2019
ANNUAL
REPORT
Kin Mining NL
CONTENTS
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
3
4
29
30
31
32
33
34
35
59
60
64
66
1
Kin Mining NL Annual Report 2019 CORPORATE INFORMATION
ABN 30 150 597 541
Directors
Giuseppe (Joe) Paolo Graziano
Andrew Munckton
Brian Dawes
Hansjoerg Plaggemars
Nicholas Anderson
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 Annual Report 2019 Joe Graziano
Chairman
CHAIRMAN’S LETTER
Dear Kin Mining Shareholder,
I am pleased to present to you the FY2019 Annual Report for Kin Mining NL (“Kin”
or the “Company”) following a year of consolidation, de-risking and optimising the
Cardinia Gold Project (“CGP”).
The difficult decisions taken by the Board and Management team in the first half
of 2018 provided the Company with a clear focus and strategy to deliver long-term
sustainable returns for Kin Shareholders which we executed during the period.
The Management team has diligently worked through the development
opportunities to re-optimise the CGP and in August 2019, provided an updated
Pre-Feasibility Study (“PFS”) which demonstrates a technically sound project
underpinned by robust cost estimates and conservative assumptions that are
readily deliverable.
There has been significant investor attention over recent months on the
significant financial problems faced by several gold projects which were fast-
tracked into production and failed to deliver for shareholders. It is your Board and
Management team’s clear objective to ensure we avoid these pitfalls and create a
profitable and sustainable business.
The CGP is a valuable asset located in a premier gold region. During FY2019 we
delivered an updated Mineral Resource of 841,000 ounces and further significant
opportunities within the project area to extend resources and discover more
deposits through exploration.
Within the region there are several opportunities with potential to improve
the forecast returns of the CGP and your Board and Management team are
investigating these options with the objective of delivering a development strategy
which ultimately displaces lower margin ore with higher value processing feed.
Our objective still remains for Kin to ultimately become a profitable mid-sized
gold producer.
Since being appointed as Chairman in August 2019, I feel we have a very capable
Board and Management team to successfully execute our current strategy.
I thank all of Kin’s Directors, past and present, the Management team and
staff for their contribution during the past 12 months. I extend my appreciation
to Managing Director Mr Andrew Munckton who continues to provide strong
leadership and professionalism in his role.
Finally, and most importantly, I would like to thank Kin shareholders for their
continued support throughout the year. Your Board continues to strive to build a
more robust and sustainable gold project with the aim of maximising the long-
term value of the CGP for our shareholders.
Yours sincerely,
Joe Graziano
Chairman
3
2019 Annual Report DIRECTORS’ REPORT
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 2019. In compliance with the provisions of the Corporations Act 2001, the
Directors report as follows:
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.
•
•
•
•
Giuseppe (Joe) Paolo Graziano (Appointed Chairman 1 August 2019)
Andrew Munckton (Appointed Managing Director 1 August 2018)
Brian Dawes
Hansjoerg Plaggemars (Appointed 31 July 2019)
• Nicholas Anderson (Appointed 31 July 2019)
•
•
Jeremy Kirkwood (Resigned 31 July 2019)
Trevor John Dixon (Resigned 31 July 2019)
“Our FY2019 work programs
confirmed the Cardinia Gold
Project as a technically
sound development asset
with considerable untested
exploration potential and
significant leverage to the strong
Australian dollar gold price.”
- Andrew Munckton, Managing Director
Mr 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.
Mr Munckton has previously held the roles of Managing Director of Syndicated
Metals Limited and 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 Andrew Munckton
Managing Director
(appointed 1 August 2018)
4
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Mr Giuseppe (Joe) Paolo
Graziano
Chairman
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:
•
Thred Ltd – Non-Executive
Director (ASX: THD) appointed 1
August 2018
• Migme Ltd – Non-Executive
•
Director (ASX: MIG) appointed 12
September 2018
Tyranna Resources Limited –
Non-Executive Director (ASX: TYX)
appointed 1 June 2019
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
Castillo Copper Ltd – Non-
Executive Director appointed 13
August 2015 and ceased 1 August
2017
•
Mr Brian Dawes
Non-Executive Director
Mr Dawes 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.
Mr Dawes’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.
Mr Dawes 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
Mr Hansjoerg Plaggemars
Non-Executive Director
(appointed 31 July 2019)
Mr Plaggemars is an experienced
company director with a deep
background in corporate finance,
corporate strategy and governance. He
has served on the Board of Directors
of many listed and unlisted companies
in a variety of industries including
mining, agriculture, shipping,
construction and investments.
This includes the Board of Delphi
Unternehmensberatung AG.
Mr Plaggemars has qualifications in
Business Administration and is fluent
in English and German.
Special Responsibilities:
• Nil
Directorships held in other public
Companies:
•
Expedeon AG – Non-Executive
Supervisory Board Member
•
• Ming Le Sports AG, Heidelberg
- Executive Board Member
(Vorstand)
Decheng Technology AG, Cologne
- Executive Board Member
(Vorstand)
Youbisheng Green Paper AG,
Heidelberg - Executive Board
Member (Vorstand)
Snowbird AG, Cologne - Executive
Board Member (Vorstand)
• MARNA Beteiligungen AG,
•
•
Heidelberg - Executive Board
Member (Vorstand)
S&O Agrar AG, Leipzig - Executive
Board Member (Vorstand)
•
•
Directorships held in other non-public
Companies:
• Nordic SSW 1000 Verwaltungs
AG, Hamburg - Non-Executive
Supervisory Board Chairman
Carus AG, Heidelberg - Non-
Executive Supervisory Board
Member
Deutsche Balaton Immobilien I
AG, Heidelberg - Non-Executive
Supervisory Board Member
Alpha Cleantec AG, Heidelberg
- Executive Board Member
(Vorstand)
Balaton Agro Invest AG,
Heidelberg - Executive Board
Member (Vorstand)
•
•
•
Mr Nicholas Anderson
Non-Executive Director
(appointed 31 July 2019)
Mr Anderson is a chemical engineer
and finance executive with extensive
experience in the resources sector.
For more than 15 years he has
provided financial/corporate advisory
services, capital raising solutions and
completed asset purchases across the
mining, infrastructure and renewables
sectors.
He is currently Chief Financial
Officer of Rivet Group which provides
transport, logistics, equipment hire
and maintenance services to a number
of industries including mining. Mr
Anderson is also a Non-Executive
Director of Adaman Resources and is a
graduate of the Australian Institute of
Company Directors.
Special Responsibilities:
• Nil
5
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Directorships held in other Australian
listed companies in the past 3 years:
• Nil
Mr Jeremy David Kirkwood
Chairman
(resigned 31 July 2019)
Mr Kirkwood has extensive experience
in corporate strategy, investment
banking and global capital markets
and provides strategic leadership and
guidance to the Company’s board and
management team.
Mr Kirkwood 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.
Mr Kirkwood 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
•
COMPANY SECRETARY
Mr Stephen Jones
Company Secretary and Chief
Financial Officer
(appointed Company Secretary 1
August 2018)
Mr Jones is a Chartered Accountant
with more than 25 years’ experience
leading corporate finance and
governance teams in Australia and
overseas. With the last 20+ years
in the Western Australian mining
industry Mr Jones has a demonstrated
history in Mineral Exploration,
Investor Relations, Analytical Skills,
Feasibility Studies, and Environmental
Awareness previously holding senior
Finance positions at Portman Mining,
Aviva, Southern Cross Goldfields and
Middle Island Resources.
Mr Trevor John Dixon
Executive Director
(resigned 31 July 2019)
Mr 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, Mr Dixon 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.
Mr Dixon’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
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
G Graziano
B Dawes
A Munckton
H Plaggemars
N Anderson
Principal activities
Fully paid ordinary shares
Share options
Number
8,843,750
805,655
52,313
-
224,000
Number
5,000,000
-
-
-
-
The principal activities of the Group during the year were gold and base metals exploration and gold project development.
6
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REVIEW OF OPERATIONS
CARDINIA GOLD PROJECT
Kin Mining NL (“Kin” or the
“Company”) holds 100% of the
Cardinia Gold Project (“CGP” or the
“Project”), located approximately
30km northeast of Leonora and
approximately 250km north-
northwest of Kalgoorlie in Western
Australia.
The CGP is situated in the heart of
an active mining district that hosts
several multi-million ounce operating
gold mines including Sons of Gwalia,
Wallaby, Sunrise Dam, Mt Morgans,
Thunderbox and Darlot (Figure
1). The district is well serviced by
infrastructure including a network
of high quality roads, gas pipelines,
communication infrastructure, airstrips
with regular services to Perth and
close proximity to an established
mining workforce and supply network.
The CGP is a valuable asset, with a
Mineral Resource of approximately
841,000 ounces of gold (see Table 2)
and significant near mine and regional
exploration upside. A Pre-Feasibility
Study (“PFS”) for the CGP was
completed subsequent to the end of the
FY2019 period in late August 2019. The
PFS was completed with a high degree
of rigour and demonstrated the Project
is both technically sound and capable
of producing solid cash flow with
significant leverage to the Australian
dollar gold price.
The CGP is a valuable asset, with a current Mineral
Resource of approximately 841,000 ounces of gold and
significant near mine and regional exploration upside.
Figure 1. The Cardinia Gold Project and surrounding deposits and gold mining operations.
7
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Table 1 summarises the key CGP 2019 PFS parameters which include Ore Reserves, the proportion of Inferred Mineral
Resource used in the Mine Plan, capital costs, production summary and project financials.
