– Talisman Mining – Non-Executive Chairman, appointed 1 April 2016
– Zenitas Ltd (formerly BGD Corporation), resigned 2 March 2018
KIN MINING NL Andrew Munckton
Managing Director
Trevor Dixon
Executive Director
Giuseppe Graziano
Non-Executive Director /
Company Secretary
Mr Andrew Munckton, Managing Director
Andrew Munckton is an experienced geologist who has held senior management roles of
both ASX-listed companies and gold operations in a career spanning more than 30 years.
Most recently, Andrew was Managing Director of a junior gold and base metals exploration
and development company, Syndicated Metals Limited. His focus at Syndicated was on
leading the acquisition and exploration of the Monument Gold Project in Western Australia
which is adjacent to Dacian Gold’s Mount Morgans gold mine. In this role he has had
responsibility for overseeing exploration programs, feasibility studies, project assessments
and acquisition, project divestments, joint ventures, capital raisings and general corporate
strategy.
Andrew has also held the roles of Managing Director of Avalon Minerals, General Manager
– Operations for Gindalbie Metals, General Manager Strategic Development of Placer
Dome Asia Pacific and General Manager Operations of the Kanowna Belle, Paddington
and Kundana gold mines over a period of 10 years.
He holds a Bachelor of Science (Geology) from the University of Western Australia and is
currently a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and
the Australian Institute of Company Directors.
Special Responsibilities:
– Nil
Directorships held in other Australian listed companies in the past 3 years:
– Syndicated Metals Limited – Managing Director, resigned 26 April 2018
Mr Trevor John Dixon, Executive Director
Trevor Dixon is a businessman with more than 30 years of experience in the mining and
exploration sector in Western Australia. Starting out as an earthmoving contractor to the
industry, Trevor developed a strong interest in mining and the identification of prospective
mineral areas and acquisition of project areas of interest. He was a founding vendor to
a number of companies including Jubilee Mines NL (Glencore PLC), Terrain Minerals Ltd
(ASX: TMX) and Nzuri Copper Ltd (ASX: NZC), Kin Mining NL (ASX: KIN) and Torian (ASX:
TNR).
During his time in the industry, he has had joint venture partners including Newcrest
Mining Ltd, Independence Group NL, St Barbara Ltd, Normandy Poseidon, Ashton
Mining, Regal Resources Ltd, Glencore PLC and currently holds Joint Venture/Royalty
agreements with Stone Resources Limited, Kin Mining NL, Torian and Syndicated Metals.
Trevor’s management experience spans the areas of contractual outcomes, Mining Act
regulatory procedures and standards, tenement management and a long history of Native
Title negotiations and resolutions.
Special Responsibilities:
– Nil
Directorships held in other Australian listed companies in the past 3 years:
– Nil
Mr Giuseppe (Joe) Paolo Graziano, Non-Executive Director / Company Secretary
(resigned as Company Secretary on 30 July 2018)
Mr Graziano is a Chartered Accountant with corporate and company secretarial
experience. Mr Graziano has over 28 years’ experience providing a wide range of
business, financial and strategic advice to small cap unlisted and listed public companies
and privately owned businesses in Western Australia’s resource-driven industries. Since
2014 he has been focused on corporate advisory, company secretarial and strategic
planning with listed corporations including Mergers & Acquisitions, Capital Raisings,
Corporate Governance, ASX compliance and structuring.
Mr Graziano is currently a director of Pathways Corporate Pty Ltd a specialised Corporate
Advisory business and holds the following Directorships in other Australian listed
Companies:
5
2018 ANNUAL REPORTDIRECTORS’ REPORT Brian Dawes
Non-Executive Director
DIRECTORS (CONTINUED)
– Thred Ltd – Non-Executive Director (ASX: THD) appointed 1 August 2018
– Migme Ltd – Non-Executive Director (ASX: MIG) appointed 12 September 2018
Special Responsibilities:
– Nil
Directorships held in other Australian listed companies in the past 3 years:
– Oz Brewing Ltd – Non-Executive Director appointed 15 April 2011 and ceased 18
August 2016
– Lithex Resources Ltd – Non-Executive Director appointed 5 December 2013 and
ceased 2 December 2016
– Antares Mining Ltd – Non-Executive Director appointed 12 August 2015 and ceased
10 September 2015
– Castillo Copper Ltd – Non-Executive Director appointed 13 August 2015 and ceased
1 August 2017
– The Carajas Copper Company Ltd – Non-Executive Director appointed 17 March 2016
and ceased 10 May 2016
Mr Brian Dawes, Non-Executive Director
Brian is a mining engineer with extensive international mining industry experience. He
holds a BSc in Mining from the University of Leeds UK, and is Member of the Australasian
Institute of Mining and Metallurgy.
He has worked in the UK, Africa, the Middle East and across Australia and holds several
First Class Mine Managers’ Certificates of Competency. Brian’s diverse expertise covers all
key industry aspects from exploration through the discovery, feasibility, funding, approvals,
project construction, commissioning, operations, optimisation, logistics, marketing,
and closure phases. This includes site management and corporate responsibilities in a
diversity of challenging and successful underground and open pit operations across many
commodities and geographies; mainly in copper, nickel, gold, zinc and lead, with iron ore,
graphite, and coal.
Brian is a Non-Executive Director of Talisman Mining, and has previously held a number
of Executive positions with Jubilee Mines NL, Western Areas, LionOre Australia, WMC,
Normandy Mining and Aberfoyle.
Special Responsibilities:
– Nil
Directorships held in other Australian listed companies in the past 3 years:
– Talisman Mining Ltd – Non-Executive Director appointed 17 June 2009
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:
DIRECTORS
J Kirkwood
T Dixon
G Graziano
B Dawes
A Munckton
FULLY PAID ORDINARY
SHARES
SHARE OPTIONS
NUMBER
1,328,156
12,152,660
8,843,750
361,182
37,366
NUMBER
-
6,037,500
5,075,000
-
-
Principal Activities
The principal activity of the Group during the year were gold and base metals exploration
and gold project development.
6
KIN MINING NLDIRECTORS’ REPORT DIRECTORS’ REPORT
R E V I E W O F O P E R A T I O N S
LEONORA GOLD PROJECT
Kin Mining NL (Kin or the Company) holds 100% of the Leonora Gold Project (LGP), located approximately
30km northeast of Leonora and approximately 250km north-northwest of Kalgoorlie in Western Australia.
The LGP is situated in the heart of an active gold mining district that hosts several multi-million ounce operating
gold mines including Sons of Gwalia, Mt Morgans, Wallaby and Granny Smith (refer Figure 1). This district
is well serviced by infrastructure including a network of high-quality roads, gas pipelines, communications
infrastructure, an airstrip with regular services to Perth and close proximity to an established mining workforce
and supply network.
The LGP is a valuable asset, with a current Mineral Resource of +1Moz and significant near-deposit and regional
exploration upside. Building on the current Mineral Resource and identifying new, higher grade ore sources are
a key part of Kin’s strategy during the upcoming 12 months. Testing the depth extension of known deposits
targeting higher grade, sulphide mineralisation will be a key priority in FY19 following the successful drilling
campaigns at the Helens prospect in FY18.
Figure 1: The Leonora Gold Project and surrounding deposits and gold mining operations
7
2018 ANNUAL REPORT LEONORA GOLD PROJECT (CONTINUED)
Successful Exploration Program
The LGP is made up of three key mining centres which each host significant Mineral Resources – Mertondale
(521,000oz), Cardinia (328,000oz) and Raeside (206,000oz) (refer Figure 2).
The Cardinia Mining Centre was the focus of exploration during the period with extensive drilling being completed
at the Helens deposit in the second half of FY18 and earlier successful programs also being completed at Bruno-
Lewis, Kyte and Triangle.
Drilling at Cardinia has targeted both shallow oxide mineralisation and deeper sulphide mineralisation. Only at the
Helens deposit has the system been subject to effective testing below a depth of 100 metres.
A program of 1,436 metres of diamond drilling and 735 metres of (RC) drilling was also completed at Mertondale
during FY18.
Figure 2: Regional interpreted geology (GSWA) of the LGP, highlighting the three mining centres
8
KIN MINING NLDIRECTORS’ REPORT HELENS
More than 15,000 metres of RC and Diamond drilling was completed at Helens during the period which was
successful in extending the Helens Main Zone towards the Helens South deposit and demonstrating that
higher grade primary mineralisation continues at depth. Gold mineralisation has now been traced over a strike
length of 1,500 metres and results suggest a larger open pit development to extract the deeper primary ores
may eventuate at Helens (refer Figure 3). Results from the FY18 drilling program have been incorporated into
an updated Mineral Resource estimate in September 2018 that has been included in the September 2018
Mineral Resource estimate included later in this Directors Report. In a potentially significant result subsequent
to the reporting period, the deepest hole drilled at Helens returned 15.8m @ 3.77 g/t Au from 266.4m in
drill hole HE18RCD231 which has increased the potential for higher grade primary mineralisation in newly
discovered mineralised positions parallel to the Helens Main Zone within the system. Other significant results
are also shown in Figure 3.
Figure 3: Plan view of Helens Main and Helens South showing recent drilling
9
2018 ANNUAL REPORTDIRECTORS’ REPORT HELENS (CONTINUED)
Drilling at the Helens deposit intersected higher grade gold mineralisation associated with altered and sulphide‐
rich shear zones in mafic and sedimentary rocks at both Helens Main and Helens South.
Two main shear structures at Helens Main are consistently present. Both shear zones are associated with
basaltic flow contacts with fine grained sedimentary interflow units. The mineralised shear zones are marked by
sericite alteration with silica flooding and minor quartz veining and fine sulphide mineralisation in mafic rocks.
One main shear structure is present at Helens South consistent with the Western Shear present at Helens Main,
with sedimentary units mapped to the east. The significant proportion of the drilling into these deposits has been
diamond drilling which, along with extensive surface mapping, continues to contribute to updated geological
and structural interpretations of the area.
Figure 4: Long section of Helens and Helens South showing interpreted south plunging shoots
Consistent, primary mineralisation
has been intersected at Helens
Main:
• 14m @ 3.08 g/t Au from 88m
(HE18RC160)
• 8m @ 8.60 g/t Au from 88m
(HE18RCD161)
• 15m @ 3.14 g/t Au from 64m
(HE18RCD170)
• 18m @ 3.08 g/t Au from 90m
(HE18RCD182)
In addition, drilling intersected
previously undiscovered
mineralised positions, east of the
Helens Main Lode in the southern
end of the Helens Main deposit.
Assay results returned:
• 6m @ 11.9 g/t Au from 36m
(HE18RC162)
• 7m @ 2.30 g/t Au from 95m
(HE18RCD163)
• 10m @ 2.25 g/t Au from 122m
(HE18RC197)
High grade oxide and primary
mineralisation intersected at
Helens South:
• 10m @ 3.27 g/t Au from 86m
(HE18RC177)
• 5m @ 15.9 g/t Au from surface
(HE18RC192)
• 8m @ 3.90 g/t Au from 71m
(HE18RC201)
10
KIN MINING NLDIRECTORS’ REPORT BRUNO-LEWIS
RC Drilling was conducted at Lewis South in the June quarter 2018 to test for depth extensions into fresh rock
below the proposed Bruno-Lewis pit. Intersections encountered were generally thin (1m to 3m with occasional
broader zones) and moderate grade (0.75 g/t Au to 2.06 g/t Au). Previous drilling had been conducted to test
for supergene mineralisation only.
Eight RC holes were completed at Bruno for a total of 864m. The holes were aimed at intersecting porphyry
intrusions which appear to control the gold mineralisation at depth below the pit design between 78m and
120m below surface.
Notable primary mineralisation included:
• 4m @ 1.45 g/t Au from 104m (BL18RC005)
• 4m @ 1.52 g/t Au from 50m (BL18RCD007)
Supergene mineralisation was intersected and extended in the south and east (Figure 5).
In addition, 7 Diamond holes were drilled into previously defined ore grade mineralised positions in fresh rock
at Lewis South subsequent to FY18. These 7 diamond holes are providing additional metallurgical testwork
samples to be input to the updated process plant design.
Figure 5: Drill hole plan of Bruno deposit with significant intersections drilled in FY18
KYTE
A total of 44 Reverse Circulation (RC) drill holes for 2,796m were completed during February and March 2018
at Kyte. Deeper drilling identified narrow, high-grade primary gold mineralisation while drilling to the south has
identified narrow gold mineralisation which will be incorporated into a model update.
11
2018 ANNUAL REPORTDIRECTORS’ REPORT DIRECTORS’ REPORT
MERTONDALE
Diamond drilling at Mertondale was designed to test extensions to deeper mineralisation and to collect data
to aid structural and geological interpretation and drill targeting. Four diamond drill holes completed which
intersected the targeted shear structures that host the gold mineralisation. The mineralised system remains
open at depth.
Gold anomalism was detected throughout the sheared intervals, with best results being:
• 0.4m @ 6.5 g/t Au from 189.9m (MT18DD045)
• 4.7m @ 2.1 g/t Au from 72.2m (MT18DD046)
• 4.8m @ 2.2 g/t Au from 131.6m and 2.1m @ 2.7 g/t Au from 143.9m (MT18DD047A)
All drill holes intersected wide zones of shearing and anomalous levels of gold throughout significant portions
of the drill holes. However, the shear zones contained relatively thin ore grade intercepts. The drilling confirmed
that the gold-bearing system remains fertile at depth, and may host further significant gold mineralisation at and
below the depths drilled to date.
The geological and structural information collected from the drill holes is currently being interpreted to update
the geological model and Mineral Resource estimate of the Mertondale area. This work will flow into the
development of additional drill targets which will be drilled in FY19.
12
KIN MINING NL TRIANGLE
The Triangle Prospect is located on a line of extensive historic workings over a strike length of approximately
350m where historic production of 151.9t of ore at an extremely high grade of 340 g/t Au was reported.
Underground mapping of the workings identified two distinct styles of gold mineralisation with north‐ dipping
ferruginous quartz veining in a 340° orientation within a large alteration zone and crosscutting east‐west quartz
veins. In the December quarter 2017 Kin embarked on an eight‐hole reconnaissance drill program, testing along
strike and underneath the historic workings (Figure 6).
Figure 6: Plan view of recent RC drilling at the Triangle Prospect
Multiple high‐grade gold intersections were returned demonstrating that primary gold mineralisation persists well
below the historic workings. Mineralisation is hosted in a series of quartz veins within a sheared, highly altered
dolerite. Results returned high‐grade intersections with the standout intersection of:
• 7m @ 16.3 g/t Au from 60m including 1m @ 103.0 g/t Au (TR17RC007)
Results of the drilling indicate that the extent of the high‐grade mineralisation is greater than previous explorers
had interpreted, as the high‐grade mineralisation intersected in TR17RC007 is approximately 40m below the
deepest part of the historic workings. Furthermore, Kin’s maiden drill campaign at Triangle intersected the high‐
grade mineralisation much deeper than that achieved in historic drilling by previous explorers. Follow-up work
will be planned.
