KINGSTON RESOURCES LIMITED
& its Controlled Entities
KINGSTON RESOURCES LIMITED
ABN 44 009 148 529
Annual Financial Report
For the year ended 30 June 2023
CONTENTS
Contents
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Page No.
Corporate Directory ...................................................................................................................................... 2
Chairman’s Letter ......................................................................................................................................... 3
Directors’ Report .......................................................................................................................................... 4
Lead Auditor’s Independence Declaration ................................................................................................. 29
Consolidated Statement of Financial Position ............................................................................................ 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income ........................................... 31
Consolidated Statement of Changes in Equity ........................................................................................... 32
Consolidated Statement of Cash Flows ...................................................................................................... 33
Notes to the Financial Statements .............................................................................................................. 34
Directors’ Declaration ................................................................................................................................ 60
Independent Auditor’s Report .................................................................................................................... 61
Corporate Governance Statement .............................................................................................................. 66
Additional Information ............................................................................................................................... 67
CORPORATE DIRECTORY
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Corporate Directory
DIRECTORS
Mick Wilkes (B Eng (Hons), MBA, GAICD)
Non-Executive Chairman
Andrew Corbett (B Eng (Mining, Hons), MBA)
Managing Director
Anthony Wehby (MAICD)
Non-Executive Director
Stuart Rechner (BSc, LLB, MAIG, MAusIMM, GAICD)
Non-Executive Director
COMPANY SECRETARY
Robyn Slaughter
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
Suite 202 – 201 Miller Street
North Sydney NSW 2060
AUSTRALIA
Telephone
Email
Website
(02) 8021 7492
info@kingstonresources.com.au
www.kingstonresources.com.au
AUDITORS
Hall Chadwick Chartered Accountants
SHARE REGISTRY
Automic Group
BANKERS
SOLICITORS
Australia & New Zealand Banking Group Limited
Macquarie Group Limited
Bank of South Pacific
Cowell Clarke Commercial Lawyers
Ashurst Australia
STOCK EXCHANGE
Australian Securities Exchange (ASX)
Secondary Listing - Frankfurt Stock Exchange
ASX CODE
KSN
- 2 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Chairman’s Letter
To our valued shareholders and other stakeholders
Welcome to the Annual Report for 2023.
It has been a successful year for Kingston marked by the first full year of gold production and cash flow. The
Mineral Hill operation sold over 16koz of gold at an All in Sustaining Cost of under $1700/oz producing strong
operating cash flows of over $15m, underpinning a full year after tax profit for the Company of just under
$10m. This is an outstanding result which exceeded our expectations. As evidenced by these results, the
strength and quality of the people within the business continues to grow and full credit goes to Andrew Corbet
and his team at Mineral Hill.
In addition to the successful delivery of operating targets, the Company completed a feasibility study for the
reopening of open pit and underground mine at Mineral Hill, including the refurbishment of the crusher,
grinding mill and flotation circuits. The study has produced a 5-year mine plan with strong economics, and the
Board approved the project in June this year.
Work has already progressed significantly, with much of it being done in house, building on our philosophy
to self-perform activities as far as is practical to minimise risk and maintain control of the cost outcomes. The
projects and maintenance teams at Mineral Hill have moved quickly to finalise contracts for refurbishment of
the plant, place orders for long leads items, and complete site preparations.
Open pit mining plans for the Pearse deposits have progressed with a short-term mining contract tendered.
Plans for reopening the underground at the Southern Ore Zone (SOZ) have also progressed with
commencement of dewatering, recruitment of mining personnel and purchase of underground mining
equipment.
At Misima having completed a high quality DFS and environmental and social assessments, which highlighted
its economic viability, we are exploring our strategic options to progress the project to development.
Discussions are continuing with interested parties and we will continue to seek value creation for our
shareholders from this fantastic gold project.
I wish to thank all of you for your support and look forward to continuing to grow the Company for all our
stakeholders.
Your sincerely
Mick Wilkes
Non-Executive Chair
14 September 2023
- 3 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Directors’ Report
The Directors present their report together with the financial statements of the Consolidated Entity (or
‘Group’), being Kingston Resources Limited (‘Kingston” or the “Company’) and its subsidiaries, for the
financial year ended 30 June 2023 and the independent auditor’s report thereon.
PRINCIPAL ACTIVITIES
The Company is an Australian-based Company listed on the ASX. The principal activity of the Group during
the period was mineral production and exploration.
OPERATING RESULTS AND REVIEW OF OPERATIONS FOR THE YEAR
Operating Results
Kingston reported a statutory after tax profit of $9,787,333 (2022: loss $2,046,430). The increase in the FY23
profit relative to FY22 loss is due to successful operations at Mineral Hill.
Review of Operations
Kingston had its first full year of production from the Mineral Hill operations and was successful in increasing
gold production and cash flow over the term. Other major achievements included:
Gold production of 16,520oz from the Tailings Project at Mineral Hill.
Multiple phases of exploration and geotechnical drilling at deposits within the current mine plan and
near mine targets within the mining lease.
Updates on the Mineral Resource Estimates for the Southern Ore Zone and Jack’s Hut.
Mineral Resource and Ore Reserve Updates for the Pearse open pits.
Completion of IP geophysics to the south of Mineral Hill mining leases and subsequent identification
of 15 high priority targets.
Successful in receiving NSW Government’s Critical Minerals and High-Tech Metals Activation Fund
– Stream 1: Project Activation Studies towards the development of Mineral Hill feasibility study work
totaling $500,000 of which $250,000 was received as at reporting date.
Delivery of the LOM update, incorporating open pit and underground mining out to 2027.
The growth outlook for the Company is now well underpinned through existing gold production at Mineral
Hill, and the work currently underway to establish a plus five-year mine plan beyond the existing tailings
processing operation. This complements the longer-term opportunities offered by the Misima Gold Project.
- 4 -
DIRECTORS’ REPORT
Mineral Hill Mine
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Kingston had a successful year at Mineral Hill in terms of gold production and cash flow performance. Gold
sales from the Tailings Project were 16,068oz at an average sales price of A$2,750/oz. Cost management was
also a highlight with all-in-sustaining cost (AISC) falling by 39% in FY23 to A$1,686/oz. In comparison to
FY22 gold production and sales increased 256% and 245% respectively.
Table 1: FY23 production results and performance relative to FY22.
FY22 actuals1
FY23 Actuals
Y on Y Δ
Tonnes Processed (t)
310,906
627,994
Average Feed Grade (g/t)
Gold Production (oz)
Gold Sales (oz)
Silver Sales (oz)
AISC (A$/oz)
Sales (A$m)
Operating Cashflow (A$m)
0.95
4,639
4,656
7,514
2,753
$12.3
-$0.7
1.36
16,520
16,068
16,898
$1,686
$44.7
$16.9
102%
43%
256%
245%
125%
-39%
263%
2,514%
1 Kingston completed the Mineral Hill transaction on 16 January 2022, FY22 actuals are from 16 June 2022 to 30 June 2022
Gold Sold (oz)
AISC (A$/oz)
Gold Price A$/oz
)
z
o
/
$
A
(
C
S
I
A
d
n
a
)
z
o
(
s
e
l
a
S
d
l
o
G
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2,534
2,079
2,629
1,770
2,770
2,968
1,543
1,494
SepQ FY23
DecQ FY23
MarQ FY23
Jun Q FY23
Figure 1: Quarterly gold sales, AISC and average realised gold price
- 5 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Kingston has been completing capital works on Tailings Storage Facility 2 (TSF2) during the year, including
an embankment raise (Lift 4) to build storage capacity for open pit and underground ore processing. Mineral
Hill is well placed in terms of TSF storage capacity for the LOM.
An updated life of mine was released in June 2023, comprising a continuation of the Tailings Project, open pit
mining from the Pearse deposits and then recommencing underground mining at the Southern Ore Zone. The
current life of mine (LOM) for the project is four years, with high potential for extending the underground
resource laterally and at depth.
Open Pit and Underground Forecast
Table 2 shows the open pit mining forecast and Figure 2 shows the designs for the two pits. Open pit mining
at Pearse consists of two pits; Pearse North and Pearse South. Pearse North is a new development while Pearse
South is a deepening and cut-back of the existing pit.
Figure 2: Pit designs for Pearse North and South.
The underground production target utilises the existing development at the Southern Ore Zone and Jack’s Hut
to enable the production of separate copper, lead and zinc concentrates. There is already substantial
underground development in place at the proposed mining areas, and this reduces the required capital
expenditure over the life of mine. The Scoping Study on the LOM was announced on the ASX platform on 29
June 2023.
- 6 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Table 2: Mining & processing physicals for open pit mining.
Mining Physicals
Oxide Tonnes
Sulphide Tonnes
Total Ore Tonnes
Gold Grade
Silver Grade
Metal
Gold
Silver
Material Movement
Waste Tonnes
Total Material Movement
Strip Ratio
Processing
Metallurgical Recovery
Recovered Gold
Recovered Silver
Table 3: Underground mining physicals.
Mining Physicals
Mining
Development Ore Tonnes
Stope Ore Tonnes
Grades (Dev & Stope)
Gold
Silver
Copper
Lead
Zinc
Metal
Gold
Silver
Copper
Lead
Zinc
Material Movement
Waste Tonnes
Ore Tonnes
Total Material Movement
Lateral Development
Capital Development
Operating Development
Total Lateral Development
- 7 -
Unit
kt
kt
kt
g/t
g/t
koz
koz
kt
kt
W:O
%
koz
koz
Open Pit
7.8
250
258
3.7
58
31
470
2,674
2,933
10
65%
20
322
Unit
Underground
kt
kt
g/t
g/t
%
%
%
koz
koz
kt
kt
kt
kt
kt
kt
m
m
m
112
773
1.7
18
0.9%
1.6%
1.3%
47
503
8
14
11
309
885
1,194
1,509
6,845
8,354
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Figure 3: Long section at Mineral Hill showing the proposed stopes (blue).
Plant Refurbishment and Underground Re-Entry
Transitioning to open pit and underground ore feed will require refurbishment of the crushing, grinding and
flotation circuits. Refurbishment of these components of the processing plant is already well advanced.
Additionally, the company has been pumping water from the underground decline and reinstating the safety
and services of the development. Underground diamond drilling will commence in the fourth quarter of this
year to infill and extend the underground Mineral Resources and deliver an initial Ore Reserve by June 2024.
Exploration and Development
Kingston’s main focus on exploration drilling during the financial year was on the Pearse gold-silver deposits,
SOZ polymetallic deposits and the Jack’s Hut trend. The primary aim of the drilling was to infill the existing
drilling and provide data for updating the Mineral Resources, Ore Reserves and LOM plan.
The Pearse North drilling confirmed the high-grade tenor of the mineralisation and the results demonstrated
high grade gold and silver starting from surface. Significant results include:
39m @ 4.2g/t Au and 37g/t Ag from 37m from DDH hole 001, including:
o 3m @ 26.7g/t Au, 27g/t Ag from 38m
10m @ 6.0g/t Au and 33g/t Ag from 72m from DDH hole 003
3m @ 5.5g/t Au and 55g/t Ag from 55m from DDH hole 004
4.3m @ 2.4g/t Au and 16g/t Ag from 142m from DDH hole 005
12m @ 3.68g/t Au, 9g/t Ag from 14m from DDH002 including:
o 7m @ 5.69g/t Au, 13g/t Ag from 15m
17m @ 2.7g/t Au, 11g/t Ag from 15m from RC hole 013 including:
o 11m @ 4.0g/t Au, 15g/t Ag from 20m
8m @ 5.6g/t Au, 66g/t Ag from 120m from RC hole 008 including:
o 3m @ 14.2g/t Au, 177g/t Ag from 125m
- 8 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Figure 4: Significant gold – silver intercepts at Pearse North relative to USD$1800 Au Ore Reserve pit design.
Surface drilling was completed into the upper sections of the SOZ during the year. High grade polymetallic
mineralisation was intersected, with extensions being made up-dip from the current mine workings and to the
north. Significant intersections include:
19m @ 1.15% Cu, 5.5% Pb, 5.5% Zn, 0.4g/t Au, 44g/t Ag from 150m in DDH006 including:
o
10m @ 2.12% Cu, 10.3% Pb, 10.4% Zn, 0.5g/t Au, 81g/t Ag from 150m
39m @ 1.1% Cu, 0.7% Pb, 0.8% Zn, 0.93g/t Au, 12g/t Ag from 161m, in DDH011
9.8m @ 4.22g/t Au, 0.7% Cu, 3.2% Pb, 3.2% Zn, 30g/t Ag from 165.5m in DDH012
8.5m @ 0.4% Cu, 4.2% Pb, 4.2% Zn, 1.23g/t Au, 28g/t Ag from 232m in DDH009
7.0m @ 0.7% Cu, 2.9% Pb, 2.6% Zn, 1.31g/t Au, 26g/t Ag from 154m in DDH008
8.1m @ 0.9% Cu, 8.3% Pb, 3.3% Zn, 0.97g/t Au, 60g/t Ag from 157.9m in DDH007
- 9 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
m
0
2
1
m
5
7
Figure 5: Plan and section view of Southern Ore zone (MH Mine Grid).
Figure 6: Section view of Southern Ore zone on Section 2
- 10 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
High grade copper-gold assay results were also returned from the maiden Jack’s Hut drilling program at
Mineral Hill. Five drill holes were designed to test the exploration potential within a dilation zone along the
Jack’s Hut trend. The program has delivered near surface, high grade copper intercepts, within a 2.2km
mineralised trend, and in close proximity to our operating mill. Key results included:
77m @ 0.93% Cu, 0.16g/t Au from 7m in KSNDDH014, including:
o
o
7.4m @ 5.7% Cu, 0.40g/t Au from 16.4m
9.3m @ 1.3% Cu, 0.39g/t Au from 43.7m
27m @ 1.02% Cu, 0.18g/t Au from 14m in KSNDDH015, including:
o
4.2m @ 4.5% Cu, 0.41g/t Au from 21.8m
54.5m @ 0.65% Cu, 0.06g/t Au, from 45m in KSNDDH015, including:
o
9.3m @ 2.2% Cu,0.18g/t Au from 63m
10.0m @ 1.56% Cu, 0.76g/t Au, from 37m in KSNRC018, including:
o
6m @ 2.20% Cu, 1.22g/t Au from 37m
Additional drilling at Pearse North and SOZ commenced in April 2023. The primary purpose of the Pearse
North drilling was to collect geotechnical data for open pit wall slope designs. The assay results again
confirmed the high-grade nature of the deposit and also added confidence to the existing geological
interpretation. The intersections concurred with the 3D wireframes shapes of the mineralisation and were
consistent with the grades of previous drill holes.