Table 1. Key Project Parameters
CGP Mineral Resources
Measured Mineral Resources1
Indicated Mineral Resources1
Inferred Mineral Resources1
Total Mineral Resources
Material in Mine Plan
Proved and Probable Ore Reserve
Inferred Mineral Resource
Total (may vary due to rounding)
Capital Costs
Tonnage
0.4Mt
11.3Mt
6.6Mt
18.2Mt
7.9Mt
3.5Mt
11.4Mt
1.5Mtpa Processing Plant (including Lawlers relocation and refurbishment)
Infrastructure Capital (Borefield, Roads & TSF "Lift 1", Camp, Communications)
Pre-Production Mining & Mine Establishment (Personnel, First Fill & Spares, Prestrip)
Sub-Total (Pre-production Capital)
Mining Haul Roads (post commissioning)
Tailings Storage Facility Construction (post commissioning)
Plant and Infrastructure Sustaining Capital
Sub-Total (Sustaining Capital)
Total Capital (LOM)
Production Summary
Key Outcome
Life of Mine Production
LOM Open Pit Strip Ratio (Waste:Ore)
Nominal Processing Rate
LOM Processing Recovery
Total Recovered Gold
Project Economics
Base Case gold price (A$)
Exchange Rate (US$:A$)
Life of Mine Revenue (A$)
C1 Cash Costs2
Adjusted Operating Costs3
All-In-Sustaining Costs4
Pre-Tax Operating Cash Surplus
Net Present Value (NPV8%)
Internal Rate of Return (IRR)
1 Cut-off grade 0.5 g/t Au
Grade
1.04g/t
1.49g/t
1.36g/t
1.44g/t
1.10g/t
1.08g/t
1.09g/t
$2,000/oz
0.70
$736.2M
$1,284/oz
$1,349/oz
$1,442/oz
$128.4M
$66.8M
17%
Ounces
12,000
541,000
289,000
841,000
(70%)
(30%)
(100%)
$44.26M
$26.57M
$6.02M
$76.85M
$5.30M
$6.02M
$11.30M
$22.62M
$99.47M
8.2 years
5.2:1
1.5Mtpa
92.4%
368koz
$2,200/oz
0.70
$809.8M
$1,284/oz
$1,349/oz
$1,442/oz
$199.8M
$118.0M
29%
2 C1 Cash Costs (C1) includes all mining, surface haulage, processing, refining, by-product credits and onsite overhead costs
3 Adjusted Operating Costs (AOC) includes C1 costs plus royalties
4 All-In-Sustaining Costs (AISC) includes AOC plus closure costs and sustaining capital, but excludes head office corporate costs and
Tax Totals may vary due to rounding
Building on the existing Mineral Resource by identifying new, higher grade ore sources is a key part of Kin’s strategy for the
next 12 months. This will be achieved by applying Kin’s enhanced understanding of the regional geology and ore systems,
along with considering potential consolidation opportunities within the region. This work will continue in parallel with
development assessment activities at an appropriate rate.
8
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
PROJECT GEOLOGY
The CGP is comprised of a 414km2
tenement package within the
Minerie Greenstone Belt which
encapsulates more than 45km
of the Minerie Formation. The
greenstone is composed of four
repeated bi-modal volcanic flows
and the greenstone is younging to
the west. Gold deposits within the
CGP area occur in two main mining
centres, Cardinia and Mertondale
(Figure 2).
Mineralisation occurs in a variety of
styles: massive sulphide deposits,
low sulphidation epithermal deposits,
structurally controlled upper crustal
(low pressure, high temperature)
sulphide replacement deposits, and
orogenic style gold deposits. All
four styles also have upper zones
of supergene enrichment and gold
mineralisation has been encountered
at every stratigraphic level within the
CGP.
The Cardinia mineral field has been
prolific in terms of historic production.
Mining has occurred at many deposits
including Eagle, Kyte, Bruno, Lewis,
Pride of the North, Pelsart, English
and Scottish, Nevertire, Black Chief,
White Chief, Comedy King, Faye Marie,
Helens, Fiona, Rangoon, East Lynn,
Triangle and Hobby.
The Cardinia prospects occur within
the younger sequence of intermediate-
mafic and felsic volcanic lithologies
and locally derived epiclastic
sediments related to mafic flows 1
and 2. Minor felsic porphyries and
lamprophyre lithologies have been
recognised within the Project.
At the baseload Bruno-Lewis
deposits, these intrusive rocks are
often associated with lithologically
discordant structures. Primary gold
mineralisation at Lewis is consistent
with volcanogenic hosted massive
sulphide (VHMS) mineralisation and
sulphidic shales as well as later, cross
cutting, low sulphidation epithermal
mineralisation.
Helens consists of sulphide
replacement mineralisation in a
slightly discordant structure and
appears to be a slightly deeper part of
the same system.
Figure 2. Local geology of the Cardinia Gold Project, showing the Minerie bi-modal
volcanic sequence.
topped by another mafic volcanic flow
(mafic flow 4).
The Eastern shear is present on
the contact of mafic flow 3 and the
younger felsic volcanic, or within
the mafic unit. These orebodies are
typically orogenic lode style deposits
and are related to brittle fracturing
and quartz veining and porphyritic
intrusions. The Western shear is
present within the volcaniclastic
sediments just below the base of
mafic flow 4. Mineralisation appears
to be related to late stage shortening
(isoclinal folding) and shearing along
this major structure.
The Mertondale prospects extend
over a total 12km strike length from
Merton’s Reward in the south to
Mertondale 5 (32,000oz mined in 1991)
to the north.
Merton’s Reward (60,524oz previously
mined), Mertondale 3-4 (179,300oz
previously mined) and Mertondale
2 are contained within the eastern
branch of the Mertondale Shear Zone
and extend over approximately 3km of
strike. Quicksilver, Tonto, Eclipse and
Mertondale 5 are all contained within
the western shear zone and extend
over approximately 9km of strike.
The Mertondale area consists of an
eastern mafic flow (mafic flow 3),
a central felsic volcanic sequence
which is overlain by a volcanoclastic
sequence of rocks which include
schists and carbonaceous shales, and
9
Kin Mining NL Annual Report 2019 EXPLORATION PROGRAM
Exploration activities at the CGP
during FY2019 were designed to
support its objective of constructing
a processing facility at Cardinia, fed
by an open pit baseload feed source
and higher grade satellite deposits.
The Bruno-Lewis system has been
identified as the baseload feed
with other deposits in the Cardinia
and Mertondale region to provide
additional ore sources.
Resource extension drilling at the
Bruno-Lewis, Helens and Mertondale
5 deposits completed during FY2019
was successful in extending the known
economic gold mineralisation both
down dip and along strike.
In conjunction with the drill
program, the FY2019 exploration
program effectively developed Kin’s
understanding of the CGP geology and
the model type that is suited to the
rocks and mineralisation present. This
greater knowledge of the nature of the
shallow crustal, low pressure, high
temperature volcanic environment of
the project area will support future
targeting and resource expansion.
BRUNO-LEWIS
Three phases of drilling were
completed at the Bruno-Lewis system
during FY2019. Bruno-Lewis is ideally
located 1km from the proposed
Cardinia processing plant site.
The first phase of drilling, completed
in September 2018, consisted of
initial exploratory diamond drilling
to establish an understanding of the
geology. This drilling, in conjunction
with the sub-audio magnetic
(SAM) survey conducted in early
2018, highlighted that the primary
mineralisation at the CGP was
considerably different to previous
geological interpretations.
The diamond core exhibited distinct
features of low pressure – high
temperature alteration as well as void
fill textures representative of shallow
crustal hydrothermal/epithermal
fluids. Multi-element anomalism
supports the existence of a low
sulphidation epithermal environment
with highly anomalous silver, copper,
zinc, tungsten, antimony, bismuth
and tellurium encountered. Sulphidic
shales and massive sulphides present
at Lewis are analogous with VHMS
deposits which returned high gold
grades and multi-element anomalism
(max values 115g/t Ag, 0.6% Cu, 0.86%
Zn, 2000ppm W, 375ppm Sb, 290ppm
Bi and 76ppm Te).
The results demonstrated the
potential for an updated Mineral
Resource estimate for Bruno-Lewis
and an expanded and simplified open
pit.
Figure 3. Lewis section through BL18DD030 (6,813,525mN) - Geology cross-section showing the April 2019 geology model; Green - basalt, Apricot
- Intermediate Volcaniclastics, Pink - Felsic Volcanics. MRE1903 modelled lodes in Orange - VHMS Lodes, Brown - Potassic Lodes, Cream -
Supergene Zones.
10
Kin Mining NL Annual Report 2019 HELENS
The Helens deposit is located 10.0km from the Cardinia processing plant
site and has open pit and underground mining potential.
Resource drilling at Helens was targeted at increasing the confidence of
the existing Inferred Mineral Resource to an Indicated Mineral Resource.
Approximately 5,600m of RC and diamond drilling was completed at
Helens during the period.
The understanding of the primary mineralisation and structural controls
was advanced through strategically designed diamond drill holes. Deeper
drilling also confirmed the mineralised system extends to a depth of
more than 250m with clear potential for further work below this depth.
Significant intercept from Helens include:
•
•
•
•
•
•
1.1m @ 135.4g/t Au from 46.7m (HE18DD221)
15.8m @ 3.77g/t Au from 266.4m (HE18RCD231)
17.0m @ 2.92g/t Au from 9.0m (HE18RC255)
3.9m @ 10.4g/t Au from 170.9m (HE18RCD259)
7.8m @ 3.4g/t Au from 13.2m (HE19DD292)
7.1m @ 4.7g/t Au from 45.3m (HE18RC293)
MERTONDALE 5
A program of deeper diamond drilling
was completed at the Mertondale
5 deposit to test the geological,
geotechnical and metallurgical
assumptions for mining and
interpretation of the deposit, as well
as understanding the controls on gold
mineralisation.
The Mineral Resource Estimate for Helens increased from 800,000t
grading 1.44g/t Au for 37koz to 910,000t grading 2.09g/t Au for 61koz as a
result of work completed during FY2019 (Table 1).
Diamond core was used for metallurgical characterisation and
domaining for test work.
Diamond drill holes were completed
to provide a test of the continuity
and direction of the northerly
plunging shoot of high grade gold
Sterilisation drilling for a Waste dump was also completed at Helens with
mineralisation which was previously
106 Aircore holes drilled for 3,850m.
mined in the pit.
MERTONDALE 5
•
14.0m @ 2.5 g/t Au from 217.0m
(ME19DD001)
Diamond core was used for
A program of deeper diamond drilling was completed at the Mertondale
metallurgical characterisation and
5 deposit to test the geological, geotechnical and metallurgical
domaining for test work.
assumptions for mining and interpretation of the deposit, as well as
understanding the controls on gold mineralisation.
Diamond drill holes were completed to provide a test of the continuity
and direction of the northerly plunging shoot of high grade gold
mineralisation which was previously mined in the pit.
•
14.0m @ 2.5 g/t Au from 217.0m (ME19DD001)
Diamond core was used for metallurgical characterisation
BRUNO-LEWIS
(CONTINUED)
A second phase of drilling was
undertaken in December 2018/
January 2019 followed by a third
phase of drilling in February/
March 2019. The programs were
designed to further define the
limits of the low sulphidation
epithermal and VHMS
mineralisation and support a
revised Mineral Resource.
