Kula Gold Limited
ABN 83 126 741 259
Annual Report
for the year ended 31 December 2023
Kula Gold Limited
Corporate Information
Chairman
Board of Directors
Mr Mark Stowell
Mr Ric Dawson
Mr Mark Bojanjac
Company Secretary
Mr Keith Bowker
Principal Place of Business & Registered Office
Suite 2, 20 Howard Street
PERTH WA 6000
PO Box Z5207
St Georges Terrace
PERTH WA 6831
Telephone:
Email:
Website:
+61 8 6144 0592
cosec@kulagold.com.au
www.kulagold.com.au
Auditor
Elderton Audit Pty Ltd
Level 32, 152 St Georges Terrace
PERTH WA 6000
Telephone:
Website:
+61 8 6324 2900
www.eldertongroup.com
Share Registry
Automic Group
Level 5, 191 St Georges Terrace
PERTH WA 6000
Telephone:
Email:
Website:
1300 288 664
hello@automic.com.au
www.investor.automic.com.au
Securities Exchanges
Australian Securities Exchange
Level 40, Central Park
152- 158 St Georges Terrace
PERTH WA 6000
Website:
ASX Code:
www.asx.com.au
KGD
Berlin Stock Exchange: BE Code: 7KL
Kula Gold Limited
Annual report
for the year ended 31 December 2023
Contents
Chairman’s letter……………………………………………………………………………………………………………………………………… 1
Directors’ report………………………………………….…………………………………………………………………………………………… 2
Auditor’s independence declaration…………………………………………………………..……………………………………..…….. 14
Independent auditor’s report………………………………………….…………………………………………………………….…………. 15
Directors’ declaration…………………………………………………………………………………………………………..………………….. 19
Consolidated statement of profit or loss and other comprehensive income…………………………………………….. 20
Consolidated statement of financial position………………………………………………………………..……………………….... 21
Consolidated statement of changes in equity…………………………………………………….……………………………..…..… 22
Consolidated statement of cash flows……………………………………………………………..……………….……………………… 23
Notes to the consolidated financial statements….………………………………………………..…………..……………………..
24
Additional information for listed public companies…………………………………………………………………………………
49
Kula Gold Limited
Chairman’s letter
Dear Shareholder
The past year was a rollercoaster ride across commodities, with lithium taking centre stage and the focus of
Kula’s exploration. We drilled some excellent prospects near to the largest lithium mine in the world but
unfortunately no success this time, along with the lithium price collapsing. We did however define another five
prospective targets for future exploration drilling when the lithium prices and market interest recover, as well
as a new gold target at Kirup with up to 3.5g/t gold in rockchips.
The Kula team set to work reanalysing our gold prospects which were put on hold with the lithium rush in 2023,
which resulted in some exciting gold targets near Marvel Loch in the rich Southern Cross Goldfield’s region in
WA. Field work and assaying with the newer UFF technique than previously used has been successful in
improving gold anomalism and warrants a lot more field work. We hope to see some good drill targets emerging
for a short sharp scout drill programme in the next few months.
Kula is in the process of finalising the mining lease application and is continuing discussions to advance
development of the 93.3mt JORC resource Boomerang Kaolin Deposit, near Southern Cross WA.
We would like to thank all of our team, contractors and consultants for their untiring efforts over the past year
and look forward to seeing the Company develop to the next stage.
“The reliability of exploration is based not on certainty but on a radical lack of certainty.
That’s the challenge and exciting part of this business”
Yours sincerely,
Mark Stowell
Chairman
Kula Gold Limited
- 1 -
Directors’ report
The directors of Kula Gold Limited (“Kula” or “the Company”) and its controlled entities (“the Group”) submit
herewith the annual report of the Group for the financial year ended 31 December 2023. To comply with the
provisions of the Corporations Act 2001, the directors report as follows:
Kula Gold Limited
Information about the directors
The names and particulars of the directors of the Company during or since the end of the financial year are:
Mr Mark Stowell
Qualifications
Non-Executive Chairman (appointed 16 September 2010)
Chartered Accountant
Mr Stowell has over 20 years of corporate finance and resource business
management experience. Mr Stowell has served as manager in the corporate
division of Arthur Anderson and subsequently in the establishment and
management of a number of successful ventures as principal, including resource
companies operating in Australia and internationally.
Mr Stowell was a founder director of Anvil Mining Ltd (Democratic Republic of
Congo), a copper explorer and developer, for seven years until 2000. He was a
founder and Non-Executive Director of Incremental Petroleum Limited, an oil
and gas producer with operations in Turkey and the USA, until its takeover by a
USA operator. He was Chairman and founder of Mawson West Ltd, a copper
producer and explorer which competed an IPO on the Toronto Stock Exchange
in one of the largest base metal IPO’s of 2011.
Mr Stowell recently resigned from Cannon Resources Limited following a
successful cash takeover bid by Kinterra Capital, a North American private equity
fund.
Mr Ric Dawson
Qualifications
Managing Director (appointed 18 October 2023)
BAppSc (Geology), MBA, MAusIMM
Mr Dawson holds a BAppSc (Geology) from Curtin University and an MBA from
the University of Western Australia. Mr Dawson has over 20 years’ experience
in gold, nickel, copper and kaolin projects throughout Western Australia and the
Northern Territory, and as a stockbroker/analyst during that time.
Mr Dawson has previously held the Manager Director roles with ASX listed
companies Prosperity Resources Ltd and Altech Ltd. Mr Dawson’s particular
fields of expertise are in target generation and evolution of Archean shear-vein
style, IOGC and hydrothermal porphyry gold in Australia and Indonesia. Mr
Dawson was also involved in the development of the initial Australian studies
into production of high purity alumna from kaolin deposits.
Mr Dawson played key roles in the advancement of gold deposits, including the
Melville Deposit, the Masuparia Project and various Tennant Creek Projects and
the research and development of the process of converting kaolin to high purity
alumina at the Meckering Project in Western Australia.
- 2 -
Mr Mark Bojanjac
Qualifications
Non-Executive Director (appointed 21 August 2017)
BCom, Chartered Accountant
Kula Gold Limited
Mr Bojanjac is a Chartered Accountant with over 25 years’ experience in
developing resource companies. Mr Bojanjac was a founding director of Gilt-
Edged Mining Limited which discovered one of Australia’s highest-grade gold
mines and was managing director of a public company which successfully
developed and financed a 2.4m oz gold resource in Mongolia. He also cofounded
a 3m oz gold project in China.
Mr Bojanjac was most recently Chief Executive Officer of Adamus Resources
Limited and oversaw its advancement from an early stage exploration project
through its definitive feasibility studies and managed the debt and equity
financing of its successful Ghanaian gold mine.
Mr John Hannaford
Qualifications
Non-Executive Director (appointed 25 May 2020, Resigned 18 October 2023)
BCom, Chartered Accountant, FFin
Mr Hannaford is an experienced Company Director & executive with extensive
experience as an ASX Director, including as Chairman. A qualified Chartered
Accountant and Fellow of the Securities Institute of Australia, Mr Hannaford has
founded and listed several companies that successfully listed in ASX. He has also
advised numerous companies through the ASX listing process in his Corporate
Advisory career. He has established an extensive corporate network and gained
a highly distinguished reputation over the last twenty years corporate life in
Australia.
The above named directors held office during the whole of the financial year and since the end of the financial
year except for:
Mr Ric Dawson – appointed 18 October 2023
Mr John Hannaford – resigned 18 October 2023.
Directorships of other listed companies
Directorships of other listed companies held by directors in the 3 years immediately before the end of the
financial year are as follows:
Name
Company
Period of directorship
Mr Mark Stowell
Southern Hemisphere Mining Limited
Since 1 November 2019
Cannon Resources Limited
24 June 2022 – 1 December 2022
Mr Mark Bojanjac
PolarX Limited
Metallica Minerals Limited
Since 13 December 2016
Since 13 May 2021
Directors’ shareholdings
The following table sets out each director’s relevant interest in shares and options in shares of the Company as
at the date of this report.
Directors
Mr Mark Stowell
Mr Ric Dawson
Mr Mark Bojanjac
Fully paid ordinary shares
Number
Unlisted share options
Number
28,087,381
2,850,000
4,250,000
-
12,000,000
-
-3 -
Remuneration of key management personnel
Information about the remuneration of key management personnel is set out in the remuneration report section
of this directors’ report. The term ‘key management personnel’ refers to those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including
any director (whether executive or otherwise) of the Group.
Kula Gold Limited
Share options granted to directors and senior management
During and since the end of the financial year, an aggregate 10,000,000 share options were issued or granted to
the following directors and senior management of the Company and its controlled entities as part of their
remuneration.
Directors and senior management
Mr Ric Dawson
Number of ordinary shares
under option
10,000,000
Company Secretary
Mr Keith Bowker is a qualified Chartered Accountant and holds a Bachelor of Commerce degree from Curtin
University and has experience in company secretarial, corporate compliance and financial accounting matters.
Mr Bowker was appointed as Company Secretary on 17 June 2022.
Principle activities
The Group’s principal activity during the course of the financial year was the exploration and evaluation of
projects in Western Australia for gold, kaolin and lithium.
Review of operations
For the 2023 financial year the Group delivered a loss before tax of $2,594,866 (2022: $1,617,731).
As at 31 December 2023, the net assets of the Group were $1,610,930 (2022: $3,413,137).
The cash and cash equivalents as at 31 December 2023 was $393,378 (2021: $1,764,307) and the Group had
negative working capital of $2,682 (2022: $1,535,461).
Brunswick Project (South West Region, WA) 100%
The Company completed a drone magnetic survey across two key targets in the prior year targeting lithium, and
gold principally.
The Brunswick Project is in the Western Gneiss Terrain within Australia’s Southwest and is prospective for
lithium, Archean gold and copper, epithermal gold (Donnybrook Gold Mine Prospect) and ‘Julimar-style’ nickel,
copper and platinum group elements. Incredibly overlooked area, given the prospective geology, for example,
the most recent material drilling programme in the project area was BHP in 1985 for gold under a ~$5m JV farm-
in.
Positive results from soil sampling and rock chip sampling at the Donnybrook Gold Mine Prospect (which hosts
the historical Donnybrook Gold Mine) revealed a strong, continuous gold-in-soil anomaly of over 250m wide and
extending over 650m along strike (open in both directions) that require ongoing investigation.
The Company has recognised two new gold prospect areas, Jarvis and Camilleri, where historical gold records for
the Camilleri (Donnybrook) Mine had production of 236.7 ounces of gold from 51.3 ton of material extracted
(146g/t gold). Geologically speaking, the Jarvis Prospect has numerous shafts, 4 ex-Metana Minerals NL
percussion holes that drilled wet sample in that era including one hole that entered into one of the old shafts.
This prospect also has a historical 500ppm soil sample from the same company. Additional work will be
performed on these prospects over the coming year.
-4 -
Kula Gold Limited
Kirup Project (South West Region, WA) 70%
The Company acquired a 70% interest in April 2023 and has obtained land access to some landowners, mapped,
rock chipped and soil sampled these properties. During the prior year, the Company RC drilled the Mustang
Lithium Prospect (suspended due to the ground conditions after 1 RC hole) and the Cobra Lithium Prospect with
modest lithium results. The Company has been encouraged on a gold exploration focus with a strong 3.5g/t rock
chip at the Mustang Prospect and has now soil sampled, mapped and rock chipped this prospect with more focus.