13
2018 ANNUAL REPORTDIRECTORS’ REPORT Water Drilling
A total of 4,325m of RC drilling for water exploration was undertaken during the June quarter 2018. The aim of
the program was to define sufficient bore holes that collectively could deliver 1.5 Mtpa of suitable quality water
to the Cardinia process plant to support processing operations. Drilling was targeted around the Cardinia Creek
area where previous RC drilling associated with gold exploration has intersected water at relatively shallow
depths. Drilling in this area resulted in three RC holes (of 34 exploration holes drilled) yielding sufficient water
(>5 litres/second each) to justify development testing.
In addition, water exploration drilling was undertaken at Bummer Creek, approximately 13km south east of
the Cardinia plant site. Four RC holes (of 8 exploration holes) in this area intersected sufficient water (>5 litres/
second each) to warrant development. Production bore development and testing during the September 2018
quarter was completed with 4 production bores (2 at Cardinia Creek and 2 at Bummer Creek) established.
Further production bores are proposed at Bummer Creek to establish the sustainable water supply to the
project.
Mineral Resource
Following a highly successful 2016-17 exploration and resource definition drilling program, Kin updated the
JORC (2012) Mineral Resource estimate for the LGP in August 2017. The August 2017 Mineral Resource was
completed by Carras Mining Pty Ltd (CM).
Drilling to August 2017 delivered a 42% increase in total Mineral Resources to 22.3Mt at a grade of 1.43g/t
Au for 1.02Moz Au. Of this estimate, 75% of the Resources were in the Indicated category, with the remainder
Inferred. More than half of the Mineral Resource was contained within the Mertondale Mining Centre.
Other than the additional drilling on the Helens deposit (refer above) and the impact on the updated Mineral
Resources statement for the Helens deposits (refer below) there are no new factors or changes to previously
acquired data that would result in material changes to the previously reported Mineral Resources.
Further drilling at the Helens deposits during the second half of FY2018 resulted in a further 92% increase in
the Mineral Resource for the Helens deposits from 37koz on August 2017 to 71koz in September 2018. The
Companies Mineral Resources are shown in the below table.
14
KIN MINING NLDIRECTORS’ REPORT LGP Mineral Resources (September 2018)
CUT
OFF
g/t Au
INDICATED
INFERRED
TOTAL
TONNES
(Mt)
AU
(g/t)
AU
(koz)
TONNES
(Mt)
AU
(g/t)
AU
(koz)
TONNES
(Mt)
AU
(g/t)
AU
(koz)
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
2.75
2.08
2.67
0.81
1.37
1.50
1.18
1.83
121
100
101
48
8.30
1.39
370
1.09
2.48
0.51
0.62
0.33
0.41
5.44
2.47
0.75
1.30
1.21
1.28
2.18
1.90
1.37
1.39
1.61
1.81
3.22
16.96
1.66
1.44
45
96
21
43
20
18
243
128
44
172
785
0.36
0.48
0.18
0.22
1.23
0.81
3.29
0.72
0.22
0.02
0.41
0.11
0.19
1.67
0.09
0.15
0.21
0.15
0.60
5.56
1.33
1.33
1.30
1.71
1.39
1.54
1.43
1.55
1.31
1.60
2.07
1.30
1.18
1.59
1.51
1.23
2.12
2.11
1.81
1.52
15
21
8
12
55
40
3.11
2.56
2.85
1.03
1.23
0.81
151
11.59
36
9
1
28
5
7
86
4
6
14
10
35
1.81
2.70
0.53
1.03
0.44
0.60
7.11
2.56
0.90
0.21
0.15
3.82
272
22.52
1.37
1.47
1.18
1.80
1.39
1.54
1.40
1.40
1.22
1.30
2.14
1.70
1.31
1.44
1.61
1.71
2.12
2.11
1.68
1.46
137
121
109
60
55
40
521
81
105
22
71
24
25
330
132
50
14
10
206
1,057
CUT
OFF
g/t Au
0.5
0.5
0.5
INDICATED
INFERRED
TOTAL
TONNES
(Mt)
AU
(g/t)
AU
(koz)
TONNES
(Mt)
AU
(g/t)
AU
(koz)
TONNES
(Mt)
AU
(g/t)
AU
(koz)
8.30
5.44
3.22
16.96
1.39
1.39
1.66
1.44
370
243
172
785
3.29
1.67
0.60
5.56
1.43
1.59
1.81
1.52
151
11.59
86
35
7.11
3.82
272
22.52
1.40
1.44
1.68
1.46
521
330
206
1,057
DEPOSIT
METRONDALE
Mertons Rewards
Mertondale 3-4
Tonto
Mertondale 5
*Eclipse
*Quicksilver
TOTAL
CARDINIA
Bruno Lewis Link
Lewis
Kyte
**Helens
Fiona
Rangoon
TOTAL
RAESIDE
Michelangelo
Leonardo
*Forgotten Four
*Krang
TOTAL
GRAND TOTAL
MINING CENTRE
Mertondale
Cardinia
Raeside
TOTAL
Notes:
All resources other than Helens, Eclipse, Quicksilver, Forgotten Four and Krang have been estimated by CM in 2017 and
reported at 0.5g/t Au within Entech AUD2,200 pit shells.
* Mineral Resources estimated by McDonald Speijers in 2009, audited by Carras Mining Pty Ltd in 2017 and reported in
accordance with JORC 2012 using a 0.5g/t Au cut-off within Entech AUD2,200 pit shells.
** Mineral Resources estimated by Jamie Logan in 2018 and reported @ 0.5g/t AU within a KIN AUD2,000 pit shell.
Totals may not tally due to rounding.
Other than the update to the Helens Resource the company confirms that it is not aware of any new information or data that
materially affects the information included in the ASX Announcement of 30 August 2017 “Kin Defines +1 Million ounces of
Gold at the Leonora Gold Project”, and that all material assumptions and technical parameters underpinning the estimates in
that announcements continue to apply and have not materially changed.
15
2018 ANNUAL REPORTDIRECTORS’ REPORT Ore Reserve
In October 2017 a maiden Ore Reserve estimate was released as part of the LGP Definitive Feasibility Study
(DFS). The estimate of 7.9Mt at a grade of 1.5g/t Au for 373,000oz Au was based on an assumed gold price of
A$1,575 an ounce.
The Ore Reserve, based on the 2017 Mineral Resources estimated by independent consultants Carras Mining
was completed by independent mining consultants Entech Pty Ltd. A detailed financial model for the LGP that
was generated as part of the DFS process was used in determining the Ore Reserve estimate.
Leonora Gold Project - October 2017 Ore Reserve estimate
OPEN PIT MINE
CLASSIFICATION
TONNES (t)
GRADE (g/t)
METAL (oz. Au)
Tonto
Merton’s Reward
Mertondale 3-4
Bruno Lewis Link / Lewis
Kyte
Helens
Rangoon
Michelangelo
Leonardo
Probable
Probable
Probable
Probable
Probable
Probable
Probable
Probable
Probable
Operation Total
Probable
210,000
1,285,000
952,000
2,479,000
461,000
873,000
285,000
1,230,000
158,000
7,933,000
1.5
1.7
1.3
1.2
1.2
1.5
1.4
1.9
2.1
1.5
10,000
71,000
39,000
94,000
18,000
42,000
13,000
75,000
11,000
373,000
Calculations have been rounded to the nearest 1,000 t of ore, 0.1 g/t Au grade and 1,000 oz. Au metal. Assume as gold price
of A$1,575/oz.
Totals vary due to rounding.
The company confirms that it is not aware of any new information or data that materially affects the information included in
the ASX Announcement of 2 October 2017 “Feasibility confirms a high margin gold mine for Kin at its Leonora Gold Project
Project”, and that all material assumptions and technical parameters underpinning the estimates in that announcements
continue to apply and have not materially changed.
16
KIN MINING NLDIRECTORS’ REPORT Definitive Feasibility Study
Kin released the results of the Definitive Feasibility Study (DFS) for the LGP in October 2017, building on the
2016 Pre-Feasibility Study. The DFS investigated the economic viability of the LGP based on the mining and on-
site treatment of the Ore Reserve derived from the Mertondale, Cardinia and Raeside Ore Reserves.
In 2017, Kin purchased the decommissioned 800,000tpa Lawlers processing plant and associated
infrastructure located approximately 160km to the north northwest of the LGP. The October 2017 DFS
incorporated the refurbishment of part of the Lawlers plant and the installation of a refurbished 2.5MW ball
mill and six new CIL tanks to establish the Cardinia plant with a nominal throughput of between 1.2Mtpa and
1.5Mtpa dependent on ore feed. The proposed plant incorporated a two-stage crushing circuit feeding the
2.5MW ball mill, with gold extracted by gravity and CIL processes.
Key outcomes of the DFS are summarised as follows:
Key Project Parameters
TONNAGE
GRADE
OUNCES
LPG MINERAL RESOURCES
Indicated Mineral Resources1
Inferred Mineral Resources1
Total Resources
MATERIAL IN MINE PLAN
Probable Ore Reserve
Inferred Mineral Resources
Total (totals vary due to rounding)
CAPITAL COSTS
17.0Mt
5.3Mt
22.3Mt
7.9Mt
0.7Mt
8.6Mt
1.4g/t
1.5g/t
1.4g/t
1.5g/t
1.4g/t
1.5g/t
Final payment to Gold Fields Ltd for Lawlers Processing Plant acquisition (September 2018)
Relocate, Refurbish and Upgrade Lawlers Processing Plant 1.5Mtpa
Infrastructure Capital (Borefield, Roads & TSF “Lift 1”)
Pre-Production Mining & mine Establishment (Accommodation expansion, communications,
Personnel, First Fill & Spares
Contingency +18%
Sub Total (Pre-production capital)
Tailings Storage Facility Construction
Post-production infrustructure & demobilisation
Contingency +15%
Sub Total
TOTAL CAPITAL (LOM)
PRODUCTION SUMMARY
Key outcomes
Life of mine Production
LOM Open Pit Strip Ratio (Waste:Ore)
Total Recovered Gold
Maximum Processing Rate
LOM Mill Recovery
PROJECT ECONOMICS
Base Case Gold price(A$)
Exchange Rate (US$:A$)
Life of Mine Revenue (A$)
C1 Cash Costs2
All-In-Sustaining Costs3
Undiscounted Operating Cash Surplus
Net Present Value NPV (8%)
Internal Rate of Return (IRR)
771,000
252,000
1,023,000oz
(92%)
(8%)
(100%)
$1.2M
$23.4M
$2.8M
$2.6M
5.4M
$35.4M
$3.4M
$1.8M
$0.8M
$6.0M
$41.4M
7yrs
8.0:1
372koz
1.5Mtpa
92.5%
$1,600/oz
0.78
$596.1M
$957/oz
$1,038/oz
$167.9M
$107.4M
77%
1 Cut off grade 0.5 g/t Au
2 C1 operating costs include all mining and processing costs, site administration
3 AISC includes C1 costs + royalties, refining and sustaining capital, but excludes head office corporate costs and Tax
Totals vary due to rounding
17
2018 ANNUAL REPORTDIRECTORS’ REPORT Commencement and Suspension of LGP Development
Following the outcomes of the DFS and the execution of a binding senior secured credit facility for US$27M with
Canadian based Sprott Private Resource Lending (Collector) LP, the Board of Kin announced in December 2017
that it had formally elected to proceed with the development of the LGP.
In the following few months, progress was made in a number of areas of construction including:
• The site administration building was established
• Clearing and grubbing activities were completed for the process plant site
• Dismantling of the Lawler’s Plant was tendered
• Detailed engineering works for packages required to prepare the foundations for the CIL tanks, ball mill and
crusher were commenced
• All CIL tank steel was procured, delivered to site and CIL tank construction was partially completed
• The 2.5MW ANI ball mill was delivered to site
• Earthworks for the foundations of major process plant components was commenced
Following changes to the composition of Kin’s Board during the March quarter 2018, a review process of
key aspects of the LGP commenced and it became apparent that the October 2017 DFS estimate of
pre-production capital costs would need to be adjusted.
The Board determined to undertake a comprehensive review of the LGP to ensure that, before project
development was resumed, it had a high degree of confidence in key project parameters, cost and time
estimates, and a clear and certain funding path in place to complete the LGP. Accordingly, the Company
engaged Como Engineers (Como) as its external and principal consultant to undertake an independent review
of the LGP and generate new cost and time to complete estimates, along with a rigorous implementation plan
for the LGP.
The preliminary report completed by Como confirmed that there are no fatal flaws with regard to the design
of the Cardinia facility. However, Como identified a number of elements of the processing plant that required
additional test work and design to optimise the project returns and accurately estimate the Capital and
Operating cost of the facility. The Como report confirmed the Board’s expectation that there will be a material
increase in the capital costs to deliver the LGP.
In addition, Kin received a preliminary report into the LGP with a focus outside the Cardinia Process Plant
from its CEO, Andrew Munckton which highlighted issues with the ore supply, water supply, infrastructure
and approvals that had not kept pace with the schedule of the Plant construction. The report also highlighted
opportunities to reduce risk and optimise the project’s financial returns by matching the plant design to the ore
supply.
Based on the information contained in the Como and CEO reports, the Board determined that the best path
forward for the LGP was a suspension of plant construction activities until additional ore test work, water and
power supply, engineering design, scheduling and cost estimates can be completed.
In May 2018, the Board made the difficult decision to suspend construction works on the LGP.
This decision was necessitated by the significant increase in the estimate of the pre-production capital cost for
the Cardinia processing plant coupled with the requirement under the Sprott Debt Facility to have any shortfall in
the cost to complete the project to be made up from shareholder supplied funds. Accordingly, Kin commenced
the process of conducting further drilling, updates to the Mineral Resource, mine scheduling, metallurgical,
water exploration, power supply, Tailing Storage Facility (TSF) and road infrastructure assessments, engineering
design scheduling and cost estimates.
By early June 2018, the orderly shutdown of construction at the Cardinia process plant site had been
completed and the project was formally placed on care and maintenance.
All construction facilities are safe and secure, and a program to make them operationally ready should
construction be recommenced in the future is being undertaken. All assets were itemised, registered and
equipment appropriately stored.
Kin’s geology and exploration teams continue to operate out of the Cardinia site as the Company’s exploration
program across all project areas carries on.
18
KIN MINING NLDIRECTORS’ REPORT DIRECTORS’ REPORT
CORPORATE
Board and Management Changes
A number of changes were made to the composition of the Board and Management during the period.
In July 2017, then Non-Executive Chairman Mr Trevor Dixon’s role was expanded to include Tenement and Land
Management and Business Development roles.
Mr Glenn Grayson joined Kin as Exploration Manager in January 2018. Mr Grayson is a geologist with deep
experience in the WA Goldfields who has held senior exploration roles with Northern Star Resources Limited and
Barrick Gold Corporation.
In February 2018, the Board accepted the resignation of Managing Director Don Harper and commenced the
process to appoint a replacement.
Shortly thereafter, the Board undertook a restructure and transition in order to build greater capabilities to support
the development of the LGP.
