Kingsgate Consolidated Limited
Annual Report 2023

Plain-text annual report

ABN 42 000 837 472 T R O P E R L A U N N A 3 2 0 2 2023 Annual Report Front cover: Overview of processing plant Main Image: Gold pour www.kingsgate.com.au 1 Contents T R O P E R L A U N N A 3 2 0 2 Contents Chairman’s Review ................................................................................ 2 Auditor’s Independence Declaration ............................. 43 Managing Director & CEO’s Report .................................... 4 Financial Statements Operations Report Chatree Gold Mine ................................................................................. 6 Projects Report Nueva Esperanza ..................................................................................... 11 Exploration Report Consolidated Statement of Profit or Loss and Other Comprehensive Income ......................... 44 Consolidated Statement of Financial Position ..................................................................................... 45 Consolidated Statement of Changes in Equity ................................................................................... 46 Exploration in Thailand ..................................................................... 12 Consolidated Statement of Cash Flows ......................... 47 Ore Reserves and Mineral Resources ........................... 20 Notes to the Financial Statements ................................. 48 Competent Persons Statement ........................................... 21 Directors’ Declaration ....................................................................... 80 Exploration, Mining and Special Prospecting Licences ................................................. 22 Directors’ Report ...................................................................................... 28 Remuneration Report .......................................................................... 35 Independent Auditor’s Report ................................................. 81 Shareholder Information ................................................................ 87 Corporate Information ...................................................................... 88 2 Chairman’s Review Chairman’s Review It is now almost seven years since your Company’s Chatree Gold Mine was illegally closed amid spurious health and environmental claims that nobody could prove as they were blatantly false. After a major international court case, lengthy negotiations and innumerable frustrations, on 23 March we produced the first gold and silver bar since December, 2016. Even this was delayed a full two months due to particularly Thai peculiarities. As of 30 June we had produced 9,705 ounces of gold and 112,097 ounces of silver, albeit only operating the refurbished #2 plant treating ore from the low grade stockpiles. We continue a weekly gold pour and are consistently producing in the order of 2,500 to 3,500 ounces of gold per month from ore from the stockpile averaging 0.5 g/tonne. Credit must go to our expert employees and management at the mine, headed by new Mine Manager, Rob Kinnaird, for this exceptional performance utilising such low grade ore and maintaining a consistent recovery rate of 80–85%. Mining has commenced on the Quartz Lease and the expansion of the main ‘A’ pit. It is expected that we may be able to access some higher grade ore early in this process. Refurbishment of the #1 plant is well advanced and, despite delays in delivery of some key items, we expect to have both plants operating by early in the new year. After a lengthy period following a general election in Thailand, a large coalition of at least 11 parties has formed a new government. Considering the importance of the Chatree operation to both the local and the national economy, we look forward to working construc- tively with the new government going forward. www.kingsgate.com.au Gold pourOverview of processing plant3 Chairman’s Review i w e v e R s ’ n a m r i a h C For quite a long period of time many of our shareholders have complained to us and to ASIC that they believe that our share price has been the subject of manipulation on the ASX. We are aware that a group of shareholders, some with a strong legal background, and after extensive research, have approached ASIC with what appears to be evidence to support their concerns. It would certainly appear to be more beneficial to properly address concerns of market manipulation rather than the protection of gullible investors from themselves with the latest fad of “greenwashing”. One of the great concerns of recent times has been the penchant of a number of companies, particularly large companies, to engage themselves in controversial political issues. That they could not properly represent the opinions of all stakeholders, particularly shareholders and customers, is obvious, but to commit shareholders’ funds to such follies opens up other issues, not the least of being potentially director’s fiduciary duties. It is most surprising that more concern has not been yet expressed at these developments. Additionally, some of the large sporting bodies that have opted to take woke controversial positions may be surprised to find that they have alienated a majority of their supporters. Seemingly oblivious to the disasters of the covid fiasco some western countries (including Australia) seem hell bent on damaging their own economies through a mindless addiction to alarmist climate policies. Very few serious commentators now accept “net zero by 2050” is possible and even fewer that it would achieve its stated aims. Even more comical is the wishful thinking behind such platitudes as Australia becoming a “ world renewables super power”. Looking forward, hopefully by this time next year, your mine should be producing at full pace back at levels experienced before the forced closure. Production will be almost solely from the ‘A’ pit due to access through the Quartz Lease, previously unavailable to the Company. Whilst it is too early to properly assess all up mining costs when fully operational, it is expected that your Company should be highly profitable. Again we would like to salute our long-suffering shareholders who have stuck with us through thick and thin. The travails of this company have severely tested all of us and it is a tribute to you that so many have stuck by us. Thanks are also due to our loyal staff both at the mine and in our corporate offices who have stuck by us through all the turmoil. Welcome also to our new management teams who have recently joined us on our journey. My thanks also to our Board of Directors, particularly Peter Warren, for their support over all these difficult times and I welcome Nucharee Sailasuta and Jamie Gibson to the Board and thank Jamie for his valuable contribution over a long and always difficult time. Ross Smyth-Kirk OAM Executive Chairman Partial view of the mine towards the south 4 Managing Director & CEO's Report Managing Director & CEO’s Report I’ve always been positive about getting the Chatree Gold Mine reopened since it was closed at the end of 2016, and I am pleased to report that this year, your Company got the jewel in its crown back. I know there have been times when it may have felt like we were taking two steps forward to take one step back, but the enormity of this achievement can’t be underestimated. While elements of our journey might read like something out of a James Bond novel, it was incredibly gratifying to see Plant #2 roar back into action in March. To ensure we stayed alive to get there, your Company has operated with a skeleton staff over the past six years, with just enough to keep Chatree in good order, and a significantly reduced management team. On that note, I would like to pass on a special thanks to our retiring CFO, Ross Coyle, who with me and Ross Smyth-Kirk, was at the forefront of the negotia- tions, and had the unenviable task of making sure we had enough money at critical times to ensure our ongoing survival. www.kingsgate.com.au & r o t c e r i i D g n g a n a M t r o p e R s ’ O E C 5 Managing Director & CEO's Report In terms of what has been achieved that’s no mean feat either, and includes but is not limited to: 〉 The reopening of the Chatree Gold Mine with the renewal of the Metallurgical Licence granted for the maximum five-year term as permitted under Thai law; 〉 Approximately $150 million in Board of Investment Incentives (which includes an eight-year tax holiday); 〉 Access to 115 Special Prospecting Licence areas (some of which have been under application for more than 18 years); 〉 The approval of the Quartz Lease, a key area in the A Pit that allows access into the A Pit West; 〉 An agreement with a Thai gold refiner to process Chatree doré at the same commercial terms as Kingsgate was receiving in 2016; 〉 Access to Thai financial institutions to establish local credit facilities; 〉 Removal of impediments to pursue a Thai IPO of the Chatree Gold Mine; and 〉 The cessation of a range of frivolous local legal cases. Nevertheless, while your Company’s future looks bright, I am the first to admit that there is still much work to be done to restore Chatree to its former prowess, and the focus is now squarely on completing Plant #1 Overhaul Project as quickly as possible and getting the operation back up to a steady state production of 100,000 to 120,000 ounces per annum. This work has been underpinned by an aggressive regional and near mine exploration program that has already yielded some impressive results to date, and while its too early to confirm, a number of near mine results indicate the possibility of an extension of the existing Chatree system. Meanwhile, Plant #2 has been performing out of its skin with 9,705 ounces of gold and 112,097 ounces of silver produced as of 30 June 2023 from the low-grade stockpiles. On that note, I would like to offer my sincere thanks to all my Kingsgate and Akara colleagues who have worked so hard to get Chatree reopen, often under very difficult circumstances, and I would especially like to thank the Kingsgate Board for the trust and confidence they have placed in me. Kingsgate has a proud legacy and tradition, and my goal is to continue restoring shareholder value, and see your Company once again become a premier mid-tier gold producer. Jamie Gibson Managing Director and Chief Executive Officer Tailings Storage Facility No #2 (TSF2)A geologist and civil engineer from AkaraAkara employees undergoing Level 1 Rope Access Training 6 Operations Report Operations Report Chatree Gold Mine Thailand Operational Performance Akara Resources Public Company Limited (Akara), a subsidiary of Kingsgate, officially reopened the Chatree Gold Mine in March 2023 following approval by the Department of Primary Industries and Mines in Thailand. Since operations recommenced in March 2023, 9,705 ounces of gold and 112,097 ounces of silver were produced as of 30 June 2023. During the year, there was a successful re-start with our LotusHall Mining contracting partners, moving rehandled materials from stockpiles to the Run of Mine (ROM). Total material hauled was 714,763 tonnes comprising of: 〉 Low grade: 91,160.5 tonnes @ Au 0.61 g/t and Ag 10.12 g/t. 〉 Marginal grade: 623,603 tonnes @ Au 0.51 g/t and Ag 9.85g/t. The TSF#1 (Tailings Storage Facility) Rehabilitation plan was re-started with 183,638 Non-Acid-Forming tonnes placed to 30 June 2023 by our local contractor Narachi Mining. During the year, refurbishment of Plant #2 was completed on time and under budget by CR3, a Thai based international engineering firm. Following commissioning, 737,174 dry tonnes were crushed and 723,006 dry tonnes were milled at an average grade of Au 0.55 g/t and Ag 9.71 g/t. Recoveries averaged 83.2% for gold and 56.8% for silver. Plant #2 continues to perform above expecta- tions and run above nameplate capacity of 2.7 million tonnes per annum. www.kingsgate.com.au Following the first gold pour on 23 March 2023, 12 shipments of doré bars were delivered to Precious Metal Refining Co. Limited (PMR), with shipments occurring on a weekly basis. A stockpile density assessment was completed which yielded approximately one million additional tonnes of ore which equates to an additional 14,338 ounces of gold and 248,426 ounces of silver. Kingsgate secured a range of BOI (Board of Investment) incentives available to Akara over an eight year period, including an exemption from the 20% corporate income tax rate up to a cap of 3.25 billion Thai baht. The TAFTA award deferral remains in place until 31 December 2023. Three Akara team members at Plant #27 Operations Report t r o p e R s n o i t a r e p O continuedu Final preparations are underway ahead of a restart to mining operations at the Quartz Lease and work continues on the Plant #1 Overhaul Project to bring the Chatree Gold Mine back up to its full operational capacity of 5 to 5.5 million tonnes per annum in 2024. Chatree and the Thailand-Australia Free Trade Agreement (TAFTA) Kingsgate, by joint agreement with the Kingdom of Thailand, deferred the arbitral award under the Thailand-Australia Free Trade Agreement (TAFTA) for a further period to 31 December 2023. Crushed ore stockpileMarking of doré bars 8 Operations Report Community Report Chatree Gold Mine Akara Resources successfully resumed opera- tions this year, alongside the implementation of a robust sustainable development policy aligned with Thailand’s Gold Mineral Management Policy Framework. Akara’s dedication to enhancing community welfare is multi-faceted and includes; robust investments in infrastructure, healthcare provi- sions, career development, local employment generation, and the cultivation of religious, cultural, traditional, and sporting activities. Akara’s positive impact has been far-reaching, touching the lives of more than 16,000 individuals across 28 villages. To ensure transparency and accountability, and to provide a platform for addressing concerns, Akara has established a variety of channels for the community to provide feedback. These include; the Akara Resources Public Company Limited Facebook page, the Akara Friends of the Community Facebook page, Line Official, dedicated feedback boxes with local villages, and the Community Relations and Development (CRD) Office which welcomes visitors. In addition, our dedicated CRD Team proactively visits locals in the community to listen, understand, and answer any questions about our operations. www.kingsgate.com.au Four Pillar Development Strategy The Four Pillar Development Strategy is the cornerstone of Akara’s CRD efforts and drives Akara’s commitment to enhancing the quality of life of the neighbouring community. 1 Sustainable Community The Sustainable Community pillar champions job creation and sustainable economic opportunities. In November 2022, Akara witnessed overwhelming community support as over 1,700 villagers near the Chatree Gold Mine showed interest in applying for 170 general roles with the company. Acknowledging this enthusiasm, Akara is committed to increase local employment from 80 percent to a minimum of 90 percent. Looking ahead, Akara’s vision includes the creation of a community market or a local product distribution centre. Through collaborations with the local forestry offices and community forest networks, Akara have planted 12,000 trees across 12 community forests during the first four months of operation, fostering lush green spaces and safeguarding against forest fires. Akara staff participating in a quarterly blood donationAkara employees participating in the tradition of offering candles for Buddhist Lent at the village temple near the gold mineRespecting our Chatree Community elders with heartfelt gifts of elephant-shaped towels, perfect for Songkran Festival celebrationsFour Pillar Development Strategy Sustainable Community Clean Water Educational Opportunities Good Health & Wellbeing EIA Fund, community funds and donations are directed towards initiatives under the four pillars. 9 Operations Report t r o p e R s n o i t a r e p O 2 Educational Opportunities Akara nurtures education across three dimensions; school development, professional growth for educators, and student development. By revamping school infrastructure, ensuring safe learning environments, and providing educational materials, Akara empowers teachers to impart knowledge effectively. Akara further supports students in need with uniforms, equipment and textbooks. Geologists from Akara’s exploration team are also encouraged to take on the role of educators in Earth Sciences. They offer guidance, study tours, and field work experiences to students from various universities who are pursuing geology studies. 3 Good Health & Wellbeing Regular health check-ups are arranged for local residents within a five kilometre radius of the Chatree Gold Mine, and Akara also provides local hospitals with supplies and essential medical equipment and supports blood donations for the Thai Red Cross Society. Akara’s empowerment of Village Health Volunteers reflects the importance placed on their role in community health. Additionally, this pillar encompasses caring for immobile patients and laying the groundwork for a community activity and sports centre, fostering physical activity for improved health. 4 Water for Life A commitment to secure clean water sources underscores this pillar. The CRD Team tirelessly pursues this goal by strengthening village water supplies, introducing new water sources, and conducting a rigorous monthly inspection regimen for its 16 water filtration stations around the Chatree Gold Mine. Immediate corrective measures are implemented should any concerns arise, thus guaranteeing continuous and unhindered access to water for the community. Furthermore, Akara extends its support to local officials stationed at road safety checkpoints during festivals by donating water bottles. Akara is also planning collaborative projects with provincial administrations and Subdistrict Administrative Organisations to treat and reuse water from mining pits for agricultural uses, to support local farmers to boost their income, particularly during the dry season in Thailand. continuedu Khun Yuwathida Phuk-on, CRD manager, presenting awards to students at a school in the Chatree Community on National Children’s DayExploring the art of weaving firsthand at the Wang Nam Om Tai Women’s Weaving Group, another local enterprise supported by AkaraCRD Team distributing bottled water at a designated checkpoint along the roads as part of the 7-day road safety campaign during the Songkran Festival 10 Operations Report Enhancing Stakeholder Engagement via Locally Managed Funds to Address Community Needs As part of Akara’s commitment to support the local community, and in alignment with the Gold Mineral Management Policy Framework, Akara has established two dedicated community funds; the Village Development Fund and the Health Monitoring Fund. These funds are overseen by individuals from the local community to ensure resources are allocated to projects and initiatives that will best meet the community’s needs. 1. The Village Development Fund is earmarked for executing projects and initiatives aimed at enhancing the wellbeing of the villages surrounding the Chatree Gold Mine. Akara contributes to this fund by depositing five percent of mineral royalties or a minimum of 15 million baht annually. 2. The Health Monitoring Fund is dedicated to supporting projects and activities focused on public health surveillance. To bolster this critical aspect of community welfare, Akara allocates three percent of mineral royalties, ensuring a minimum annual contribution of 10 million baht. As we continue to rebuild the Chatree Gold Mine Akara remains steadfast in its commitment to achieving both operational excellence and enduring social progress. We take pride in our role as a responsible corporate entity and proactively contribute to the wellbeing of the community we are privileged to be part of. www.kingsgate.com.au Khun Cherdsak Utha-aroon, Lead General Manager, taking part in a tree planting activity as part of Akara’s initiative to plant 1 million trees by 202711 Projects Report t r o p e R s t c e o r P j mining laws/regulations) and follows a public consultation period that resulted in no objec- tions being lodged against the project and is the successful culmination of 18 months of detailed work that saw Kingsgate working closely with environmental consultants, local indigenous communities and the Chilean Government. Kingsgate continues to advance divestment of the Nueva Esperanza Project and is working with several parties who are completing their due diligence, with one party undertaking a site visit in early August 2023. Kingsgate has made all non-essential staff redundant to reduce ongoing holding costs of the project. Projects Report Nueva Esperanza Gold/Silver Chile Summary Nueva Esperanza is a feasibility-stage development project with a resource base (inclusive of ore reserves) of approximately 0.49 million ounces gold and 83.4 million ounces of silver (See ASX: KCN released titled “Kingsgate Mineral Resources and Ore Reserves 2016” dated 7 October 2016). In July 2020, Kingsgate advised that its 100% owned Laguna Resources Chile entity (“LRC”) has been granted an Environmental Impact Assessment (“RCA-64/20”) approval for the Nueva Esperanza Gold/Silver Project (See ASX: KCN released titled “Nueva Esperanza Project – EIA Approved” dated 14 July 2020). This approval will enable the development of the project (subject to compliance with local 12 Exploration Report Exploration Report Thailand Summary Exploration work to date on the 44 Phetchabun Special Prospecting Licences (SPLs) has included geological mapping, rock and soil sampling, Rotary Air Blast (RAB) and Reverse Circulation (RC) drilling, ground magnetic survey and Analytical Spectral Device (ASD) analysis. The exploration results in the northern part of the SPLs indicated few gold occurrences and lacked potential for gold discovery. Consequently, 12 SPLs were relinquished in October 2022. The remaining SPLs cover an area of 465.33 km² (Refer to map showing SPLs, MLs, relinquished SPLs and prospect locations on page 22 to 25, Exploration, Mining and Special Prospecting Licences). Rock-Chip Assays Geological mapping and rock-chip sampling exposed massive quartz, quartz-sulphide veins and hydrothermal breccia in the Phetchabun SPLs. Numerous significant rock chip assay results have been identified in Yellow Tiger, Sua Dao and Chalawan. 〉 Yellow Tiger, assay results of massive milky quartz veins yielded 41.0, 22.5, 19.8, 16.3 and 14.0 g/t Au and is coincident with a NE–SW magnetic lineament. 〉 Sua Dao, a sample of quartz-sulphide vein assayed 4.56 g/t Au with 14 ppm Ag, 1,590 ppm Cu and 1,510 ppm Zn. 〉 Chalawan, is related to quartz vein and hydrothermal breccia hosting silicified volcanic rocks. Current rock assay results yielded up to 1.08 g/t Au. www.kingsgate.com.au Exploration staff conducting field mapping Soil Assays Soil assay results returned up to 4.22 g/t Au with 340 ppm Pb in Chang Puek. RC drilling was also conducted to test mineralisation underneath in this potential area. CHEVRON-UP Figure 1: Yellow Tiger rock assayed 41.0 and 22.5 g/t Au in left and right respectively www.kingsgate.com.auExploration staff conducting field mapping13 Exploration Report t t r r o o p p e e R R n n o o i i t t a a r r o o p p x x E E l l CHEVRON-DOWN Table 1: Rock Assay Highlight (> 1.0 g/t Au) Area Sua Dao Sample ID RS529547 RS529548 SPL 17/2563 RF529976 Yellow Tiger RF529459 RF529461 RF529462 RF529463 RF529464 RF529465 RF529491 RF529492 SPL 37/2563 RF530030 Chalawan RS530051 Easting local Northing local 7861 7862 7052 4243 4194 4175 4165 4286 4203 4157 4148 7559 8336 2690 2694 5631 0908 0870 0899 0898 0874 0972 0929 0910 2839 1052 Au g/t 1.66 4.56 4.87 3.54 2.93 14.00 2.93 22.50 19.80 16.30 41.00 2.01 1.08 Ag ppm 14 21 41 -1 -1 1 -1 5 1 2 4 39 3 Cu ppm 1,590 213 1,270 9 9 12 14 18 39 16 22 29 9 Pb ppm 690 80 55 10 9 10 11 7 14 7 3 9 7 Zn ppm 1,510 180 98 6 4 5 7 7 6 10 8 36 3 continuedu 14 Exploration Report RAB and RC Drilling Drilling has intersected alteration and mineralisation in Chang Puek, Sua Dao, B-Extension (changed to Chalawan and Kumpee) and Jarakae Prospects exceeding 9,900m. Chang Puek (CHP) Prospect A RC drill hole targeting a geophysical charge- ability anomaly intersected several significant gold zones. Significant intercepts from hole 7647RC are highlighted below: 〉 26m@3.02 g/t Au from 81–107m 〉 7m@5.77 g/t Au from 125–132m 〉 1m@1.71 g/t Au from 195–196m However, gold mineralisation is still open at depth as 1.71 g/t Au was found at the last metre (195–196m). The mineralisation in Chang Puek is similar to the Chatree Gold Mine, comprising quartz- carbonate-pyrite veins and hydrothermal breccias within silicified rhyolitic tuff host rocks. Sua Dao (SDO) Prospect Mineralisation is restricted to quartz-sulphide to quartz base metal due to coarse crystalline quartz and sulphide minerals such as chalco- pyrite and galena. The drill targeting was initially focused on the high gold-grade quartz-sulphide veins. RC drilling results failed to repeat the high grade quartz-sulphide vein up to 44.8 g/t Au on the surface. The best intercept in this prospect is 6m@1.11 g/t Au. Kumpee (KMP) Prospect RAB drilling returned significant assays as follows. All intercepts end at the last metre drilled. 