Highlights from FY2019 drilling
at Bruno-Lewis included:
•
Low sulphidation epithermal
gold system – broad intervals
of Potassic altered basalt:
20.8m @ 1.76g/t Au,
•
2.40g/t Ag from 17.4m
(BL18DD016)
32.4m @ 1.16g/t Au,
2.03g/t Ag from 39.6m
(BL18DD018)
37.2m @ 1.04g/t Au,
2.03g/t Ag from 51.4m
(BL18DD019)
40.5m @ 0.98g/t Au,
2.28g/t Ag from 45.0m
(BL19DD049)
42.3m @ 0.77g/t Au from
38.6m (BL19DD050)
•
•
•
VHMS mineralisation
within the system –
gold rich, massive and
banded sulphides in felsic
volcaniclastic sediments:
•
4.8m @ 17.6g/t Au from
48.6m (BL18DD013)
0.5m @ 127.8g/t Au, 115g/t
Ag, 0.1% Cu, 76g/t Te and
36ppm Sb from 50.3m
(BL18DD014)
0.7m @ 6.6g/t Au,
36.5g/t Ag, 0.2% Cu and
375ppm Sb from 96.0m
(BL18DD018)
2.8m @ 5.9g/t Au from
103.0m (BL19DD029)
4.9m @ 18.8g/t Au from
201.3m (BL19DD030)
•
•
•
•
Diamond core from the
drill program was used for
metallurgical characterisation
and domaining for test work as
part of the PFS.
11
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
MINERAL RESOURCES
UPDATES
During the year the Company
provided an update of the Mineral
Resource Estimate (MRE) for the
CGP (see ASX Announcement 17
April 2019 Cardinia Gold Project
Mineral Resource Update).
All 16 deposits within the CGP were
reviewed. Mineral Resources for six
deposits were remodelled, estimated,
optimised and reported (Mertons
Reward, Mertondale 3-4, Bruno, Lewis,
Kyte and Helens). An additional six
Mineral Resources were re-optimised
and reported (Tonto, Mertondale
5, Fiona, Rangoon, Michelangelo
and Leonardo). The remaining four
deposits remained unchanged from
the 2017 Mineral Resource Estimate
(Eclipse, Quicksilver, Forgotten Four
and Krang).
Immediately after the end of the year,
the Bruno-Lewis Mineral Resource
was further updated to include drilling
completed during the June quarter
(see ASX Announcement 9 July
2019 Bruno Lewis Mineral Resource
Update).
As at the end of FY2019, the Mineral
Resource for the CGP now stands
at 18.2 million tonnes at a grade
of 1.44g/t Au for 841,000 ounces
(see Table 1 for Mineral Resource
Estimates detailed by deposit and
classification).
The main drivers of the change,
compared to the previous estimate
of 22.5 million tonnes at a grade of
1.46g/t Au for 1.05 million ounces, are
the lower gold price assumption of
A$2,000 per ounce (previously A$2,200
per ounce), updated 2019 mining and
processing costs, updated optimisation
parameters including revised open
pit wall angles and test work derived
metallurgical recoveries.
In addition, new geological
interpretations have provided
new resource models for the six
key deposits of Mertons Reward,
Mertondale 3-4, Bruno, Lewis, Kyte
and Helens.
Full details of the MRE can be found in
the ASX announcements dated 17 April
2019 and 9 July 2019.
Resource
Gold
Price
(AUD)
Lower
Cut off
(g/t Au)
$2,000
$2,000
$2,000
$2,000
$2,200
$2,200
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,200
$2,200
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
Project Area
Mertondale
Mertons Reward
Mertondale 3-4
Tonto*
Mertondale 5*
Eclipse **
Quicksilver **
Subtotal
Mertondale
Cardinia
Bruno
Lewis
Kyte
Helens
Fiona*
Rangoon*
Subtotal Cardinia
Raeside
Michaelangelo*
Leonardo*
Forgotten Four **
Krang **
Subtotal Raeside
TOTAL
Cardinia Gold Project: Mineral Resources: June 2019
Measured Resources
Indicated Resources
Inferred Resources
Total Resources
Tonnes
(Mt)
Au
(g/t
Au)
Au
(k Oz)
Tonnes
(Mt)
0.80
1.17
1.79
0.57
Au
(g/t
Au)
2.30
1.99
1.31
2.18
Au
(k Oz)
Tonnes
(Mt)
60
75
75
40
0.44
0.45
0.00
0.04
1.23
0.81
Au
(g/t
Au)
1.01
1.36
1.27
2.23
1.39
1.54
Au
(k Oz)
Tonnes
(Mt)
15
20
0
3
55
40
1.25
1.62
1.79
0.61
1.23
0.81
Au
(g/t
Au)
1.86
1.82
1.31
2.19
1.39
1.54
Au
(k Oz)
74
95
75
43
55
40
4.34
1.80
250
2.97
1.38
132
7.31
1.63
383
0.36
1.04
12
0.36
1.04
12
0.87
3.59
0.32
0.68
0.22
0.31
5.99
0.82
0.12
1.02
0.93
1.57
2.18
1.80
1.51
1.18
2.04
2.33
0.4
1.04
12
0.94
11.3
2.08
1.49
28
108
16
47
13
15
228
53
9
0
0
63
541
1.90
0.98
0.05
0.24
0.06
0.05
3.27
0.21
0.15
0.36
6.6
1.28
1.06
1.30
1.83
1.48
1.15
1.25
2.12
2.11
2.12
1.36
78
33
2
14
3
2
132
14
10
24
289
2.77
4.93
0.37
0.91
0.28
0.37
9.63
0.82
0.12
0.21
0.15
1.30
18.2
1.20
0.97
1.54
2.09
1.73
1.46
1.20
2.04
2.33
2.12
2.11
2.09
1.44
106
153
18
61
16
17
372
53
9
14
10
87
841
Table 1. Mineral Resource Table June 2019
Mineral Resources estimated by Jamie Logan of Kin Mining NL and reported in accordance with JORC 2012 using a 0.5g/t Au cut-off within Entech A$2,000 optimisation shells.
* Mineral Resources estimated by Carras Mining Pty Ltd in 2017 and reported in accordance with JORC 2012 using a 0.5g/t Au cut-off within Entech A$2,000 optimisation 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 A$2,200 optimisation shells.
Totals may not tally 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 Announcements of 17 April 2019 “Cardinia
Gold Project Mineral Resource Update” and 9 July 2019 “Bruno Lewis Mineral Resource Update”, and that all material assumptions and technical parameters underpinning
the estimates in those announcements continue to apply and have not materially changed. The Company is not aware of any new information/data that materially affects the
information included in the relevant announcement.
12
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
PROJECT DEVELOPMENT ACTIVITIES
Development activities completed
in FY2019 for the CGP primarily
concerned workstreams needed to
complete the Pre-Feasibility Study
which was released subsequent
to the end of the year in August
2019 (see ASX Announcement 30
August 2019 Pre-Feasibility Study
and Updated Ore Reserve for
Cardinia Gold Project). These work
programs included:
• Water supply for processing
and site use
•
Extractive metallurgy of the ore
deposits
• Road access and haulage
•
•
Tailing storage solutions
Power generation
• Mine design and scheduling
•
Permitting
Water Supply and Infrastructure
Water demand at the CGP is expected
to peak at 70L/sec for a 1.5Mtpa plant
during summer, with minimal Tailings
Storage Facility (TSF) water returns
during the plant commissioning
phase. Water demand is expected to
fall to 50L/sec once the TSF return
water reaches steady state and will
fall further to approximately 42L/sec
during winter for plant demand and
dust suppression.
During FY2019, Kin completed a
program of bore drilling and test
pumping which was designed to test
whether the nearby Bummer Creek
and Cardinia Creek could fulfill these
water demands.
Four production bores have been
established at Bummer Creek and test
work has confirmed they will be able
to supply 40L/sec of sustained supply
to the CGP plant. Bummer Creek
water quality remains excellent with
salinities in testing remaining below
2,240ppm total dissolved solids (TDS).
The Cardinia Creek bore field now
contains five established bores with
a combined sustainable yield of
approximately 30L/sec. Together with
Bummer Creek, the two borefields
have been assessed as being suitable
to provide a long-term water supply
for the CGP.
Metallurgical Testwork
Extensive metallurgical test work
was conducted on the majority of the
primary ore sources for the planned
processing plant. Fresh core from
Bruno-Lewis, Helens, Mertondale 5
and Mertondale East were used to
define the separate metallurgical
domains of each deposit.
Recovery for Cardinia ore is in the
ranges of 90 – 92.6% for Fresh ore,
and higher for transitional and oxide
ores. Test work showed that a grind
size of 150μm and 106μm is optimal
with maximum recovery achieved after
an eight hour leach.
Road Access and Haulage
Road access to the CGP from Perth
is 592km via the Great Eastern
Highway to Kalgoorlie, then north a
further 235km through Menzies to
the Leonora townsite. Access to the
Project is via the Leonora to Laverton
Road and entering the southern end
of the property via the proposed Site
Access Road.
During the period, the Company
commenced planning and permitting
for a new 13.5km unsealed Site
Access Road to be developed from the
Leonora to Laverton Road to the plant
site. The Site Access Road will include
access to the accommodation camp
site and a branch to the Bummer
Creek borefield. A haul road has
also been planned from the Cardinia
processing plant site north through to
Mertondale.
13
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Tailing Storage
The design of the proposed Tailings
Storage Facility (TSF) to dispose of
and store tailings from the processing
plant at the CGP was largely completed
during the period. This TSF design is
based on a 10-year life, with a nominal
ore processing rate of 1.5Mtpa. The
design meets the requirements of the
WA Department of Mines, Industry,
Regulation and Safety (DMIRS), for
an Integrated Waste Landform/
Tailings Storage Facility (IWL/TSF).
A site plan showing the location of
the TSF in relation to other proposed
infrastructure is presented in Figure
4 below. The capacity of the TSF is
12.4Mt of tailings over 8.2 year LOM,
which includes excess capacity of
1.0Mt. Further capacity beyond 12.4Mt
may be achieved by an additional TSF
wall raise. The TSF has a basal area
of approximately 55ha and will have
a maximum embankment height of
22m. A starter embankment will be
constructed to provide a nominal
two years of storage life at the
commencement of processing. The
TSF construction will be to raise the
TSF walls along with the surrounding
waste dump using downstream lift
methods.
Power Generation
An assessment of a number of
potential power generation alternatives
was completed during FY2019 and
concluded that a LNG-fuelled Build-
Own-Operate contract power station
located at the Cardinia process plant
site with electricity distributed to the
required locations was the preferred
solution. LNG will be sourced from the
Murrin Murrin pipeline and piped to
the power station.
The Pre-production capital cost
includes all of the following power
lines:
•
•
•
•
Process Plant to Mining Hub.
Process Plant to Cardinia Creek
Bores.
Process Plant to Bummer Creek
Borefield.
Accommodation Camp branch
from Bummer Creek line.
Figure 4: CGP infrastructure highlighting the Tailings
14
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Mine Design and Scheduling
Extensive work was completed in
conjunction with Entech on the mine
scheduling and mine design for the
CGP as part of the Pre-Feasibility
Study.
Kin plans to use conventional open pit
mining methods to extract gold ore
from nine deposits at the CGP divided
into two mining centres; Cardinia and
Mertondale. An overview of the layout
of the open pits and infrastructure in
the Cardinia area is shown in Figure 5.