Mr Brian Dawes joined the Board as Non-Executive Director in February 2018 and Kin advised of its intention to
appoint a new independent Chairman. Mr David Sproule also resigned as a Non-Executive Director.
Mr Jeremy Kirkwood joined the Board as Non-Executive Chairman in February 2018. Mr Kirkwood brings a
wealth of experience in corporate strategy, investment banking and global capital markets. Mr Dixon stepped
down as Chairman and continued as an Executive Director.
In April 2018, Mr Andrew Munckton was appointed as Chief Executive Officer. Mr Munckton is a geologist who
has held senior management roles in ASX-listed companies and gold operations in a career spanning more than
30 years.
In August 2018 Mr Munckton joined the Board as Managing Director. At the same time, Company Secretary Joe
Graziano stepped down from the role which was assumed by Chief Financial Officer Stephen Jones. Mr Graziano
remains on the Kin Board as a Non-Executive Director.
Details of the current Board and Management team are contained in the Directors Report.
Section 249D Notice
On 12 February 2018, Kin advised that it had received notice from a number of shareholders requesting the
Company call a General Meeting of shareholders pursuant to section 249D of the Corporations Act 2001 to
consider a resolution to remove Mr David Sproule as a Director.
Following changes to the Board as outlined above, the requisition notice was withdrawn on 28 February 2018.
19
2018 ANNUAL REPORT Sprott Credit Facility
In December 2017, Kin entered into an agreement with Sprott Private Resource Lending (Collector) LP (“Sprott”)
to provide a US$27M (~A$35M) senior secured credit facility (the “Credit Facility”) to be used for the construction
of the LGP.
The Credit Facility provided Kin with sufficient funding to carry out the necessary pre-production capital works
to bring the LGP into production based on the forecast capital costs included in the Definitive Feasibility Study
released in October 2017. An initial A$6.5M (US$5M) of funding was advanced to Kin in December 2017.
Following the suspension of construction at the LGP in May 2018, no further advances have been sought.
Subsequent to the end of the period, Kin agreed with Sprott to repay the outstanding balance of US$5M on the
Credit Facility and leave the Credit Facility in place as a potential source of future funding. A US$2M payment
was made in August 2018 and Kin advised Sprott of its current intention to repay the balance of US$3M by
31 December 2018.
Equity Capital Raisings
In December 2017, Kin undertook an equity capital raising to raise A$10M (before costs) to be largely used to
accelerate gold exploration at the LGP.
The capital raising comprised a Placement and Entitlement issue. The Company successfully raised A$7M (before
costs) from Institutional and Sophisticated investors via the issue of 28,000,000 fully paid ordinary shares at an
issue price of A$0.25 per Share.
A further A$3M was raised via a pro-rata non-renounceable entitlement issue of approximately 12,000,000
ordinary fully paid shares (New Shares) priced at A$0.25 per share on the basis of 1 New Share for every 16
Shares held by Eligible Shareholders. The entitlement issue closed oversubscribed in early February 2018.
In May 2018, following the decision to suspend construction of the LGP, Kin announced its intention to undertake
a fully underwritten equity capital raising of approximately A$11.3 million (before costs). Proceeds of the capital
raising were to be directed towards the acceleration of exploration at the LGP and commencement of repayment
of the Sprott Facility.
The capital raising comprised a fully underwritten Placement and Entitlement Offer. The Company raised
approximately A$2.4 million (before costs) from Institutional and Sophisticated Investors via the issue of
21,909,586 fully paid ordinary shares (Shares) at an issue price of A$0.11 per Share.
The balance of A$8.9 million (before costs) was raised through a fully underwritten non-renounceable rights issue
of 1 new share for every 3 shares held by Eligible Shareholders, at an issue price of A$0.11 per new share.
The Company received valid acceptances for 39,569,874 new shares and granted a further 33,162,333 Top Up
New Shares after consultation with the Underwriter, Euroz Securities Ltd. The Underwriter managed the shortfall
of 8,450,437 new shares in accordance with the Underwriting Agreement.
Subsequent Events
On 2 July 2018 the Company announced the issue of 72,732,207 new shares issued at 11cents per share to
raise $8,000,542. On 4 July 2018 the Company announced the issue of 8,450,437 new shares issued at 11cents
per share to raise $929,548. Collectively these two amounts raised $8,930,091 from the rights issue of one new
share for every three existing shares initially announced on 30 May 2018. The proceeds from this rights issue are
not reflected in the Consolidated Statement of Financial Position included in this Annual Report.
On 31 August 2018 the Company advised that it has reached agreement with Sprott to modify the US$27M
senior secured credit facility (discussed in Note 16 of the Financial Statements). The modifications to the Credit
Facility include repayment in tranches of the US$5M outstanding and a removal of all Facility covenants from the
date of completion of repayment. Kin made the first tranche repayment of US$2M in August 2018 and intends to
repay the balance before 31 December 2018. Sprott has expressed a desire to remain involved in the LGP and
has agreed to leave the Facility structure in place (with no costs or obligations on Kin) until Kin has completed its
additional work programs.
Likely Developments and Expected Results
Disclosure of information regarding likely developments in the operations of the Group in future financial years and
the expected results of those operations is likely to result in unreasonable prejudice to the Group. Therefore, this
information has not been presented in this report.
Environmental Legislation
The Group is subject to the environmental legislation of the State of Western Australia.
20
KIN MINING NLDIRECTORS’ REPORT 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 2018. 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 KMP of the Group during or since the end of the financial year were the directors of the
Company as follows:
Directors:
J Kirkwood
Non-executive Chairman (commenced 26 February 2018)
A Munckton
Managing Director (commenced as MD on 1 August 2018)
T Dixon
B Dawes
G Graziano
Executive Director, Tenement and Land Manager and Business Development Manager
Non-executive Director (commenced 20 February 2018)
Non-executive Director and Company Secretary (resigned 1 August 2018 from Company
Secretary role)
D Harper
Managing Director (commenced 13 February 2017, resigned 13 February 2018)
D Sproule
Non-executive Director (commenced 13 February 2017, resigned 20 February 2018)
Other Key Management:
A Munckton
Chief Executive Officer (commenced 26 April 2018)
S Jones
Chief Financial Officer and Company Secretary (Co Sec from 1 August 2018)
G Goh
General Manager - Development
G Grayson
Exploration Manager (commenced 9 January 2018)
Except as noted, the named persons held their current positions for the whole of the financial year.
Remuneration philosophy
The performance of the Group depends upon the quality of the directors and executives. The philosophy of the
Group 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.
21
2018 ANNUAL REPORTDIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
In considering the Group’s performance and returns on shareholder wealth, the Board has regard to the following
indicators of performance in respect of the current financial year and the previous four financial years:
2018
2017
2016
2015
2014
Revenue
41,036
11,532
1,057
510
38,984
Net profit/(loss) after tax
(15,793,246)
(10,662,621)
(3,446,559)
(1,148,561)
(615,749)
Earnings per share
Share price at year-end
(8.00)
0.120
(9.29)
0.355
(4.92)
0.250
(2.53)
0.096
(1.79)
0.175
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.
Executive directors and key management personnel remuneration
The Board is responsible for determining the remuneration policies for the Executive Directors and other key
management personnel. The Board may seek external advice to assist in its decision making. The Company’s
remuneration policy for Executive Directors and key management personnel is designed to motivate Executive
Directors and senior executives to pursue long term growth and success of the Company within an appropriate
control framework promote superior performance and long term commitment to the Company. The main
principles of the policy when considering remuneration are as follows:
• Executive Directors and key management personnel are motivated to pursue long term growth and success of
the Company within an appropriate control framework;
• interests of key leadership are aligned with the long-term interests of the Company’s shareholders; and
• there is a clear correlation between performance and remuneration.
The remuneration policy for Executive Directors and other key management personnel has three main
components, fixed remuneration, short term incentives and longer term incentives.
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.
Group’s financial performance and link to remuneration
The Key Management Personnel’s remuneration has a variable component for short term incentives and long
term incentives to link the achievement of the Company’s operational targets with the remuneration received by
Executive Directors and other key management charged with meeting those targets.
22
KIN MINING NLDIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Variable remuneration - short-term incentives
The objective of short term incentives is to link the achievement of the Company’s operational targets with the
remuneration received by Executive Directors and other key management charged with meeting those targets.
The total potential short term incentive available is set at a level so as to provide sufficient incentive to the
Executive Directors and other key management to achieve the operational targets and such that the cost to the
Company is reasonable in the circumstances.
Actual payments granted to Executive Directors and other key management depend on the extent to which
specific operating targets set by the Board are met.
At this time short term incentives in the form of cash bonuses and Performance Rights have been included in
some Key management personnel contracts as disclosed in this Remuneration Report.
The aggregate of annual payments available to Executive Directors and other key management of the Company
is subject to the approval of the Board.
Variable remuneration - Long-term incentives
The Company has an approved Employee Share Scheme designed to facilitate long term incentive payments to
employees in a manner that aligns this element of remuneration with the creation of shareholder wealth.
There has been no utilisation of the Employee Share Scheme at this time.
Employment Contracts
Details of employment contracts currently in place with respect to directors’ and key management personnel
employment with the company are as follows:
Jeremy Kirkwood, Non-Executive Chairman
• Director’s fees of $50,000 per annum inclusive of statutory superannuation contributions.
Andrew Munckton, Managing Director
• Base annual remuneration of $325,000 inclusive of statutory superannuation contributions.
• The appointment will be on an ongoing basis with termination provisions summarised below.
– The employment agreement may be terminated by either party with three months’ notice.
– The employment agreement may be terminated by Kin Mining without notice for serious misconduct or
other circumstances justifying summary dismissal. In this case only accrued legal entitlements will be paid.
Trevor Dixon, Executive Director
• Director
– The term of the employment agreement is subject to the constitution unless otherwise terminated in
accordance with the agreement.
– Annual director’s fees of $36,000 per annum inclusive of statutory superannuation contributions.
– Either party may terminate the agreement without cause by providing the Director with ninety days’ notice.
– Six months termination on loss of role on change of control.
– Long term incentives as granted by the Board as part of a grant of benefits to Directors and subject to
shareholder approval.
• Tenement, Land Manager & Business Development Manager
– Annual salary of $190,000 (including statutory superannuation) per annum.
– Either party may terminate the agreement without cause by providing the Director with ninety days’ notice.
– 12 months’ termination for change of control, change of role or termination by Employer.
– Long term incentives as granted by the Board as part of a grant of benefits to Directors and subject to
shareholder approval.
23
2018 ANNUAL REPORTDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
Giuseppe (Joe) Paolo Graziano, Non-Executive Director
• Director’s fees of $36,000 per annum inclusive of statutory superannuation contributions.
• Long term incentives as granted by the Board as part of a grant of benefits to Directors and subject to
shareholder approval.
Brian Dawes, Non-Executive Director
• Director’s fees of $36,000 per annum inclusive of statutory superannuation contributions.
Stephen Jones, Chief Financial Officer & Company Secretary
• Base annual remuneration of $250,000 exclusive of statutory superannuation contributions.
• The appointment will be on an ongoing basis with termination provisions summarised below.
– The employment agreement may be terminated by either party with three months’ notice.
– The employment agreement may be terminated by Kin Mining without notice for serious misconduct or
other circumstances justifying summary dismissal. In this case only accrued legal entitlements will be paid.
– The employment agreement may be terminated immediately by the employee on a “Change of Control” or
a “Change in Employment”.
– If the employment is terminated by the employer or by the employee following a change in control or
employment the employer will pay an amount of 12 months on termination.
Gary Goh, General Manager, Development
• Base annual remuneration of $250,000 exclusive of statutory superannuation contributions.
• The appointment will be on an ongoing basis with termination provisions summarised below.
– The employment agreement may be terminated by either party with three months’ notice.
– The employment agreement may be terminated by Kin Mining without notice for serious misconduct or
other circumstances justifying summary dismissal. In this case only accrued legal entitlements will be paid.
– The employment agreement may be terminated immediately by the employee on a “Change of Control” or
a “Change in Employment”.
– If the employment is terminated by the employer or by the employee following a change in control or
employment the employer will pay an amount of 12 months on termination.
Glenn Grayson, Exploration Manager
• Base annual remuneration of $190,000 exclusive of statutory superannuation contributions.
• The appointment will be on an ongoing basis with termination provisions summarised below.
– The employment agreement may be terminated by either party with one months’ notice.
– The employment agreement may be terminated by Kin Mining without notice for serious misconduct or
other circumstances justifying summary dismissal. In this case only accrued legal entitlements will be paid.
– The employment agreement may be terminated immediately by the employee on a “Change of Control” or
a “Change in Employment”.
– If the employment is terminated by the employer or by the employee following a change in control or
employment the employer will pay an amount of 12 months on termination.
24
KIN MINING NLDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
Remuneration of Key Management Personnel
Short-term employee
benefits
Post-
employment
benefits
Equity
Performance
related
30 June
2018
Salary
and fees Consulting
Non-
monetary
benefits
$
Directors
J Kirkwood
15,628
T Dixon
225,679
$
-
-
G Graziano
36,000 120,0003
B Dawes
11,840
-
$
-
-
-
-
Other
$
Super-
annuation
Share
options
$
$
Total
$
-
1,485
-
17,113
3,6001
21,440
533,700
784,419
-
-
-
449,800
605,800
1,125
-
12,965
D Harper
252,177
- 100,0002
50,0002
22,610
274,800
699,587
D Sproule
23,892
56,8504
-
274,800
355,542
KMP
A Munckton
53,028
S Jones
G Goh
260,417
252,885
-
-
-
-
-
-
- 25,0005
50,0005 25,0005
20,884
5,220
-
-
20,049
8,551
-
-
-
-
58,249
356,301
297,933
98,557
%
-
68%
74%
-
61%
77%
-
21%
8%
-
G Grayson
90,006
-
-
1,221,552 176,850 175,000
78,600
101,364 1,533,100 3,286,466
1 Mr. T Dixon received $3,600 for equipment hire (GST exclusive).
2 Mr. Don Harper received performance payments of $100,000 in Performance Rights and $50,000 in cash during 2018. No
other cash bonuses were granted during 2018.
3 Consulting services rendered by Mr. Graziano were via Pathways Corporate Pty Ltd for Company Secretarial services during
the period (GST exclusive).
4 Consulting fees paid to Mr. D Sproule were for processing plant consulting services during the period.
5 Non monetary benefits and Other benefits were paid in accordance with Short Term incentives in executive employment
contracts.
25
2018 ANNUAL REPORTDIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Short-term employee
benefits
Post-
employment
benefits
Equity
Performance
related
Salary
and fees Consulting
Non-monetary
benefits
Other
Super-
annuation
Share
options
$
$
Total
$
30 June
2017
Directors
$
$
-
-
T Grammer
33,333
T Dixon
M Fitton
156,000
24,000
43,8752
G Graziano
36,000 103,2003
D Harper
236,250
-
D Sproule
10,500
45,000
KMP
A Munckton
S Jones
G Goh
G Grayson
-
31,250
-
-
-
-
-
-
$
-
$
-
3,167
- 138,6501
14,820
-
-
-
-
-
2,969
-
-
-
-
2,280
-
50,0004
22,444
-
-
-
-
-
-
-
-
-
-
-
36,500
- 309,470
-
70,155
- 139,200
- 308,694
-
55,500
-
-
-
-
-
32,219
-
-
%
-
-
-
-
16
-
-
-
-
-
527,333
192,075
-
188,650
42,711
- 951,738
1 Mr. T Dixon received $138,650 for equipment hire (GST exclusive).
2 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 exclusive).
