(ACN 100 714 181)
Annual Report
For the year ended 30 June 2022
Contents
Corporate Directory
Directors’ Report
Auditor’s Independence Report
Directors Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Independent Audit Report
ASX Additional Information
Page
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4
14
15
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18
19
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45
Corporate Directory
ACN: 100 714 181
ASX Code: KRR
King River Resources Limited shares are listed on the Australian Stock Exchange (ASX)
DIRECTORS
Anthony Barton
(Chairman)
Leonid Charuckyj
(Director)
Greg MacMillan
(Director)
COMPANY SECRETARIES
Greg MacMillan
Kathrin Gerstmayr
REGISTERED OFFICE
254 Adelaide Tce
Perth WA 6000
Tel:
Fax:
Email: info@kingriverresources.com.au
(08) 9221 8055
(08) 9325 8088
SOLICITORS
Fairweather Corporate Lawyers
589 Stirling Highway
Cottesloe WA 6011
BANKERS
ANZ Banking Corporation
77 St George’s Terrace
Perth WA 6000
SHARE REGISTER
Automic Group
Level 2, 267 St Georges Terrace
Perth WA 6000
AUDITORS
Ernst and Young
11 Mounts Bay Road
Perth WA 6000
INTERNET ADDRESS
www.kingriverresources.com.au
CORPORATE GOVERNANCE STATEMENT
www.kingriverresources.com.au/investors/corporate-governance/
Page 3
Directors Report
The directors submit their report for King River Resources Limited (“King River” or “the Company”) and its controlled entities
for the year ended 30 June 2022.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows
below. The directors were in office for the entire period unless otherwise stated. No director has served as a director of any other
ASX Listed Company in the past 3 years unless mentioned below.
Anthony Barton
Chairman
Appointed 21 May 2007
Mr Barton has been involved in founding and growing a number of successful listed public companies. He has extensive
experience in capital markets, corporate finance, funds management and venture capital and has had advisory roles in the
incorporation and listing of many Australian based resource companies.
Mr Barton is the founding Executive Chairman of the boutique investment bank Australian Heritage Group. He is a graduate of
the Royal Melbourne Institute of Technology with a Bachelor of Business (Accountancy) degree and has in excess of 40 years of
commercial experience having also acted in senior executive and director capacities for two leading Australian stockbroking
firms.
Leonid Charuckyj
Director
Appointed 13 December 2011
Mr. Charuckyj (B.E. and M.Eng-Sc. Melbourne University) has had extensive experience over a broad range of technical,
engineering, management and corporate roles including senior positions in government, public and private industry both in
Australia and overseas. His focus has been on the environmental, pollution control and waste management industries and on the
energy and mining industries amongst others.
This has included such diverse roles as representing Australia as an expert engineering advisor in the Middle East, developing
and commercialising new technologies (both in the public company arena and for major international groups), and managing all
aspects of an industrial minerals development from mine and processing to product development and marketing.
Gregory MacMillan
Director - Appointed 2 July 2014
Joint Company Secretary - Appointed 9 August 2012
Mr. MacMillan has wide ranging corporate, financial, capital markets and commercial experience in excess of 35 years. Mr
MacMillan has held the positions of director, company secretary, chief financial officer, and corporate finance executive in
numerous companies across the finance, mining and commercial sectors. He holds a Bachelor of Business degree, is a Certified
Practicing Accountant and a Chartered Company Secretary.
COMPANY SECRETARY
Kathrin Gerstmayr
Joint Company Secretary
Appointed 4 April 2019
Ms. Gerstmayr commenced her career working for a chartered accounting and business advisory firm as tax manager, before
moving into senior finance roles in a variety of industries. She holds a Bachelor of Commerce degree (Professional Accounting
and Marketing Management) and Graduate Diploma of Financial Planning. Ms Gerstmayr, is a Certified Practicing Accountant
and a Chartered Company Secretary.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
King River has a portfolio of 100% owned tenements covering approximately 2,473 square kilometres in the East Kimberley region
in Western Australia, and a portfolio of 100% owned tenements covering approximately 7,421 square kilometres, in the Tennant
Creek region of the Northern Territory. King River has also developed its ARC HPA process for the production of High Purity
Alumina (‘HPA’). The principal activities of the entities within the Group during the year were modification and ongoing
development of the ARC HPA process, ongoing metallurgical testwork on the Speewah project, and exploration of the tenements
in the East Kimberley and Tennant Creek.
Page 4
Directors Report
CORPORATE STRUCTURE
King River is a company limited by shares that is incorporated and domiciled in Australia. King River has fully owned
subsidiaries:
-
Speewah Mining Pty Ltd
-
Treasure Creek Pty Ltd
-
Kimberley Gold Pty Ltd
- Whitewater Minerals Pty Ltd
- High Purity Metals Ltd (formerly named ARC Specialty Metals Pty Ltd)
The Group has prepared a consolidated financial report incorporating the entities that it controlled during the financial year.
OPERATIONS REPORT
The primary focus of King River during the 2022 financial year was the development of the ARC HPA process for the production
of high purity alumina and the advancement of metallurgical studies on the Speewah project located on the Speewah Dome, in
the Eastern Kimberley. The Company has also continued exploration for gold and base metals at Mt Remarkable, located some
120 kilometres South of Speewah, and Treasure Creek, located in the Tennant Creek region of the Northern Territory.
High Purity Alumina (HPA) project
In June 2021 King River completed a Pre-Feasibility Study (PFS) for the production of HPA using the ARC HPA process. Ongoing
work following the PFS resulted in the production of a high purity HPA Precursor compound . In September 2021 King River
commenced a Definitive Feasibility Study (DFS) on a high purity HPA Precursor compound project to cost a modular process
design. Development progressed on a laboratory scale pilot plant to demonstrate the ARC process works at a larger scale for the
DFS and to produce batch marketing samples of high purity HPA Precursor compound.
In October 2021, King River signed a Participant Agreement with the Future Battery Industries Cooperative Research Centre for
collaboration in the following projects:
Cathode Precursor and Active Materials Production Pilot Plant, and
Development and application of Vanadium Redox Flow Batteries.
Laboratory process development testwork remained ongoing during the engineering component of the DFS which identified new
process improvements to the ARC HPA process, which could provide potentially more economical options and pathways for a
more environmentally friendly process route to the production of HPA than the process design the DFS was based on. These
process modifications were subject to ongoing investigation and proof of concept at the laboratory.
In April 2022 King River placed further work on the DFS for the high purity HPA Precursor compound project on hold to capitalise
on the other emerging HPA opportunities. The laboratory testwork on the new ARC HPA processes is continuing and will be
reviewed when completed to determine the next step in the potential development of the HPA project.
Speewah project
Metallurgical testwork of the Speewah Project continued with the focus on extracting high purity vanadium and titanium
products. The Hydrometallurgy Research Group at Murdoch University commenced a testwork programme to develop and
optimise processing option(s) for the extraction and recovery of vanadium, titanium and iron products from magnetite-ilmenite
concentrates from the Speewah vanadium project. King River’s focus on this metallurgical approach is to address the current
interest in battery metals and master alloy compounds of the green economy.
Gold project
King River continued ongoing exploration at its Mount Remarkable and Tennant Creek Gold Projects, including the discovery of
new epithermal quartz adularia veins, with indications of mineralisation, during helicopter reconnaissance work and ongoing
geophysical work immediately east of the Tennant Creek gold field.
An airborne magnetic survey was completed over EL31634 southeast of Tennant Creek within the Barkly project. A total of 6,035
line km were surveyed. The programme was part of the Northern Territory governments collaboration programme “Resourcing
the Territory” covering 50% of the survey costs.
Page 5
Directors Report
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the directors in the shares of the Company were
Anthony Barton
Leonid Charuckyj
Greg MacMillan
Total
Chairman
Director
Director
Ordinary Shares
Options Over Ordinary Shares
104,660,1571
18,162,1212
35,468,1093
158,290,387
-
-
-
-
¹ 40,778,058 of the shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation Fund of
which Mr Barton is a director and a beneficiary, 25,022,244 of the shares are held by Barton & Barton Pty Ltd of which Mr Barton
is a director and shareholder, 31,992,238 of the shares are held by Universal Oil (Australia) Pty Ltd of which Mr Barton is a director
and a shareholder, and 6,867,617 of the shares are held by Harvey Springs Estate Pty Ltd of which Mr Barton is a director and a
shareholder.
2 1,050,699 shares are held in Mr L Charuckyj’s personal name, 4,939,754 of the shares are held by Mr L Charuckyj & Mrs CM
Charuckyj as trustee for the ZETA Super Fund of which Mr Charuckyj is a trustee and beneficiary, 12,171,668 of the shares are
held by Temtor Pty Ltd of which Mr Charuckyj is a director and shareholder.
3 35,468,109 shares are held by GDM Services Pty Ltd as trustee for the GDM Services Trust and GDM Services Superannuation
Fund of which Mr MacMillan is a director and beneficiary.
REVIEW OF CONSOLIDATED FINANCIAL CONDITION
The consolidated entity recorded an operating loss after income tax of $3,062,768 (2021: $968,842 loss). There was no dividend
declared or paid during the year. As at 30 June 2022 the Group had a net current asset surplus of $2,648,520 (2021: $6,335,291
surplus).
CAPITAL STRUCTURE
As at the date of this report the Company had 1,553,524,947 (2021: 1,553,524,947) fully paid ordinary shares. There were nil (2021:
152,443,342) listed options over ordinary shares on issue and nil (2021: 7,000,000) unlisted options over ordinary shares on issue.
Details of the terms of the unlisted options are outlined in Note 18 of the consolidated financial statements.
CASH FROM OPERATIONS
The net cash outflow used for operating activities was $2,107,392 (2021: $742,479). The cash balance at year end was $2,945,395
(2021: $6,124,217).