Additional lithium and gold prospects, Thunderbird and Falcon will be advanced this year.
Westonia Gold Project (Southern Cross, WA) 100%
The Company completed a maiden RC exploration programme over the central portion of E77/2766 returning
low level results of anomalous gold, moving forward the Company will UFF soil sample around the known 1.85g/t
gold in a quartz vein rock sample from a lateritic breakaway as it appears the Westonia Project is situated on the
same structural system as the 2Moz operating Edna May Gold Mine less than 5km away.
Marvel Loch Project (Southern Cross, WA) 100%
Boomerang Kaolin Deposit
The Company continued discussions during the year to advance development of the large Boomerang Kaolin
Deposit of 93.3 million tonnes, near excellent infrastructure in Southern Cross WA.
Engineering studies continued for downstream processing on site to produce metakaolin products for the Green
Construction Industry. Mineralogical/metallurgical test work by Sedgman has been completed confirming the
suitability of the raw material for green cement as well as many uses such as paint, rubber and pesticide
production. Discussions with potential acquirers and developers of the project continue with a view to
monetising this asset.
The Company has lodged applications for a Mining Licence ML77/1302 & a Miscellaneous Licence L77/359.
Subsequent to the year end, the Company has had a gold exploration focus with multiple UFF soil programmes on
various prospects, Boomerang, Crayfish, Stingray, G-Star, 311 and Nevoria North Prospects. These properties are
advancing methodically and will provide enhanced gold exploration this year.
Southern Cross Project (Southern Cross, WA) 100%
During the year the Company advanced the Nadia, Sasha and Taliah Prospects with mapping, rock chip and soil
sampling programmes with an emphasis on lithium exploration seeking mineralised pegmatites. All three
prospects are now at a drill ready stage and the Company is evaluating funding options. The Company notes the
recent announcement by Mineral Resources Ltd about establishing a lithium processing facility at the Lake
Johnston Lithium Hub.
Rankin Dome Project (Southern Cross, WA) 100%
The Company entered into a binding Farm-In Agreement with Australian Critical Minerals Pty Ltd (“ACM”) in
respect of the Company’s non-core Rankin Dome Project comprising of three tenements being E77/2709,
E77/2753 and E77/2768. During the year, ACM completed an auger and RC drill programme with anomalous
TREO results, these will be further explored this year to enhance the project.
- 5 -
Kula Gold Limited
Changes in state of affairs
There was no significant change in the state of affairs of the Group during the financial year.
Dividends
There were no dividends paid or recommended during the financial year ended 31 December 2023 or 31
December 2022.
Subsequent events
Subsequent to the year under review, the Company undertook the following activities:
On 22 March 2024, the Company entered into an At-the-Market Subscription Agreement (“ATM”) with
Acuity Capital. The ATM provides the Company with up to $1,000,000 of standby equity capital over a
period to 31 January 2029.
As security for the ATM, the Company issued 24,000,000 fully paid ordinary shares to Acuity Capital at
nil consideration.
On 28 February 2024, the Company issued 39,250,000 fully paid ordinary shares via a placement of
shares at an issue price of $0.008 per share to raise $314,000. Subject to shareholder approval at the
Company’s Annual General Meeting to be held in May 2024, the Company will issue an additional
10,750,000 fully paid ordinary shares at an issue price of $0.008 to raise an additional $86,000.
On 25 January 2024, the Company issued 3,846,153 fully paid ordinary shares to directors via a
placement of shares at the issue price of $0.013 per share to raise an additional $50,000, following
shareholders’ approval obtained at the General Meeting held on 19 January 2024.
Also, on 25 January 2024, the Company issued 5,000,000 unlisted options exercisable at $0.02 on or
before 1 July 2026 and 5,000,000 unlisted options exercisable at $0.05 on or before 1 July 2027,
following shareholder approval obtained at the General Meeting held on 19 January 2024, to Mr
Dawson following his appointment as Managing Director. The unlisted options were granted to
remunerate and incentivise Mr Dawson and preserve cash resources of the Company. The options will
vest when the Company’s market capitalisation reaches $12m.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Group, the results
of those operations, or the state of affairs of the Group in future financial years.
Future developments
The main focus of the Group for the year ahead is gold exploration in Western Australia and to continue
development of the Boomerang Kaolin Deposit.
Environmental Regulations
The Company is subject to the state and federal environmental regulation of Western Australia and Australia
respectively. The Company needs to ensure the appropriate standard of environmental care is achieved, and in
doing so, that it is aware of and is in compliance with all environmental legislation. The directors of the Company
are not aware of any breach of environmental legislation for the period under review.
- 6 -
Kula Gold Limited
Shares under option or issue on exercise of options
Details of unissued shares under option as at the date of this report are:
Quoted / unlisted
Grant date
Number of shares under option
Exercise price of option
Expiry date of options
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
19 January 2024
19 January 2024
1 February 2023
8 November 2022
7 November 2022
18 July 2022
16 August 2021
28 June 2021
5,000,0001
5,000,0001
1,300,0002
2,300,0003
6,000,0004
1,800,0005
575,0006
2,950,0007
24,925,000
$0.02
$0.05
$0.06
$0.06
$0.08
$0.06
$0.085
$0.06
1 July 2026
1 July 2027
1 July 2026
1 July 2026
7 November 2025
1 July 2026
1 August 2025
1 July 2026
1 Unlisted options were granted to Mr Dawson, following shareholder approval obtained at the General Meeting held on 19 January 2024.
The unlisted options were granted to remunerate and incentivise Mr Dawson in his role as Managing Director and preserve cash resources
of the Company. The unlisted options will vest when the Company’s market capitalisation reaches $12m.
2Unlisted options were granted to employees under the Employee Incentive Option Plan approved at the Annual General Meeting held
in 2021 (‘EIOP’). These options have fully vested.
3 Unlisted options were granted to employees under the EIOP. These options have fully vested.
4 Unlisted options issued to Taylor Collison for being Lead Manager to the Placement announced on 19 September 2022, following
shareholder approval at the General Meeting held on 7 November 2022.
5Unlisted options were granted to employees under the EIOP. These options have fully vested.
6 Unlisted options were granted to employees under the EIOP. These options have fully vested.
7 Unlisted options were granted to employees under the EIOP. These options have fully vested.
The holders of these options do not have the right, by virtue of the option, to participate in any share issue or
interest issue of the Company or of any other body corporate or registered scheme.
No fully paid ordinary shares were issued by the Company as a result of the exercise of options during or since
the end of the financial year.
1,000,000 unlisted options lapsed during and since the end of the financial year as a result of continued
employment conditions.
Indemnification of officers and auditors
During the financial year, the Company paid a premium in respect of a contract insuring the directors and all
executive officers of the Company against a liability incurred as such a director or executive officer to the extent
permitted by the Corporations Act. The contract of insurance prohibits disclosure of the nature of the liability
and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such
an officer or auditor.
Proceedings on behalf of company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
- 7 -
Kula Gold Limited
Directors’ meetings
The following table sets out the number of directors’ meetings held during the financial year and the number of
meetings attended by each director. The directors communicate regularly and pass most resolutions via circular
resolutions.
Directors'
Meetings
Audit
Committee
Nomination
Committee
Remuneration
Committee
Finance and
Operations Committee
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Mr Mark Stowell
Mr Mark Bojanjac
Mr Ric Dawson1
Mr John Hannaford2
6
6
1
5
6
6
1
3
1 Appointed 18 October 2023.
2 Resigned 18 October 2023.
At the date of this report, the Remuneration, Audit, Nomination, and Finance and
Operations Committees comprise the full Board of Directors. The Directors believe the
Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of these separate committees. Accordingly, all matters capable of
delegation to such committees are considered by the full Board of Directors.
Non-audit services
During the current and previous financial year, the Company’s auditor, Elderton Audit Pty Ltd, did not perform
any services other than their statutory audits. Details of remuneration paid to the auditor can be found within
the financial statements at note 22.
In the event that non-audit services are provided by Elderton Audit Pty Ltd, the directors are satisfied that the
provision of non-audit services are compatible with, and do not compromise, the auditor independence
requirements of the Corporations Act 2001. These procedures include:
All non-audit services will be reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or
decision making capacity for the Company, acting as an advocate for the Company or jointly sharing
economic risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included after this report on page 14.
Rounding off of amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors’
Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument
amounts in this directors’ report are rounded off to the nearest dollar, unless otherwise indicated.
- 8 -
Kula Gold Limited
Remuneration report
This remuneration report, which forms part of the directors’ report, sets out information about the
remuneration of Kula Gold Limited’s key management personnel for the financial year ended 31 December 2023.
The term ‘key management personnel’ refers to those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the Group. The prescribed details for each person covered by this report are detailed
below under the following headings:
Key management personnel.
Remuneration policy.
Relationship between the remuneration policy any company performance.
Remuneration of key management personnel.
Key terms of employment contracts.
Key management personnel
The directors and other key management personnel of the Group during or since the end of the financial year
were:
Mr Mark Stowell
Mr Ric Dawson
Mr Mark Bojanjac
Mr John Hannaford
Chairman
Managing Director
Director
Director
The named persons held their current position for the whole of the financial year and since the end of the
financial year except for:
Mr John Hannaford – Resigned 18 October 2023.
Mr Ric Dawson – Appointed 18 October 2023.
Remuneration policy
In assessing the remuneration of its key management personnel, the Group does not have in place any formal
objectives, criteria or analysis; instead, it relies mainly on Board discussion. The adoption of this remuneration
report is periodically recommended for approval by shareholders via a non-binding resolution at the Company’s
Annual General Meeting.
The Group’s policy regarding executive remuneration is that the executives are paid a commercial salary and
benefits based on the market rate and experience designed to promote superior performance and long-term
commitment to the Group.
The Group’s executive compensation program has two principal components: base salary and incentive share
options.
Base salaries for all employees of the Group are established for each position based on individual and corporate
performances.
Non-Executive Director remuneration is not to exceed $300,000 per annum. Directors have no entitlement to
termination payments in the event of removal for misconduct.
Key management personnel are entitled to participate in the Group’s Employee Incentive Option Plan (‘EIOP’),
which was approved by shareholders at the 2021 Annual General Meeting. The EIOP is designed to give each
option holder an interest in preserving and maximising shareholder value. Such grants are determined by an
informal assessment of an individual’s performance, level of responsibilities and the importance of his/her
position and contribution to the Group.
- 9 -
Kula Gold Limited
Relationship between the remuneration policy and company performance
During the Group’s exploration and development phases of its business, the Board anticipates that the Company
will retain earnings (if any) and other cash resources for the exploration and development of its resource projects.
Accordingly, the Company does not currently have a policy with respect to the payment of dividends and returns
of capital. Therefore, there was no relationship between the Board’s policy for determining, or in relation to, the
nature during the current and previous financial years.
The Board did not determine the nature and amount of remuneration of the key management personnel by
reference to changes in the price at which shares in the Company traded between the beginning and end of the
current and previous financial years.