3 Consulting services rendered by Mr. Graziano were via Pathways Corporate Pty Ltd for Company Secretarial, and services during
the period (GST exclusive).
4 Mr. Don Harper received a cash bonus of $50,000 during 2017. No other cash bonuses were granted during 2017.
Shareholdings of key management personnel
2018
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper1
D Sproule1
KMP
A Munckton
S Jones
G Goh
G Grayson
Balance at
01/07/17
Shares
Purchased
Shares
Issued
Shares Vendor
Acquisition
Shares on
Resignation
Balance at
30/06/18
No.
No.
No.
No.
No.
No.
-
10,582,660
7,605,418
-
250,000
4,984,091
-
-
-
-
-
520,000
238,332
270,886
39,381
-
1,050,000
500,000
-
380,0832
-
-
-
-
-
-
-
194,0993
97,0504
-
23,422,169
1,068,599
2,221,232
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,152,660
8,343,750
270,886
(669,464)
(4,984,091)
-
-
-
-
-
-
-
194,099
97,050
-
(5,653,555)
21,058,445
1 Messrs Harper and Sproule resigned on 13 February 2018 and 20 February 2018 respectively. The number of shares
disposed is the number of shares they held at the time of their resignation.
2 Mr Harper was issued 380,083 shares on the conversion of performance rights upon the achievement of the performance
hurdles included in his contract.
3 Mr Jones was issued 194,099 shares on the conversion of performance rights upon the achievement of the performance
hurdles included in his contract.
4 Mr Goh was issued 97,050 shares on the conversion of performance rights upon the achievement of the performance
hurdles included in his contract.
26
KIN MINING NLDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
2017
Directors
Balance at
01/07/16
Shares
Purchased
Shares
Issued
Shares Vendor
Acquisition
Shares on
Resignation
Balance at
30/06/17
No.
No.
No.
No.
No.
No.
T Grammer
1,406,113
-
T Dixon
M Fitton
10,008,001
574,659
1,774,000
-
G Graziano
7,001,668
603,750
D Harper
D Sproule
KMP
A Munckton
S Jones
G Goh
G Grayson
-
-
-
-
-
-
250,000
4,984,091
-
-
-
-
20,189,782
6,412,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,406,113)
-
-
10,582,660
(1,774,000)
-
-
-
-
-
-
-
-
7,605,418
250,000
4,984,091
-
-
-
-
(3,180,113)
23,422,169
Option holdings of key management personnel
2018
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper1
D Sproule2
KMP
A Munckton
S Jones
G Goh
G Grayson
Balance at
01/07/17
Options
Purchased
Options
Disposed
No.
No.
No.
Options
Issued
No.
Options
Expired
No.
-
1,087,500
575,000
-
125,000
2,037,500
-
-
-
-
3,825,000
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,050,000)
6,000,000
(500,000)
5,000,000
-
-
(3,125,000)
3,000,000
(5,037,500)
3,000,000
-
-
-
-
-
-
-
-
(9,712,500)
17,000,000
-
-
-
-
-
-
-
-
-
-
-
Balance at
30/06/18
No.
-
6,037,500
5,075,000
-
-
-
-
-
-
-
11,112,500
1 Mr Harper resigned on 13 February 2018. 3,125,000 options were held at the time of resignation.
2 Mr Sproule resigned on 20 February 2018. The number of options disposed is the number of options held at the time of
resignation.
27
2018 ANNUAL REPORTDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
2017
Directors
T Grammer1
T Dixon
M Fitton1
G Graziano
D Harper
D Sproule
KMP
A Munckton
S Jones
G Goh
G Grayson
Balance at
01/07/16
Options
Purchased
Options
Disposed
No.
No.
No.
Options
Issued
No.
Options
Expired
No.
630,000
-
(630,000)
1,050,000
37,500
-
325,000
500,000
-
-
-
-
-
-
-
(325,000)
75,000
125,000
2,037,500
-
-
-
-
-
-
-
-
-
-
-
2,505,000
2,275,000
(955,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
30/06/17
No.
-
1,087,500
-
575,000
125,000
2,037,500
-
-
-
-
3,825,000
1 Messrs Grammer and Fitton resigned on 13 February 2017. The number of options disposed is the number of options
they held at the time of their resignation.
Share-based remuneration granted as compensation
For details of share-based payments granted during year refer note 18.
Options
Granted as compensation
Number granted
Grant date
Value per option at
grant date
Value of options at
grant date
3,000,000
2,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
13-Oct-17
$
0.0836
0.0916
0.0998
0.0836
0.0916
0.0998
0.0836
0.0916
0.0998
0.0836
0.0916
0.0998
$
250,766
183,114
99,820
167,062
182,987
99,751
83,538
91,502
99,760
83,538
91,502
99,760
T Dixon
T Dixon
T Dixon
G Graziano
G Graziano
G Graziano
D Harper
D Harper
D Harper
D Sproule
D Sproule
D Sproule
28
KIN MINING NLDIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
T Dixon
G Graziano
Date exercised
31-Aug-17
25-Aug-17
Ordinary shares
issued on exercise
Vesting and first
exercise date
Last exercised date
1,050,000
500,000
31-Aug-15
31-Aug-15
31-Aug-17
31-Aug-17
The options were provided at no cost and expire on the earlier of their date or termination of the Key Management Personnel’s
employment.
Exercised
T Dixon
G Graziano
Number granted
Grant date
1,050,000
500,000
31-Aug-15
31-Aug-15
Value at
exercise date (i)
351,750
172,500
(i) The value at the date of exercise of options that were granted as part of remuneration and exercised during the year has
been determined as the intrinsic value of the options at the exercise date.
Forfeited / lapsed during the year
D Harper
D Harper
D Sproule
D Sproule
Number forfeited /
lapsed during the year
Financial year
granted
125,000
3,000,000
2,037,500
3,000,000
30-Jun-16
30-Jun-18
30-Jun-16
30-Jun-18
Performance Rights holdings of key management personnel
Rights
Converted to
shares
Rights
Cancelled on
resignation
Balance at
30/06/18
No.
No.
No.
2018
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper1
D Sproule
KMP
A Munckton
S Jones
G Goh
G Grayson
Balance at
01/07/17
No.
-
-
-
-
-
-
-
-
-
-
-
Rights
Issued
No.
-
-
-
-
-
-
-
-
-
-
-
-
4,000,000
(380,083)
(3,619,917)
-
-
194,099
97,050
-
-
-
(194,099)
(97,050)
-
-
-
-
-
-
4,291,149
(671,232)
(3,619,917)
-
-
-
-
-
-
-
-
-
-
-
1 Mr Harper resigned on 13 February 2018. The number of performance rights issued was 4,000,000. The number of rights
disposed includes 380,083 performance rights converted to shares (see above) and 3,619,917 performance rights held at
the time of resignation.
29
2018 ANNUAL REPORTDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
2017 – None
A $50,000 cash bonus was paid to Mr Don Harper for performance related to Short Term Benefits in his
employment contract during 2018. A further $100,000 worth of performance rights vested for Mr Don Harper
during 2018 and were converted into shares following the achievement of performance hurdles related to Short
Term Benefits in his employment contract.
A $25,000 cash bonus was paid to Mr Stephen Jones for performance related to Short Term Benefits in his
employment contract during 2018. A further $50,000 worth of performance rights vested for Mr Stephen Jones
during 2018 and were converted into shares following the achievement of performance hurdles related to Short
Term Benefits in his employment contract.
Performance rights worth $25,000 vested for Mr Gary Goh during 2018 and were converted into shares
following the achievement of performance hurdles related to Short Term Benefits in his employment contract.
Additional performance rights and cash bonuses have been granted to Mr Stephen Jones and Mr Gary Goh that
vest and may be converted to shares following the achievement of future performance hurdles as follows:
Stephen Jones
Gary Goh
Performance
Performance
Rights * Cash Bonus
Rights * Cash Bonus
$50,000
$25,000
$50,000
$25,000
$50,000
$25,000
$75,000
$25,000
$50,000
$25,000
$75,000
$25,000
Performance Hurdles
Conditions
Capital Expenditure on
LGP is within 10% of
budget
First Month of gold
production exceeding
4,000 fine ounces
output from the LGP
Steady State production
at design throughput of
the LGP mill
Budget and contingency
to be determined from the
DFS with allocation and cash
payment made within 1 month
following internal accounts
demonstrating the milestone
Allocation and cash payment
made within 1 month following
the milestone
Six months commercial
production having achieved
design throughput and gold
output with allocation and cash
payment made within 1 month
following the milestone
* Performance Rights will, subject to meeting the Performance Hurdles, vest into shares in the Employer in accordance with
the following formula
Number of shares =
Volume Weighted Average Price (VWAP) of the Employer’s shares over the 5 days on which
trading in the Employer’s shares occurred leading up to and including the day prior to the
vesting date
$ value of the Performance Rights
No amounts were unpaid on options exercised during the year.
30
KIN MINING NLDIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED)
Share options
During the year the following share options and performance rights were granted to Directors and KMP as
compensation or remuneration.
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper
D Sproule
KMP
A Munckton
S Jones
G Goh
G Grayson
Tranche 11
Director Options
Tranche 21
Director Options
Tranche 31
Director Options
Performance
Rights1
n/a
n/a
n/a
3,000,000
2,000,000
1,000,000
2,000,000
2,000,000
1,000,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Total
n/a
6,000,000
5,000,000
n/a
1,000,000
1,000,000
1,000,000
4,000,0002
7,000,000
1,000,000
1,000,000
1,000,000
n/a
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
194,099
97,050
-
-
194,099
97,050
-
7,000,000
6,000,000
4,000,000
4,291,149
21,291,149
1 Refer to Note 18 in the Financial Report for the details of the terms of the Options and Performance Rights issued.
2 380,083 of these rights were converted to shares and the remainder were cancelled following resignation.
Other transactions with Key Management Personnel
Mr Trevor Dixon received $3,600 for rental of motor vehicles to the Company during 2018. Mr Dixon also
received $27,852 in cash payment for a parcel of tenure that he sold to the Company in a prior year.
Pathways Corporate Pty Ltd, a company of which Mr. Graziano is a Director, charged the Group director fees
of $36,000 (2017: $36,000), excluding GST, none of which was outstanding at 30 June 2018 (2017: Nil) and
provided financial and associated services to the Group during the year on normal commercial terms and
conditions. No interest was payable or accrued.
END OF REMUNERATION REPORT
31
2018 ANNUAL REPORTDIRECTORS’ REPORT
Shares under option or issued on exercise of options
At the date of this report unissued ordinary shares or interests of the Company under option are:
Date options granted
21 November 2016
10 April 2017
13 April 2017
15 September 2017
15 January 2018
15 September 2017
15 September 2017
Number of shares
under option
Exercise price
of option
Expiry date
of option
100,000
12,235,750
5,000,000
9,000,000
1,000,000
6,000,000
4,000,000
$0.332
21 November 2018
$0.40
$0.27
$0.75
$0.36
$1.00
$1.25
31 March 2019
10 April 2020
15 September 2022
15 January 2020
15 September 2021
15 September 2022
Details of ordinary shares issued by the Company during or since the end of the financial year as a result of the
exercise of an option are:
Date options granted
3 September 2015
Number of
shares issued
11,229,500
Amount paid
for the shares
$2,245,900
Details of ordinary shares issued by the Company during or since the end of the financial year as a result of the
vesting of performance rights are:
Date performance rights
vested
29 December 2017
Number of
shares issued
380,083
Amount paid
for the shares
Nil
Additional performance rights that will vest and may be converted to shares following the achievement of future
performance hurdles are as follows:
Performance Hurdles
Conditions
Capital Expenditure on LGP is within
10% of budget
Budget and contingency to be determined from the DFS
with allocation and cash payment made within 1 month
following internal accounts demonstrating the milestone
First Month of gold production
exceeding 4,000 fine ounces output
from the LGP
Steady State production at design
throughput of the LGP mill
Allocation and cash payment made within 1 month
following the milestone
Six months commercial production having achieved design
throughput and gold output with allocation and cash
payment made within 1 month following the milestone
Performance
Rights *
$100,000
$125,000
$125,000
* Performance Rights will, subject to meeting the Performance Hurdles, vest into shares in the Employer in
accordance with the following formula.
Number of shares =
Volume Weighted Average Price (VWAP) of the Employer’s shares over the 5 days on
which trading in the Employer’s shares occurred leading up to and including the day
prior to the vesting date
$ value of the Performance Rights
32
KIN MINING NLDIRECTORS’ REPORT
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:
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper
D Sproule
1 All meetings held while a director attended
2 Missed one meeting
Directors’ meetings
8
31
8
8
41
31
32
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 all services provided during the year by the auditor are
outlined in Note 23 to the financial statements. No non-audits services were provided during the year ended
30 June 2018 (2017: $Nil). 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.
33
2018 ANNUAL REPORTDIRECTORS’ REPORT 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 financial report. This
Independence Declaration is set out on page 36 and forms part of this directors’ report for the year ended
30 June 2018.
Signed in accordance with a resolution of the directors.
Andrew Munckton
Managing Director
Perth, Western Australia
28 September 2018
Competent Persons Statement
The information contained in this report that relates to the 2017 Mineral Resources (excluding Helens that was updated in 2018) is based on
information reviewed and compiled by Dr. Spero Carras of Carras Mining Pty Ltd (CM). Dr. Carras is a Fellow of the Australasian Institute Mining
and Metallurgy (AusIMM) and has over 40 years experience relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Mark Nelson, Consultant Geologist to CM with over 30 years experience
and is a Member of the Australasian Institute Mining and Metallurgy (AusIMM) with sufficient experience in the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Gary Powell Consultant Geologist to
CM with over 30 years experience and is a Member of the Australasian Institute Mining and Metallurgy (AusIMM) and the AIG with sufficient
experience in the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”.
CM also acted as auditors of the 2009 McDonald Speijers resource estimates for Eclipse, Quicksilver, Forgotten Four and Krang.
Dr. S. Carras, Mr. Mark Nelson and Mr. Gary Powell consent to the inclusion in the report of the matters based on their information in the context
in which it appears.
The information contained in this report relating to the 2018 Resource Estimation results for the Helens deposit relates to information compiled
by Mr Jamie Logan. Mr Logan is a member of the Australian Institute of Geoscientists and is a full time employee of the company. Mr Logan 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 “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”.
Mr Logan consents to the inclusion in this report of the matters based on information in the form and context in which it appears.
The information contained in this report relating to exploration results relates to information compiled or reviewed by Glenn Grayson. Mr Grayson
is a member of the Australasian Institute of Mining and Metallurgy and is a full time employee of the company. Mr Grayson 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 “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves”.