Key conclusions of this workstream
are as follows:
•
•
•
Open Pit mining is planned on a
double shift continuous roster
basis, using 120t excavators and
100t dump trucks with mining
benches approximately 5m in
height.
Two mining fleets will be required
to meet the scheduled processing
plant feed requirements for the
initial four years of mining.
A mining contractor will be
engaged to execute the mine plan
and schedule.
Permitting and Native Title
Kin holds all the tenure that the CGP
requires for execution of its activities.
All mining areas and infrastructure
areas are on existing granted mining
or miscellaneous leases. All studies to
support the lodgement of the required
approvals have been completed.
During FY2019, Kin engaged with a
range of consultants to deliver the
following studies:
•
•
•
•
•
•
•
Flora and fauna surveys
completed across all project
areas
Soil and waste characterisation
and management
Subterranean field survey and
laboratory assessments
Surface hydrology
Proposed plant, TSF and waste
dump site sterilisation drilling
Refreshed discussions with
participants of previous
ethnographic surveys.
There have been no issues
identified in these studies that are
expected to delay the submission
Figure 5: Cardinia area open pits and infrastructure layout
2019. While the claim has been
registered no Native Title has yet
been granted.
•
•
and approval of the required
consents.
Kin has conducted extensive
heritage surveys and consultation
over the past two years with
archaeological and ethnographical
consultants and Traditional
Owners.
Two native titles claims were
lodged over the CGP project
area during the period. The first,
lodged in May 2018, has since
failed to pass the registration test.
The second group, the Nyalpa
Pirniku claimants, lodged a claim
in February 2019 and had their
registration accepted on 15th May
15
Kin Mining NL Annual Report 2019 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 August 2018 Mr Andrew Munckton
joined the Board as Managing Director.
At the same time, Company Secretary
Mr Giuseppe (Joe) Paolo Graziano
stepped down from the role which was
assumed by Chief Financial Officer Mr
Stephen Jones.
Kin held its Annual General Meeting
on 29 November 2018 which included
a number of resolutions that had
been requested by shareholders
pursuant to sections 203D and 249D
of the Corporations Act 2001. These
resolutions to remove all directors and
appoint three new directors were not
passed by the shareholders.
On 31 July 2019 Mr Hansjoerg
Plaggemars and Mr Nicholas Anderson
joined the Board as Non-Executive
Directors as causal appointments
following the resignation of Mr Jeremy
Kirkwood and Mr Trevor Dixon.
With the resignation of Mr Kirkwood,
Mr Giuseppe (Joe) Graziano was
appointed as Non-Executive Chairman
on 1 August 2019.
Details of the current Board and
management team are contained in the
Directors’ 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 CGP.
During the current year, Kin repaid
the first tranche drawdown of Sprott
credit facility of US$5M. The Company
and Sprott agreed to vary the credit
agreement with an early repayment
of the outstanding balance except for
US$1 and the removal of all security
and covenant requirements while the
outstanding balance is only US$1. The
variations to the agreement following
the early repayment included:
•
an increase in the availability
period from 30 June 2019 to 30
June 2021,
16
effective 1 August 2019.
On 30 August 2019 the Company
announced the results of its Pre-
feasibility Study and an updated Ore
Reserve for the Cardinia Gold Project.
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.
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.
Environmental legislation
The Group is subject to the
environmental legislation of the State
of Western Australia.
•
•
•
an extension in the maturity date
of the facility to 31 March 2023,
commencement of quarterly
principal repayments (on any
future drawdowns) has been
moved forward to 30 June 2021,
an amendment to the secured
position (during the period that
the loan outstanding is USD$1) to
just cover the 1.5% NSR.
As a result of the modification to
the terms of the credit agreement
transaction costs of $1,690,041 have
been expensed in the current period.
Equity Capital Raisings
The company raised $20.361M during
the period from the completion of
the rights issue announced on 30
May 2018, a further Rights Issue
announced on 9 October 2018 and
a Placement announced on 18 June
2019.
The May 2018 Rights Issue raised
$8.930M in the current period from the
issue of 81,182,644 shares at 11c per
share. The October 2018 issue raised
$9.331M from the issue of 116,640,760
shares at 8c per share. The June 2019
issue raised $2.1M from the issue of
42,000,000 shares at 5c per share.
The funds raised from those three
issues allowed Kin to repay the Sprott
credit facility, continue its exploration
drilling and complete the Cardinia
Gold Project Pre-Feasibility Study
and provide sufficient working capital
for the next phase of the Project
assessment.
Subsequent Events
On 24 July 2019, the Company
announced Changes to Board of
Directors effective 31 July 2019. The
changes to the Board are as follows:
•
•
•
•
Appointment of Mr Nicholas
Anderson
Appointment of Mr Hansjoerg
Plaggemars
Resignation of Mr Jeremy
Kirkwood
Resignation of Mr Trevor Dixon
On 2 August 2019, the Company
announced the appointment of Mr
Giuseppe (Joe) Graziano as Chairman
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
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 2019. 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
G Graziano
A Munckton
B Dawes
H Plaggemars
N Anderson
J Kirkwood
T Dixon
Other Key Management
S Jones
G Grayson
J Kelly
A Pate
G Goh
Non-executive Chairman (from 1 August 2019)
Company Secretary (resigned 1 August 2018 from Company Secretary role)
Managing Director (commenced as MD on 1 August 2018)
Non-executive Director
Non-executive Director (appointed 31 July 2019)
Non-executive Director (appointed 31 July 2019)
Non-executive Chairman (resigned 31 July 2019)
Executive Director (resigned 31 July 2019)
Tenement and Land Manager and Business Development Manager
Chief Financial Officer and Company Secretary (Co Sec from 1 August 2018)
Exploration Manager
Mining Manager (commenced 4 March 2019)
Health Safety and Environment Manager
General Manager – Development (resigned 1 February 2019)
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.
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:
Revenue
2019
49,133
2018
41,306
2017
11,532
2016
1,057
2015
510
Net profit/(loss) after tax
(14,555,272)
(15,793,246)
(10,662,621)
(3,446,559)
(1,148,561)
Earnings per share
Share price at year-end
(3.70)
0.052
(8.00)
0.120
(9.29)
0.355
(4.92)
0.250
(2.53)
0.096
17
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
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.
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 depends 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. The Company has not utilised a remuneration
consultant in the current year.
18
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Employment Contracts
Details of employment contracts currently in place with respect to directors’ and key management personnel employment
with the company are as follows:
Giuseppe (Joe) Paolo Graziano, Non-Executive Chairman
• Director’s fees of $50,000 per annum.
• Long term incentives as granted by the Board as part of a grant of benefits to Directors and subject to shareholder
approval.
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.
Brian Dawes, Non-Executive Director
• Director’s fees of $36,000 per annum inclusive of statutory superannuation contributions.
Hansjoerg Plaggemans, Non-Executive Director
• Director’s fees of $36,000 per annum.
Nicholas Anderson, Non-Executive Director
• Director’s fees of $36,000 per annum.
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.
Trevor Dixon, Tenement and Land Manager and 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.
John Kelly, Mining Manager
• Base annual remuneration of $270,000 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 one month’s 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.
19
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
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 month’s 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.
Anthea Pate, Health Safety and Environment Manager
•
•
Base annual remuneration of $190,000 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 one month’s 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.
Remuneration of Key Management Personnel
Short-term employee benefits
Post-
employment
benefits
Equity
Performance
related
30 June 2019
Salary and
fees
Consulting
Non-
monetary
benefits
Other
Superan-
nuation
Share
options
Total
%
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
A Munckton
KMP
S Jones
G Grayson
J Kelly
A Pate
G Goh
$
$
$
$
$
$
$
45,662
207,458
-
-
36,000
21,0001
32,877
283,623
250,000
190,000
82,197
153,965
169,994
-
-
-
-
-
-
-
1,451,776
21,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,338
19,709
-
3,123
24,657
20,531
18,050
6,844
14,627
12,622
124,501
-
-
-
-
-
-
-
-
-
-
-
50,000
227,167
57,000
36,000
308,280
270,531
208,050
89,041
168,592
182,616
1,597,277
-
-
-
-
-
-
-
-
-
-
-
1 Consulting services rendered by Mr. Graziano were via Pathways Corporate Pty Ltd for Company Secretarial services during the period (GST exclusive).
20
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Short-term employee benefits
Post-employment benefits
Equity
30 June 2018
Salary and
fees
Consulting
Non-
monetary
benefits
Other
Superan-
nuation
Share
options
Total
%6
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
D Harper
D Sproule
KMP
A Munckton
S Jones
G Goh
G Grayson
$
$
$
$
$
$
$
15,628
225,679
-
-
36,000
120,0003
11,840
252,177
-
-
23,892
56,8504
53,028
260,417
252,885
90,006
-
-
-
-
-
-
-
-
-
1,485
-
17,113
3,6001
21,440
533,700
784,419
-
-
-
449,800
605,800
1,125
-
12,965
100,0002
50,0002
22,610
274,800
699,587
-
-
-
-
50,0005
25,0005
-
25,0005
-
-
-
274,800
355,542
5,220
20,884
20,049
8,551
-
-
-
-
58,249
356,301
297,933
98,557
1,221,552
176,850
175,000
78,600
101,364
1,533,100
3,286,466
-
68%
74%
-
61%
77%
-
21%
8%
-
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.
6 Percentage of performance based remuneration.
Shareholdings of Key Management personnel
2019
DIRECTORS
J Kirkwood
T Dixon
G Graziano
B Dawes
A Munckton
KMP
S Jones
G Grayson
J Kelly
A Pate
G Goh1
Balance at
1/07/18
No.
Shares
Purchased
No.
Shares
Issued
No.
Shares
Acquisition
No.
Shares on
Resignation
No.
Balance at
30/06/19
No.
-
3,260,295
12,152,660
8,343,750
270,886
-
194,099
-
-
-
97,050
200,000
500,000
534,769
52,313
-
-
-
-
-
21,058,445
4,547,377
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(97,050)
3,260,295
12,352,660
8,843,750
805,655
52,313
194,099
-
-
-
-
(97,050)
25,508,772
1 Mr Goh resigned on 1 February 2019. The number of shares disposed is the number of shares they held at the time of their resignation.
21
Kin Mining NL Annual Report 2019
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
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
No.
Shares
Purchased
No.
Shares
Issued
No.
Shares
Acquisition
No.
Shares on
Resignation
No.
Balance at
30/06/18
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(669,464)
(4,984,091)
-
-
-
-
-
12,152,660
8,343,750
270,886
-
-
-
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.
22
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Option holdings of key management personnel
2019
Directors
J Kirkwood
T Dixon
G Graziano
B Dawes
A Munckton
KMP
S Jones
J Kelly
G Grayson
A Pate
G Goh1
Balance at
01/07/18
No.