The table below sets out summary information about the Group’s earnings and movements in shareholder wealth
for the five years to 31 December 2023:
Interest and other income
Profit/(loss) after tax
Share price at start of year
Share price at end of year
Basic and diluted profit/(loss)
31 Dec
2023
549,998
(2,594,866)
0.025
0.015
(0.69)
31 Dec
2022
447,157
(1,617,731)
0.048
0.025
(0.64)
31 Dec
2021
14,541
(1,645,522)
0.041
0.048
(0.87)
31 Dec
2020
31 Dec
2019
36,601
(548,943)
0.037
0.041
(0.53)
601,420
49,727
0.020
0.037
0.02
Remuneration of key management personnel
The table of benefits and payment details, in respect to the financial year, the components of remuneration for each
member of the key management personnel of the Group:
2023
Group
Key
Management
Personnel
Mr Mark Stowell
Mr Ric Dawson1
Mr Mark Bojanjac
Mr John Hannaford2
Short-term employee benefits
Post-
employment
benefits
Director
fees
$
9,000
1,210
6,000
4,790
21,000
Cash bonus Non-
monetary
Consulting
fees
Super-
annuation
$
-
-
-
-
-
$
-
-
-
-
-
$
41,250
150,000
24,600
18,600
234,450
$
968
15,375
645
512
17,500
Long-
term
employee
benefits
Long
service
$
-
-
-
-
-
1 Appointed 18 October 2023
2 Resigned 24 October 2022
2022
Group
Key
Management
Personnel
Mr Mark Stowell
Mr Mark Bojanjac
Mr John Hannaford
Mr Simon Adams1
Mr Ric Dawson2
Short-term employee benefits
Post-
employment
benefits
Director
fees
$
9,000
6,000
6,000
5,000
-
26,000
Cash bonus Non-
monetary
Consulting
fees
Super-
annuation
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
42,500
24,000
30,000
20,000
29,091
145,591
$
1,125
350
850
700
-
3,025
Long-
term
employee
benefits
Long
service
$
-
-
-
-
-
-
1 Resigned 2 November 2022
2 Appointed as CEO on 24 October 2022
Share-
based payments
Total
Equity
Options
$
-
-
-
-
-
$
-
-
-
-
-
$
51,218
166,585
31,245
23,902
272,950
Share-
based payments
Total
Equity
Options
$
-
-
-
-
-
-
$
-
-
-
-
28,415
28,415
$
52,625
30,350
36,850
25,700
57,506
203,031
- 10 -
Kula Gold Limited
Bonuses and share-based payments granted as compensation for the current financial year
There were no cash bonuses paid during the current or previous financial year and there are no set performance
criteria for achieving cash bonuses.
On 25 January 2024, the Company issued 5,000,000 unlisted options exercisable at $0.02 on or before 1 July
2026 and 5,000,000 unlisted options exercisable at $0.05 on or before 1 July 2027, following shareholder
approval obtained at the General Meeting held on 19 January 2024, to Mr Dawson following his appointment as
Managing Director. The unlisted options were granted to remunerate and incentivise Mr Dawson and preserve
cash resources of the Company. The options will vest when the Company’s market capitalisation reaches $12m.
There was no remuneration paid to key management personnel linked to performance during the previous
financial year.
No key management personnel appointed during the current or previous financial year received a payment as
part of his consideration for agreeing to hold the position.
Employee incentive option plan
Kula Gold Limited operates an ownership-based Employee Incentive Option Plan (‘EIOP’) for executives and
senior employees of the Group.
In accordance with the terms and conditions of the EIOP, as approved by shareholders at the 2021 Annual
General Meeting, each unlisted option converts to fully paid ordinary shares on a one-for-one basis.
No amounts are paid or payable by the recipient on receipt of the unlisted option. The options carry neither
rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date
of their expiry. There is no performance based formula to calculate the number of options each executive or
senior employee receives. Options expire on the expiry date and any unvested options expire on the resignation
of the executive or senior employee. As at the date of this report the Group had 8,925,000 unlisted options on
issue under the EIOP leaving a capacity of 33,782.
Terms and conditions of share-based payments granted as at the date of this report:
Option series
Grant date
Number of
shares under
option
1,300,000
2,300,000
1,800,000
575,000
Grant date
fair value
Exercise price
Expiry date
options
Vesting dates
$0.016
$0.025
$0.016
$0.044
$0.029
$0.06
$0.06
$0.06
1 July 2026
100% vested
1 July 2026
100% vested
1 July 2026
100% vested
$0.085
1 August 2025
100% vested
$0.06
1 July 2026
100% vested
1 Feb 2023
8 Nov 2022
18 Jul 2022
16 Aug 2021
28 Jun 2021
2,950,000
5
4
3
2
1
There has been no alteration of the terms and conditions of the above share-based payment arrangements since
the grant date.
No share-based payments were granted as compensation to key management personnel during the current or
previous financial year under the EIOP.
No options were exercised during the current or previous financial years. 1,000,000 options lapsed during the
financial year (2022: 175,000) as a result of the resignation of the executive or senior employee.
Each option converts into one fully paid ordinary share of the Company.
- 11 -
Key management personnel equity holdings
Fully paid ordinary shares of Kula Gold Limited.
Name
Balance at
1 Jan 2023
Shares
acquired
Shares
disposed
Balance on
resignation
Balance at
31 Dec 2023
Kula Gold Limited
Balance at date of
this report
Shares
acquired
subsequent
year-end1
No.
No.
No.
No.
No.
No.
No.
Mr Mark Stowell
25,091,228
Mr Ric Dawson2
Mr Mark Bojanjac
2,500,000
3,750,000
-
-
-
-
-
-
- 25,091,228
2,996,153
28,087,381
-
-
2,500,000
3,750,000
350,000
500,000
2,850,000
4,250,000
17,765,113
Mr John Hannaford3
-
1 On 25 January 2024, the Company issued 3,846,153 fully paid ordinary shares to directors via a placement of shares at the
issue price of $0.013 per share to raise an additional $50,000, following shareholders’ approval obtained at the General
Meeting held on 19 January 2024.
2 Appointed as CEO on 24 October 2022 and appointed as Managing Director on 18 October 2023.
3 Resigned 18 October 2023.
- 17,765,113
-
-
-
Key terms of employment contacts
The compensation for all Non-Executive Directors is not to exceed $300,000 p.a.
Directors have no entitlement to termination payments in the event of removal for misconduct.
Mr Dawson was appointed as CEO on 24 October 2022. The full-time employment contract included
annual remuneration of $150,000 plus superannuation paid to his nominee consulting entity. On
appointment as CEO Mr Dawson received 2,000,000 unlisted options issued under the EIOP,
exercisable at $0.06 on or before 1 July 2026.
Following Mr Dawson being appointed as Managing Director on 18 October 2023, Mr Dawson also
receives directors’ fees of 6,000 per annum plus superannuation. On 25 January 2024, the Company
issued 5,000,000 unlisted options exercisable at $0.02 on or before 1 July 2026 and 5,000,000
unlisted options exercisable at $0.05 on or before 1 July 2027, following shareholder approval
obtained at the General Meeting held on 19 January 2024. The unlisted options were granted to
remunerate and incentivise Mr Dawson and preserve cash resources of the Company. The options
will vest when the Company’s market capitalisation reaches $12m.
Other transactions with key management personnel of the Group
During the financial year, the Company leases premises at Suite 2, 20 Howard Street, Perth from an entity that is
controlled by Mr Mark Stowell. The terms of this lease are set at a rate that is considered to be arms-length for
comparable premises. The rent and outgoings paid for this premises during the financial year ended 31 December
2023 was $41,714 (2022: $35,922).
During the financial year, the Company leases storage facilities at Unit 18, 6 Production Road, Canning Vale from an
entity that is controlled by Mr John Hannaford. The terms of this lease are set at a rate that is considered to be arms-
length for comparable premises. The rent for this premises during the financial year ended 31 December 2023 to
the date of Mr Hannaford’s resignation was $2,383 (2022: $2,383).
On 28 November 2022, the Company entered into a binding term sheet (‘Agreement’) with Sentinel Exploration Ltd
(‘Sentinel’) to acquire a 70% interest (subject to the completion of satisfactory due diligence, shareholder and other
regulatory approvals) in the lithium and related minerals in a key tenement to complement the existing Brunswick
Project, being the Kirup Project, tenement E70/5452, situated within 25km from the world class Greenbushes
Lithium Mine.
Mr Mark Stowell and Mr Simon Adams collectively hold approximately 37.59% of the issued capital of Sentinel.
The Company paid Sentinel an amount of $70,000 upon executing the Agreement.
- 12 -
Kula Gold Limited
The Company held a General Meeting on 31 March 2023 and obtained shareholder approval to complete the
acquisition. Upon completion of the acquisition the Company paid Sentinel:
Issued 12,000,000 fully paid ordinary shares (released from escrow on 3 April 2024); and
A further $130,000 for the reimbursement of exploration expenditure costs incurred to date by Sentinel;
$2,000,000 payable in fully paid ordinary shares issued at the 10-day VWAP (commencing upon announcing
the resource), with a minimum issue price of $0.04 on completion of a JORC maiden inferred resource on
the Kirup Project of a minimum of 10mt of ore at a grade of 1% lithium (or metal equivalent) or greater
within 5 years of the lithium rights being acquired.
Subsequent to the year-end a variation agreement has been executed to include 70% of all gold, base metal and
non-LCT minerals rights acquired for the reimbursement of costs of $10,000 as a result of the new epithermal
potential.
This directors’ report, is signed in accordance with a resolution of directors made pursuant to s.298(2) of the
Corporations Act 2001.
On behalf of the Directors
Mr Mark Stowell
Chairman
27 March 2024
Perth, Western Australia
- 13 -
Auditor's Independence Declaration
As auditor for the audit of Kula Gold Limited for the year ended 31 December 2023, I declare that, to the
best of my knowledge and belief, there have been:
I)
II)
no contraventions of the independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Kula Gold Limited and the entities it controlled during the year.
Elderton Audit Pty Ltd
Rafay Nabeel
Director
27 March 2024
Perth
Independent Audit Report to the members of Kula Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Kula Gold Limited (the “Company”) and its subsidiaries (collectedly referred to as the
“Group”) , which comprises the Consolidated Statement of financial position as at 31 December 2023, the Consolidated
Statement of profit or loss and other comprehensive income, the Consolidated Statement of changes in equity and the
Consolidated Statement of cash flows for the year then ended, and notes to the Financial Statements, including a summary
of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group's financial position as at 31 December 2023 and of its financial performance for
the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described as in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional
Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors
of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty related to Going Concern
We draw attention to the Basis of Preparation note 2 (b) of the financial report, which describes that the ability of the Company
and the Group to continue as a going concern is dependent on fund raising activities and the execution of an At-the-Market
Subscription Agreement with Acuity Capital to raise further funds from the capital markets. As a result, there is a material
uncertainty related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial report.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matter
described below to be a key audit matter to be communicated in our report.
Capitalized Exploration
Refer to accounting policy Note 2(y) and Note 12 for the accounting policy and disclosures in relation to Exploration and
Evaluation Expenditure ($1,460,337) as at 30 December 2023.
Key Audit Matter
How our audit addressed the matter
incurred
The Group has
significant
exploration and evaluation expenditures
which have been capitalised. As the carrying
value of exploration and evaluation
expenditures represents a significant asset
of the Group, we considered it necessary to
assess whether facts and circumstances
existed to suggest that the carrying amount
of this asset may exceed its recoverable
amount. As a result, the asset was required
to be assessed for impairment.