The earlier drilling results from Pearse, SOZ and Jack’s Hut were then incorporated into updated Mineral
Resource Estimates (MRE) for all three projects. Additionally, an Ore Reserve Estimate was delivered for the
Pearse North and Pearse South deposits. Significantly, the SOZ MRE resulted in a 114% increase in total
tonnage and increases of 54% and 64% in contained gold and copper respectively. The MREs for SOZ and
Jack’s Hut are shown in Table 4 and Table 5.
Table 4: Southern Ore Zone (SOZ) Mineral Resource Estimation for November 2022.
Tonnage
(Kt)
Resource Category
Measured
Indicated
Inferred
Total
* Due to rounding to appropriate significant figures, minor discrepancies may occur, tonnages are dry metric tonnes.
Zn % Au (koz) Ag (koz)
80
15.5
0.3%
1,038
66.8
1.5%
1,256
75.4
1.5%
2,349
157.6
1.4%
Au (g/t) Ag (g/t)
10.9
19.9
20.0
19.2
Pb (kt)
1,200
28,500
30,500
60,200
Pb %
0.5%
1.8%
1.6%
1.6%
228
1,622
1,954
3,804
2.11
1.28
1.20
1.29
Zn (kt)
700
24,200
28,900
53,800
Metal
Cu (kt)
3,000
16,200
14,500
33,600
Grade
Cu %
1.3%
1.0%
0.7%
0.9%
Table 5: Jack’s Hut Mineral Resource Estimate for March 2023.
Grade
Au g/t Ag g/t Cu % Pb % Zn %
Metal
Cu kt Pb kt Zn kt
Class
Indicated
Inferred
Total
Mass
(kt)
608
1,032
1,640
3.0
10.8
13.8
* Due to rounding to appropriate significant figures, minor discrepancies may occur, tonnages are dry metric tonnes.
7.8
7.2
15.0
1.3%
0.7%
0.9%
0.5%
1.0%
0.8%
0.4%
0.8%
0.6%
1.53
1.09
1.25
7
28
20
2.3
7.8
10.1
Au
koz
30
36
66
Ag
koz
134
917
1,051
- 11 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Kingston undertook a new Induced Polarisation (IP) survey during the year to expand coverage to the south-
eastern edge of EL1999. This data has enhanced the evidence already provided by gravity geophysics in this
region. The existing mineral deposits at Mineral Hill lie at the intersection of IP chargeability highs and gravity
gradients (i.e. zones of transition from gravity highs to gravity lows). Extending this knowledge to the south
of Mineral Hill has helped to identify 15 additional priority targets (see Figure 7) and drilling of these has
already commenced, with results pending.
Figure 7: Recently generated geophysical targets in the vicinity of the mining licences.
Misima Gold Project
Kingston undertook a strategic review of Misima with a view of to maximising value from the project. The
company has been actively engaged in discussions with numerous groups to find ways to bring the project into
production. Work on site consisted of background environmental monitoring as part of the Environmental and
Social Impact Assessment (ESIA) as well as work to progress the Mining Licence application.
- 12 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
MINERAL RESOURCES TABLE
Mineral Hill (NSW, Australia)
Table 6: Mineral Hill Mineral Resource summary, prepared by Mr S. Hayward of Kingston Resources Ltd. Rounding
errors may occur.
Resource
Category
Measured
Indicated
Inferred
Total
Tonnes
Au Ag
Cu
kt
g/t
g/t %
228
5,582
3,091
8,901
2.11
1.06
1.17
1.13
11
28
23
26
1.3%
1.2%
0.7%
1.0%
Pb
%
0.5%
1.7%
1.4%
1.6%
Zn
%
0.3%
1.1%
1.2%
1.1%
Au
Ag Cu
koz
koz
kt
3
15
80
47
191 4,244
116 2,242
22
323 6,566 72
Pb
kt
1.2
70
42
113
Zn
kt
0.7
42
38
81
Table 7: Mineral Hill Mineral Reserve summary, prepared by Mr J. Wyche of Australian Mine Design and Development
Pty Ltd. Rounding errors may occur.
Tonnes Au
Reserve
kt
Proved
Probable
Total
-
1,431
1,431
g/t
-
1.55
1.55
Ag
g/t
-
57
57
Cu
%
Pb
%
Zn
%
Cu
kt
Pb
kt
Zn
kt
Au
koz
-
71
71
Ag
koz
-
470
470
Misima Gold Project (PNG)
Table 8: Misima Gold Project Mineral Resource summary, prepared by Mr S. Hayward of Kingston Resources Ltd.
Rounding errors may occur.
Deposit
Umuna Total
Resource
Umuna TOTAL
Cooktown Stockpile
Cooktown Stockpile
Ewatinona Total
Resource
Ewatinona TOTAL
Misima
Misima TOTAL
Classificati
on
Indicated
Inferred
Inferred
Indicated
Inferred
Indicated
Inferred
Cutoff Tonnes
g/t Au
0.3
0.3
Mt
93.5
64.1
157.6
3.8
3.8
4.2
3.4
7.6
97.7
71.3
169
Gold
g/t Au
0.78
0.58
0.70
0.65
0.65
0.88
0.74
0.81
0.79
0.59
0.71
Silver
g/t Ag
4.3
3.8
4.1
7.0
7.0
2.6
3.2
2.8
4.3
3.8
4.1
Au Moz Ag Moz
2.4
1.2
3.6
0.1
0.1
0.12
0.08
0.2
2.5
1.4
3.8
13.1
7.5
20.5
0.9
0.9
0.3
0.3
0.7
13.4
8.7
22.1
0.5
0.3
0.3
Table 9: Misima Gold Project Ore Reserve summary, prepared by Mr J. Wyche of Australian Mine Design and
Development Pty Ltd. Rounding errors may occur.
Ewatinona
Probable
Ewatinona Total
Umuna
Probable
Umuna Total
Probable
Misima Total Reserve
Tonnes
Mt
Gold
Au g/t
Silver
Ag g/t
Au koz
Ag koz
0.8
0.8
0.8
0.8
0.8
0.8
2.4
2.4
4.6
4.6
4.5
4.5
100
100
1,800
1,800
1,900
1,900
300
300
10,600
10,600
10,900
10,900
3.9
3.9
71.7
71.7
75.6
75.6
- 13 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Exploration Results and Mineral Resources is based on
information compiled by Mr. Stuart Hayward BAppSc (Geology) MAIG, a Competent Person who is a
member of the Australian Institute of Geoscientists. Mr. Hayward is an employee of the Company. Mr.
Hayward has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration 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 Exploration Results, Mineral Resources and Ore Reserves”.
Mr. Hayward consents to the inclusion in this report of the matters based upon the information in the form and
context in which it appears.
The Competent Person signing off on the overall Ore Reserves Estimate is Mr John Wyche BE (Min Hon), of
Australian Mine Design and Development Pty Ltd, who is a Fellow of the Australasian Institute of Mining and
Metallurgy and who has sufficient relevant experience in operations and consulting for open pit metalliferous
mines. Mr Wyche consents to the inclusion in this report of the matters based upon the information in the form
and context in which it appears.
Kingston publicly reports Exploration Results and Mineral Resource estimates in accordance with the ASX
Listing Rules and the requirements and guidelines of the 2012 edition of the Australasian Code for Reporting
Exploration Results, Mineral Resources and Ore Reserves – the JORC Code. Kingston’s governance for public
reporting of Exploration Results and Mineral Resource estimates includes important assurance measures. All
reports are signed-off by appropriate JORC Competent Persons with JORC Code Table 1 Checklists as
required. Exploration Results and Mineral Resource estimates are also peer reviewed (either by Kingston
technical staff or suitably qualified external consultants) before Board approval and ASX release.
FINANCIAL POSITION
At the end of the financial year, the Consolidated Entity had net assets of $76,454,900 (2022: $61,130,177)
and held $18,206,767 in cash (2022: $5,589,673).
On 7 July 2022, the Company secured a two tranche $10m debt facility with PURE asset management. Tranche
1 of $5 million was drawn immediately as a 4-year secured loan facility at an interest rate of 9.90% per annum
with 25,000,000 detached warrant shares at an exercise price of $0.20. An establishment fee of $150,000 was
recognised as a reduction in proceeds.
On 29 June 2023, Tranche 2 of $5million was drawn as a 4-year secured loan facility at an interest rate of
9.90% per annum with 35,714,286 detached warrant shares at an exercise price of $0.14. An establishment fee
of $150,000 was recognised as a reduction in proceeds.
On 27 June 2023, the Company announced its intention to undertake a two Tranche Share Placement offer
raising a total of $5,500,000. On 30 June 2023, advanced placement monies totalling $4,500,000 were received
as Tranche 1 of the Placement offer. On 3 July 2023, 52,941,176 Tranche 1 Placement shares were issued at
$0.085.On 17 August 2023, Tranche 1 of the Placement offer was completed upon issuing 26,245,576 unlisted
attaching options expiring on 31 July 2025 with an exercise price of $0.14 on the basis of one option for every
two Placement Share.
- 14 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than reported above in the Review of Results and Operations, there were no significant changes in the
state of affairs of the Company during the reporting period.
MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR
On 31 July 2023, the 4,561,810 LTI performance Options were converted to shares raising $45,618.10 and
2,707,994 unvested LTI performance options expired.
On 14 August 2023 Shareholders approved the grant of up to $300,000 MH Project Goal Performance Options
to Andrew Corbett.
On 17 August 2023, Tranche 1 of the Placement offer was completed upon issuing 26,245,576 unlisted
attaching options expiring on 31 July 2025 with an exercise price of $0.14 on the basis of one option for every
two Placement Share.
Also on 17 August 2023:
-
-
-
-
-
the Company issued 11,764,705 shares at $0.085 to Quintana Holdings LLP under Tranche 2 of the
Placement offer. These proceeds reduce the final deferred consideration payable to Quintana Holdings
LLP upon producing 30,000ozs since the acquisition of Mineral Hill. In addition 5,882,352 unlisted
attaching options expiring on 31 July 2025 with an exercise price of $0.14 were issued on the basis of one
option for every two Placement Share.
the Company issued 11,764,664 shares at $0.085 under a fully underwritten Share Purchase Plan raising
$1,000,000 (before costs). In addition, a total of 5,882,332 unlisted options expiring on 31 July 2025 with
an exercise price of $0.14 was issued on the basis of one option for every two SPP Share.
742,826 STI performance rights vested and were converted to shares, and 6,043,019 STI performance
rights lapsed.
326,233 service fee options were converted to shares for nil consideration.
206,764 shares were issued for nil consideration to an employee as part of their employment contract.
Other than the above, there has been no other matter or circumstance which has arisen since 30 June 2023
that has significantly affected or may significantly affect:
a)
b)
c)
Kingston Resources Limited’s operations in future financial years; or
the results of those operations in future financial years; or
Kingston Resources Limited’s state of affairs in future financial years.
DIVIDENDS OR DISTRIBUTIONS
No dividends were paid during the financial year and the directors do not recommend the payment of a
dividend.
- 15 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
FUTURE DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue its operating activities and evaluation of its mineral projects and undertake generative
work to identify and potentially acquire new resource projects. Due to the nature of the business, the result is
not predictable.
ENVIRONMENTAL REGULATIONS
The mineral tenements granted to the Company pursuant to New South Wales Mining Act 1992 and the Papua
New Guinea Mining Act 1992, are granted subject to various conditions which include standard environmental
requirements. The Company adheres to these conditions and the directors are not aware of any non-compliance
with environmental laws.
INFORMATION ON THE DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Mick Wilkes – Chair (Independent Non-Executive)
Andrew Corbett – Director (Managing)
Anthony Wehby – Director (Independent Non-Executive)
Stuart Rechner - Director (Independent Non-Executive)
Directors have been in office since the start of the financial year to the date of this report unless otherwise
stated.
Mick Wilkes, Non-Executive Chair (B Eng (Hons), MBA, GAICD)
Term of Office
Appointed Non-Executive Chair of Kingston Resources Limited from 1 December
2020; previously Non-Executive Director of Kingston Resources Limited from 6
July 2018 to 1 December 2020.
Skills and Experience: Mr Wilkes is a mining engineer with over 35 years of broad international experience
with a strong emphasis on operations management and new mine development,
predominantly in precious and base metals across Asia and Australia. He was the
President and CEO of OceanaGold Corporation (ASX:OCG) from 2011 to 2020. In
previous roles he was the Executive General Manager of Operations at OZ Minerals
responsible for the development of the Prominent Hill copper/gold project in South
Australia and General Manager of the Sepon gold/copper project for Oxiana based
in Laos. His earlier experience included 10 years in various project development
roles in Papua New Guinea.
Mr Wilkes was appointed as a Non-Executive Director of Genesis Minerals Ltd in
September 2022. In April 2022 Mr Wilkes was appointed Non-Executive Chair of
Andromeda Metals Ltd (ASX:ADN). Mr Wilkes and was previously Non-Executive
Director of Dacian Gold Ltd (ASX:DCN) from September 2021 then Non-Executive
Chair from March 2022 to July 2022. He was also a Non-Executive Director of
Matador Mining Ltd (ASX:MZZ) from July 2020 to May 2022.
- 16 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Mr Wilkes holds a Bachelor of Engineering from the University of Queensland, a
Master of Business Administration from Deakin University, and is a member of both
the Australian Institute of Mining and Metallurgy, and the Australian Institute of
Company Directors.
Andrew Corbett, Managing Director (B Eng (Mining, Hons), MBA)
Term of Office:
Managing Director of Kingston Resources Limited since 4 July 2016.