Options
Purchased
No.
Options
Disposed
No.
Options
Issued
No.
-
6,037,500
5,075,000
-
-
-
-
-
-
-
11,112,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options
Expired
No.
-
(37,500)
(75,000)
Balance at
30/06/19
No.
-
6,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(112,500)
11,000,000
1 Mr Goh resigned on 1 February 2019. No options was held at the time of resignation.
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
No.
Options
Purchased
No.
Options
Disposed
No.
Options
Issued
No.
Options
Expired
No.
Balance at
30/06/18
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
-
-
-
-
-
-
-
-
-
-
-
-
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.
23
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Share-based remuneration granted as compensation
There were no share based remuneration payments that were made or lapsed / forfeited during the year.
Performance Rights holdings of key management personnel
2019 - None
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.
Rights converted
to shares
No.
Rights cancelled on
resignation
No.
Balance at
30/06/18
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.
Additional performance rights and cash bonuses have been granted to Mr Stephen Jones that vest and may be converted to
shares following the achievement of future performance hurdles as follows:
Performance hurdles
Conditions
Capital expenditure on CGP 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
Stephen Jones
Performance
rights*
Cash bonus
$50,000
$25,000
First month of gold production exceeding
4,000 fine ounces output from the CGP
Allocation and cash payment made within 1 month following
the milestone
$50,000
$25,000
Steady state production at design
throughput of the CGP mill
Six months commercial production having achieved design
throughput and gold output with allocation and cash
payment made within 1 month following the milestone
$50,000
$25,000
* Performance rights will, subject to meeting the performance hurdles, vest into shares in the employer in accordance with the following formula.
Number of shares =
$ value of the Performance Rights
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
No amounts were unpaid on options exercised during the year.
24
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Share options
During the year no share options and performance rights were granted to Directors and the KMP as compensation or
remuneration.
Other transactions with Key Management Personnel
Pathways Corporate Pty Ltd, a company of which Mr. Graziano is a Director, charged the Group director fees of $36,000
(2018: $36,000), excluding GST, none of which was outstanding at 30 June 2019 (2018: 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
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
Number of shares under option
Exercise price of option
Expiry date of option
13 April 2017
15 September 2017
15 January 2018
15 September 2017
15 September 2017
5,000,000
9,000,000
1,000,000
6,000,000
4,000,000
$0.27
$0.75
$0.36
$1.00
$1.25
10 April 2020
15 September 2022
15 January 2020
15 September 2021
15 September 2022
There were no ordinary shares issued by the Company during or since the end of the financial year as a result of the exercise
of any options.
There were no ordinary shares issued by the Company during or since the end of the financial year as a result of the vesting
of performance rights.
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:
Directors’ meetings
Number of meetings held:
Number of meetings attended:
J Kirkwood
T Dixon
G Graziano
B Dawes
A Munckton
12
12
12
12
12
111
1 Mr Munckton attended all meetings of Directors from the date that he was appointed a Director on 1 August 2018.
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.
25
Kin Mining NL Annual Report 2019
DIRECTORS’ REPORT
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
22 to the financial statements. No non-audits services were provided during the year ended 30 June 2019 (2018: $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.
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 30 and forms part of this directors’ report for the year ended 30 June 2019.
Signed in accordance with a resolution of the directors.
Andrew Munckton
Managing Director
Perth, Western Australia
27 September 2019
26
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
Competent Persons Statement (Mineral Resources Estimate)
The information contained in this report relating to Resource Estimation results for Bruno Lewis, Kyte, Helens and
Mertondale East 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 in this report that relates to 2017 Mineral Resources for Mertondale 5, Tonto, Rangoon (including Fiona)
and Leonardo / Michaelangelo 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 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 Cardinia Gold Project is based on information
compiled or reviewed by Mr. Craig Mann who is a fulltime employee of Entech Pty Ltd. Mr. Mann 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 Member of The Australasian Institute of Mining
and Metallurgy, he has reviewed the Report to which this consent statement applies, for the period ended 31st August 2019.
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
This report contains “forward-looking information” that is based on the Company’s expectations, estimates and
projections as of the date on which the statements were made. This forward-looking information includes, among other
things, statements with respect to the feasibility and definitive feasibility studies, the Company’s’ business strategy, plan,
development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves
and resources, results of exploration and operational expenses. Generally, this forward-looking information can be identified
by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘likely’,’ believe’, ’estimate’,
‘expect’, ’intend’, ’may’, ’would’, ’could’, ’should’, ’scheduled’, ’will’, ’plan’, ’forecast’, ’evolve’ and similar expressions.
Forward- looking information is subject to known and unknown risks, uncertainties and other factors that may cause the
Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or
implied by such forward-looking information. Forward-looking information is developed based on assumptions about such
risks, uncertainties and other factors set out herein.
27
Kin Mining NL Annual Report 2019 DIRECTORS’ REPORT
This list is not exhausted of the factors that may affect our forward-looking information. These and other factors should
be considered carefully and readers should not place undue reliance on such forward-looking information. The Company
disclaims any intent or obligations to or revise any forward-looking statements whether as a result of new information,
estimates, or options, future events or results or otherwise, unless required to do so by law. Statements regarding plans
with respect to the Company’s mineral properties may contain forward-looking statements in relation to future matters that
can be only made where the Company has a reasonable basis for making those statements. This announcement has been
prepared in compliance with the JORC Code 2012 Edition and the current ASX Listing Rules. The Company believes that
it has a reasonable basis for making the forward-looking statements in this announcement, including with respect to any
mining of mineralised material, modifying factors and production targets and financial forecasts.
28
Kin Mining NL Annual Report 2019 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 2019 is dated as at 30 June 2019 and was
approved by the Board on 27 September 2019. The Corporate Governance Statement is available on Kin Mining NL’s website
at www.kinmining.com.au/corporate-profile/corporate-governance.
29
Kin Mining NL Annual Report 2019 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 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2019
D I Buckley
Partner
Kin Mining NL Annual Report 2019 30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
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
Exploration and evaluation costs
Impairment expense
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
Notes
2019
$
2018
$
2
2
2, 12
15
3
49,133
40,925
(326,083)
(839,826)
(87,764)
(1,322,253)
-
(1,677,165)
(95,103)
(31,745)
(8,366,973)
(1,768,254)
-
(130,164)
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)
(14,555,272)
(15,793,246)
-
-
(14,555,272)
(15,793,246)
-
-
-
-
Total comprehensive loss for the year
(14,555,272)
(15,793,246)
Basic loss per share (cents per share)
5
(3.70)
(8.00)
The accompanying notes form part of these consolidated financial statements.
Kin Mining NL Annual Report 2019 31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
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
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share based payments reserve
Accumulated losses
Total equity
The accompanying notes form part of these consolidated financial statements.
Notes
2019
$
2018
$
7
8
9
10
11
13
15
14
16
3,148,063
2,195,518
52,746
-
25,906
827,032
14,738
16,554
3,226,715
3,053,842
10,554,609
10,554,609
13,781,324
12,429,794
12,429,794
15,483,636
888,226
1
888,227
1,500,000
1,500,000
2,388,227
11,393,097
2,292,251
5,431,384
7,723,635
1,500,000
1,500,000
9,223,635
6,260,001
62,863,653
1,818,488
43,175,285
1,818,488
(53,289,044)
(38,733,772)
11,393,097
6,260,001
Kin Mining NL Annual Report 2019 32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Issued capital
Accumulated
losses
Share based
payments
reserve
Total equity
Balance as at 1 July 2017 Restated
26,805,451
(22,940,526)
35,128
Notes
$
$
$
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
Balance as at 1 July 2018
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 2019
-
-
-
16,974,884
(605,050)
(15,793,246)
(15,793,246)
-
-
-
-
-
1,783,360
-
-
43,175,285
(38,733,772)
1,818,488
43,175,285
(38,733,772)
1,818,488
-
-
-
20,361,352
(672,984)
(14,555,272)
(14,555,272)
-
-
-
-
-
-
-
-
62,863,653
(53,289,044)
1,818,488
$
3,900,053
(15,793,246)
(15,793,246)
1,783,360
16,974,884
(605,050)
6,260,001
6,260,001
(14,555,272)
(14,555,272)
-
20,361,352
(672,984)
11,393,097
The accompanying notes form part of these consolidated financial statements.
Kin Mining NL Annual Report 2019 33
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Finance costs
Notes
2019
$
2018
$
(10,648,277)
(11,623,186)
49,133
(356,351)
41,306
(352,006)
Net cash (outflow) from operating activities
7
(10,955,495)
(11,933,886)
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
Repayment of borrowings
Net cash inflow from financing activities
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The accompanying notes form part of these consolidated financial statements.
-
(897,971)
(897,971)
600,000
(9,648,945)
(9,048,945)
19,976,362
(287,994)
-
-
(6,882,357)
12,806,011
952,545
2,195,518
3,148,063
14,454,908
(605,050)
6,398,100
(800,000)
(2,924,000)
16,523,958
(4,458,873)
6,654,391
2,195,518
7
7
7
7
Kin Mining NL Annual Report 2019 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 2019
In the year ended 30 June 2019, 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 Group has
initially applied AASB 9 and AASB 15 from 1 July 2018.
Due to the transition methods chosen by the Group in applying AASB 9 and AASB 15, comparative information throughout the financial
statements has not been restated to reflect the requirements of the new standards.
AASB 9 Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes changes to a number of areas including
classification of financial instruments, measurement, impairment of financial assets and hedge accounting model. The Group has
adopted AASB 9 from 1 July 2018.
The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at
amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which
arise on specified dates and that are solely principal and interest.
A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose
objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and
interest as well as selling the asset on the basis of its fair value.
All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable
election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent
consideration recognised in a business combination) in other comprehensive income ('OCI').
Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to
reduce the effect of, or eliminate, an accounting mismatch.
For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value
that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch).
New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management
activities of the entity.
New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using
a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which
Kin Mining NL Annual Report 2019 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime
expected loss allowance is available.
The Group has applied AASB 9 retrospectively with the effect of initially applying this standard recognised at the date of initial
application, being 1 July 2018 and has elected not to restate comparative information accordingly, the information presented for 30
June 2018 has not been restated.
There is no material impact to profit or loss or net assets on the adoption of this new standard in the current or comparative years.
AASB 15 Revenue from contracts with Customers
AASB 15 replaces AASB 118 Revenue and AASB 111 Construction Contracts and related interpretations and it applies to all revenue
arising from contracts with customers, unless those contracts are in the scope of other standards.
The group has no revenue from contracts with customers.
Other than the above, the Directors have determined that there is no material impact of the other new and revised Standards and
Interpretations on the Company 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 2019. As a
result of this review, the Directors have determined that AASB 16 Leases may have a material effect on the application in future
periods.