Mr. Grayson consents to the inclusion in this report of the matters based on information in the form and context in which it appears.
Competent Persons Statement (Ore Reserves)
The information contained in the report that relates to ore reserves at the Leonora Gold Project is based on information compiled or reviewed
by Mr. Shane McLeay who is a fulltime employee of Entech Pty Ltd. Mr. McLeay confirms that he has read and understood the requirements
of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012
JORC Edition). He is a Competent Person as defined by the JORC Code 2012 Edition, having five years’ experience which is relevant to the
style of mineralisation and type of deposit described in the Report, and to the activity for which he is accepting responsibility. He is a Fellow of
The Australasian Institute of Mining and Metallurgy, he has reviewed the Report to which this consent statement applies, for the period ended
1 October 2017. He verifies that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the
information in his supporting documentation relating to Ore Reserves.
Forward Looking Statements
Certain information in this document refers to the intentions of Kin Mining NL, but these are not intended to be forecasts, forward looking
statements or statements about future matters for the purposes of the Corporations Act or any other applicable law. The occurrence of events
in the future are subject to risks, uncertainties and other factors that may cause Kin Mining NL’s actual results, performance or achievements
to differ from those referred to in this announcement. Accordingly, Kin Mining NL, its directors, officers, employees and agents do not give any
assurance or guarantee that the occurrence of the events referred to in this announcement will actually occur as contemplated.
34
KIN MINING NLDIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As
such, Kin Mining NL and its controlled entities have adopted the third edition of the Corporate Governance
Principles and Recommendations which was released by the ASX Corporate Governance Council on 27 March
2015 and became effective for financial years beginning on or after 1 July 2015.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2018 is dated as at
30 June 2018 and was approved by the Board on 3 September 2018. The Corporate Governance Statement is
available on Kin Mining NL’s website at www.kinmining.com.au/corporate-profile/corporate-governance.
35
2018 ANNUAL REPORT 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 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in 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
28 September 2018
D I Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: 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 world-wide organisation of accounting firms and business advisers
36
KIN MINING NLAUDITOR’S INDEPENDENCE DECLARATION C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 8
Notes
$
$
2018
Restated 2017
Continuing operations
Revenue:
Interest income
Other income
Depreciation and amortisation expense
Administration expenses
Consultant expenses
Employee expenses
Share based payment expenses
Finance costs
Occupancy expenses
Travel expenses
Exploration and evaluation costs
Provision for rehabilitation
Unrealised Foreign exchange losses
Loss before income tax expense
Income tax benefit
Net loss for the year
Other comprehensive income, net of income tax
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Basic loss per share (cents per share)
3
3
2, 13
15
4
6
41,306
14,908
(156,535)
(1,349,021)
(319,249)
(1,301,728)
(2,205,900)
(1,083,704)
(118,515)
(100,493)
(7,379,015)
(1,500,000)
(335,300)
11,532
6,658
(54,161)
(791,957)
(422,113)
(894,481)
(72,630)
(113,184)
(119,421)
(45,465)
(8,300,513)
-
-
(15,793,246)
(10,795,735)
-
133,114
(15,793,246)
(10,662,621)
-
-
-
-
(15,793,246)
(10,662,621)
(8.00)
(9.29)
The accompanying notes form part of these consolidated financial statements.
37
2018 ANNUAL REPORT C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N
A S A T 3 0 J U N E 2 0 1 8
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share based payments reserve
Accumulated losses
Total equity
Notes
$
$
2018
Restated 2017
8
9
10
11
12
14
16
15
16
17
2,195,518
827,032
14,738
16,554
6,654,391
493,909
14,738
10,474
3,053,842
7,173,512
12,429,794
12,429,794
15,483,636
2,800,385
2,800,385
9,973,897
2,292,251
5,431,384
7,723,635
1,500,000
-
1,500,000
9,223,635
6,260,001
2,394,877
2,478,967
4,873,844
-
1,200,000
1,200,000
6,073,844
3,900,053
43,175,285
1,818,488
26,805,451
35,128
(38,733,772)
(22,940,526)
6,260,001
3,900,053
The accompanying notes form part of these consolidated financial statements.
38
KIN MINING NL C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 8
Issued
capital
$
Accumulated
losses
$
Share based
payments
reserve
$
Total
equity
$
Notes
9,961,007
(12,277,905)
27,998
(2,288,900)
-
-
-
17,436,558
(592,114)
(10,662,621)
(10,662,621)
-
-
(10,662,621)
(10,662,621)
-
-
-
7,130
7,130
-
-
17,436,558
(592,114)
26,805,451
(22,940,526)
35,128
3,900,053
26,805,451
(22,940,526)
35,128
3,900,053
-
-
-
16,974,884
(605,050)
(15,793,246)
(15,793,246)
-
-
(15,793,246)
(15,793,246)
-
-
-
1,783,360
1,783,360
-
-
16,974,884
(605,050)
Balance as at 1 July 2016
Restated
Loss for the year
Total comprehensive loss
for the year
Share based payments
Shares issued during the year
Share issue costs
Balance as at 30 June 2017
Restated
Balance as at 1 July 2017
Restated
Loss for the year
Total comprehensive loss
for the year
Share based payments
Shares issued during the year
Share issue costs
Balance as at 30 June 2018
43,175,285
(38,733,772)
1,818,488
6,260,001
The accompanying notes form part of these consolidated financial statements.
39
2018 ANNUAL REPORT C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 8
Cash flows from operating activities
Receipts from customers
Notes
2018
Restated 2017
$
-
$
-
Payments to suppliers and employees
(11,623,186)
(8,953,488)
Interest received
Finance costs
41,306
(352,006)
11,532
(288,915)
Net cash (outflow) from operating activities
8
(11,933,886)
(9,230,871)
Cash flows from investing activities
Proceeds from sale of plant and equipment
Payments for property, plant and equipment
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Proceeds from borrowings
Payments for borrowing transaction costs
Repayments of borrowings
Net cash inflow from financing activities
8
8
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
year
600,000
(9,648,945)
(9,048,945)
-
(198,779)
(198,779)
14,454,908
16,737,488
(605,050)
6,398,100
(800,000)
(2,924,000)
16,523,958
(4,458,873)
6,654,391
(592,114)
-
-
(1,350,900)
14,794,474
5,364,824
1,289,567
Cash and cash equivalents at the end of the year
8
2,195,518
6,654,391
The accompanying notes form part of these consolidated financial statements.
40
KIN MINING NL N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
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 consolidated financial statements for the Group. For the purposes
of preparing the consolidated 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 are for the Group consisting of Kin Mining NL and its
subsidiaries.
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 Group’s
principal activities are gold and base metals exploration.
(b) Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2018
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group 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 Group and, therefore, no material change is
necessary to Group accounting policies.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the year
ended 30 June 2018. As a result of this review, the Directors have determined that there is no material
impact of the Standards and Interpretations in issue not yet adopted on the Group and, therefore, no
change is necessary to Group accounting policies.
(c) Statement of compliance
The financial report was authorised for issue on 28 September 2018.
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).
(d) Significant accounting estimates and judgements
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.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable
evidence available at each reporting date. The future realisation of these inventories may be affected by
future technology or other market-driven changes that may reduce future selling prices.
Capitalised exploration and evaluation expenditure
The Group’s accounting policy is stated at 1(u). Also refer to Note 2.
41
2018 ANNUAL REPORT NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Significant accounting estimates and judgements (continued)
Mine development expenditure carried forward
The recoverability of the carrying amount of mine development expenditure carried forward has been
reviewed by the Directors. In conducting the review, the recoverable amount has been assessed by
reference to the higher of “fair value less costs to sell” and “value in use”. In determining value in use,
future cash flows are based on:
• Estimates of ore reserves and mineral resources for which there is a high degree of confidence of
economic extraction;
• Estimated production and sales levels;
• Estimate future commodity prices;
• Future costs of production;
• Future capital expenditure; and/or
• Future exchange rates
Variations to expected future cash flows, and timing thereof, could result in significant changes to the
impairment test results, which in turn could impact future financial results.
Mine rehabilitation provision
The Group’s mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management’s best estimate for asset retirement
obligations in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates. Additionally, future changes to environmental laws and regulations, life of
mine estimates and discount rates could affect the carrying amount of this provision.
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using a Black and Scholes
model, using the assumptions detailed in Note 18.
(e) Going concern
Notwithstanding the fact that the Group incurred an operating loss of $15,793,246 for the year ended
30 June 2018, had net cash outflow from operating activities of $11,933,886 and investing activities of
$9,048,945, and is in a net current liability position of $4,679,793, the directors are of the opinion that the
Group is a going concern for the following reasons:
• Subsequent to year end, an amount of $8,930,091 has been received by the company from the Non-
Renounceable Rights Issue.
• The Directors are confident further capital raisings will be achieved.
The Directors anticipate that further equity raisings will be required in the forthcoming year to meet
ongoing working capital and expenditure commitments.
Should the equity raisings not be completed, there is a material uncertainty that may cast significant doubt
as to whether the Group will be available to realise its assets and extinguish its liabilities in the normal
course of business and at the amount stated in the financial report.
(f) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement in with the investee; and
• has the ability to its power to affect its returns.
The Company reassess whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements listed above.
42
KIN MINING NL NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Basis of consolidation (continued)
When the Company has less than a majority of the voting rights in an investee, it has the power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of
the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether
or not the Company’s voting rights are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the
other vote holders;
• potential voting rights held by the Company, other vote holders or other parties; rights arising from other
contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including voting
patterns at previous shareholder meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of comprehensive
income from the date the Company gains control until the date when the Company ceases to control the
subsidiary.
Changes in the Group’s ownership interest in existing subsidiaries
Changes in the Group’s ownership interest in subsidiaries that do not result in the Group losing control over
the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and
the non-controlling interests are adjusted to reflect the changes in their relative interests in subsidiaries. Any
difference between the amount paid by which the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognised directly in equity and attributed to the owners of the
Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between:
• The aggregate of the fair value of the consideration received and the fair value of any retained interest;
and
• The previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit and loss or transferred to another category of equity as specified/permitted by the
applicable AASBs). The fair value of any investment retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139,
when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
(g) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue is capable of being reliably measured. The following specific recognition criteria must also be
met before revenue is recognised.
Interest income
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the
net carrying amount of the financial asset.
(h)
Income tax
Deferred income tax is provided for on all temporary differences at balance date between the tax base of
assets and liabilities and their carrying amounts for financial reporting purposes.
No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss. No
deferred income tax will be recognised in respect of temporary differences associated with investments in
subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary differences will not reverse in the near future.
43
2018 ANNUAL REPORT NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h)
Income tax (continued)
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
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 future tax profits will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on tax rates (and
tax laws) that have been enacted or substantially enacted at the balance date and the anticipation that the
Group will derive sufficient future assessable income to enable the benefit to be realised and comply with
the conditions of deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed
at each balance date and only recognised to the extent that sufficient future assessable income is expected
to be obtained. Income taxes relating to items recognised directly in equity are recognised in equity and not
in the statement of comprehensive income.
Tax consolidation legislation
Kin Mining NL and its 100% owned Australian resident subsidiaries have implemented the tax consolidation
legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity
continued to act as a taxpayer on its own.
Kin Mining NL recognises its own current and deferred tax amounts and those current tax liabilities, current
tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has
assumed from its controlled entities within the tax consolidated Group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised
as amounts payable or receivable from or payable to other entities in the Group. Any difference between
the amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or
distribution from) controlled entities in the tax consolidated Group.
(i) Other taxes
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.
(j)
Impairment of non-financial assets
The Group assesses at each reporting 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 Group 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 of the Group. 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).
44
KIN MINING NL NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
Impairment of non-financial assets (continued)
An assessment is also made at each reporting 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.
(k) Cash and cash equivalents
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.
(l) Property, plant and equipment
Property, 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 cost less accumulated depreciation on buildings and less any
impairment losses recognised after the date of the revaluation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Buildings
Plant and equipment
Motor Vehicles
5 to 25 years
5 to 20 years
5 years
Computer equipment
2 to 3 years
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 property, 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 property, 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 unit exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
Impairment losses are recognised in the statement of comprehensive income as 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.
45
2018 ANNUAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Property, plant and equipment (continued)
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.
(m) Trade and other receivables
Trade and other 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 15 days to 30 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 Group will not be able to collect all amounts due according to the original
contractual terms. Factors considered by the Group 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 Group. 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 with other
expenses when a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in subsequent period, it is written off against the allowance account. Subsequent recoveries
of amounts previous written off are credited against other expenses in the statement of comprehensive
income.
(n)
Inventories
Gold bullion, are physically measured or estimated and stated at the lower of cost and net realisable value.
Cost comprises direct material, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to
individual items of inventory on the basis of weighted average costs in getting such inventories to their
existing location and condition, based on weighted average costs incurred during the period in which
such inventories were produced. Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and costs of selling the final product.
(o) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group 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.
(p) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that
it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for
liquidity services and amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an
equivalent non-convertible note. This amount is recorded as a liability on an amortised cost basis until
extinguished on conversion or maturity of the note. The remainder of the proceeds is allocated to the
conversion option. This is recognised and included in shareholders’ equity, net of income tax effects.
Borrowings are removed from the statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or
finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
46
KIN MINING NL NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not
recognised for future operating losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the statement of comprehensive income net
of any reimbursement. Provisions are measured at the present value or management’s best estimate of the
expenditure required to settle the present obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an
interest expense.
Restoration and rehabilitation
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 expensed in the statement of
comprehensive income, or capitalised if asset recognition criteria are met. Changes in the estimate of the
provision for restoration and rehabilitation are treated in the same manner. The unwinding of the effect of
discounting on the provision is recognised as a finance cost.
(r) Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and
sick 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, long service leave and sick
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 Group.
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.
47
2018 ANNUAL REPORT NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s)
Issued capital
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.
(t) Earnings/ loss per share
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.
(u) Exploration and evaluation
Exploration and evaluation expenditure is expensed to the profit or loss as incurred except in the following
circumstance in which case the expenditure may be capitalised:
• The existence of mineral deposit has been established however additional expenditure is required to
determine the technical feasibility and commercial viability of extraction and it is anticipated that future
economic benefits are more likely than not to be generated as a result of the expenditure.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. An impairment exists when the carrying value of
expenditure exceeds its estimated recoverable amount. The area of interest is then written down to its
recoverable amount and the impairment losses are recognised in the statement of comprehensive income.
The financial report has been prepared on the basis of the retrospectively applied voluntary change in
accounting policy related to exploration and evaluation expenditure (refer to Note 2 for further details). The
previous accounting policy was to capitalise exploration and evaluation incurred and carry forward as an
asset when costs were expected to be recouped through the successful development of the area of interest
(or alternatively by its sale), or where activities in the area had not yet reached a stage which permitted
a reasonable assessment of the existence or otherwise of economically recoverable reserves and active
operations were continuing.
The directors believe that this change in policy will result in more relevant and reliable information in the
financial report. Exploration and evaluation assets are inherently uncertain and expensing as incurred results
in a more transparent statement of financial position and statement of comprehensive income. Furthermore,
the newly adopted accounting policy is consistent with those of many other exploration and mining
companies.