We carried out the following work in accordance with the guidance set out
in AASB 6 Exploration for and Evaluation of Mineral Resources:
• We obtained evidence that the Group has valid rights to explore
in the areas represented by the capitalised exploration and
evaluation expenditures by obtaining independent searches of a
sample of the Group’s tenement holdings;
• We enquired with management and reviewed budgets to ensure
that substantive expenditure on further exploration for and
evaluation of the mineral resources in the Group’s areas of
interest were planned;
• We enquired with management, reviewed announcements made
and reviewed minutes of directors’ meetings to ensure that the
Group had not decided to discontinue activities in any of its areas
of interest;
• We enquired with management to ensure that the Group had not
decided to proceed with development of a specific area of
interest,
the classification as exploration was
appropriate.
to ensure
Based on our testing, no issues were noted.
Other Information
The directors are responsible for the other information. The other information obtained at the date of this auditor's report is
included in the annual report but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this auditor's report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the
financial report represents the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a Statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit
of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 12 of the directors’ report for the year ended 31 December
2023. The directors of the Kula Gold Limited are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Kula Gold Limited for the year ended 31 December 2023 complies with section
300A of the Corporations Act 2001.
Elderton Audit Pty Ltd
Rafay Nabeel
Director
Perth
27 March 2024
Kula Gold Limited
Directors’ declaration
The directors declare that:
(a)
in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable;
(b)
(c)
in the directors’ opinion, the attached financial statements are in compliance with International Financial
Reporting Standards, as stated in note 1 to the financial statements;
in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements and giving a true and fair view of the financial
position as at 31 December 2022 and performance of the Group for the financial year ended on that date; and
(d)
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Mr Mark Stowell
Chairman
27 March 2024
Perth, Western Australia
- 19 -
Kula Gold Limited
Consolidated statement of profit or loss and other
comprehensive income
for the year ended 31 December 2023
Continuing operations
Other income
Administration expenses
Share-based payments
Exploration and evaluation expenditure
Finance costs
Loss before tax
Income tax expense
Loss for the year
Other comprehensive expense
Items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Total other comprehensive loss for the year
Total comprehensive loss for the year
Loss attributable to:
Owners of Kula Gold Limited
Total comprehensive loss attributable to:
Owners of Kula Gold Limited
Loss per share from continuing operations:
Basic and diluted (cents per share)
Consolidated
Year ended
31 December
2023
$
31 December
2022
$
Note
4
19
6
5
549,998
(896,140)
(56,128)
(2,191,033)
(1,563)
(2,594,866)
-
(2,594,866)
447,157
(994,104)
(96,742)
(972,622)
(1,420)
(1,617,731)
-
(1,617,731)
-
-
-
(2,594,866)
-
-
-
(1,617,731)
(2,594,866)
(1,617,731)
(2,594,866)
(1,617,731)
7
(0.69)
(0.64)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
- 20 -
Consolidated statement of financial position
as at 31 December 2023
Kula Gold Limited
ASSETS
Current assets
Cash and cash equivalents
Receivables and other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Exploration tenement
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Lease liability
Total current liabilities
Non-current liabilities
Provisions
Lease liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Equity attributable to:
Owners of Kula Gold Limited
Non-controlling interest
Total equity
Consolidated
31 December
2023
$
31 December
2022
$
Note
8
9
10
11
12
13
14
11
14
11
15
16
393,378
122,505
515,883
1,764,307
488,709
2,253,016
42,678
52,112
1,460,337
1,555,127
2,071,010
396,060
10,761
19,668
426,489
-
33,591
33,591
460,080
1,610,930
52,525
8,874
1,379,019
1,440,418
3,693,434
228,846
10,761
9,690
249,297
31,000
-
31,000
280,297
3,413,137
156,243,065
807,705
(155,439,840)
155,506,534
766,856
(152,860,253)
1,610,930
-
1,610,930
3,413,137
-
3,413,137
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
- 21 -
Consolidated statement of changes in equity
for the year ended 31 December 2023
Kula Gold Limited
Consolidated
Note
Share capital
$
Balance at 1 January 2022
Loss for the year
Total other comprehensive loss for the year
Total comprehensive loss for the year
Issue of share capital
Share issue costs
Share-based payments related to share issue costs
Share-based payments
Lapsed employee incentive options
Reversal of an unclaimed equity contribution received
from Geopacific Resources Ltd
Balance at 31 December 2022
15
15
15
19
16
19
16
Share-based
payment
reserve
$
151,047
-
-
-
-
-
120,109
96,742
(5,408)
Consolidation
reserve
$
398,758
-
-
-
-
-
-
-
-
Total
reserves
$
549,805
-
-
-
-
-
120,109
96,742
(5,408)
Accumulated
losses
$
(151,247,930)
(1,617,731)
-
(1,617,731)
-
-
-
-
5,408
Total equity
$
2,140,383
(1,617,731)
-
(1,617,731)
2,920,726
(132,591)
-
96,742
-
152,838,508
-
-
-
2,920,726
(132,591)
(120,109)
-
-
-
155,506,534
-
362,490
5,608
404,366
5,608
766,856
-
(152,860,253)
5,608
3,413,137
Balance at 1 January 2023
Loss for the year
Total other comprehensive loss for the year
Total comprehensive loss for the year
Issue of share capital
Issue of shares as part consideration of the Kirup Project
Share issue costs
Share-based payments
Lapsed employee incentive options
Balance at 31 December 2023
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
155,506,534
-
-
-
600,000
192,000
(55,469)
-
-
156,243,065
362,490
-
-
-
-
-
-
56,128
(15,279)
403,339
15
15
15
19
16
404,366
-
-
-
-
-
-
-
-
404,366
766,856
-
-
-
-
-
-
56,128
(15,279)
807,705
(152,860,253)
(2,594,866)
-
(2,594,866)
-
-
-
-
15,279
(155,439,840)
3,413,137
(2,594,866)
-
(2,594,866)
600,000
192,000
(55,469)
56,128
-
1,610,930
- 22 -
Consolidated statement of cash flows
for the year ended 31 December 2023
Kula Gold Limited
Consolidated
Year ended
31 December
2023
$
31 December
2022
$
Note
Cash flows from operating activities
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Payments for exploration and evaluation expenditure
Payment of the deposit for the Kirup Project acquisition
Interest income
Research and development grant
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Net cash provided by financing activities
8
10
18
4
15
15
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year 8
(967,866)
(967,866)
(847,512)
(847,512)
2,000
(1,888,892)
-
1,119
938,179
(947,594)
(59,079)
(2,186,455)
(70,000)
283
-
(2,315,251)
600,000
(55,469)
544,531
(1,370,929)
1,764,307
393,378
2,920,726
(132,591)
2,788,135
(374,628)
2,138,935
1,764,307
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
- 23 -
Kula Gold Limited
Notes to the consolidated financial statements
for the year ended 31 December 2023
1. General information
Kula Gold Limited (‘Kula Gold’ or the ‘Company’) is an exploration stage company engaged in the acquisition
and exploration of mineral properties, principally located in Western Australia. The Company and its
subsidiaries (the ‘Group’) have not yet determined whether its mineral properties contain reserves that
are economically recoverable.
Kula Gold is a company limited by shares incorporated and registered in Australia whose ordinary shares
are publicly traded on the Australian Securities Exchange (‘ASX’) under ticker code (ASX: KGD). The address
of the registered office is Suite 2, 20 Howard Street, Perth, Western Australia 6000. The financial report of
the Group for the year ended 31 December 2023 was authorised for issue in accordance with a resolution
of the directors on 27 March 2024.
2. Basis of preparation and significant accounting policies
(a) Statement of compliance
These consolidated financial statements as at and for the year ended 31 December 2023 have been
prepared in accordance with Australian equivalents to International Financial Reporting Standards
(“AIFRS”), other pronouncements of the Australian Accounting Standards Board (“AASB”), Australian
Accounting Interpretations and the Corporations Act 2001. Compliance with AIFRS also ensures that the
consolidated financial statements are in compliance with International Financial Reporting Standards
(including interpretations).
(b) Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Except for cash flow information, the financial report has been prepared on an accrual basis and is based
on historical costs, modified, where applicable, by the measurement at fair value of selected non-current
assets, financial assets and financial liabilities. Material accounting policies adopted in preparation of this
financial report are presented below and have been consistently applied unless otherwise stated.
i. New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
ii. New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 31
December 2023. The Group has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
iii. Going concern
The financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activities and the realisation of assets and the settlement of liabilities in the
normal course of business.
- 24 -
Kula Gold Limited
iii. Going concern (continued)
As disclosed in the financial statements for the year ended 31 December 2023, the Group incurred a loss
of $2,594,866 (2022: $1,617,731), had net cash outflows from operating activities of $967,866 (2022:
$847,512), had cash inflows from financing activities of $544,532 (2022: $2,788,135). As at 31 December
2023 the Group had net assets of $1,610,930 (2022: $3,413,137) and cash and cash equivalents of $393,378
(2022: $1,764,307).
As such, the directors believe that there are reasonable grounds to believe that the Group will be able to
continue as a going concern, after consideration of the following factors:
On 22 March 2024, the Company entered into an At-the-Market Subscription Agreement (“ATM”)
with Acuity Capital. The ATM provides the Company with up to $1,000,000 of standby equity capital
over a period to 31 January 2029. As security for the ATM, the Company issued 24,000,000 fully paid
ordinary shares to Acuity Capital at nil consideration.
On 28 February 2024, the Company issued 39,250,000 fully paid ordinary shares via a placement of
shares at an issue price of $0.008 per share to raise $314,000. Subject to shareholder approval at the
Company’s Annual General Meeting to be held in May 2024, the Company will issue an additional
10,750,000 fully paid ordinary shares at an issue price of $0.008 to raise an additional $86,000.
the current cash balance of the Company relative to its fixed and discretionary expenditure
commitments;
given the Company’s market capitalisation and the underlying prospects for the Company to raise
further funds from the capital markets; and
the fact that future exploration and evaluation expenditure is generally discretionary in nature (i.e.
at the discretion of the directors having regard to an assessment of the Group’s eligible expenditure
to date and the timing and quantum of its remaining earn-in expenditure requirements). Subject to
meeting certain minimum expenditure commitments, further exploration activities may be slowed
or suspended as part of the management of the Company’s working capital.
Accordingly, the directors believe that the Group will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
In the event that the Group is unsuccessful in the matters set out above in relation to obtaining future
funds through capital raisings, there is a material uncertainty whether the Group will continue as a going
concern, and therefore whether it will realise its assets and discharge its liabilities in the normal course of
business, and at the amounts stated in the financial report.
The financial report does not include any adjustments relating to the recoverability and classification of
recorded assets or to the amounts and classification of liabilities that might be necessary should the Group
not continue as a going concern.
(c) Parent Entity Information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group
only.
(d) Basis of Consolidation
The Company’s consolidated financial statements include Kula Gold Limited and its subsidiaries, all of
which are wholly owned.