AASB 16 replaces AASB 117 Leases and related interpretations.
AASB 16 removes the classification of leases as either operating leases or finance leases – for the lessee – effectively treating all
leases as finance leases. Most leases will be capitalised on the statement of financial position by recognising a lease liability for the
present value obligation and a ‘right of use’ asset. The right of use asset is calculated based on the lease liability plus initial direct
costs, prepaid lease payments and estimated restoration costs less lease incentives received. This will result in an increase in the
recognised assets and liabilities in the statement of financial position as well as a change in the expense recognition with interest
and depreciation replacing operating lease expense. There are exemptions for short-term leases and leases of low-value items.
Lessor accounting remains similar to current practice, i.e. lessors continue to classify leases as finance and operating leases.
This Standard will primarily affect the accounting for the Group’s operating lease commitments predominately relating to rental
premises. The Group is considering available options to account for this transition which may result in a change in reported earnings
before interest, tax and depreciation and amortisation (EBITDA) and increase in lease assets and liabilities recognition. The Standard
may also have an impact on deferred tax balances. This will however be dependent on the lease arrangements in place when the new
Standard is effective, The Group has commenced the process of evaluating the impact of the new Standard.
AASB 16 is effective from annual reporting periods beginning on or after 1 January 2019. A lessee can choose to apply the Standard
using a full retrospective or modified retrospective approach.
Other than the above, there is no material impact of the new and revised Standards and Interpretations on the Company and therefore,
no material change is necessary to Group accounting policies.
(c) Statement of compliance
The financial report was authorised for issue on 27 September 2019.
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).
Kin Mining NL Annual Report 2019 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
Mine development expenditure carried forward (included in assets in construction in Note 11)
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 17.
(e) Going concern
Notwithstanding the fact that the Group incurred an operating loss of $14,555,272 for the year ended 30 June 2019, had net cash
outflow from operating activities of $10,955,495 and investing activities of $897,971, the directors are of the opinion that the Group is
a going concern for the following reasons:
•
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.
Kin Mining NL Annual Report 2019 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
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 9, 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 control of the good or service has passed and 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.
Kin Mining NL Annual Report 2019 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
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.
Impairment of non-financial assets
(j)
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.
Kin Mining NL Annual Report 2019 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of non-financial assets (continued)
(j)
In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of
an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to
continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset
is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each 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
Computer equipment
5 to 25 years
5 to 20 years
5 years
2 to 3 years
Mine Properties (assets in construction)
amortised over units of production
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.
Kin Mining NL Annual Report 2019 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Property, plant and equipment (continued)
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.
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.
Derecognition and disposal
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss in the year the asset is derecognised.
(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.
The Group measures the loss allowance for trade and other receivables at an amount equal to lifetime expected credit loss. The
expected credit losses on trade and other receivables are estimated with reference to past default experience of the debtor and an
analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtor, general economic conditions of
the industry in which the debtor operates and an assessment of both the current and the forecast direction of conditions at the
reporting date.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there
is no realistic prospect of recovery; for example, when the debtor has been placed under liquidation or has entered into bankruptcy
proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. 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.
Kin Mining NL Annual Report 2019 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
(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
Kin Mining NL Annual Report 2019 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r) Employee leave benefits (continued)
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.
Issued capital
(s)
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 directors believe that this policy results 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. All exploration and evaluation expenditure in the current period has been expensed to the
profit or loss.
(v) Parent entity financial information
The financial information for the parent entity, Kin Mining NL, disclosed in Note 21 has been prepared on the same basis as the
consolidated financial statements, except as set out below.
Kin Mining NL Annual Report 2019 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v) Parent entity financial information (continued)
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.
NOTE 2: 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 – royalty1
Interest expense1
Amortisation of transaction costs
2019
2018
$
$
40,925
40,925
14,908
14,908
2019
2018
$
$
(369,231)
356,355
1,690,041
1,677,165
369,231
397,054
317,419
1,083,704
1See Note 15
NOTE 3: INCOME TAX
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:
Loss before income tax
Income tax expense calculated at 30% (2018: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable loss:
•
Effect of expenses that are not deductible in determining taxable
loss
Effect of unused tax losses and tax offsets not recognised as
deferred tax assets
•
Income tax benefit reported in the consolidated statement of
comprehensive income
2019
$
2018
$
(14,555,272)
(15,793,246)
(4,366,582)
(4,737,974)
73,017
764,407
4,293,565
3,973,567
-
-
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.
Kin Mining NL Annual Report 2019 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: INCOME TAX (CONTINUED)
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 $13,434,503 (2018: $9,140,938). 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.
NOTE 4: 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 5: LOSS PER SHARE
2019
2018
Cents per share
Cents per
share
Basic/diluted loss per share
(3.70)
(8.00)
The loss and weighted average number of ordinary shares used in the calculation of basic/diluted loss per share is as follows:
Loss for the year
Weighted average number of ordinary shares for the purpose of
basic/dilutive earnings per share
$
$
(14,555,272)
(15,793,246)
393,768,617
197,411,002
The potential ordinary shares that could be dilutive in the future are the options discussed at Note 17.
NOTE 6: 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 7: 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
Cash at bank earns interest at floating rates based on daily bank deposit rates.
2019
$
2018
$
3,118,063
30,000
3,148,063
2,165,518
30,000
2,195,518
Kin Mining NL Annual Report 2019 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
NOTE 7: CASH AND CASH EQUIVALENTS (CONTINUED)
Reconciliation of net loss for the year to net cash flows from operating activities
Net loss for the year
Depreciation of non-current assets
Amortisation of finance transaction costs
Share based payments
Interest paid in shares
Foreign exchange
Effective interest - royalty
Impairment expense
(Increase)/decrease in assets:
Trade and other receivables
Increase/(decrease) in liabilities:
Trade and other payables
Provisions
Net cash outflow from operating activities
Changes in liabilities arising from financing activities
2019
$
2018
$
(14,555,272)
(15,793,246)
326,083
1,690,041
-
-
130,164
(369,231)
1,768,254
156,535
317,419
2,205,900
45,033
354,094
369,231
781,504
(334,589)
(727,038)
-
(754,263)
1,500,000
(10,955,495)
(11,933,886)
Prior Year
Balance as at as at 1 July 2017
Cash flows from financing activities
Proceeds from borrowings
Borrowing transaction costs
Repayments of borrowings
Net cash from/(used in) financing activities
Repayments of borrowings through equity
Borrowing transaction costs through equity
Exchange differences
Changes in fair value
Effective interest - royalty
Amortisation of transaction costs
Balance as at 30 June 2018
Current Year
Cash flows from financing activities
Repayments of borrowings
Net cash from/(used in) financing activities
Exchange differences
Effective interest - royalty
Amortisation of transaction costs
Balance as at 30 June 2019
Related party
loans
$
1,278,967
Vendor Finance
$
2,400,000
Sprott Credit
Facility
$
Total
$
-
3,678,967
-
-
(524,000)
(524,000)
(754,967)
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,400,000)
(2,400,000)
-
-
-
-
-
-
-
-
-
-
-
-
6,398,100
(800,000)
-
5,598,100
-
(1,207,460)
354,094
-
369,231
317,419
5,431,384
6,398,100
(800,000)
(2,924,000)
2,674,100
(754,967)
(1,207,460)
354,094
-
369,231
317,419
5,431,384
(6,882,357)
(6,882,357)
(6,882,357)
(6,882,357)
130,164
(369,231)
1,690,041
1
130,164
(369,231)
1,690,041
1
Kin Mining NL Annual Report 2019 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8: TRADE AND OTHER 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 9: INVENTORY
Gold bullion (at cost)
NOTE 10: OTHER ASSETS
Current
Prepayment – others
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
2019
2018
$
$
34,648
17,016
1,082
52,746
690,118
42,900
94,014
827,032
2019
2018
$
$
-
-
14,738
14,738
2019
2018
$
$
25,906
25,906
16,554
16,554
Assets in
construction
Plant and
equipment
Motor Vehicles
Total
$
$
$
$
Freehold
land and
buildings
$
2,636,838
285,700
-
(12,558)
2,909,980
2,909,980
113,357
-
Balance at 1 July 2017
Additions
Disposal
Depreciation charge for the year
Balance at 30 June 2018
Balance at 1 July 2018
Additions
Disposal
Depreciation charge for the year
(36,880)
-
8,796,970
(620,000)
-
8,176,970
8,176,970
31,926
-
-
Impairment expense
Balance at 30 June 2019
-
2,986,457
(1,768,254)
6,440,642
76,461
583,267
-
(57,857)
601,871
601,871
73,869
-
87,086
740,007
-
(86,120)
740,973
2,800,385
10,405,944
(620,000)
(156,535)
12,429,794
740,973
12,429,794
-
-
219,152
-
(132,410)
(156,793)
(326,083)
-
-
(1,768,254)
543,330
584,180
10,554,609
Kin Mining NL Annual Report 2019 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The useful life of the assets was estimated as follows for both 2019 and 2018:
Buildings
Plant and equipment
Motor vehicles
Computer equipment
Impairment
5 to 25 years
5 to 20 years
5 years
2 to 3 years
During the current period the Company has been preparing an updated pre-feasibility study on the Cardinia Gold Project. That study
(completed in August 2019) determined certain changes to the layout and construction of the Cardinia Processing Plant. Following
the changes to the layout 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 although the recoverable amount exceeds the
carrying value there are certain aspects of the work in progress that will need to be dismantled and recompleted. As a result of the
review an amount of $1,768,254 of costs incurred to date have been written off. No further impairment is considered necessary at this
time as the recoverable amount exceeds the carrying value. 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 Cardinia Gold Project in Leonora, WA, which is comprised of the process plant ($6.4m) and other property, plant and equipment
associated with the project ($3.0m). 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 an 8 year period. The discount rate
applied to cash flow projections is 8% (refer to page 10, the Directors’ Report, Table 1. Key Project Parameters for further detail on
assumptions).
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase – at cost
Cumulative exploration and evaluation at beginning of year
Expenditure incurred - cash
Cumulative exploration and evaluation expenditure at the end of the year
2019
$
2018
$
24,957,894
8,366,973
33,324,867
17,578,879
7,379,015
24,957,894
Exploration and evaluation expenditure expensed to the statement of
comprehensive income in the current period
(8,366,973)
(7,379,015)
Exploration and evaluation expenditure carried forward on the balance
sheet
-
-
NOTE 13: 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.