(v) Parent entity financial information
The financial information for the parent entity, Kin Mining NL, disclosed in Note 22 has been prepared on the
same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent
entity’s financial statements.
Share-based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as a capital contribution to that subsidiary undertaking. The fair value
of employee services received, measured by reference to the grant date fair value, is recognised over the
vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.
48
KIN MINING NL NOTE 2: VOLUNTARY CHANGE IN ACCOUNTING POLICY
(a) Exploration and Evaluation Accounting Policy
The financial report has been reported on the basis of a retrospectively applied voluntary change in
accounting policy related to exploration and evaluation expenditure.
The new accounting policy is to expense exploration and evaluation expenditure to the profit or loss as
incurred except in the following circumstance in which case the expenditure may be capitalised:
• The existence of a mineral deposit has been established however additional expenditure is required to
determine the technical feasibility and commercial viability of extraction and it is anticipated that future
economic benefits are more likely than not to be generated as a result of the expenditure.
The previous accounting policy was to capitalise exploration and evaluation expenditure incurred and carry
forward as an asset when costs were expected to be recouped through the successful development of
the area of interest (or alternatively by its sale), or where activities in the area had not yet reached a stage
which permitted a reasonable assessment of the existence or otherwise of economically recoverable
reserves and active operations were continuing.
The directors believe that this change in policy will result in more relevant and reliable information in the
financial report. Recognition criteria of exploration and evaluation assets are inherently uncertain and
expensing as incurred results in a more transparent statement of financial position and statement of
comprehensive income. Furthermore, the newly adopted accounting system policy is consistent with
those of many other exploration and mining companies.
(b)
Impact on Financial Statements
As a result of the change in the accounting policy of exploration and evaluation expenditure, prior year
financial statements had to be restated. The amounts disclosed for the year ended 30 June reporting
periods in the statement of financial positions as at 30 June 2018 and 30 June 2017 are after the change
in accounting policy for exploration and expenditure.
49
2018 ANNUAL REPORT NOTE 2: VOLUNTARY CHANGE IN ACCOUNTING POLICY (CONTINUED)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Previously Stated
2017
$
Loss Increase/
(Decrease)
$
Restated
2017
$
Continuing operations
Revenue:
Interest income
Other income
Depreciation and amortisation expense
Administration expenses
Consultant expenses
Employee expenses
Share based payment expense
Finance costs
Occupancy expenses
Travel expenses
11,532
6,658
(54,161)
(791,957)
(422,113)
(894,481)
(72,630)
(113,184)
(119,421)
(45,465)
-
-
-
-
-
-
-
-
-
-
11,532
6,658
(54,161)
(791,957)
(422,113)
(894,481)
(72,630)
(113,184)
(119,421)
(45,465)
Exploration and evaluation costs
-
(8,300,513)
(8,300,513)
Loss before income tax
(2,495,222)
(8,300,513)
(10,795,735)
Income tax benefit
Loss after tax
Other comprehensive income, net of
income tax
Other comprehensive income
Other comprehensive income for the
year, net of income tax
133,114
133,114
(2,362,108)
(8,300,513)
(10,662,621)
-
-
-
-
-
-
Total comprehensive loss for the year
(2,362,108)
(8,300,513)
(10,662,621)
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
(2.06)
(2.06)
(9.29)
(9.29)
50
KIN MINING NL NOTE 2: VOLUNTARY CHANGE IN ACCOUNTING POLICY (CONTINUED)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Previously
Stated
2017
$
Loss
Increase/
(Decrease)
$
Restated
2017
$
Previously
Stated
2016
$
Loss
Increase/
(Decrease)
$
Restated
2016
$
Assets
Current assets
Cash and cash equivalents
6,654,391
Trade and other receivables
493,909
Inventory
Other
14,738
10,474
Total current assets
7,173,512
Non-current assets
Property, plant and
equipment
Capitalised exploration and
evaluation expenditure
2,800,385
-
-
-
-
-
-
6,654,391
1,289,567
493,909
246,262
14,738
10,474
-
96,072
7,173,512
1,631,901
2,800,385
260,235
-
-
-
-
-
-
1,289,567
246,262
-
96,072
1,631,901
260,235
17,578,879
(17,578,879)
-
9,278,366
(9,278,366)
-
Total non-current assets
20,379,264
(17,578,879)
2,800,385
9,538,601
(9,278,366)
260,235
Total assets
Liabilities
Current liabilities
27,552,776
(17,578,879)
9,973,897
11,170,502
(9,278,366)
1,892,136
Trade and other payables
2,394,877
Borrowings
2,478,967
Total current liabilities
4,873,844
Non-current liabilities
Borrowings
1,200,000
Total non-current liabilities
1,200,000
Total liabilities
6,073,844
-
-
-
-
-
-
2,394,877
1,070,753
2,478,967
3,110,283
4,873,844
4,181,036
1,200,000
1,200,000
-
-
6,073,844
4,181,036
-
-
-
-
-
-
1,070,753
3,110,283
4,181,036
-
-
4,181,036
Net assets
Equity
Issued capital
Share based payments
reserve
21,478,932
(17,578,879)
3,900,053
6,989,466
(9,278,366)
(2,288,900)
26,805,451
35,128
-
-
26,805,451
9,961,007
35,128
27,998
-
-
9,961,007
27,998
Accumulated losses
(5,361,647)
(17,578,879)
(22,940,526)
(2,999,539)
(9,278,366)
(12,277,905)
Total equity
21,478,932
(17,578,879)
3,900,053
6,989,466
(9,278,366)
(2,288,900)
Statement of Cash Flows
Exploration and evaluation expenditure that is expensed is included as part of the cash flows from operating
activities whereas exploration and evaluation expenditure that is capitalised is included as part of cash flows
from investing activities. This has resulted in additional cash outflows from operating activities of $6,600,392 for
the year ended 30 June 2017. This has also resulted in a corresponding reduction of $6,600,392 being reflected
in the net cash outflows from investing activities for the same reporting period.
51
2018 ANNUAL REPORT
NOTE 3: REVENUE AND EXPENSES
Included in the loss for the year are the following items of revenue and expenses:
Revenue
Other income:
• Other income
Expenses
• Effective interest - royalty
• Interest expense
• Amortisation of transaction costs
NOTE 4: INCOME TAX
2018
$
14,908
14,908
2018
$
369,231
397,054
317,419
1,083,704
2017
$
6,658
6,658
2017
$
-
113,184
-
113,184
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax
expense in the financial statements as follows:
2018
Restated 2017
$
$
Loss before income tax
(15,793,246)
(10,795,735)
Income tax expense calculated at 30% (2017: 30%)
(4,737,974)
(3,238,721)
Tax effect of amounts which are not deductible/(taxable) in
calculating taxable loss:
• Effect of expenses that are not deductible in determining
764,407
134,313
taxable loss
• Effect of unused tax losses and tax offsets not recognised
3,973,567
3,104,408
as deferred tax assets
• Research and development tax concession
Income tax benefit reported in the consolidated statement of
comprehensive income
-
-
(133,114)
(133,114)
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 and its subsidiaries are part of an income tax consolidated group. The Company’s unused tax
losses arising in Australia including the current year losses is $9,653,579 (2017: $8,608,159). These tax losses
are available indefinitely for offset against future taxable profits, subject to the Company passing the regulatory
tests for continued use of the tax losses.
52
KIN MINING NL NOTE 5: SEGMENT REPORTING
Operating segments are identified on the basis of internal reports about components of the Group 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 period, the Group 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.
NOTE 6: LOSS PER SHARE
Basic/diluted loss per share
(8.00)
(9.29)
The loss and weighted average number of ordinary shares used in the calculation of basic/diluted loss per share
is as follows:
2018
Restated 2017
Cents per share
Cents per share
Loss for the year
Weighted average number of ordinary shares for the purpose
of basic/dilutive earnings per share
$
Restated
$
(15,793,246)
(10,662,621)
197,411,002
114,828,927
The potential ordinary shares that could be dilutive in the future are the options discussed at Note 17.
NOTE 7: 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.
NOTE 8: CASH AND CASH EQUIVALENTS
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 at bank and on hand
Short-term deposits
2018
$
2,165,518
30,000
2,195,518
2017
$
3,654,391
3,000,000
6,654,391
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and 3 months, depending on the
immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
53
2018 ANNUAL REPORT NOTE 8: CASH AND CASH EQUIVALENTS (CONTINUED)
Reconciliation of net loss for the year to net cash flows from operating activities
Net loss for the year
(15,793,246)
(10,662,621)
2018
$
Restated
2017
$
Depreciation of non-current assets
Amortisation of finance transaction costs
Share based payments
Accrued interest expense
Interest paid in shares
R&D tax concession
Foreign exchange
Effective interest - royalty
(Increase)/decrease in assets:
Trade and other receivables
Increase/(decrease) in liabilities:
Trade and other payables
Provisions
156,535
317,419
2,205,900
-
45,033
-
354,094
369,231
54,161
-
72,630
(175,731)
-
147,659
-
-
(334,589)
(309,708)
(754,263)
1,500,000
(57,382)
-
Net cash outflow from operating activities
(11,933,886)
(10,930,992)
Changes in liabilities arising from financing activities
Balance as at 1 July 2017
1,278,967
2,400,000
-
3,678,967
Related
party loans
$
Vendor
Finance
$
Sprott
Credit Facility
$
Total
$
Cash flows from financing activities
Proceeds from borrowings
Borrowing transaction costs
-
-
-
-
6,398,100
6,398,100
(800,000)
(800,000)
Repayments of borrowings
(524,000)
(2,400,000)
-
(2,924,000)
Net cash from/(used in) financing activities
(524,000)
(2,400,000)
5,598,100
2,674,100
Repayments of borrowings through equity
(754,967)
Borrowing transaction costs through equity
Exchange differences
Changes in fair value
Effective interest - royalty
Amortisation of transaction costs
Balance as at 30 June 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(754,967)
(1,207,460)
(1,207,460)
354,094
354,094
-
369,231
317,419
-
369,231
317,419
5,431,384
5,431,384
54
KIN MINING NL NOTE 9: TRADE AND OTHER RECEIVABLES
Trade receivables
Other debtors (GST)
Other debtors
Other debtors (ATO receivable and fuel credits refundable)
Aging of past due but not impaired
There are no past due amounts at the reporting date.
NOTE 10: INVENTORY
Gold bullion
NOTE 11: OTHER ASSETS
Current
Prepayment – others
2018
$
690,118
42,900
94,014
827,032
2018
$
14,738
14,738
2018
$
16,554
16,554
2017
$
382,070
-
111,839
493,909
2017
$
14,738
14,738
2017
$
10,474
10,474
55
2018 ANNUAL REPORT NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Freehold land
and buildings
$
Assets in
construction
$
Plant and
equipment
$
Motor
Vehicles
$
Total
$
Balance at 1 July 2016
Additions
120,191
2,520,000
Depreciation charge for the year
(3,353)
Balance at 30 June 2017
2,636,838
Balance at 1 July 2017
2,636,838
-
-
-
-
-
40,708
69,311
99,336
260,235
5,000
2,594,311
(33,558)
(17,250)
(54,161)
76,461
87,086
2,800,385
76,461
87,086
2,800,385
Additions
Disposal
285,700
8,796,970
583,267
740,007
10,405,944
-
(620,000)
-
-
(620,000)
Depreciation charge for the year
(12,558)
-
(57,857)
(86,120)
(156,535)
Balance at 30 June 2018
2,909,980
8,176,970
601,871
740,973
12,429,794
The useful life of the assets was estimated as follows for both 2018 and 2017:
Buildings
5 to 25 years
Plant and equipment
5 to 20 years
Motor vehicles
5 years
Computer equipment
2 to 3 years
Impairment
Following the temporary curtailment of the Cardinia Processing Plant in April 2018 and the full suspension in
May 2018, the recoverable amount of the cost to date for the work in progress on the Cardinia Processing Plant
was reviewed for impairment. Following the review, the Directors have determined that the recoverable amount
exceeds the carrying value and that no impairment exists. The recoverable amount estimation was based on
the estimated value in use and was determined at the cash-generating unit level. The cash-generating unit
consists of the operating assets associated with the Leonora Gold Project in Leonora, WA, which is comprised
of the process plant ($8.8m) and other property, plant and equipment associated with the project ($2.6m). The
recoverable amount of the project has been determined based on a value in use calculation using cash flow
projections based on financial budgets approved by senior management covering a 7 year period. The discount
rate applied to cash flow projections is 8% (refer to page 15, the Directors’ Report, Table 3. Key Project
Parameters for further detail on assumptions). Property, plant and equipment was reviewed for specific write offs
of items which are not expected to be utilised in the future following the temporary curtailment. As a result of the
review no material items required write off.
56
KIN MINING NL
NOTE 13: CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase – at cost
Cumulative exploration and evaluation at beginning of year
Expenditure incurred - cash
- issue of shares
Trial mine gold production
Cumulative exploration and evaluation expenditure at the
end of the year
2018
$
2017
$
17,578,879
7,379,015
-
-
9,278,366
9,507,597
330,000
(1,537,084)
24,957,894
17,578,879
Exploration and evaluation expenditure expensed to the
statement of comprehensive income in the current period
(7,379,015)
(8,300,513)
Exploration and evaluation expenditure carried forward on the
balance sheet
-
-
During the period the Company changed its accounting policy for the treatment of exploration and evaluation
costs. The change is discussed in more detail in Note 2.
NOTE 14: TRADE AND OTHER PAYABLES
Current
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.
2018
$
2017
$
1,799,132
1,887,993
338,197
154,922
440,694
66,190
2,292,251
2,394,877
NOTE 15: PROVISIONS
Non-Current
Restoration and rehabilitation provision
2018
$
1,500,000
1,500,000
2017
$
-
-
57
2018 ANNUAL REPORT NOTE 16: BORROWINGS
Current
Unsecured
Related party loans (ii)
Vendor finance (iii)
Secured
Sprott Credit Facility (i)
Non-Current
Unsecured
Vendor finance (iii)
Total borrowings
2018
$
-
-
5,431,384
5,431,384
2017
$
1,278,967
1,200,000
-
2,478,967
-
5,431,384
1,200,000
3,678,967
Summary of borrowing arrangements
(i)
The Company has entered into a credit agreement with Sprott Private Resource Lending (Collector), LP
(Sprott) to provide a USD$27M senior secured credit facility to be used for the construction of the 100%
owned Leonora Gold Project. The credit facility includes the following key terms:
• First payback is required 18 months after first drawdown (expected 28 June 2019)
• Annual interest rate of 8.00%, plus the greater of US 12-month LIBOR or 1.00%
• 3,500,000 KIN ordinary shares were issued to Sprott on closing with the shares escrowed until 24 April
2018
• 1.5% NSR on first 100,000oz gold produced by the LGP
• 3-year loan term, repayments beginning June 2019
On 27 December 2017, the Company received the first tranche drawdown of this facility of USD$5M which
has been recorded in the Statement of Financial Position net of the transaction costs related to the facility. The
effective rate of this facility (based on the initial drawdown only and the total of the transaction costs) is 63%
however this rate will reduce if further funds are drawn down. There was an immaterial change in fair value of
loan based on the change in gold price from 1st draw down to 30 June 2018.