Skills and Experience: Mr Corbett is Managing Director and CEO of the Company. Mr Corbett is a highly
experienced mining engineer, having operated in the mining industry for over 25
years. Mr Corbett has senior corporate, operational and mine management
experience combined with an in-depth understanding of global equity markets,
business development and corporate strategy within the mining sector. His prior roles
include General Manager at Orica Mining Services based in Germany and Co-
Portfolio Manager of the Global Resource Fund at Perpetual Investments as well as
mine management and operations roles with contractor and owner-mining
operations.
Anthony Wehby, Non-Executive Director (MAICD)
Term of Office:
Non-Executive Director of Kingston Resources Limited from 1 December 2020;
previously Non-Executive Chairman of Kingston Resources Limited from 4 July
2016 to 1 December 2020. Mr Wehby is Chair of the Audit and Risk Committee.
Skills and Experience: Mr Wehby is a highly experienced board member and chairman. He is a Director of
Ensurance Ltd (ASX:ENA) and Chairman of Variscan Mines Limited (ASX:VAR).
He was previously Chairman of Tellus Resources Limited and Chairman of Aurelia
Metals Limited. Since 2001, Mr Wehby has maintained a financial consulting
practice, focusing on strategic advice to companies including investments,
divestments and capital raisings. Prior to 2001, Mr Wehby was a partner in
PricewaterhouseCoopers Australia (Coopers & Lybrand) for 19 years.
Mr Wehby is a Member of the Australian Institute of Company Directors.
Stuart Rechner, Non-Executive Director (BSc, LLB, MAIG, MAusIMM, GAICD)
Term of Office:
Non-Executive Director from 4 July 2016; previously Executive Director of
Kingston Resources Limited from 23 February 2015. Mr Rechner is Chair of the
Remuneration and Nomination Committee.
Skills and Experience: Mr Rechner is an experienced company director and geologist with a proven track
record in project generation, acquisition, exploration, funding and development in
Australia and overseas. Mr Rechner holds degrees in both geology and law and is a
member of the Australian Institute of Geoscientists, the Australasian Institute of
Mining and Metallurgy and the Australian Institute of Company Directors. For over
ten years Mr Rechner was an Australian diplomat with postings to Beijing and
Jakarta.
Mr Rechner has been a Director of Strategic Energy Limited (ASX:SER) since 12
September 2014.
- 17 -
DIRECTORS’ REPORT
COMPANY SECRETARY
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Chris Drew was the Company Secretary from 18 December 2019 to 8 November 2022. He holds a Bachelor
of Commerce from the University of Auckland, is a CFA Charterholder, and is a Fellow Member of the
Governance Institute of Australia.
Robyn Slaughter has been Company Secretary since 8 November 2022. Robyn is a Company Secretary who
works at Automic Group, which provides market leading, cloud-based share registry technology, compliance
and governance solutions, supported by a tailored range of professional services. She works closely with a
number of boards of both listed and unlisted public companies. Robyn is a qualified Governance Professional
('CGI') and Affiliate of the Governance Institute of Australia ('GIA'), who holds a Master's degree in Corporate
Governance and a Bachelor's degree in Accounting and Finance.
DIRECTORS’ INTERESTS
As at the date of this report the relevant interests of each of the Directors, held either directly or indirectly
through their associates, in the securities of Kingston are as follows:
Director
Mick Wilkes 1
Andrew Corbett 2,5
Anthony Wehby 3
Stuart Rechner 4
Fully Paid
Ordinary Shares
(KSN)
3,067,060
7,986,181
2,311,361
854,268
Unlisted
Options
176,470
2,495,167
352,941
176,470
1 Mick Wilkes holds a relevant interest in the specified number of Shares and Options as a result of being a director of Eligius Holdings Pty Limited as
trustee of Eligius Holdings Pty Limited ATF, which is the registered holder of those Shares and Options.
2 Andrew Corbett holds a relevant interest in the specified number of Shares and Options as a result of being a director of Milamar Group Pty Ltd as trustee
of Milamar Family Trust, which is the registered holder of those Shares and Options.
3 Anthony Wehby holds a relevant interest in Options as he is a related party to Mrs Rosemary Wehby, who is the registered holder of the options.
4 Stuart Rechner holds a relevant interest in the specified number of Shares and Options as a result of being a director of Osmium Holdings Pty Limited
5 As approved by Shareholders at the General Meeting on 14 August 2023, Andrew Corbett has a right to acquire MH Project Goal Performance Options
5 As approved by Shareholders at the General Meeting on 14 August 2023, Andrew Corbett has a right to acquire MH Project Goal Performance Options
valued at $300,000 subject to satisfaction of various vesting conditions. The earliest date on which the securities may vest is 30 July 2023. The number of
securities to be provided in respect of the rights will be calculated on the basis of the 20-day KSN VWAP immediately prior to the vesting condition being
met. Any unvested securities will automatically lapse on 31 July 2025.
- 18 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
MEETINGS OF DIRECTORS
The number of Directors’ meetings and Committee meetings, and the number of meetings attended by each of
the Directors who was a member of the Board and the relevant Committee, held during the year ended 30 June
2023 were:
Board Meetings
Audit and Risk Committee
Meetings
held while a
Director
10
10
10
10
Number
attended
10
10
10
10
Meetings
held while a
Director
2
-
2
2
Number
attended
2
-
2
2
Remuneration and
Nomination Committee
Number
Meetings
attended
held while a
Director
1
1
-
1
1
-
1
1
Mick Wilkes
Andrew Corbett
Anthony Wehby
Stuart Rechner
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the director and executive remuneration arrangements of the Company and
the Group for the year ended 30 June 2023 in accordance with the requirements of the Corporations Act 2001
and its Regulations.
- 19 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
(a)
Key management personnel disclosed in this report
For the purposes of this report, key management personnel (KMP) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, including a director (whether executive or otherwise) of the Company.
Details of key management personnel:
M Wilkes
Non-Executive Chair (appointed Non-Executive Director 6 July 2018, appointed Non-
Executive Chair 1 December 2020)
A Corbett Managing Director (appointed 4 July 2016)
A Wehby
Non-Executive Director (appointed Non-Executive Chairman 4 July 2016, Non-Executive
Director 1 December 2020)
S Rechner Non-Executive Director (transitioned to Non-Executive Director on 4 July 2016)
(b)
Remuneration Philosophy
The objective of the Group’s executive remuneration framework is to attract, motivate and retain high quality
personnel then incentivise and reward performance fairly and responsibly. The framework aligns executive
reward with the achievement of strategic objectives and the creation of long-term value for shareholders. The
Board has established a separate Remuneration and Nomination Committee which meets as required to review
remuneration, recruitment, retention, and termination procedures and to evaluate KMP performance. Our
values of safety, respect for the environment, respect for each other, social responsibility, honesty and
accountability guide the Committee in policy formation and decision making.
Executive remuneration is benchmarked against similar organisations in regards to industry and size; and, from
time to time, independent external advice is sought from remuneration consultants. The Corporate Governance
Statement provides further information on the Company’s remuneration governance.
(c)
Executive remuneration policy and framework
In determining executive remuneration, the Remuneration and Nomination Committee aims to ensure that
remuneration practices are:
Competitive and reasonable, enabling the Company to attract and retain key talent;
Aligned to the Company’s strategic and business objectives and the creation of shareholder value;
Transparent and easily understood; and
Acceptable to shareholders.
The Remuneration and Nomination Committee reviews executive packages annually by reference to the
executive’s performance and comparable information from industry sectors and other listed companies in
similar industries. The terms and conditions for the Managing Director are considered appropriate for the
current exploration and development phase of the Group’s asset base.
Options and performance rights may be issued to directors subject to approval by shareholders. All
remuneration paid to directors is valued at the cost to the Group and expensed. Options are valued using the
Black-Scholes methodology.
(d)
Relationship between remuneration and the Group’s performance
The Board has structured its remuneration arrangements in such a way it believes is in the best interests of
building shareholder wealth in the longer term. Directors’ remuneration is set by reference to other companies
of similar size and industry, and by reference to the skills and experience of directors. Fees paid to Non-
Executive Directors are not linked to the performance of the Group.
- 20 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
The following table shows the net loss, loss per share and share price for the last four financial years.
2023
2022
2021
2020
Net Profit/( Loss)
$9,807,227
($2,088,167)
($1,954,631)
($751,587)
Diluted Profit/(Loss) per share
(cents/share)
Share price at year end (cents)
2.37
7.8
(0.67)
(0.76)
(0.42)
8.1
21.5
17.0
Long-term (LTI) and short-term (STI) incentives are provided to KMP in the form of Performance Securities
over ordinary shares of the Company and are considered to promote continuity of employment and provide
additional incentive to recipients to increase shareholder wealth. Performance Securities may only be issued
to directors subject to approval by shareholders in general meeting. Outstanding business and individual
performance are required to achieve the maximum level of remuneration. This includes financial; health and
safety; and environmental, social & governance components.
During the Financial Year the following incentive Performance Securities were issued:
Unlisted Options 5,171,621 (FY22 2,737,240)
STI Performance Rights 6,785,845 (FY22 3,395,667).
Non-Executive Directors remuneration policy
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in
the form of a letter of appointment. The letter summarises the Board policies and terms including remuneration,
relevant to the office of director.
The Board policy is to remunerate non-executive directors at commercial market rates for comparable
companies for their time, commitment and responsibilities.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders is currently set at $500,000 per annum (approved by shareholders at 2021 AGM). Fees may also
be paid to non-executive directors for additional consulting services provided to the Company above and
beyond normal non-executive duties.
Fees for non-executive directors are not linked to the performance of the Group. Non-executive directors’
remuneration may also include an incentive portion consisting of options, subject to approval by shareholders.
(e)
Voting and comments made at the Company’s 2022 Annual General Meeting
Kingston received over 96.38% of “yes” votes (3.62% of “no” votes) on its remuneration report for the 2022
financial year.
(f)
Remuneration Details for the Year Ended 30 June 2023
The following table of benefits and payments details, in respect to the financial year, the components of
remuneration for each member of the KMP of the Group.
- 21 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Short-term Benefits
Post-employment
Benefits
Long-term Benefits
Equity-settled Share-based
Payments
Non-
monetary
Other
Salary, Fees
and Leave
$
104,930
96,000
Profit
Share and
Bonuses
$
-
-
344,427
330,362
203,354
38,732
69,000
69,000
116,696
275,874
76,245
75,555
-
-
36,259
-
-
711,298
846,791
203,354
74,991
Director
Mick Wilkes
2023
2022
Andrew Corbett
2023
2022
Anthony Wehby
2023
2022
Chris Drew*
2023
2022
Stuart Rechner
2023
2022
Total
2023
2022
$
-
-
-
-
-
-
-
-
-
-
Pension
and Super-
annuation
$
-
-
34,817
33,036
7,245
6,900
$
-
7,200
-
-
40,436
-
12,188
27,587
8,000
-
-
-
48,436
7,200
54,250
67,523
Other
Incentive
Plans
LSL
Performance
Rights/Shares
Options
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
6,493
-
-
-
-
-
-
-
$
-
-
13,098
13,259
-
-
-
11,140
-
-
6,493
-
13,098
24,399
$
-
29,867
27,407
7,970
-
11,165
-
7,743
-
11,165
27,407
67,910
Cash-settled
Share-based
Payments
Termination
Benefits
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
-
-
-
-
104,930
133,067
629,596
423,359
76,245
87,065
169,320
358,603
84,245
86,720
1,064,336
1,088,815
*as at the date of retirement
(g)
Service Agreements
Remuneration and other terms of employment for KMP are formalised in service agreements. The service
agreements specify the components of remuneration, benefits and notice periods.
Michael Wilkes
Mr Wilkes was appointed a Non-Executive Director on 6 July 2018. On 1 December 2020 Mr Wilkes was
appointed as Non-Executive Chair. The appointment is contingent upon satisfactory performance and
successful re-election by shareholders of the Company as and when required by the constitution of the
Company and the Corporations Act. Mr Wilkes is not entitled to any termination benefits unless paid at the
discretion of directors.
Andrew Corbett
Mr Corbett was appointed as Managing Director on 4 July 2016. Mr Corbett is remunerated pursuant to the
terms and conditions of an employment agreement entered into on 4 July 2016 with no fixed term. The
agreement may be terminated by either party on the giving of six months’ notice. Mr Corbett is not entitled to
any termination benefits other than accrued pay, leave entitlements and other statutory payments unless paid
at the discretion of directors.
Anthony Wehby
Mr Wehby was appointed Non-Executive Chair on 4 July 2016 and transitioned to a Non-Executive Director
on 1 December 2020. The appointment is contingent upon satisfactory performance and successful re-election
by shareholders of the Company as and when required by the constitution of the Company and the Corporations
Act. Mr Wehby is not entitled to any termination benefits unless paid at the discretion of directors.
Stuart Rechner
Mr Rechner was appointed as Executive Director on 23 February 2015 and transitioned to a Non-Executive
Director on 4 July 2016. The appointment as Non-Executive Director is contingent upon satisfactory
performance and successful re-election by shareholders of the Company as and when required by the
constitution of the Company and the Corporations Act. Mr Rechner is not entitled to any termination benefits
unless paid at the discretion of directors.
- 22 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
(h) Equity Interests of KMP
Options holdings of KMP
The number of options over ordinary shares held by each KMP of the Group during the 2023 and 2022
reporting periods is as follows:
2023
Balance at Beginning of
Year
Issue Date
No.
Value
No.
Value
No.
Grant Details
Exercised
Lapsed
Other changes
Mick Wilkes
Andrew Corbett
Anthony Wehby
Chris Drew*
Stuart Rechner
LTI¹
LTI²
LTI3
LTI4
LTI5
LTI6
LTI¹
LTI²
LTI3
LTI4
LTI5
LTI¹
LTI²
300,000
186,667
27-Nov-20
14-Dec-21
300,000
186,667
$
15,584.00
29,867.00
3,421,563
6-Nov-19
3,421,563
137,644.00
1,086,301
27-Nov-20
1,086,301
815,952
14-Dec-21
815,952
-
6-Dec-22
1,679,215
300,000
69,783
27-Nov-20
14-Dec-21
300,000
69,783
2,257,031
6-Nov-19
2,257,031
696,926
27-Nov-20
-
5-Nov-21
300,000
69,783
27-Nov-20
14-Dec-21
696,926
685,510
300,000
69,783
56,118.00
40,052.00
27,407.00
15,584.00
11,165.00
90,797.00
36,003.00
33,649.00
15,584.00
11,165.00
*balance at the date of retirement
3,693,523
4,379,033
213,947
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
300,000
-
-
-
-
-
300,000
-
116,154
342,755
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
Exercisable at
End of Year
No.
