(ACN 100 714 181)
Annual Report
For the year ended 30 June 2023
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
3
4
15
16
17
18
19
20
21
43
48
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 2023.
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.
CORPORATE STRUCTURE
King River is a company limited by shares that is incorporated and domiciled in Australia. King River has fully owned
Treasure Creek Pty Ltd
subsidiaries:
-
-
Kimberley Gold Pty Ltd
- Whitewater Minerals Pty Ltd
- High Purity Metals Pty Ltd
The Group has prepared a consolidated financial report incorporating the entities that it controlled during the financial year.
Page 4
Directors Report
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
King River has a portfolio of 100% owned tenements covering approximately 6,641 square kilometres in the Tennant Creek region
of the Northern Territory, and a portfolio of 100% owned tenements covering approximately 351 square kilometres, in the East
Kimberley region in Western Australia. The principal activities of the entities within the Group during the year was exploration
and geophysical survey works of the tenements in Tennant Creek. The Speewah Vanadium-Titanium-Iron Project was sold during
the year.
OPERATIONS REPORT
Sale of Speewah Project
King River Resources Ltd signed a binding term sheet ("Binding Term Sheet") on 17 February 2023 with ASX listed resources
company Tivan Limited (ASX: TVN) ("Tivan") by which Tivan will acquire 100% of the issued capital of Speewah Mining Pty Ltd
("SMPL"), the owner of the Speewah Vanadium-Titanium-Iron Project (“Speewah Project”) in the East Kimberley region of North
Western Australia.
Binding Term Sheet
King River and Tivan executed a Binding Term Sheet for the sale of the Speewah Project, with key terms summarised as follows:
•
Tivan will acquire, and KRR will sell, of all of the unencumbered legal and beneficial interest in the issued capital of
•
•
Speewah Mining Pty Ltd (SMPL) (the "Transaction").
SPML is the legal and beneficial owner of the Speewah Project tenements in Western Australia (E80/2863-I, E80/3657-
I, L80/43, L80/47, M80/267, M80/268, M80/269) and associated project assets including mining information (previous
studies and testwork completed) and all related intellectual property.
A$2.5 million to be held in escrow as a refundable deposit pending Transaction completion;
Tivan will acquire SPML for total consideration of A$20 million paid on the following terms:
-
-
-
A$2.5 million on Tivan completing a raising of no less than A$2.5 million;
A$5 million to be paid 12 months after execution of the Agreement, or, if the payment of A$2.5m above has not
been made at that time, A$7.5 million must be paid 12 months after execution of the Agreement; and
-
A$10 million through the issue of 100 million ordinary fully paid shares in Tivan to KRR at a deemed issue price
of 10 cents per share; these shares will be subject to a voluntary escrow for a two-year period from the date of the
agreement.
The sale transaction was completed on 11 April 2023 based on the following conditions precedent being satisfied:
•
•
completion of an independent geological assessment to validate the reported resources of Speewah; and
shareholders of KRR approving the transaction under Listing Rule 11.2.
As at the date of this report, King River received the following instalments in respect of the total sale proceeds:
•
•
•
A$2.5million cash received 11 April 2023;
100 million ordinary fully paid shares in Tivan received 11 April 2023. These shares are subject to voluntary escrow for
a two-year period; and
A$2.5million cash received 27 July 2023 from Tivan undertaking a raising of no less than A$2.5 million.
The deferred consideration of A$5million for the sale of Speewah Project remains owing to King River and is to be paid 12 months
after execution of the Agreement (due date being 16 February 2024). This deferred consideration is secured by a general security
deed over the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah Vanadium-Titanium-Iron Project.
Gold Project
King River continued exploration at its Tennant Creek and Mount Remarkable Gold Projects.
Tennant Creek
The Tennant Creek Project is located to the East, Southeast and South of the very rich historic goldfields of Tennant Creek
comprising gold and copper exploration leases. The Tennant Creek tenements are held by King River’s 100% subsidiary Treasure
Creek Pty Ltd and there are 17 tenements covering 6,641 square kms and is very prospective for gold and copper.
Mt Remarkable
The Mt Remarkable Project is located 200km south west of Kununurra in the East Kimberley, Western Australia. The Mt
Remarkable tenements are held by King River’s 100% subsidiary Whitewater Minerals Pty Ltd and cover the prospective
Whitewater Volcanic rocks that extend 200km along a NE-SW strike south of the Speewah Dome. Mt Remarkable covers 4
tenements totalling 351 square kms and is prospective for gold and copper.
Page 5
Directors Report
Tennant Creek Geophysical Programme
The primary focus of King River during the 2023 financial year was the ongoing geophysical works at Tennant Creek, with the IP
work focused at Tennant East and Kurundi locations, together with additional airborne magnetics at the new Pioneer Project
(south east of the Bluebird deposit) and the Barkly areas. Multiple targets have already been identified with the gravity work and
given the effectiveness, additional gravity surveys are being planned. Geophysical processing and modelling of all data is
ongoing.
The work is targeting prospective IOCG areas at Rover East, Tennant East, Barkly and Kurundi, including targets along strike of
geophysical and geological trends associated with other known significant deposits of high-grade Copper and Gold including
Rover, Bluebird and Mauretania. The program commenced in April 2023 and consists of a proposed: 55 line km of DDIP, 10km2
of GAIP, 30km2 of Gravity and 370km2 of detailed magnetics (drone and airborne) to identify multiple targets. Initial results
received to date are excellent with new targets generated at several locations.
The KRR 2023 Geophysical program and initial results are summarized below:
Figure 1: 2023 Geophysical Exploration Programme Proposal for Tennant Creek Projects.
High Purity Alumina (HPA) Project
The laboratory testwork on the ARC HPA processes continued early in the 2023 financial year and was reviewed by the Board to
determine the next step in the potential development of the HPA project. Based on the laboratory developments the Definitive
Feasibility Study in its current form was not the commercial solution required by King River. In September 2022 King River ceased
work on the HPA project.
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 2023.
Page 6
Directors Report
MATERIAL RISK OVERVIEW
King River’s exploration activities has associated inherent risks and the Board is unable to provide assurance of the expected
results. Due to the speculative nature of the undertaking, the material business risks and how these risks are managed by the
Company are outlined below.
Exploration and operational risk
The Company is in the early stages of exploration and there can be no assurance that the exploration programme will result in
the discovery of an economic mineable reserve or resource. The exploration activities on existing tenements may prove to be
unsuccessful and this may result in the reduction in the project value, a diminution in cash reserves and possible relinquishment
of the respective tenements or exploration licences.
The Company’s future exploration activities may be affected by a range of factors including, but not limited to, maintaining the
title of tenements, and obtaining all consent and approvals necessary, geological conditions, adverse weather, changes in
government policies or legislation that affect mining and exploration activities, and unforeseen operational difficulties outside
the control of the Company. The Company manages this risk by conducting exploration activities during times of expected
favourable seasonal weather patterns, extensive planning and engaging qualified professionals and contractors to complete the
work.