〉 33856RA: 10m@1.97 g/t Au from 9 to 19m (EOH) in phyllic altered to silicified rhyolitic tuff/polymictic rhyolitic breccia. 〉 33858RA: 8m@5.02 g/t Au from 6 to 14m (EOH) including 2m@18.12 g/t Au at 7 to 9m in silicified rhyolitic tuff. RC drilling program started in an area where significant intercepts were found by RAB drilling (8m@5.02 g/t Au and 10m@1.97 g/t Au). Hole 7668RC intersected near surface Au mineralisation from 11m down to 49m (38m interval) with an average grade of 1.01 g/t Au. This interval includes 3m@8.45 g/t Au from 24 to 27m. RC drilling results indicated that the minerali- sation zone is generally low-medium grade Au, localised by narrow high-grade zones up to 25.9 g/t. The mineralisation zone is characterised by strongly phyllic altered and silicified rhyolitic tuff and polymictic rhyolitic breccia with 3–10% quartz vein and 1–3% pyrite dissemination. The gentle east dipping mineralisation zone is at least 200m long and is still open in all directions (Figure 3). Reverse circulation drilling CHEVRON-UP Figure 2: Cross section line 2075N showing intercepts in hole 7647RC www.kingsgate.com.au www.kingsgate.com.au10700mE10800mE10900mE11000mE10700mE10800mE10900mE11000mE050m RL-50m RL100m RL050m RL-50m RL100m RL9m@0.57 g/t Au2.12 g/t Au5m@0.41 g/t Au26m@3.02 g/t Au7m@5.77 g/t Au1m@1.71 g/t Au2m@0.56 g/t AuLegendSection 2075NSignificant Gold InterceptsChang Puek ProspectMineralisationZone>0.2 g/t Au>0.5 g/t Au>1.0 g/t Au>3.0 g/t AuAverage Au grade intercept7647RCRABMineralised ZoneMineralised ZoneCHARGEABILITYEOH 196mReverse circulation drilling15 Exploration Report t t r r o o p p e e R R n n o o i i t t a a r r o o p p x x E E l l CHEVRON-UP Figure 3: Map showing projected mineralisation zone (red hatching) from 50mRL (surface is 80mRL) and RC and RAB drill intercept highlight in Kumpee Prospect CHEVRON-UP Figure 4: Cross section line 0635N in Kumpee Prospect showing interpreted ore zone and assay highlight continuedu 8550mE8650mE8750mE8850mE8550mE8650mE8750mE8850mE050m RL-50m RL100m RL050m RL-50m RL100m RL44m@0.43 g/t Au14m@0.40 g/t Au19m@2.37 g/t Au48m@0.38 g/t Au5m@0.25 g/t AuLegendSection 0635NSignificant Gold InterceptsMineralisationZoneFeldspar porphyry>0.2 g/t Au>0.5 g/t Au>1.0 g/t Au>3.0 g/t AuAverage Au grade intercept7673RC7681RCAlluvium + Saprolite96m78m90m114m7683RCKMP-20RCKumpee Prospect8500E8600E8700E8800E8900E8500E8600E8700E8800E8900E0600N0700N0800N0500N0600N0700N0800N0500N9m@0.26 (22–31m)7m@0.37 (48–55m)6m@0.57 (6–12m)10m@0.71 (67–77m)4m@0.40 (50–54m)7m@0.54 (76–83m)5m@0.39 (16–21m)9m@1.20 (57–66m)11m@0.23 (88–99m)5m@0.82 (20–25m)7m@0.92 (37–44m)4m@1.85 (54–58m)3m@0.52 (12–15m)2m@1.20 (19–21m)19m@2.37 (6–25m)14m@0.40(32–46m)38m@1.01 (11–49m)5m@0.47 (63–68m)48m@0.38 (37–85m)44m@0.43 (18–62m)5m@1.10 (35–40m)6m@0.39 (16–22m)9m@0.57 (70–79m)8m@0.25 (19–27m)RAB SignificantIntercepts (g/t Au)RC SignificantIntercepts (g/t Au)LegendN0507525metresMineralisationZone 16 Exploration Report CHEVRON-DOWN Table 2: RC drilling assay highlight Area Hole ID Easting local Northing local Azimuth local Dip ˚ Hole Depth m From m To m Interval m Au g/t Including KMP 7668RC 8711 0682 270 -55 78 7673RC 8737 0635 270 -55 96 7681RC 8761 0635 270 -55 78 7683RC 8787 0635 270 -55 90 11 63 6 32 8 18 37 49 68 25 46 13 62 85 38 5 19 14 5 44 48 1.01 0.47 2.73 0.40 0.25 0.43 0.38 3m@8.44 g/t Au (24–27m) 1m@25.90 g/t Au (22–23m) 2m@1.13 g/t Au (23–25m) Chalawan (CLW) Prospect RAB drilling to the north of the drilled RC section intersected 3m@0.51 g/t Au in altered polymictic rhyolitic breccias. Following significant assay results from rock samples, RAB and RC drilling was conducted to find the continuity of the ore zone from B prospect. Five RC holes were drilled along section line 0935N and discovered a low-medium grade near surface ore zone with significant intercepts. 〉 7654RC: 53m@0.83 g/t Au from 1 to 54m (43.99 gram-metre) including 14m@2.22 g/t Au from 40 to 54m. is in the vicinity of the Chatree Gold Mine, will be followed up by RC drilling together with other targets from RAB drilling nearby. 〉 7655RC: 15@0.32 g/t Au from 0 to 15m 〉 7656RC: 3m@1.68 g/t Au from 44 to 47m 〉 7657RC: 33m@0.25 g/t Au from 42 to 75m The 53m@0.83 g/t Au (44 gram-metre) was intercepted at the Chalawan Prospect from 1m down in depth. This near surface ore zone, which In addition, several low-grade intercepts were also found in 7655RC, 7656RC and 7657RC, which require further drilling to check the continuity of the ore zone along the strike (north and south). CHEVRON-UP Figure 5: Au intercepts highlight along cross section line 0935N in Chalawan Prospect www.kingsgate.com.au 96m120m180m95m84m8150mE8250mE8350mE8450mE8150mE8250mE8350mE8450mE050m RL-50m RL100m RL050m RL-50m RL100m RLSaprolite6m@0.19 g/t Au11m@0.21 g/t Au7m@0.24 g/t Au15m@0.32 g/t Au6m@0.58 g/t Au3m@1.68 g/t Au3m@0.65 g/t Au53m@0.83 g/t Auincluding 14m@2.22 g/t Au25m@0.22 g/t Au33m@0.25 g/t AuLegendSection 0935NSignificant Gold InterceptsChalawanProspectMineralisationZone>0.2 g/t Au>0.5 g/t Au>1.0 g/t Au>3.0 g/t AuAverage Au grade intercept7658RC7657RC7656RC7654RC7655RCResistivity 17 Exploration Report CHEVRON-DOWN Table 3: RC drilling assay highlight Area Hole ID Easting local Northing local Azimuth local Dip ˚ Hole Depth m From m To m Interval m Au g/t Including CLW 7654RC 8344 0935 270 -60 120 7655RC 8397 0935 270 -60 170 7656RC 8296 0935 90 -55 84 7657RC 8243 0935 90 -55 95 1 59 96 0 65 4 28 44 53 42 54 84 99 15 72 10 39 47 59 75 53 25 3 15 7 6 11 3 6 33 0.83 14m@2.22 g/t Au (40–54m) 0.22 0.65 0.32 0.24 0.19 0.21 1.68 0.58 0.25 3m@0.53 g/t Au (79–82m) t t r r o o p p e e R R n n o o i i t t a a r r o o p p x x E E l l 2m@0.6 g/t Au (60–62m) 4m@0.64 g/t Au (67–71m) 84 95 11 0.28 Jorakae (JRK) Prospect Geological mapping along a small creek and pond continues to find silicified rhyolitic tuff with elevated Au, assaying 0.37, 0.46 g/t Au, and 0.85 g/t Au. These samples extend the low grade mineralised zone to the north from the area previously found from RAB drilling. RAB drilling with hole spacing of 25–50m focussed in a paddy field area south of the small creek where elevated Au was found from outcrop of silicified rhyolitic tuff. Significant RAB assay results returned which yielded a maximum of 8.6 g/t Au. RAB drilling exposed widespread phyllic alteration and silicified rhyolitic tuff with quartz vein. CHEVRON-DOWN Table 4: RAB drilling assay highlight CHEVRON-UP Figure 6: Rock slab of silicified rock with 0.85 g/t Au (RF530392) and silicified rhyolitic tuff with 0.37 g/t Au (RF530393) in Jorakae Prospect Area Hole ID Easting local Northing local Hole Depth m From m To m Interval m JRK 33947RA 0025 6650 33951RA 9925 6650 33952RA 9900 6650 33953RA 9950 6650 13 7 11 8 1 3 4 6 2 7 11 8 1 4 7 2 Au g/t 8.6 0.93 0.5 1.06 Including 1m@1.56 g/t Au (5–6m) 1m@1.02 g/t Au (5–6m) 1m@1.47 g/t Au (6–7m) continuedu 18 Exploration Report CHEVRON-UP Figure 7: Map showing alteration zone (red hatching) in Jorakae Prospect, rock, RAB max Au and RC assay highlight To date, the alteration zone with elevated Au identified from the RAB drilling results in this area, is approximately 1km wide but may be split into two main zones. The western zone appears to be wider. The mineralisation zone is expected to be in a north-south direction and is still open to the north and south. The first phase of drilling consisted of three RC holes drilled in the area where RAB assay results of 0.9 and 1.03 g/t Au were reported. A near surface ore zone was uncovered by hole 7670RC with an intercept of 17m@0.65 g/t Au from 9–26m in phyllic altered and silicified rhyolitic tuff and polymictic rhyolitic breccia with 1–10% quartz vein and 1–3% disseminated pyrite. CHEVRON-DOWN Table 5: RC drilling assay highlight Area Hole ID Easting local Northing local Azimuth local Dip ˚ Hole Depth m From m JRK 7670RC 9710 6400 7672RC 9660 6400 90 90 -55 -55 114 108 9 29 42 To m 26 30 49 Interval m Au g/t Including 17 1 7 0.65 3m@1.10 g/t Au (14–17m) 1.25 0.27 www.kingsgate.com.au 19400E19600E19800E20000E20200E20400E20600E19400E19600E19800E20000E20200E20600E20400E6000N6400N6600N6800N6200N6200N6400N6600N6800N6000N1m@1.25 (29–30m)5m@0.32 (42–47m)17m@0.65 (9–26m)0.850.370.460.361.021.560.350.428.600.480.320.450.770.700.350.390.321.141.030.900.321.47LegendN050100150200metresAlteration ZoneRC Significant Drill Intercepts(g/t Au)RAB Max Au (ppm)>0.50.3 to 0.50.1 to 0.30.05 to 0.10.02 to 0.050 to 0.02Rock Au (g/t)0.5 to 10.3 to 0.50.1 to 0.30 to 0.119 Exploration Report t t r r o o p p e e R R n n o o i i t t a a r r o o p p x x E E l l CHEVRON-UP Figure 8: Section 6400N showing low grade Au intercept in 7670RC and 7672RC at Jorakae Prospect Reverse circulation drilling 9650mE9750mE9850mE9950mE9650mE9750mE9850mE9950mE050m RL-50m RL100m RL050m RL-50m RL100m RL7m@0.27 (42–49m)17m@0.65 (9–26m)LegendSection 6400NSignificant Gold InterceptsGold (Au) MineralisationAndesite dyke>0.2 g/t Au>0.5 g/t Au>1.0 g/t Au>3.0 g/t AuAverage Au grade intercept7670RC7672RCEOH 114mEOH 108mJorakaeProspectReverse circulation drilling 20 Ore Reserves and Mineral Resources Ore Reserves and Mineral Resources Ore Reserves Classification Tonnes (Million) Gold (g/t) Silver (g/t) Gold (M oz) Silver (M oz) Grade Contained Metal 31 20 51 – 17 17 31 37 68 0.85 0.67 0.77 – 0.50 0.50 0.85 0.59 0.71 7.6 7.0 7.3 – 87 87 7.6 42.8 27 0.85 0.43 1.28 – 0.30 0.30 0.85 0.73 1.58 7.5 4.4 11.9 – 47.8 47.8 7.5 52.2 59.7 Mineral Resources (inclusive of Ore Reserves) Grade Contained Metal Resource Classification Tonnes (Million) Gold (g/t) Silver (g/t) 73.2 49.8 40.6 163.6 1.6 27.2 10.6 39.4 74.8 77.0 51.2 203.0 0.69 0.64 0.59 0.65 0.01 0.46 0.30 0.39 0.68 0.58 0.53 0.60 6.2 5.6 4.5 5.6 93.0 73.0 43.0 66.0 8.1 29.4 12.5 17.3 Gold (M oz) 1.63 1.02 0.77 3.42 0.0005 0.40 0.09 0.49 1.63 1.42 0.86 3.91 Silver (M oz) 14.6 8.9 5.9 29.4 4.8 63.8 14.8 83.4 19.4 72.7 20.7 112.8 as at 30 June 2023 Ore Reserves Source Chatree Nueva Esperanza Total Total Proved and Probable Ore Reserves Proved Probable Total Proved Probable Total Proved Probable Measured Indicated Inferred Total Measured Indicated Inferred Total Measured Indicated Inferred Source Chatree Nueva Esperanza Total Total Measured, Indicated and Inferred Mineral Resources www.kingsgate.com.au www.kingsgate.com.au21 Ore Reserves and Mineral Resources Notes to the Ore Reserves and Mineral Resources 1. Rounding errors are apparent. 2. Chatree metallurgical recoveries: 83.3% Au and 38.7% Ag based on metallurgical test work and plant performance. 3. Chatree Mineral Resources are reported at cut-off of 0.30 g/t Au. 4. Chatree Ore Reserves were estimated using a projected gold price of US$1,700/oz and silver price of US$22/oz and are reported at a cut-off grade of 0.35 g/t Au. 5. Nueva Esperanza metallurgical recoveries: 80% Au and 84% Ag estimated from test work by Kingsgate. 6. Nueva Esperanza Mineral Resource cut off is 0.5g/t gold equivalent, based on long term historical prices of US$1,200/oz for gold and US$19/oz for silver and combined life of mine average metallurgical recoveries of 80% Au and 84% Ag estimated from test work by Kingsgate giving the following formula: AuEq (g/t) = Au (g/t) + Ag (g/t) ÷ 60. It is Kingsgate’s opinion that all elements included in the metal equivalents calculation have a reasonable potential to be recovered and sold. 7. Nueva Esperanza Ore Reserves are based on a floating cut-off grade method. In this method each Resource block is subjected to a series of estimates to generate revenue and cost fields that are used to determine a breakeven cut-off grade. d n a s e v r e s e R e r O s e c r u o s e R l a r e n M i Competent Persons Statement Information relating to Chatree Mineral Resource estimates is extracted from the ASX: KCN announcement Kingsgate Mineral Resources and Ore Reserves 2017 released 5 October 2017 and is available to view on www.kingsgate.com.au. Information relating to Chatree Ore Reserve estimates is extracted from the ASX: KCN announcement Kingsgate announces 46% increase in Chatree Ore Reserve released 18 May 2022 and is available to view on www.kingsgate.com.au. Information relating to Nueva Esperanza Mineral Resource estimates is extracted from the ASX: KCN announcement Nueva Esperanza Mineral Resource Update released 14 April 2016 and is available to view on www.kingsgate.com.au. Information relating to Nueva Esperanza Ore Reserve estimates is extracted from the ASX: KCN announcement Nueva Esperanza Pre-Feasibility Study Confirms Kingsgate Growth Strategy released 14 April 2016 and is available to view on www.kingsgate.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements describing Mineral Resources and Ore Reserves referenced above, and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. The information in this report that relates to the Chatree Mineral Resources is based on information compiled by Ron James, who is a consultant geologist to the Kingsgate Group. Ron James is a member of The Australasian Institute of Mining and Metallurgy and qualifies as a Competent Person. Mr James has sufficient experience that is relevant to the style of mineralisation and type of deposit under consid- eration, and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr James has consented to the public reporting of these statements and the inclusion of the material in the form and context in which it appears. The information in this report that relates to the Chatree Ore Reserve estimates is based on information compiled by Glen Williamson who is a member of the Australasian Institute of Mining and Metallurgy. Mr Williamson is a full time employee of AMC Consultants Pty Ltd and has sufficient relevant experience in the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Williamson has consented to the public reporting of these statements and the inclusion of the material in the form and context in which it appears. Mr Williamson has no potential for conflict of interest in relation to this report to Kingsgate Consolidated Limited. 22 Exploration, Mining and Special Prospecting Licences Exploration, Mining and Special Prospecting Licences held by Kingsgate and/or its subsidiaries as at 30 June 2023 Chatree, Thailand Mining Leases, Mining Lease Applications and Special Prospecting Licence applications for Akara Resources Public Company Limited as at 30 June 2023. Mining licences No. ML/MLA Province Issue Date Expiry Date Rai Application Date Phichit Phichit Phichit Phichit Phichit Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phichit Phichit Phichit 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 21/7/2008 30/12/2021 30/12/2021 30/12/2021 Phetchabun 19/6/2000 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 20/7/2028 29/12/2031 29/12/2031 29/12/2031 18/6/2020 Phetchabun Phichit Phichit Phichit/ Phetchabun 252-3-06 283-1-65 275-2-54 293-2-02 204-1-26 283-1-49 299-1-60 279-1-79 294-1-28 93-1-77 285-3-4 275-1-81 294-0-37 299-1-92 57-2-93 194-2-36 51-0-28 under licence renewal 16/7/2013 25/3/2016 25/3/2016 19/1/2022 18/1/2027 2439-0-75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 26917/15804 26922/15805 26921/15806 26920/15807 26923/15808 32529/15809 32530/15810 32531/15811 32532/15812 25528/14714 26910/15365 26911/15366 26912/15367 25618/15368 MLA 6/2556 MLA 1/2559 MLA 2/2559 MPL 1/2551 www.kingsgate.com.au Exploration, Mining and Special Prospecting Licences 23 d n a g n n M i i , n o i t a r o p x E l i s e c n e c L g n i t c e p s o r P l i a c e p S continuedu 675000E682500E690000E697500E705000E675000E682500E690000E697500E705000E1815000N1822500N1807500N1800000N1807500N1785000N1777500N1770000N1815000N1822500N1807500N1800000N1807500N1785000N1777500N1770000NPhitsanulokPhetchabunPhichitBangkokLAOSCCCAMBODIAChiang MaiKhon Kaen37373733336363363/2563/256316/16/256316/2563/2563/25634/4/25634/25633333/2563/256336/36/256336/2563/41/41/41/3333/2563/256322/22/256322/256356356356356333333333/2563/25634/4/25634/2563//20/20/02020//2563/256317/17/256317/25632563/25632/12/256312/2563Mining LeasePhetchabun SPLsRelinquished SPLsOther Company SPLALegendN05101kmCHATREECHATREECHATREE 24 Exploration, Mining and Special Prospecting Licences Special prospecting licence applications No. App No Province Area (Rai) No. App No Province Area (Rai) 16/2554 & 14/2555 Phichit 38 39 40 41 42 43 44 45 46 47 48 48 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 8/2549 9/2549 6/2555 2/2550 3/2550 4/2550 5/2550 6/2550 7/2550 8/2550 9/2550 10/2550 11/2550 12/2550 13/2550 14/2550 15/2550 16/2550 1/2551 1/2549 1/2550 2/2550 3/2550 4/2550 3/2554 & 1/2555 4/2554 & 2/2555 5/2554 & 3/2555 6/2554 & 4/2555 7/2554 & 5/2555 8/2554 & 6/2555 9/2554 & 7/2555 10/2554 & 8/2555 11/2554 & 9/2555 12/2554 & 10/2555 13/2554 & 11/2555 14/2554 & 12/2555 15/2554 & 13/2555 Chantaburi Chantaburi Chantaburi Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Lop Buri Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit Phichit 5,360 9,290 9,320 9,923 9,967 10,000 8,504 10,000 6,711 9,597 9,255 9,347 9,426 9,493 10,000 7,948 10,000 10,000 10,000 10,000 9,812 10,000 10,000 10,000 9,850 9,375 9,440 9,900 8,919 10,000 10,000 10,000 10,000 9,862 9,500 10,000 9,500 www.kingsgate.com.au 1/2550 2/2550 10/2554 11/2554 12/2554 13/2554 14/2554 15/2554 16/2554 17/2554 18/2554 19/2554 20/2554 21/2554 22/2554 23/2554 24/2554 25/2554 26/2554 27/2554 1/2550 2/2550 3/2550 4/2550 3/2553 4/2553 1/2549 4/2554 5/2554 6/2554 7/2554 8/2554 9/2554 10/2554 Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok 7,519 130 1,050 2,170 8,695 1,300 9,868 9,909 8,973 Phitsanulok 10,000 Phitsanulok 9,460 Phitsanulok 10,000 Phitsanulok 9,635 Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phitsanulok Phetchabun Phetchabun 10,000 10,000 10,000 10,000 4,072 3,869 9,393 8,700 9,019 9,992 Phetchabun 10,000 Phetchabun Phetchabun 586 9,576 Phetchabun 10,000 Rayong Saraburi Saraburi Saraburi Saraburi Saraburi Saraburi Saraburi 7,300 9,381 9,500 9,460 7,106 9,656 9,921 10,000 Total (Rai): 626,539 Total (Km2): 1,002.46 d n a g n n M i i , n o i t a r o p x E l i s e c n e c L g n i t c e p s o r P l i a c e p S Exploration, Mining and Special Prospecting Licences 25 Special prospecting licences No. SPL No Province Issue Date Expiry Date Area (Rai) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 3/2563 4/2563 5/2563 7/2563 9/2563 10/2563 11/2563 12/2563 13/2563 14/2563 15/2563 16/2563 17/2563 18/2563 19/2563 20/2563 21/2563 22/2563 23/2563 24/2563 25/2563 28/2563 36/2563 37/2563 39/2563 40/2563 41/2563 42/2563 43/2563 44/2563 45/2563 46/2563 Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun Phetchabun 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 26/10/2020 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 25/10/2025 9,375 9,672 9,107 9,798 10,000 10,000 10,000 10,000 9,009 9,997 9,716 9,858 9,599 8,916 9,069 9,375 10,000 10,000 10,000 9,976 10,000 9,375 9,005 2,112 9,604 10,000 10,000 10,000 8,900 7,985 9,350 1,034 Total (Rai): 290,832 Total (Km2): 465.3312 continuedu 26 Exploration, Mining and Special Prospecting Licences Nueva Esperanza, Chile Tenements for Laguna Resources Chile Limitada (LRC), (a wholly owned subsidiary of Kingsgate Consolidated Limited) as at 30 June 2023. Mining licences ID ID File Name Owner Area (Ha) Observation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 031022897-4 031022894-K 031022895-8 031022896-6 031021296-2 031021193-1 031021169-9 031023646-2 031021152-4 PASCUA I 1/20 PASCUA II 1/30 PASCUA III 1/30 PASCUA IV 1/20 ROBINSON 1/14 PASCUA 1/328 PENA 1/181 NEGRA 1/1003 NEGRA 1/1003 031022998-9 REEMPLAZO A 1/10 031022999-7 REEMPLAZO B 1/5 031022318-2 031021151-6 031021192-3 NEGRA 1/1003 FLOR 1/20 CANARIAS 1/414 031026465-2 CRISTAL 54 B 1/40 031026466-0 03201C776-3 03201C777-1 03201C778-K 03201C779-8 03201C780-1 GASTON B 1/40 PACITA 1A, 1/40 PACITA 2A, 1/40 PACITA 3A, 1/40 PACITA 4A, 1/40 PACITA 5A, 1/40 03201C893-K PACITA 6A, 1/20 03201C781-K 03201C782-8 03201C783-6 PACITA 7A, 1/40 PACITA 8A, 1/40 PACITA 9A, 1/40 03201C784-4 PACITA 10A, 1/40 03201C785-2 PACITA 11A, 1/40 03201C786-0 PACITA 12A, 1/40 03201C787-9 PACITA 13A, 1/40 LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC LRC 200 300 300 200 94 1131 905 4,545 370 10 5 100 100 1,066 200 88 196 200 200 200 200 100 200 200 200 200 200 200 200 Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted www.kingsgate.com.au Exploration, Mining and Special Prospecting Licences 27 Mining licences ID 30 31 32 33 34 35 36 37 38 ID File Name Owner Area (Ha) Observation 03201C788-7 PACITA 14A, 1/20 03201C790-9 PACITA 16A, 1/32 03201C791-7 PACITA 17A, 1/20 03102Q947-5 03102Q948-3 03102Q949-1 03102Q950-5 03102Q951-3 03102Q952-1 PACITA 19D PACITA 20D PACITA 21D PACITA 22D PACITA 23D PACITA 24D LRC LRC LRC LRC LRC LRC LRC LRC LRC 100 144 80 200 300 200 200 200 200 Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Constituted Total (Ha): 13,734 Tenements in progress ID 39 ID File 03201P647-4 Name PACITA 6D Owner LRC Total (Ha): Area (Ha) 100 100 Observation In Progress d n a g n n M i i , n o i t a r o p x E l i s e c n e c L g n i t c e p s o r P l i a c e p S 28 Directors’ Report Your Directors’ present their report on the Group consisting of Kingsgate Consolidated Limited and the entities it controlled at the end of, or during the year ended 30 June 2023. Directors The following persons were Directors of Kingsgate Consolidated Limited during the year ended 30 June 2023 and up to the date of this report, except where noted. Ross Smyth-Kirk Executive Chairman Jamie Gibson Managing Director and Chief Executive Officer – appointed 4 July 2023, previously Managing Director and acting Chief Executive Officer appointed 3 February 2023 Nucharee Sailasuta Non-Executive Director – appointed 3 February 2023 Peter Warren Non-Executive Director Peter Alexander Non-Executive Director – resigned 1 February 2023 Principal activities Kingsgate is a gold and silver mining, development and exploration company based in Sydney, Australia. Kingsgate owns and operates the Chatree Gold Mine (“Chatree”) in Thailand. In addition, the Company has an advanced development project, Nueva Esperanza, in the highly prospective Maricunga Gold/Silver Belt in Chile. Dividends 〉 No final dividend was declared for the year ended 30 June 2022 (30 June 2021: nil). 〉 No interim dividend was declared for the year ended 30 June 2023 (30 June 2022: nil). Review of operations and results Operational Performance Chatree Akara Resources Public Company Limited (Akara), a subsidiary of Kingsgate, officially reopened the Chatree Gold Mine in March 2023 following approval by the Department of Primary Industries and Mines in Thailand. Since operations recommenced in March 2023, 9,705 ounces of gold (Au) and 112,097 ounces of silver (Ag) were produced as of 30 June 2023. During the year, there was a successful re-start with our LotusHall Mining contracting partners, moving rehandled materials from stockpiles to the Run of Mine (ROM). Total material hauled was 714,763 tonnes comprising: 〉 Low grade – 91,160.5 tonnes @Au 0.61 g/t and Ag 10.12 g/t. 