LOSS PER SHARE
Basic and diluted loss per share (cents)
Share price
2022
(0.20)
0.020
2021
(0.06)
0.026
2020
(0.09)
0.033
2019
(0.06)
0.028
2018
(0.09)
0.097
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year there were no significant changes made to the Company’s equity.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has had no significant impact on the consolidated
entity up to 30 June 2022, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The
situation is dependent on measures imposed by the Australian Government and other countries, such as maintaining social
distancing requirements, quarantine, and travel restrictions.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
152,443,342 listed options expired on 31 July 2022 and 7,000,000 unlisted options expired on 14 August 2022. There were no other
significant events following the balance date that affected the Company’s equity or state of affairs.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The consolidated entity’s primary focus was the ongoing engineering and laboratory work of the Company’s ARC HPA process
to capitalise on emerging High Purity Alumina opportunities. The progress and future of the ARC HPA process development is
being reviewed and will be announced in due course. Metallurgical testwork of the Speewah project progressed during the year
and Murdoch University Hydrometallurgy Research Group were engaged to develop a new process flow sheet involving salt
roast-water leach and reductive roast methods to extract high purity V2O5, TiO2 and metallic iron. The metallurgical testwork of
the Speewah project is ongoing and the progress of the work and future of the Speewah project will be announced in due course.
King River also continued with exploration of the Company’s Gold project at Treasure Creek and Mt Remarkable. The Gold
projects and recent exploration is being reviewed and the future of the gold projects will be announced in due course.
Page 6
Directors Report
ENVIRONMENTAL REGULATION AND PERFORMANCE
The consolidated entity’s environmental obligations are regulated under both State and Federal law. All environmental
performance obligations are monitored by the Board and subjected from time to time to Government agency audits and site
inspections. The consolidated entity has a policy of at least complying with, but in most cases exceeding, it’s statutory
environmental performance obligations. No environmental breaches have occurred or have been notified by any Government
agencies during the year ended 30 June 2022.
LOAN PLAN SHARES
As at the date of this report, there are 10,000,000 loan plan shares issued to Key Management Personnel. 5,000,000 of the shares
are subject to trading restrictions and escrowed until the completion of a definitive feasibility study.
Date Shares Granted
Limited Recourse
Loan Term End Date
Fair Value per
Shares at Grant
14-August- 2019
14-Aug-2023
$0.0254
Number of Shares
10,000,000
10,000,000
Escrowed
5,000,000
5,000,000
SHARES UNDER OPTION
As at the date of this report, there were no unissued ordinary shares under granted options. The following options expired on
expiry date subsequent to 30 June 2022.
Date Options Granted
14-August- 2019
19-August-2020
Expiry Date
14-Aug-2022
31-July-2022
Issue Price of Shares
Number Under Option
$0.06
$0.06
7,000,000
152,443,342
159,443,342
SHARES ISSUED ON EXERCISE OF OPTIONS
During or since the end of the financial year, there were no shares issued on options exercised. Refer to Note 16 of the consolidated
financial statements for further details of the options. Option holders do not have any right, by virtue of the option, to participate
in any issue of the Company or any related body corporate.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into Director and Officer Protection Deeds (“D&O Deed”) with each Director and the Company
Secretary (“Officers”). Under the D&O Deed, the Company indemnifies the Officers to the maximum extent permitted by law
and the Constitution against legal proceedings, damage, loss, liability, cost, charge, expense, outgoing or payment (including
legal expenses on a solicitor/client basis) suffered, paid or incurred by the officers in connection with the Officers being an officer
of the Company, the employment of the officer with the Company or a breach by the Company of its obligations under the D&O
Deed.
Also pursuant to the D&O Deed, the Company must insure the Officers against liability and provide access to all board papers
relevant to defending any claim brought against the Officers in their capacity as officers of the Company. The Company has paid
insurance premiums in respect of liability for any current and future directors, Company secretary, executives and employees of
the Company. This amount is payable in total and no specific amount is included in the directors’ remuneration. The Directors
have not included details of the premium paid in respect of the Directors’ and Officers’ liability and legal expenses’ insurance
contracts, as such disclosure is prohibited under the terms of the contract.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest dollar.
Page 7
Directors Report
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of King River Resources Limited, and for the
executives in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report,
key management personnel (KMP) of the Company and the Group are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any
director (whether executive or otherwise) of the Company.
For the purposes of this report, the term “executive” encompasses the chief executive and senior executives of the Company.
Details of key management personnel
(i) Directors
A Barton
L Charuckyj
G MacMillan
(ii) Executives
K Rogers
A Chapman
D Flanagan
Chairman
Director
Director / Company Secretary
Chief Geologist
Project Geologist
Chief Executive Officer of High Purity Metals Ltd commenced 1 October 2021
Other than as detailed above there are no other Executives of the Company.
1. Remuneration Committee
The Remuneration Committee of the Board of Directors of King River is responsible for determining and reviewing
compensation arrangements for the directors and executives. The Remuneration Committee assesses the appropriateness of the
nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions
with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive
team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe
benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal
for the recipient without creating undue cost for the Company.
2. Use of Independent Remuneration Consultants
During the year ended 30 June 2022 no external remuneration consultants were engaged to assist the Group in any capacity.
3. Remuneration Policy
The Company's remuneration policies are reflected in the Charter of the Remuneration Committee. It is the Company’s objective
to provide maximum stakeholder benefit from the retention of high quality Board and executive team by remunerating directors
and key executives fairly and appropriately with reference to relevant employment market conditions.
The Company’s remuneration policy is to establish competitive remuneration (including performance incentives) consistent with
long term development and success, to ensure remuneration is fair and reasonable (taking into account all relevant factors, and
within appropriate controls or limits), that all remuneration packages are reviewed annually or on an ongoing basis in accordance
with management's remuneration packages, and that retirement benefits or termination payments (other than notice periods) will
not be provided or agreed other than in exceptional circumstances.
It is the Company’s objective that the remuneration policy aligns with achievement of strategic objectives and creation of long
term value for shareholders. The Company assesses each employee annually based upon the individual performance in carrying
out the agreed responsibilities of the employee which have been developed in consideration of the Company’s long term goals.
The performance incentive component is reflected as part of the increase in salary and the issue of equity based compensation for
each employee on an annual basis.
The Company has a formal policy to prohibit executives from entering into arrangements to protect the value of unvested long
term incentive awards. The Company performance related payments and long term incentive awards are under ongoing review
and will be included when deemed appropriate given the Company position and performance at the time.
Page 8
Directors Report
The table below sets out summary information about the Group’s results and movements in shareholders wealth for the five years
to 30 June 2022:
Description
Revenue
30-Jun-22
30-Jun-21
30-Jun-20*
30-Jun-19*
30-Jun-18*
$2,324
$6,094
$1,764
$4,466
$931
Net loss before tax
($3,062,768)
($968,842)
($1,115,536)
($806,862)
($871,803)
Net loss after tax
($3,062,768)
($968,842)
($1,115,536)
($806,862)
($871,803)
Share price at end of year
$0.020
$0.026
$0.032
$0.028
$0.097
Market capitalisation
$31.07m
$40.39m
$39.96m
$34.68m
$113.8m
Basic loss cents per share
Diluted loss cents per share
0.20
0.20
0.06
0.06
0.09
0.09
0.06
0.06
0.09
0.09
*Comparatives have not been adjusted for the changes due to the adoption of AASB 15 and AASB 9 in 2019 and AASB 16 in 2020.
4. Non Executive Director Remuneration
4.1 Fixed Remuneration
The aggregate remuneration of non executive directors will not exceed the maximum approved amount of $150,000 approved at
Annual General Meeting on 24 April 2007. The board seeks to set aggregate remuneration at a level which provides the Company
with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable by 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 fees paid to non executive directors of comparable companies when
undertaking the annual review as well as additional time commitment of directors who serve on one or more sub committees and
assistance to the Company with new investment opportunities. Each of the non executive directors during the financial year
received a salary of $44,000 per annum inclusive of superannuation where superannuation is paid. Non executive directors are
encouraged to hold shares in the Company; these are to be purchased by the director on market. It is considered good corporate
governance for directors to have a stake in the company on whose board he or she sits. Remuneration of non executive directors
for the year ended 30 June 2022 is disclosed in Table 1 under the remuneration section of this report.
4.2 Variable Remuneration – Short Term Incentives
Non executive directors do not receive performance based bonuses or additional remuneration for their membership of subsidiary
boards or committees.
4.3 Variable Remuneration – Long Term Incentives
During the financial year, the Company had no contractual obligations to provide long term incentives to non executive directors.
5. Executive Director Remuneration
The Company aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the company so as to:
reward executives for Company and individual performance;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the company; and
ensure total remuneration is competitive by market standards.
Executive remuneration comprises of:
base pay and benefits; and
long term incentives through equity based compensation.
5.1 Fixed Remuneration
Base pay and benefits
Base pay is structured as a total employment cost package that may be delivered as combination of cash and salary sacrifice
superannuation at the executive’s discretion.
Executives are offered a competitive base pay. Reference is made to industry benchmarks to ensure that the base pay is set to
reflect the market for a comparable role. Base pay is reviewed annually, or upon promotion, to ensure the executive’s pay is
competitive with comparable positions of responsibility. There is no guaranteed base pay increases for any executive contract.
Page 9
Directors Report
5.2 Variable Remuneration – Short Term Incentives
During the financial year the Company had no contractual obligations to provide short term incentives to the Key Management
Personnel and Executives of the Company.
5.3 Variable Remuneration – Long Term Incentives
During the financial year the Company had no contractual obligations to provide long term incentives to the Key Management
Personnel and Executives of the Company.
5.4 Employment Contract – Executive - Ken Rogers (Chief Geologist)
The Company has entered into an employment agreement with Mr Rogers for the provision of technical geological services based
on daily rates for the provision of services. Their services can be terminated by giving a 4 week notice by either party.
5.5 Consulting Contract – Executives - Andrew Chapman (Project Geologist)
The Company has entered into a contractor agreement with Mr Chapman for the provision of technical geological services based
on daily rates for the provision of services. Their services can be terminated by giving a 4 week notice by either party.