2019
$
2018
$
565,586
145,830
176,810
888,226
1,799,132
338,197
154,922
2,292,251
Kin Mining NL Annual Report 2019 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14: PROVISIONS
Non-Current
Restoration and rehabilitation provision
2019
$
2018
$
1,500,000
1,500,000
1,500,000
1,500,000
Kin has an obligation to certain rehabilitation activities from historical exploration and mining activities. A closure cost estimate for
these activities has been prepared as follows:
Calculation of required provision
• All historical areas of disturbance have been incorporated in this calculation.
• Each historical disturbance has been planned for the type of activities to complete the rehabilitation of that disturbance.
• The unit rates used to estimate the cost of rehabilitation for each type of rehabilitation activity has not changed from the
prior years’ estimate.
• The PFS document assumed that a large number of the unit rates have refined to lower rates than were used previously.
For example, applying the unit rates from the PFS to the rehabilitation activities on the Mining Infrastructure (Mertondale
Pit and WRL rehabilitation) would result in a reduction of $0.151M or 27% from the previous estimate.
• The PFS costings are based on a LOM operation and mining contractor presence while the current rehabilitation provision
(assuming no LOM operation) will involve local Leonora operators.
• The provision though relating to historical activities is not current as it is anticipated that the rehabilitation will not occur
until throughout and at the end of the proposed mine life. The 2019 PFS envisages an 8-year LOM slightly longer than the
2017 DFS LOM of 7 years.
• The provision is adequately and appropriately estimated at $1.5M.
• Current exploration areas are rehabilitated at the end of the exploration program (within 6 months in accordance with POW
conditions).
The closure costs have been discounted using an 8% discount rate.
NOTE 15: BORROWINGS
Current
Secured
Sprott Credit Facility (i)
Total borrowings
Summary of borrowing arrangements
2019
$
2018
$
1
1
1
5,431,384
5,431,384
5,431,384
(i) The Company entered into a credit agreement (original credit facility) 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 in December 2017.
The original credit facility includes the following key terms:
•
•
•
•
•
annual interest rate of 8.00%, plus the greater of US 12-month LIBOR or 1.00%,
3,500,000 KIN ordinary shares will be issued to Sprott on closing with the shares to be escrowed for 4 months,
1.5% NSR on first 100,000oz gold produced by the LGP,
3-year loan term, repayments beginning June 2019, and
a General Security Deed and Mining Tenement Mortgage.
Kin Mining NL Annual Report 2019 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: BORROWINGS (CONTINUED)
On 27 December 2017, the Company received the first tranche drawdown of this original credit facility of USD$5M which was
recorded in the Statement of Financial Position at 30 June 2018 net of the transaction costs related to the facility.
During the current year the Company and Sprott agreed to vary the credit agreement with an early repayment of the outstanding
balance except for US$1 and the removal of all security and covenant requirements while the outstanding balance is only USD$1.
The variations to the agreement following the early repayment included:
•
•
•
•
an increase in the availability period from 30 June 2019 to 30 June 2021,
an extension in the maturity date of the facility to 31 March 2023,
commencement of quarterly principle repayments (on any future drawdowns) has been moved forward to 30 June
2021,
an amendment to the secured position (during the period that the no loan outstanding is USD$1) to just cover the
1.5% NSR.
As a result of the modification to the terms of the credit agreement transaction costs of $1,690,041 have been expensed in the
current year.
The company has an additional USD$22M to drawdown under the facility subject to further due diligence to the satisfaction of the
lender. The general security and covenants will be reinstated in the event that Kin seeks to recommence drawdowns on the
Credit Facility (subject to further due diligence by Sprott).
Kin Mining NL Annual Report 2019 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16: ISSUED CAPITAL
2019
$
2018
$
Ordinary shares issued and fully paid
62,863,653
43,175,286
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
Movements in ordinary shares
Balance at beginning of year
Rights issues
Placement of shares
Issue of shares to settle transaction costs
Issue of shares to a Director after satisfaction
of performance rights condition
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
Conversion of options
Share issue costs
Balance at end of year
2019
2018
No.
$
No.
$
243,547,933
43,175,285
161,696,184
26,805,451
197,823,404
18,261,352
34,665,303
5,598,984
42,000,000
2,100,000
28,000,000
7,000,000
-
-
-
-
-
-
-
-
-
-
-
-
3,500,000
875,000
380,083
100,000
2,785,714
750,000
1,000,000
330,000
291,149
75,000
11,229,500
2,245,900
-
(672,984)
-
(605,050)
483,371,337
62,863,653
243,547,933
43,175,285
Kin Mining NL Annual Report 2019 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17: OPTIONS AND PERFORMANCE RIGHTS
Movement in options on issue
2019
No.
Weighted average
exercise price
No.
$
2018
Weighted average
exercise price
$
Balance at the beginning of the year
37,335,750
0.653
28,865,750
Options issued to former Directors for past
services (i)
Options issued to Directors (ii)
Options issued to consultants (iii)
Options exercised (iv)
Options cancelled on expiry (v)
Balance at the end of the year (vi)
-
-
-
-
(12,335,750)
25,000,000
-
-
-
-
0.400
0.778
2,000,000
17,000,000
1,000,000
(11,229,500)
(300,500)
37,335,750
0.297
0.750
0.960
0.360
0.200
0.200
0.653
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. The options remain in existence at balance date.
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
7,000,000
15/9/17
0.33
0.75
15 September 2020
85.07%
2.08%
30%
0.0836
Tranche 2
6,000,000
15/9/17
0.33
1.00
15 September 2021
85.07%
2.08%
30%
0.0916
Tranche 3
4,000,000
15/9/17
0.33
1.25
15 September 2022
85.07%
2.08%
30%
0.0998
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
Discount for lack of marketability
Total fair value
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%
30%
$82,460
Kin Mining NL Annual Report 2019 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17: OPTIONS AND PERFORMANCE RIGHTS (CONTINUED)
iv. Exercised during the year.
Period of
Exercised
Exercise date
Number
Share price at
exercise date
Year to 30 June 2018
$0.20 options
11,229,500
31 August 2017
$0.285 to $0.390
v. 300,500 Unlisted options with an exercise price of $0.20 expired unexercised on 31 August 2018. 12,335,750 Unlisted
Options issued as part of Share Purchase Plan and Shareholder Approval exercisable at $0.40 by 31 March 2019 expired
unexercised.
vi. 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 606 days.
Movement in performance rights on issue
2019
2018
No.
Value of
performance
rights
$
Balance at the beginning of the year
Issued to Director (i)
Issued to employees (ii)
Vested in Directors (i)
Vested in employees (ii)
Cancelled on resignation of Director (i)
Balance at the end of the year
-
-
-
-
-
-
-
No.
-
4,000,000
291,149
(380,083)
(291,149)
(3,619,917)
-
Value of
performance
rights
$
-
400,000
75,000
(100,000)
(75,000)
(300,000)
-
-
-
-
-
-
-
-
i. 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.
ii. 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 prior year. There were no shares issued in the current
year on vesting of performance rights. 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.
Kin Mining NL Annual Report 2019 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18: 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 2018. 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
2019
$
3,148,063
18,098
3,166,161
565,586
1
322,640
888,227
2018
$
2,195,518
151,651
2,347,169
1,799,132
5,431,384
493,119
7,723,635
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.
Market risk
The Company is not materially impacted by market risk other than share price risk related to future capital raisings.
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.
Kin Mining NL Annual Report 2019 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
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 2019.
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 2019
Trade and other payables
Borrowings – interest bearing
Weighted
average
interest rate
Less than 1
month
%
-
(a)
15
$
888,226
-
888,226
1 – 3
months
$
3 months –
1 year
1 – 5 years
5+ years
$
$
$
-
-
-
-
1
1
-
-
-
-
-
-
Kin Mining NL Annual Report 2019 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(a) The annual interest rate is 8.00%, plus the greater of US 12-month LIBOR or 1.00%
30 June 2018
Trade and other payables
Borrowings – interest bearing
Weighted
average
interest rate
%
-
(a)
15
Less than 1
month
$
2,292,251
1 – 3
months
$
3 months –
1 year
$
-
-
-
2,700,878
2,730,506
2,292,251
2,700,878
2,730,506
1 – 5 years
5+ years
$
$
-
-
-
-
-
-
NOTE 19: 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
After one year but not more than five years
More than five years
2019
$
2018
$
2,861,300
2,485,040
-
-
-
-
2,861,300
2,485,040
Contingencies
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 2019 or 30 June
2018.
NOTE 20: RELATED PARTY DISCLOSURE
The consolidated financial statements include the financial statements of Kin Mining NL and the subsidiaries listed in the following
table.
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
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
% Equity interest
2019
2018
%
100
100
100
100
100
100
%
100
100
100
100
100
100
Parent Investment
2019
$
2018
$
28,863,297
21,339,175
517
2
10,725,550
10,696,968
2,524,023
3,635,272
263
2,261,834
2,831,130
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.
Kin Mining NL Annual Report 2019 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20: RELATED PARTY DISCLOSURE (CONTINUED)
Other transactions with related parties
Pathways Corporate Pty Ltd, a company of which Mr. Graziano is a Director, charged the Group director fees of $36,000 (2018:
$36,000), excluding GST, none of which was outstanding at 30 June 2019 (2018: 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.
NOTE 21: 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
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2019
$
2018
$
3,226,715
9,054,609
12,281,324
3,039,104
10,944,532
13,983,636
888,227
7,723,635
-
-
888,227
7,723,635
62,863,653
1,818,488
43,175,285
1,818,488
(53,289,044)
(38,733,772)
11,393,097
6,260,001
2019
$
2018
$
(14,555,272)
(15,937,584)
-
-
(14,555,272)
(15,937,584)
The Parent Entity (Kin Mining NL) has no commitments or contingencies other than as disclosed in these Notes to the Consolidated
Financial Statements.
NOTE 22: 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
2019
2018
$
$
51,000
51,000
43,492
43,492
Kin Mining NL Annual Report 2019 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23: 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
NOTE 24: SUBSEQUENT EVENTS
2019
$
1,472,776
124,501
-
1,597,277
2018
$
1,652,002
101,364
1,533,100
3,286,466
On 24 July 2019, the Company announced Changes to Board of Directors effective 31 July 2019. The changes to the Board are as
follows:
•
•
•
•
Appointment of Mr Nicholas Anderson
Appointment of Mr Hansjoerg Plaggemars
Resignation of Mr Jeremy Kirkwood
Resignation of Mr Trevor Dixon
On 2 August 2019, the Company announced the appointment of Mr Giuseppe (Joe) Graziano as Chairman effective 1 August 2019.
On 30 August 2019, the Company announced the results of its pre-feasibility study and updated ore reserve for Cardinia Gold
Project
Kin Mining NL Annual Report 2019 58
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Kin Mining NL (the ‘Company’):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2019 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 2019.
This declaration is signed in accordance with a resolution of the board of directors.