〉 Marginal grade – 623,603 tonnes @Au 0.51 g/t and Ag 9.85 g/t. The TSF#1 (Tailings Storage Facility) Rehabilitation plan was re-started with 183,638 Non-Acid-Forming tonnes placed to 30 June 2023 by our local contractor Narachi Mining. During the year, refurbishment of Plant #2 was completed on time and under budget by CR3, a Thai based international engineering firm. Following commissioning, 737,174 dry tonnes were crushed and 723,006 dry tonnes were milled at an average grade of Au 0.55 g/t and Ag 9.71 g/t. Recoveries averaged 83.2% for gold and 56.8% for silver. Plant #2 continues to perform above expecta- tions and run above nameplate capacity of 2.7 million tonnes per annum. Following the first gold pour on 23 March 2023, 12 shipments of doré bars were delivered to Precious Metal Refining Co. Limited (PMR) on a weekly basis. During the year a stockpile density assessment was completed which yielded approximately one million additional tonnes of ore which equates to an additional 14,338 ounces of gold and 248,426 ounces of silver. Kingsgate secured a range of BOI (Board of Investment) incentives available to Akara over an eight year period, including an exemption from the 20% corporate income tax rate up to a cap of 3.25 billion Thai baht. The TAFTA award deferral remains in place until 31 December 2023. Final preparations are underway ahead of a restart to mining operations at the Quartz Lease and work continues of the Plant #1 Overhaul Project and to bring the Chatree Gold Mine back up to its full operational capacity of 5 to 5.5 million tonnes per annum in 2024. Chatree and the Thailand-Australia Free Trade Agreement (TAFTA) Kingsgate, by joint agreement with the Kingdom of Thailand, deferred the arbitral award under the Thailand-Australia Free Trade Agreement (TAFTA) for a further period to 31 December 2023. Nueva Esperanza Nueva Esperanza is a feasibility-stage devel- opment project with a resource base (inclusive of ore reserves) of approximately 0.49 million ounces gold and 83.4 million ounces of silver (See ASX: KCN released titled “Kingsgate Mineral Resources and Ore Reserves 2016” dated 7 October 2016). Kingsgate is continuing to work with a number of parties interested in acquiring the Nueva Esperanza Project. No exploration work was carried out during the period and management costs were kept to a minimum. Directors’ Reportwww.kingsgate.com.au 29 t r o p e R ' s r o t c e r i D continuedu Financing At the end of June 2023, Kingsgate’s Group cash totalled $8.9 million. This does not include $0.7 million of refundable bank guarantees relating to rehabilitation obligation in respect of the 32 SPLs held by Akara Resources at the end of the year and $1.4 million deposit on mining licence. Placement and Share Purchase Plan (SPP) On 28 March 2023, the Company announced the successful completion of a placement to institutional investors at an issue price of $1.50 per share, raising $46 million. The Company also announced a Share Purchase Plan to existing shareholders in April 2023. The SPP provided the opportunity to acquire up to $30,000 of fully paid ordinary shares in Kingsgate without incurring any brokerage fees. The SPP was issued at $1.50 per share, raising $8.6 million. The Placement and SPP raised $54.6 million, issuing 36,431,239 shares. The total cost of $2.8 million, was deducted from shareholder equity. Advances from preference shareholder On 25 November 2022, Akara Resources Public Company Limited (Akara) received an unsecured 200 million Thai baht advance from the preference shareholder. On 22 February 2023, Akara received an additional cash advance of 100 million Thai baht from the preference shareholder. Both advances are repayable in 12 months from drawdown with 12% interest rate. Repayment of Secured Bridge Facility On 10 May 2022 a secured Bridge Facility of US$15 million was entered into with Taurus Mining Finance Fund No.2 L.P. (Taurus). The first tranche of US$7.5 million was drawn on 11 May 2022 and the second tranche of US$7.5 million was drawn on 22 July 2022. On 31 March 2023, US$15 million loan was fully repaid out of the net proceeds received by the Group from a placement. Under the terms of the Bridge Facility, 2,500,000 options were issued to Taurus during the year ended 2022 and have the following conditions attached to them: 〉 each option will entitle the holder to subscribe for one ordinary share of the Company; 〉 options are granted for no consideration; and 〉 options granted under the plan carry no dividend or voting rights. Directors’ Report 30 Financial results Net profit/(loss) after tax (‘000) EBITDA (‘000) Dividends paid (Cash & DRP) ($’000) Share price 30 June ($) Basic earnings/(loss) per share (Cents) Diluted earnings/(loss) per share (Cents) Kingsgate has recorded a net profit after income tax of $4.7 million for the year ended 30 June 2023. This result includes a gain of $60 million arising from a reversal of the inventory stock- piles write-down to the net realisable value and gold sales of 8,437 ounces at an average gold price received of US$1,964 per ounce, offset by an increase of rehabilitation provision for $11.4 million charged to profit and loss. Direct costs of mining and processing was $16.3 million, a result of the production at Chatree of 9,705 ounces of gold and 112,097 ounces of silver. Reversal of previously recorded inventory write-down to net realisable value Refurbishment of Chatree Plant #2 was completed in early March 2023 and on 15 March 2023, the permission to reopen the Chatree mine was granted. Since that date the Group has used the refurbished Chatree Plant #2 to start processing the available inventory stockpiles. The first gold pour occurred on 23 March 2023. A reversal of the inventory stockpiles write- down to the net realisable value resulted in a gain of $60 million recognised at 30 June 2023. No reversal of impairment in respect of Chatree Plant #2 has been recorded. The net realisable value of the inventory stockpile has been determined based on the accounting policy for inventory described in Note 2i. The determination of net realisable value involves significant judgement and accounting estimates in relation to the selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. Refer Note 3(i) for details. 2023 2022 2021 2020 4,738 11,072 – 1.51 2.06 2.04 (12,420) (10,406) – 1.33 (5.61) (5.61) (8,877) (7,415) – 0.84 (4.00) (4.00) (24,244) (22,782) – 0.40 (10.84) (10.84) 2019 8,375 15,958 – 0.26 3.70 3.70 Production Summary Ore Treated Head Grade – Gold Head Grade – Silver Gold Recovery Silver Recovery Gold Poured Silver Poured Revenue Summary Gold sold Silver sold Average Gold Price Received Average Silver Price Received Receipt of the official Board of Investment Certificate Kingsgate’s Thai controlled entity Akara Resources Public Company Limited (Akara) received on 8 June 2023 approval from the Royal Thai Board of Investment (BOI) for investment promotion application for the Chatree Gold Mine. This approval provides Akara an eight year exemption including: 〉 the 20 per cent corporate income tax rate, up to a cap of 3.25 billion Thai baht; 〉 〉 the 10 per cent withholding tax on dividends remitted overseas; and import duties on machinery, raw materials used in research and development, and raw materials used in production for export. The start of the promotion period was 20 March 2023. Units FY2023 tonnes Au g/t Ag g/t % % ounces ounces ounces ounces US$/oz US$/oz 723,006 0.55 9.71 83.2 56.8 9,705 112,097 8,437 97,693 1,964 23 Going Concern and Material Uncertainty The financial statements have been prepared on a going concern basis, which indicates conti- nuity of business activities and the realisation of assets and settlement of liabilities in the normal course of business. For the year ended 30 June 2023, the Group recorded a net profit before tax of $4,738,000 (2022: loss of $12,420,000), which included a non-cash reversal of a previous inventory write- down of $59,822,000, experienced net cash outflows from operating and investing activities of $51,147,000 (2022: $12,155,000) and as at that date held cash and cash equivalents of $8,921,000 (2022: $7,424,000). The Group is continuing to develop the Chatree Gold Mine including the overhaul of Chatree Plant #1, while processing available inventory stockpiles through Plant #2. The cash flow generated from these operations is currently not sufficient to fund the ramp up of mining operations and overhaul of Chatree Plant #1. Directors’ Reportwww.kingsgate.com.au31 To ensure the continued viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due and to ensure that adequate funding is available to complete the Chatree Plant #1 overhaul and ramp up mining operations to generate sufficient operating cash flows, the Group is dependent on being successful in: 1. 2. negotiating and implementing additional financing facilities in the order of $25 to $30 million; and/or deferring the repayment of the Akara preference shareholder Nucharee Sailasuta advances of 300 million Thai baht ($12,756,000) (see Note 16b) and the liability relating to Preference Shares (see Note 16a) for a period of more than twelve months from the end of September 2023; and/or 3. deferring, if necessary, the timing for completion of Chatree Plant #1 overhaul schedule and managing the balances owed to creditors; and/or 4. completing the sale of the Nueva Esperanza Project; and/or 5. an equity raising. As a result of these matters, there is a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Directors believe that a combination of these matters will be implemented and, accordingly, have prepared the financial report on a going concern basis. No adjustments have therefore been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. The attached financial report for the year ended 30 June 2023 contains an independent auditor’s report which includes an emphasis of matter paragraph in regard to the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. For further information, refer to Note 1 (a) to the financial report. t r o p e R ' s r o t c e r i D Material business risks As a mining company, we operate in a dynamic and complex environment where various factors and risks can impact our operations, financial performance, and sustainability. It is crucial for our stakeholders to be aware of the material business risks we face. While we strive to manage these risks effectively, there can be no assurance that they will not have a significant impact on our business in the future. The following are the material business risks that could affect our Group: Capital and Financing Risk Access to capital for exploration, development, and expansion projects is essential for our growth. Financial market conditions, interest rates, and credit availability can influence our ability to raise funds. The Group’s ability to successfully develop projects is contingent on the ability to fund those projects from operating cash flows or through affordable debt and equity raisings. Political, economic, social and security risks Kingsgate’s activities are subject to the political, economic, social and other risks and uncertainties in the jurisdictions in which those activities are undertaken, including changes in government policies, local community relations, and potential disruptions due to protests or conflicts in the regions where we operate. As evidenced by the decision by the Thai Government that the Chatree Gold Mine must cease operation by 31 December 2016, there can be no certainty as to what changes, if any, will be made to relevant laws in the jurisdictions where the Company has current interests, or other jurisdictions where the Company may have interest in the future, or the impact that relevant changes may have on Kingsgate’s ability to own and operate its mining and related interests and to otherwise conduct its business in those jurisdictions. Commodity Prices Volatility and Exchange Rates Commodity prices fluctuate according to changes in demand and supply. The Group is exposed to changes in commodity prices, which could affect the profitability of the Group’s projects. Significant adverse movements in commodity prices could also affect the ability to raise debt and equity to fund exploration and development of projects. The Group will be exposed to changes in the US Dollar. Mineral resources and ore reserves Ore reserves and mineral resources are estimates. These estimates are substantially based on interpretations of geological data obtained from drill holes and other sampling techniques. Actual mineralisation or geological conditions may be different from those predicted and as a consequence there is a risk that any part, or all of the mineral resources, will not be converted into reserves. Market price fluctuations of gold and silver as well as increased production and capital costs, may render ore reserves unprofitable to develop at a particular site for periods of time. Mining risks and insurance risks These risks and hazards could result in significant costs or delays that could have a material adverse impact on the Group’s financial performance and position. The Group maintains insurance to cover some of these risks and hazards at levels that are believed to be appropriate for the circumstances surrounding each identified risk. However, there remains the possibility that the level of insurance may not provide sufficient coverage for losses related to specific loss events. Regulatory Risk The Group’s activities are subject to obtaining and maintaining the necessary titles, authorisa- tions, permits and licences, and associated land access arrangements with the local community, which authorise those activities under the relevant law (“Authorisations”). There can be no guarantee that the Group will be able to successfully obtain and maintain relevant Authorisations to support its activities, or that renewal of existing Authorisations will be granted in a timely manner or on terms acceptable to the Group. Authorisations held by or granted to the Group may also be subject to challenge by third parties which, if successful, could impact on Kingsgate’s exploration, development and/or mining activities. Reliance on contractors Some aspects of Kingsgate’s activities are conducted by contractors. As a result, the Group’s business performance is impacted upon by the availability and performance of contractors and the associated risks. continuedu Directors’ Report 32 Likely developments and expected results of operations Kingsgate is focused on ramping up operations at the Chatree Gold Mine, Thailand, which includes restarting mining operations, and resuming a steady state production of between 100,000 and 120,000 ounces of gold per annum, as well as completing an aggressive near mine and regional exploration program. The Company also expects to monetise or joint venture its advanced gold-silver development project, Nueva Esperanza, in Chile. Kingsgate will also continue to assess other viable gold project opportunities which may offer value enhancing opportunities for shareholders. Material business risks that may impact the results of future operations include tenure risks, environmental risks, ore reserve and mineral resources estimates, production estimates and metallurgical recovery, sovereign risks, debt funding risks, future commodity prices, exchange rate risks, development risks, reliance on key personnel, operating risks, capital costs, operating costs, occupational health and safety, political and regulatory risks. Environmental laws The Group is subject to various environmental laws in respect to its activities in Thailand and Chile. For the year ended 30 June 2023, the Group has operated within all applicable environmental laws and regulations. Legal and Litigation Risk We may face legal disputes related to contractual agreements, environmental claims, or other matters that can result in financial losses and damage to our reputation. Community relations and reputational risk The Group has established community relations functions that have developed a community engagement framework, including a set of principles, policies and procedures designed to provide a structured and consistent approach to community activities. A failure to appropriately manage local community stakeholder expectations may lead to damage to the Group’s reputation and disruptions in the Group’s activities. Health and Safety of Workers Ensuring the health and safety of our employees is paramount. Health crises, such as pandemics, can disrupt operations and pose risks to our workforce. Mining operations inherently involve risks related to equipment failures, accidents, and geological challenges. Ensuring the safety of our workforce and mitigating operational disrup- tions is a top priority. Environmental, health and safety regulations Stringent and extensive environmental regulations govern our industry. Failure to comply with these regulations can lead to fines, legal liabilities, and reputational damage. Adapting to evolving environmental standards is crucial. Delays in obtaining, or failure to obtain government permits and approvals may adversely affect the Group. Climate Change and Sustainability Climate change considerations, including carbon emissions and environmental sustainability, are increasingly important for our industry. Failure to address these issues can result in reputational harm and regulatory challenges. Risk management It is essential to note that these risks are interconnected, and their impact may vary based on market conditions, industry trends, and other factors. We are committed to proactive risk management, continuous improvement, and transparency in our reporting to mitigate these material business risks and ensure the long-term success of our mining operations. Please note that this list of material business risks is not exhaustive, and there may be other risks specific to our industry or individual circumstances that could affect our business. Our Board and management team regularly reviews and updates our risk assessment to adapt to changing conditions and implement strategies for risk mitigation. Significant change in the state of affairs Akara Resources Public Company Limited (Akara), a subsidiary of Kingsgate, officially reopened the Chatree Gold Mine in March 2023 following approval by the Department of Primary Industries and Mines in Thailand (see “Operational Performance” section of the Directors Report). There were no other significant changes in the state of affairs of the Group that occurred during the financial year not otherwise disclosed in this report or the consolidated financial statements. Matters subsequent to the end of the financial year Mr Jamie Gibson was appointed as Managing Director and Chief Executive Officer of the Company 4 July 2023. Mr Paul Mason resigned as Company Secretary 31 July 2023. Ms Stephanie Wen was appointed as General Counsel and Company Secretary 1 August 2023. On 17 July 2023, Akara entered into a drilling agreement with LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Ms Nucharee Sailasuta is the Managing Director, for drill and blast and grade control services for Chatree Gold Mine. No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect: 〉 the Group’s operations in future financial periods; 〉 〉 the results of those operations in future financial periods; or the Group’s state of affairs in future financial periods. Directors’ Reportwww.kingsgate.com.au33 t r o p e R ' s r o t c e r i D Directors’ meetings The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2023, and the number of meetings attended by each Director were: Directors Ross Smyth-Kirk Jamie Gibson1 Nucharee Sailasuta1 Peter Warren Peter Alexander2 Board Meetings A 14 3 2 14 11 B 14 3 3 14 11 Meetings of Committees Audit Nomination Remuneration A 2 1 B 2 1 A 1 1 B 2 1 N/A N/A N/A N/A 2 1 2 1 2 1 2 1 A 3 2 N/A 3 N/A B 3 3 N/A 3 N/A A B Number of meetings attended. Number of meetings held during the time the Director held office or was a member of the committee during the year. Appointed 3 February 2023. 1 2 Resigned 1 February 2023. Information on Directors Ross Smyth-Kirk OAM B Com, CPA, F Fin Jamie Gibson GAICD Executive Chairman Ross Smyth-Kirk was a founding Director of the former leading investment management company, Clayton Robard Management Limited and has had extensive experience over a number of years in investment management including a close involvement with the minerals and mining sectors. He has been a Director of a number of companies over the past 43 years in Australia and the United Kingdom. Mr Smyth-Kirk is a former Chairman of the Australian Jockey Club Limited. He is Chairman of Kingsgate’s wholly owned subsidiary, Akara Resources Public Company Limited. Responsibilities Chairman of the Board, member of the Audit Committee, Chairman of the Nomination and Remuneration Committees. Managing Director and Chief Executive Officer – appointed 4 July 2023 Jamie was previously Managing Director and Acting Chief Executive Officer – appointed 3 February 2023 Responsibilities Member of the Audit, Nomination and Remuneration Committees. Jamie Gibson is a highly experienced government and corporate professional with more than 25 years’ experience, and has worked with Kingsgate since 2013 across corporate strategy, investor, media, and government relations. During this time, Jamie has built strong relation- ships with the Thai Government and community leaders around the Chatree Gold Mine, and continues to be an important member of the Kingsgate team that has successfully negotiated the Chatree restart. Jamie is a Director of Kingsgate’s wholly owned subsidiary, Akara Resources Public Company Limited. He is a former Chief Advisor in Mining Portfolios (metals and coal) and has high level international trade and investment experience. Jamie was formerly a Board Member and Vice President of the Australia Thailand Business Council and holds business and management qualifications from Macquarie University and the Sydney Institute of Technology respectively. Jamie is also a graduate of the Australian Institute of Company Directors. continuedu Directors’ Report 34 Nucharee Sailasuta Peter Warren B Com, CPA Non-Executive Director Peter Warren was Chief Financial Officer and Company Secretary of Kingsgate Consolidated Limited for six years up until his retirement in 2011. He is a CPA of over 48 years standing, with an extensive involvement in the resources industry. He was Company Secretary and Chief Financial Officer for Equatorial Mining Limited and of the Australian subsidiaries of the Swiss based Alusuisse Group and has held various financial and accounting positions for Peabody Resources and Hamersley Iron. Mr Warren is a former Director of Kingsgate’s wholly owned subsidiary, Akara Resources Public Company Limited. Responsibilities Chairman of the Audit Committee and member of the Nomination and Remuneration Committees. Non-Executive Director – appointed 3 February 2023 Nucharee Sailasuta is currently the Managing Director of LotusHall Mining Heavy Engineering Construction Co., Ltd., Managing Director of Lotus Green Energy Co., Ltd., Thailand, and the owner of Pangluang Garden Resort & Restaurant Lampang, Thailand. Nucharee is a Thai business woman with strong mining credentials especially in effective mining management. Since 1983, she has worked in Gold, Copper, Quarry, Coal, Kaolin and Limestone mining operations, both in Thailand and in neighbouring countries, including the Sepon Gold & Copper Mine and Phubia Mining, located in Laos PDR. In Thailand, Nucharee owns the FGD (Flue Gas Desulfulization) No.2 Project in partnership with EGAT (“the Electricity Generating Authority of Thailand”) and has been the mining contractor at the Chatree Gold Mine since operations commenced in 2001. Nucharee is a Director of Kingsgate’s wholly owned subsidiary, Akara Resources Public Company Limited. She is also the President of the Business Woman’s Association of Lampang, Thailand, and works as a conciliator of Alternative Dispute Resolution for Lampang Court, Ministry of Justice, Thailand, and has won many awards during her impressive career. Company Secretary Stephanie Wen GAICD, LLB, B Com. General Counsel and Company Secretary – appointed 1 August 2023 Stephanie is an experienced legal professional with a strong background in corporate transactions and legal advisory services, both in Australia and the APAC region. Her expertise includes cross-border mergers and acquisitions, IPOs, and capital raising in Asian and Australian markets. Previously, Stephanie