-
186,667
Vested and
Unexercisable at End
of Year
No.
-
-
3,421,563
-
-
-
-
69,783
2,257,031
-
-
-
69,783
-
1,086,301
815,952
1,679,215
-
-
-
580,772
342,755
-
-
1,058,909
2,396,597
923,527
¹ Unlisted LTI Options issued 27 November 2020 exercisable at 50c - expiry on 30 June 2023
2 Unlisted LTI Service Fee Options issued 14 December 2021 exercisable at 0c - expiry on 14 December 2024, fully exercised on 17 August 2023
3 Unlisted LTI Options issued 6 November 2019 exercisable at 1c, expiry 31 July 2023, exercise is subject to operational hurdles, fully exercised on 31 July 2023
4 Unlisted LTI Options issued 5 August 2020 and 27 November 2020 exercisable at 1c, expiry 31 July 2023, exercise is subject to share price hurdles which were not satisfied and lapsed on 31 July 2023
5 Unlisted LTI Options issued 5 November 2021 and 14 December 2021 exercisable at 0c, expiry 31 August 2024, exercise is subject to share price hurdles
6 Unlisted LTI Options issued 6 December 2022 exercisable at 0c, expiry 31 August 2028, exercise is subject to share price hurdles
2022
Balance at Beginning of
Year
Issue Date
No.
Value
No.
Value
No.
Grant Details
Exercised
Lapsed
Other changes
Mick Wilkes
Andrew Corbett
Anthony Wehby
Chris Drew
Stuart Rechner
LTI¹
LTI²
LTI3
4
LTI
5
LTI
LTI¹
LTI²
LTI3
LTI4
LTI5
LTI¹
LTI²
300,000
-
27-Nov-20
14-Dec-21
300,000
186,667
3,421,563
6-Nov-19
3,421,563
1,086,301
27-Nov-20
1,086,301
-
14-Dec-21
815,952
300,000
-
27-Nov-20
14-Dec-21
300,000
69,783
2,257,031
6-Nov-19
2,257,031
696,926
27-Nov-20
-
5-Nov-21
300,000
-
27-Nov-20
14-Dec-21
696,926
685,510
300,000
69,783
$
-
29,867
137,644
56,118
7,970
15,584
11,165
90,797
36,003
7,743
15,584
11,165
8,361,821
10,189,516
419,641
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
Exercisable at
End of Year
No.
300,000
186,667
Vested and
Unexercisable at End
of Year
No.
-
-
3,421,563
-
-
300,000
69,783
2,257,031
-
-
300,000
69,783
-
1,086,301
815,952
-
-
-
696,926
685,510
-
-
6,904,827
3,284,689
¹ Unlisted LTI Options issued 27 November 2020 exercisable at 50c - expiry on 30 June 2023
2 Unlisted LTI Options issued 14 December 2021 exercisable at 0c - expiry on 14 December 2024
3 Unlisted LTI Options issued 6 November 2019 exercisable at 1c, expiry 31 July 2023, exercise is subject to operational hurdles
4 Unlisted LTI Options issued 5 August 2020 and 27 November 2020 exercisable at 1c, expiry 31 July 2023, exercise is subject to share price hurdles
5 Unlisted LTI Options issued 5 November 2021 and 14 December 2021 exercisable at 0c, expiry 31 August 2024, exercise is subject to share price hurdles
- 23 -
-
2,099,018
-
-
1,019,940
-
856,888
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Performance Rights Holdings of KMP
The number of performance rights in the Company held by each KMP of the Group during the 2023 and 2022
reporting periods is as follows:
Grant Details
Vested
Lapsed
Other changes
2023
Balance at Beginning
of Year
Issue Date
No.
Andrew Corbett
STI222
STI233
1,019,940
14-Dec-21
1,019,940
-
6-Dec-22
2,099,018
Value
$
13,259
13,098
No.
178,489
-
Value
$
2,320
-
841,451
-
No.
No.
Balance at End
of Year
Chris Drew*
STI222
856,888
5-Nov-21
856,888
11,140
167,093
2,172
689,795
*balance at the date of retirement
1,876,828
3,975,846
37,497
345,582
4,492
1,531,246
-
2,099,018
Grant Details
Vested
Lapsed
Other changes
2022
Balance at Beginning
of Year
Issue Date
No.
Andrew Corbett
Chris Drew
STI211
STI222
STI211
STI222
1,357,877
27-Nov-20
1,357,877
-
14-Dec-21
1,019,940
871,157
27-Nov-20
-
5-Nov-21
871,157
856,888
Value
$
77,786
13,259
49,904
11,140
No.
923,553
-
Value
$
52,906
-
434,324
-
636,081
36,438
235,076
-
-
-
No.
No.
Balance at End
of Year
2,229,034
4,105,862
152,089
1,559,634
89,344
669,400
-
1,876,828
1 STI21 Performance Rights issued on 27 November 2020 will vest as follows: (a) Up to 50% of STI Performance Rights will automatically vest if the
Comp any ’s June 2021 VWAP is between 120% to 150% of the Company’s June 2020 VWAP; and (b) Up to 50% of the STI Performance Rights will
vest, at the Board’s discretion, upon the achievement of operational performance measures before 30 June 2021. All STI Performance Rights that have
not vested by 31 July 2021 will automatically lapse and be forfeited.
2 STI22 Performance Rights issued on 5 November 2021 and 14 December 2021 will vest as follows: (a) Up to 40% of STI Performance Rights will
automatically vest if the Company’s June 2022 VWAP is between 120% to 150% of the Company’s June 2021 VWAP; and (b) Up to 60% of the STI
Performance Rights will vest, at the Board’s discretion, upon the achievement of op erational performance measures before 30 June 2022. All STI
Performance Rights that have not vested by 31 August 2022 will automatically lapse and be forfeited.
3 STI23 Performance Rights issued on 6 December 2022 will vest as follows:
(a) Up to 40% of STI Performance Rights will automatically vest if the Company’s June 2023 VWAP is between 120% to 150% of the Comp any ’s
June 2022 VWAP; and
(b) Up to 60% of the STI Performance Rights will vest, at the Board’s discretion, upon the achievement of op erational performance measures before
30 June 2023. All STI Performance Rights that have not vested by 31 August 2023 will automatically lapse and be forfeited.
Share holdings of KMP
The number of ordinary shares in the Company held by each KMP of the Group during the 2023 and 2022
reporting periods is as follows:
2023
Mick Wilkes
Andrew Corbett
Anthony Wehby
Stuart Rechner
Balance at
Beginning of Year
Granted as
Remuneration during
the Year
Issued on Exercise of
Options/Vesting of
Performance Rights during
the Year
Other Net Changes
during the Year
Balance at End of
Year
2,527,452
4,386,129
1,335,696
431,544
8,680,821
-
- -
- 178,489 -
200,000
-
-
- 178,489
2,527,452
4,564,618
1,535,696
-
- - 431,544
9,059,310
200,000
- 24 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
2022
Mick Wilkes
Andrew Corbett
Anthony Wehby
Chris Drew
Stuart Rechner
Balance at
Beginning
of Year
Granted as
Remuneration
during the Year
Issued on Exercise of
Options/Vesting of
Performance Rights
during the Year
Other (Net) Changes
during the Year
Balance at
End of Year
2,527,452
3,462,576
1,335,696
2,114,199
431,544
9,871,467
-
-
-
-
-
-
-
923,553
-
636,081
-
1,559,634
-
-
-
-
-
-
2,527,452
4,386,129
1,335,696
2,750,280
431,544
11,431,101
(i)
Loans to key management personnel
There were no loans to individuals or members of KMP during the financial year or the previous financial
year.
(j)
Other KMP transactions
Subsequent to 30 June 2023, on 14 August 2023 Shareholders approved the grant of up to $300,000 MH Project
Goal Performance Options to Andrew Corbett, subject to the following vesting conditions:
a. Completion of process plant upgrade commissioning;
b. Announcement of commercial production; and
c. Commencement of concentrate sales.
The earliest date on which the Options may vest is 30 June 2025. The number of options to be provided in
respect of the rights will be calculated on the basis of 20-day KSN VWAP immediately prior to the vesting
condition being met. All MH Project Options that have not vested by 31 July 2025 will automatically lapse
and be forfeited.
There have been no other transactions involving equity instruments other than those described above. For
details of other transactions with KMP, refer to Note 22 Related Party Transactions
END OF AUDITED REMUNERATION REPORT
- 25 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
SHARE OPTIONS, PERFORMANCE RIGHTS AND WARRANTS
During the 2023 reporting period, the unissued ordinary shares of the Company under option, warrants and
Performance rights were as follows:
Security Type
Grant
Date
Date of
Expiry
Exercise
Price
Held at
Issued
Exercised
01-Jul-22
06-Nov-19
31-Jul-23
1 cent
6,818,841
31-Jan-20
31-Jan-23
25 cents
600,000
27-Nov-20
31-Jul-23
1 cent
2,707,994
27-Nov-20
31-Jul-23
50 cents
900,000
5-Nov- 21
31-Aug-24
0 cents
2,685,770
14-Dec-21
14-Dec-24
0 cents
326,233
-
-
-
-
-
-
Options
Options
Options
Options
Options
Options
Options
Warrants
Lapsed /
Cancelled
-
600,000
116,154
900,000
342,755
-
-
-
-
Held at
30-Jun-23
4,561,8101
-
2,591,8402
-
2,343,015
326,2333
5,171,621
25,000,000
6,785,8454
2,257,031
-
-
-
-
-
-
-
-
6 Dec 22
31-Aug-28
0 Cents
7 July 22
7-July-27
20 Cents
Performance Rights
6-Dec-22
31-Aug- 23
0 Cents
5,171,621
25,000,000
-
-
-
1 Subsequent to 30 June 2023, 4,561,810 ordinary shares in the Company were issued pursuant to the exercise of options on 26 July 2023
2 Subsequent to 30 June 2023, 2,591,840 unlisted options lapsed on 31 July 2023
3 Subsequent to 30 June 2023, 326,233 ordinary shares in the Company were issued pursuant to the exercise of options on 17 August 2023
4Subsequent to 30 June 2023, 742,826 Performance Rights vested and were converted to ordinary shares and 6,043,019 Performance Rights lapsed
During the year ended 30 June 2023, 2,257,031 ordinary shares in the Company were issued pursuant to the
exercise of options. During the year ended 30 June 2022, no ordinary shares in the Company were issued
pursuant to the exercise of options. Apart from as described in this report, there have been no conversions to,
calls of, or subscriptions for ordinary shares of issued or potential ordinary shares since the reporting date and
before the completion of these financial statements.
No person entitled to exercise an option had or has any right by virtue of the option to participate in any share
issue of any other body corporate.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to any court pursuant to section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the
purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Group
was not a party to any such proceedings during the year.
- 26 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
INDEMNITIES GIVEN AND INSURANCE PREMIUMS PAID TO AUDITORS AND OFFICERS
The Company has entered into Deeds of Access, Indemnity and Insurance with each Director.
Under these deeds, the Company has undertaken, subject to the restrictions in the Corporations Act, to:
a)
b)
c)
d)
e)
indemnify each Director from certain liabilities incurred from acting in that position under specified
circumstances;
maintain directors’ and officers’ insurance cover (if available) in favour of each Director whilst that
person maintains such office and for seven years after the Director has ceased to be a director;
cease to maintain directors’ and officers’ insurance cover in favour of each Director if the Company
reasonably determines that the type of coverage is no longer available.
If the Company ceases to maintain directors’ and officers’ insurance cover in favour of a Director, then
the Company must notify that Director of that event; and
provide access to any Company records which are relevant to the Director’s holding of office with the
Company, for a period of seven years after the Director has ceased to be a Director.
During the year, the Company paid a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all directors and the company secretary.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise
out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such
disclosure is prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify any current or former officer or auditor of the Group against a liability
incurred as such by an officer or auditor.
AUDIT COMMITTEE
The Board has established a separate Audit and Risk Management Committee to assist the Board to discharge
its corporate governance duties in relation to implementing and maintaining appropriate policies and
procedures relating to risk management, financial reporting, external and internal control and auditing.
- 27 -
DIRECTORS’ REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
NON-AUDIT SERVICES
During the year the Company’s auditor provided taxation services to the Company at a total cost of $22,881.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 is
included in this Annual Report. Hall Chadwick continues in office in accordance with section 327 of the
Corporations Act 2001.
Pursuant to section 298(2) Corporations Act, this Directors’ Report:
a)
b)
c)
is made in accordance with a resolution of the Directors; and
is dated 14 September 2023 and
is signed by Mr Mick Wilkes.