Future capital raising
The development of the Company’s projects may require additional funding in the future. While previous capital raises have
been well-supported, there can be no assurance of the availability of future capital or favourable financing options if and when
required. Any additional capital raising may be dilutive to shareholders. If the Company is unable to obtain additional funding
as needed, it may be required to reduce the scope of its exploration activities.
Global economic and financial conditions
The Company and resources industry are impacted by global economic and financial conditions. There are a number of factors
that can impact the devaluations and volatility in global and domestic equity, commodity, foreign exchange and precious metal
markets, including the COVID-19 pandemic, global geopolitical tensions and inflationary economic environments. A slowdown
in the financial markets or other economic conditions may adversely affect the Company’s share price, exploration plans and
ability to fund activities.
Climate risk
There are a number of climate-related factors that may significantly change the industry in which the Company operates,
including market changes related to climate change mitigation and new or expanding regulations associated with the transition
to a lower-carbon economy. Climate change may cause certain environment and physical risks that cannot be anticipated by the
Company, including events such as increased severity of weather patterns, extreme weather events and longer term physical risks
such as shifting climate patterns. While the Company endeavours to manage these risks and limit any consequential impacts,
there can be no guarantee that the Group will not be impacted by these occurrences.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The consolidated entity’s primary focus is the ongoing geophysical survey programme at Tennant Creek and exploration of the
Company’s Gold project at Treasure Creek and Mt Remarkable. The Gold projects and geophysical survey results are being
reviewed and an update will be announced in due course.
CAPITAL STRUCTURE
As at the date of this report the Company had 1,553,524,947 (2022: 1,553,524,947) fully paid ordinary shares. There was nil (2022:
nil) listed options over ordinary shares on issue and nil (2022: nil) unlisted options over ordinary shares on issue. Details of the
terms of the options are outlined in Note 19 of the consolidated financial statements.
REVIEW OF CONSOLIDATED FINANCIAL CONDITION
The consolidated entity recorded an operating profit after income tax of $3,686,732 (2022: $3,062,768 loss). There was no dividend
declared or paid during the year. As at 30 June 2023 the Group had a net current asset surplus of $10,364,809 (2022: $2,648,520
surplus).
Page 7
Directors Report
CASH FROM OPERATIONS
The net cash outflow used for operating activities was $329,981 (2022: $2,107,392). The cash balance at year end was $3,145,977
(2022: $2,945,395).
EARNINGS/(LOSS) PER SHARE
Basic and diluted earnings/(loss) per share (cents)
Share price
2023
0.24
0.007
2022
(0.20)
0.020
2021
(0.06)
0.026
2020
(0.09)
0.033
2019
(0.06)
0.032
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
King River Resources Ltd signed a binding term sheet on 17 February 2023 with ASX listed resources company Tivan Limited
(ASX: TVN) ("Tivan") by which Tivan acquired 100% of the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah
Vanadium-Titanium-Iron Project (“Speewah Project”) in the East Kimberley region of North Western Australia. The sale
transaction was completed on 11 April 2023, refer to Operations Report – Sale of Speewah Project page 5.
There were no other significant changes made to the Company’s state of affairs during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 10 July 2023 the Company announced it has lodged the respective notification to enable an on-market share buy-back of up
to 10% of its ordinary shares over the next 12 months. The Company has set the maximum number of shares proposed to be
bought back of approximately 155,352,495 ordinary shares, being 10% of the lowest number of ordinary shares issued during the
previous 12 months. Pursuant to the Corporations Act 2001 (Cth), companies are permitted to buy-back up to 10% of the lowest
number of voting shares on issue during the previous 12 months, without requiring shareholder approval.
The number of shares purchased, the purchase price, and timing of the Buy-back will be subject to the Company’s prevailing
market conditions, share price and other considerations including unforeseen circumstances. The Company reserves the right to
vary the terms, suspend or terminate the buy-back at any time, subject to and in accordance with applicable legal requirements.
On 27 July 2023 the Company announced it has received the second cash payment of A$2.5million for the acquisition of the
Speewah Project by Tivan Limited ("Tivan"). The balance of deferred consideration of A$5million for the sale of Speewah Project
remains owing to KRR and to be paid 12 months after execution of the Agreement (due date being 16 February 2024). This deferred
consideration is secured by a general security deed over the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah
Vanadium-Titanium-Iron Project. The Company’s cash position on 27 July 2023 was $5,257,553.
There were no other significant events following the balance date that affected the Company’s equity or state of affairs.
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
Chairman
Leonid Charuckyj
Greg MacMillan
Director
Director
Total
Ordinary Shares
104,660,1571
18,162,1212
35,468,1093
158,290,387
Options Over Ordinary Shares
-
-
-
-
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.
Page 8
Directors Report
LOAN PLAN SHARES
As at the date of this report, there are 10,000,000 loan plan shares issued to Chief Geologist.
Date Shares Granted
Loan Term End Date
Shares at Grant
Number of Shares
Escrowed
Limited Recourse
Fair Value per
14-August- 2019
14-Aug-2026
$0.0254
10,000,000
10,000,000
-
-
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 shares have been released from voluntary escrow and therefore no longer subject to trading restrictions. The shares
have been funded by a limited recourse loan from the Company with a varied loan repayment date of 14 August 2026 and zero
interest rate, the loan is repayable at the end of the term or from the proceeds of any shares sold. 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 were provided at no cost to the recipient. 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 19 Share Based
Payments of the financial statements.
SHARES UNDER OPTION
As at the date of this report, there were no unissued ordinary shares under granted options. The following options expired on
their respective expiry date during the financial year ended 30 June 2023.
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.
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 9
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
Executive Chairman
Non-Executive Director
Executive Director / Company Secretary
Other than as detailed above there are no other Key Management Personnel of the Company. From 1 July 2022, Ken Rogers,
Andrew Chapman and Douglas Flanagan were no longer considered Key Management Personnel of the Group pursuant to the
definition of Key Management Personnel.
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 2023 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 10
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 2023:
Description
30-Jun-23
30-Jun-22
30-Jun-21
30-Jun-20*
30-Jun-19*
Revenue and other income
$9,148,156
$2,324
$6,094
$1,764
$4,466
Net profit/(loss) before tax
$7,459,879
($3,062,768)
($968,842)
($1,115,536)
($806,862)
Net profit/(loss) after tax
$3,686,732
($3,062,768)
($968,842)
($1,115,536)
($806,862)
Share price at end of year
$0.007
$0.020
$0.026
$0.032
$0.028
Market capitalisation
$10.87m
$31.07m
$40.39m
$39.96m
$34.68m
Basic earnings/(loss) cents per share
Diluted earnings/(loss) cents per
share
0.24
0.24
(0.20)
(0.06)
(0.09)
(0.20)
(0.06)
(0.09)
(0.06)
(0.06)
*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.