held senior positions in the Legal and Compliance departments of renowned global financial institutions. She also served as a non-executive director for an ASX listed healthcare company. Stephanie holds a dual degree in Law and Commerce (LL B) (B.Com: Accounting) from the University of New South Wales, and a Master’s degree in International Affairs (International Business and Finance) from Columbia University in New York. She is a graduate of the Australian Institute of Company Directors. Paul Mason BE, CA, AGIA Company Secretary – resigned 31 July 2023 Paul was previously the Company Secretary of Kingsgate from 2014 to 2015, following which he was appointed as Commercial Manager at the Group’s Chatree Gold Mine, a position he held until the closure of the mine in January 2017. He is a Chartered Accountant, and an Associate Member of the Governance Institute of Australia. Paul has over 26 years of experience in the resources industry in company secretarial and finance roles. Directors’ Reportwww.kingsgate.com.au 35 t r o p e R ' s r o t c e r i D Remuneration Report Introduction This Remuneration Report forms part of the Directors’ Report. It outlines the Remuneration Policy and framework applied by the Company as well as details of the remuneration paid to Key Management Personnel (“KMP”). KMP are defined as those persons having the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including Directors and Executive Management. The information provided in this report has been prepared in accordance with s300A and audited as required by section 308 (3c) of the Corporations Act 2001. The objective of the Company’s remuneration philosophy is to ensure that Directors and Executives are remunerated fairly and respon- sibly at a level that is competitive, reasonable and appropriate, in order to attract and retain suitably skilled and experienced people. Remuneration Policy The Remuneration Policy remains unchanged from last financial year. The Remuneration Policy has been designed to align the interests of shareholders, Directors, and employees. This is achieved by setting a framework to: 〉 help ensure an applicable balance of fixed and at-risk remuneration, with the at-risk component linking incentive and performance measures to both Group and individual performance; 〉 provide an appropriate reward for Directors and Executive Management to manage and lead the business successfully and to drive strong, long-term growth in line with the Company’s strategy and business objectives; 〉 〉 encourage executives to strive for superior performance; facilitate transparency and fairness in executive remuneration policy and practices; 〉 be competitive and cost effective in the current employment market; and 〉 contribute to appropriate attraction and retention strategies for Directors and executives. In consultation with external remuneration consultants, the Group has structured an executive remuneration framework that is market competitive and aligned with to the business strategy of the organisation. The framework is intended to provide a mix of fixed and variable remuneration, with a blend of short and long-term incentives as appropriate. As executives gain seniority within the Group, the balance of this mix shifts to a higher proportion of “at risk” rewards. Remuneration Governance Role of the Remuneration Committee The Remuneration Committee is a committee of the Board and has responsibility for setting policy for determining the nature and amount of emoluments of Board members and Executives. The Committee makes recommendations to the Board concerning: 〉 Non-Executive Director fees; 〉 remuneration level of Executive Directors and other KMP; 〉 〉 〉 the executive remuneration framework and operation of the incentive plan; key performance indicators and performance hurdles for the executive team; and the engagement of specialist external consultants to design or validate method- ology used by the Company to remunerate Directors and employees. In forming its recommendations the Committee takes into consideration the Group’s stage of development, remuneration in the industry and performance. The Corporate Governance Statement provides further information on the role of this committee. Remuneration consultants The Group engages the services of independent and specialist remuneration consultants from time to time. Under the Corporations Act 2001, remuneration consultants must be engaged by the Non-Executive Directors and reporting of any remuneration recommendations must be made directly to the Remuneration Committee. The Remuneration Committee engaged the services of Godfrey Remuneration Group Pty Ltd in the 2013/2014 financial year to review its remuneration practice revisions and to provide further validation in respect of both the executive short-term and long-term incentive plan design methodology and standards. These recommendations covered the remuneration of the Group’s Non-Executive Directors and KMP. Godfrey Remuneration Group Pty Ltd confirmed that the recommendations from that review were made free from undue influence by members of the Group’s KMP. The following arrangements were implemented by the Remuneration Committee to ensure that the remuneration recommendations were free from undue influence: 〉 Godfrey Remuneration Group Pty Ltd was engaged by, and reported directly to, the Chair of the Remuneration Committee. The agreement for the provision of remuneration consulting services was executed by the Chair of the Remuneration Committee under delegated authority on behalf of the Board; and 〉 any remuneration recommendations by Godfrey Remuneration Group Pty Ltd were made directly to the Chair of the Remuneration Committee. As a consequence, the Board is satisfied that the recommendations contained in the report were made free from undue influence from any members of the Group’s KMP at the time this review was completed. Executive Director and Key Management Personnel Remuneration The executive pay and reward framework is comprised of three components: 〉 fixed remuneration including superannuation; 〉 〉 short-term performance incentives; and long-term incentives through participation in the Kingsgate Employee Share Option Plan (“ESOP”). Fixed remuneration Total fixed remuneration (“TFR”) is structured as a total employment cost package, including base pay and superannuation. Base pay may be delivered as a mix of cash, statutory and salary sacrificed superannuation, and prescribed non-financial benefits at the Executive’s discretion. Executives are offered a competitive base pay. Base pay for executives is reviewed annually to ensure their pay is competitive with the market. An executive’s pay is also reviewed on promotion. continuedu Directors’ Report 36 The following summarises the performance of the Group over the last five years: Revenue Net profit/(loss) after tax (‘000) EBITDA (‘000s) Share price at year end ($/share) Dividends paid (cent/share) KMP short term employee benefits (‘000s) 2023 2022 2021 2020 2019 27,337 4,738 11,072 1.51 – *1,333 – (12,420) (10,406) 1.33 – *555 12,339 (8,877) (7,415) 0.84 – 559 – (24,244) (22,782) 0.40 – 328 – 8,375 15,958 0.26 – 901 * see page 39 for table outlining the short term employee benefits. Short-Term Incentives Linking current financial year earnings of executives to their performance and the performance of the Group is the key objective of our Short-Term Incentive (“STI”) Plan. The Remuneration Committee set key performance measures and indicators for the individual executives on an annual basis that reinforce the Group’s business plan and targets for the year. The Board has discretion to issue cash bonuses to employees for individual performance outside the STI Plan. The structure of the STI Plan remains unchanged since 30 June 2016 and its key features are outlined in the table below: What is the STI Plan and who participates? The STI Plan is a potential annual reward for eligible Executive Key Management Personnel for achievement of predetermined individual Key Performance Indicators (“KPIs”) aligned to the achievement of business objectives for the assessment period (financial year commencing 1 July). How much can the executives earn under the STI Plan? Is there Board discretion in the payment of an STI benefit? What are the performance conditions? How are performance targets set and assessed? Threshold – represents the minimum acceptable level of performance that needs to be achieved before any Individual Award would be payable in relation to that Performance Measure. Managing Director/CEO – up to 15% of TFR. COO & CFO – up to 12.5% of TFR. Other KMP – up to 10% of TFR. Target – represents a challenging but achievable level of performance relative to past and otherwise expected achievements. It will normally be the budget level for financial and other quantitative perfor- mance objectives. Managing Director/CEO – up to 30% of TFR. COO & CFO – up to 25% of TFR. Other KMP – up to 20% of TFR. Stretch (Maximum) – represents a clearly outstanding level of performance which is evident to all as a very high level of achievement. Managing Director/CEO – up to 60% of TFR. COO & CFO – up to 50% of TFR. Other KMP – up to 40% of TFR. (TFR – Total Fixed Remuneration) Yes, the plan provides for Board discretion in the approval of STI outcomes. For KMP between 70–80% of potential STI weighting (dependent upon role) is assessed against specific predetermined KPIs by role with 20–30% being based on company performance indicators. Individual performance targets are set by the identification of key achievements required by role in order to meet business objectives determined for the upcoming assessment period in advance. The criteria for KMP are recommended by the Managing Director/CEO for sign off by the Remuneration Committee and in the case of the Managing Director/CEO, are recommended by the Chairman by sign off by the Remuneration Committee. The relative achievement at the end of the financial period is determined by the above authorities with final sign off by the Remuneration Committee after confirmation of financial results and individual/company performance against established criteria. The Remuneration Committee is responsible for assessing whether the KPIs are met. To assist in this assessment, the Committee receives detailed reports on performance from management which are verified by independent remuneration consultants if required. The Committee has the discretion to adjust STIs in light of unexpected or unintended circumstances. Directors’ Reportwww.kingsgate.com.au37 How is the STI delivered? STIs are paid in cash after the conclusion of the assessment period and confirmation of financial results/individual performance and subject to tax in accordance with prevailing Australian taxation laws. The STIs are then in effect paid and expensed in the financial year subsequent to the measurement year. What happens in the event of cessation of employment? Executives are required to be employed for the full 12 months of the assessment period before they are eligible to be considered to receive benefits from the STI Plan. t r o p e R ' s r o t c e r i D Long-Term Incentives The objectives of the LTI Plan are to retain key executives and to align an at-risk component of certain executives’ remuneration with shareholder returns. The previously operating Kingsgate Long-Term Incentive (“LTI”) plan, also referred to as the Executive Rights Plan, has been terminated. All outstanding Performance Rights and Deferred Rights vested on 1 July 2016 and the Performance Rights subsequently lapsed. The Executive Rights Plan was replaced by the Kingsgate Employee Share Option Plan (“ESOP”). The rules and terms and conditions of the ESOP have been independently reviewed. Under the terms of the Kingsgate Employee Share Option Plan (ESOP) long-term incentives can be provided to certain employees through the issue of options to acquire Kingsgate shares. Options are issued to employees to provide incentives for employees to deliver long-term shareholder returns. No executive was the recipient of options during the 2023 financial year. Key features of the ESOP LTI Plan are outlined in the following table: What is the LTI Plan and who participates? Kingsgate executives and other eligible employees can be granted options to acquire Kingsgate Consolidated Limited fully paid shares. In granting the options the Board takes into account such matters as the position of the eligible person, the role they play in the Company, their current level of fixed remuneration, the nature of the terms of employment and the contribution they make to the Group. What are the performance and vesting conditions? Is there a cost to participate? What happens in the event of bonus shares, rights issues or other capital reconstructions? The period over which the options vest is at the discretion of the Board though in general it is 1–3 years. The executive and eligible employee must still be employed by the Company at vesting date. The options may at the discretion of the Board be issued for nil consideration and are granted in accordance with performance guidelines established by the Remuneration Committee and approved by the Board. If between the grant date and the date of conversion of options into shares there are bonus shares, rights issues or other capital reconstructions that affect the value of Kingsgate Consolidated shares, the Board may, subject to the ASX Listing Rules make adjustments to the number of rights and/or the vesting entitlements to ensure that holders of rights are neither advantaged or disadvantaged by those changes. Directors and Key Management Personnel Except where noted, the named persons held their current positions for the whole of the year and up to the date of this report. Ross Smyth-Kirk Executive Chairman Jamie Gibson Managing Director and Chief Executive Officer – appointed 4 July 2023, previously Managing Director and acting Chief Executive Officer appointed 3 February 2023 Nucharee Sailasuta Non-Executive Director – appointed 3 February 2023 Peter Warren Non-Executive Director Peter Alexander Non-Executive Director – resigned 1 February 2023 Changes since the end of the reporting period There were no changes to Directors and Key Management Personnel since the end of the reporting period. continuedu Directors’ Report 38 Contract terms of the Executive Directors and Key Management Personnel Remuneration and other key terms of employment for the Senior Executives are summarised in the following table. Name Ross Smyth-Kirk3 Jamie Gibson4 Term of agreement Fixed annual remuneration including superannuation Notice period by Executive Notice period by the Company2 FY 2023 FY 2022 Open Note 4 $319,2921 $317,5681 Note 4 N/A 90 days 90 days4 90 days 90 days4 1 2 3 4 Amount shown are annual salaries as at year end. This amount does not include the director fees received from subsidiary. Notice period by the Company in respect of benefits payable in the event of an early termination only. Ross Smyth-Kirk is on full time employment effective 1 July 2022. Jamie Gibson became an executive director on 3 February 2023 and was remunerated pursuant to the terms and conditions of a Consultancy Agreement entered into between Mr Gibson and the Company. Pursuant to the Agreement, Mr Gibson is entitled to a payment of up to $1,500 per day (inclusive of all entitlements) or as otherwise approved by Kingsgate, in respect of work performed for the Company. The Agreement may be terminated by either party by giving of 90 days notice, or earlier in the event of a default not remedied within 14 days. Fixed annual remuneration, inclusive of the required superannuation contribution amount is reviewed annually by the Board following the end of the financial year. Non-Executive Directors Fees Non-Executive Directors are paid fixed fees for their services to the Company plus statutory superannuation contributions the Company is required by law to make on their behalf. Those fees are inclusive of any salary-sacrificed contribution to superannuation that a Non-Executive Director wishes to make. The level of Non-Executive Directors fees is set so as to attract the best candidates for the Board while maintaining a level commensurate with boards of similar size and type. The Board may also seek the advice of independent remuneration consultants, including survey data, to ensure Non-Executive Directors’ fees and payments are consistent with the current market. Non-Executive Directors’ base fees, inclusive of committee membership but not including statutory superannuation, are outlined as follows. Non-Executive Directors remuneration excluding superannuation Financial year ended 30 June 20231 Financial year ended 30 June 20221 $ $ 270,000 270,000 180,000 180,000 1 On an annualised basis for all Non-Executive Directors. This amount does not include director fees received from subsidiary. The aggregate remuneration of Non-Executive Directors is set by shareholders in general meeting in accordance with the Constitution of the Company, with individual Non-Executive Directors remuneration determined by the Board within the aggregate total. The aggregate amount of Non-Executive Directors’ fees approved by shareholders on 13 November 2008 is $1,000,000. Non-Executive Directors do not receive any additional fees for serving on committees of the Company. There are no retirement allowances for Non-Executive Directors. Directors’ Reportwww.kingsgate.com.au39 Additional Statutory Disclosures Details of remuneration Details of the nature and amount of each major element of the remuneration of the Directors and the Group Key Management Personnel are set out in the following tables: Year ended 30 June 2023 Name Cash salary and fees $ Non-Executive Directors Nucharee Sailasuta3 Payable by Company Paid by subsidiary Peter Warren Peter Alexander4 36,964 16,424 90,000 52,500 Sub-total Non-Executive Directors Compensation 195,888 Short-term benefits Cash bonus8 Non-monetary benefit1 Other benefits2 $ – – – – – $ $ – – – – – – – – – – Executive Directors Ross Smyth-Kirk5 Paid by Company Paid by subsidiary Jamie Gibson7 Paid by Company Paid by subsidiary Sub-total Executive Directors Compensation 294,000 81,009 207,143 16,424 250,000 – 250,000 – 13,702 – 24,6286 – – – – – 598,576 500,000 13,702 24,628 TOTAL 794,464 500,000 13,702 24,628 Long-term benefits Other benefits2 $ Post- employment benefits Super- annuation $ Total $ 36,964 16,424 99,450 58,013 – – 9,450 5,513 14,963 210,851 25,292 – – – 608,169 81,009 457,143 16,424 25,292 1,162,745 40,255 1,373,596 – – – – – 547 – – – 547 547 t r o p e R ' s r o t c e r i D 1 2 3 4 5 6 7 8 Non-Monetary benefit relates to car parking. Represents annual leave (short term) and long service leave (long term) entitlements, measured on an accrual basis, and reflects the leave expenses over the 12 month period. Appointed 3 February 2023. See Note 23d related party transactions and Note 16 for borrowings. Resigned 1 February 2023. Full time employment effective 1 July 2022. Benefits paid on 6 September 2023. Managing Director and Chief Executive Officer appointed 4 July 2023, previously Managing Director and Acting Chief Executive Officer appointed 3 February 2023. Cash bonus paid at the discretion of the Board. continuedu Directors’ Report 40 Year ended 30 June 2022 Name Non-Executive Directors Peter Alexander Peter Warren Sub-total Non-Executive Directors Compensation Executive Chairman Ross Smyth-Kirk Paid by Company Paid by Subsidiary Sub-total Executive Chairman Compensation TOTAL Cash salary and fees $ 90,000 90,000 180,000 294,000 79,306 373,306 553,306 Short-term benefits Post- employment benefits Cash bonus Non-monetary benefits1 Super- annuation $ $ Total $ $ – – – – – – – – – – 1,509 – 1,509 1,509 9,000 9,000 99,000 99,000 18,000 198,000 23,568 – 319,077 79,306 23,568 398,383 41,568 596,383 1 Non-monetary benefits relate primarily to car parking. The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Name Executive Director Ross Smyth-Kirk Jamie Gibson1 Fixed remuneration STI/cash bonus At risk – LTI 2023 2023 2023 64% N/A 36% N/A – N/A 1 Jamie Gibson became an Executive Director on 3 February 2023 and was remunerated pursuant to the terms and conditions of a Consultancy Agreement entered into between Mr Gibson and the Company. Pursuant to the Agreement, Mr Gibson is entitled to a payment of up to $1,500 per day (inclusive of all entitlements) or as otherwise approved by Kingsgate, in respect of work performed for the Company. Share Holdings 2023 Executive Chairman Ross Smyth-Kirk Executive Director Jamie Gibson1 Non-Executive Director Nucharee Sailasuta Peter Warren Peter Alexander2 Balance at start of year Participation of Share Purchase Plan during the year Other changes during the year Balance at year end 5,076,725 1,333 – 5,078,058 – – 25,0001 25,000 – 200,000 46,487 – 20,000 – – – (46,487)2 – 220,000 – 1 2 Jamie Gibson appointed 3 February 2023 and he bought 25,000 shares on-market on 28 April 2023. Peter Alexander resigned 1 February 2023 and at the time of his resignation he held 46,487 shares. Directors’ Reportwww.kingsgate.com.au41 t r o p e R ' s r o t c e r i D Loans to Directors There were no loans made to Directors or other Key Management Personnel at any time during the year. END OF THE REMUNERATION REPORT Insurance of officers During the financial year, the Group paid premiums to insure Directors and Officers of the Group. The contracts include a prohibition on disclosure of the premium paid and nature of the liabilities covered under the policy. Directors’ interest in contracts a. Advances from preference shareholder (see Note 16b and Note 23d) On 25 November 2022, Akara Resources Public Company Limited (Akara) received an unsecured THB200,000,000 advance from the preference shareholder Ms Nucharee Sailasuta. Terms and conditions of the advance were as follows: Currency Interest rate Financial year of maturity Face value $’000 Carrying amount $’000 Advance from preference shareholder THB 12% 20241 8,504 8,504 1 The advance from preference shareholder is repayable in 12 months from drawdown. On 22 February 2023, Akara received an additional cash advance of THB100,000,000 from the preference shareholder Ms Nucharee Sailasuta. This advance is repayable in 12 months from drawdown. Terms and conditions of the advance were as follows: Advance from preference shareholder THB 12% 20242 4,252 4,252 Currency Interest rate Financial year of maturity Face value $’000 Carrying amount $’000 2 The advance from preference shareholder is repayable in 12 months from drawdown. A total of $588,000 interest was expensed and $138,000 accrued at year end (see Note 16b for details). b. Preference shares in controlled entity (see Note 16a and Note 23d) Preference Shareholder interest in the amount of $544,000 were expensed during the year and an amount of $676,000 accrued at year end (see Note 16a for details). c. Services provided to Chatree Gold Mine (see Note 23d) LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Ms Nucharee Sailasuta is the Managing Director, provided primarily ore rehandle services to Chatree Gold Mine during the year ended 30 June 2023. A total of $2,013,000 was expensed during the year. At year end, $827,000 is included in current payables. continuedu Directors’ Report 42 Non-audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year are detailed in Note 29: Auditors’ Remuneration. The Directors are satisfied that the provision of non-audit services during the period by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services disclosed in Note 29: Auditors’ Remuneration to the financial statements do not compromise the external auditors’ independence, based on the Auditors’ representations and advice received from the Audit Committee, for the following reasons: 〉 all non-audit services have been reviewed to ensure they do not impact the integrity and objectivity of the auditor; and 〉 none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. A copy of the Auditor’s Independence Declaration as required under section 307c of the Corporations Act 2001 is set out in page 43. Rounding of amounts The Company is of a kind referred to in ASIC Corporations (Rounding in Financial Directors’ Reports) Instrument 2016/191 and in accordance with that instrument, amounts