Mick Wilkes
Non-Executive Chair
Sydney, New South Wales
14 September 2023
- 28 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
as at 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Consolidated Statement of Financial Position
Notes
Consolidated Group
2023
$
2022
$
Current assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Inventory
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Capitalised exploration expenditure
Mine & Resource development expenditure
Right of use assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing loan
Lease liabilities
Employee Provisions
Deferred Payables
Total current liabilities
Non-current liabilities
Borrowings
Interest bearing loan
Lease liabilities
Rehabilitation Provision
Employee Provisions
Deferred Payables
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Advanced Placement Fund (net)
Accumulated losses
Share based payment reserve
Foreign currency translation reserve
Total equity
9
10
11
13
23
23
5
14
15
5
26
5
16
21
18,206,767
1,315,211
269,150
3,030,080
278,752
23,099,960
17,256,109
46,079,669
16,650,984
935,006
7,399,044
88,320,812
111,420,772
7,907,917
42,796
360,334
539,486
9,579,789
18,430,322
8,822,176
-
400,687
7,274,000
38,687
-
16,535,550
34,965,872
76,454,900
5,589,673
3,414,195
562,900
2,338,674
101,887
12,007,329
16,999,182
41,554,898
13,553,356
833,234
3,641,425
76,582,095
88,589,424
6,267,320
39,481
283,986
469,308
-
7,060,095
-
41,272
466,756
7,274,000
59,242
12,557,882
20,399,152
27,459,247
61,130,177
121,170,385
3,867,452
(50,812,957)
2,043,126
186,894
76,454,900
121,051,877
-
(60,738,440)
609,952
206,788
61,130,177
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
- 30 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
as at 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Continuing Operations
Sales
Silver sales
Other income
Cost of sales
Gross Profit
Administration expenses
Employee benefits
Consultant and legal fees
Depreciation expense
Amortisation expense
Director fees
Share based payments expense
Other expenses
Mark to market financial assets
Foreign Exchange Gain/(Loss)
Profit/ (Loss) before income tax expense
Income tax expense
Profit/(Loss) for the year
Other comprehensive income/(loss)
Other comprehensive income/(loss) – net of tax
Total comprehensive loss for the year
Basic Profit/(loss) per share (cents)
Diluted Profit/(loss) per share (cents)
Notes
Consolidated Group
2023
$
2022
$
2
3
4
8
8
44,753,992
21,238
(20,985,979)
23,789,251
11,903,750
1,497,460
(10,815,833)
2,585,377
(532,142)
(7,041,660)
(111,996)
(3,375,375)
(1,075,696)
(285,730)
(314,996)
(777,088)
(293,750)
(173,591)
9,807,227
-
9,807,227
(1,055,468)
(945,751)
(550,423)
(1,217,484)
(81,258)
(239,455)
(130,942)
(15,791)
(437,500)
529
(2,088,167)
-
(2,088,167)
(19,894)
9,787,333
41,737
(2,046,430)
2.37
2.13
(0.67)
(0.67)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
- 31 -
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Consolidated Statement of Changes in Equity
Attributable to the shareholders of Kingston Resources Limited
Advanced
Placement Fund
$
Balance at 1 July 2021
Loss for the full year
Other comprehensive income
Issue of Shares
Cost of share issue
Share based payments
Transfer from Share Based Payment
Reserve on vesting/lapsing of
securities
Additions to reserves
Ordinary
Shares
$
98,584,828
-
-
98,584,828
23,126,061
(797,505)
-
138,493
-
Balance at 30 June 2022
121,051,877
Balance at 1 July 2022
Profit for the full year
Other comprehensive income
Issue of Shares
T1 Placement monies
Cost of share issue
Share based payments
Transfer from Share Based Payment
Reserve on vesting/lapsing of
securities
Additions to reserves
121,051,877
-
-
121,051,877
22,570
-
(2,500)
-
98,438
-
-
-
-
-
-
4,500,000
(302,255)
(330,293)
-
-
Balance at 30 June 2023
121,170,385
3,867,452
(50,812,957)
Accumul
ated
Losses
$
(58,713,1
89)
(2,088,16
7)
-
(60,801,3
56)
-
-
-
62,916
-
(60,738,4
40)
Foreign
Exchange
Reserves
$
Share Based
Payment
Reserve
$
Total Equity
$
165,051
690,419
40,727,110
-
-
-
-
(2,088,167)
-
165,051
690,419
38,638,943
-
-
-
-
-
-
120,942
23,126,061
(797,505)
120,942
(201,409)
--
41,737
-
41,737
206,788
609,952
61,130,177
-
-
-
-
-
-
-
-
-
-
(60,738,440)
206,788
609,952
61,130,177
9,807,227
-
-
-
-
-
9,807,227
-
(50,931,213)
206,788
609,952
70,937,404
-
-
-
-
118,256
-
-
-
-
-
-
-
-
-
1,649,868
(216,694)
22,570
4,500,000
(304,755)
1,319,575
-
(19,894)
186,894
-
(19,894)
2,043,126
76,454,900
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
- 32 -
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Consolidated Statement of Cash Flows
Cash flows from operating activities
Continued operations
Receipts from customers
Interest received
Government Grants
Payments to suppliers and employees
Net cash used in operating activities
Notes
Consolidated Group
2023
$
2022
$
44,774,911
3,238
250,000
(29,533,911)
15,494,238
11,660,228
21,122
-
(8,697,090)
2,984,260
20
Cash flows from investing activities
Payment for exploration and evaluation/Mine Development
Payment for bond deposits
Payment for acquisition of Mineral Hill Pty Ltd
Proceeds from divestment of WesternX Pty Ltd
Payment for PPE
Proceeds from sale of investment
Proceeds from sale of PPE
Payment for other non-current assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Advanced placement fund
Transaction costs related to issue of shares, convertibles, or options
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
Net change in cash and cash equivalents held
Cash and cash equivalents at beginning of financial year
Effect of movement in exchange rate on cash held
Cash and cash equivalents at end of financial year
9
(8,830,323)
(3,746,109)
(2,915,629)
1,500,000
(2,792,869)
-
-
-
(16,784,930)
22,570
4,226,629
(2,500)
9,700,000
(41,230)
13,905,469
12,614,777
5,589,673
2,317
18,206,767
(19,700,402)
(3,591,853)
(1,236,210)
2,500,000
-
314,972
1,179
(249,426)
(21,961,740)
14,230,000
-
(697,506)
49,149
(29,916)
13,551,727
(5,425,753)
11,007,936
7,490
5,589,673
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
- 33 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Notes to the Financial Statements
This financial report includes the consolidated financial statements and notes of Kingston Resources Limited and
controlled entities (‘Consolidated Group’ or ‘Group’).
For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.
Note 1: Statement of Significant Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The consolidated financial statements are presented in the
currency of Australian dollars.
Statement of Compliance
Compliance with Australian Accounting Standards ensures that the financial statements and notes of Kingston Resources
Limited and its controlled entities comply with International Financial Reporting Standards (IFRS).
The financial statements were authorised for issue by the directors on 14 September 2023.
Basis of Preparation
The financial statements have been prepared on an accrual basis and are based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of
accounting has been applied.
Significant Accounting Policies
a)
Principles of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June
2023. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with
the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries
have a reporting date of 30 June. A list of controlled entities is contained in Note 12 to the financial statements.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts
reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with
the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net
assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests based on their respective ownership interests.
b)
Changes in Accounting Policies
The Group has considered the implications of new or amended Accounting Standards which have become
applicable for the current financial reporting period.
c)
New Accounting Standards and Interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June
2023.
- 34 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
d)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income). Current and deferred income tax expense (income) is charged or credited directly to other
comprehensive income instead of the profit or loss when the tax relates to items that are credited or charged directly
to other comprehensive income.
Current tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and its intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of
the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Tax consolidation
Kingston Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation legislation. Each entity in the Group recognises its own current and
deferred tax liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current
tax liability (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are
immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed
an income tax consolidated group to apply from 1 July 2003.
e)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash
flows that will be received from the assets employment and subsequent disposal.
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. All other repairs and maintenance are charged to profit or loss on the statement
of profit or loss and other comprehensive income.
Depreciation
The depreciable amount of all fixed assets is depreciated using the straight line method commencing from the time
the asset is held ready for use.
- 35 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Assets
Motor Vehicles
Buildings
Plant & Equipment
Depreciation Rate
20-25%
10-33%
10-50%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. The gains and
losses are included in profit or loss in the statement of profit or loss and other comprehensive income. When
revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained
earnings.
f)
Leases
At inception of a contract the Group assesses if the contract contains or is a lease. If there is a lease present and
the Group is the lessee, a right-of-use asset and a corresponding lease liability is recognised. However, all contracts
that are classified as short-term leases (ie a lease with a remaining lease term of 12 months or less) and leases of
low-value assets are recognised as an operating expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above,
any lease payments made at or before the commencement date, as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the
shortest. Where a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects
that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
underlying asset.
g)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
- 36 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined
using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie
the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a
market, the most advantageous market available to the entity at the end of the reporting period (ie the market that
maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after
taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use
the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest
and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
h)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase
or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs,
except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are
expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine
fair value. In other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as specified in AASB 15.63.
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at:
-
-
amortised cost; or
fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
-
-
-
a contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
held for trading; or
initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of
the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through
the expected life of the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
-
it is incurred for the purpose of repurchasing or repaying in the near term;
- 37 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
-
-
part of a portfolio where there is an actual pattern of short-term profit taking; or
a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a
derivative that is in a effective hedging relationships).
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not
part of a designated hedging relationship are recognised in profit or loss.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other
comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred to
retained earnings upon derecognition of the financial liability. If taking the change in credit risk in other
comprehensive income enlarges or creates an accounting mismatch, then these gains or losses should be taken to
profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
-
-
-
amortised cost;
fair value through other comprehensive income; or
fair value through profit or loss.
Measurement is on the basis of two primary criteria:
-
-
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
-
-
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
-
-
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates;
the business model for managing the financial assets comprises both contractual cash flows collection
and the selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The Group initially designates a financial instrument as measured at fair value through profit or loss if:
-
-
-
it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases;
it is in accordance with the documented risk management or investment strategy, and information about
the groupings was documented appropriately, so that the performance of the financial liability that was
part of a group of financial liabilities or financial assets can be managed and evaluated consistently on a
fair value basis;
it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows
otherwise required by the contract.
- 38 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time
option on initial classification and is irrevocable until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent consideration
recognised by an acquirer in a business combination to which AASB 3: Business Combinations applies, the Group
made an irrevocable election to measure any subsequent changes in fair value of the equity instruments in other
comprehensive income, while the dividend revenue received on underlying equity instruments investment will still
be recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in
accordance with the Group's accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the
statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a
substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability
and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of financial asset:
-
-
-
the right to receive cash flows from the asset has expired or been transferred;
all risk and rewards of ownership of the asset have been substantially transferred; and
the Group no longer controls the asset (ie the Group has no practical ability to make a unilateral decision
to sell the asset to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through other comprehensive income, the
cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or
loss.
On derecognition of an investment in equity which was elected to be classified under fair value through other
comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve
is not reclassified to profit or loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
-
-
-
-
-
financial assets that are measured at amortised cost or fair value through other comprehensive income;
lease receivables;
contract assets (eg amounts due from customers under construction contracts);
loan commitments that are not measured at fair value through profit or loss; and
financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
-
financial assets measured at fair value through profit or loss; or
- 39 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
-
equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial
instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original effective interest rate of the financial instrument.
The Group uses the general approach to impairment, as applicable under AASB 9: Financial Instruments:
Under the general approach, at each reporting period, the Group assesses whether the financial instruments are
credit-impaired, and if:
-
-
the credit risk of the financial instrument has increased significantly since initial recognition, the Group
measures the loss allowance of the financial instruments at an amount equal to the lifetime expected credit
losses; or
there is no significant increase in credit risk since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to 12-month expected credit losses.
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in
the statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that
asset.
Assets measured at fair value through other comprehensive income are recognised at fair value, with changes in
fair value recognised in other comprehensive income. Amounts in relation to change in credit risk are transferred
from other comprehensive income to profit or loss at every reporting period.
For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a provision
for loss allowance is created in the statement of financial position to recognise the loss allowance.
i)
Impairment of Non-Financial Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the
asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the
statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
j)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars
which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where
deferred in equity as a qualifying cash flow or net investment hedge in which case they would be recognised in
other comprehensive income.
k)
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees
to reporting date. Employee benefits that are expected to be settled wholly within one year have been measured at
the amounts expected to be paid when the liability is settled plus related on costs. Employee benefits payable later
than one year have been measured at the present value of the estimated future cash outflows to be made for those
benefits.
- 40 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Equity-settled compensation
The Group operates a share-based compensation plan which includes a share option arrangement. The bonus
element over the exercise price of the employee’s services rendered in exchange for the grant of options is
recognised as an expense in the statement of profit or loss and other comprehensive income, with a corresponding
increase to an equity account. The total amount to be expensed over the vesting period is determined by reference
to the fair value of the shares of the options granted. The fair value of options is ascertained using a Black-Scholes
pricing model which incorporates all market vesting conditions, the fair value of Performance Rights is ascertained
using the Monte Carlo method.
l)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less.
m)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
n)
Revenue and Other Income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Research and development credits are treated as Other Income and recognised to the extent that the related
expenditure has been expensed in the Statement of Profit and Loss and Other Comprehensive Income. Research
and development credits that pertain to expenditure on any capitalised amounts remaining on the Statement of
Financial Position are deferred accordingly to be recognised in-line with expensing of those items.
All revenue is stated net of the amount of goods and services tax (GST).
o) Mine Development
Mine development expenditures incurred are capitalised in respect of each identifiable area of interest where there
is a reasonable assessment of existence of recoverable reserves. These costs are only capitalised to the extent that
they are expected to be realised through production and sale of mineral resources identified.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of
the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise
costs in relation to that area of interest.
p)
Exploration Expenditure
Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area
of interest. These costs are only capitalised to the extent that they are expected to be recovered through the
successful development of the area or where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of
the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise
costs in relation to that area of interest.
Costs of site restoration are provided over the life of the project from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and
regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current
legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
- 41 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
and future legislation. Accordingly the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
q)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement
of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.
r)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
s)
Going Concern
The consolidated entity has earned an operating profit of $9,807,227 (2022:Loss $2,088,167) and positive
operating cash flows of $15,494,238 (2022 $2,984,260) for the year ended 30 June 2023. The consolidated entity’s
net current asset position as at 30 June 2023 was $4,669,638 (2022: $4,947,234) including $18,206,767 in cash
(2022: $5,589,673).
During the year the following significant equity and debt raisings were made:
On 7 July 2022, the Company secured a two-tranche $10m debt facility with PURE asset management.
$5 million was drawn immediately under Tranche 1 of the facility under a 4-year secured loan facility
with an interest rate of 9.90% per annum with 25,000,000 detached warrant shares issued at an
exercise price of $0.20. An establishment fee of $150,000 was recognised as a reduction in proceeds.