Subsidiaries
Subsidiaries are entities controlled by the Company. Consolidation accounting is applied for all of the
Company’s wholly owned subsidiaries. Control is achieved when the Company:
• Has power over the investee;
•
• Has the ability to use its power to affect its returns.
Is exposed, or has rights, to variable returns from its involvement with the investee; and
The Company reassesses whether or not it controls an investee, if facts and circumstance indicate that there
are changes to one or more of the three elements of control listed above.
- 25 -
Kula Gold Limited
Subsidiaries (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Group recognises the fair value of the consideration received and the fair value
of any investment retained together with any gain or loss in profit or loss.
Joint Ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. Investments in joint ventures are accounted for using the equity
method. Under the equity method, the share of the profits or losses of the joint venture is recognised in
profit or loss and the share of the movements in equity is recognised in other comprehensive income.
Investments in joint ventures are carried in the statement of financial position at cost plus post-acquisition
changes in the Group's share of net assets of the joint venture. Income earned from joint venture entities
reduce the carrying amount of the investment.
(e) Operating Segments
Operating segments are presented using the 'management approach', where the information presented is
on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The
CODM is responsible for the allocation of resources to operating segments and assessing their
performance.
(f) Functional and Presentation Currency
Items included in the financial statements of each of the Company’s operations are measured using the
currency of the primary economic environment in which it operates (”the functional currency”). The
financial statements are presented in Australian dollars, which is the Company's functional and
presentation currency.
(g) Use of Estimates and Judgements
The preparation of the consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.
Critical Accounting Estimates
Exploration and Evaluation Assets
Estimates and assumptions made may change if new information becomes available. If, after expenditure
is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the
amount capitalised is recognised in loss in the period that the new information becomes available.
Impairment
Assets, including property, plant and equipment and exploration and evaluation assets, are reviewed for
impairment whenever events or changes in circumstances indicate that their carrying amounts exceed
their recoverable amounts.
The assessment of the fair value often requires estimates and assumptions such as discount rates,
exchange rates, commodity prices, rehabilitation and restoration costs, future capital requirements and
future operating performance. Changes in such estimates could impact recoverable values of these assets.
Estimates are reviewed regularly by management.
- 26 -
Kula Gold Limited
Provisions and contingencies
The amount recognised as a provision, including legal, contractual and other exposures or obligations, is
the best estimate of the consideration required to settle the related liability, including any related interest
charges, taking into account the risks and uncertainties surrounding the obligation. The Company assesses
its liabilities and contingencies based upon the best information available, relevant tax laws and other
appropriate requirements.
Decommissioning and environmental provisions
The Company’s operations are subject to environmental regulations in Australia. Upon any establishment
of commercial viability of a site, the Company estimates the cost to restore the site following the
completion of commercial activities and depletion of reserves. These future obligations are estimated by
taking into consideration closure plans, known environmental impacts, and internal and external studies
which estimate the activities and costs that will be carried out to meet the decommissioning and
environmental provisions obligations. Amounts recorded for decommissioning and environmental
provisions are based on estimates of decommissioning and environmental costs which may not be incurred
for several years or decades.
The decommissioning and environmental cost estimates could change due to amendments in laws and
regulations in Australia. Additionally, actual estimated decommissioning and reclamation costs may differ
from those projected. The Company is currently in the exploration stage and as such, there are no
decommissioning and environmental reclamation costs at the year end.
Fair value of share-based compensation
The fair value of share-based compensation are subject to the limitation of the pricing models adopted that
incorporates market data and involves uncertainty in estimates used by management in the assumptions.
As the option pricing models require the input of highly subjective assumptions, including the volatility of
share price, changes in subjective input assumptions can materially affect the fair value estimate. Where
applicable, judgement is exercised on the probability and timing of achieving milestones related to the
options.
Critical Accounting Judgements
Exploration and Evaluation Assets
The application of the Company’s accounting policy for and determination on recoverability of capitalised
exploration and evaluation expenditure requires judgement in determining whether future economic
benefits are likely, which may be based on assumptions about future events or circumstances.
Income taxes
Judgement is required in determining whether deferred tax assets are recognised in the statements of
financial position. Deferred tax assets, including those arising from unutilised tax losses, require
management to assess the likelihood that the Company will generate taxable earnings in future periods,
in order to utilise recognised deferred tax assets.
Estimates of future taxable income are based on forecast cash flows from operations and the application
of existing tax laws in Australia. To the extent that future cash flows and taxable income differ significantly
from estimates, the ability of the Company to realise the deferred tax assets recorded at the date of the
statement of financial position could be impacted.
Additionally, future changes in tax laws in Australia in which the Company operates could limit the ability
of the Company to obtain tax deductions in future periods.
Fair value measurement hierarchy
The Group is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly and Level 3: Unobservable inputs for the
asset or liability. Considerable judgement is required to determine what is significant to fair value and
therefore which category the asset or liability is placed in can be subjective. The fair value of assets and
liabilities classified as Level 3 is determined by the use of valuation models.
- 27 -
Kula Gold Limited
Fair value measurement hierarchy (continued)
These include discounted cash flow analysis or the use of observable inputs that require significant
adjustments based on unobservable inputs.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly
as a result of technical innovations or some other event. The depreciation and amortisation charge will
increase where the useful lives are less than previously estimated lives, or technically obsolete or non-
strategic assets that have been abandoned or sold will be written off or written down.
(h) Financial Instruments
Financial assets and liabilities are recognised when the Company becomes party to the contractual
provisions of the instrument. Financial assets are derecognised when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all the
risks and rewards of ownership.
Effective Interest Method
The effective interest method calculates the amortised cost of a financial instrument asset or liability and
allocates interest income over the corresponding period. The effective interest rate is the rate that
discounts estimated future cash receipts over the expected life of the financial asset or liability, or where
appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments
other than those financial assets classified as fair value through profit and loss.
Loans and Receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. These assets are measured at amortised cost using the effective interest method. Any
gains or losses on the realisation of receivables are included in profit or loss.
Impairment of Financial Assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Group's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
Other financial liabilities
They are measured at amortised cost using the effective interest method. Any gains or losses in the
realisation of other financial liabilities are included in profit or loss.
Fair values
Fair values of financial assets and liabilities are based upon quoted market prices available from active
markets or are otherwise determined using a variety of valuation techniques and models using quoted
market prices.
- 28 -
Kula Gold Limited
Fair values (continued)
The Company has made the following classifications:
Other assets
Trade and other payables
Loans and receivables
Other liabilities
All financial instruments are required to be measured at fair value on initial recognition. Fair value
measurement for financial instruments and liquidity risk disclosures require a three hierarchy that
reflects the significance of the inputs used in making the measurements.
(i) Long-Lived Asset Impairment
Long-lived assets, which comprise exploration and evaluation assets and property, plant and equipment,
are reviewed for impairment if events or changes in circumstances indicate that the carrying value may
not be recoverable.
The Company’s property, plant and equipment are assessed for indication of impairment at each financial
position date.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. Internal
factors, such as budgets and forecasts, as well as external factors, such as future prices, costs and other
market factors are also monitored to determine if indicators of impairment exist. If any indication of
impairment exists, an estimate of the assets’ recoverable amount is calculated. The recoverable amount
is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets of the Company’s assets. If this is the case, the individual assets
are grouped together into cash generating units (“CGU”) for impairment purposes. Such CGU’s represent
the lowest levels for which there are separately identifiable cash inflows that are largely independent of
the cash flows from other assets.
If the carrying amount of the asset exceeds its recoverable amount, the asset is impaired and an
impairment loss is charged to profit or loss so as to reduce the carrying amount to its recoverable amount
(i.e. the higher of fair value less cost to sell and fair value in use). Fair value less cost to sell is the amount
obtainable from the sale of an asset of CGU in an arm’s length transaction between knowledgeable, willing
parties, less the costs of disposal. Value in use is determined as the present value of the future cash flows
expected to be derived from an asset of CGU.
Estimated future cash flows are calculated using estimated future prices, mineral reserves and resources
and operating and capital costs. All assumptions used are those that an independent market participant
would consider appropriate. The estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which estimates of future cash flows have not been adjusted.
(j) Decommissioning and Environmental Provisions
The Company’s mineral exploration and development activities are subject to various Australian laws and
regulations regarding the protection of the environment. As a result, the Company is expected to incur
expenses to discharge its obligations under these laws and regulations.
Decommissioning and environmental costs are estimated based on the Company’s interpretation of
current regulatory and operating license requirements. Initially, a liability for a decommissioning and
environmental provision is recognised as its fair value in the period in which it is incurred. Upon initial
recognition of the liability, the corresponding decommissioning and environmental provision is added to
the carrying amount of the related asset and the cost is amortised as an expense over the economic life
of the asset using either the unit of production method or the straight-line method, as appropriate.
(k) Revenue recognition
The Group recognises interest revenue as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income over the
relevant period using the effective interest rate, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to the net carrying amount of the financial
asset.
- 29 -
Kula Gold Limited
(l) Receivables
Receivables are recognised at amortised cost, less any allowance for expected credit losses.
(m) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(n) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when it is either expected to be realised or intended to be sold or consumed
in the Group’s normal operating cycle, expected to be realised within 12 months after the reporting period
or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when it is either expected to be settled in the Group’s normal operating
cycle, due to be settled within 12 months after the reporting period or there is no unconditional right to
defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(o) Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Buildings and leasehold improvements
Motor vehicles
Plant and equipment
Furniture and fittings
25 years
3 years
6 years
6 years
The residual values, useful lives and depreciation methods are reviewed and adjusted if appropriate at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposed proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred
directly to accumulated losses.
(p) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
(q) Employee benefits
Short-term employee benefits.
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long services leave
expected to be settled wholly within 12 months of the reporting date are measure at the amounts expected
to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and
period of services. Expected future payments are discounted using market yields at the reporting date on
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
- 30 -
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Kula Gold Limited
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined for reference to the share price.
The cost of equity-settled transactions are measured at the fair value on grant date. Fair value is
independently determined using either the Binomial or Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate
for the term of the option, together with non-vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the Group or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the
remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
(r) Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(s) Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the statement of financial position date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences and the carry-forward of unused tax credits and
unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; or
- 31 -
Kula Gold Limited
(s) Income tax (continued)
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or
loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(t) Good and Services Tax (GST) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from or payable to, the tax authority is included in other receivables or other payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the tax authority.
(u) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
(v) Rounding of amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors’
Reports) Instrument 2016/191, dated 24 March 2016 and in accordance with that Corporations Instrument
amounts in the directors’ report and the financial statements are rounded off to the nearest dollar, unless
otherwise indicated.
- 32 -
Kula Gold Limited
(w) Leases
The accounting policy for leases under AASB 16 is as follows:
For any new contracts entered into as a lessee, the Company considers whether a contract is, or contains
a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange for consideration’.
To apply this definition the Company assesses whether the contract meets three key evaluations which are
whether:
the contract contains an identified asset, which is either explicitly identified in the contract or
implicitly specified by being identified at the time the asset is made available to the Company;
the Company has the right to obtain substantially all of the economic benefits from use of the
identified asset throughout the period of use, considering its rights within the defined scope of the
contract; and
the Company has the right to direct the use of the identified asset throughout the period of use. The
Company assesses whether it has the right to direct ‘how and for what purpose’ the asset is used
throughout the period of use.