in the Directors’ Report have been rounded to the nearest thousand dollars except where otherwise indicated. Auditors PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of Directors. Ross Smyth-Kirk OAM Director Sydney 29 September 2023 www.kingsgate.com.au Directors’ ReportAuditor’s Independence Declaration 43 Auditor’s Independence Declaration e c n e d n e p e d n I s ’ r o t i d u A n o i t a r a c e D l Auditor’s Independence Declaration As lead auditor for the audit of Kingsgate Consolidated Limited for the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Kingsgate Consolidated Limited and the entities it controlled during the period. Craig Thomason Partner PricewaterhouseCoopers Sydney 29 September 2023 44 Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2023 Sales revenue Cost of sales Gross profit Exploration expenses Care and maintenance expenses Plant refurbishment expenses Corporate and administration expenses Other income and expenses Foreign exchange (losses)/gain Reversal of previously recorded inventory write-down to net realisable value Rehabilitation provision revision expenses Profit/(loss) before finance costs and income tax Finance income Finance costs Net finance costs Profit/(loss) before income tax Income tax expense Profit/(loss) after income tax Note 5a 5b 5c 5d 5e 17 5f 6 Other comprehensive income Items that may be reclassified to profit and loss Exchange differences on translation of foreign operations (net of tax) 19a Total other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year Profit/(loss) attributable to: Owners of Kingsgate Consolidated Limited Total comprehensive income/(loss) attributable to: Owners of Kingsgate Consolidated Limited Earnings per share Basic earnings/(loss) per share Diluted earnings/(loss) per share 2023 $’000 27,337 (23,500) 3,837 (7,408) (5,027) (14,788) (11,386) 212 (2,811) 59,822 (11,444) 11,007 57 (6,326) (6,269) 4,738 – 4,738 1,382 1,382 6,120 2022 $’000 – – – (4,274) (2,924) – (10,588) 1,758 5,521 – – (10,507) 5 (1,918) (1,913) (12,420) – (12,420) (5,010) (5,010) (17,430) 4,738 (12,420) 6,120 (17,430) 30 30 Cents Cents 2.06 2.04 (5.61) (5.61) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. www.kingsgate.com.au www.kingsgate.com.auConsolidated Statement of Financial Position As at 30 June 2023 ASSETS Current assets Cash and cash equivalents Restricted cash Receivables Inventories Other assets Total current assets Non-current assets Inventory Property, plant and equipment Right-of-use assets Exploration, evaluation and development Intangibles Other assets Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Payables Lease liability Borrowings Provisions Total current liabilities Non-current liabilities Payables Borrowings Provisions Total non-current liabilities TOTAL LIABILITIES NET ASSETS / (LIABILITIES) EQUITY Contributed equity Reserves Accumulated losses TOTAL EQUITY/(NET DEFICIT) 45 Financial Statements Note 2023 $’000 2022 $’000 s t n e m e t a t S l i a c n a n F i 7 7 8 9 10 9 11 12 13 14 10 15 12 16 17 15 16 17 8,921 649 9,331 34,800 4,636 58,337 29,681 120 – 26,436 711 11,439 68,387 126,724 16,889 – 12,756 2,436 32,081 7,441 11,286 25,867 44,594 76,675 50,049 7,424 – 246 – 298 7,968 – 98 21 25,471 – 10,202 35,792 43,760 8,866 20 8,960 305 18,151 7,402 10,915 15,186 33,503 51,654 (7,894) 18 19a 19b 727,307 60,431 (737,689) 675,484 59,049 (742,427) 50,049 (7,894) The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 46 Financial Statements Consolidated Statement of Changes in Equity For the year ended 30 June 2023 Contributed equity $’000 Reserves $’000 Accumulated losses $’000 Total equity $’000 Balance at 1 July 2021 Loss after income tax Total other comprehensive income for the year 675,919 – – 62,390 – (5,010) (730,007) (12,420) – Total comprehensive loss for the year – (5,010) (12,420) Transaction with owners in their capacity as owners: Payments for share buy-backs Payments for share buy-backs expenses Movement in share-based payment reserve Total transaction with owners Balance at 30 June 2022 (433) (2) – (435) – – 1,669 1,669 – – – – 675,484 59,049 (742,427) (7,894) Balance at 1 July 2022 Profit after income tax Total other comprehensive income for the year 675,484 – – 59,049 – 1,382 (742,427) 4,738 – Total comprehensive income for the year – 1,382 4,738 Transaction with owners in their capacity as owners: Issue of shares Share issue costs Total transaction with owners Balance at 30 June 2023 54,647 (2,824) 51,823 – – – – – – 727,307 60,431 (737,689) 50,049 8,302 (12,420) (5,010) (17,430) (433) (2) 1,669 1,234 (7,894) 4,738 1,382 6,120 54,647 (2,824) 51,823 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. www.kingsgate.com.au www.kingsgate.com.au s t n e m e t a t S l i a c n a n F i Consolidated Statement of Cash Flows For the year ended 30 June 2023 Cash flows from operating activities Receipts from customers Payments to suppliers and employees (inclusive of GST/VAT) Interest received Finance costs paid 47 Financial Statements Note 2023 $’000 2022 $’000 20,272 (60,534) 57 (5,059) 114 (13,724) 5 (171) Net cash outflow from operating activities 25 (45,264) (13,776) Cash flows from investing activities Payment for property, and equipment Payment for intangibles Payments as a reduction of rehabilitation provision Payment of deposits Increase in restricted cash Non-refundable proceeds from the sale of Nueva Esperanza Project Net cash (outflow)/inflow from investing activities Cash flows from financing activities Proceeds from issue of shares Payments for share issue transaction costs Proceeds from Secured Bridge Facility, net of transaction costs Proceeds from advances from preference shareholder, net of transaction costs Repayment of Secured Bridge Facility Payment of lease liability Payments for share buy-backs Payments for share buy-back expenses Net cash inflow from financing activities Net increase/(decrease) in cash held Cash at the beginning of the year Effects of exchange rate on cash and cash equivalents Cash at the end of the year The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. (22) (733) (197) (4,282) (649) – (5,883) 54,647 (2,815) 10,808 12,658 (22,538) (20) – – 52,740 1,593 7,424 (96) 8,921 (21) – – (2) – 1,644 1,621 – – 10,110 – – (83) (433) (2) 9,592 (2,563) 9,984 3 7,424 48 Notes to the Financial Statements for the year ended 30 June 2023 The Financial Report of Kingsgate Consolidated Limited (Kingsgate or the “Company”) for the year ended 30 June 2023 was authorised for issue in accordance with a resolution of Directors on 29 September 2023. Kingsgate is a company limited by shares incor- porated in Australia whose shares are publicly traded on the Australian Securities Exchange using the ASX code KCN. The consolidated financial statements of the Company as at and for the year ended 30 June 2023 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “group entities”). A description of the nature of the Group’s operations and its principal activities is included in the Directors’ Report. 1. Basis of preparation These general purpose financial statements have been prepared in accordance with the Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The Company is a for-profit entity for the purpose of preparing the financial statements. a. Going concern and material uncertainty The financial statements have been prepared on a going concern basis, which indicates continuity of business activities and the realisation of assets and settlement of liabilities in the normal course of business. For the year ended 30 June 2023, the Group recorded a net profit before tax of $4,738,000 (2022: loss of $12,420,000), which included a non-cash reversal of a previous inventory write-down of $59,822,000, experienced net cash outflows from operating and investing activities of $51,147,000 (2022: $12,155,000) and as at that date held cash and cash equivalents of $8,921,000 (2022: $7,424,000). The Group is continuing to develop the Chatree Gold Mine including the overhaul of Chatree Plant #1, while processing available inventory stockpiles through Plant #2. The cash flow generated from these operations is currently not sufficient to fund the ramp up of mining operations and overhaul of Chatree Plant #1. To ensure the continued viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due and to ensure that adequate funding is available to complete the Chatree Plant #1 overhaul and ramp up mining operations to generate sufficient operating cash flows, the Group is dependent on being successful in: 1. negotiating and implementing additional financing facilities in the order of $25 to $30 million; and/or 2. deferring the repayment of the Akara preference shareholder Nucharee Sailasuta advances of 300 million Thai baht ($12,756,000) (see Note 16b) and the liability relating to Preference Shares (see Note 16a) for a period of more than twelve months from the end of September 2023; and/or 3. deferring, if necessary, the timing for completion of Chatree Plant #1 overhaul schedule and managing the balances owed to creditors; and/or 4. completing the sale of the Nueva Esperanza Project; and/or 5. an equity raising. As a result of these matters, there is a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Directors believe that a combination of these matters will be implemented and, accordingly, have prepared the financial report on a going concern basis. No adjustments have therefore been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. b. Compliance with IFRS The financial statements comply with International Financial Reporting Standards (“IFRS”) adopted by the International Accounting Standards Board (“IASB”). c. Historical cost convention The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial instruments (including derivative instruments) at fair value through profit or loss. Comparative information is reclassified where appropriate to enhance comparability or in conformity with revised standards and interpretations. d. Functional and presentation currency The financial statements of the Group entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated statements are presented in Australian dollars, which is the Company’s functional currency and presentation currency. e. Rounding of amounts The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 relating to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. f. Critical accounting estimates The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, Notes to the Financial Statementswww.kingsgate.com.au49 or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3. g. New and amended standards adopted by the group The Group has applied all the new standards and amendments that have been published and which are applicable for the first time for its annual reporting period commencing 1 July 2022. These standards and amendments did not have a material impact on the financial statements. h. New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2023 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the financial statements. 2. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented. a. Principles of consolidation (i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred does not include amounts related to the settlement of a pre-existing relationship. Such amounts are generally recognised in profit or loss. Costs related to the acquisition other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The non-controlling interest in the acquiree is based on the fair value of the acquiree’s net identifiable assets. The adjustments to non-controlling interests are based on the proportionate amount of the net assets of the subsidiary. The acquisition of an asset or group of assets that is not a business is accounted for by allocating the cost of the transaction to the net identifiable assets and liabilities acquired based on their fair values. (ii) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when the Group 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. b. Foreign currency translation (i) Transactions and balances Foreign currency transactions are translated into the respective functional currencies of the Group entities at exchange rates on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss; except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or, are attributable to part of the net investment in a foreign operation. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary assets are included in the fair value reserve in equity. Exchange gains and losses which arise on balances between Group entities are taken to the foreign currency translation reserve where the intra-group balances are in substance part of the Group’s net investment. Whereas a result of a change in circumstances, a previously designated intra-group balance is intended to be settled in the foreseeable future, the intra-group balance is no longer regarded as part of net investment. The exchange differences for such balance previously taken directly to the foreign currency translation reserves are recognised in the profit or loss. (ii) Foreign operations The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: 〉 〉 the assets and liabilities of the foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated at the year-end exchange rate; the income and expenses of foreign opera- tions are translated at average exchange rates (unless this is not a reasonable approxi- mation of the cumulative effect of the rate prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and 〉 foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve. c. Revenue Revenue is measured at the fair value of the consideration received or receivable. Sales revenue represents the net proceeds receivable from the buyer. Gold and silver sales Revenue from contracts with customers is recognised when control of the goods is transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods. The Group recognises revenue from gold doré sales at the point where the doré is delivered to the buyer at the buyer’s location. continuedu Notes to the Financial StatementsNotes to the Financial Statements50 d. Income tax Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is expected tax payable or receivable on the taxable income or loss for the year using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax is not recognised for: 〉 〉 temporary differences on the initial recog- nition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; temporary differences related to invest- ments in subsidiaries where the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and 〉 taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and, they relate to income taxes levied by the same tax authority on the same taxable entity. Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the liability to pay the related dividend is recognised. Tax consolidation The Company and its wholly owned Australian resident entities formed a tax-consolidation group with effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidation group is Kingsgate Consolidated Limited. Current tax expense or benefit, deferred tax assets and deferred tax liabilities arising from temporary differences of the members of the tax-consolidation group are recognised in the separate financial statements of the members of the tax-consolidation group using the “standalone taxpayer” approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax assets or liabilities and deferred tax assets arising from unused tax losses assumed by the head entity from the subsidiaries in the tax-consolidation group, are recognised as amounts receivable or payable to other entities in the tax-consolidation group in conjunction with any tax funding agreement amounts. The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidation group to the extent that it is probable that future taxable profits of the tax-consolidation group will be available against which the asset can be utilised. Tax funding and sharing agreements The members of the tax-consolidation group have entered into a funding agreement that sets out the funding obligations of members of the tax-consolidation group in respect of tax amounts. The tax funding arrangements require payments to or from the head entity and any deferred tax asset assumed by the head entity, resulting in the head entity recognising an intra-group receivable or payable in the separate financial statements of the members of the tax-consolidation group equal in amount to the tax liability or asset assumed. The intra-group receivables or payables are at call. The head entity recognises the assumed current tax amounts as current tax liabilities or assets adding to its own current tax amounts, since they are also due to or from the same taxation authority. The current tax liabilities or assets are equivalent to the tax balances generated by external transactions entered into by the tax-consolidated group. The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The members of the tax-consolidation group have also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the consolidated financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote. Uncertain tax position An uncertain tax treatment is any tax treatment applied by the Group where there is uncertainty over whether that treatment will be accepted by the tax authority. The Group is required to determine the uncertainty over income tax treatment by addressing the following: 〉 〉 〉 the Group determines whether uncertain tax treatments should be considered separately, or together as a group, depending on which approach better predicts the resolution of the uncertainty; the Group determines if it is probable that the tax authorities will accept the uncertain tax treatment; and if it is not probable that the uncertain tax treatment will be accepted, the Group reflects the effect of the uncer- tainty in its income tax accounting in the period in which that determination is made (for example, by recognising an additional tax liability or applying a higher tax rate); the Group measures the tax uncertainty based on the most likely amount or expected value, depending on whichever method better predicts the resolution of the uncertainty. Based on the assessment completed by the Group, there is no material tax uncertainty that requires a tax liability to be recognised or that requires a different tax rate to be applied. e. Leases Where the Group has entered into a lease contract for the right to control the use of an asset over the lease term, the present value of future lease commitments is recognised as a liability on the balance sheet at commencement date, with the corresponding asset recognised as a right-of-use asset. The lease liability represents the present value of the expected future lease payments, discounted at the consolidated entity’s average incremental borrowing rate. Notes to the Financial Statementswww.kingsgate.com.au51 The right of use assets are classified as leases of property and are carried at cost less accumulated depreciation and impairment loss. The assets are amortised on a straight line basis over the shorter of the asset’s useful life and the lease term. The amount of the impairment loss is recognised in the income statement within other expenses. When a trade and other receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. f. Impairment of assets Assets other than goodwill and indefinite life intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds it recoverable amount. The recoverable amount is the higher of an asset’s fair value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. g. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. h. Trade and other receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Receivables are due for settlement no more than 90 days from the date of recognition. Collectability of trade and other receivables is reviewed on an ongoing basis. The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. Inventories i. Raw materials and stores, work in progress and finished goods (including gold bullion), are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Stockpiles represent ore that has been extracted and is available for further processing. If there is significant uncertainty as to whether the stockpiled ore will be processed it is expensed as incurred. Where the future processing of this ore can be predicted with confidence, e.g. because it exceeds the mine’s cut-off grade, it is valued at the lower of cost and net realisable value. If the ore will not be processed within the 12 months after the reporting date, it is included within non-current assets. Work in progress inventory includes ore stockpiles and other partly processed material. Quantities are assessed primarily through surveys and assays, and truck counts. j. Non-derivative financial assets Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. k. Derivative financial instruments Derivative financial instruments are used by the Group to protect against the Group’s Australian dollar gold price risk exposures. The Group does not apply hedge accounting and accordingly all fair value movements on derivative financial instruments are recognised in the profit or loss. Derivative financial instruments are stated at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the income statement immediately. l. Property, plant and equipment Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the income statement during the reporting period in which they are incurred. Depreciation Depreciation and amortisation of mine buildings, plant, machinery and equipment is provided over the assessed life of the relevant mine or asset, whichever is the shorter. Depreciation and amortisation is determined on a units-of-production basis over the estimated recoverable reserves from the related area. In some circumstances, where conversion of resources into reserves is expected, some elements of resources may be included. For mine plant, machinery and equipment, which have an expected economic life shorter than the life of the mine, a straight line basis is adopted. The expected useful lives are as follows: 〉 mine buildings – the shorter of applicable mine life and 25 years; 〉 plant, machinery and equipment – the shorter of applicable mine life and 3-15 years depending on the nature of the asset. The estimated recoverable reserves and life of each mine and the remaining useful life of each class of asset are reassessed at least annually. Notes to the Financial StatementsNotes to the Financial Statementscontinuedu52 l. Property, plant and equipment continued Where there is a change in the reserves during the period, depreciation and amortisation rates are adjusted prospectively from the beginning of the reporting period. Major spares purchased specifically for a particular plant are capitalised and depreciated on the same basis as the plant to which they relate. Impairment An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2f). Derecognition An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the profit or loss in the period the item is derecognised. m. Deferred stripping costs As part of its mining operations, the Group incurs stripping (waste removal) costs both during the development phase and production phase of its operations. Stripping costs incurred during the production phase are generally considered to create two benefits, being either the production of inventory in the period or improved access to the ore to be mined in the future. Where the benefits are realised in the form of inventory produced in the period, the production stripping costs are accounted for as part of the cost of producing those inventories. Where production stripping costs are incurred and the benefit is improved access to the ore to be mined in the future, the costs are recognised as a non-current asset, referred to as a “production stripping asset”, if the following criteria are all met: 〉 〉 〉 future economic benefits (being improved access to the ore body) associated with the stripping activity are probable; the component of the ore body for which access has been improved can be accurately identified; and the costs associated with the stripping activity associated with that component can be reliably measured. The amount of stripping costs deferred is based on the ratio obtained by dividing the volume of waste mined by the volume of ore mined for each component of the mine. Stripping costs incurred in the period are deferred to the extent that the actual current period waste to ore ratio exceeds the life of component expected waste to ore (“life of component”) ratio. A component is defined as a specific volume of the ore body that is made more accessible by the stripping activity. An identified component of the ore body is typically a subset of the total ore body of the mine. It is considered that each mine may have several components, which are identified based on the mine plan. The mine plans and therefore the identification of specific components will vary between mines as a result of both the geological characteristics and location of the ore body. The financial considerations of the mining operations may also impact the identification and designation of a component. The identification of components is necessary for both the measurement of costs at the initial recognition of the production stripping asset, and the subsequent depreciation of the production stripping asset. The life of component ratio is a function of an individual mine’s design and therefore changes to that design will generally result in changes to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of component ratio even if they do not affect the mine’s design. Changes to the life of component ratio are accounted for prospectively from the date of change. The production stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of ore. If incidental operations are occurring at the same time as the production stripping activity, but are not necessary for the production stripping activity to continue as planned, these costs are not included in the cost of the stripping activity asset. The production stripping asset is amortised over the expected useful life of the identified component of the ore body that is made more accessible by the activity, on a units of production basis. Economically recoverable reserves are used to determine the expected useful life of the identified component of the ore body. The production stripping asset is then carried at cost less accumulated amortisation and any impairment losses. The production stripping asset is included in “Exploration, Evaluation and Development”. These costs form part of the total investment in the relevant cash generating unit to which they relate, which is reviewed for impairment in accordance with the Group’s impairment accounting policy (Note 2f). n. Exploration, evaluation and feasibility expenditure Exploration and evaluation expenditure Exploration and evaluation expenditure incurred by, or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises direct costs and depreciation and does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest. Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the area of interest are current and one of the following conditions is met: 〉 〉 the exploration and evaluation expenditures 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 which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant opera- tions in, or in relation to, the area of interest are continuing. Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of interest is abandoned. The carrying value of exploration and evaluation assets is assessed in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources and the Group’s impairment policy (Note 2f). Feasibility expenditure Feasibility expenditure represents costs related to the preparation and completion of a feasibility study to enable a development decision to be made in relation to an area of interest and capitalised as incurred. At the commencement of production, all past exploration, evaluation and feasibility expenditure in respect of an area of interest that has been capitalised is transferred to mine properties where it is amortised over the life of the area of interest to which it relates on a unit-of-production basis. Notes to the Financial Statementswww.kingsgate.com.au53 o. Mine properties Mine properties represents the accumulated exploration, evaluation, land and development expenditure incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource has commenced. When further development expenditure is incurred in respect of a mine property after commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established. Otherwise, such expenditure is classified as part of the cost of production. Amortisation of costs is provided on the units-of-production method with separate calculations being made for each component. The units-of-production basis results in an amortisation charge proportional to the depletion of the estimated recoverable reserves. In some circumstances, where conversion of resources into reserves is expected, some elements of resources may be included. Development and land expenditure still to be incurred in relation to the current recoverable reserves are included in the amortisation calculation. Where the life of the assets is shorter than the mine life, their costs are amortised based on the useful life of the assets. The estimated recoverable reserves and life of each mine and the remaining useful life of each class of asset are reassessed at least annually. Where there is a change in the reserves during a six month period, depreciation and amortisation rates are adjusted prospectively from the beginning of that reporting period. p. Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. q. Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised and amortised over the period of the facility to which it relates. Preference shares which are mandatorily redeemable on a specific date are classified as liabilities. The dividends on these preference shares are recognised in the profit or loss as finance costs. Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or finance costs. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. r. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to the relevant borrowings during the period. Where funds borrowed are directly attributable to a qualifying asset, the amount capitalised represents the borrowing costs specific to those borrowings. All other borrowing costs are recognised as expenses in the period in which they are incurred. s. Provisions Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as finance costs. t. Restoration and rehabilitation provision The estimated costs of decommissioning and removing an asset and restoring the site are included in the cost of the asset at the date the obligation first arises and to the extent that it is first recognised as a provision. This restoration asset is subsequently amortised on a units-of- production basis. The corresponding provision of an amount equivalent to the restoration asset created is reviewed at the end of each reporting period. The provision is measured at the best estimate of present obligation at the end of the reporting period based on current legal and other requirements and technology, discounted where material using national government bond rates at the reporting date with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. Where there is a change in the expected restoration, rehabilitation or decommissioning costs, an adjustment is recorded against the carrying value of the provision and any related restoration asset, and the effects are recognised in the income statement on a prospective basis over the remaining life of the operation. The unwinding of the effect of discounting on the rehabilitation provision is included within finance costs in the income statement. Costs incurred that relate to an existing condition caused by past operations, but do not have a future economic benefit are expensed as incurred. u. Employee benefits (i) Wages and salaries, annual leave and sick 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 provisions for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Notes to the Financial StatementsNotes to the Financial Statementscontinuedu54 u. Employee benefits continued (ii) Long service leave and severance pay The liability for long service leave and severance pay 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. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur. (iii) Cash bonuses Cash bonuses are expensed in the income statement at reporting date. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the Directors or employees and the obligation can be estimated reliably. (iv) Retirement benefit obligations Defined contribution plan Contributions to defined contribution superannuation plans are recognised as an expense in the income statement as they become payable. Defined benefit plan The Company’s Thai subsidiary, Akara Resources Public Company Limited, have a defined benefit plan which is the amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. Retirement benefit Under labour laws applicable in Thailand, employees completing 120 days of service are entitled to severance pay on termination or retrenchment without cause or upon retirement age of 60. The severance pay will be at the rate according to number of years of service as stipulated in the Labour Law which is currently at a maximum rate of 400 days of final salary. The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. (v) Share-based payment transactions The Group provides benefits to employees (including Directors) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (“equity settled transactions”). The fair value of these equity settled transactions is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled. The fair value at grant date is determined using a pricing model that takes into account the exercise price, the term, the share price at the grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate. Upon the exercise of the equity settled reward, the related balance of the share-based payments reserve is transferred to share capital. v. Dividends Dividends are recognised as a liability in the period in which they are declared. w. Earnings per share (i) Basic earnings per share Basic earnings per share is calculated by dividing: 〉 the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; and 〉 by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. (ii) Diluted earnings per share Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account: 〉 the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and 〉 by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. x. Contributed equity Issued ordinary share capital is classified as equity and is recognised at the fair value of the consideration received by the Group. Incremental costs directly attributable to the issue of shares and share options are recognised as a deduction, net of tax from the proceeds. y. Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of the cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. z. Operating and segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The operating segments are disclosed in Note 4. Notes to the Financial Statementswww.kingsgate.com.au55 price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which they change or become known. (iii) Impairment of non-current assets – exploration, evaluation and development assets Nueva Esperanza At 30 June 2019, the recoverable amount of the Nueva Esperanza Gold/Silver Project CGU was determined to be $27,509,000 resulting in an impairment loss of $33,436,000. Significant judgements and assumptions were required in making estimates of the recoverable amounts. The Group has assessed if impairment indicators existed as at 30 June 2023 and determined that it was not necessary to formally estimate the recoverable amount of the CGU as no indication of an impairment loss was identified as a result of that assessment, in accordance with the Group’s accounting policy. The Group also assessed whether changes in estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised, existed as at 30 June 2023 and whether such changes in estimates would require reversal of impairment. The Group determined that no such changes in estimates were identified. In reaching these conclusions, the Group considered both external and internal factors relevant to the CGU which included impairment criteria noted in AASB 6 Exploration for and Evaluation of Mineral Resources, Kingsgate’s market capitalisation, the sustained high gold and silver prices and recent expression of interest for the acquisition of the Nueva Esperanza Gold/Silver Project. aa. Parent entity financial Chatree Plant #1 and Chatree Plant #2. information The financial information for the parent entity Kingsgate Consolidated Limited, disclosed in Note 30 has been prepared on the same basis as the consolidated financial statements except as set out below: Investments in subsidiaries Investments in subsidiaries are accounted for at cost in the financial statements of Kingsgate. Share-based payments The issue by the Company of equity instruments to extinguish liabilities of a subsidiary undertaking in the Group is treated as a capital contribution to that subsidiary undertaking. 3. Critical accounting estimates, assumptions and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. Actual results may differ from these estimates under different assumptions and conditions. The estimates and assumptions that could materially affect the financial position and results are discussed below: (i) Reversal of previously recorded inventory write- down and impairment charges in relation to Chatree Gold Mine Refurbishment of Chatree Plant #2 was completed in early March 2023 and on 15 March 2023, the permission to reopen the mine was granted. Since that date the Group has used the refurbished Chatree Plant #2 to start processing the available inventory stockpiles. The first gold pour occurred on 23 March 2023 and $27,337,000 of gold and silver sales have been recorded for the financial year ended June 2023. The indicator triggering the impairment assessment and eventually causing the write down of the Chatree Gold Mine assets to practically nil in 2016 was the closure of the mine. An inventory write-down to its net realisable value and an impairment loss were recorded because the mine closed and operations were ceased, this included mining operations, and processing operations for The recommencement of operations through the processing of the inventory stockpiles using Chatree Plant #2 is considered to be an indicator for reversal of the inventory write-down and impairment as it relates to the inventory stockpiles and Chatree Plant #2. The mine and Chatree Plant #1 do not have a reversal indicator as the mining operations and Chatree Plant #1 operations have not yet resumed. The Group has prepared a model which represents the value of the future cash flows expected to be derived from processing the inventory stockpiles using Chatree Plant #2. It does not represent the entire assets of the Chatree Gold Mine. The value of the inventory stockpiles write-down recorded in June 2016 and December 2016 need to be reversed before any impairment of Chatree Plant #2 is reversed. Based on this model, a reversal of the inventory stockpiles write-down to the net realisable value amounting to $59,822,000 was recognised during the year. No reversal of impairment in respect of Chatree Plant #2 has been recorded. The net realisable value of the inventory has been determined based on the accounting policy for inventory described in Note 2i. The determination of net realisable value involves significant judgements and estimates in relation to the selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. (ii) Restoration and rehabilitation provision In respect of rehabilitation liabilities, during the financial year ending 30 June 2017, the Group revised its previous estimates and reduced its total rehabilitation liability to $14,779,000. This was based on management’s rehabilitation plan which is a revision from the initial plan submitted to the Thai Authorities in 2007 and which was estimated in the context of the early closure of the Chatree Gold Mine. Following the reopening of the mine on 15 March 2023, the Group revised its previous estimates and increased its total rehabilitation liability to $26,523,000 with a corresponding charge to profit and loss of $11,444,000. Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine site. Factors that will affect this liability include changes in technology, changes in regulations, Notes to the Financial StatementsNotes to the Financial Statementscontinuedu56 4. Segment information The Group’s operating segments are based on the internal management reports that are reviewed and used by the Board of Directors (chief operating decision maker). The operating segments represent the Group’s mine and project and include the following: 〉 Chatree Gold Mine, Thailand; and 〉 Nueva Esperanza Gold/Silver Project, Chile. Information regarding the results of each reportable segment is included as follows: 2023 External sales revenue Other income/(expense) Total segment income Segment EBITDA Depreciation and amortisation Segment result Finance income Finance costs Net finance costs Profit before tax Other segment information Segment assets Segment liabilities Net asset/(liabilities) 1 Includes foreign exchange loss of $2,811,000 for the Group. 2022 Other income/(expense) Total segment income Segment EBITDA Depreciation and amortisation Segment result Finance income Finance costs Net finance costs Loss before tax Other segment information Segment assets Segment liabilities Net assets/(liabilities) 2 Includes foreign exchange gain of $5,521,000 for the Group. Chatree $’000 27,337 216 27,553 27,198 (28) Nueva Esperanza $’000 Corporate $’000 – (4) (4) – – – (6,839) (31) (9,287)1 (6) Total $’000 27,337 212 27,549 11,072 (65) 27,170 (6,870) (9,293) 11,007 57 (6,326) (6,269) 4,738 85,572 (62,434) 23,138 34,972 (11,189) 23,783 6,180 (3,052) 3,128 126,724 (76,675) 50,049 Care and Maintenance Chatree $’000 Nueva Esperanza $’000 Corporate $’000 114 114 – – 1,644 1,644 Total $’000 1,758 1,758 (5,591) – (4,177) (97) (638)2 (4) (10,406) (101) (5,591) (4,274) (642) (10,507) 5 (1,918) (1,913) (12,420) 43,760 (51,654) (7,894) 2,650 (30,439) (27,789) 33,656 (10,848) 22,808 7,454 (10,367) (2,913) Notes to the Financial Statementswww.kingsgate.com.au57 5. Revenue and expenses 2023 $’000 2022 $’000 a. Sales revenue Gold sales Silver sales Total sales revenue b. Cost of sales Direct costs of mining and processing Royalties and other expenses incurred upon the sale of doré Depreciation (operation) Total cost of sales c. Corporate and administration expenses Administration Statutory and professional fees Depreciation (corporate) Total corporate and administration expenses d. Other income and expenses Net loss on sale of fixed assets Other revenue Total other income and expenses * Mainly relates to the payment from TDG of the non-refundable deposit of C$1,500,000 e. Reversal of previously recorded inventory write-down to net realisable value Chatree Gold Mine (see Note 3i and Note 9) Total reversal of previously recorded inventory write-down to net realisable value f. Finance costs Interest and finance charges Amortisation of deferred borrowing costs Total finance costs g. Depreciation and amortisation Property, plant and equipment Right-of-use assets Intangibles Total depreciation and amortisation expenses Included in: Depreciation – operation Depreciation – corporate 24,048 3,289 27,337 20,090 3,382 28 23,500 – – – – – – – 6,506 4,843 37 5,587 4,900 101 11,386 10,588 (4) 216 212 – *1,758 1,758 59,822 59,822 3,954 2,372 6,326 17 20 28 65 28 37 – – 1,606 312 1,918 18 83 – 101 – 101 Notes to the Financial StatementsNotes to the Financial Statementscontinuedu58 5. Revenue and expenses continued h. Employee benefits expenses Included in: Cost of sales Care and maintenance expenses Corporate and administration expenses Exploration expenses Total employee benefits expenses i. Other items Short-term and low value lease expenses Total other items 6. Income tax a. Income tax expense Current tax Deferred tax Total income tax expense Deferred tax expense included in income tax expense comprises: Decrease/(increase) in deferred tax assets (Decrease)/increase in deferred tax liabilities Deferred tax b. Numerical reconciliation of income tax expense to prima facie tax payable Profit/(loss) before income tax Tax at Australian rate of 30% Tax effect of amounts not deductible/assessable in calculating taxable income Non-deductible expenses Non-deductible interest expense to preference shareholders Non-deductible rehabilitation provision revision expenses Non-assessable unrealised foreign exchange gain Non-assessable reversal of previously recorded inventory write-down to net realisable value Realised foreign exchange gain on capitalisation of intercompany loan Tax losses not brought to account Income tax expense 2023 $’000 2022 $’000 2,904 1,525 1,605 321 6,355 250 250 – 695 1,706 – 2,401 285 285 2023 $’000 2022 $’000 – – – (2,349) 2,349 – 4,738 1,421 121 403 3,433 680 (17,947) – 11,889 – – – – 620 (620) – (12,420) (3,726) 430 394 – (110) – 4,816 (1,804) – Kingsgate’s Thai controlled entity Akara Resources Public Company Limited (Akara) received on 8 June 2023 approval from the Royal Thai Board of Investment (BOI) for investment promotion application for the Chatree Gold Mine. This approval provides Akara an eight year exemption including: 〉 〉 〉 the 20 per cent corporate income tax rate, up to a cap of 3.25 billion Thai baht; the 10 per cent withholding tax on dividends remitted overseas; and import duties on machinery, raw materials used in research and development, and raw materials used in production for export. The start of the promotion period was 20 March 2023. Notes to the Financial Statementswww.kingsgate.com.au59 2023 $’000 2022 $’000 – – – – 302,895 68,045 291,013 39,209 370,940 330,222 111,282 94,831 c. Tax recognised in other comprehensive income Foreign exchange losses recognised directly in foreign currency translation reserves Total tax recognised in other comprehensive income d. Deferred tax liabilities offset Deferred tax assets amounting to $10,964,000 (2022: $8,615,000) have been offset against deferred tax liabilities. e. Unrecognised deferred tax assets and tax liabilities Tax losses – Australian entities Tax losses – other entities Subtotal Unrecognised deferred tax assets f. Tax consolidation group Kingsgate Consolidated Limited and it wholly owned Australian subsidiary have implemented the tax consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out in Note 2d. On adoption of the tax consolidation legislation, the entities in the tax-consolidation group entered into a tax sharing agreement which, in the opinion of the Directors, limits the joint and several liabilities of the wholly owned entities in the case of default by the head entity, Kingsgate Consolidated Limited. The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Kingsgate for any current tax payable assumed and are compensated for any current tax receivable and deferred tax assets relating to the unused tax losses or unused tax credits that are trans- ferred to Kingsgate under the tax legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements. The amount receivable/payable under the tax agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligation to pay tax instalments. g. Recognised deferred tax assets and liabilities Deferred tax assets/(liabilities) Employee benefits Unrealised exchange losses/(gains) Other items Financial assets Tax losses Total deferred tax assets/(liabilities) Set off tax Net deferred tax assets/(liabilities) Deferred tax assets/(liabilities) expected to be recovered within 12 months Deferred tax assets/(liabilities) expected to be recovered after more than 12 months Total deferred tax assets/(liabilities) Assets Liabilities Net 2023 $’000 2022 $’000 2023 $’000 2022 $’000 2023 $’000 2022 $’000 91 10,534 516 321 (498) 10,964 (10,964) – – 10,964 10,964 66 8,427 283 321 (482) 8,615 (8,615) – – 8,615 8,615 – (10,964) – – – (10,964) 10,964 – – – (8,615) – – – (8,615) 8,615 – – (10,964) (8,615) (10,964) (8,615) 91 (430) 516 321 (498) – – – – – – 66 (188) 283 321 (482) – – – – – – Notes to the Financial StatementsNotes to the Financial Statementscontinuedu 60 6. Income tax continued h. Movement in deferred tax balances 2023 Deferred tax assets/(liabilities): Employee benefits Unrealised exchange losses Other items Financial assets Tax losses Net deferred tax assets/(liabilities) 2022 Net deferred tax assets/(liabilities): Employee benefits Unrealised exchange losses Other items Financial assets Tax losses Net deferred tax assets/(liabilities) 7. Cash and cash equivalents and restricted cash Cash on hand Deposits at call Total cash and cash equivalents Restricted cash Total restricted cash Cash on hand These are petty cash balances held by subsidiaries. Deposits at call These deposits are at call and may be accessed daily. Balance at 1 July $’000 Recognised in profit or loss $’000 Balance at 30 June $’000 66 (188) 283 321 (482) – 50 (5,064) 150 321 4,543 – 25 (242) 233 – (16) – 16 4,876 133 – (5,025) – 2023 $’000 12 8,909 8,921 649 649 91 (430) 516 321 (498) – 66 (188) 283 321 (482) – 2022 $’000 7 7,417 7,424 - - Restricted cash Restricted cash includes cash held on deposit with financial institutions that is restricted to use on community projects in Thailand and rehabilitation projects for Chatree Gold Mine. Risk exposure The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 28. Notes to the Financial Statementswww.kingsgate.com.au8. Receivables Current Trade receivables Other debtors Total receivables – current 61 2023 $’000 2022 $’000 7,280 2,051 9,331 – 246 246 Trade receivables Trade receivables represent gold and silver sales at the end of the financial year, where payment was yet to be received. No trade receivables were past due or impaired as at 30 June 2023. Other debtors Other debtors relate to Goods and Services Tax/Value Added Tax receivables. Risk exposure The Group’s exposure to credit and currency risks are disclosed in Note 28. 