The Group realised a net profit during the year ended 30 June 2023 as a result of the sale of the Speewah Project. The disposal of
the Speewah Project derived a net profit on sale of asset of $8,614,950.
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 $40,000 per annum plus statutory superannuation guarantee where superannuation is paid. Remuneration of
non executive directors for the year ended 30 June 2023 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.
Page 11
Directors Report
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.
Each of the executive directors during the financial year received a salary of $40,000 per annum plus statutory superannuation
guarantee where superannuation is paid. Remuneration of executive directors for the year ended 30 June 2023 is disclosed in
Table 1 under the remuneration section of this 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 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 of the Company.
6. Remuneration of Key Management Personnel and Executives of the Company
Details of the remuneration of each director of King River and the consolidated entity for the year ended 30 June 2023 are set out
in the following tables.
Table 1: Remuneration for the year ended 30 June 2023
30 June 2023
Directors
A Barton
L Charuckyj
G MacMillan
Total1
Short Term
Post-Employment
Payments
Salary & Fees
Superannuation
Options
Share Based
$
40,000
40,000
40,000
120,000
$
4,200
4,200
4,200
12,600
$
-
-
-
-
Performance
Based
Remuneration as
% of Total
$
-
-
-
-
Total
$
44,200
44,200
44,200
132,600
1Premium for Director’s liability insurance is not included in remuneration table.
From 1 July 2022, Ken Rogers, Andrew Chapman and Douglas Flanagan were no longer considered Key Management Personnel
of the Group pursuant to the definition of Key Management Personnel.
Table 2: Remuneration for the year ended 30 June 2022
Short Term
Post-Employment
Share Based
Payments
Performance
Based
Cash
Accrued
Superannuation
Options
Loan Plan
Total
Remuneration
Bonus
Annual Leave
Shares
as % of Total
$
-
-
-
-
-
-
13,227
13,227
13,227
$
4,000
4,000
4,000
12,000
12,223
-
25,524
37,747
49,747
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
43,6012
-
-
43,601
43,601
$
44,000
44,000
44,000
132,000
178,055
158,843
293,995
630,893
762,893
%
-
-
-
-
58%
-
8%
20%
17%
Salary
& Fees
$
40,000
40,000
40,000
120,000
$
-
-
-
-
61,776
60,455 3
158,843
232,517
453,136
573,136
-
22,7273
83,182
83,182
30 June 2022
Directors
A Barton
L Charuckyj
G MacMillan
Sub Total1
Executives
K Rogers
A Chapman
D Flanagan
Sub Total
Total
Page 12
Directors Report
Remuneration for the year ended 30 June 2022 continued
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. The shares have
been funded by a limited recourse loan from the Company with an extended term date 14 August 2026 and zero interest rate. The
fair value per share at grant date is $0.0254 and 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. Note 19 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.
6.1 Equity Based Compensation – Options 2023
During the year, no unlisted options were issued to key management personnel or executives as an alternate remuneration to
cash.
6.2. Equity Based Compensation – Shares 2023
Table 1: Shareholdings of Key Management Personnel during the year ended 30 June 2023
30 June 2023
Directors
A Barton 1
L Charuckyj 2
G MacMillan 3
Balance
Granted as
On Exercise
Net Change
Balance
1 July 2022
Remuneration
of Options
Ord
Ord
Ord
Other
Ord
30 June 2023
Ord
104,660,157
18,162,121
35,468,109
158,290,387
-
-
-
-
Total
-
-
-
-
-
-
-
-
104,660,157
18,162,121
35,468,109
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. 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.
6.3 Related Party Transactions
Australian Heritage Group Pty Ltd (“AHG”), a company in which Mr Anthony Barton is a Director and Shareholder, and Mr
Greg MacMillan is a Director, Shareholder 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 (2022: $4,909). AHG was also engaged to
provide management and corporate services in relation to the sale of Speewah Project for a management fee of 1% on the proceeds
value, resulting in management fee invoiced of $176,000 plus GST. All services provided by companies associated with directors
were provided on commercial terms.
6.4 Voting and comments made at the company's 2022 Annual General Meeting ('AGM')
At the 2022 AGM, 89.17% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2022. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
End of Remuneration Report
Page 13
Directors 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
4
4
4
4
1. During the year the Directors approved 12 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 15 of this report and forms part of this directors’ report for the year ended 30 June 2023.
NON AUDIT SERVICES
The Company’s auditors, Ernst & Young, provided no non audit services during the year ended 30 June 2023.
Signed in accordance with a resolution of the directors.
Mr Greg MacMillan
Director
15 September 2023
Page 14
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 2023, 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;
b) No contraventions of any applicable code of professional conduct in relation to the audit; and
c) No non-audit services provided that contravene 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
15 September 2023
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 2023 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;
(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 2023.
On behalf of the Board
Mr Greg MacMillan
Director
15 September 2023
Page 16
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
2022
Notes
$
$
Revenue
Other income
HPA project development
HPA project marketing
Directors’ and employee benefits expenses
Compliance costs
Depreciation expense
Finance costs
Insurance expense
Net fair value loss on financial assets
Other administration expenses
Share-based payments
Write-off of capitalised exploration expense
Profit/(Loss) before income tax
6(a)
6(b)
6(c)
6(c)
12
6(c)
19
6(d)
Income tax – non-cash derecognition of deferred tax asset
7
Net profit/(loss) for the year after tax
249
9,147,907
2,324
-
(130,915)
(1,458,600)
-
(155,392)
(229,136)
(41,396)
(3,074)
(54,140)
(200,000)
(277,702)
(21,872)
(574,650)
7,459,879
(3,773,147)
3,686,732
(54,111)
(147,343)
(196,895)
(52,476)
(5,575)
(51,668)
-
(298,469)
(43,601)
(756,354)
(3,062,768)
-
(3,062,768)
Other Comprehensive Income
Total Comprehensive Profit/(Loss) for the Year
-
-
3,686,732
(3,062,768)
Total Comprehensive Profit/(Loss) for the Year is attributable to:
Owners of King River Resources Limited
3,686,732
3,686,732
(3,062,768)
(3,062,768)
Loss per share
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
9
9
0.24
0.24
(0.20)
(0.20)
The above statement of other comprehensive income should be read in conjunction with the accompanying notes
Page 17
Statement of Financial Position
AS AT 30 JUNE 2023
Assets
Current Assets
Cash and cash equivalents
Other receivables
Other current assets
Total Current Assets
Non-Current Assets
Capitalised exploration expenditure
Financial Assets at fair value through profit or loss
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
2023
2022
Notes
$
$
10(a)
10(b)
10(c)
11
12
13
14
15
16
16
17(a)
17(b)
3,145,977
7,580,509
51,355
10,777,841
7,638,295
7,400,000
14,756
80,575
15,133,626
25,911,467
390,849
22,183
413,032
59,041
59,041
472,073
2,945,395
98,204
47,184
3,090,783
19,023,605
-
14,584
118,232
19,156,421
22,247,204
394,160
48,103
442,263
74,151
74,151
516,414
25,439,394
21,730,790
49,408,241
1,963,588
49,408,241
1,941,716
(25,932,435)
(29,619,167)
25,439,394
21,730,790
The above statement of financial position should be read in conjunction with the accompanying notes.