On 29 June 2023, , $5million was drawn under Tranche 2 of the facility under a 4-year secured loan
facility issued with an interest rate of 9.90% per annum with 35,714,286 detached warrant shares
issued at an exercise price of $0.14. An establishment fee of $150,000 was recognised as a reduction
in proceeds.
On 27 June 2023,the Company announced its intention to undertake a two Tranche Share Placement
offer raising a total of $5,500,000. On 30 June 2023, advanced placement monies totalling $4,500,000
were received under Tranche 1 of the Placement offer. On 3 July 2023, 52,941,176 Tranche 1
Placement shares were issued at $0.085.On 17 August 2023, Tranche 1 of the Placement offer was
completed upon issuing 26,470,588 unlisted attaching options expiring on 31 July 2025 with an
exercise price of $0.14.
For details on the remaining shares issued during the year see Note 16.
The entity has planned to use these funds largely on Life of Mine exploration and development activities, the
expenditure of which can be varied and applied discretionarily.
The Group’s cash balance of $18,206,767 as at 30 June 2023 leaves it with sufficient funding to continue to meet
operational expenditure requirements, including minimum exploration commitments across its tenement portfolio.
Nevertheless, the nature of an exploration and development company is to have negative cash flow from operations
and investing activities, and as such the Company may need to raise equity from time to time as successfully
demonstrated most recently in November 2021 and February 2022. If the Group is unsuccessful in raising capital,
a material uncertainty exists, that may cast significant doubt on the Group’s ability as a going concern and its
ability to recover assets, and discharge liabilities in the normal course of business and at the amount shown in the
financial statements. The financial statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary
should the Group not continue as a going concern.
Taking into account the current cash reserves of the Company, the Directors are confident the Company has
adequate resources to continue in its main business activity for the foreseeable future. As a result, the financial
statements have been prepared on the basis of going concern which contemplates continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business and at the
amounts stated in the financial report.
- 42 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
t)
Joint arrangements and associates
Associates are those entities over which the Group is able to exert significant influence but which are not
subsidiaries.
A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which
the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and
obligations for underlying liabilities. A joint arrangement in which the Group has direct rights to underlying assets
and obligations for underlying liabilities is classified as a joint operation.
Investments in associates and joint ventures are accounted for using the equity method. Interests in joint operations
are accounted for by recognising the Group’s assets (including its share of any assets held jointly), its liabilities
(including its share of any liabilities incurred jointly), its revenue from the sale of its share of the output arising
from the joint operation, its share of the revenue from the sale of the output by the joint operation and its expenses
(including its share of any expenses incurred jointly).
Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not
recognised separately and is included in the amount recognised as investment.
The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted
where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset
is also tested for impairment.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group.
Key estimates – Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to
impairment of assets.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by management review using the Black
Scholes, Monte Carlo, or an agreed fair value method. The relevant assumptions are detailed in Note 21. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact expenses and equity.
Assessment of mine life of assets
The Assessment of mine life of assets has been based on Life of Mine Plan. In addition, condition of the assets is assessed
at least once per year and considered against the remaining mine life. Adjustments to mine lives are made when considered
necessary.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience and manufacturers’ warranties (for
plant and equipment). In addition, the condition of the assets is assessed at least once per year and considered against the
remaining useful life. Adjustments to useful lives are made when considered necessary.
Exploration and evaluation of expenditure
Costs arising from exploration and evaluation activities are carried forward provided the rights to tenure of the area of the
interest are current and such costs are expected to be recouped through successful development, or by sale, or where
exploration and evaluation activities have not, at reporting date, reached a stage to allow a reasonable assessment
regarding the existence of economically recoverable reserves. Costs carried forward in respect of an area of interest that
is abandoned are written off in the year in which the decision to abandon is made. The carrying value of the capitalised
exploration and evaluation expenditure is assessed for impairment whenever facts and circumstances suggest that the
- 43 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
carrying amount of the asset may exceed its recoverable amount. Such capitalised exploration expenditure is carried at
the end of the reporting period at $46,079,669 (see Note 23).
The Group has applied AASB 6 Exploration for and Evaluation of Mineral Resources.
Consolidated Group
2023
$
2022
$
3,238
-
-
-
18,000
21,238
21,122
82,184
1,392,976
1,178
-
1,497,460
Consolidated Group
2023
$
2022
$
(225,107)
(86,670)
(3,063,598)
(3,375,375)
(78,013)
(37,751)
(1,101,720)
(1,217,484)
2.
OTHER INCOME
Other income
Interest income
Profit on sale of financial assets
Profit on disposal of mining assets
Proceeds from sale of motor vehicle
Rental income
Total other income
3.
DEPRECIATION
Depreciation of:
- right of use asset
- building
- plant and equipment
Total depreciation and amortisation
4.
INCOME TAX
(a) Income tax recognised in profit and loss
The prima facie tax expense (benefit) on operating result is reconciled to the income tax provided in the statement of
profit or loss and other comprehensive income as follows:
Consolidated Group
2023
$
2022
$
Accounting profit/(loss) before income tax
9,807,227
(2,088,146)
Income tax benefit calculated at 25%
Non-deductible expenses
Utilisation of tax losses previously not recognised
Tax losses/temporary difference not brought into
account
Income tax expense (benefit)
(2,451,807)
143,455
2,308,352
-
(522,037)
350,381
-
171,656
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 25% (FY22 25%) payable by Australian corporate
entities on taxable profits under Australian tax law.
- 44 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
(b) Analysis of deferred tax asset
No deferred tax assets have been recognised other than to offset deferred tax liabilities, as it is currently not probable that
future taxable profit will be available to realise the asset. The potential deferred tax asset on carry forward losses amounts
to $6,296,780 (2022: $4,104,549).
Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, the Company and its 100% wholly-owned subsidiaries formed
a tax consolidated group; the head entity of the tax consolidated group is Kingston Resources Limited.
5.
RIGHT OF USE ASSETS
The Group’s Right of use Assets include buildings (in the form of an office lease), plant and equipment and motor
vehicles.
Consolidated Group
30 June 2023
$
30 June 2022
$
336,145
(183,312)
152,833
336,145
(95,978)
240,167
361,505
-
262,978
(326,654)
297,829
518,500
-
63,901
(98,057)
484,344
935,006
360,334
400,687
761,021
-
180,044
181,461
(58,445)
303,060
200,786
109,877
207,837
(228,493)
290,007
833,234
283,986
466,756
750,742
a. Right of use assets
Leased Buildings
Accumulated Amortisation
Net Carrying Value
Leased Motor Vehicles
Opening Balance
Addition through business combination
Additions
Accumulated Amortisation
Net Carrying Value
Leased Equipment
Opening Balance
Addition through business combination
Additions
Accumulated Amortisation
Net Carrying Value
Total Net Carrying Value
b. Lease liabilities
Current
Non-current
- 45 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
6.
INTERESTS OF KEY MANAGEMENT PERSONNEL
(a)
Key management personnel compensation
Key management personnel (KMP) remuneration has been included in the Remuneration Report section of the Directors’
Report.
The totals of remuneration paid to KMP of the Group during the 2023 and 2022 reporting periods are as follows.
Short-term employee benefits
Post-employment benefits
Equity-settled share-based payments
Total
Consolidated Group
2023
$
2022
$
1,037,447
61,375
40,505
1,139,327
928,982
67,523
92,309
1,088,814
Consolidated Group
2023
$
2022
$
7.
AUDITOR REMUNERATION
Remuneration of the auditor of the Company for:
- auditing or reviewing the financial statements
- non-audit services
Total
81,456
22,881
104,337
44,572
27,327
71,899
8.
PROFIT/(LOSS) PER SHARE
(a) Basic profit/(loss) per share (cents per share)
(b) Diluted profit/(loss) per share (cents per share)
(c) Weighted average number of ordinary shares on
issue used in the calculation of basic profit/(loss)
per share
(d) Weighted average number of ordinary shares on
issue used in the calculation of diluted profit/(loss)
per share
Profit/(Loss) used in calculation
(d)
Consolidated Group
2023
$
2022
$
2.37
2.13
413,256,806
(0.67)
(0.67)
313,665,434
460,037,170
313,665,434
$9,807,227
($2,088,167)
Consolidated Group
2023
$
2022
$
9.
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Total
18,206,767
18,206,767
5,589,673
5,589,673
- 46 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Cash at bank earns interest at floating rates based on daily deposit rates. The carrying amounts of cash and cash
equivalents represent fair value.
Consolidated Group
2023
$
2022
$
10. TRADE AND OTHER RECEIVABLES
Current
Deferred receivable – Divestment of WesternX Pty Ltd
Other receivables
Total current trade and other receivables
-
1,315,211
1,315,211
1,500,000
1,914,195
3,414,195
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter
parties other than those receivables specifically provided for as mentioned within this note. The class of assets described
as Other Receivables is considered to be the main source of credit risk related to the Group. During the year, the Group
took up a provision equivalent to 66.66% of total GST receivable for Gallipoli Exploration (PNG) Ltd and WCB PNG
Exploration Ltd totalling $647,599. The provision increased the capitalised expenditure for Misima gold project by
$647,599.
The Group applies the AASB 9 general approach to measuring expected credit losses, which permits the use of the lifetime
expected loss provision for all other receivables. Under the general approach a nil expected loss rate was applied to all
receivables as at 30 June 2023 and 30 June 2022.
11.
FINANCIAL ASSETS
Financial assets at fair value through profit and loss:
At fair value
Shares in listed entities
Options in listed entities
Consolidated Group
2023
$
2022
$
262,900
6,250
269,150
500,400
62,500
562,900
Financial assets at fair value through profit and loss consist of investments in ordinary shares and listed options.
(i) Listed shares - The fair value of listed shares has been determined directly by reference to published price quotations
in an active market.
(ii) Listed options - The fair value of listed options has been determined directly by reference to published price
quotations in an active market.
12. CONTROLLED ENTITIES
Name
Country of
Incorporation
Principal Activity
Beneficial Percentage
Interest Held By
Economic Entity
2022
%
2023
%
Slipstream WANT Pty Ltd
Universal Rare Earths Pty Ltd
Fleurieu Mines Pty Ltd
Centex Resources Ltd (formerly U Energy Pty Ltd)
WCB Pacific Pty Limited
WCB Australia Pty Limited
Mineral Hill Pty Ltd
WCB PNG Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Mineral Exploration
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Papua New Guinea Mineral exploration
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
- 47 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
WCB PNG Exploration Limited
Papua New Guinea Mineral exploration
Gallipoli Exploration (PNG) Limited
Papua New Guinea Mineral exploration
100
100
100
100
Consolidated Group
2023
$
2022
$
13.
PROPERTY, PLANT AND EQUIPMENT
Motor vehicles:
Opening balance
Exchange rate adjustment
Additions
Disposals
Closing Balance
Accumulated depreciation
Opening balance
Exchange rate adjustment
Depreciation for the year
Closing balance
Net Book Value – Motor Vehicles
Buildings:
Opening balance
Addition through business combination
Exchange rate adjustment
Additions
Disposals
Closing Balance
Accumulated depreciation
Opening balance
Addition through business combination
Exchange rate adjustment
Depreciation for the year
Closing balance
Net Book Value – Buildings
Plant & Equipment:
Opening balance
Addition through business combination
Exchange rate adjustment
Additions
Disposals
Closing Balance
Accumulated depreciation
Opening balance
Addition through business combination
Exchange rate adjustment
Depreciation for the year
Closing balance
Net Book Value – Plant & Equipment
226,352
-
-
-
226,352
135,900
-
40,481
176,381
49,971
895,222
-
-
14,465
-
909,687
333,015
-
-
86,670
419,685
490,002
20,265,787
-
-
3,433,211
-
23,698,998
3,919,264
-
-
3,063,598
6,982,862
16,716,136
177,203
-
49,149
-
226,352
97,987
-
37,913
135,900
90,452
-
819,700
-
75,522
-
895,222
-
295,265
-
37,750
333,015
562,207
-
7,854,425
-
12,411,362
-
20,265,787
-
2,817,544
-
1,101,720
3,919,264
16,346,523
Net Book Value – Property, plant and Equipment
17,256,109
16,999,182
- 48 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
14. OTHER NON CURRENT ASSETS
Environmental bonds
Other security deposits
Total
15. TRADE AND OTHER PAYABLES
Trade payables – unsecured
Other payables and accruals
Total
Consolidated Group
2023
$
2022
$
7,274,000
125,044
7,399,044
3,477,000
164,425
3,641,425
Consolidated Group
2023
$
2022
$
5,234,297
2,673,620
7,907,917
3,956,907
2,310,413
6,267,320
Given the short term nature of these amounts, their carrying value approximates their fair value.
- 49 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
ISSUED CAPITAL
16.
(a) Movements in contributed equity for the year
Balance at the beginning of the year
- 5 Aug 2022
- 5 Dec 2022
Shares issued during the previous financial year:
- 30 Jul 2021
- 24 Nov 2021
- 25 Nov 2021
- 25 Nov 2021
- 17 Jan 2022
- 4 Feb 2022
Less capital raising costs
Total contributed equity
Consolidated Group
30 June 2023
30 June 2022
Number of Fully
Paid Ordinary
Shares
$
Number of Fully
Paid Ordinary
Shares
$
412,769,439
627,186
2,257,031
121,051,877
7,641
113,367
283,736,946
98,584,828
2,417,611
70,000,000
500,000
50,000
54,914,882
1,150,000
138,494
14,000,000
100,000
10,000
8,786,061
230,000
415,653,656
(2,500)
121,170,385
412,769,439
(797,506)
121,051,877
During the period the Company issued share capital amounting to 2,884,217 fully paid ordinary shares of no par value. At shareholders’ meetings each fully paid ordinary share
is entitled to one vote when a poll is called.
On 17 January 2022, the Company issued 54,914,882 shares at $0.20 to Quintana Resources Holdings LP in part consideration for the acquisition of Mineral Hill Pty Ltd.
On 4 February 2022, the Company completed a placement of 1,150,000 shares at $0.20 purchased under a Share Purchase Plan announced 18 November 2021, raising $230,000.