This facility is secured by a General Security Deed and Mining Tenement Mortgage.
The company had an additional USD$22M to drawdown under the facility at balance date.
(ii) Related party loans include
a. Mr. Fritz Fitton, the technical director of the Company at the time, provided a loan of $1,000,000 on
24 October 2014 for a term of 12 months at an interest rate of 15%. Interest of $45,033 has been
recorded in the current period. Outstanding principal of $1,000,000 and interest of $207,621 was
repaid during the period with no amounts outstanding at period end (2017: $1,154,967). This loan is
now fully repaid.
b. Mr. Terry Grammer has previously provided loans that have all been repaid. At 30 June 2017
$124,000 remained owing. These loans had no fixed term or interest chargeable.
c.
No new unsecured loans have been provided by Directors and their associates during the year
(2017: $Nil).
(iii) On 28 June 2017 the Company exercised its option to acquire the Lawlers Mill from Agnew Gold Mining
Company Pty Ltd (Goldfields). The terms of this transaction included two payments to Goldfields of
$1,200,000 each. Both payments have been made in the current period.
58
KIN MINING NL NOTE 17: ISSUED CAPITAL
2018
$
2017
$
Ordinary shares issued and fully paid
43,175,286
26,805,451
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
2018
2017
No.
$
No.
$
Movements in ordinary shares
Balance at beginning of year
161,696,184
26,805,451
89,512,891
9,961,007
Rights issues
Placement of shares
Share Purchase Plan issues
Placement
34,665,303
5,598,984
22,665,723
4,986,458
28,000,000
7,000,000
3,750,000
750,000
-
-
-
-
20,721,500
4,144,300
20,049,375
6,415,800
Issue of shares to settle transaction costs
3,500,000
Issue of shares to a Director after
satisfaction of performance rights condition
380,083
875,000
100,000
Issue of shares to a former Director in
repayment of amounts owing
Issue of shares to former Directors for past
services
Issue of shares to employees after
satisfaction of performance rights condition
2,785,714
750,000
1,000,000
330,000
291,149
75,000
-
-
-
-
-
-
-
-
-
-
Issue of shares to consultants
Issue of shares to vendor
Conversion of options
Share issue costs
Balance at end of year
-
-
-
-
601,695
1,000,000
11,229,500
2,245,900
3,395,000
131,000
330,000
679,000
-
(605,050)
-
(592,114)
243,547,933
43,175,285
161,696,184
26,805,451
59
2018 ANNUAL REPORT NOTE 18: OPTIONS AND PERFORMANCE RIGHTS
Movement in options on issue
2018
2017
Weighted
average
exercise price
$
No.
Weighted
average
exercise price
$
No.
Balance at the beginning of the year
28,865,750
0.297
14,925,000
0.200
Options issued to former Directors for past
services (i)
2,000,000
0.750
Options issued to Directors (ii)
Options issued to consultants (iii)
Options issued (iv)
Options issued (v)
17,000,000
1,000,000
-
-
0.960
0.360
-
-
-
-
100,000
12,235,750
5,000,000
Options exercised (vi)
(11,229,500)
0.200
(3,395,000)
Options cancelled on expiry (vii)
(300,500)
0.200
-
Balance at the end of the year (viii)
37,335,750
0.653
28,865,750
-
-
0.332
0.400
0.270
0.200
-
0.297
i.
ii.
Unlisted Options issued as part of approvals granted at the 15 September 2017 Shareholder General
Meeting exercisable at $0.75 by 15 September 2020. Refer to Tranche 1 below for valuation assumptions.
The following Unlisted Options were issued as part of approvals granted at the 15 September 2017
Shareholder General Meeting. There were no vesting conditions attached to the options.
Number of options issued
Date of issue
Spot price at date of issue
Exercise price
Date exercisable
Volatility
Interest rate
Discount for lack of marketability
Fair value per option
Tranche 1
Tranche 2
Tranche 3
7,000,000
15/9/17
0.33
0.75
6,000,000
15/9/17
0.33
1.00
4,000,000
15/9/17
0.33
1.25
15 September 2020
15 September 2021
15 September 2022
85.07%
2.08%
30%
0.0836
85.07%
2.08%
30%
0.0916
85.07%
2.08%
30%
0.0998
60
KIN MINING NL NOTE 18: OPTIONS AND PERFORMANCE RIGHTS (CONTINUED)
iii.
Unlisted options issued for the purpose described were valued using the Black & Scholes option pricing
as shown below:
Purpose of issue
No. of Options
Date of issue
Spot price at date of issue
Exercise price
Date exercisable
Volatility
Interest rate
2018
in accordance with a mandate and part of transaction fee for
arranging the Project Finance Facility
1,000,000
15 January 2018
$0.270
$0.360
15 January 2020
94%
1.96%
Discount for lack of marketability
30%
Total fair value
$82,460
iv.
Unlisted Options issued as part of Share Purchase Plan and Shareholder Approval exercisable at $0.40 by
31 March 2019.
Unlisted Incentive Options issued as part of a Subscription and Settlement Deed in full and final settlement
arising in relation to a dispute as announced on 12 April 2017. Options are exercisable at $0.27 by 10
April 2020.
v.
Exercised during the period.
Period of
Exercised
number
Exercise
date
Share price at
exercise date
Year to 30 June 2017
$0.20 options
3,395,000
31 August 2017
$0.17 to $0.41
Year to 30 June 2018
$0.20 options
11,229,500
31 August 2017
$0.285 to $0.390
vi.
300,500 Unlisted options with an exercise price of $0.20 expired unexercised on 31 August 2018.
vii.
The share options outstanding at the end of the year had an exercise price between $0.27 and $1.25 and
a weighted average remaining contractual life of 740 days.
Movement in performance rights on issue
2018
2017
Value of
performance
rights
$
No.
Value of p
erformance
rights
$
No.
Balance at the beginning of the year
-
-
Issued to Director (i)
Issued to employees (ii)
Vested in Directors (i)
Vested in employees (ii)
4,000,000
291,149
(380,083)
(291,149)
400,000
75,000
(100,000)
(75,000)
Cancelled on resignation of Director (i)
(3,619,917)
(300,000)
Balance at the end of the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
61
2018 ANNUAL REPORT
NOTE 18: OPTIONS AND PERFORMANCE RIGHTS (CONTINUED)
i.
ii.
Performance Rights were issued to the previous Managing Director as part of approvals granted at the 15
September 2017 Shareholder General Meeting. These performance rights come in four equal tranches
and are each subject to a range of vesting conditions in line with the performance of the company and its
projects. The number of shares is determined by dividing each $100,000 tranche by a 5 day VWAP prior
to vesting date. 380,083 performance rights were converted to shares during the period on completion
of the relevant vesting conditions. The remaining performance rights were cancelled on resignation of the
Managing Director.
Various employees were issued performance rights when the performance hurdles were met. These
performance rights are subject to a range of vesting conditions in line with the performance of the
company and its projects. The number of shares issued for performance rights is determined by dividing
each dollar of performance right by a 5 day VWAP prior to vesting date. 291,149 performance rights
were converted to shares during the period. Additional performance rights and cash bonuses have been
granted to employees in accordance with executive contracts that vest and may be converted to shares
following the achievement of future performance hurdles as discussed in the Remuneration Report.
NOTE 19: FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group 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 Group’s overall strategy remains unchanged from 2017.
The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained earnings.
None of the Group’s entities are subject to externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures
such as tax, dividends and 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 assets
Financial liabilities
Trade and other payables
Borrowings
Other financial liabilities
2018
$
2017
$
2,195,518
168,205
2,363,723
1,799,132
5,431,384
493,119
7,723,635
6,654,391
519,121
7,173,512
1,887,993
3,678,967
506,884
6,073,844
The fair values of the Company’s financial assets and liabilities approximate their carrying values.
Financial risk management objectives
The Group is exposed to market risk (including currency risk, fair value interest rate risk and price risk), credit
risk, liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effect of these risks, where the risk is significant to the performance of the
Group, by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives
is governed by the Group’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 Group does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
62
KIN MINING NL NOTE 19: FINANCIAL INSTRUMENTS (CONTINUED)
Market risk
The value of the 1.5% NSR in the first 100,000oz gold produced by the LGP payable to Sprott under the Sprott
Credit Facility is exposed to market risk in relation to the future gold price. A 10% change in the future price of
gold would change the value of the total royalty payable to Sprott by approximately $240,000.
There has been no other 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 and the Group are exposed to interest rate risk as entities in the Group borrow funds at both
fixed and floating interest rates. The Group does not consider floating rate borrowings to be material.
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 counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The
Group 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 Group uses publicly
available financial information and its own trading record to rate its major customers. The Group’s exposure
and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions
concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that
are reviewed and approved by the risk management committee annually.
The Group does not have any significant credit risk exposure to any single counterparty or any Group 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 Group’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 Group’s short, medium and long-
term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate
reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities.
Fair value measurement
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped
into three levels of a fair value hierarchy.
The Sprott Credit Facility is a level 3 in the fair value hierarchy. The fair value is impacted by the estimated timing
of the cashflows and the future gold price.
Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of
maximising the use of market-based information. The finance team reports directly with the Board. Valuation
processes and fair value changes are discussed among the Board at least every year, in line with the Group’s
reporting dates.
The fair value of the Sprott Credit Facility is estimated using a present value technique. There was immaterial
change in fair value of the Sprott Credit Facility based on the change in timing of cashflows and the future gold
price from first draw down to 30 June 2018.
63
2018 ANNUAL REPORT NOTE 19: FINANCIAL INSTRUMENTS (CONTINUED)
The following table details the Company’s and the Group’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 Group can be required to repay. The tables include both interest and
principal cash flows.
30 June 2018
Trade and other payables
Borrowings – interest bearing
Weighted
average
interest
rate
%
-
(a)
15
Less than
1 month
$
1 – 3
months
$
3 months –
1 year
$
1 – 5
years
$
5+ years
$
2,292,251
-
-
-
2,700,878
2,730,506
2,292,251
2,700,878
2,730,506
-
-
-
-
-
-
(a)
The annual interest rate is 8.00%, plus the greater of US 12-month LIBOR or 1.00%
30 June 2017
Trade and other payables
Borrowings – interest bearing
Borrowings – non-interest bearing
Weighted
average
interest
rate
%
-
15
-
15
Less than
1 month
$
1 – 3
months
$
3 months –
1 year
$
1 – 5
years
$
5+
years
$
2,394,877
-
-
-
-
-
1,154,967
-
-
1,324,000
-
1,200,000
2,394,877
1,324,000
1,154,967
1,200,000
-
-
-
-
NOTE 20: COMMITMENTS AND CONTINGENCIES
Exploration expenditure commitments
The Group 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
2018
$
2017
$
2,485,040
2,248,092
After one year but not more than five years
-
-
More than five years
Contingencies
-
-
2,485,040
2,248,092
The company has entered into various agreements that include royalty obligations in the event that certain
parameters are achieved. These parameters are production based such that the royalty is only paid when
production is made.
Other than discussed above the Company has no further contingent liabilities or assets for the years ended
30 June 2018 or 30 June 2017.
64
KIN MINING NL NOTE 21: RELATED PARTY DISCLOSURE
The consolidated financial statements include the financial statements of Kin Mining NL and the subsidiaries
listed in the following table.
% Equity interest
Parent Investment
Country of
incorporation
2018
2017
%
%
2018
$
2017
$
Navigator Mining Pty Ltd
Leonora Gold Plant Holdings Pty Ltd
Leonora Gold Plant Pty Ltd
Kin East Pty Ltd
Kin West WA Pty Ltd
Kin Tenement Holdings Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
-
-
-
21,339,175
2,753,957
2
10,696,968
2,261,834
2,831,130
2
2
2
-
-
-
Kin Mining NL is the ultimate Australian parent entity and ultimate parent of the Group.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and not disclosed in this note. Details of transactions between the Group
and other related entities are disclosed below.
Other transactions with related parties
On 24 October 2014, the Company entered into a loan agreement with Mr. Fitton, a former director, to assist
with the acquisition of the Leonora Gold Project for an amount of $1,000,000, at 30 June 2018 this loan had
been fully repaid (at 30 June 2017 $1,000,000 plus $154,967 in capitalised interest remained outstanding).
This loan was unsecured and earned interest at a rate of 15% p.a. Interest accrued during the year amounted
to $45,033 (2017: $65,695).
In 2016 the Company entered into a loan agreement with Mr. Grammer, a former director, to assist with working
capital funding for $350,000, none of which was outstanding at 30 June 2018 (30 June 2017: $124,000). There
were no new loans with Mr. Grammer in the current year. During the year, the Company repaid $124,000 of the
related party loan owing. No interest was payable or accrued. As at 30 June 2018, the Company has no other
payables due to Mr. Grammer (2017: $27,781).
During the year the Company settled an outstanding payable to Mr Trevor Dixon for $18,172. The company also
paid $3,600 to Mr Dixon in rental fees for motor vehicles hired to the Company and paid $27,852 to Mr Dixon in
settlement of a purchase of a tenure package from prior years. As at 30 June 2018, the Company has no other
payables due to Mr. Dixon (2017: $18,172).
Pathways Corporate Pty Ltd, a company of which Mr. Graziano is a Director, charged the Group director fees
of $36,000 (2017: $36,000), excluding GST, none of which was outstanding at 30 June 2018 (2017: Nil) and
provided financial and associated services to the Group during the year on normal commercial terms and
conditions. No interest was payable or accrued.
65
2018 ANNUAL REPORT NOTE 22: PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Share based payment reserve
Accumulated losses
Total equity
2018
$
3,039,104
10,944,532
13,983,636
Restated
2017
$
7,158,774
559,461
7,718,235
7,723,635
3,673,844
-
-
7,723,635
3,673,844
43,175,285
1,818,488
26,805,451
35,128
(38,733,772)
(22,796,188)
6,260,001
4,044,391
66
KIN MINING NL NOTE 22: PARENT ENTITY DISCLOSURES (CONTINUED)
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2018
$
2017
$
(15,937,584)
(19,888,945)
-
-
(15,937,584)
(19,888,945)
The Parent Entity (Kin Mining NL) has no commitments or contingencies other than as disclosed in these Notes
to the Consolidated Financial Statements.
NOTE 23: AUDITOR’S REMUNERATION
The auditor of Kin Mining NL is HLB Mann Judd.
Auditor of the parent entity
Audit or review of the consolidated financial statements
2018
$
43,492
43,492
NOTE 24: KEY MANAGEMENT PERSONNEL
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share based payments
2018
$
1,652,002
101,364
1,533,100
3,286,466
2017
$
35,500
35,500
2017
$
876,808
42,711
-
919,519
NOTE 25: SUBSEQUENT EVENTS
On 2 July 2018 the Company announced the issue of 72,732,207 new shares issued at 11cents per share
to raise $8,000,542. On 4 July 2018 the Company announced the issue of 8,450,437 new shares issued at
11cents per share to raise $929,548. Collectively these two amounts raised $8,930,000 from the rights issue of
one new share for every three existing shares initially announced on 30 May 2018. The proceeds from this rights
issue are not reflected in the Consolidated Statement of Financial Position included in this Annual Report.