Page 18
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2023
Cash Flows from Operating Activities
Interest received
Research & Development tax incentive received (HPA project)
Payments for HPA project development
Payments to suppliers and employees
Interest and other finance costs paid
Payment for security deposit
Consolidated
2023
2022
Notes
$
$
249
532,957
2,324
-
(166,230)
(1,330,659)
(693,883)
(3,074)
-
(761,327)
(5,575)
(12,155)
Net cash used in operating activities
10(a)
(329,981)
(2,107,392)
Cash Flows from Investing Activities
Proceeds from sale of Speewah Project
6(b)
Payments for transaction costs associated to sale of Speewah Project
6(b)
Government grants received
Research & Development tax incentive received (Speewah project)
Payment for exploration and evaluation
Payment for property, plant & equipment
Net cash used in investing activities
Cash Flows from Financing Activities
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)
2,500,000
(112,142)
100,000
248,740
-
-
32,831
835,296
(2,150,754)
(1,890,758)
(4,500)
581,344
-
(1,022,631)
(50,781)
(50,781)
200,582
2,945,395
3,145,977
(48,799)
(48,799)
(3,178,822)
6,124,217
2,945,395
The above statement of cash flows should be read in conjunction with the accompanying notes.
Page 19
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2023
Issued
Capital
Note 16(a)
Equity
Benefits
Reserve
Note 16(b)
Accumulated
Losses
Total Equity
Notes
Consolidated
$
$
$
$
At 1 July 2022
Profit/(Loss) for the year
Total comprehensive income/(loss) for the year
Transaction with owners in their capacity as owners:
Loan Plan Shares – issued 14 August 2019
19(a)
49,408,241
1,941,716
(29,619,167)
21,730,790
-
-
-
-
-
3,686,732
3,686,732
3,686,732
3,686,732
21,872
-
21,872
Balance at 30 June 2023
49,408,241
1,963,588
(25,932,435)
25,439,394
At 1 July 2021
Profit/(Loss) for the year
Total comprehensive income/(loss) for the year
Transaction with owners in their capacity as owners:
Loan Plan Shares – issued 14 August 2019
19(a)
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
Balance at 30 June 2022
49,408,241
1,941,716
(29,619,167)
21,730,790
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page 20
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
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 2023 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 15 September 2023 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
The financial report has been prepared under the historical cost convention, except for, where applicable, the revaluation of
financial assets and liabilities at fair value through profit or loss.
(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 profit after income tax of $3,686,732 for the year ended 30 June 2023 (2022: $3,062,768 loss) and had a
net cash inflow from operating and investing activities of $251,363 (2022: $3,130,023 outflow). As at 30 June 2023 the Group had
cash and cash equivalents of $3,145,977 (2022: $2,945,395) and a net current asset surplus of $ 10,364,809 (2022: $2,648,520 surplus).
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.
(f) Changes in accounting policies
From 1 July 2022 the Group has adopted all new and amended Accounting Standards and Interpretations, mandatory for annual
periods beginning 1 July 2022. 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 2023. 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 statements incorporate the assets and liabilities of all subsidiaries of King River Resources Limited
('company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. King River Resources
Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’ or 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Page 21
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(a) Principles of Consolidation continued
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred
and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses
incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated
entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
(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,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
•
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures,
and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences
and the carry-forward of unused tax credits and unused tax losses can be utilised, except::
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference
will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each 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.
Page 22
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(b) Income Tax and Other Taxes continued
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.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost are classified as financial assets at fair value through profit or loss. This category
of financial asset includes equity investments. Fair value movements are recognised in profit or loss.
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. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
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.
Page 23
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(c) Financial Instruments continued
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.
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.
Page 24
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(f) Exploration and Evaluation Expenditure continued
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
impairment exists when
the carrying amount of an asset or cash-generating unit exceeds
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) Research and development costs
Research costs are expensed as incurred. Development expenditure on an individual project are recognised as an intangible asset
when the Group can demonstrate:
The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
Its intention to complete and its ability and intention to use or sell the asset
•
•
• How the asset will generate future economic benefits
•
The availability of resources to complete the asset
•
The ability to measure reliably the expenditure during the development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete, and the asset
is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in cost of sales. During the
period of development, the asset is teste for impairment annually.
(h) Leases – Group as Lessee
The Company entered into agreements to occupy 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
Page 25
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(h) Leases – Group as Lessee continued
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.
(i) Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
(j) 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.
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.
(k) 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.
(l) 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 19. 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
Page 26
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES continued
(l) Share Based Payment Transactions continued
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.
(m) 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.
Other long-term employee benefits
The liability for annual and 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.
(n) 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.
(o) 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.
(p) 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) Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is
exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset
will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the
lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension
option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include
the importance of the asset to the consolidated entity's operations; comparison of terms and conditions to prevailing market rates;
Page 27
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS continued
(a) Significant accounting judgements continued
incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the
asset. The consolidated entity reassesses whether it is reasonably certain to exercise an extension option, or not exercise a
termination option, if there is a significant event or significant change in circumstances.
ii) Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on
what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a
similar value to the right-of-use asset, with similar terms, security and economic environment.
(iii) Research and development tax incentives
As the research and development tax incentive only relates to specific types of expenditure incurred and is directly settled in cash,
the Group has determined that this incentive should be accounted for as a government grant. As such the research and
development tax incentive is recognised when there is reasonable assurance that the incentive rebate will be received.
Management judgement is required to assess that the incentive meets the recognition criteria and in determining the measurement
of the incentive 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:
(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. Changes in the probability of vesting 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.
Page 28
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
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
Profit/(Loss) for the year
Total Comprehensive Profit/(loss) for the year
2023
$
10,358,967
7,486,331
17,845,298
168,394
59,041
227,435
49,408,241
(33,753,966)
1,963,588
17,617,863
15,267,178
15,267,178
2022
$
2,605,422
120,741
2,726,163
323,199
74,151
397,350
49,408,241
(49,021,144)
1,941,716
2,328,813
(7,253,645)
(7,253,645)
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 (up to 31 March
2023), 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. Pursuant to the sale of the Speewah Project, Speewah Mining Pty Ltd exited the
Closed Group effect from 1 April 2023.