On 27 June 2023, the Company announced its intention to undertake a two Tranche Share Placement offer raising a total of $5,500,000. On 30 June 2023, advanced placement
monies totalling $4,500,000 was received under Tranche 1 of the Placement offer. On 3 July 2023, 52,941,176 Tranche 1 Placement shares were issued at $0.085.On 17 August
2023, Tranche 1 of the Placement offer was completed upon issuing 26,245,576 unlisted attaching options expiring on 31 July 2025 with an exercise price of $0.14 on the basis
of one option for every two Placement Share.
During the financial year, 2,257,031 fully paid ordinary shares were issued as a result of the exercise of options, and 627,186 shares were issued as a result of Performance
Rights vesting.
- 50 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Since the end of the financial year end, no ordinary shares have been issued as a result of the exercise of options,
however 627,186 shares were issued as a result of Performance Rights vesting.
For more details on issues subsequent to the end of financial year, refer Subsequent Events note.
(b) Options
(i)
For information relating to the Company’s employee and consultant option scheme, including details of options
issued, exercised and lapsed during the financial year and the options outstanding at year end, refer to Note 21
Share-based Payments.
(ii)
For information relating to share options issued to key management personnel during the financial year, refer
to the Directors’ Report.
(c) Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going
concern.
The Group’s debt and equity capital includes ordinary share capital and financial liabilities, supported by
financial assets. There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing its financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of
debts levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since
the prior year.
17. RESERVES
(a)
Share-based Payment Reserve
The share-based payment reserve records items recognised as expenses on valuation of unlisted employee and
consultant incentive scheme options and performance rights. Refer to Note 21 Share-based Payments for further
details.
18. COMMITMENTS AND CONTINGENCIES
The Group has certain obligations to perform minimum exploration work and to expend minimum amounts of
money on such work on mining tenements. These obligations may be varied from time to time subject to approval
and are expected to be fulfilled in the normal course of the operations of the Group. These commitments have not
been provided for in the financial report. Due to the nature of the Group’s operations in exploring and evaluating
areas of interest, it is difficult to accurately forecast the nature and amount of future expenditure beyond the next
year. Expenditure may be reduced by seeking exemption from individual commitments, by relinquishing tenure
or by new joint venture arrangements. Expenditure may be increased when new tenements are granted or joint
venture agreements amended. The minimum expenditure commitment on currently held tenements is:
Exploration commitment
Consolidated Group
2023
$
2023
$
Not later than one year
Later than one year and less than five years
1,465,151
3,161,458
200,000
-
During the prior year, with the acquisition of Mineral Hill Pty, the Group had a commitment to increase the
Rehabilitation Security Bond as follows;
- 51 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Rehabilitation Security Bond commitment
Consolidated Group
2023
$
2022
$
Not later than one year
Later than one year and less than five years
-
-
3,770,000
-
On 4 July 2022, the Company increased its the Rehabilitation Security Bond by $2,000,000, to a total of
$5,477,000, reducing the remaining commitment to $1,770,000.
On 28 June 2023, the Company increased and fulfilled its final installment of the Rehabilitation Security Bond by
paying $1,770,000, to a total of $7,247,000.
The Group has finance leases between two and five years for motor vehicles and equipment purchased for the
Mineral Hill mine. The future minimum lease payments are as follows:
Finance lease commitment
Consolidated Group
2023
$
2022
$
Not later than one year
Later than one year and less than five years
268,317
327,276
270,408
311,151
The Group is a party to rental leases for its office premises. The future minimum lease payments are as follows:
Operating lease commitment
Consolidated Group
2023
$
2022
$
Not later than one year
Later than one year and less than five years
86,342
79,086
78,891
165,428
19.
SEGMENT REPORTING
For the year ended 30 June 2023, the Group has two segments, being mining and exploration of minerals in
Australia and Papua New Guinea.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period in that geographic region.
External revenue
Other revenue
Interest income
Total revenue
EBITDA
Depreciation and amortisation
Total comprehensive income
Reportable segment asset
Reportable segment liability
Net assets
Australia
44,753,992
18,000
3,238
44,775,230
15,052,690
(4,451,071)
9,816,707
PNG
-
-
-
-
(20,543)
-
(29,374)
Total
44,753,992
18,000
3,238
44,775,230
15,032,147
(4,451,071)
9,787,333
69,328,702
(34,743,120)
34,585,582
42,092,070
(222,752)
41,869,318
111,420,772
(34,965,872)
76,454,900
- 52 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
20. CASH FLOW INFORMATION
(a)
Reconciliation to Statement of Cash Flows
For the purposes of the Statement of Cash Flows, cash and cash equivalents are as reported above.
Reconciliation of Loss from Ordinary Activities to
Net Cash Flows from Operating Activities
Profit/(Loss) for the year
Depreciation and amortisation
Share-based payments
Revaluation of assets at FVTPL
Interest Paid
Unrealised fx (gain)/losses
Changes in assets and liabilities
Decrease/(increase) in trade and other receivables
Decrease/(increase) in prepayments
Decrease/(increase) in inventory
Decrease/(increase) in other non-current assets
(Decrease) in trade payables
(Decrease)/increase in provisions
(Decrease)/increase in other payables and accruals
Net cash flows from operating activities
Consolidated Group
2023
$
2022
$
9,807,225
4,451,071
314,996
293,750
647,500
13,980
(47,054)
(176,891)
(55,306)
(1,061,094)
1,124,059
33,319
148,683
)
15,494,238
(2,088,167)
1,217,484
130,942
437,500
-
(529)
19,371
269,718
-
(10,553)
1,553,754
176,856
1,277,884
2,984,260
21.
SHARE-BASED PAYMENTS
(i)
Share options and performance rights are granted to employees and directors of the Company, or any Associated
Body Corporate of the Company. The following employee share-based payment arrangements existed at 30 June
2023.
Share options:
Date of grant Share-based payment
6 Nov 2019
LTI Options1
27 Nov 2020
LTI Options1
5 Nov 2021
LTI Options2
14 Dec 2021
LTI Options2
17 Jun 22
LTI Options3
6 Dec 2022
LTI Options3
14 Dec 21
Service Fee Options3
Number
Outstanding
4,561,810
Value
183,515
Share Price
on Issue
0.170
Exercise
Price
0.010
Expiry
31 Jul 2023
2,591,840
133,894
0.295
0.010
31 July 2023
1,377,981
815,952
149,082
5,171,621
326,233
67,640
40,052
7,318
84,407
52,197
0.205
0.165
0.094
0.105
0.165
0.00
0.00
0.00
0.00
0.00
31 August 2024
31 August 2024
31 August 2024
31 August 2028
14 December 2024
1 LTI Performance Options vest upon delivery of operational performance hurdles
2 LTI Performance Options vest based on Total Shareholder Return relative to peer group companies prior to expiry
3 Options vested upon issue
- 53 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Performance Rights:
Date of grant
6 Dec 2022
Share-based payment
STI Performance Rights1
Number granted
6,785,845
Value
42,344
Expiry
31 August 2023
1 STI Performance Rights issued on 12 December 2022 will vest as follows:
(a) Up to 40% of STI Performance Rights will automatically vest if the Company’s June 2023 VWAP is between 120% to 150%
of the Company’s June 2022 VWAP; and
(b) Up to 60% of the STI Performance Rights will vest, at the Board’s discretion, upon the achievement of operational
performance measures before 30 June 2023.
Of these STI Performance Rights, those that have not vested by 31 August 2023 will automatically lapse and be forfeited.
The principal assumptions used in estimating the value of the STI and LTI options include volatility of 55%
determined with reference to the Company’s historic volatility and the volatility of peer group companies, and a risk
free interest rate of 1.0%.
The number and weighted average exercise prices of share options granted to employees and directors is as follows:
Outstanding at beginning of period
Expired during the period
Issued during the period
Outstanding at year-end
Exercisable at year-end
2023
2022
Number of
Options
13,438,838
(3,615,940)
5,171,621
14,994,519
4,888,043
Weighted Average
Exercise Price
$
0.05
0.13
0.00
0.00
0.01
Number of
Options
10,487,675
(112,310)
3,063,472
13,438,837
1,226,233
Weighted Average
Exercise Price
$
0.01
0.01
0.00
0.05
0.37
(ii) Other share-based payments granted to third parties.
Ordinary shares:
There was nil share based payments to third parties during the year.
Share options:
Date of grant
Share-based payment
31 Jan 2020
Advisory fees
Number
granted
600,000
Value
$28,051
Share price on
issue
$0.175
Exercise
Price
$0.25
Expiry
31 Jan 2023
On 31 January 2023, 600,000 options granted as consideration for advisory fees expired. The Options were valued
at $28,051.
There were no options exercised during the year ended 30 June 2023 (2022: nil).
22. RELATED PARTY TRANSACTIONS
(a) Key Management Personnel
Key management personnel compensation has been included in the Remuneration Report section of the Directors’
Report and Note 6 Interests of Key Management Personnel.
- 54 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
(b) Directors’ Interests
As at 30 June 2023 the relevant interests of each of the Directors, held either directly or indirectly through their a
Director
Mick Wilkes 1
Andrew Corbett 2
Anthony Wehby3
Stuart Rechner 4
Fully Paid
Ordinary Shares
(KSN)
2,527,452
4,564,618
1,535,696
431,544
Unlisted LTI
Options
186.667
7,003,031
69,783
69,783
1 Mick Wilkes holds a relevant interest in the specified number of securities as a result of being a director of Eligius Holdings Pty
Limited as trustee of Eligius Holdings Pty Ltd ATF, who is the registered holder of those securities.
2 Andrew Corbett holds a relevant interest in the specified number of securities as a result of being a director of Milamar Group Pty
Ltd as trustee of Milamar Family Trust, who is the registered holder of those securities
3 Anthony Wehby holds a relevant interest in Options as he is a related party to Mrs Rosemary Wehby, who is the registered holder of
the options. He has a relevant interest in the shares as the registered holder
4Stuart Rechner holds a relevant interest in the specified number of securities as a result of being a director of Osmium Holdings Pty
Limited as trustee of Ferndale Superannuation Fund, who is the registered holder of those securities
ssociates, in the securities of Kingston was as follows:
23. MINE/RESOURCE DEVELOPMENT AND EXPLORATION
At 1 July 2022
Cost
Accumulated amortisation
Net Carrying Amount
Year ended 30 June 2023
Carrying amount at the beginning of the period
Amounts acquired in business combinations
Additions
Amortisation
Foreign exchange differences
Carrying amount at the end of the year
At 30 June 2023
Cost
Accumulated amortisation
Net Carrying Amount
Mine/Resource
development
expenditure
$
Consolidated Group
Capitalised
exploration
expenditure
$
Total
$
13,634,614
(81,258)
13,553,356
41,554,898
-
41,554,898
55,189,512
(81,258)
55,108,254
13,553,356
-
4,173,324
(1,075,696)
-
16,650,984
41,554,898
-
4,647,585
-
(122,814)
46,079,669
55,108,254
-
8,820,909
(1,075,696)
(122,814)
62,730,653
17,807,938
(1,156,954)
16,650,984
46,079,669
-
46,079,669
63,887,607
(1,156,954)
62,730,653
An impairment assessment was undertaken of the Group’s exploration assets held at the end of FY23. Nothing has
come to the Company’s attention to indicate that amounts recorded as Capitalised Exploration Expenditure as at
30 June 2023 are not reasonable, require impairment, or do not meet the requirements of AASB 6.
Of the total $46,079,669 capitalised exploration expenditure, $42,092,069 is attributable to the Misima Gold
Project, 3,987,600 is attributable to Mineral Hill tenements.
- 55 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
24.
FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise receivables, payables, FVTPL financial assets, cash and
short-term deposits and a commercial loan.
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity risk.
The Company uses different methods to measure and manage different types of risks to which it is exposed. These
included monitoring levels of exposure to interest rate and market forecasts for interest rate. Ageing analyses and
monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through
the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks which are summarised below.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial
loss to the Group.
Credit risk arises from cash and cash equivalents, trade and other receivables and FVTPL financial assets. The
Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal
to the carrying amount net of any provisions for these assets as disclosed in the statement of financial position and
notes to the financial statements.
The Group has adopted a policy of only dealing with creditworthy counter parties as a means of mitigating the risk
of financial loss from defaults. It is the Group’s policy that all customers who wish to trade on credit terms are
subject to credit evaluations including an assessment of their independent credit rating, financial position, past
experience and industry reputation. Risk limits are set for each individual customer in accordance with parameters
set by the Board. These risk limits are regulatory monitored. The Group does not require collateral in respect of
financial assets.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant. At the reporting date there were no significant concentrations of credit risk. Refer to
Note 10 for further information on impairment of financial assets that are past due.
(b)
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and long-
term funding and liquidity management. The Group manages the liquidity risk by maintaining adequate cash
reserves, and by continuously monitoring forecast and actual cash flows while matching the maturity profiles of
financial assets and liabilities. There are no material financial assets or financial liabilities that are subject to
liquidity risk as at 30 June 2023 or 30 June 2022.
(c) Interest rate risk
The Group’s current exposure to the risk of changes in market interest rates relate primarily to cash assets rates.
The Group does not account for fixed rate financial assets and liabilities at fair value through profit or loss.
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The table indicates
the impact on how profit / (loss) and equity values reported at reporting date would have been affected by changes
in the relevant risk variable that management considers to be reasonably possible. The Group’s main interest rate
risk arises from cash and cash equivalents with variable interest rates.
- 56 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Financial assets
Cash and cash equivalents
Impact on post tax profit / (loss) and equity
+ 2% in interest rate
- 2% in interest rate
(d) Foreign currency risk
Consolidated Group
2023
$
2022
$
18,206,767
18,206,767
364,135
(364,135)
5,589,673
5,589,673
111,793
(111,793)
The Group is not exposed to significant financial risks from movements in foreign exchange rates. The Group does
not participate in any type of hedging transactions or derivatives. Therefore, no sensitivity analysis is required.
(e)
Price risk
The Group’s exposure to commodity and equity securities price risk is minimal. Equity securities price risk arises
from investments in equity securities.