At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the
balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of
the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle
and remove the asset at the end of the lease, and any lease payments made in advance of the lease
commencement date (net of any incentives received). The Company depreciates the right-of-use assets on
a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for
impairment when such indicators exist. At the commencement date, the Company measures the lease
liability at the present value of the lease payments unpaid at that date, discounted using the interest rate
implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments
(including in substance fixed), variable payments based on an index or rate, amounts expected to be
payable under a residual value guarantee and payments arising from options reasonably certain to be
exercised. Subsequent to initial measurement, the liability will be reduced for payments made and
increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes
in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The
Company has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these
are recognised as an expense in profit or loss on a straight-line basis over the lease term. Lease liabilities
are shown directly on the statement of financial position (current and non-current).
(x) Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item included in the same class of obligations may
be small.
Provisions are measured at the present value of management's best estimate of the expenditure required
to settle the present obligation at the reporting date. The discount rate used to determine the present
value reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.
- 33 -
Kula Gold Limited
(y) Exploration and evaluation expenditure
Exploration and evaluation costs related to an area of interest are expensed as incurred except where they
may be carried forward as an item in the statement of financial position where the rights of tenure of an
area are current and one of the following conditions is met:
the costs are expected to be recouped through successful development and exploitation of the area
of interest, or alternatively, by its sale; or
exploration and/or evaluation activities in the area of interest have not at the reporting date reached
a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
is continuing.
Exploration and evaluation expenditure is written-off when it fails to meet at least one of the conditions
outlined above or an area of interest is abandoned. Exploration and evaluation assets are assessed for
impairment when facts and circumstances suggest that the carrying amount of an exploration and
evaluation asset may exceed its recoverable amount. When facts and circumstances suggest that the
carrying amount exceeds the recoverable amount, the impairment loss will be measured in accordance
with the Company’s impairment policy (note 2(i)).
3. Operating segments
The Company has determined that it operates in one operating segment, being exploration in Western
Australia and this is the basis on which internal reports are provided to the directors for assessing
performance and determining the allocation of resources in the Company. Accordingly, the financial results
of the segment are equivalent to the financial statements of the Company as a whole.
4. Other income
Cost recovery of certain expenses1
Research and development government grant
Interest on term deposit
2022
$
57,574
389,300
283
447,157
1 Cost recovery of $50,147 for the current year has been allocated and reduced either administration or exploration expenses as a
result of the reimbursement of costs.
-
548,879
1,119
549,998
2023
$
5. Loss for the year
Other income
Depreciation
Furniture and fittings
Right-of-use-assets
Employee benefit expenses
Share-based payments
Employees under incentive plan
Capital raising costs
Professional and consulting expenses
Exploration and evaluation expenditure
Interest on right-of-use liabilities
Other administration expenses
2023
$
2022
$
(549,998)
(447,157)
11,847
10,422
413,581
56,128
-
183,364
2,191,033
1,563
276,926
2,594,866
6,554
17,895
314,035
96,742
120,109
209,543
972,622
1,420
325,968
1,617,731
- 34 -
6. Income tax
The prima facie income tax benefit on the loss before income tax
from continued operations reconciles to income tax:
Loss before income tax
Corporate tax rate
Tax at the corporate tax rate
Tax effect of expenses that are not deductible in determining taxable profit
Tax effect of income that is not assessable in determining taxable profit
Tax effect of deferred taxes that would be recognised directly in equity
Change in unrecognised deferred tax assets
Kula Gold Limited
2023
$
2022
$
(2,594,866)
25%
(648,716)
(3,770)
(137,220)
25,445
764,261
-
(1,617,731)
25%
(404,433)
50,296
(97,325)
83,256
368,206
-
The tax rates used in the above reconciliation is the corporate tax rate of 25% (2022: 25%) payable by
Australian corporate entities on taxable profits under Australian tax law.
Unrecognised deferred tax assets and liabilities as at 31 December 2023 comprise:
Exploration and evaluation expenses
Trade and other payables
Provisions
Unexpired blackhole expenditure
Unused tax losses
Deferred tax
assets
$
Deferred tax
liabilities
$
11,106
2,690
48,449
2,338,425
2,400,670
(365,084)
-
-
-
-
(365,084)
Net
$
(365,084)
11,106
2,690
48,449
2,338,425
2,035,586
The tax benefits of the above net deferred tax assets will only be obtained if:
(a) The Company derives future assessable income of a nature and of an amount sufficient to enable the
benefits to be utilised;
(b) The Company continues to comply with the conditions for deductibility imposed by law; and
(c) No changes in income tax legislation adversely affect the Company in utilising the benefits.
- 35 -
7. Loss per share
Loss for the year
Loss for the year attributable to the owners of the Company used
for the purposes of basic and diluted loss per share
Number of shares
Weighted average number of fully paid ordinary shares used for
the purposes of basic and diluted loss per share
Loss per share
Basic and diluted loss per share
Kula Gold Limited
2023
$
2022
$
(2,594,866)
(1,617,731)
2023
No.
2022
No.
375,338,791
252,529,467
2023
$
2022
$
(0.69)
(0.64)
Basic loss per share is calculated as the net loss attributable to owners of the Company, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by
the weighted average number of fully paid ordinary shares, adjusted for any bonus element.
Diluted loss per share is the same as the basic loss per share as these are not dilutive transactions when
the Company had a loss.
8. Cash and cash equivalents
Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated
statement of cash flows is reconciled to items in the consolidated
statement of financial position as follows:
Cash and bank balances
2023
$
2022
$
393,378
1,764,307
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts.
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one and three months, depending on the
immediate cash requirements of the Company, and earn interest at the respective short-term deposit
rates.
The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is
discussed in note 20.
- 36 -
8. Cash and cash equivalents (continued)
Cash flow information
Reconciliation of cash flows from operating activities to the loss
after income tax:
Loss after income tax
Increase in receivables and other assets
(Increase)/decrease in trade and other payables
Share-based payments
Depreciation
Finance costs
Exploration expenditure – classified within investing activities
Net cash used in operating activities
Kula Gold Limited
2023
$
2022
$
(2,594,866)
(546,764)
(97,230)
56,129
22,269
1,563
2,191,033
(967,866)
(1,617,731)
(359,261)
34,247
96,742
24,449
1,420
972,622
(847,512)
Non-cash investing and financing activities
There were no non-cash investing or financing activities during the current year.
During the prior year, following shareholder approval on 7 November 2022, the Company issued 6,000,000
unlisted options exercisable at $0.08 on or before 7 November 2025 to Taylor Collison for the provision of
Lead Manager services for the placement capital raising transaction announced on 19 September 2022.
9. Receivables and other assets
GST receivable
Prepayments and other receivables
Research and development government grant
10. Property, plant and equipment
Cost
At 1 January
Additions
At 31 December
Accumulated depreciation
At 1 January
Charge for the year
At 31 December
Carrying amount
At 31 December 2023
At 31 December 2022
At 1 January 2022
2023
$
18,882
103,623
-
122,505
2022
$
27,007
72,402
389,300
488,709
2023
$
2022
$
153,667
2,000
155,667
2023
$
94,588
59,079
153,667
2022
$
(101,142)
(11,847)
(112,989)
(94,588)
(6,554)
(101,142)
42,678
52,525
-
- 37 -
Kula Gold Limited
11. Right-of-use-assets and lease liabilities
The Company leases office facilities in Perth, Western Australia. The lease runs for a period of three years
with an option to renew at the end of the lease period. Lease payment amounts are set based on fixed annual
increases.
Right-of-use assets
Right-of-use assets
Depreciation charge
2023
$
2022
$
2023
$
2022
$
Buildings
52,112
8,874
10,422
17,895
Lease liabilities
Lease liabilities
Interest charge
Current
Non-current
2023
$
19,668
33,591
2022
$
9,690
-
2023
$
1,563
-
2022
$
1,420
-
12. Exploration tenement
At 1 January
Capitalised exploration & evaluation expenditure
At 31 December
2023
$
1,379,019
81,318
2022
$
408,189
970,830
1,460,337
1,379,019
The Company is of the view that the only tenement that meets the criteria of Aus 7.2 of AASB 6 is the
Boomerang Kaolin Deposit on tenement E77/2621 where the Company has a 93.3mt resource (15.2mt
indicated and 78.1mt inferred). The Company has lodged applications for mining licence M77/1302 and a
miscellaneous licence L77/359.
13. Trade and other payables
Trade creditors and other payables
Accruals
PAYG withholding payable
Superannuation payable
2023
$
351,638
11,770
-
32,652
396,060
2022
$
81,367
114,533
14,936
18,010
228,846
Trade and other payable are non-interest bearing and are usually settled within the lower of terms of trade
or 30 days. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and
liabilities are disclosed in note 20.
- 38 -
14. Provisions
Current
Provision for annual leave
Non-current
Provision for rehabilitation
15. Share capital
Kula Gold Limited
2023
$
2022
$
10,761
10,761
10,761
10,761
2023
$
2022
$
-
-
31,000
31,000
Fully paid ordinary shares
419,365,768
361,211,921
156,243,064
2023
No.
2022
No.
2023
$
Fully paid ordinary shares
At the beginning of the year
Share placement1
Share issue2
Share placement3
Share placement4
Entitlement issue5
Share issue costs
361,211,921
46,153,847
12,000,000
-
-
-
-
419,365,768
215,175,632
-
-
25,000,000
67,242,383
53,793,906
-
361,211,921
155,506,534
600,000
192,000
-
-
-
(55,469)
156,243,065
2022
$
155,506,534
152,838,508
-
-
500,000
1,344,848
1,075,878
(252,700)
155,506,534
1 On 21 November 2023, the Company completed the first tranche of a share placement to sophisticated and professional
investors issuing a total of 46,153,847 fully paid ordinary shares at an issue price of $0.013 per share to raise $600,000
before costs of $55,470. Subsequent to the year-end and following shareholder approval at a General Meeting held on
19 January 2024, the Company completed the share placement and issued at total of 3,846,153 fully paid ordinary shares
to directors at an issue price of $0.013 per share to raise a further $50,000.
2 On 4 April 2023, following shareholder approval at a General Meeting held on 18 May 2023, the Company issued
12,000,000 fully paid ordinary shares to Sentinel Exploration Limited at a deemed value of $0.016 per share as part
consideration for a 70% interest in the lithium and related minerals in the Kirup Project, tenement E70/5452.
3 On 11 November 2022 following shareholder approval at a General Meeting held, the Company completed the second
tranche of a share placement to sophisticated and professional investors issuing a total of 25,000,000 fully paid ordinary
shares at an issue price of $0.02 per share to raise $500,000 before costs.
4 On 28 September 2022, the Company completed the first tranche of a share placement to sophisticated and professional
investors issuing a total of 67,242,383 fully paid ordinary shares at an issue price of $0.02 per share to raise $1,344,848
before costs.
5 On 15 September 2022, the Company completed a non-renounceable pro-rata entitlement offer to eligible shareholders
on the basis of one fully paid ordinary share for every four fully paid ordinary shares held at an issue price of $0.02 per
share to raise $1,075,878 before costs.
Terms of fully paid ordinary shares
Voting rights
The Company has one class of fully paid ordinary shares which participates in dividends and any proceeds on
the winding up of the Company in proportion to the number of shares held.