6. REVENUES AND EXPENSES
(a) Interest Revenue
Interest revenue calculated using the effective interest rate method
(b) Other Income
Net profit on sale of asset – Speewah Project
Research & Development Tax Incentive HPA Project
Consolidated
2023
$
2022
$
249
2,324
8,614,9501
532,957
9,147,907
-
-
-
1King River Resources Ltd signed a binding term sheet on 17 February 2023 with ASX listed resources company Tivan Limited
(ASX: TVN) ("Tivan") by which Tivan acquired 100% of the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah
Vanadium-Titanium-Iron Project (“Speewah Project”) in the East Kimberley region of North Western Australia. The sale
transaction was completed on 11 April 2023, refer to Operations Report – Sale of Speewah Project page 5.
Reconciliation of net profit on sale of asset – Speewah Project
Sale consideration pursuant to Binding Term Sheet
Fair Value of cash consideration receivable
Share consideration: 100m ordinary shares in Tivan Ltd at 7.6cents
Less cost base
Carrying value of Speewah tenements
Deferred tax accounting adjustment relating to Speewah tenements
Cash at bank Speewah Mining Pty Ltd
Other transaction costs
Net profit on sale of asset – Speewah Project
Page 29
10,000,0002
7,600,0003
17,600,000
(12,577,157)
3,773,147
-
(181,040)
8,614,950
-
-
-
-
-
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
6.
REVENUES AND EXPENSES continued
(b) Other Income continued
2 King River received A$2.5m cash and 100m ordinary fully paid shares in Tivan Ltd on 11 April 2023. The deferred cash
consideration of $7.5m is recognised as receivable at 30 June 2023 (see note 10). Refer to Operations Report: Sale of Speewah Project
page 5.
3The closing share price of 7.6cents on 31 March 2023 when the King River General Meeting was held approving the sale, satisfying
the final condition precedent. The shares are subject to a voluntary escrow for a two-year period from 16 February 2023.
(c) 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
Other administration expenses:
Administration and bookkeeping fees
Media and investor relations
Office expenses
Short term lease expenses
Other expenses
(d) Write-off Capitalised Exploration Costs
Speewah E80/4468
Speewah E80/4972
Whitewater E80/5192
Whitewater E80/5193
Whitewater E80/5177
Whitewater E80/5194
Whitewater E80/5195
Whitewater E80/5196
Whitewater E80/5329
Consolidated
2023
$
2022
$
(37,068)
(4,328)
(41,396)
(120,000)
(20,626)
(14,766)
(155,392)
(110,368)
(13,937)
(59,596)
(55,623)
(38,178)
(277,702)
(27,655)
-
-
-
(220,343)
(125,538)
(83,999)
(110,949)
(6,166)
(574,650)
(44,772)
(7,704)
(52,476)
(120,000)
(13,395)
(13,948)
(147,343)
(95,252)
(70,205)
(64,298)
(45,051)
(23,663)
(298,469)
(647,285)
(38,842)
(27,292)
(42,935)
-
-
-
-
-
(756,354)
During the financial year, the listed tenement licences were allowed to expire or were surrendered. The total capitalised tenement
costs in the amount of $574,650 (2022: $756,354) incurred were written off.
Page 30
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
2023
$
2022
$
7. INCOME TAX
(a) The components of tax comprise:
Current income tax
Current income tax expense / (benefit)
Deferred income tax
Relating to the origination and reversal of temporary differences
Deferred tax asset derecognised
Total income tax as reported in the profit or loss
-
3,773,1471
3,773,147
1 Non-cash derecognition of deferred tax asset following disposal of Speewah Mining Pty Ltd (see note 6(b)).
-
-
-
(b) The prima facie tax on profit from ordinary activities before income tax
is reconciled to the income tax as follows:
Profit / (Loss) Before Income Tax
Prima facie tax payable on profit from ordinary activities before income tax at
30% (2022: 30%)
Add:
Tax Effect of:
Non-assessable/deductible items
Movement in deferred tax assets not brought to account
Adjustment relating to prior period not brought to account
Deferred tax asset derecognised
Deferred Tax Assets and Liabilities
Deferred Tax Assets (DTA)
Capital raising costs
Tax losses
Other
Financial Assets
Provisions
Accrued expenses
Deferred Tax Liabilities (DTL)
Exploration
Fixed Assets
Other
Net Deferred assets/ liabilities not recognised
7,459,879
(3,062,768)
2,237,964
(918,830)
2,471,311
(1,245,614)
309,486
3,773,147
(118,110)
852,273
184,668
-
30 June 2022 Movement
30 June 2023
54,801
27,776
82,577
9,811,155
(4,741,829)
5,069,326
36,676
(12,309)
-
3,968
14,382
60,000
(3,968)
1,458
24,367
60,000
-
15,840
9,920,982
(4,668,872)
5,252,110
(5,707,082)
3,415,593
(2,291,489)
420
(35,470)
(1,042)
8,707
(622)
(26,763)
(5,742,132)
3,423,258
(2,318,874)
4,178,850
(1,245,614)
2,933,236
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 31
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
8. SEGMENT REPORTING
Segment information is presented in respect of the Group’s Directors and internal reporting. The Chief Operating Decision Makers
are the Board of Directors 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 2023 and 30 June 2022, the group had two segments being:
• ARC High Purity Alumina (‘HPA’) Project to develop the ARC HPA process and precursor compound for the production
of HPA. This was undertaken by High Purity Metals Pty Ltd; and
•
Exploration and evaluation activities of its gold projects in Australia (Western Australia and Norther Territory). These
activities were undertaken by Treasure Creek Pty Ltd, Whitewater Minerals Pty Ltd and Speewah Mining Pty Ltd.
2023
ARC HPA
Project
$
Exploration and
Evaluation
$
Total
Segments
$
Adjustment or
Unallocated
items
$
Consolidated
$
-
-
3
3
3
3
532,9571
-
532,957
-
-
(130,915)
-
-
(1,324)
(132,239)
-
8,614,9502
8,614,950
(3,075)
-
-
(574,650)
-
(1,438)
(579,163)
532,957
8,614,950
9,147,907
(3,075)
-
(130,915)
(574,650)
-
(2,762)
(711,402)
246
246
-
-
-
(38,321)
(3,074)
-
-
249
249
532,957
8,614,950
9,147,907
(41,396)
(3,074)
(130,915)
(574,650)
(200,000)
(735,480)
(976,875)
(200,000)
(738,242)
(1,688,277)
400,718
8,035,787
8,436,505
(976,629)
7,459,630
644
8,065,525
8,066,169
644
8,065,525
8,066,169
-
-
(244,638)
(244,638)
(244,638)
(244,638)
-
2,816,132
7,400,000
7,522,047
107,119
17,845,298
-
(146,211)
(81,224)
(227,435)
8,066,169
2,816,132
7,400,000
7,522,047
107,119
25,911,467
(244,638)
(146,211)
(81,224)
(472,073)
Revenue
Interest revenue
Total revenue
Other income
R&D Tax Incentive
Net profit on disposal of asset
Total other income
Expenses
Depreciation and amortisation
Finance costs
HPA development costs
Write-off of capitalised
exploration expense
Net fair value loss on investment
Other costs
Total Expenses
Reportable segment result
before tax
Reportable segment assets
Cash and cash equivalent
Ordinary shares
Other receivables
Other assets
Total assets
Reportable segment liabilities
Trade and other payables
Lease liability
Total liabilities
12022 Research & Development incentive of $532,957 received during the year ended 30 June 2023 and is attributable to the eligible
expenditure incurred in the year ended 30 June 2022. The ARC HPA project has been placed on hold April 2022.