5.6 Executive Services Agreement – Executive – Doug Flanagan (Chief Executive Officer – High Purity Metals Ltd)
Commenced employment with Group 23 June 2021
The Company entered into an Executive Services Agreement with Mr Flanagan on a 12 month fixed term contract, concluding on
22 September 2022, for the provision of project management and general executive services. Mr Flanagan remuneration is based
on an annual base salary of $227,273 plus superannuation at the statutory rate. The services can be terminated by giving a 1 month
notice by either party or at term end date.
6. Remuneration of Key Management Personnel and Executives of the Company
Details of the remuneration of each director of King River, each of the executives of the Company and the consolidated entity for
the year ended 30 June 2022 are set out in the following tables.
Table 1: Remuneration for the year ended 30 June 2022
Salary
& Fees
$
40,000
40,000
40,000
120,000
61,776
158,843
232,517
453,136
573,136
Short Term
Cash
Bonus
$
Accrued
Annual Leave
$
-
-
-
-
60,455 3
-
22,7273
83,182
83,182
-
-
-
-
-
-
13,227
13,227
13,227
30 June 2022
Directors
A Barton
L Charuckyj
G MacMillan
Sub Total1
Executives
K Rogers
A Chapman
D Flanagan
Sub Total
Total
Post-Employment
Share Based
Payments
Superannuation
Options
$
4,000
4,000
4,000
12,000
12,223
-
25,524
37,747
49,747
$
-
-
-
-
-
-
-
-
-
Loan Plan
Shares
$
Total
$
-
-
-
-
43,6012
-
-
43,601
43,601
44,000
44,000
44,000
132,000
178,055
158,843
293,995
630,893
762,893
Performance
Based
Remuneration
as % of Total
%
-
-
-
-
58%
-
8%
20%
17%
1Premium for Director’s liability insurance is not included in remuneration table.
2On 14 August 2019 the Company issued 10,000,000 shares to Mr Rogers at the market price of 3.2 cents per share. 5,000,000 of the
shares were escrowed until the completion of the prefeasibility study which was completed on 16 June 2021 and the 5,000,000
shares were released from escrow on 1 July 2021. 5,000,000 of the shares are subject to trading restrictions and escrowed until the
completion of a bankable feasibility study. The shares have been funded by a limited recourse loan from the Company with a 4-year
term and zero interest rate. The fair value per share at grant date is $0.0254 and, due to the trading restrictions, has been expensed
over the vesting period. The expense for the period relating to the loan plan shares (in-substance options) is $43,601, the remaining
future expense is $21,872. Please refer to section 6.2 Equity Based Compensation (Loan Plan Shares) and Note 18 Share-Based
Payment of the financial statements.
3Mr Rogers and Mr Flanagan received a discretionary cash bonus in light of his contribution to the Company and technical input
with the ARC HPA process and Speewah project metallurgical testwork.
Page 10
Directors Report
Table 2: Remuneration for the year ended 30 June 2021
Short Term
Post-Employment
Share Based
Payments
30 June 2021
Directors
A Barton
L Charuckyj
G MacMillan
Sub Total1
Executives
K Rogers
A Chapman
Sub Total
Total
Salary &
Fees
$
Cash
Bonus
$
43,800
43,800
43,800
131,400
61,776
161,859
223,635
355,035
-
-
-
-
33,8443
-
33,844
33,844
Superannuation Options
$
-
-
-
-
9,084
-
9,084
9,084
$
-
-
-
-
-
-
-
-
Loan Plan
Shares
$
Total
$
-
-
-
-
13,9952
-
13,995
13,995
43,800
43,800
43,800
131,400
118,699
161,859
280,558
411,958
Performance
Based
Remuneration
as % of Total
%
-
-
-
-
40%
-
17%
12%
1Premium for Director’s liability insurance is not included in remuneration table.
2On 14 August 2019 the Company issued 10,000,000 shares to Mr Rogers at the market price of 3.2 cents per share. 5,000,000 of the
shares were escrowed until the completion of the prefeasibility study which was completed on 16 June 2021 and the 5,000,000
shares were released from escrow on 1 July 2021. 5,000,000 of the shares are subject to trading restrictions and escrowed until the
completion of a bankable feasibility study. The shares have been funded by a limited recourse loan from the Company with a 4-year
term and zero interest rate. The fair value per share at grant date is $0.0254 and the expense for the period relating to the loan plan
shares (in-substance options) is $13,995 the remaining future expense is $65,473. Please refer to section 6.2 Equity Based
Compensation (Loan Plan Shares) and Note 18 Share-Based Payment of the financial statements.
3Mr Rogers received a cash bonus in light of his services in finalising the PFS and his contribution to the Company.
6.1 Equity Based Compensation – Options 2022
During the year, no unlisted options were issued to executives as an alternate remuneration to cash.
Table 1: Compensation Option Holdings of Key Management Personnel during the year ended 30 June 2022
30 June 2021
Balance at
Beginning
of Period
Granted as
Remuner-
ation
Options
Exercised
Options
Expired
1 July
2021
Balance at
End of
Period
30 June
2022
Vested at 30 June 2022
Not
Total
Exercisable Exercisable
Executives
A Chapman
Total
5,000,000
5,000,000
-
-
-
-
-
-
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
-
-
On 14 August 2019 the Company issued 5,000,000 options to Andrew Chapman with an exercise price of 6 cents per share and an
expiry date of 14 August 2022. The options will be subject to exercise restrictions and will vest upon defining a minimum Inferred
resource (at either the Tennant Creek Project or the Mt Remarkable Region) of no less than 250,000 ounces of Au at an average grade
of no less than 6 grams per tonne.
Page 11
Directors Report
6.2. Equity Based Compensation – Shares 2022
Table 1: Shareholdings of Key Management Personnel during the year ended 30 June 2022
30 June 2021
Directors
A Barton 1
L Charuckyj 2
G MacMillan 3
Executives
A Chapman
D Flanagan4
K Rogers5
Balance
1 July 2021
Ord
Granted as
Remuneration
Ord
On Exercise
of Options
Ord
Net Change
Other
Ord
Balance
30 June 2022
Ord
104,660,157
18,162,121
35,468,109
-
-
-
-
-
4,406,182
162,696,569
-
-
-
-
Total
-
-
-
-
-
-
-
-
-
-
104,660,157
18,162,121
35,468,109
-
-
404,279
-
404,279
404,279
4,406,182
163,100,848
¹ 40,778,058 of the shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation Fund
of which Mr Barton is a director and a beneficiary. 25,022,244 of the shares are held by Barton & Barton Pty Ltd of which Mr
Barton is a director and shareholder. 31,992,238 of the shares are held by Universal Oil (Australia) Pty Ltd of which Mr Barton
is a director and a shareholder. 6,867,617 of the shares are held by Harvey Springs Estate Pty Ltd of which Mr Barton is a
director and a shareholder.
2 1,050,699 shares are held in Mr L Charuckyj’s personal name. 4,939,754 of the shares are held by Mr L Charuckyj & Mrs CM
Charuckyj as trustee for the ZETA Super Fund of which Mr Charuckyj is a trustee and beneficiary. 12,171,668 of the shares are
held by Temtor Pty Ltd of which Mr Charuckyj is a director and shareholder.
3 35,468,109 of the shares are held by GDM Services Pty Ltd as trustee for the GDM Services Trust and GDM Services
Superannuation Fund of which Mr MacMillan is a director and beneficiary.
4 404,279 shares are held in Mr Flanagan’s personal name. Mr Flanagan acquired these shares on market.
5 4,406,182 shares are held in Mr Roger’s personal name. Mr Rogers shareholdings does not include the Loan Plan Shares
detailed in the following Table 2.
Loan Plan Shares
During the year, no Loan Plan Shares were issued to executives.
Table 2: Loan Plan Shares of Key Management Personnel
30 June 2022
Executives
K Rogers
Total
Balance
1 July 2021
Ord
Fair value per
share at
issue date
Balance
30 June 2022
Ord
Escrowed
/Unvested
Expiry Date1
Issue Date
10,000,000
14 August 2019
$0.0254
10,000,0002
5,000,000
14 August 2023
10,000,000
10,000,000
5,000,000
1 The limited recourse loan in respect of the Loan Plan Shares has to be fully repaid 4 years after grant date of the Loan Plan
Shares.
2 At the date of this report, there is 5,000,0000 escrowed loan plan shares.
On 14 August 2019 the Company issued 10,000,000 Loan Plan Shares to the Mr Rogers at the market price of 3.2 cents per share.
The PFS was completed on 16 June 2021, of which 5,000,000 shares were released from escrow on 1 July 2021. 5,000,000 of the
shares are subject to trading restrictions will be escrowed until the completion of a bankable feasibility study on either the
Speewah Project or the High Purity Alumina Project. The shares have been funded by a limited recourse loan from the Company
with a 4-year term and zero interest rate, the loan is repayable at the end of the term or from the proceeds of any shares sold after
escrow release. In the event that any shares sold are less than 3.2 cents the Company will only recoup the value of the shares sold
at the respective price in repayment of the loan, or part thereof. Please refer to Note 18 Share-Based Payment of the financial
statements.
The Loan Plan Shares were provided at no cost to the recipients.
The Loan Plan Shares have been accounted for as an in-substance option award. The fair value of the equity instrument granted
was estimated as at the date of grant using the Black and Scholes model taking into account the terms and conditions upon which
the shares were granted. Please refer to Note 18 Share Based Payments of the financial statements.
Page 12
Directors Report
6.3 Related Party Transactions
Australian Heritage Group Pty Ltd (“AHG”), a company of which Mr Anthony Barton, a Director and Mr Greg MacMillan, a
Director and the Company Secretary, have entered into an occupancy and administration agreement with King River in respect
of providing occupancy and administration commencing March 2009. The total value of the occupancy and administration
services provided by AHG during the year was $4,909 (2021: $4,909). All services provided by companies associated with directors
were provided on commercial terms.