At shareholder meetings, each fully paid ordinary share is entitled to one vote.
- 39 -
16. Reserves
Share-based payment reserve
Consolidation reserve
Movement in reserves
Share-based payment reserve
Unlisted options
14,925,000
14,625,000
2023
No.
2022
No.
Unlisted options
At the beginning of the year
ESIP option allotment1
ESIP option allotment2
Option allotment3
ESIP option allotment4
Lapsed ESIP options4,
14,625,000
1,300,000
-
-
-
(1,000,000)
14,925,000
3,700,000
-
2,300,000
6,000,000
2,800,000
(175,000)
14,625,000
Kula Gold Limited
2023
$
403,339
404,366
807,705
2022
$
362,490
404,366
766,856
2023
$
403,339
2022
$
362,490
362,490
19,281
24,391
-
12,456
(15,279)
403,339
181,876
-
32,677
120,109
33,236
(5,408)
362,490
1 On 2 February 2023, the Company issued 1,300,000 unlisted options to employees under the Employee Incentive Option
Plan (‘EIOP’). The unlisted options have an exercise price of $0.06 and an expiry date of 1 July 2026. The unlisted options
have fully vested.
2 On 8 November 2022, the Company issued 2,300,000 unlisted options to employees under the EIOP. The unlisted
options have an exercise price of $0.06 and an expiry date of 1 July 2026. The unlisted options have fully vested.
3 On 7 November 2022 following shareholder approval at the General Meeting held, the Company issued 6,000,000
unlisted options exercisable at $0.08 expiring 7 November 2025 to Taylor Collison for Lead Manager and equity market
services for a placement capital raising.
4 On 18 July 2022, the Company issued 2,800,000 unlisted options to employees under the EIOP. The unlisted options
have an exercise price of $0.06 and an expiry date of 1 July 2026. The unlisted options have fully vested. On 2 February
2023, 1,000,000 unlisted options lapsed as a result of the continued employment conditions.
The share-based payment reserve is used to recognise the grant date fair value of unlisted options issued to
directors, employees, contractors and stockbrokers.
The fair value of the unlisted options are valued using the Black-Scholes option valuation methodology. For
further information regarding the inputs and key variables for the valuation and the terms and conditions of
the EIOP refer to note 19.
Performance Rights
On 4 April 2023, following shareholder approval at a General Meeting held on 18 May 2023, the Company
issued 2,000,000 performance rights to Sentinel Exploration Limited as deferred consideration for a 70%
interest in the lithium and related minerals in the Kirup Project, tenement E70/5452.
The performance rights converts to an amount of $2,000,000 payable in fully paid ordinary shares issued at
the 10-day VWAP (commencing upon announcing the resource), with a minimum issue price of $0.04 on
completion of a JORC maiden inferred resource on the Kirup Project of a minimum of 10mt of ore at a grade
of 1% lithium (or metal equivalent) or greater within 5 years of the lithium rights being acquired (refer note
18).
As at the date of acquisition and as at 31 December 2023, the directors have assessed the fair value of the
performance rights as nil, given the current stage of exploration on the Kirup tenement, E70/5452.
- 40 -
16. Reserves (continued)
Movement in reserves
Consolidation reserve
Balance at beginning of the year
Reversal of an unclaimed equity contribution received from
Geopacific Resources Ltd.
Kula Gold Limited
2023
2022
$
404,366
-
404,366
$
398,758
5,608
404,366
The consolidation reserve represents the difference between the minority interest recognised and the equity
contributions received from Geopacific Resources Ltd.
17. Key management personnel compensation
The names and positions of key management personnel are as follows:
Mr Mark Stowell Chairman
Mr Ric Dawson Managing Director – Appointed 18 October 2023.
Mr Mark Bojanjac Director
Mr John Hannaford Director – Resigned 18 October 2023.
Information regarding individual directors and executives’ compensation and equity instrument disclosures as
required by the Corporations Regulations 2M.3.03 is provided in the remuneration report in the directors’
report.
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
18. Related party transactions
Key management personnel
2023
$
255,450
17,500
-
-
272,950
2022
$
171,591
3,025
-
28,415
203,031
Disclosures relating to Key Management Personnel are set out in note 17 and detailed remuneration disclosures
are provided in the remuneration report in the directors’ report.
Other transactions with key management personnel of the Group
During the financial year, the Company leases premises at Suite 2, 20 Howard Street, Perth from an entity that
is controlled by Mr Mark Stowell. The terms of this lease are set at a rate that is considered to be arms-length
for comparable premises. The rent and outgoings paid for this premises during the financial year ended 31
December 2023 was $44,097 (2022: $35,922).
The Company also leases storage facilities at Unit 18, 6 Production Road, Canning Vale from an entity that is
controlled by Mr John Hannaford. The terms of this lease are set at a rate that is considered to be arms-length
for comparable premises. The rent for this premises during the financial year to Mr John Hannaford’s
resignation was $2,383 (2022: $2,383).
- 41 -
18. Related party transactions (continued)
Kula Gold Limited
On 28 November 2022, the Company entered into a binding term sheet (‘Agreement’) with Sentinel Exploration
Ltd (‘Sentinel’) to acquire a 70% interest in the lithium and related minerals in a key tenement E70/5452 (‘Kirup
Project’).
Mr Mark Stowell is a current director of both Sentinel and the Company and Mr Simon Adams is a current director
of Sentinel and a previous director of the Company, resigning on 2 November 2022. As a result, this transaction
was considered a related party transaction, and was approved by shareholders at a General Meeting held on 31
March 2023.
The consideration was as follows:
$200,000 for the reimbursement of exploration expenditure costs;
Issued 12,000,000 fully paid ordinary shares at a deemed value of $0.016 per share; and
Issued 2,000,000 performance rights as deferred consideration of $2,000,000 payable in fully paid
ordinary shares issued at the 10-day VWAP (commencing upon announcing the resource), with a
minimum issue price of $0.04 on completion of a JORC maiden inferred resource on the Kirup Project of
a minimum of 10mt of ore at a grade of 1% lithium (or metal equivalent) or greater within 5 years of the
lithium rights being acquired.
Subsequent to the year-end a variation agreement has been executed to include 70% of all gold, base metal
and non-LCT minerals rights acquired for the reimbursement of costs of $10,000 as a result of the new
epithermal potential.
Apart from the above, no key management personnel have entered into a material contract with the Group
since the end of the previous financial year and there were no material contracts involving key management
personnel interests existing at year-end.
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operating decisions. Parties are
also considered to be related if they are subject to common control or common significant influence, related
parties may be individuals or corporate entities. A transaction is considered to be a related party transaction
when there is a transfer of resources or obligations between related parties. Related party transactions that
are in the normal course of business and have commercial substance are measured at the exchange amount.
19. Share-based payments
The Company operates an ownership-based Employee Incentive Option Plan (‘EIOP’) for executives and senior
employees of the Group.
In accordance with the terms and conditions of the EIOP, as approved by shareholders at the 2021 Annual
General Meeting, each unlisted option converts to fully paid ordinary shares on a one-for-one basis.
No amounts are paid or payable by the recipient on receipt of the unlisted option. The holders of these unlisted
options do not have the right, by virtue of the unlisted option, to participate in any share issue or interest issue
of the Company or of any other body corporate or registered scheme.
The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the
date of vesting to the date of their expiry. There is no performance based formula to calculate the number of
options each executive or senior employee receives. Options expire on the expiry date and any unvested
options expire on the resignation of the executive or senior employee.
No fully paid ordinary share were issued by the Company as a result of the exercise of unlisted options during
or since the end of the financial year.
- 42 -
19. Share-based payments (continued)
Kula Gold Limited
On 2 February 2023, the Company issued 1,300,000 unlisted options to employees under the EIOP. The
unlisted options have an exercise price of $0.06 and an expiry date of 1 July 2026. 50% of the unlisted
options have vested with the remaining balance vesting on 2 February 2024.
On 8 November 2022, the Company issued 2,300,000 unlisted options to employees under the EIOP. The
unlisted options have an exercise price of $0.06 and an expiry date of 1 July 2026. The unlisted options have
fully vested.
On 7 November 2022 following shareholder approval at the General Meeting held, the Company issued
6,000,000 unlisted options exercisable at $0.08 expiring 7 November 2025 to Taylor Collison for Lead
Manager and equity market services for a placement capital raising.
On 18 July 2022, the Company issued 2,800,000 unlisted options to employees under the EIOP. The unlisted
options have an exercise price of $0.06 and an expiry date of 1 July 2026. The unlisted options have fully
vested. On 2 February 2023, 1,000,000 unlisted options lapsed as a result of the continued employment
conditions.
Set out below are summaries of the unlisted options granted during the current and previous financial years.
2023
EIOP
Options
series
5
4
N/A
3
2
1
2022
EIOP
Options
series
4
N/A
3
2
1
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
-
1,300,000
2 Feb 23
8 Nov 22
7 Nov 22
18 Jul 22
1 Jul 26
1 Jul 26
7 Nov 25
1 Jul 26
$0.06
$0.06
$0.08
$0.06
2,300,000
6,000,000
2,800,000
16 Aug 21
1 Aug 25
$0.085
575,000
28 Jun 21
1 Jul 26
$0.06
2,950,000
-
-
-
-
-
Weighted average exercise price
14,625,000
1,300,000
$0.069
$0.06
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
8 Nov 22
1 Jul 26
7 Nov 22
7 Nov 25
18 Jul 22
1 Jul 26
$0.06
$0.08
$0.06
-
-
-
2,300,000
6,000,000
2,800,000
16 Aug 21
1 Aug 25
$0.085
600,000
28 Jun 21
1 Jul 26
$0.06
3,100,000
-
-
Weighted average exercise price
3,700,000
11,100,000
$0.064
$0.071
Expired/
forfeited/
lapsed
-
-
-
Balance at
the end of
the year
1,300,000
2,300,000
6,000,000
(1,000,000)
1,800,000
-
-
575,000
2,950,000
(1,000,000) 14,925,000
$0.06
$0.069
Expired/
forfeited/
lapsed
-
-
-
Balance at
the end of
the year
2,300,000
6,000,000
2,800,000
(25,000)
575,000
(150,000)
2,950,000
(175,000)
14,625,000
$0.064
$0.069
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,275,000 unlisted options exercisable at the end of the financial year (2022: 12,075,000).
The weighted average share price during the financial year was $0.017 (2022: $0.024).
The weighted average remaining contractual life of the unlisted options at the end of the financial year was
2.21 years (2022: 3.20 years).
- 43 -
19. Share-based payments (continued)
For the unlisted options granted, the valuation model inputs used to determine the total fair value of $20,165
(2022: $222,869) at the various grant dates using the Black-Scholes Option Model are as follows:
Kula Gold Limited
Grant date
Expiry date
EIOP
Options
series
5
4
2 Feb 23
8 Nov 22
1 Jul 26
1 Jul 26
N/A
7 Nov 22
7 Nov 25
3
2
1
18 Jul 22
1 Jul 26
16 Aug 21
1 Aug 25
28 Jun 21
1 Jul 26
Share price
at grant
date
$0.027
$0.0385
$0.038
$0.03
$0.066
$0.04
Exercise
price
Expected
volatility
$0.06
$0.06
$0.08
$0.06
$0.085
109.67%
107.10%
107.09%
93.65%
106%
$0.06
107.71%
Risk-free
interest
rate
3.24%
3.70%
3.37%
3.21%
0.57%
0.79%
Fair value
at grant
date
$0.016
$0.025
Total fair
value
$20,165
$57,068
$0.02
$120,109
$0.016
$0.044
$0.029
$45,692
$26,683
$90,263
For further details in relation to the EIOP terms and conditions refer to page 11 of the remuneration report.