2 Net profit on the disposal of Speewah Project refer to Note 6(b) Other Income.
Page 32
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
8. SEGMENT REPORTING continued
Revenue
Interest revenue
Total revenue
Expenses
Depreciation and amortisation
Finance costs
HPA development costs
Write-off of capitalised
exploration expense
Other costs
Total Expenses
Reportable segment result
before tax
Reportable segment assets
Cash and cash equivalent
Other receivables
Other assets
Total assets
Reportable segment liabilities
Trade and other payables
Lease liability
2022
ARC HPA
Project
$
Exploration and
Evaluation
$
Total
Segments
$
Adjustment or
Unallocated
items
$
Consolidated
$
-
-
29
29
29
29
2,295
2,295
2,324
2,324
-
-
(1,512,711)
-
(9,690)
(1,522,401)
(6,902)
-
-
(756,354)
(1,891)
(765,147)
(6,902)
-
(1,512,711)
(756,354)
(45,574)
(5,575)
-
(52,476)
(5,575)
(1,512,711)
-
(756,354)
(11,581)
(726,395)
(737,976)
(2,287,548)
(777,544)
(3,065,092)
(1,522,401)
(765,118)
(2,287,519)
(775,249)
(3,062,768)
137,133
19,383,908
19,521,041
137,133
19,383,908
19,521,041
(62,709)
(272,620)
(335,329)
-
2,558,224
30,581
137,358
2,726,163
-
(58,831)
(122,254)
(181,085)
19,521,041
2,558,224
30,581
137,358
22,247,204
(335,329)
(58,831)
(122,254)
(516,414)
Consolidated
2023
$
2022
$
Total liabilities
(62,709)
(272,620)
(335,329)
9. EARNINGS/(LOSS) PER SHARE
Earnings/(Loss) used in calculation of basic and diluted earnings per share
3,686,732
(3,062,768)
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
-
1,553,524,947
1,553,524,947
-
1,553,524,947
As at 30 June 2023 the Company has 10,000,000 Loan Plan Shares accounted for as in-substance options (2022: 10,000,000), nil
unlisted options (2022: 7,000,000), and nil (2022: 152,443,342) listed options on issue. The listed and unlisted options were not
included in the calculation of diluted earnings per share prior to expiry because they are antidilutive for the periods presented
and conversion of the options to ordinary shares will decrease the loss per share at the time. 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 33
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
10. CURRENT ASSETS
(a) Cash and cash equivalents balance
Cash at bank and on hand
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
Net fair value loss through Profit & Loss
Net gain on sale of asset
Consolidated
2023
$
2022
$
3,145,977
3,145,977
2,945,395
2,945,395
7,459,879
(3,062,768)
21,872
41,396
574,650
200,000
(8,614,950)
43,601
52,476
756,354
-
-
Plant & equipment brought to account as HPA development expense
-
92,626
(Increase)/decrease in assets:
- Receivables and 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
173,529
(2,916)
(186,357)
(329,981)
13,235
(2,107,392)
80,509
7,500,0001
7,580,509
94,907
3,297
98,204
1 The $7,500,000 is the deferred consideration for the sale of the Speewah Project to Tivan Limited and is measured at amortised
cost with nil loss allowance based on lifetime ECLs at the reporting date. On 27 July 2023 King River received A$2.5million cash
and the balance of the deferred consideration of $5million remains owing to King River and is due to be paid 12 months after
execution of the Agreement (due date being 16 February 2024). This deferred consideration is secured by a general security deed
over the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah Vanadium-Titanium-Iron Project.
(c) Other current assets
Prepayments
Security deposit
Security deposit – bank1
8,633
30,567
12,155
51,355
4,462
30,567
12,155
47,184
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.
Allowance for impairment loss
Other receivables which are non-interest bearing and are neither past due nor materially impaired at 30 June 2023 and 30 June
2022.
Fair value
Due to the short-term nature of the other receivables, their carrying value approximates their fair value.
Page 34
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
11. CAPITALISED EXPLORATION EXPENDITURE
At Cost
Balance at beginning of the year
Expenditure incurred
Capitalised Tenement costs written off1
Research & Development Incentive Received
Government Grants
Disposal of asset – Speewah Project2
Total Capitalised Exploration Expenditure
Consolidated
2023
$
2022
$
19,023,605
2,106,146
(574,650)
(248,740)
(90,909)
(12,577,157)
7,638,295
18,173,969
2,088,668
(756,354)
(452,832)
(29,846)
-
19,023,605
1 Please refer to Note 6. Revenue and Expenses (d).
2 Please refer to Note 6. Revenue and Expenses (b)
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.
12.
FINANCIAL ASSET AT FAIR VALUE THROUGH PROFIT & LOSS
Listed ordinary shares - designated at fair value through profit or loss
Reconciliation
Opening fair value
Additions
Loss on fair value remeasurement
Closing fair value
Consolidated
2023
$
7,400,000
7,400,000
-
7,600,0001
(200,000)2
7,400,000
2022
$
-
-
-
-
-
-
1100 million fully paid ordinary shares in Tivan Ltd at $0.076, being the quoted share price on 31 March 2023 when shareholder
approval for the sale of Speewah Project was received. The shares were issued pursuant to the Binding Term sheet and are subject
to a voluntary escrow for a two-year period from 16 February 2023.
2The fair value measurement is based on Level 1: Quoted prices (unadjusted) in an active markets for identical assets or liabilities
that the entity can access at the measurement date being 30 June 2023.
13.
PLANT AND EQUIPMENT
Gross carrying amount – at cost
Accumulated depreciation
Net carrying amount
At beginning of year, net carrying amount
Acquired
Disposals
Depreciation charge for the year
At end of year, net carrying amount
The useful life of the assets was estimated between 2 and 20 years for 2023 and 2022.
14. RIGHT OF USE ASSET
Leased warehouse storage
Page 35
Consolidated
2023
$
105,489
(90,733)
14,756
14,584
4,500
-
(4,328)
14,756
2022
$
121,011
(106,427)
14,584
207,540
-
(185,252)
(7,704)
14,584
80,575
80,575
118,232
118,232
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
TRADE AND OTHER PAYABLES
15.
Trade payables
Accruals
Other payables
Consolidated
2023
$
333,502
52,800
4,547
390,849
2022
$
322,345
47,940
23,875
394,160
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.