6.4 Voting and comments made at the company's 2021 Annual General Meeting ('AGM')
At the 2021 AGM, 96.89% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
End of Remuneration Report
DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the number of
meetings attended by each director was as follows:
Number of Meetings Held
Number of Meetings Attended
Anthony Barton
Leonid Charuckyj
Greg MacMillan
Directors
Meetings
3
3
3
3
1. During the year the Directors approved 9 circular resolutions which were signed by all Directors of the Company.
2. All committees of directors are made up of the full Board. Reference to meeting refers to meeting conducted specifically to deal
with the particular business of that Committee.
COMMITTEE MEMBERSHIP
The role of the Audit, Remuneration and Nomination Committees is carried out by the full Board in accordance with the
appropriate charters. The Board considers that no efficiencies or benefits would be gained by establishing separate committees.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of King River support
and have adhered to the principles of corporate governance. The Company’s corporate governance statement is located on the
Company website www.kingriverresources.com.au/investors/corporate-governance/.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law and professional regulations, the Company has agreed to indemnify its auditors, Ernst & Young,
as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
AUDITOR INDEPENDENCE
Section 370C of the Corporation Act 2001 requires our auditors, Ernst & Young, to provide the directors of the Company with an
Independence Declaration in relation to the audit of the consolidated financial report. This Independence Declaration is disclosed
on page 13 of this report and forms part of this directors’ report for the year ended 30 June 2022.
NON AUDIT SERVICES
The Company’s auditors, Ernst & Young, provided no non audit services during the year ended 30 June 2022.
Signed in accordance with a resolution of the directors.
Mr Greg MacMillan
Director
23 September 2022
Page 13
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of King River
Resources Limited
As lead auditor for the audit of the financial report of King River Resources Limited for the financial
year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of King River Resources Limited and the entities it controlled during the
financial year.
Ernst & Young
Timothy G Dachs
Partner
23 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Directors’ Declaration
In accordance with a resolution of the directors of King River Resources Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2(a);
(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, subject to the matters set out in Note 2(e) to the financial report;
(d) there are reasonable grounds to believe that the Company and the subsidiaries identified in Note 5 will be able to meet any
obligations or liabilities to which they are or may become subject to, by virtue of the Deed of Cross Guarantee between the
Company and that subsidiary; and
(e) 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 ending 30 June 2022.
On behalf of the Board
Mr Greg MacMillan
Director
23 September 2022
Page 15
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
2021
Notes
$
$
6(a)
6(b)
6(b)
6(c)
18
6(d)
7
Revenue
HPA project development
HPA project marketing
Directors’ and employee benefits expenses
Compliance costs
Depreciation expense
Finance costs
Insurance expense
Other administration expenses
Share-based payments
Write-off of capitalised exploration expense
Loss before income tax expense
Income tax benefit
Net loss for the year after tax
Other Comprehensive Income
Total Comprehensive Loss for the Year
Total Comprehensive Loss for the Year is attributable to:
Owners of King River Resources Limited
2,324
(1,458,600)
(54,111)
6,094
-
-
(147,343)
(131,400)
(196,895)
(217,527)
(52,476)
(5,575)
(51,668)
(59,668)
(1,521)
(43,051)
(298,469)
(327,172)
(43,601)
(756,354)
(3,062,768)
-
(13,995)
(180,602)
(968,842)
-
(3,062,768)
(968,842)
-
-
(3,062,768)
(968,842)
(3,062,768)
(3,062,768)
(968,842)
(968,842)
Loss per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
9
9
(0.20)
(0.20)
(0.06)
(0.06)
The above statement of other comprehensive income should be read in conjunction with the accompanying notes
Page 16
Statement of Financial Position
AS AT 30 JUNE 2022
Assets
Current Assets
Cash and cash equivalents
Other receivables
Other current assets
Total Current Assets
Non-Current Assets
Deferred exploration expenditure
Plant and Equipment
Right of use asset
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
2022
2021
Notes
$
$
10(a)
10(b)
10(c)
11
12
13
14
15
15
16(a)
16(b)
2,945,395
6,124,217
98,204
47,184
3,090,783
423,130
34,412
6,581,759
19,023,605
18,173,969
14,584
118,232
19,156,421
22,247,204
207,540
76,552
18,458,061
25,039,820
394,160
48,103
442,263
74,151
74,151
516,414
213,033
33,435
246,468
43,395
43,395
289,863
21,730,790
24,749,957
49,408,241
1,941,716
49,408,241
1,898,115
(29,619,167)
(26,556,399)
21,730,790
24,749,957
The above statement of financial position should be read in conjunction with the accompanying notes.
Page 17
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2022
Cash Flows from Operating Activities
Interest received
Payments for HPA project development
Payments to suppliers and employees
Interest and other finance costs paid
Payment of director fees in arrears
Payment for security deposit
Consolidated
2022
2021
Notes
$
$
2,324
(1,330,659)
(761,327)
(5,575)
-
(12,155)
6,094
-
(703,252)
(1,521)
(43,800)
-
Net cash used in operating activities
10(a)
(2,107,392)
(742,479)
Cash Flows from Investing Activities
Government grants received
Research & Development tax incentive received
Payment for exploration and evaluation
Payment for property, plant & equipment
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from share issues
Payment of share issue costs
Payment of loan
Repayment of principal portion of lease liabilities
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and Cash Equivalents at end of year
10(a)
32,831
835,296
45,552
-
(1,890,758)
(2,679,120)
-
(193,106)
(1,022,631)
(2,826,674)
-
-
-
(48,799)
(48,799)
(3,178,822)
6,124,217
2,945,395
9,861,230
(187,368)
(500,000)
(58,671)
9,115,191
5,546,038
578,179
6,124,217
The above statement of cash flows should be read in conjunction with the accompanying notes.
Page 18
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
At 1 July 2021
Loss for the year
Total comprehensive income for the year
Issued
Capital
Note 16(a)
Equity
Benefits
Reserve
Note 16(b)
Accumulated
Losses
Total Equity
Notes
$
$
$
$
49,408,241
1,898,115
(26,556,399)
24,749,957
-
-
-
-
-
(3,062,768)
(3,062,768)
(3,062,768)
(3,062,768)
43,601
-
43,601
Transaction with owners in their capacity as owners:
Loan Plan Shares – 14 August 2019
18(a)
Balance at 30 June 2022
49,408,241
1,941,716
(29,619,167)
21,730,790
At 1 July 2020
Loss for the year
Total comprehensive income for the year
39,734,369
1,884,120
(25,587,557)
16,030,932
-
-
-
-
(968,842)
(968,842)
(968,842)
(968,842)
Transaction with owners in their capacity as owners:
Loan Plan Shares – 14 August 2019
18(a)
Issue of Shares – Placement 27 July 2020
Issue of Shares – Share Purchase Plan 19 August 2020
Share issue costs net tax
Balance at 30 June 2021
-
2,000,000
7,861,239
(187,367)
13,995
-
-
-
-
-
-
-
13,995
2,000,000
7,861,239
(187,367)
49,408,241
1,898,115
(26,556,399)
24,749,957
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page 19
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
1. CORPORATE INFORMATION
King River Resources (“King River” or “the Company”) is a Company domiciled in Australia and publicly listed on the Australian
Stock Exchange (ASX). The Company was incorporated on 28 May 2002. The address of the Company’s registered office is 254
Adelaide Tce, Perth WA 6000. The consolidated financial statements as at and for the year ended 30 June 2022 comprise the
Company and its subsidiaries (the “Group”). The nature of the operations and principal activities of the Group are described in
the Directors’ Report.
The consolidated financial report was authorised for issue by the directors on the 23 September 2022 in accordance with a
resolution of the directors.
2. BASIS OF PREPARATION
(a) Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting
Standards (AAS’s) and other authoritative pronouncements issued by the Australian Accounting Standards Board, and the
Corporations Act 2001. The consolidated financial report also complies with International Financial Reporting Standards (IFRS’s)
and interpretations adopted by the International Accounting Standards Board (IASB).
(b) Basis of measurement
Unless stated otherwise, the consolidated financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.
(d) Use of estimates and judgements
The preparation of financial statements in conformity requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
(e) Going Concern Basis of Preparation
The Group incurred a net loss after income tax of $3,062,768 for the year ended 30 June 2022 (2021: $968,842) and had a net cash
outflow from operating and investing activities of $3,130,023 (2021: $3,569,153). As at 30 June 2022 the Group had cash and cash
equivalents of $2,945,395 (2021: $6,124,217) and a net current asset surplus of $2,648,520 (2021: $6,335,291 surplus).
The Group will require further funding to progress its exploration projects. Based on the Group’s cash flow forecast for the period
ended 30 September 2023, the Board of Directors is aware of the Group’s need to access additional working capital prior to the
end of this period to enable the Group to continue its normal business activities to ensure the realization of assets and
extinguishment of liabilities as and when they fall due, including progression of its exploration interests.
The directors are satisfied that at the date of signing of the financial report, there are reasonable grounds to believe that the Group
will be able to continue to pay its debts as and when they fall due and that it is appropriate for the financial statements to be
prepared on a going concern basis. The directors have based this on the following pertinent matters:
• The Group has the capacity, if necessary, to reduce its operating cost structure in order to minimise its working capital
requirements.
• The Group retains the ability, if required, to wholly or in part dispose of interests in mineral exploration assets.
• The directors regularly monitor the Group’s cash position and, on an on-going basis, consider a number of strategic initiatives
to ensure that adequate funding continues to be available.
• The Directors believe that future funding will be available to meet the Group’s objectives and debts as and when they fall
due.
Should the Group not achieve the matters set out above, there is material uncertainty whether it will be able to continue as a going
concern and therefore whether it will be able to pay its debts as and when they fall due and realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial statements. The financial report does not
include any adjustments relating to the recoverability or classification of recorded asset amounts, or to the amounts or
classifications of liabilities that might be necessary should the Group not be able to continue as a going concern.