Andrew Munckton
Managing Director
______________________________
Dated this 27th day of September 2019
Kin Mining NL Annual Report 2019 59
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 2019,
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 2019 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 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 related to going concern section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Kin Mining NL Annual Report 2019 60
Key Audit Matter
How our audit addressed the key audit
matter
Carrying value of the Cardina Gold Project (“CGP”)
Refer to Note 11.
The Board made a decision to curtail the construction
of the Cardinia Mine and to complete a revised pre-
feasibility study (“PFS") for the project. As part of the
process an impairment assessment was conducted by
management in relation to the assets comprising the
CGP. As a result of the review certain aspects of the
work in progress will need to be dismantled and
recompleted and
impairment of
$1,768,254 being recognised.
resulted
in an
The impairment assessment conducted in accordance
with AASB 136 Impairment of Assets involved a
comparison of the recoverable amount of the CGP
assets with their carrying amounts in the financial
statements.
The CGP Gold assets include property, plant and
equipment with a carrying value of $9.4 million and
represent a significant asset to the Group.
The evaluation of the recoverable amount of these
assets is considered a key audit matter due to the
significant judgement involved.
Accounting for the Sprott Credit Facility
Refer to Note 15.
The Group’s Sprott Credit Facility was a financial
liability carried at amortised cost, and included a royalty
based on 1.5% of the first 100,000 ounces produced
from the Leonora Gold Project.
Our procedures included but were not
limited to:
- We obtained an understanding of the
the
key controls associated with
preparation of the model used to assess
the recoverable amount of the Leonora
Gold Project;
- We critically evaluated management's
methodology in the value-in-use model
and the basis for key assumptions;
- We performed 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;
- We
reviewed
the mathematical
accuracy of the value-in-use model;
- We compared the value-in-use to the
carrying amount of assets comprising
the cash-generating unit;
- We considered whether the assets
comprising the cash-generating unit
had been correctly allocated;
- We considered the appropriateness of
the discount rate used; and
- We assessed the appropriateness of
the disclosures included in the financial
report.
Our procedures included but were not
limited to:
- We reviewed the key terms of the
Sprott Credit Facility agreement;
- We substantiated cash repayments to
During the year, the Group repaid all but US$1 of the
facility and signed an amendment to extend the
availability period by
two years. Upon partial
extinguishment of the original financial liability, all
remaining transaction costs of $1,690,041 have been
derecognised and the royalty component of the Sprott
facility was also derecognised as the Group reverted to
evaluation stage and completed a new pre-feasibility
study (PFS).
the lender;
- We considered whether the
modifications to the facility were a
derecognition event under AASB 9
Financial Instruments;
- We obtained a confirmation from the
lender of the balance outstanding at
balance date; and
- We considered the adequacy of the
for
the Sprott Credit Facility
The accounting
is
considered a key audit matter due to the judgement
required as to whether the modification to the facility
was a derecognition event.
disclosures included within the financial
statements.
Kin Mining NL Annual Report 2019 61
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 annual report for the year ended 30 June 2019,
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.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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.
Kin Mining NL Annual Report 2019 62
-
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
Kin Mining NL Annual Report 2019 60
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.
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 within the directors’ report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of Kin Mining NL for the year ended 30 June 2019
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
27 September 2019
D I Buckley
Partner
Kin Mining NL Annual Report 2019 63
ADDITIONAL SECURITIES EXCHANGE INFORMATION
1.
Shareholding
(a) Distribution schedule and number of holders of equity securities at 18 September 2019
1 -1,000
Fully Paid Ordinary Shares (KIN)
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
157
-
-
-
-
-
1,001 -
5,000
158
-
-
-
-
-
5,001 –
10,000
222
-
-
-
-
-
10,001 –
100,000
716
-
-
-
-
-
100,001
and over
365
1
1
6
4
4
Total
1,618
1
1
6
4
4
The number of holders holding less than a marketable parcel of fully paid ordinary shares at 18 September 2019 is 563.
(b)
20 largest holders of quoted equity securities as at 18 September 2019
The names of the twenty largest holders of fully paid ordinary shares (ASX Code: KIN) as at 18 September 2019
Rank Name
Number
Percentage
1 DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
2 MOSTIA DION NOMINEES PTY LTD
3 HARMANIS HOLDINGS PTY LTD
4 HARMANIS HOLDINGS PTY LTD
5
IPARKS PROPERTY GROUP PTY LTD
6 TREVOR JOHN DIXON
7 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
8 ACN 112 940 057 PTY LTD
9 GIUSEPPE PAOLO GRAZIANO
10 MITCHELL FAMILY INVESTMENTS (QLD) PTY LTD
11 A.C.N 112 940 057 PTY LTD
12 MARVYN JOHN FITTON
13 ACN 112 940 057 PTY LTD
14 BOTSIS HOLDINGS PTY LTD
15 MR JOSEPHUS ANTONIO GROOT
16 ROGUE INVESTMENTS PTY LTD
17 MEADOW HEAD INVESTMENTS PTY LTD
18 ERNIO EOLINI
19 MR JOSEPHUS ANTONIO GROOT & MRS CHRISTINE GROOT
20 HARMANIS HOLDINGS PTY LTD
83,424,371
40,957,262
34,050,792
22,437,294
12,727,274
12,282,910
8,473,103
7,035,979
6,800,000
6,262,840
5,493,095
5,274,472
5,226,668
5,000,000
4,815,642
4,000,001
4,000,000
3,692,188
3,657,810
3,574,961
17.26
8.47
7.04
4.64
2.63
2.54
1.75
1.46
1.41
1.30
1.14
1.09
1.08
1.03
1.00
0.83
0.83
0.76
0.76
0.74
Total
279,186,662
57.76
Kin Mining NL Annual Report 2019 64
ADDITIONAL SECURITIES EXCHANGE INFORMATION
(c)
Substantial Shareholders
Holder
Delphi Unterehmensberatung Aktiengesellschaft
1
2 Harmanis Holdings Pty Ltd
3 Mostia Dion
4 Michele Canci
Shares
83,424,371
66,682,424
40,957,262
34,909,022
Percent
17.26%
13.80%
8.47%
7.94%
(d) Unquoted Securities
The number of unquoted securities on issue at 18 September 2019:
Unquoted Securities
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Number on Issue
5,000,000
9,000,000
6,000,000
4,000,000
1,000,000
Exercise Price
27c
75c
$1.00
$1.25
36c
Expiry Date
10/4/20
15/9/20
15/9/21
15/9/22
15/1/20
(e)
Voting Rights
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.
Kin Mining NL Annual Report 2019 65
TENEMENT TABLE
TENEMENT INFORMATION AS REQUIRED BY LISTING RULE 5.3.3
CARDINIA / MERTONDALE
35 kms East & North East of Leonora Townsite
Tenement ID
L37/65
L37/106
L37/127
L37/128
L37/195
L37/196
L37/226
L37/232
L37/241
L37/242
L37/243
L37/244
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
M37/1320
M37/1323
M37/1325
M37/1328
M37/1329
M37/1330
M37/1331
M37/1332
M37/1333
P37/7953
P37/7954
P37/7969
P37/7970
P37/7971
P37/7972
P37/7973
P37/7974
P37/7975
P37/7976
Ownership
at end of Quarter
0%
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%
100%
100%
100%
100%
100%
100%
100%
0%
0%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Change
During Quarter
Expired 11/4/19
Granted 17/6/19
Granted 17/6/19
Granted 17/6/19
Granted 7/6/19
Expired 11/5/19
Expired 11/5/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
Tenement ID
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
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
P 37/9166
P 37/9170
P 37/9171
P 37/9172
P 37/9173
P37/9221
P37/9222
P37/9223
P37/9224
P37/9225
P37/9226
P37/9227
P37/9228
Ownership
at end of Quarter
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
Change
During Quarter
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Kin Mining NL Annual Report 2019 66
TENEMENT TABLE
P37/7977
P37/7978
P37/7979
P37/8007
P37/8196
P37/8199
P37/8209
P37/8210
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
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CARDINIA / MERTONDALE (cont)
35 kms East & North East of Leonora Townsite
Surrendered 6/6/19
Surrendered 6/6/19
Surrendered 6/6/19
P37/9229
P37/9230
P37/9231
P37/9232
M37/1342
0%
0%
0%
0%
0%
Tenement Application
Tenement Application
Tenement Application
Tenement Application
Tenement Application
RAESIDE
8 kms East of Leonora Townsite
Change
During Quarter
Tenement ID
E37/868
E37/1103
L37/77
L37/125
M37/1298
Ownership
at end of Quarter
100%
100%
100%
100%
100%
DESDEMONA
20 kms South of Leonora Townsite
PIG WELL
25 kms East of Leonora Townsite
Tenement ID
E37/1152
E37/1156
E37/1201
E37/1203
E37/1315
E37/1326
E40/283
E40/285
E40/323
E40/366
E40/369
M40/330
M40/346
P37/8350
P37/8390
P37/8500
P37/8504
P40/1263
P40/1283
P40/1464
Ownership
at end of Quarter
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
Change
During Quarter
Tenement ID
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
Change
During Quarter
Ownership
at end of Quarter
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Kin Mining NL Annual Report 2019 67
TENEMENT TABLE
IRON KING / VICTORY
45 kms North North West of Leonora
Change
During Quarter
RAESIDE
8 kms East of Leonora Townsite
Tenement ID
E37/1300
Ownership
at end of Quarter
100%
Change
During Quarter
Tenement ID
E37/1134
M37/1327
P37/8359
P37/8414
P37/8415
P37/8455
P37/8458
P37/8459
P37/8460
P37/8461
P37/8491
Ownership
at end of Quarter
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
MURRIN MURRIN
50 kms East of Leonora
REDCASTLE
65 kms South West of Laverton
Tenement
ID
M39/279
M39/1121
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
M39/1136
Tenement
ID
M39/1118
P39/5181
P39/5182
P39/5183
P39/5185
P39/5859
P39/5860
Ownership
at end of Quarter
66.66%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
Change
During Quarter
Tenement Application
MT FLORA
50 kms East North East of Leonora
Change
During Quarter
Ownership
at end of Quarter
100%
100%
100%
100%
100%
100%
100%
Tenement
ID
M39/1108
M39/1119
P39/5105
P39/5267
P39/6118
Tenement
ID
M37/1316
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
M37/1343
Ownership
at end of Quarter
100%
0%
0%
100%
0%
Change
During Quarter
Expired 11/4/19
RANDWICK
45 kms North East of Leonora
Ownership
at end of Quarter
100%
0%
0%
0%
0%
0%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
Change
During Quarter
Surrendered 5/6/19
Surrendered 5/6/19
Surrendered 5/6/19
Surrendered 5/6/19
Surrendered 5/6/19
Surrendered 5/6/19
Tenement Application
Kin Mining NL Annual Report 2019 68