On 31 August 2018 the Company advised that it has reached agreement with Sprott to modify the US$27M
senior secured credit facility (discussed in Note 16 above). The modifications to the Credit Facility include
repayment in tranches of the US$5M outstanding and a removal of all Facility covenants from the date of
completion of repayment. Kin made the first tranche repayment of US$2M in August 2018 and intends to repay
the balance before 31 December 2018. Sprott has expressed a desire to remain involved in the LGP and has
agreed to leave the Facility structure in place (with no costs or obligations on Kin) until Kin has completed its
additional work programs.
67
2018 ANNUAL REPORT D I R E C T O R S ’ D E C L A R A T I O N
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 Group’s financial position as at 30 June 2018 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.
b.
c.
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.
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 2018.
This declaration is signed in accordance with a resolution of the board of directors.
Managing Director
Dated this 28th day of September 2018
68
KIN MINING NLDIRECTORS’ DECLARATION I N D E P E N D E N T A U D I T O R ’ S R E P O R T
Independent Auditor’s Report
To the Members of Kin Mining NL
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Kin Mining NL (“the Company”) and its controlled entities (“the
Group”), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(e) in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material Uncertainty
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: 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 world-wide organisation of accounting firms and business advisers
69
2018 ANNUAL REPORTINDEPENDENT AUDITOR’S REPORT
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T I N U E D )
Related to Going Concern, we have determined the matters described below to be the key audit matters
to be communicated in our report.
Key Audit Matter
How our audit addressed the key audit
matter
Accounting for the Sprott Credit Facility
Note 16
The Group’s Sprott Credit Facility is a financial liability
carried at amortised cost, and includes a royalty based
on 1.5% of the first 100,000 ounces produced from the
Leonora Gold Project. This has the effect of changing
the fair value of the loan which must be recorded in
profit or loss after inception.
for
the Sprott Credit Facility
is
The accounting
considered a key audit matter due to the judgement
required to estimate the fair value element of the loan
and because the loan is material.
Our procedures included but were not
limited to:
- Considering the key terms of the Sprott
Credit Facility agreement;
- Agreeing cash drawdowns by
the
Group from the lender;
- Recalculating the carrying value of the
financial liability;
- Considering whether the classification
of the financial liability as current or non-
current was appropriate; and
Carrying value of the Leonora Gold Project
Note 12
impairment assessment was conducted by
An
management during the year in relation to the assets
comprising the Leonora Gold Project due to the
existence of
the
impairment
curtailment of construction.
indicators
following
The Leonora Gold Project assets include property, plant
and equipment with a carrying value of $11.4 million.
The impairment assessment conducted under AASB
136 Impairment of Assets involved a comparison of the
recoverable amount of the Leonora Gold Project assets
with their carrying amounts in the financial statements.
Recoverable amount is based upon the higher of fair
value less costs of disposal and value-in-use.
The evaluation of the recoverable amount of these
assets is considered a key audit matter as it was based
required
upon a value-in-use calculation which
significant judgement in verifying the key assumptions
supporting the expected discounted future cash flows
of the Leonora Gold Project.
- Considering
the adequacy of
the
disclosures included within the financial
statements.
Our procedures included but were not
limited to:
- Obtaining an understanding of the key
controls associated with the preparation
of the model used to assess the
recoverable amount of the Leonora
Gold Project;
- Critically evaluating management's
methodology in the value-in-use model
and the basis for key assumptions;
- Performing sensitivity analyses around
the key inputs used in the cash flow
forecasts that either
individually or
collectively would be required for assets
to be impaired;
- Reviewing the mathematical accuracy
of the value-in-use model;
- Comparing value-in-use to the carrying
amount of assets comprising the cash-
generating unit;
- Considering whether
assets
comprising the cash-generating unit
had been correctly allocated;
the
- Comparing forecast cash flows to the
latest Board approved forecasts;
- Considering the results of independent
technical reports obtained subsequent
to the curtailing of construction;
70
KIN MINING NLINDEPENDENT AUDITOR’S REPORT
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T I N U E D )
Key Audit Matter
How our audit addressed the key audit
matter
- Considering the appropriateness of the
discount rate used; and
- Assessing the appropriateness of the
disclosures included in the relevant
notes to the financial report.
Our procedures included but were not
limited to:
- We considered the appropriateness of
in accounting policy
the change
ensuring
disclosure
requirements set out in accounting
standards were complied with, including
that the change provided more relevant
financial information to the users of the
financial report; and
that
the
- We reconciled the restated balances to
the prior year audited balances
ensuring that the change was correctly
calculated and disclosed.
Change of accounting policy
Note 2
During the current year, the Group changed its
accounting policy in relation to deferred exploration and
evaluation expenditure. In previous reporting periods,
exploration and evaluation expenditure was capitalised
under AASB 6 Exploration for and Evaluation of Mineral
Resources. The accounting policy of the Group in this
respect has been changed to expense exploration
expenditure as incurred on the basis described in Note
2.
Management has assessed
this change against
accounting standards requirements with respect to
voluntary changes in accounting policies and the
change in accounting policy is on the basis that it will
result in more relevant and reliable information in the
financial report.
The change in accounting policy resulted in the
restatement of affected 30 June 2017 balances and the
disclosure of the impact of the change for each financial
statement line item affected.
The change in accounting policy was considered a key
audit matter as it was determined to be important to the
users understanding of the financial statements as a
whole, was material in size and nature and involved the
those charged with
most communication with
governance.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2018, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
71
2018 ANNUAL REPORTINDEPENDENT AUDITOR’S REPORT I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T I N U E D )
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
72
KIN MINING NLINDEPENDENT AUDITOR’S REPORT I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T I N U E D )
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2018.
In our opinion, the Remuneration Report of Kin Mining NL for the year ended 30 June 2018 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 September 2018
D I Buckley
Partner
73
2018 ANNUAL REPORTINDEPENDENT AUDITOR’S REPORT A D D I T I O N A L S E C U R I T I E S E X C H A N G E I N F O R M A T I O N
SHAREHOLDING
(a) Distribution schedule and number of holders of equity securities at 25 September 2018
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)
152
Unlisted Options – 33.2c 21/11/18
Unlisted Options – 40c 31/03/19
Unlisted Options – 27c 10/04/20
Unlisted Options – 36c 15/01/20
Unlisted Options – 75c 15/09/20
Unlisted Options – $1.00 15/09/21
Unlisted Options – $1.25 15/09/22
-
-
-
-
-
-
-
187
-
25
-
-
-
-
-
232
-
17
-
-
-
-
-
796
1
123
-
-
-
-
-
341
1,708
-
20
1
1
6
4
4
1
185
1
1
6
4
4
The number of holders holding less than a marketable parcel of fully paid ordinary shares at 25 September 2018
is 305.
(b) 20 largest holders of quoted equity securities as at 25 September 2018
The names of the twenty largest holders of fully paid ordinary shares (ASX Code: KIN) as at 25 September 2018
RANK NAME
NUMBER PERCENTAGE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
22,727,271
TREVOR JOHN DIXON
PERSHING NOMINEES PTY LTD
IPARKS PROPERTY GROUP PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
HARMANIS HOLDINGS PTY LTD
HARMANIS HOLDINGS PTY LTD
12,082,910
9,474,472
9,090,910
8,608,282
8,445,543
7,455,210
MOSTIA DION NOMINEES PTY LTD
7,025,569
GIUSEPPE PAOLO GRAZIANO
ROGUE INVESTMENTS PTY LTD
6,800,000
6,000,001
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
5,767,891
MITCHELL FAMILY INVESTMENTS (QLD) PTY LTD
CITICORP NOMINEES PTY LIMITED
MARVYN JOHN FITTON
ACN 112 940 057 PTY LTD
KAMJOH PTY LTD
5,720,061
5,540,874
5,274,472
5,025,699
4,001,564
MEADOW HEAD INVESTMENTS PTY LTD
4,000,000
A.C.N 112 940 057 PTY LTD
ERNIO EOLINI
MR JOSEPHUS ANTONIO GROOT
3,733,334
3,692,188
3,439,744
7.00
3.72
2.92
2.80
2.65
2.60
2.30
2.16
2.09
1.85
1.78
1.76
1.71
1.62
1.55
1.23
1.23
1.15
1.14
1.06
Total
143,905,995
44.32
74
KIN MINING NLADDITIONAL SECURITIES EXCHANGE INFORMATION (c) Substantial Shareholders
HOLDER
Harmanis Holdings Pty Ltd
Delphi Unterehmensberatung Aktiengesellschaft
Michele Canci
1
2
3
SHARES
PERCENT
23,182,422
22,727,271
22,409,019
7.14%
6.99%
6.90%
(d) Unquoted Securities
The number of unquoted securities on issue at 25 September 2017:
UNQUOTED SECURITIES
NUMBER ON ISSUE
EXERCISE PRICE
EXPIRY DATE
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
(e) Voting Rights
100,000
12,235,750
5,000,000
9,000,000
6,000,000
4,000,000
1,000,000
33.2c
40c
27c
75c
$1.00
$1.25
36c
21/11/18
31/3/19
10/4/20
15/9/20
15/9/21
15/9/22
15/1/20
Each fully paid ordinary share carries the rights of one vote per share.
(f) Restricted Securities
There are no restricted securities under ASX imposed escrow.
(g) On-Market Buy-Back
There is currently no on-market buy-back in place.
75
2018 ANNUAL REPORTADDITIONAL SECURITIES EXCHANGE INFORMATION
Tenement information as required by listing rule 5.3.3
MURRIN MURRIN
50 kms East of Leonora
REDCASTLE
65 kms South West of Laverton
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
M39/279
M39/1121
P39/4980
P39/5112
P39/5113
P39/5164
P39/5165
P39/5176
P39/5177
P39/5178
P39/5179
P39/5180
P39/5861
P39/5862
P39/5863
P39/5864
66.66%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
MT FLORA
50 kms East North East of Leonora
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
M39/1118
P39/4617
P39/4618
P39/4619
P39/4620
P39/4621
P39/5181
P39/5182
P39/5183
P39/5185
P39/5463
P39/5859
P39/5860
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
DESDEMONA
20 kms South of Leonora Townsite
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
E37/1152
E37/1156
E37/1201
E37/1203
E37/1315
E37/1326
E40/283
E40/285
E40/323
E40/366
E40/369
M40/330
P37/8350
P37/8390
P37/8500
P37/8504
P40/1263
P40/1283
P40/1464
100%
100%
100%
100%
0%
0%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
0%
M39/1108
M39/1119
P39/4834
P39/5097
P39/5098
P39/5099
P39/5100
P39/5101
P39/5102
P39/5103
P39/5105
P39/5267
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
RANDWICK
45 kms North East of Leonora
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
M37/1316
P37/7806
P37/7995
P37/7996
P37/7997
P37/7998
P37/7999
P37/8000
P37/8001
P37/8965
P37/8966
P37/8967
P37/8968
P37/8969
P37/8970
P37/8971
P37/8972
P37/8973
100%
0% Expired 23/06/18
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
100%
100%
100%
IRON KING / VICTORY
45 kms North North West of Leonora
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
E37/1134
M37/1327
P37/7175
P37/7176
P37/7177
P37/7194
P37/7195
P37/7196
P37/7197
P37/7198
P37/8359
P37/8414
P37/8415
P37/8455
P37/8458
P37/8459
P37/8460
P37/8461
P37/8491
100%
100%
Granted 18/04/18
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
0% Converted to M37/1327
100%
100%
100%
100%
100%
100%
100%
100%
100%
76
KIN MINING NLTENEMENT TABLE
PIG WELL
25 kms East of Leonora Townsite
RAESIDE
8 kms East of Leonora Townsite
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
E37/868
E37/1103
L37/77
L37/125
M37/1298
E37/1300
100%
100%
100%
100%
100%
100%
P37/8948
P37/8949
P37/8950
P37/8951
P37/8952
P37/8953
P37/8954
P37/8955
P37/8956
P37/8957
P37/8958
P37/8959
P37/8960
P37/8961
P37/8962
P37/8963
P37/8964
P37/8974
P37/8975
P37/8976
P37/8977
P37/8978
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CARDINIA / MERTONDALE
35 kms East & North East of Leonora Townsite
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
Granted 31/05/2018
L37/65
L37/106
L37/127
L37/128
L37/195
L37/196
L37/226
L37/232
M37/81
M37/82
M37/86
M37/88
M37/223
M37/227
M37/231
M37/232
M37/233
M37/277
M37/299
M37/300
M37/316
M37/317
M37/422
M37/428
M37/487
M37/594
M37/646
M37/720
M37/1284
M37/1303
M37/1304
M37/1315
M37/1318
M37/1319
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
M37/1320
M37/1323
M37/1325
M37/1328
M37/1329
M37/1330
M37/1331
M37/1332
M37/1333
P37/7756
P37/7757
P37/7758
P37/7759
P37/7760
P37/7761
P37/7892
P37/7953
P37/7954
P37/7969
P37/7970
P37/7971
P37/7972
P37/7973
P37/7974
P37/7975
P37/7976
P37/7977
P37/7978
P37/7979
P37/8007
P37/8196
P37/8199
P37/8209
P37/8210
Granted 14/05/2018
Granted 14/05/2018
100%
100%
100%
100%
0%
0%
100%
0%
0%
100%
100%
100%
100%
100%
100%
0% Converted to M37/1331
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
77
2018 ANNUAL REPORTTENEMENT TABLE
CARDINIA / MERTONDALE (continued)
35 kms East & North East of Leonora Townsite
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
TENEMENT ID
OWNERSHIP AT
END OF QUARTER
CHANGE
DURING QUARTER
P37/8536
P37/8537
P37/8538
P37/8539
P37/8540
P37/8541
P37/8542
P37/8543
P37/8737
P37/8738
P37/8739
P37/8740
P37/8741
P37/8742
P37/8743
P37/8744
P37/8795
P37/8938
P37/8939
P37/8940
P37/8941
P37/8942
P37/8943
P37/8944
P37/8945
P37/8946
P37/8947
P37/8988
P37/8989
P37/8990
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
P37/8991
P37/8992
P37/8993
P37/8994
P37/8995
P37/8996
P37/8997
P37/8998
P37/8999
P37/9000
P37/9001
P37/9002
P37/9003
P37/9004
P37/9122
P37/9123
P37/9124
P37/9125
P37/9126
P37/9127
P37/9128
P37/9129
P37/9130
P37/9131
P37/9132
P37/9133
P37/9134
P37/9135
P37/9136
P37/9137
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
78
KIN MINING NLTENEMENT TABLE
M I N I N G NL
KIN Mining NL
342 Scarborough Beach Road
Osborne Park Western Australia 6017
P +61 8 9242 2227
E info@kinmining.com.au
kinmining.com.au