Page 20
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
2. BASIS OF PREPARATION continued
(f) Changes in accounting policies
From 1 July 2021 the Group has adopted all new and amended Accounting Standards and Interpretations, mandatory for annual
periods beginning 1 July 2021. The application of these new and amended Accounting Standards and Interpretations’ did not
have a material impact on the financial position or performance of the Group.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have
not been adopted by the Group for the annual reporting period ended 30 June 2022. Management are of the view that these
standards and amendments will not have a significant impact of the financial statements.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation
The consolidated financial report comprises the financial statements of King River Resources Limited and its controlled entities
(the “Group” or “consolidated entity”). King River Resources Limited’s controlled entities are the wholly owned companies
Speewah Mining Pty Ltd, Treasure Creek Pty Ltd, Kimberley Gold Pty Ltd, Whitewater Minerals Pty Ltd and High Purity Metals
Ltd. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with its investee and
has ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if
the Group has;
Power over the investee (eg, existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including;
- The contractual arrangement with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until
the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (OCI) are
attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-
controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s accounting policies. All inter-company balances and transactions
between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation.
Where controlled entities have entered or left the consolidated entity during the year, their operating results have been
included/excluded from the date control was obtained, or until the date control ceased. There are no minority interests in the
equity of the controlled entity.
(b) Income Tax and Other Taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by the balance sheet date. 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.
Deferred income tax liabilities are recognised for all taxable temporary differences except when the deferred income tax liability
arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that,
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures,
and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences
and the carry-forward of unused tax credits and unused tax losses can be utilised, except::
Page 21
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. SIGNIFICANT ACCOUNTING POLICIES continued
(b) Income Tax and Other Taxes continued
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference
will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each financial year end and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
Tax consolidation legislation
The Company and its’ subsidiary have formed a tax consolidated group.
The head entity, King River and the subsidiary in the tax consolidated group continue to account for their own current and
deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of current
taxes and deferred taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, King River also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated
group.
(c) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Initial recognition and measurement
On initial recognition a financial asset is classified and measured at:
a. Amortised cost;
b. Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
c. FVOCI – equity investment; or
d. Fair Value through Profit or Loss (FVTPL)
The classification of financial assets is generally based on the business model in which a financial asset is managed and its
contractual cash flow characteristics. A financial asset (unless it is a trade receivable without a significant financing component
that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction
costs that are directly attributable to its acquisition.
In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are ‘solely
payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test
and is performed at an instrument level.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. For financial assets measured at amortised cost, these assets are subsequently
measured using the effective interest method. The amortised cost is reduced by impairment losses.
Interest income and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
The Group’s financial assets consist of cash and cash equivalents and other receivables.
Impairment of financial assets
In relation to the financial assets carried at amortised cost, an expected credit loss model is applied. For short term receivables,
the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting
date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic environment.
Page 22
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. SIGNIFICANT ACCOUNTING POLICIES continued
(c) Financial Instruments continued
The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to
receive the outstanding contractual amounts in full. A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows.
Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables and loans and borrowings.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Trade and other payables are designated as other financial liabilities and are measured at amortised cost.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(d) Plant and Equipment
Plant and equipment are measured on the cost basis less accumulated depreciation and impairment losses.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.
Impairment
Carrying values of assets are reviewed at each financial year end to determine whether there are any indicators of impairment
that may indicate the carrying values may not be recoverable in whole or in part.
Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit and the
recoverable amount test applied to the cash generating unit as a whole.
Recoverable amount is determined as the greater of fair value less costs of disposal and value in use. An impairment exists if the
carrying value of the asset is determined to be in excess of its recoverable amount, in which case the asset or cash generating unit
is written down to its recoverable amount.
Depreciation
The depreciable amount of plant and equipment is depreciated on a straight line basis over its useful life to the Group commencing
from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets.
Class of Fixed Asset
Plant and equipment
Depreciation Rate
10-50%
An asset’s residual value and useful life is reviewed, and adjusted if appropriate, at each balance sheet date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the income statement.
(e) Shares in controlled entities
Investments in controlled entities are measured at cost in the separate financial statements of the Parent. The Company assesses
whether it is necessary to recognise any impairment loss in the investment in subsidiaries following any significant changes in
the underlying assets or operations of the relevant subsidiary.
(f) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest' method.
Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current and either:
•
the exploration and evaluation activities are expected to be recouped through successful development and
exploitation of the area of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or relating to, the area of interest is continuing.
•
Page 23
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. SIGNIFICANT ACCOUNTING POLICIES continued
(f) Exploration and Evaluation Expenditure continued
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated
then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior
to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
impairment exists when
the carrying amount of an asset or cash-generating unit exceeds
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash
generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed
its recoverable amount.
An
its estimated
recoverable amount. One or more of the following facts and circumstances indicate that an entity should test exploration and
evaluation assets for impairment: (a) the period for which the entity has the right to explore in the specific area has expired during
the period or will expire in the near future, and is not expected to be renewed; (b) substantive expenditure on further exploration
for and evaluation of mineral resources in the specific area is neither budgeted nor planned; (c) exploration for and evaluation of
mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the
entity has decided to discontinue such activities in the specific area; (d) sufficient data exist to indicate that, although a
development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale. In any such case, or similar cases, the entity shall perform an impairment
test. Any impairment loss is recognised as an expense.
(g) Leases – Group as Lessee
The Company entered into agreements to occupy two warehouse storage facilities.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date
net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an
estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of
the asset, whichever the shorter. Where the Company expects to obtain ownership of the leased asset at the end of the lease term,
the depreciation is over the estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The Company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases of 12 months
or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, Company’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that do depend on an index or a rate are expensed in the period
in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there
is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease
term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
(h) 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.
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 income statement net of any reimbursement.
Page 24
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. SIGNIFICANT ACCOUNTING POLICIES continued
(h) Provisions continued
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the balance sheet date. If the effect of the time value of money is material, provisions are discounted using a pre-tax
rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the
passage of time is recognised in finance costs.
(i) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(j) Share Based Payment Transactions
Equity settled transactions
The Group provides benefits to directors and employees (including senior executives) of the Group in the form of share based
payments, whereby employees render services in exchange for shares or rights over shares (equity settled transactions).
The cost of these equity settled transactions with employees is measured by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value of shares is determined by the price on grant date and of options using the
Black & Scholes model, further details of which are given in Note 18. In valuing equity settled transactions, no account is taken
of any performance conditions, other than conditions linked to the price of the shares of King River (market conditions) if
applicable.
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
the extent to which the vesting period has expired; and
the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included
in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any modification that increases the total fair value of the share based payment
arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity settled award is
cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in
the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of diluted earnings per share.
(k) Employee Benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of
the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured
at the amounts expected to be paid when the liabilities are settled.
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 reporting date using the projected
unit credit method. 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 reporting date on high quality corporate
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
Page 25
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. SIGNIFICANT ACCOUNTING POLICIES continued
(l) Contributed Equity
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.
(m) Earnings Per Share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than 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. Losses have an anti-dilutive effect. Therefore, the basic and diluted earnings for the current and prior period have
remained the same.
(n) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods
that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is offset against
the related asset.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(a) Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those
involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial statements:
(i) Capitalisation of exploration and evaluation expenditure
Under AASB 6 Exploration for and Evaluation of Mineral Resources, the Group has the option to either expense exploration and
evaluation expenditure as incurred, or to capitalise such expenditure (provided certain conditions are satisfied). The Group has
elected, when the conditions in AASB 6 are met, to capitalise these costs.
(ii) Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on
the consolidated entity based on known information. This consideration extends to the nature of , staffing and geographic regions
in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either
any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which
may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-
19) pandemic.
(iii) Research and development tax incentives
Research and development rebates are recognised when there is reasonable assurance that the rebate will be received.
Management judgement is required to assess that the rebate meets the recognition criteria and in determining the measurement
of the rebate including the assessment of the eligibility and appropriateness of the apportionment of eligible expenses based on
research and development activities undertaken by the consolidated entity and taking into consideration relevant legislative
requirements.
Further, the Research and Development Tax Incentive program in Australia is a self-assessment regime and there is a four year
period from the date of lodgement where the claim may be subject to a review the Australian Taxation Office or Ausindustry,
with any amounts overclaimed being potentially subject to full repayment with interest and penalties.
(b) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events
and are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are
revised and in any future periods affected. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities with the next annual reporting period are:
Page 26
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS continued
(b) Significant accounting estimates and assumptions continued
(i) Determination of mineral resources and ore reserves
The Group’s policy for estimating its mineral resources and ore reserves requires that the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2004 (the ‘JORC code’) be used as a minimum standard.
The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as
defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the
JORC code. There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available.
(ii) Share based payment transactions
The Group measures the cost of equity settled transactions with employees and suppliers by reference to the fair value of the
equity instrument at the date at which they are granted. The expense recognised is based on an assessment of the probability of
the vesting. The fair value is determined by using a Black and Scholes model, using the assumptions detailed in Note 18. The
accounting estimates and assumptions relating to equity settled share based payments would have no impact on the carrying
amounts of the assets and liabilities within the next annual reporting period but may impact income and expenses.
(iii) Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and
evaluation asset through sale. To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, profits and net assets will be reduced in the period in which this determination is made. In addition,
exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the
future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this
determination is made.
5. PARENT ENTITY INFORMATION
Parent
Current Assets1
Non-current Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Contributed Equity
Accumulated Losses
Option Reserve
Total Equity
Loss for the year
Total Comprehensive loss for the year
2022
$
2,605,422
120,741
2,726,163
323,199
74,151
397,350
49,408,241
(49,021,144)
1,941,716
6,197,780
(7,253,645)
(7,253,645)
2021
$
6,262,978
79,863
6,342,841
101,666
43,395
145,061
49,408,241
(45,108,576)
1,898,115
6,197,780
(3,341,077)
(3,341,077)
1Loan receivables from the subsidiaries of King River have been written down to fair value in the parent entity information and
recorded in profit and loss.