16.
LEASE LIABILITIES
Leased warehouse storage – current
Leased warehouse storage - non-current
Consolidated
2023
$
22,183
59,041
81,224
2022
$
48,103
74,151
122,254
17. CONTRIBUTED EQUITY AND RESERVES
(a) Contributed Equity – Consolidated
Issued capital at beginning of year as at 1 July 2022
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 2023
2023
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 19(b)
Loan Plan Shares.
Movement in options on issue
Listed Options on Issue as at 1 July 2022
Issued
Expired
Listed Options on Issue as at 30 June 2023
Each option has an exercise price of $0.06 and expiry date of 31 July 2022.
Movement in options on issue
Unlisted Options on Issue as at 1 July 2022
Issued
Expired
Options on Issue as at 30 June 2023
Refer note 19 (b) Summaries of Options Granted.
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
Number
Exercise Price
152,443,342
-
(152,443,342)
-
6 cents
-
-
-
Number
7,000,000
-
(7,000,000)
-
Exercise Price
6 cents
-
-
-
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 19(b)
Loan Plan Shares.
Page 36
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
17.
CONTRIBUTED EQUITY AND RESERVES continued
(a) Contributed Equity – Consolidated continued
2022
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.
Unlisted Options on Issue as at 1 July 2021
Issued
Expired
Options on Issue as at 30 June 2022
Refer note 19 (b) Summaries of Options Granted.
Terms and conditions of contributed equity
Ordinary shares
Number
Exercise Price
152,443,342
-
-
152,443,342
6 cents
-
-
6 cents
Number
7,000,000
Exercise Price
6 cents
-
-
-
-
7,000,000
6 cents
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.
17(b) Reserves
Reserves
At 30 June 2021
Share – based payments
At 30 June 2022
Share – based payments
At 30 June 2023
Equity Benefits Reserve
$
1,898,115
43,601
1,941,716
21,872
1,963,588
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.
18. COMMITMENTS
Exploration Expenditure Commitment
Within 1 year
Consolidated
2023
$
2022
$
873,800
1,684,800
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.
Page 37
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
19. 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 shares have been funded by a limited recourse loan from the Company with zero interest rate, the loan is repayable
at the end of the term (14 August 2026) 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 Loan Plan Shares have been released from
voluntary escrow and there are no remaining vesting conditions.. 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 19(g). The value brought to account as a share-based payment expense in the year ended 30
June 2023 was $21,872.
(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.
2023
2022
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
0.06
7,000,000
-
(7,000,000)
-
-
-
-
-
-
-
-
7,000,000
2,000,000
0.06
-
-
0.06
0.06
There were nil options on issue as at 30 June 2023 (2022: 7,000,000).
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
2023
2022
Number
WAEP
Number
WAEP
10,000,000
0.032
10,000,000
0.032
-
-
-
-
-
-
-
-
-
10,000,000
-
0.032
-
10,000,000
5,000,000
-
-
-
0.032
0.032
There were 10,000,000 Loan Plan Shares which have been accounted for as an in-substance options award (2022: 10,000,000) at 30
June 2023. Refer to section Note 19 (g) Share pricing model, and Loan Plan Shares of the Directors 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 unlisted options outstanding as at 30 June 2023 is 0 year (2022: 0.12 years).
The Loan Plan Shares have been funded by a limited recourse loan from the Company with a varied loan repayment date of 14
August 2026 and zero interest rate, the loan is repayable at the end of the term or from the proceeds of any shares sold. The
weighted average remaining contractual life for the Loan Plan Share loan term outstanding as at 30 June 2023 is 3.13 years.
(d) Range of exercise price and weighted average share price at the date of exercise
The exercise price for unlisted options outstanding at the end of the year was:
Options
Class O (7,000,000)
2023
-
2022
0.06
There were no unlisted options exercised during the 2023 financial year. Class O 7,000,000 unlisted options expired on 14 August
2022.
Page 38
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
19. SHARE BASED PAYMENTS continued
(e) Weighted average fair value
There were no options granted during the year ended 30 June 2023 (2022: nil). There were 7,000,000 unlisted options expired
during the year ended 30 June 2023 (2022: nil).
(f) Option pricing model
There were no unlisted options on issue as at 30 June 2023 (2022: 7,000,000). There were 10,000,000 Loan Plan Shares which have
been accounted for as an in-substance options award (2022: 10,000,000) at 30 June 2023. Refer to Note 19 (g) Share pricing model.
(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 (%)
Share price at 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
20.
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 15 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.
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 2023.
Foreign currency risk
The Group has no material transactional foreign currency exposure.
Page 39
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
FINANCIAL RISK MANAGEMENT continued
20.
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 2023
Cash and cash equivalents
Other Financial Assets
Other Receivables
S&P Credit rating
AAA
$
-
-
80,509
A1+
$
3,145,977
-
-
A1
$
-
-
-
A2
$
-
-
-
Unrated
$
-
-
7,500,0001
1 On 27 July 2023 the Company received the cash payment of A$2.5million for the sale of the Speewah Project. The balance of
the deferred consideration of A$5million remains owing to KRR and is due to be paid by 16 February 2024. This deferred
consideration is secured by a general security deed over the issued capital of Speewah Mining Pty Ltd, the owner of the
Speewah Vanadium-Titanium-Iron Project .
S&P Credit rating
AAA
$
-
-
98,204
A1+
$
2,945,395
-
-
A1
$
-
-
-
A2
$
-
-
-
Unrated
$
-
-
-
Consolidated as at 30 June 2022
Cash and cash equivalents
Other Financial Assets
Other Receivables
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
One to five years
Total undiscounted cash flow
Capital risk management
$413,032
$68,973
$482,005
The Group’s capital comprises share capital, reserves less accumulated losses amounting to $25,439,394 at 30 June 2023
To safeguard the business as a going concern;
(2022: $21,730,790). The Group’s capital management objectives are:
•
•
•
The Group may issue new shares or sell assets to reduce debts in order to maintain the optimal capital structure.
To retain an optimal debt to equity balance in order to minimise the cost of capital.
To maximise potential returns for shareholders through minimising dilution; and
Page 40
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
FINANCIAL RISK MANAGEMENT continued
20.
Equity price risk
The Group’s listed equity investments are susceptible to market price risk arising from uncertainties about future values of the
investment securities. The Group manages the equity price risk by placing limits on individual and total equity instruments.
Reports on the equity portfolio are submitted to the Group’s Board of Directors on a regular basis. The Group’s Board of Directors
reviews and approves all equity investment decisions. At the reporting date, the listed equity investments are subject to escrow
until 17 February 2024 and exposure to equity investments at fair value listed on the ASX was $7,4000,000. Given that the changes
in fair values of the equity investments held are strongly positively correlated with changes of the ASX market index, the Group
has determined that an increase/(decrease) of 10% on the fair value could have an impact of approximately $740,000
increase/(decrease) on the income and equity attributable to the Group.