The price risk for both listed and unlisted securities is immaterial in terms of a possible impact on profit and loss
or total equity and as such a sensitivity analysis has not been completed.
(f) Fair value
For the financial assets and liabilities disclosed in this note, the fair value approximates their carrying value.
The aggregate fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to and forming part of the financial statements.
2023
2022
Footnote Net Carrying
Value
$
Fair
Value
$
Net Carrying
Value
$
Fair
Value
$
Consolidated Group
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value
Total financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Deferred Payables
Interest bearing liabilities
Total financial liabilities
(i)
(i)
(ii)
(i)
18,206,767
1,315,211
269,150
19,791,128
18,206,767
1,315,211
269,150
19,791,128
5,589,673
3,414,195
562,900
9,566,768
5,589,673
3,414,195
562,900
9,566,768
7,907,918
761,021
7,907,918
761,021
9,579,789 9,579,789
8,864,972
27,113,700
8,864,972
27,113,700
6,267,320
750,742
12,557,882
80,753
19,656,697
6,267,320
750,742
12,557,882
80,753
19,656,697
The fair values disclosed in the above table have been determined based on the following methodologies:
(i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term
instruments in nature whose carrying value is equivalent to fair value. Trade and other payables exclude
amounts provided for annual leave, which is not considered a financial instrument.
(ii) For financial assets at fair value through profit and loss, closing quoted bid prices at the end of the reporting
period are used. These listed investments are included within level 1 of the hierarchy of financial assets.
(iii) Lease liabilities and Interest bearing liabilities are carried at amortised cost.
- 57 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
25.
PARENT COMPANY INFORMATION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Share-based payments reserve
Total equity
Financial performance
Loss for the year
Other comprehensive income / (loss)
Total comprehensive loss
Parent Entity
2023
$
2022
$
11,429,755
71,246,534
82,676,289
4,109,147
71,968,847
76,077,994
10,519,933
8,930,808
19,450,741
2,503,444
12,758,530
15,261,974
121,170,385
(63,855,415)
2,043,126
59,358,096
121,051,877
(60,845,809)
609,952
60,816,020
(3,127,861)
-
(3,127,861)
(1,875,059)
-
(1,875,059)
Contractual commitments
Refer to note 18 for contractual and exploration commitments for the parent entity during the
financial year.
26.
BORROWINGS
Consolidated Group
30 June 2023
$
30 June 2022
$
Interest bearing loans
8,822,176
-
On 7 July 2022, the Company secured a two tranche $10m debt facility with PURE Asset Management. Under
Tranche 1, $5 million was drawn under a 4-year secured loan facility at an interest rate of 9.90% per annum with
25,000,000 detached warrant shares at an exercise price of $0.20. An establishment fee of $150,000 was
recognised as a reduction in proceeds.
On 29 June 2023, the Company withdrew $5million under Tranche 2 of the facility, under a 4-year secured loan
facility at an interest rate of 9.90% per annum with 35,714,286 detached warrant shares at an exercise price of
$0.14. An establishment fee of $150,000 was recognised as a reduction in proceeds.
Conversion by the lender
Tranche 1 Warrants - The lender may elect at any time up to 7 July 2027, to convert any number greater than or
equal to 5,000,000 warrant shares per conversion, at a rate of $0.20 share for every warrant share converted (this
conversion rate may be adjusted in the event of significant future capital raisings). The noteholder is not entitled
to any additional payments on account of this conversion.
- 58 -
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2023
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Tranche 2 Warrants - The lender may elect at any time up to 29 June 2028, to convert any number greater than or
equal to 5,000,000 warrant shares per conversion, at a rate of $0.14 share for every warrant share converted (this
conversion rate may be adjusted in the event of significant future capital raisings). The noteholder is not entitled
to any additional payments on account of this conversion.
Failure to Redeem
If the noteholder does not convert all their warrant shares during the exercise period, then the balance of the debt
facility under Tranche 1 facility will be repaid on 7 July 2026 and the balance of the debt facility under the
Tranche 2 facility will be repaid on 29 June 2027.
Movement in interest bearing loan
Consolidated Group
30 June 2023
$
30 June 2022
$
Carrying value at the beginning of the period
Issue of convertible notes – face value
Less: 3% Establishment fee
Less: Fair value of equity component – share warrants
Add: Unwinding of discount
Carrying value as at end of the period
-
10,000,000
(300,000)
(1,004,579)
126,755
8,822,176
-
-
-
-
-
-
SUBSEQUENT EVENTS
On 31 July 2023, the 4,561,810 LTI performance Options were converted to shares raising $45,618.10 and 2,707,994
unvested LTI performance options expired
On 14 August 2023 Shareholders approved the grant of up to $300,000 MH Project Goal Performance Options to Andrew
Corbett.
On 17 August 2023, Tranche 1 of the Placement offer was completed upon issuing 26,245,576 unlisted attaching options
expiring on 31 July 2025 with an exercise price of $0.14 on the basis of one option for every two Placement Share.
Also on 17 August 2023:
-
-
-
-
-
the Company issued 11,764,705 shares at $0.085 to Quintana Holdings LLP under Tranche 2 of the Placement offer.
These proceeds reduce the final deferred consideration payable to Quintana Holdings LLP upon producing
30,000ozs since the acquisition of Mineral Hill. In addition 5,882,352 unlisted attaching options expiring on 31 July
2025 with an exercise price of $0.14 were issued on the basis of one option for every two Placement Share.
the Company issued 11,764,664 shares at $0.085 under a fully underwritten Share Purchase Plan raising $1,000,000
(before costs). In addition, a total of 5,882,332 unlisted options expiring on 31 July 2025 with an exercise price of
$0.14 was issued on the basis of one option for every two SPP Share.
742,826 STI performance rights vested and were converted to shares, and 6,043,019 STI performance rights lapsed.
326,233 service fee options were converted to shares for nil consideration.
206,764 shares were issued for nil consideration to an employee as part of their employment contract.
Other than the above, there has been no other matter or circumstance which has arisen since 30 June 2023 that has
significantly affected or may significantly affect:
d)
e)
f)
Kingston Resources Limited’s operations in future financial years; or
the results of those operations in future financial years; or
Kingston Resources Limited’s state of affairs in future financial years.
- 59 -
2023 ANNUAL REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Directors’ Declaration
The Directors of the Company declare that:
1.
In the opinion of the Directors of the Company:
(a)
the financial statements and notes set out on page 30 to 59, and the Remuneration disclosures that are
contained in page 19 to 25 of the Remuneration Report in the Directors’ Report, are in accordance with
the Corporations Act 2001, including:
(i)
giving 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;
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(iii) complying with International Financial Reporting Standards as disclosed in Note 1.
(b)
(c)
the remuneration disclosures that are contained in page 19 to 25 of the Remuneration Report in the
Directors’ Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures.
the directors have been given the declaration required by s295A of the Corporations Act 2001 by the
persons undertaking the roles of Managing Director and Chief Financial Officer.
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Signed in accordance with a resolution of the Board of Directors.
MICK WILKES
Non-Executive Chairman
Sydney, New South Wales
14 September 2023
- 60 -
CORPORATE GOVERNANCE STATEMENT
2023 ANNUAL REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such Kingston
Resources Limited has adopted the fourth edition of the Corporate Governance Principles and Recommendations which
was released by the ASX Corporate Governance Council and became effective for financial years beginning on or after
1 January 2020.
The Company’s Corporate Governance Statement for the financial year ending 30 June 2023 was approved by the Board
on 14 September 2023. The Corporate Governance Statement can be located on the Company’s website
www.kingstonresources.com.au
66
ADDITIONAL INFORMATION
2023 ANNUAL REPORT
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Additional Information required by the Australia Stock Exchange Limited Listing Rules and not disclosed elsewhere in
this report.
This additional information was applicable as at 31 August 2023.
SHAREHOLDER INFORMATION
Distribution of Ordinary Shares
Distribution
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
No. of Shareholders
(ASX code – KSN)
Total Units % Issued Share
Capital
280
516
488
48,362
1,727,729
3,602,622
0.01%
0.35%
0.72%
9.53%
above 10,000 up to and including 100,000
1,239
47,468,804
above 100,000
Total
Holding less than a marketable parcel
(based on a price of $0.08)
Distribution of Unlisted Options
396
445,114,317
89.39%
2,879
497,961,834
100.00%
2,457,959
917
Distribution
No. of Holders
Total Units % Issued Capital
UNLISTED OPTIONS AT $0.14, EXP 31/07/25
above 10,000 up to and including 100,000
above 100,000
Total
UNLISTED LTI OPTIONS AT $0.00, EXP 31/08/24
above 10,000 up to and including 100,000
above 100,000
Total
UNLISTED OPTIONS AT $0.00, EXP 31/08/28
above 10,000 up to and including 100,000
above 100,000
Total
- 67 -
104
46
150
3,163,988
34,846,222
8.32%
91.68%
38,010,210
100.00%
1
6
7
1
9
10
45,553
1.94%
2,297,462
98.06%
2,343,015
100.00%
37,048
5,171,621
0.71%
99.29%
5,208,669
100.00%
ADDITIONAL INFORMATION
2023 ANNUAL REPORT
Distribution of Unlisted Warrants
KINGSTON RESOURCES LIMITED
& its Controlled Entities
Distribution
No. of Holders
Total Units % Issued Capital
WARRANT @ $0.20, EXP 07/7/27
above 100,000
WARRANT @ $0.14, EXP 29/6/28
above 100,000
Statement of Top 20 Shareholders of the Quoted Equity Securities
Contributed Equity (ASX code – KSN)
Name
1
CITICORP NOMINEES PTY LIMITED
2 WINCHESTER INVESTMENTS GROUP PTY LIMITED
1
25,000,000
100.00%
1
35,714,286
100.00%
Holding
%
68,510,816
13.76%
35,205,882
31,951,847
28,086,219
26,955,938
19,365,778
13,667,409
11,764,705
10,263,203
9,782,221
7,800,000
6,688,888
5,704,876
5,250,000
4,312,207
3,800,000
3,000,000
2,880,393
2,771,225
7.07%
6.42%
5.64%
5.41%
3.89%
2.74%
2.36%
2.10%
2.06%
1.96%
1.57%
1.34%
1.15%
1.05%
0.87%
0.76%
0.60%
0.58%
0.56%
308,212,022
61.89%
497,961,834
100.00%
23,650,000
BNP PARIBAS NOMINEES PTY LTD
10,450,415
FARJOY PTY LTD
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMS PTY LTD
QUINTANA RESOURCES HOLDINGS LP
3
4
5
6
7
8
9
10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
11
12
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2INVEST AG
13 WGS PTY LTD
14 MILAMAR GROUP PTY LTD
15
16
17
T MITCHELL PTY LTD
BERNE NO 132 NOMINEES PTY LTD <656165 A/C>
PASAGEAN PTY LIMITED
18 YELRIF INVESTMENTS PTY LTD
19
20
ELIGIUS HOLDINGS PTY LTD
LIGHTNING JACK PTY LTD
Total
Total on Issue
- 68 -
ADDITIONAL INFORMATION
2023 ANNUAL REPORT
Substantial Shareholders
KINGSTON RESOURCES LIMITED
& its Controlled Entities
The names of the substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Shareholder
Shares Held
% of Shares Held Date of Last Notice
Delphi Unternehmensberatung Aktiegesellshaft and
associates
Quintana Resources Holdings LP
Winchester Investments Group Pty Ltd & Ian Ronald
Ingram
55,687,157
13.53%
20 January 2022
54,914,882
34,500,000
13.34%
7.36%
18 January 2022
5 July 2023
Farjoy Pty Ltd
31,951,847
6.82%
4 July 2023
Substantial Holders of Unquoted Equity Securities
Holders of more than 20% of Warrants.
HOLDERS
WARRANT @ $0.20, EXP 07/7/27
PURE ASSET MANAGEMENT PTY LTD
WARRANT @ $0.14, EXP 29/6/28
PURE ASSET MANAGEMENT PTY LTD
Number
of Units
% of Total
holding
25,000,000
100.00%
35,714,286
100.00%
Voting Rights
The Company’s share capital is of one class with the following voting rights:
Fully Paid 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.
Other Unquoted Securities
There are no voting rights attached to any other securities on issue.
Statement of Restricted Securities
The Company has no restricted securities on issue.
On Market Buy Back
The Company is not currently conducting an on market buy back.
Other ASX Information
Stock Exchange on which the Company’s Securities are Quoted
The Company’s listed equity securities are quoted on the Australian Securities Exchange and the secondary listing of
the Company’s listed equity securities are quoted on the Frankfurt Stock Exchange.
Review of Operations
A review of operations is contained in the Directors Report.
- 69 -
ADDITIONAL INFORMATION
2023 ANNUAL REPORT
Annual General Meeting
KINGSTON RESOURCES LIMITED
& its Controlled Entities
The Company advises that the Annual General Meeting ('AGM') of the company is scheduled for 17 November 2023.
Further to Listing Rule 3.13.1, Listing Rule 14.3 and clause 7.2(f) of the Company's Constitution, nominations for election
of directors at the AGM must be received not less than 35 Business Days before the meeting, being no later than Friday,
29 September 2023.
4.
ON MARKET BUY BACK
The Company does not currently have an on market buy back in operation.
5.
TENEMENT SCHEDULE
Tenement
Project Name & Location
Status
Ownership
Type
Title Area
EL1747
EL1999
EL8334
ML5240
ML5267
ML5278
ML332
ML333
ML334
ML335
ML336
ML337
ML338
ML339
ML340
ML1695
ML1712
ML1778
ML5499
ML5621
ML5632
ML6329
ML6365
Misima, PNG
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Mineral Hill, NSW
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
EL
EL
EL
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
ML
180 km2
17 UNITS
100 UNITS
32.37 HA
32.37 HA
32.37 HA
22.36 HA
28.03 HA
21.04 HA
24.79 HA
23.07 HA
32.27 HA
26.3 HA
25.09 HA
25.79 HA
8.779 HA
23.92 HA
29.05 HA
32.37 HA
32.37 HA
27.32 HA
8.094 HA
2.02 HA
- 70 -