Guarantees
As a condition of the Corporations Instrument 2016/785, King River Resources Limited, Speewah Mining Pty Ltd, Treasure Creek
Pty Ltd, Kimberley Gold Pty Ltd, Whitewater Minerals Pty Ltd and High Purity Metals Ltd (The “Closed Group”) have entered
into a deed of cross guarantee. The effect of the deed is that King River Resources Limited has guaranteed to pay any deficiency in
the event of winding up of the controlled entity or if it does not meet its obligations under the terms of overdrafts, loans, leases or
other liabilities subject to the guarantee. The controlled entity has also given a similar guarantee in the event that King River
Resources Limited is wound up or if it does not meet its obligations under the terms of overdrafts, loans, leases or other liabilities
subject to the guarantee.
Page 27
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
6. REVENUES AND EXPENSES
(a) Interest Revenue
Interest revenue calculated using the effective interest rate method
(b) Expenses
Depreciation expenses:
depreciation – right of use asset
depreciation – plant and equipment
Directors’ and employee benefits expenses (excluding sharebased payments):
director fees
wages other
superannuation contribution
(c) Other administration expenses
Administration and bookkeeping fees
Travel and accommodation
Media and investor relations
Office expenses
Short term lease expenses
Other expenses
(d) Tenement Expenses
Speewah E80/4468
Speewah E80/4972
Whitewater E80/5192
Whitewater E80/5193
Speewah E80/4961
Speewah E80/4962
Speewah E80/4973
Consolidated
2022
$
2021
$
2,324
6,094
(44,772)
(7,704)
(52,476)
(120,000)
(13,395)
(13,948)
(147,343)
(95,252)
(481)
(70,205)
(64,298)
(45,051)
(23,182)
(33,425)
(26,243)
(59,668)
(131,400)
-
-
(131,400)
(84,066)
(7,645)
(97,550)
(61,227)
(47,347)
(29,337)
(298,469)
(327,172)
(647,285)
(38,842)
(27,292)
(42,935)
-
-
-
(756,354)
-
-
-
-
(88,394)
(56,895)
(35,313)
(180,602)
During the financial year, the listed tenement licences were allowed to expire or were surrendered. The total capitalised tenement
costs in the amount of $756,354 (2021: $180,602) incurred were written off.
Page 28
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
7. INCOME TAX
(a) The components of tax expense comprise:
Current income tax
Current income tax expense / (benefit)
Deferred income tax
Relating to the origination and reversal of temporary differences
Total income tax expense as reported in the profit or loss
(b) The prima facie tax on profit from ordinary activities before income tax
is reconciled to the income tax expense as follows:
Profit / (Loss) Before Income Tax
Prima facie tax payable on profit from ordinary activities before income tax at
30% (2021: 30%)
Add:
Tax Effect of:
Permanent differences
Movement in deferred tax assets not brought to account
Adjustment for prior periods not brought to account
Deferred Tax Assets and Liabilities
Deferred Tax Assets (DTA)
Capital raising costs
Prepayments
Tax losses
Other
Provisions
Accrued expenses
Fixed assets
Deferred Tax Liabilities (DTL)
Exploration
Other
Net Deferred assets/ liabilities not recognised
Consolidated
2022
$
2021
$
-
-
-
-
-
-
(3,062,768)
(968,842)
(918,830)
(290,653)
(118,110)
852,273
184,668
8,708
281,945
-
-
-
30 June 2021 Movement
30 June 2022
90,411
-
8,732,767
23,049
-
12,075
(56,568)
8,801,734
(5,452,191)
(22,966)
(5,475,157)
3,326,577
(35,610)
-
1,078,388
13,627
3,968
2,307
56,988
1,119,668
(254,891)
(12,504)
(267,395)
852,273
54,801
-
9,811,155
36,676
3,968
14,382
420
9,921,402
(5,707,082)
(35,470)
(5,742,552)
4,178,850
The Company and its subsidiary form a tax consolidated group. The consolidated financial statements have been prepared on
this basis of the formation of a consolidated group. The above DTA amounts are not recognised in the accounts on the basis the
Company does not meet the DTA recognition test due to the absence of forecasted future taxable profits
Page 29
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
8. SEGMENT REPORTING
Segment information is presented in respect of the Group’s management and internal reporting structure. The Chief Operating
Decision Makers are the Board of Directors and management of the Group. The accounting policies applied for internal reporting
purposes are consistent with those applied in the preparation of the financial statements.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise mainly corporate assets and head office expenses, and income tax assets and
liabilities. The corporate and administrative functions based in Australia are considered incidental to Consolidated Entity’s
exploration activities. The Group’s interest income is all earned in Australia.
For the year ended 30 June 2022, the group had two segments being development of the ARC High Purity Alumina (‘HPA’)
Project and Exploration and Evaluation in Australia.
Reportable segment loss before tax
Depreciation and amortisation
Impairment of exploration and evaluation
expenditure
Reportable segment assets
Reportable segment liabilities
ARC HPA
Project
$
(1,515,116)
2022
Exploration and
Evaluation
$
Total
$
(763,256)
(2,278,372)
-
(6,902)
(6,902)
-
137,133
(62,709)
(756,354)
19,383,908
(272,620)
(756,354)
19,521,041
(335,329)
The Consolidated Entity operates in one geographical area being Australia (Western Australia and Northern Territory) and one
industry, being exploration for the year to 30 June 2021. For the year ended 30 June 2021 there is only one operating segment
identified being exploration activities in Australia based on internal reports reviewed by the Chief Operating Decision Makers in
assessing performance and allocation of resources.
Consolidated
2022
$
2021
$
9. LOSS PER SHARE
Loss used in calculation of basic and diluted earnings per share
(3,062,768)
(968,842)
Weighted average number of ordinary shares for the purposes of basic
earnings per share
Effect of dilution - share options
Weighted average number of ordinary shares adjusted for effect of dilution
Number
Number
1,553,524,947
-
1,515,960,601
-
1,553,524,947
1,515,960,601
As at 30 June 2022 the Company has 10,000,000 Loan Plan Shares accounted for as in-substance options (2021: 10,000,000),
7,000,000 unlisted options (2021: 7,000,000), and 152,443,342 (2021: 152,443,342) listed options on issue. These options were not
included in the calculation of diluted earnings per share because they are antidilutive for the periods presented and conversion
of the options to ordinary shares will decrease the loss per share. There have been no other transactions involving ordinary
shares or potential ordinary shares subsequent to the balance date that would significantly change the number of ordinary
shares or potential ordinary shares outstanding for the reporting period.
Page 30
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
10. CURRENT ASSETS
(a) Cash and cash equivalents balance
Cash at bank and on hand
Cash at bank – bank deposits
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Reconciliation of net loss after tax to net cash flows from operations
Profit/(Loss) for the year
Share-based payments
Depreciation
Capitalised exploration expenditure written off
Plant & equipment brought to account as HPA development expense
(Increase)/decrease in assets:
- other current assets
Increase/(decrease) in liabilities:
- Trade and other current payables
Net Cash flow used in Operating Activities
(b) Other Receivables
GST recoverable
Other receivables
Research & Development tax rebate receivable
(c) Other current assets
Prepayments
Security deposit
Security deposit – bank1
Consolidated
2022
$
2021
$
2,945,395
-
2,945,395
6,112,062
12,155
6,124,217
(3,062,768)
43,601
52,476
756,354
92,626
(968,842)
13,995
59,668
180,602
-
(2,916)
(4,833)
13,235
(2,107,392)
(23,069)
(742,479)
94,907
3,297
-
98,204
4,462
30,567
12,155
47,184
40,666
-
382,464
423,130
13,136
21,276
-
34,412
1The bank security deposits of $12,155 is made up of two bank accounts in the name of King River for security of the bank
guarantees in the amount of $5,555 and $6,600 on the warehouse leases.
Allowance for impairment loss
Other receivables which are primarily from the ATO are non-interest bearing and are generally paid on 30 day settlement terms.
Other receivables are neither past due nor materially impaired at 30 June 2021 and 30 June 2020.
Fair value
Due to the short-term nature of the other receivables, their carrying value approximates their fair value.
11. DEFERRED EXPLORATION EXPENDITURE
At Cost
Balance at beginning of the year
Expenditure incurred
Capitalised Tenement costs written off1
Research & Development Incentive Received
Exploration Incentive Scheme
Total Exploration Expenditure
1 Please refer to Note 6. Revenue and Expenses (d).
Consolidated
2022
$
2021
$
18,173,969
2,088,668
(756,354)
(452,832)
(29,846)
19,023,605
16,155,543
2,622,903
(180,602)
(382,464)
(41,411)
18,173,969
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases are dependent
on the successful development and commercial exploitation or sale of the respective areas.
Page 31
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
12.
PLANT AND EQUIPMENT
Gross carrying amount – at cost
Accumulated depreciation
Net carrying amount
At beginning of year, net accumulated depreciation
Acquired
Disposals – expensed as HPA project development
Depreciation charge for the year
At end of year, net accumulated depreciation
The useful life of the assets was estimated between 2 and 20 years for 2022 and 2021.
13. RIGHT OF USE ASSET
Leased warehouse storage
TRADE AND OTHER PAYABLES
14.
Trade payables
Accruals
Other payables
Consolidated
2022
$
121,011
(106,427)
14,584
207,540
-
(185,252)
(7,704)
14,584
118,232
118,232
322,345
47,940
23,875
394,160
2021
$
314,117
(106,577)
207,540
39,587
193,106
-
(25,153)
207,540
76,552
76,552
171,799
40,250
984
213,033
Trade payables and other creditors are non-interest bearing and are normally settled on 30 day terms. Due to the short term nature
of these payables, their carrying value approximates their fair value.
15.
LEASE LIABILITIES
Leased warehouse storage – current
Leased warehouse storage - non-current
16. CONTRIBUTED EQUITY AND RESERVES
(a) Contributed Equity – Consolidated
Issued capital at beginning of year as at 1 July 2021
Fully paid ordinary shares carry one vote per share and carry the right to
dividends
Movements in ordinary shares on issue
Issued capital at end of year as at 30 June 2022
Consolidated
2022
$
48,103
74,151
122,254
2021
$
33,435
43,395
76,830
2022
Number
$
1,553,524,9471
49,408,241
-
-
1,553,524,9471
49,408,241
1 Number of shares is inclusive of the 10,000,000 Loan Plan Shares accounted for as in-substance options. Refer to Note 18(b)
Loan Plan Shares.