21. GROUPS INFORMATION
The consolidated financial statements include the financial statements of King River Resources Limited and its subsidiaries:
Speewah Mining Pty Ltd (sale completed 11 April 2023)
Treasure Creek Pty Ltd
Kimberley Gold Pty Ltd
Whitewater Minerals Pty Ltd
High Purity Metals Pty Ltd
Country of
% Equity Interest
Incorporation
Australia
Australia
Australia
Australia
Australia
2023
2022
-
100
100
100
100
100
100
100
100
100
22. EVENTS AFTER THE BALANCE SHEET DATE
On 10 July 2023 the Company announced it has lodged the respective notification to enable an on-market share buy-back of up
to 10% of its ordinary shares over the next 12 months. The Company has set the maximum number of shares proposed to be
bought back of approximately 155,352,495 ordinary shares, being 10% of the lowest number of ordinary shares issued during the
previous 12 months. Pursuant to the Corporations Act 2001 (Cth), companies are permitted to buy-back up to 10% of the lowest
number of voting shares on issue during the previous 12 months, without requiring shareholder approval.
The number of shares purchased, the purchase price, and timing of the Buy-back will be subject to the Company’s prevailing
market conditions, share price and other considerations including unforeseen circumstances. The Company reserves the right to
vary the terms, suspend or terminate the buy-back at any time, subject to and in accordance with applicable legal requirements.
On 27 July 2023 the Company announced it has received the second cash payment of A$2.5million for the acquisition of the
Speewah Project by Tivan Limited ("Tivan"). The balance of deferred consideration of A$5million for the sale of Speewah Project
remains owing to KRR and to be paid 12 months after execution of the Agreement (due date being 16 February 2024). This deferred
consideration is secured by a general security deed over the issued capital of Speewah Mining Pty Ltd, the owner of the Speewah
Vanadium-Titanium-Iron Project. The Company’s cash position on 27 July 2023 was $5,257,553.
There were no other significant events following the balance date that affected the Company’s equity or state of affairs.
23. 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
2023
$
64,512
-
64,512
64,512
2022
$
45,604
-
45,604
45,604
Page 41
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
24. 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
2023
$
120,000
12,600
-
132,600
2022
$
669,545
49,747
43,601
762,893
From 1 July 2022, Ken Rogers, Andrew Chapman and Douglas Flanagan were no longer considered Key Management Personnel
of the Group pursuant to the definition of Key Management Personnel.
25. RELATED PARTY TRANSACTIONS
Australian Heritage Group Pty Ltd (“AHG”), a company in which Mr Anthony Barton is a Director and shareholder, and Mr
Greg MacMillan, a Director, Shareholder 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 (2022:
$4,909). AHG was engaged to provide management and corporate services in relation to the sale of Speewah Project for a
management fee of 1% on the proceeds value, resulting in management fee invoiced of $176,000 plus GST. As at 30th June 2023,
there is $82,950 (2022: $450) outstanding to pay AHG. All services provided by companies associated with directors were provided
on commercial terms.
Page 42
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 2023, 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 2023
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.
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. For the matter below, our description of how our audit addressed
the matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2
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 this matter. 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 2023, the Group held exploration and
evaluation assets of $7,638,295 as disclosed in
Note 11 to the financial report.
We evaluated the Group’s assessment of the carrying
amount of exploration and evaluation assets. Our
audit procedures included the following:
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 2023 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 $574,650 as set out in note 6 (d) 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.
► 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.
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 2023 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
3
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.
► 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
4
► 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 are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
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
taken 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
5
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 2023.
In our opinion, the Remuneration Report of King River Resources Limited for the year ended 30 June
2023, 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
15 September 2023
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 14 September 2023.
(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
Number of
Shares
Number of
Holders
Number of
Options
166
262
429
2,080
1,389
4,326
41,721
917,559
3,549,656
90,630,108
1,458,385,903
1,553,524,947
-
-
-
-
-
-
-
-
-
-
-
-
(b) Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
Listed Ordinary Shares
Number of Shares Percentage
of Shares %
68,360,742
47,240,315
40,778,058
35,401,684
34,883,676
28,064,033
26,000,000
25,174,193
24,351,703
24,000,000
17,000,000
15,713,098
15,000,000
15,000,000
14,406,182
14,000,000
13,917,018
13,000,000
10,391,667
10,196,135
9,247,532
4.40%
3.04%
2.62%
2.28%
2.25%
1.81%
1.67%
1.62%
1.57%
1.54%
1.09%
1.01%
0.97%
0.97%
0.93%
0.90%
0.90%
0.84%
0.67%
0.66%
0.60%
502,126,036
32.32%
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
UNIVERSAL OIL (AUSTRALIA) PTY LTD
L & E FISHER NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
BNP PARIBAS NOMS PTY LTD
C W SPENCER SUPERFUND A/C
HOOKS ENTERPRISES PTY LTD
S F MARAVENTANO PTY LTD
SESNA PTY LTD
MR K CARTER & MRS M CARTER
MR K ROGERS
LASTING LEGACY PTY LTD
BARTON & BARTON PTY LTD
MR M JONES & MS M TAI
TEMTOR PTY LTD
BARTON & BARTON PTY LTD
WHALE WATCH HOLDINGS LIMITED
TOTAL
1
2
3
4
5
6
7
8
9
10
11
12
13
13
14
15
16
17
18
19
20
Page 48
ASX Additional Information
(c) Voting Rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(d) Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
Number of Shares
104,660,157
Percentage of
Ordinary Shares %
6.737%
Mr Anthony Barton and Associates
(e) Twenty Largest Quoted Option Holders
The are no quoted options on issue.
(f) Distribution of unquoted option holder numbers
There are no unquoted options on issue.
(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
On 10 July 2023 the Company announced it has lodged the respective notification to enable an on-market share buy-back of up
to 10% of its ordinary shares over the next 12 months. The Company has set the maximum number of shares proposed to be
bought back of approximately 155,352,495 ordinary shares, being 10% of the lowest number of ordinary shares issued during the
previous 12 months. Pursuant to the Corporations Act 2001 (Cth), companies are permitted to buy-back up to 10% of the lowest
number of voting shares on issue during the previous 12 months, without requiring shareholder approval.
The number of shares purchased, the purchase price, and timing of the Buy-back will be subject to the Company’s prevailing
market conditions, share price and other considerations including unforeseen circumstances. The Company reserves the right to
vary the terms, suspend or terminate the buy-back at any time, subject to and in accordance with applicable legal requirements.
Pursuant to the announcement on 10 July 2023, no shares have been bought back during the period up to 14 September 2023.
(i) Schedule of Mining Tenements
Area of Interest
Tenements
Comments
Australia – Western Australia
All of the Tenements are registered in the name of 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
E80/5007
E80/5133
E80/5176
E80/5178
EL30205
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
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
Tennant Creek
Page 49