9. Inventories Current Raw materials and stores Stockpiles and work in progress Gold bullion Total inventories – current Non-current Stockpiles Total inventories – non-current 2023 $’000 2022 $’000 4,057 27,398 3,345 34,800 29,681 29,681 – – – – – – As noted in Note 3i, there was a reversal of the inventory stockpiles write-down to the net realisable of $59,822,000 for the year ended 30 June 2023 (30 June 2022: nil). 10. Other assets Current Prepayments Other deposits Other assets Total other assets – current Non-current Prepayments Other deposits Total other assets – non-current 2023 $’000 2022 $’000 634 3,477 525 4,636 9,195 2,244 11,439 94 204 – 298 8,859 1,343 10,202 Prepayments Non-current prepayments include prepaid royalties and water rights in respect of the Nueva Esperanza Gold/Silver Project in Chile. Notes to the Financial StatementsNotes to the Financial Statementscontinuedu62 11. Property, plant and equipment At 1 July Cost Accumulated depreciation and amortisation Accumulated impairment Net book amount Year ended 30 June Opening net book amount Additions Disposals Depreciation and amortisation expense Foreign currency differences Closing net book amount At 30 June Cost Accumulated depreciation and amortisation Accumulated impairment Net book amount 12. Right-of-use assets and lease liabilities Amounts recognised in the consolidated statement of financial position: Right-of-use assets Property Lease liabilities Current Non-current Future lease payments in relation to lease liabilities as at year end are as follows: Within one year Later than one year but not later than five years 2023 $’000 2022 $’000 261,159 (76,801) (184,260) 264,194 (79,883) (184,260) 98 51 98 22 (4) (17) 21 120 51 21 – (18) 44 98 269,710 (85,330) (184,260) 261,159 (76,801) (184,260) 120 98 2023 $’000 2022 $’000 – – – – – 21 20 – 20 – Depreciation of right-of-use assets: The depreciation and amortisation disclosed in the consolidated statement of profit or loss includes the following amount for right-of-use assets: Property (Note 5g) 20 83 Notes to the Financial Statementswww.kingsgate.com.au63 13. Exploration, evaluation and development Exploration & evaluation $’000 Feasibility expenditure $’000 Mine properties $’000 Total $’000 At 30 June 2021 Cost Accumulated depreciation and amortisation Accumulated impairment Net book amount Year ended 30 June 2022 Opening net book amount Foreign currency exchange differences Closing net book amount At 30 June 2022 Cost Accumulated depreciation and amortisation Accumulated impairment Net book amount Year ended 30 June 2023 Opening net book amount Foreign currency exchange differences Closing net book amount At 30 June 2023 Cost Accumulated depreciation and amortisation Accumulated impairment 39,991 – (39,991) – – – – 39,991 – (39,991) – – – – 85,698 – (63,091) 22,607 22,607 2,017 24,624 87,715 – (63,091) 24,624 24,624 936 25,560 361,150 (70,422) (289,871) 486,839 (70,422) (392,953) 857 23,464 857 (10) 847 23,464 2,007 25,471 356,904 (66,186) (289,871) 484,610 (66,186) (392,953) 847 25,471 847 29 876 25,471 965 26,436 39,991 – (39,991) 88,651 – (63,091) 368,945 (78,198) (289,871) 497,587 (78,198) (392,953) Net book amount – 25,560 876 26,436 Notes to the Financial StatementsNotes to the Financial Statementscontinuedu64 14. Intangibles Year ended 30 June Opening net book amount Additions Amortisation expense Foreign currency differences Closing net book amount At 30 June Cost Accumulated depreciation and amortisation Net book amount 2023 $’000 2022 $’000 – 733 (28) 6 711 739 (28) 711 – – – – – – – – Intangibles primarily relate to mining software licenses purchased during the year ended 30 June 2023. The licenses have a useful life of 10 years. 15. Payables Current Trade payables Other payables and accruals Total payables – current Non-current Other payables Total payables – non-current 2023 $’000 2022 $’000 5,555 11,334 16,889 7,441 7,441 953 7,913 8,866 7,402 7,402 The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 28. The Group is required to pay Anglo American US$2,000,000 per year in advance pre-production royalties related to the Nueva Esperanza Gold/Silver Project. The Group also has an obligation to pay US$64,800 per month to Anglo American for water rights. During the year ended 30 June 2021, the Group finalised an agreement with Anglo American relating to the deferral of 65% of the fees for both the water rights and project royalty payments which were due from June 2020 until December 2021. These balances are now repayable from January 2022 to September 2025. These deferred balances are also repayable immediately under certain conditions including the sale of Nueva Esperanza Gold/Silver Project. Included in non-current other payable is also a US$3,000,000 contingent consideration for the Nueva Esperanza Gold/Silver Project which is due 24 months after the start of commercial operation. Notes to the Financial Statementswww.kingsgate.com.au16. Borrowings Current Advances from preference shareholderb Secured Bridge Facilityc Total borrowings – current Non-current Preference shares in controlled entitya Total borrowings – non-current Total borrowings1 65 2023 $’000 2022 $’000 12,756 – 12,756 11,286 11,286 24,042 – 8,960 8,960 10,915 10,915 19,875 1 The Group has nil unused facilities as of 30 June 2023. a. Preference shares in controlled entity Terms and conditions of outstanding preference shares in controlled entity were as follows: Currency Interest rate Financial year of maturity Face value $’000 Carrying amount $’000 Preference shares in controlled entity Thai baht 12% n/a 11,286 11,286 During the year ended 30 June 2022 the terms of the Preference Shareholder Agreement, which is between the Preference Shareholder, Akara and Kingsgate Capital Pty Ltd relating to Preference Shares issued by Akara were amended. The amendment has extended the date whereby the Preference Shareholder may exercise a put option for the Preference Shares to be repaid at any time commencing from 1 January 2024, by giving a six month written notice of such intention resulting in the preference shares being repayable at the earliest on 1 July 2024. b. Advances from preference shareholder On 25 November 2022, Akara Resources Public Company Limited (Akara) received an unsecured THB200,000,000 advance from the preference shareholder. Terms and conditions of the advance were as follows: Currency Interest rate Financial year of maturity Face value $’000 Carrying amount $’000 Advance from preference shareholder THB 12% 20242 8,504 8,504 2 The advance from preference shareholder is repayable in 12 months from drawdown. On 22 February 2023, Akara received an additional cash advance of THB100,000,000 from the preference shareholder. This advance is repayable in 12 months from drawdown. Terms and conditions of the advance were as follows: Advance from preference shareholder THB 12% 20243 4,252 4,252 3 The advance from preference shareholder is repayable in 12 months from drawdown. Currency Interest rate Financial year of maturity Face value $’000 Carrying amount $’000 Notes to the Financial StatementsNotes to the Financial Statementscontinuedu66 16. Borrowings continued c. Secured Bridge Facility On 10 May 2022 a secured Bridge Facility of US$15,000,000 was entered into with Taurus Mining Finance Fund No.2 L.P. (Taurus). The Bridge Facility is to finance general working capital for the Group, costs associated with the recommissioning of the Chatree Project including long lead items required for refurbishment of the Plant, costs associated with the recruitment of senior expatriate technical site personnel and Chatree regional exploration programs. The Bridge Facility was provided subject to security over interests and shares held in Kingsgate’s subsidiaries. The first tranche of US$7,500,000 was drawn on 11 May 2022 and the second tranche of US$7,500,000 was drawn on 22 July 2022. On 31 March 2023, US$15,000,000 loan was fully repaid out of the net proceeds received by the Group from a Placement (see Note 18). Terms of the Bridge Facility include annual interest rate of 9% paid quarterly in arrears, arranging fee of 2% and a commitment fee of 2% on the undrawn amount. Issue of options to Taurus Under the terms of the Bridge Facility, 2,500,000 options were issued to Taurus and have the following conditions attached to them: 〉 each option will entitle the holder to subscribe for one ordinary share of the Company; 〉 options are granted for no consideration; and 〉 options granted under the plan carry no dividend or voting rights. Set out below are summaries of options granted to Taurus: Grant date Expiry date Exercise price ($) Balance at the start of year (Number) Granted during year (Number) Exercised during year (Number) Balance end of year (Number) Vested and exercisable at end of year (Number) The options will expire at the end of its vesting periods. Fair value of options granted The fair value at grant date of the options is determined using the Black-Scholes option pricing model which incorporates the following inputs: Term Exercise price ($) Underlying share price at the date of grant Expected share price volatility over the term of the options Risk free rate for the term of the options (based on Government bond rate) The assessed fair value of the share options issued was $0.6678 resulting in a value of $1,669,000. For more information about the Group’s exposure to interest rate and liquidity risk, see Note 28. 13 May 2022 12 May 2027 $2.00 – 2,500,000 – 2,500,000 2,500,000 5 years $2.00 $1.385 65% 3% Notes to the Financial Statementswww.kingsgate.com.au67 2023 $’000 2022 $’000 305 – 305 407 14,779 15,186 14,955 – (176) 14,779 2022 $’000 675,919 – – – (433) (2) 17. Provisions Current Employee benefits Restoration and rehabilitation Total provisions – current Non-current Employee benefits Restoration and rehabilitation Total provisions – non-current Movements in the restoration and rehabilitation provision: Restoration and rehabilitation At the beginning of the financial year Revision of restoration and rehabilitation provision – see Note 3(ii) Foreign currency exchange differences At the end of the financial year Note 2u, 24 2t 2u, 24 2t 874 1,562 2,436 906 24,961 25,867 14,779 11,444 300 26,523 18. Contributed equity Opening balance Shares issued via placement Shares issued via Share Purchase Plan Share issue costs Share buy-back Share buy-back expenses 2023 Shares 2022 Shares 2023 $’000 221,320,453 30,698,067 5,733,172 – – – 221,853,852 – – – (533,399) – 675,484 46,047 8,600 (2,824) – – Closing balance 257,751,692 221,320,453 727,307 675,484 Placement and Share Purchase Plan (SPP) On 28 March 2023, the Company announced the successful completion of a Placement to institutional investors at an issue price of $1.50 per share, raising $46,047,000. The Company also announced a Share Purchase Plan to existing shareholders in April 2023. The SPP provided the opportunity to acquire up to $30,000 of fully paid ordinary shares in Kingsgate without incurring any brokerage fees. The SPP was issued at $1.50 per share, raising $8,600,000. The Placement and SPP raised $54,647,000, issuing 36,431,239 shares. The total cost of $2,824,000, was deducted from shareholder equity. Share buy-back No share buy-back occurred during the year ended 30 June 2023. During the year ended 30 June 2022, the Company purchased 533,399 shares on-market in order to give shareholders the option of maintaining or selling all or part of their shareholding. The buy-back was approved by shareholders at the 2021 annual general meeting. The shares were acquired at an average price of $0.82 per share, with prices ranging from $0.80 to $0.84. The total cost of $435,000, including $2,000 of transaction costs, was deducted from shareholder equity. Notes to the Financial StatementsNotes to the Financial Statementscontinuedu68 19. Reserves Foreign currency translation reserve Share-based payment reserve General reserve Total reserves Movements: Foreign currency translation reserve At the beginning of the financial year Exchange differences on translation of foreign controlled entities (net of tax) At the end of the financial year Share-based payment reserve At the beginning of the financial year Share-based payment expense At the end of the financial year General reserve At the beginning of the financial year Net change At the end of the financial year 2023 $’000 52,961 10,811 (3,341) 2022 $’000 51,579 10,811 (3,341) 60,431 59,049 51,579 1,382 52,961 10,811 – 10,811 (3,341) – (3,341) 56,589 (5,010) 51,579 9,142 1,669 10,811 (3,341) – (3,341) Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, as described in Note 2b. Share-based payment reserve The share-based payment reserve is used to recognise the fair value of deferred rights, performance rights and options issued but not exercised. The share- based payment reserve also records the value of the equity instrument issued to Taurus as part of the Bridge Facility (refer Note 16). General reserve The general reserve represents changes in equity as a result of changes in non-controlling interests and revaluation of employee benefit obligations recog- nised in other comprehensive income in prior periods. Notes to the Financial Statementswww.kingsgate.com.au20. Commitments for expenditure Short-term and low value leases Within one year Total short-term and low value leases 69 2023 $’000 2022 $’000 84 84 – – In addition to the table above, the Group is also to pay Anglo American US$2,000,000 per year in advance pre-production royalties related to the Nueva Esperanza Gold/Silver Project. Akara has a minimum contribution commitment for various community and rehabilitation funds for 65 million Thai Baht on a calendar year basis. The Group also has an obligation to pay US$64,800 per month to Anglo American for water rights. 21. Controlled entities Entity Parent Entity Kingsgate Consolidated Limited Subsidiaries Dominion Mining Limited Gawler Gold Mining Pty Ltd Kingsgate Treasury Pty Ltd Kingsgate Capital Pty Ltd Kingsgate Chile NL Laguna Exploration Pty Ltd Akara Resources Public Company Limited Issara Mining Limited Suan Sak Patana Ltd Phar Mai Exploration Ltd Richaphum Mining Ltd Phar Lap Ltd Phar Rong Ltd Asia Gold Ltd Laguna Resources Chile Ltda Minera Kingsgate Limitada 22. Dividends No final dividend was declared for the year ended 30 June 2022 (30 June 2021: nil). No interim dividend was declared for the year ended 30 June 2023 (30 June 2022: nil). Equity holding Country of Incorporation Class of shares 2023 % 2022 % Australia Ordinary 100 Australia Australia Australia Australia Australia Australia Thailand Thailand Thailand Thailand Thailand Thailand Thailand Mauritius Chile Chile Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Notes to the Financial StatementsNotes to the Financial Statementscontinuedu70 23. Related parties a. Controlling entity The ultimate parent entity of the Group is Kingsgate Consolidated Limited. b. Subsidiaries Interests in subsidiaries are set out in Note 21. c. Key Management Personnel compensation The aggregate compensation provided to Key Management Personnel is set out below: Short-term employee benefits Long-term employee benefits Post-employment benefits Total Key Management Personnel compensation 2023 $ 1,332,794 547 40,255 2022 $ 554,815 – 41,568 1,373,596 596,383 Detailed information on remuneration of Directors and Key Management Personnel is disclosed in the Remuneration Report. d. Related party transactions On 3 February 2023, Ms Nucharee Sailasuta was appointed to the Kingsgate Board as a Non-Executive Director. Ms Nucharee Sailasuta is also a director and preference shareholder of the Company’s Thai subsidiary, Akara Resources Public Company Limited. Details of the related party transactions during the year were as follows: 〉 LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Ms Nucharee Sailasuta is the Managing Director, provided primarily ore rehandle services to Chatree Gold Mine during the year ended 30 June 2023. A total of $2,013,000 was expensed during the year. At year end, $827,000 is included in current payables; 〉 Preference Shareholder interest in the amount of $544,000 were expensed during the year and an amount of $676,000 accrued at year end (see Note 16a for details); and 〉 Ms Nucharee Sailasuta advanced a total of 300,000,000 Thai baht as working capital support to Akara during the year. A total of $588,000 interest was expensed and $138,000 accrued at year end (see Note 16b for details). 24. Employee benefits Employee benefits and related on-costs liabilities Provision for employment benefits – current Provision for employee benefits – non-current Total employee provisions 2023 $’000 2022 $’000 874 906 1,780 305 407 712 Superannuation The Group makes contributions on behalf of employees to externally managed defined contribution superannuation funds. Contributions are based on percentages of employee wages and salaries and include any salary-sacrifice amounts. Contributions to defined contribution plans for 2023 were $215,000 (2022: $149,000). Notes to the Financial Statementswww.kingsgate.com.au71 25. Reconciliation of profit/(loss) after income tax to net cash flow from operating activities Profit/(loss) for the year Depreciation and amortisation Net profit on sale of fixed assets Amortisation of deferred borrowing costs Net exchange differences Rehabilitation provision expenses Non-refundable proceeds from the sale of Nueva Esperanza Project Change in operating assets and liabilities: (Increase)/decrease in receivables (Increase)/decrease in prepayments (Increase)/decrease in other assets (Increase)/decrease in inventories Increase/(decrease) in creditors Increase/(decrease) in provisions 2023 $’000 4,738 65 4 2,373 2,245 11,444 – (9,037) (536) (328) (63,984) 6,709 1,043 2022 $’000 (12,420) 101 – 312 (404) – (1,644) 790 270 – – (995) 214 Net cash outflow from operating activities (45,264) (13,776) Net (debt)/cash and cash equivalents reconciliation Cash and cash equivalents Borrowings – repayable within one year Borrowings – repayable after one year Net (debt)/cash and cash equivalents Cash and cash equivalents Gross debt – fixed interest rates Gross debt – nil interest rates Net (debt)/cash and cash equivalents m o r f g n w o r r o B i e u d s u r u a T h s a C y t i t n e d e l l o r t n o c r a e y 1 r e ft a e u d e c n e r e f e r P n i s e r a h s m o r f s e c n a v d A e c n e r e f e r p e u d r e d l o h e r a h s r a e y 1 n h t i i w r a e y 1 n h t i i w 8,921 (12,756) (11,286) (15,121) 8,921 (24,042) – (15,121) s e i t i l i b a i l e s a e L r a e y 1 r e ft a e u d 7,424 (8,980) (10,915) (12,471) 7,424 (19,875) (20) (12,471) l a t o T r a e y 1 n h t i i w e u d s e i t i l i b a i l e s a e L $’000 $’000 $’000 $’000 $’000 $’000 $’000 Net cash and cash equivalents/(debt) as at 30 June 2021 9,984 – (11,046) Cash flows Foreign exchange adjustments Other non-cash movements (2,563) 3 – (10,110) (207) 1,357 – 131 – Net cash and cash equivalents/(debt) as at 30 June 2022 7,424 (8,960) (10,915) – – – – – Cash flows Foreign exchange adjustments Other non-cash movements 1,593 (96) – 11,730 (847) (1,923) – (371) – (12,658) (98) – Net cash and cash equivalents/(debt) as at 30 June 2023 8,921 – (11,286) (12,756) (83) 83 – (20) (20) 20 – – – (20) (1,165) – – 20 – – – – – (12,590) (73) 1,357 (12,471) 685 (1,412) (1,923) (15,121) Notes to the Financial StatementsNotes to the Financial Statementscontinuedu 72 26. Events occurring after reporting date Mr Jamie Gibson was appointed as Managing Director and Chief Executive Officer of the Company 4 July 2023. Mr Paul Mason resigned as Company Secretary effective 31 July 2023. Ms Stephanie Wen was appointed as General Counsel and Company Secretary 1 August 2023. On 17 July 2023, Akara entered into a drilling agreement with LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Ms Nucharee Sailasuta is the Managing Director, for drill and blast and grade control services for Chatree Gold Mine. No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect: 〉 〉 〉 the Group’s operations in future financial periods; the results of those operations in future financial periods; or the Group’s state of affairs in future financial periods. 27. Contingent assets and liabilities In March 2019, Kingsgate settled a Political Risk Insurance claim against Zurich Insurance Australia Ltd, and other named insurers. The settlement consisted of: 〉 〉 a cash payment of US$55,000,000 received in April 2019; a contribution totalling US$3,500,000 and A$750,000 for future costs incurred towards the Thailand- Australia Free Trade Agreement (TAFTA) Arbitration. To the extent that any amount is recovered by Kingsgate (being Kingsgate Consolidated Limited and/or Kingsgate Capital Pty Ltd) in connection with the TAFTA Arbitration, the Award Proceeds (meaning “any monetary amount finally received under, or from enforcement of, an Arbitral Award”) or any amount received by Kingsgate following a negotiated settlement or compromise of the TAFTA Arbitration, the settlement allows for a sharing arrangement between Kingsgate and the Insurers. The Insurers are only entitled to the amount of their original financial contribution including interest. The Group had no other contingent assets or liabilities at 30 June 2023 that is required to be reported. At the time of preparing this financial report some companies included in the Group are parties to pending legal proceedings. The Directors have determined that the possibility of any outflow in settlement resulting from these proceedings is remote. 28. Financial risk management and instruments The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk, fair value risk and interest rate risk), credit risk and liquidity risk. At this point, the Directors believe that it is in the interest of shareholders to expose the Group to foreign currency risk, price risk and interest rate risk. Therefore, the Group does not employ any derivative hedging of foreign currency or interest rate risks. The Directors and management monitor these risks, in particular market forecasts of future movements in foreign currency and price movements and, if it is to be believed to be in the best interests of shareholders, will implement risk management strategies to minimise potential adverse effects on the financial performance of the Group. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. Risk management is carried out by the senior executive team. Notes to the Financial Statementswww.kingsgate.com.au73 2023 $’000 2022 $’000 8,921 649 9,331 5,721 24,622 7,424 – 246 1,547 9,217 (24,330) (24,042) – (16,268) (19,875) (20) (48,372) (36,163) Financial assets Cash and cash equivalents Restricted cash Receivables Other deposits Total financial assets Financial liabilities Payables Borrowings Lease liabilities Total financial liabilities Market risk Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the US dollar and Thai baht and, as discussed earlier, no financial instruments are employed to mitigate the exposed risks. This is the Group’s current policy and it is reviewed regularly including forecast movements in these currencies by management and the Board. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the relevant group entity. Currently foreign exchange risks arise primarily from: 〉 cash balances in US dollars; 〉 receivables denominated in US dollars for Australian entities; and 〉 payables denominated in Australian dollars for Thailand entities. The functional currency of the Thai subsidiaries is Thai baht. The functional currency of the Chilean subsidiaries is the US dollar. The Company’s functional currency is Australian dollar. The Group’s exposure to US dollar and Thai baht foreign currency risk arises mainly from balances receivable and payable between Group companies which are not considered to form part of the related investment balance in the entities. The unrealised foreign exchange gain/loss on these balances is therefore recorded in the statement of profit or loss of the Group. At the reporting date, expressed in Australian dollars these balances were as follows: USD 2023 $’000 THB 2023 $’000 Total 2023 $’000 USD 2022 $’000 THB 2022 $’000 Total 2022 $’000 Cash and cash equivalents Receivables Payables Borrowing Total exposure to foreign currency risk 110 1,960 (7,253) – (5,183) – 76,172 (76,172) – 110 78,132 (83,425) – 962 1,889 (6,887) (10,883) – 75,964 (75,964) – – (5,183) (14,919) – 962 77,853 (82,851) (10,883) (14,919) One cent weakened in Australian dollar against the US dollar One cent strengthened in Australian dollar against the US dollar One cent weakened in Australian dollar against the Thai baht One cent strengthened in Australian dollar against the Thai baht Impact on post tax profit and loss Impact on other comprehensive income 2023 $’000 20 (19) 622 (624) 2022 $’000 129 (126) 706 (707) 2023 $’000 20 (19) 821 (819) 2022 $’000 129 (126) 899 (896) Notes to the Financial StatementsNotes to the Financial Statementscontinuedu74 28. Financial risk management and instruments continued Interest rate risk The Group’s exposure to interest rate risk for classes of financial assets and financial liabilities, at 30 June 2023 and 30 June 2022 are set out as follows: Fixed interest rate maturing in Floating interest rate $’000 1 year or less $’000 1–2 years $’000 2–5 years $’000 Non-interest bearing $’000 Total $’000 2023 Financial assets Cash and cash equivalents Restricted cash Receivables Other deposits Total financial assets Financial liabilities Payables Borrowings Total financial liabilities 5,207 649 – 2,625 8,481 – – – – – – – – – – – – – (1,879) (12,756) (1,161) (11,286) (14,635) (12,447) Net financial assets/(liabilities) 8,481 (14,635) (12,447) 2022 Financial assets Cash and cash equivalents Receivables Other deposits Total financial assets Financial liabilities Payables Borrowings Lease liabilities Total financial liabilities 6,155 – 1,356 7,511 – – – – – – – – – – – – (1,810) (8,960) – (1,339) (10,915) – (10,770) (12,254) Net financial assets/(liabilities) 7,511 (10,770) (12,254) – – – – – (698) – (698) (698) – – – – (1,710) – – (1,710) (1,710) 3,714 – 9,331 3,096 16,141 8,921 649 9,331 5,721 24,622 (20,592) – (24,330) (24,042) (20,592) (48,372) (4,451) (23,750) 1,269 246 191 1,706 7,424 246 1,547 9,217 (11,409) _ (20) (16,268) (19,875) (20) (11,429) (36,163) (9,723) (26,946) Notes to the Financial Statementswww.kingsgate.com.au75 Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers including, outstanding receivables and committed transactions. The Group has no significant concentrations of credit risk. s t n e m e t a t S l i i a c n a n F e h t o t s e t o N The maximum exposure to credit risk is represented by the carrying value of the Group’s financial assets in the statement of financial position. The maximum exposure to credit risk at reporting date was: Cash and cash equivalents Restricted cash Receivables Other deposits Total exposure to credit risk at year end 2023 $’000 8,921 649 9,331 5,721 24,622 2022 $’000 7,424 – 246 1,547 9,217 Liquidity risk The Group’s liquidity requirements are based upon cash flow forecasts. Liquidity management, including debt/equity management, is carried out under policies approved by the Board and forecast material liquidity changes are discussed at Board meetings. The following table analyses the Company’s financial assets and liabilities into relevant maturity groupings based on the remaining period at the reporting date. The amounts disclosed are the contractual undiscounted cash flows. The borrowings of the Group are repayable on demand, however the contractual amounts for borrowings also include the interests that are expected to be repaid until the repayment of these debts based on the cash flow forecast prepared by the Group. 2023 Payables Borrowings Total financial liabilities 2022 Payables Borrowings Lease liabilities Total financial liabilities Carrying amount $’000 1 year or less $’000 1–2 years 2–5 years $’000 $’000 More than 5 years $’000 Total $’000 24,330 24,042 48,372 16,268 19,875 20 36,163 16,889 14,328 31,217 8,866 12,863 20 21,749 1,273 11,286 12,559 1,338 11,554 – 12,892 5,7361 – 5,736 6,2831 – – 6,283 452 – 452 – – – – 24,350 25,614 49,964 16,487 24,417 20 40,924 1 Primarily related to pre-production royalties and water rights payable in respect of the Nueva Esperanza Gold/Silver Project in Chile and the contingent consideration (refer Note 15). Notes to the Financial Statementscontinuedu 76 Notes to the Financial Statements 29. Auditors’ remuneration Audit and other assurance services PricewaterhouseCoopers Australian Firm Audit and review of the financial reports Related Practices of PricewaterhouseCoopers Australian Firm Audit and review of the financial statements Total remuneration for audit services Other services PricewaterhouseCoopers Australian Firm Service fee on sale of Nueva Esperanza Project to TDG Related Practices of PricewaterhouseCoopers Australian Firm BOI report Other services Total remuneration for non-audit related services Taxation services PricewaterhouseCoopers Australian Firm Tax compliance services Nueva Esperanza tax advice Related Practices of PricewaterhouseCoopers Australian Firm Tax compliance services Review tax ruling of doré sales Review refining contract Total remuneration for tax related services 30. Earnings per share Basic earnings/(loss) per share Diluted earnings/(loss) per share Net profit/(loss) used to calculate basic and diluted earnings per share Weighted average number of ordinary shares used as the denominator: basic Adjustment for dilutive effect 2023 $ 2022 $ 555,000 301,000 179,609 74,107 734,609 375,107 – 16,500 4,039 – 4,039 – 1,239 17,739 50,000 – 10,630 10,630 – 71,260 2023 Cents 2.06 2.04 27,000 82,440 16,467 – 12,392 138,299 2022 Cents (5.61) (5.61) $’000 $’000 4,738 (12,420) Number Number 229,916,383 2,500,000 221,338,363 – Weighted average number of ordinary shares used as the denominator: diluted 232,416,383 221,338,363 www.kingsgate.com.aus t n e m e t a t S l i i a c n a n F e h t o t s e t o N 77 Notes to the Financial Statements 31. Parent entity financial information As at, and throughout the financial year ending 30 June 2023, the parent entity of the Group was Kingsgate Consolidated Limited. Summary of financial information Results of parent entity Loss for the year Other comprehensive loss Total comprehensive losses Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising: Issued capital Reserve Accumulated losses Total equity 2023 $’000 2022 $’000 (49,188) – (20,345) – (49,188) (20,345) 6,081 29,888 87,966 87,966 7,384 31,663 92,376 92,376 727,307 10,432 (795,817) 675,484 10,432 (746,629) (58,078) (60,713) Contingent liabilities of the parent entity There are cross guarantees given by Kingsgate Consolidated Limited, Dominion Mining Limited and Gawler Gold Mining Pty Ltd as described in Note 32. No liability was recognised by the parent entity or the Group in relation to this guarantee, as the fair value of the guarantees is immaterial. As at 30 June 2023, the parent entity had no contractual commitments for the acquisition of property, plant or equipment. 32. Deed of Cross Guarantee Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the wholly owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and Directors’ Reports. It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee (“Deed”). The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of the winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up. The subsidiaries subject to the Deed are: 〉 Dominion Mining Limited; and 〉 Gawler Gold Mining Pty Ltd. The above companies represent a ‘closed group’ for the purpose of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by Kingsgate Consolidated Limited, they also represent the ‘extended closed group’. 78 32. Deed of Cross Guarantee continued A consolidated statement of profit or loss and other comprehensive income, a summary of movements in consolidated accumulated losses, and consolidated statement of financial position, comprising the Company and controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, is set out as follows: Statement of profit or loss and other comprehensive income Corporate and administration expenses Other income and expenses Foreign exchange gain/(losses) Impairment losses – Nueva Esperanza Project Intercompany loan (write-off)/forgiveness Loss before financial costs and income tax Finance income Finance costs Net finance costs Loss before income tax Income tax expense Loss after income tax Total comprehensive loss for the year Loss attributable to: Owners of Kingsgate Consolidated Limited Total comprehensive loss attributable to: Owners of Kingsgate Consolidated Limited Summary of movements in consolidated retained earnings Accumulated losses At the beginning of the financial year Loss for the year At end of the financial year 2023 $’000 (7,333) 10,867 6,410 (490) (54,689) 2022 $’000 (4,876) 6,144 13,665 (3,238) (31,556) (45,235) (19,861) 53 (4,120) (4,067) (49,302) – 2 (488) (486) (20,347) – (49,302) (20,347) (49,302) (20,347) (49,302) (20,347) (49,302) (20,347) (746,628) (49,302) (726,281) (20,347) (795,930) (746,628) Notes to the Financial Statementswww.kingsgate.com.au79 Statement of financial position 2023 $’000 2022 $’000 ASSETS Current assets Cash and cash equivalents Receivables Other assets Total current assets Non-current assets Property, plant and equipment Investment in subsidiaries Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Payables Provisions Borrowings Total current liabilities Non-current liabilities Provisions Total non-current liabilities TOTAL LIABILITIES NET LIABILITIES EQUITY Contributed equity Reserves Accumulated losses TOTAL EQUITY 5,403 141 541 6,085 24 23,781 23,805 29,890 87,778 302 – 88,080 1 1 7,230 72 87 7,389 8 24,271 24,279 31,668 83,200 220 8,960 92,380 – – 88,081 92,380 (58,191) (60,712) 727,307 10,432 (795,930) 675,484 10,432 (746,628) (58,191) (60,712) Notes to the Financial StatementsNotes to the Financial Statements80 Directors’ Declaration Directors’ Declaration In the Directors’ opinion: a) the financial statements and notes that are set out on pages 44 to 79 and the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and (ii) complying with Australian Accounting Standards, the Corporation Regulations 2001 and other mandatory professional reporting requirements. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in Note 32 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee described in Note 32. b) c) Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer and Acting Chief Financial Officer for the financial year ended 30 June 2023. This declaration is made in accordance with a resolution of the Directors. Ross Smyth-Kirk OAM Director Dated at Sydney on 29 September 2023 On behalf of the Board www.kingsgate.com.au Independent Auditor’s Report 81 Independent Auditor’s Report t r o p e R s ’ r o t i d u A t n e d n e p e d n I Independent auditor’s report To the members of Kingsgate Consolidated Limited Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Kingsgate Consolidated Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: 〉 〉 〉 〉 〉 〉 the consolidated statement of financial position as at 30 June 2023 the consolidated statement of changes in equity for the year then ended the consolidated statement of cash flows for the year then ended the consolidated statement of profit or loss and other comprehensive income for the year then ended the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information the directors’ declaration. continuedu 82 Independent Auditor’s Report 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence 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 & 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. Material uncertainty related to going concern We draw attention to Note 1(a), which indicates that the Group held cash and cash equivalents of $8,921,000 as at 30 June 2023, experienced net cash outflows from operating and investing activities of $51,147,000 for the year then ended, and is dependent on being successful in raising additional funds through one or more sources, as described in Note 1(a). These conditions, along with other matters set forth in Note 1(a), indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. www.kingsgate.com.au83 Independent Auditor’s Report t r o p e R s ’ r o t i d u A t n e d n e p e d n I Materiality Audit scope Key audit matters 〉 Amongst other relevant topics, we communicated the following key audit matters to the Audit and Risk Committee: 〉 Reversal of the inventory write-down at Chatree Gold Mine. 〉 Impairment indicator assessment of exploration and evaluation assets Nueva Esperanza Gold/Silver Project. These are further described in the Key audit matters section of our report, except for the matter which is described in the material uncertainty related to going concern section. 〉 〉 Our audit focused on where the Group made subjective judge- ments; for example, significant accounting estimates involving assumptions and inherently uncertain future events. 〉 〉 〉 The Australian engagement team directed the involvement of the Thai component audit team, which audited the financial information of Akara Resources Public Company Limited. The component auditor in Chile, operating under instructions, also performed specified audit proce- dures over the Group’s Chilean operations’ financial information. The Australian engagement team determined the required level of involvement in the work performed by the Thai and Chilean component audit teams, in order to be satisfied that sufficient appropriate audit evidence had been obtained for our opinion on the Group financial statements as a whole. 〉 For the purpose of our audit we used overall Group materiality of $1.2 million, which represents approximately 1% of the Group’s total assets. 〉 We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. 〉 We chose the Group’s total assets because, in our view, it is the benchmark which best reflects the expected requirements of users of the Group’s financial statements. 〉 We chose total assets as the materiality benchmark rather than a profit measure given the fact that operations at Chatree Gold Mine recommenced in the latter part of the year, and the Group’s focus on the possible sale of the Nueva Esperanza Gold/Silver Project. 〉 We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds. continuedu 84 Independent Auditor’s Report Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matter(s) described below to be the key audit matters to be communicated in our report. Key audit matter How our audit addressed the key audit matter We considered the Group’s reversal of the prior period inventory write- down at Chatree Gold Mine. We performed the following procedures, amongst others: 〉 performed a site visit to inspect the production activities at Chatree Gold Mine and refurbishment work performed; 〉 〉 〉 〉 reviewed mining licences and permits granted by the Department of Mines granting permission to re-open the mine; confirmed that the reversal of impairment was limited to Chatree Plant #2 and the ore stockpile; assessed whether the methodology adopted to reverse the previous inventory write-down was consistent with the requirements of Australian Accounting Standards; and evaluated management’s model and assessed whether the cashflow forecasts and key assumptions within the forecasts were reasonable. We evaluated the disclosures made in note 3(i) in relation to the reversal of inventory write-down and assessed their adequacy, in light of the requirements of Australian Accounting Standards. Reversal of inventory write-down at Chatree Gold Mine. (Refer to note 3(i) and 5(e)) $59.8 million During the year, the refurbishment of Chatree Plant #2 was completed and the Thai Government granted permission to reopen the mine. The production plant reopened in March 2023 and processing of the stockpile recom- menced. Management considered this to be an indicator for reversal of the previous inventory write-down. Based on cash flow models prepared, a reversal of inventory write-down $59,822,000 was recognised in relation to Chatree Gold Mine. The reversal of the inventory write-down at Chatree Gold Mine and associated disclosures is considered to be a key audit matter due to the significance of the reversal to the consoli- dated statement of profit or loss and other comprehensive income, and the significance of the asset to the consolidated statement of financial position, and the significant judgments involved in determining the net realisable value of inventories. www.kingsgate.com.au85 Independent Auditor’s Report Key audit matter How our audit addressed the key audit matter Impairment indicator assessment of exploration and evaluation assets Nueva Esperanza Gold/Silver Project (Refer to Note 3(iii)) We considered the Group’s impairment indicator assessment for the Nueva Esperanza Gold/Silver Project and its conclusion that no impairment indicators, nor indicators for impairment loss reversal existed at balance sheet date. The impairment indicator assessment of the exploration and evaluation assets for the Nueva Esperanza Gold/Silver Project was a key audit matter given the significance of the carrying value of this CGU ($23.8 million as at 30 June 2023) and given the impairment charge recorded in the 2019 financial year ($33.4 million). The impairment indicator (and the potential reversal of impairment) assessment is also subject to significant judgements by the Group as described in the Note 3 (iii) to the financial statements. In respect of the impairment indicator assessment, we: 〉 evaluated if the Group identified and considered the relevant internal and external factors in its assessment; 〉 obtained and discussed with the directors information relating to recent offers to acquire the Project and the current status of any expressions of interest; 〉 obtained and reviewed evidence around recent developments for the Esperanza Gold/Silver Project; and 〉 considered the Groups’ market capitalisation at balance sheet date compared with the net assets of the Group. We evaluated the adequacy of the disclosures made in Note 3 (iii), including those regarding the key internal and external factors considered in light of the requirements of Australian Accounting Standards. t r o p e R s ’ r o t i d u A t n e d n e p e d n I Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor’s report, the other information we obtained included the Corporate Information and the Directors’ report. We expect the remaining other information to be made available to us after the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not and will not express an opinion or any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. 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 on the other information that we obtained prior to the date of this auditor’s report, 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. When we read the other information not yet received, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the appropriate action to take. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. continuedu 86 Independent Auditor’s Report 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 the financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor’s report. Report on the remuneration report Our opinion on the remuneration report We have audited the remuneration report included in pages 35 to 41 of the directors’ report for the year ended 30 June 2023. In our opinion, the remuneration report of Kingsgate Consolidated 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. PricewaterhouseCoopers Craig Thomason Partner Sydney 29 September 2023 www.kingsgate.com.au Shareholder Information as at 15 September 2023 Distribution of equity securities Size of Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 + Total 20 largest shareholders Below are the 20 largest shareholders of quoted ordinary shares: Shareholder Number of shareholders of fully paid ordinary shares 3,909 2,520 854 1,358 296 8,937 HSBC Custody Nominees (Australia) Citicorp Nominees Pty Limited BNP Paribas Noms Pty Ltd BNP Paribas Nominees Pty Ltd BNP Paribas Nominees Pty Ltd Arinya Investments Pty Ltd Clawson Holdings Pty Ltd Russell Phillip Quinn J P Morgan Nominees Australia Andrew Lenox Hewitt 1 2 3 4 5 6 7 8 9 10 11 Wyong Rugby League Club Ltd 12 Warbont Nominees Pty Ltd 13 14 15 16 17 18 19 20 Ian Gillespie-Jones Jay Evan Dale Hughes Philip Storr Jamari Pty Ltd Frank Markert Pty Ltd HSBC Custody Nominees (Australia) Limited Anthony Mark Van Der Steeg Twisted Corporation Pty Ltd 87 Shareholder Information n o i t a m r o f n I l r e d o h e r a h S Number of shares Percentage 27,860,412 20,881,917 18,539,010 9,952,286 9,447,457 4,996,944 3,100,000 3,000,000 2,648,582 2,459,303 2,300,000 2,252,095 2,180,009 2,000,000 1,650,000 1,510,000 1,456,087 1,340,647 1,263,000 1,184,332 10.81 8.10 7.19 3.86 3.67 1.94 1.20 1.16 1.03 0.95 0.89 0.87 0.85 0.78 0.64 0.59 0.56 0.52 0.49 0.46 Voting rights – Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. 88 Corporate Information Corporate Information Kingsgate Consolidated Limited ABN 42 000 837 472 Directors Ross Smyth-Kirk OAM Executive Chairman Jamie Gibson Managing Director Nucharee Sailasuta Non-Executive Director Peter Warren Non-Executive Director Chief Executive Officer Jamie Gibson Company Secretary Stephanie Wen Stock Exchange Listing Kingsgate Consolidated Limited is a company limited by shares, listed on the Australian Securities Exchange (ASX) under the code KCN. The Company’s shares also trade in the United States of America over-the-counter (OTC) as an American Depository Receipt (ADR) under the code OTC: KSKGY. Registered Office and Principal Business Address Kingsgate Consolidated Limited Suite 12.07 – Level 12 14 Martin Place Sydney NSW 2000 Australia +61 2 8256 4800 Tel: Email: info@kingsgate.com.au Web: www.kingsgate.com.au Thailand Office Akara Resources Public Company Limited No. 99 Moo 9, Tambon Khao Chet Luk Amphur Thap Khlo Phichit 66230 Thailand +66 56 614 500 +66 56 614 190 Tel: Fax: Email: admincgm@akararesources.com Web: www.akararesources.com Share Registry Link Market Services Limited Level 12 680 George Street Sydney NSW 2000 Australia Postal address: Locked Bag A14 Sydney South NSW 1235 Australia +61 1300 554 474 +61 2 9287 0303 Tel: Fax: Email: registrars@linkmarketservices.com.au Web: www.linkmarketservices.com.au Auditor PricewaterhouseCoopers One International Towers Sydney Watermans Quay Barangaroo NSW 2000 Australia Tel: Fax: +61 2 8266 0000 +61 2 8266 9999 www.kingsgate.com.au n o i t a m r o f n I e t a r o p r o C Design & Production > apmgraphics.com.au > 1800 806 930 Suite 12.07 – Level 12 14 Martin Place Sydney NSW 2000 Australia +61 2 8256 4800 Tel: Email: info@kingsgate.com.au Web: www.kingsgate.com.au 

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