Movement in options on issue
Number
Exercise Price
Listed Options on Issue as at 1 July 2021
Issued
Expired
Listed Options on Issue as at 30 June 2022
Each option has an exercise price of $0.06 and expiry date of 31 July 2022.
152,443,342
-
-
152,443,342
6 cents
-
-
6 cents
Page 32
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
16. CONTRIBUTED EQUITY AND RESERVES continued
(a) Contributed Equity – Consolidated continued
Unlisted Options on Issue as at 1 July 2021
Issued
Expired
Options on Issue as at 30 June 2022
Refer note 18 (b) Summaries of Options Granted.
Issued capital at beginning of year as at 1 July 2020
Fully paid ordinary shares carry one vote per share and carry the right to
dividends
Movements in ordinary shares on issue
Issue of Shares – Placement 27 July 2020
Issue of Shares – Share Purchase Plan 19 August 2020
Capital Raising Fees net of tax
2022
Number
$
Number
7,000,000
Exercise Price
6 cents
-
-
-
-
7,000,000
6 cents
2021
Number
$
1,248,638,5531
39,734,369
66,666,669
238,219,725
-
2,000,000
7,861,239
(187,367)
Issued capital at end of year as at 30 June 2021
1,553,524,9471
49,408,241
1 Number of shares is inclusive of the 10,000,000 Loan Plan Shares accounted for as in-substance options. Refer to Note 18(b)
Loan Plan Shares.
Movement in options on issue
Number
Exercise Price
Listed Options on Issue as at 1 July 2020
Granted – Attaching options Placement and Share Purchase Plan
Exercised
Expired 31 July 2020
Listed Options on Issue as at 30 June 2021
412,867,511
152,443,342
-
(412,867,511)
152,443,342
12 cents
6 cents
-
12 cents
6 cents
On 19 August 2020 the Company completed a Security Purchase Plan (“SPP”) and raised $7,861,240 from the issue of 238,219,725
shares and 119,110,007 attaching options. The issue price for each share under this SPP was $0.033 plus 1 free attaching option for
every 2 shares issued. Each option has an exercise price of $0.06 and expiry date of 31 July 2022.
On 27 July 2020 the Company completed a Placement from professional and sophisticated investors and raised $2,000,000 from
the issue of 66,666,669 shares and 33,333,335 attaching options. The issue price for each share under the Placement was $0.03 plus
1 free attaching option for every 2 shares issued. The options have an exercise price of $0.06 and an expiry of 31 July 2022. There
were no other significant movements in equity after the 2021 reporting period until the lodgement of this report.
Unlisted Options on Issue as at 1 July 2020
Granted
Expired
Options on Issue as at 30 June 2021
Refer note 18 (b) Summaries of Options Granted.
Number
7,000,000
Exercise Price
6 cents
-
-
-
-
7,000,000
6 cents
Page 33
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
16. CONTRIBUTED EQUITY AND RESERVES continued
(a) Contributed Equity – Consolidated continued
Terms and conditions of contributed equity
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. 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.
As per the Corporations Act 2001 the Company does not have authorised capital and ordinary shares do not have a par value.
16(b) Reserves
Reserves
At 30 June 2020
Share – based payments
At 30 June 2021
Share – based payments
At 30 June 2022
Equity Benefits Reserve
$
1,884,120
13,995
1,898,115
43,601
1,941,716
Nature and Purpose of Equity Benefits Reserve
This reserve is used to record the value of equity benefits provided to directors, employees and external service providers as
part of their fees and remuneration.
17. COMMITMENTS
Exploration Expenditure Commitment
Within 1 year
Consolidated
2022
$
2021
$
1,684,800
1,775,350
In order to maintain the Company’s interest in mining tenements, the Company is committed to meet the minimum expenditure
conditions under which the tenements were granted. These amounts change annually and are also based on whether term of
extensions are granted for each tenement.
18. SHARE BASED PAYMENTS
(a) Recognised share-based payment expenses
On 14 August 2019 the Company issued 10,000,000 Loan Plan Shares to the Chief Geologist at the market price of 3.2 cents per
share. The prefeasibility study was completed on 16 June 2021 and 5,000,000 shares were released from escrow on 1 July 2021.
5,000,000 of the shares are subject to trading restrictions will be escrowed until the completion of a bankable feasibility study on
either the Speewah Project or High Purity Alumina Project. The shares have been funded by a limited recourse loan from the
Company with a 4-year term and zero interest rate, the loan is repayable at the end of the term or from the proceeds of any shares
sold after escrow release. In the event that any shares sold are less than 3.2 cents the Company will only recoup the value of the
shares sold at the respective price in repayment of the loan, or part thereof.
The Loan Plan Shares have been accounted for as an in-substance option award. The fair value of the equity instrument granted
was estimated as at the date of grant using the Black and Scholes model taking into account the terms and conditions upon which
the shares were granted. Please refer to Note 18(g). The value brought to account as a share-based payment expense in the year
ended 30 June 2022 was $43,601.
Page 34
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
18. SHARE BASED PAYMENTS continued
(b) Summaries of options granted
The following table illustrates the number and weighted average exercise prices (WAEP) and movements of share options issued
during the year to contractors & employees.
2022
2021
Number
WAEP
Number
WAEP
Options outstanding at the beginning of
the year
Granted during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
7,000,000
-
-
7,000,000
2,000,000
0.06
-
-
0.06
0.06
7,000,000
-
-
7,000,000
2,000,000
0.06
-
-
0.06
0.06
There were 7,000,000 options on issue as at 30 June 2022 (2021: 7,000,000). Only 2,000,000 are vested immediately and exercisable.
5,000,000 have vesting conditions.
Loan Plan Shares
Loan Plan Shares outstanding at the
beginning of the year
Issued during the year
Released during the year
Expired during the year
Loan Plan Share outstanding at the end of
the year
Escrowed at the end of the year
2022
2021
Number
WAEP
Number
WAEP
10,000,000
-
-
-
10,000,000
5,000,000
0.0254
-
-
-
0.0254
0.0254
10,000,000
-
-
-
10,000,000
10,000,000
0.0254
-
-
-
0.0254
0.0254
There were 10,000,000 Loan Plan Shares which have been accounted for as an in-substance options award (2021: 10,000,000) at 30
June 2022, the 5,000,000 Loan Plan Shares have vesting conditions. Refer to section 6.2 Equity Based Compensation of the
Remuneration Report for details of Loan Plan Shares accounted for as in substance options.
(c) Weighted average remaining contractual life
The weighted average remaining contractual life for the options outstanding as at 30 June 2022 is 0.12 year (2021: 1.12 years).
(d) Range of exercise price and weighted average share price at the date of exercise
The exercise price for options outstanding at the end of the year was:
2022
0.06
Class O (7,000,000)
Options
2021
0.06
There were no options exercised during the 2022 financial year. Class O 7,000,000 options expire on 14 August 2022.
(e) Weighted average fair value
There were no options granted during the year ended 30 June 2022 (2021: nil). There were no options expired during the year
ended 30 June 2022 (2021: nil).
Page 35
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
18. SHARE BASED PAYMENTS continued
(f) Option pricing model
The fair value of the equity-settled share options granted under the option plan is estimated as at the date of grant using a Black-
Scholes model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used.
Grant Date
Options Issued
Volatility (%)
Risk free interest rate (%)
Discount rate (%)
Historic share price previous to grant date ($)
Expected life of options (months)
Options exercise price ($)
Fair value at grant date ($)
14 August
2019
7,000,000
100
0.69
0.94
0.036
36
0.06
0.0068
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.
(g) Share pricing model
The fair value of the equity-settled share granted under the Loan Plan Shares issued to Chief Geologist is estimated as at the date
of grant using a Black-Scholes model taking into account the terms and conditions upon which the shares were granted.
The following table lists the expense inputs to the model used.
Grant Date
Options Issued
Volatility (%)
Risk free interest rate (%)
Discount rate (%)
Historic share price previous to grant date ($)
Expected life of options (months)
Fair value at grant date ($)
14 August
2019
10,000,000
100
0.71
0.94
0.032
48
0.0254
The expected life of the shares is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome.
FINANCIAL RISK MANAGEMENT
19.
The Group’s principal financial instruments comprise of cash and short term deposits. The Group has various other financial
assets and liabilities such as loan and borrowings, lease liabilities, receivables and trade payables, which arise directly from its
operations.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity
instrument are disclosed in notes 10 and 14 to the consolidated financial statements.
The Group manages its exposure to a variety of financial risks: market risk (including interest rate risk), credit risk, liquidity risk
and cash flow interest rate risk in accordance with the approved Group policies.
Primary responsibility for the identification and control of financial risks rests with the Board. The Board reviews and agrees
policies for managing each of the risks identified.
The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to interest rate and foreign exchange risk and assessment of market forecast for interest rate and foreign
exchange.
The Group manages credit risk by only dealing with recognised, creditworthy, third parties and liquidity risk is monitored
through the development of future rolling cash flow forecasts.
Commodity price risk
Presently the Group is not exposed to commodity price risk.
Page 36
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
FINANCIAL RISK MANAGEMENT continued
19.
Interest rate risk
The Group’s current exposure to the risk of changes in market interest rates relate primarily to cash assets rates and is managed
by the Board in accordance with the approved investment policy. This policy defines maximum exposures and credit ratings
limits.
The Group does not account for fixed rate financial assets and liabilities at fair value through profit or loss.
The group does not have any material exposure to interest rate risk as at 30 June 2022.
Foreign currency risk
The Group has no material transactional foreign currency exposure.
Credit risk
Credit risk arises in the event that counterparty will not meet its obligations under a financial instrument leading to financial
losses. The Group is exposed to credit risk from its operating activities, financing activities including deposits with banks and
receivables.
The credit risk control procedures adopted by the Group is to assess the credit quality of the institution with whom funds are
deposited or invested, taking into account its financial position and past experiences. Investment limits are set in accordance with
limits set by the Board based on the counterparty credit rating. The limits are assigned to minimise concentration of risks and
mitigate financial loss through potential counterparty failure. The compliance with credit limits is regularly monitored as part of
day-to-day operations. Any credit concerns are highlighted to senior management.
As the Group is yet to commence mining operations it has no significant exposure to customer credit risk. The maximum exposure
to credit risk at the reporting date is the carrying value of each class of financial assets in the Statement of Financial Position.
Credit Quality of Financial Assets
Consolidated as at 30 June 2022
Cash and cash equivalents
Other Financial Assets
Other Receivables
Consolidated as at 30 June 2021
Cash and cash equivalents
Other Financial Assets
Other Receivables
AAA
$
-
-
98,204
AAA
$
-
-
40,666
S&P Credit rating
A1+
$
2,945,395
-
-
A1
$
-
-
-
S&P Credit rating
A1+
$
6,124,217
-
-
A1
$
-
-
-
A2
$
-
-
-
A2
$
-
-
-
Unrated
$
-
-
-
Unrated
$
-
-
-
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors.
The Group manages liquidity risk by maintaining sufficient cash to meet the operating requirements of the business and investing
excess funds in highly liquid short term investments. The Group’s liquidity needs can be met through a variety of sources,
including: cash generated from interest accrued on cash balances, short and long term borrowings and issue of equity instruments.
Alternatives for sourcing our future capital needs include our current cash position, future operating cash flow, project debt
financings and equity raisings. These alternatives are evaluated to determine the optimal mix of capital resources for our capital
needs.
The maturity analysis for contractual undiscounted cash flows of liabilities:
Less than one year
$442,263
One to five years
Total undiscounted cash flow
$74,151
$516,414
Page 37
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
FINANCIAL RISK MANAGEMENT continued
19.
Capital risk management
The Group’s capital comprises share capital, reserves less accumulated losses amounting to $21,730,790 at 30 June 2022
(2021: $24,749,957). The Group’s capital management objectives are:
To safeguard the business as a going concern;
To maximise potential returns for shareholders through minimising dilution; and
To retain an optimal debt to equity balance in order to minimise the cost of capital.
The Group may issue new shares or sell assets to reduce debts in order to maintain the optimal capital structure.
20. GROUPS INFORMATION
The consolidated financial statements include the financial statements of King River Resources Limited and its subsidiaries:
Speewah Mining Pty Ltd
Treasure Creek Pty Ltd
Kimberley Gold Pty Ltd
Whitewater Minerals Pty Ltd
High Purity Metals Ltd (formerly named ARC Specialty Metals Pty Ltd)
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
% Equity Interest
2022
100
100
100
100
100
2021
100
100
100
100
100
21. EVENTS AFTER THE BALANCE SHEET DATE
152,443,342 listed options expired on 31 July 2022 and 7,000,000 unlisted options expired on 14 August 2022. There were no other
significant events following the balance date that affected the Company’s equity or state of affairs.
22. AUDITORS’ REMUNERATION
The auditors of King River are Ernst & Young.
Auditor’s Remuneration
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the
group and auditing the statutory financial reports of any controlled entities
Fees for other assurance and agreed-upon-procedures services under other
legislation or contractual arrangements where there is discretion as to
whether the service is provided by the auditor or another firm
Total fees to Ernst & Young (Australia)
Total auditor’s remuneration
Consolidated
2022
$
45,604
-
45,604
45,604
2021
$
42,674
-
42,674
42,674
23. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES
There were no changes to Directors and Key Management Personnel between the reporting date and the date the financial report
was authorised for issue.
Consolidated
(a) Compensation of Directors and Key Management Personnel
Director and Key Management Personnel
Short-term
Post-employment superannuation
Share based payments
2022
$
669,545
49,747
43,601
762,893
2021
$
388,879
9,084
13,995
411,958
Page 38
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
24. RELATED PARTY TRANSACTIONS
Australian Heritage Group Pty Ltd (“AHG”), a company of which Mr Anthony Barton, a Director and Mr Greg MacMillan, a
Director and the Company Secretary, have entered into an occupancy and administration agreement with King River Resources
in respect of providing occupancy, administration and bookkeeping services commencing March 2009. The total value of the
occupancy and administration services provided by AHG during the year was $4,909 (2021: $4,909). As at 30th June 2022, there is
$450 amount (2021: $520) outstanding to pay AHG. All services provided by companies associated with directors were provided
on commercial terms.
Page 39
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent Auditor's Report to the Members of King River Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of King River Resources Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2022, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, 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 consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
b) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(e) in the financial report, which describes the principal conditions that
raise doubt about the Groups’ ability to continue as a going concern. These conditions indicate the
existence of a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but 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 matter described below to be the key audit
matter to be communicated in our report. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Carrying amount of capitalised exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
At 30 June 2022, the Group held exploration and
evaluation assets of $19,023,605 as disclosed in Note 11
to the financial report.
The carrying amount of exploration and evaluation assets
is assessed for impairment by the Group when facts and
circumstances indicate that the carrying amount of
exploration and evaluation assets may exceed its
recoverable amount.
The determination as to whether there are any indicators to
require the exploration and evaluation assets to be
assessed for impairment involves a number of judgments,
including whether the Group has tenure, whether
substantive expenditure on further exploration and
evaluation is neither planned or budgeted and whether
there is sufficient information for a decision to be made
that the area of interest is not commercially viable.
For the year ended 30 June 2022 the Group identified a
number of tenements which were allowed to expire or were
surrendered, which resulted in a write off of their full
carrying values of $756,354 as set out in note 6 (e) to the
financial report. The Group did not identify any further
indicators of impairment.
Given the size of the balance and the judgmental nature of
impairment indicator assessments associated with
exploration and evaluation assets, we consider this a key
audit matter.
We evaluated the Group’s assessment of the carrying
amount of exploration and evaluation assets. Our audit
procedures included the following:
Considered the Group’s right to explore in the relevant
exploration area which included obtaining and
assessing supporting documentation such as license
agreements.
Considered the Group’s intention to carry out
significant exploration and evaluation activity in the
relevant exploration area which included assessment of
the Group’s cash-flow forecast models and enquiries
with senior management and the Directors as to the
intentions and strategy of the Group.
Assessed whether exploration and evaluation data
exists to indicate that the carrying amount of
capitalised exploration and evaluation assets is unlikely
to be recovered through development or sale.
Assessed the appropriateness of exploration and
evaluation asset balances written off where impairment
triggers were identified.
Assessed the adequacy of the disclosures in the
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 Company’s 2022 Annual Report 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, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of King River Resources Limited for the year ended
30 June 2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Timothy G Dachs
Partner
Perth
23 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as
follows. The information is current as at 21 September 2022.
(a) Distribution of Equity Securities
The number of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
Listed Ordinary Shares
Listed Options
Number of
Holders
162
Number of
Shares
41,710
279
449
2,222
1,492
4,604
975,238
3,704,358
96,297,705
1,452,505,936
1,553,524,947
Number of
Holders
Number of
Options
-
-
-
-
-
-
-
-
-
-
-
-
(b) Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
A P BARTON PERSON S/F A/C
GDM SERVICES PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
UNIVERSAL OIL (AUSTRALIA) PTY LTD
BNP PARIBAS NOMS PTY LTD
L & E FISHER NOMINEES PTY LTD
HOOKS ENTERPRISES PTY LTD
S F MARAVENTANO PTY LTD
SESNA PTY LTD
MR KENNETH JON CARTER & MRS MANDY EMMA CARTER
LASTING LEGACY PTY LTD
BARTON & BARTON PTY LTD
TEMTOR PTY LTD
J & R SUPERANNUATION PTY LTD
17. MR KENNETH ARNOLD ROGERS
18.
BARTON & BARTON PTY LTD
19. MARK LA STARZA SUPERANNUATION FUND PTY LTD
20.
B LA STARZA SUPERANNUATION PTY LTD
TOTAL
(c) Voting Rights
Listed Ordinary Shares
Number of Shares Percentage
of Shares %
48,054,990
47,021,651
40,778,058
35,401,684
31,235,836
29,684,052
28,064,033
23,921,939
18,000,000
16,000,000
15,713,098
15,000,000
15,000,000
14,000,000
13,917,018
10,391,667
10,310,000
10,303,031
10,196,135
9,000,000
8,968,127
3.09%
3.03%
2.62%
2.28%
2.01%
1.91%
1.81%
1.54%
1.16%
1.03%
1.01%
0.97%
0.97%
0.90%
0.90%
0.67%
0.66%
0.66%
0.66%
0.58%
0.58%
450,931,319
29.03%
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
Page 45
ASX Additional Information
(d) Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
Mr Anthony Barton and Associates
Number of Shares
104,660,157
Percentage of
Ordinary Shares %
6.737%
(e) Twenty Largest Quoted Option Holders
The expired options all had an exercise price of 6 cents and expired on the 31 July 2022.
(f) Distribution of unquoted option holder numbers
These expired options all had an exercise price of 6 cents and expired on the 14 August 2022.
(g) Holders of more than 20% of unquoted options
There were no holders, holding more than 20% of the unquoted options on issue.
(h) On-Market Buyback
There is no on-market buy-back scheme in operation for the company’s quoted shares or quoted options.
(i) Schedule of Mining Tenements
Area of Interest
Tenements
Comments
Australia – Western Australia
All of the Tenements are registered in the name of Speewah
Mining Pty Ltd, Treasure Creek Pty Ltd and Whitewater
Minerals Pty Ltd the wholly owned subsidiaries of King
River Resources Limited.
Note:
M = Mining Lease
E/EL = Exploration Licence
L = Miscellaneous Licence
M80/267
M80/268
M80/269
E80/2863
E80/3657
E80/5007
E80/5133
E80/5176
E80/5177
E80/5178
E80/5194
E80/5195
E80/5196
L80/43
L80/47
EL31617
EL31618
EL31619
EL31623
EL31624
EL31625
EL31626
EL31627
EL31628
EL31629
EL31633
EL31634
EL32199
EL32200
EL32344
EL32345
ML32745
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Tennant Creek
Page 46