The total fair value of the unlisted options is expensed over the estimated vesting period. The share-based
expense of $56,128 (2022: $96,742) was recognised in the consolidated statement of profit and loss and other
comprehensive income for the year.
In the prior year, the share-based expense of $120,109 for the unlisted options granted to Taylor Collison for
Lead Manager and equity market services for a placement capital raising was recognised as share issue costs
within equity.
20. Financial risk management
Financial risk management policies
This note presents information about the Group’s exposure to each of the risks below, its objectives, policies
and procedures for measuring and managing risk including the management of capital.
The Group’s financial instruments consist mainly of deposits with banks, short-term investments and accounts
payable and receivable. The Group does not speculate in the trading of derivative instruments.
A summary of the Group’s financial assets and liabilities is set out below:
Floating
Fixed
Non-
Interest
Interest
interest
Rate
Rate
Bearing
2023
Total
$
Floating
Fixed
Interest
Interest
Rate
$
Rate
$
$
-
-
393,378
1,764,307
393,378
1,764,307
$
$
Financial Assets
Cash and cash equivalents
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
393,378
393,378
-
-
Net Financial (Liabilities/Assets)
393,378
-
-
-
-
-
(396,060)
(396,060)
(396,060)
(396,060)
-
-
(396,060)
(2,682)
1,764,307
-
-
-
-
-
Non-
interest
Bearing
$
-
-
2022
Total
$
1,764,307
1,764,307
(228,846)
(228,846)
(228,846)
(228,846)
(228,846)
1,535,461
- 44 -
20. Financial risk management (continued)
Specific financial risk exposures and management
Kula Gold Limited
The main risks the Group are exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate, equity and commodity price risk.
The Board of directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board adopts practices designed to identify significant areas of business risk and to effectively
manage those risks in accordance with the Group’s risk profile. This includes assessing, monitoring and
managing risks for the Group and setting appropriate risk limits and controls. The Group is not of a size nor is
its affairs of such complexity to justify the establishment of a formal system for risk management and
associated controls. Instead, the Board approves all expenditure, is intimately acquainted with all operations
and discuss all relevant issues at the Board meetings. The operational and other compliance risk management
have also been assessed and found to be operating efficiently and effectively.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties
of contract obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or group of receivables
under financial instruments entered into by the Group.
The Group’s cash is held in an Australian financial institution which is considered to have high creditability. The
Group believes that it has no major credit risk.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities.
The Group has no income from operations and relies on equity fund raising to support its exploration programs.
The Group manages liquidity risk by continuously monitoring forecasts and actual cash flows and ensuring
sufficient cash and marketable securities are available to meet the current and future commitments of the
Group.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash to meet expected operational expenses for a period of
60 days, including the servicing of financial obligations; this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the consolidated
statement of financial position. All trade and other payables are non-interest bearing and due within 30 days
of the reporting date.
- 45 -
20. Financial risk management (continued)
The following are the contractual maturities of the financial liabilities of the Group:
Within 1 Year Greater Than 1 Year
Total
Kula Gold Limited
2023
$
2022
2023
2022
$
$
Financial liabilities due for payment
Trade and other payables
Total contractual outflows
Financial assets
Cash and cash equivalents
Total anticipated inflows
(396,060)
(228,846)
(396,060)
(228,846)
393,378
1,764,307
393,378
1,764,307
Net (outflows)/inflow on financial instruments
(2,682)
1,535,461
-
-
-
-
-
2023
$
2022
$
(396,060)
(228,846)
(396,060)
(228,846)
393,378
1,764,307
393,378
1,764,307
(2,683)
1,535,461
$
-
-
-
-
-
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts.
Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of
fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate
instruments.
Cash and cash equivalents bear interest at floating rates based on the bank prime rate, and as such, are
subject to interest rate cash flow risk resulting from market fluctuations in interest rates. The Group has
cash balances in bank accounts and short-term deposits. Due to the short-term nature of these financial
instruments, the Group believes that risks related to interest rates are not significant to the Group at this
time.
Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. The Group does not presently hold material amounts subject to price
risk. As such the Board considers price risk as a low risk to the Group.
Commodity Price risk
The ability of the Group to develop its properties and the future profitability of the Group is directly related
to the market price of certain minerals. A sustained, significant decline in either the prices of the minerals,
the Group’s issued equities or investor sentiment can have a negative impact on the Group’s ability to raise
additional capital.
Once in production the Group initially expects to have an exposure to commodity price risk associated with
the production and sale of gold, kaolin and lithium, However, the Group is still in the exploration stage.
- 46 -
Kula Gold Limited
20. Financial risk management (continued)
Net fair values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the table in note 20 and can be
compared to their carried values as presented in the consolidated statement of financial position. Fair values
are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.
Financial instruments whose carrying value is equivalent to fair value due to their mature include:
Cash and cash equivalents;
Receivables and other assets; and
Trade and other payables.
The methods and assumptions used in determining the fair values of financial instruments are disclosed in
the accounting policy notes specific to the asset or liability.
21. Capital management
The directors’ objectives when managing capital is to raise sufficient funds in order to maintain and
execute the objectives identified in each mineral property project in the Group’s exploration plan. There
is no quantitative return of capital criteria set out for management, but instead the Group relies on the
expertise of management to further develop and maintain its activities. The Group monitors its capital
through monthly Board reporting including management accounts and forecasts combined with
appropriate external financial, corporate and legal advice when required. The Group is not subject to any
externally imposed capital requirements.
The Group considers its capital to be equity which comprises fully paid ordinary shares, share-based
payment reserve, consolidation reserve and accumulated losses, which at 31 December 2023 amounted
to $1,610,930 (2022: $3,413,137).
The mineral properties in which the Group currently has an interest are in the exploration stage, as such
the Group is dependent on external financing to fund its activities. In order to carry out the planned
exploration and pay for administrative costs, the Group will spend its existing working capital and raise
additional amounts as required.
There were no changes in the Group’s approach to capital management during the current or previous
financial years.
The working capital position of the Group were as follows:
Cash and cash equivalents
Trade and other payables
22. Auditor’s remuneration
Remuneration of the auditor of Kula Gold Limited for:
Auditing or reviewing the financial reports
Elderton Audit Pty Ltd
Note
8
13
2023
$
393,378
(396,060)
(2,682)
2022
$
1,764,307
(228,846)
1,535,461
2023
$
2022
$
26,775
26,775
22,775
22,775
- 47 -
Kula Gold Limited
23. Contingent assets/liabilities
There were no contingent assets or liabilities as at 31 December 2023 or 31 December 2022.
24. Commitments
Exploration expenditure
The minimum annual exploration and evaluation expenditure to keep the Group’s tenements in good
standing is $581,500 (2022: $599,250).
25. Controlled entities
On 16 May 2022, the Company incorporated a wholly owned subsidiary, Boomerang Kaolin Pty Ltd. This
entity was incorporated to identify costs associated with the Boomerang Kaolin project on tenement
E77/2621.
26. Joint ventures
The Company has a Joint Venture (‘Agreement’) with Australian Critical Minerals Limited (ASX: ACM) in
respect of the Company’s non-core Rankin Dome Project comprising of three tenements being E77/2709,
E77/2753 and E77/2768 (‘Rankin Dome Project’).
ACM can earn 51% interest (‘Stage 1’) in the Rankin Dome Project through undertaking exploration and
incurring exploration expenditure of $200,000, which shall include at least 2,000m of RC drilling, within 24
months.
Following Stage 1, the Company will have the option to retain its 49% interest and contribute to the
development of the Project. As at 31 December 2023, ACM has incurred $242,951 exploration
expenditure, however is yet to meet the drilling requirements to earn the Stage 1 interest of 51%.
27. Subsequent events
On 22 March 2024, the Company entered into an At-the-Market Subscription Agreement
(“ATM”) with Acuity Capital. The ATM provides the Company with up to $1,000,000 of standby
equity capital over a period to 31 January 2029. As security for the ATM, the Company issued
24,000,000 fully paid ordinary shares to Acuity Capital at nil consideration.
On 28 February 2024, the Company issued 39,250,000 fully paid ordinary shares via a placement
of shares at an issue price of $0.008 per share to raise $314,000. Subject to shareholder approval
at the Company’s Annual General Meeting to be held in May 2024, the Company will issue an
additional 10,750,000 fully paid ordinary shares at an issue price of $0.008 to raise an additional
$86,000.
On 25 January 2024, the Company issued 3,846,153 fully paid ordinary shares to directors via a
placement of shares at the issue price of $0.013 per share to raise an additional $50,000,
following shareholders’ approval obtained at the General Meeting held on 19 January 2024.
Also, on 25 January 2024, the Company issued 5,000,000 unlisted options exercisable at $0.02
on or before 1 July 2026 and 5,000,000 unlisted options exercisable at $0.05 on or before 1 July
2027, following shareholder approval obtained at the General Meeting held on 19 January 2024,
to Mr Dawson following his appointment as Managing Director. The unlisted options were
granted to remunerate and incentivise Mr Dawson and preserve cash resources of the Company.
The options will vest when the Company’s market capitalisation reaches $12m.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end
of the financial year that has significantly affected, or may significantly affect, the operations of the
Group, the results of those operations, or the state of affairs of the Group in future financial years.
- 48 -
Additional Information for Listed Public Companies
The following additional information as at 25 March 2024 is required by the Australian Securities Exchange in respect of listed
public companies.
Kula Gold Limited
1
Capital
a.
Fully paid ordinary shares
486,461,921 fully paid ordinary shares held by 1,136 shareholders.
b.
Listed options
The Company has no listed options on issue.
c. Unlisted options
8,350,000 unlisted options exercisable at $0.06 expiring 1 July 2026 held by 9 optionholders.
575,000 unlisted options exercisable at $0.085 expiring 1 August 2025 held by 3 optionholders.
6,000,000 unlisted options exercisable at $0.08 expiring 7 November 2025 held by 2 optionholders.
5,000,000 unlisted options exercisable at $0.02 expiring 1 July 2026 held by 1 optionholder.
5,000,000 unlisted options exercisable at $0.05 expiring 1 July 2027 held by 1 optionholder.
d. Performance Shares
2,000,000 performance shares held by 1 performance shareholder.
e. Voting Rights
The voting rights attached to each class of equity security are as follows:
Fully paid ordinary shares: Each fully paid ordinary share is entitled to one vote.
Listed, unlisted options and performance shares: Optionholders of listed or unlisted options and holders of
performance shares are not entitled to vote by virtue of holding an option or performance share.
f.
Substantial Shareholders as at 25 March 2024
Name
Merchant Holdings Pty Ltd
g. Distribution of Shareholders as at 25 March 2024
Category (size of holding)
Total Holders
Number of Fully Paid
Ordinary Shares Held
% Held of Issued
Ordinary Capital
28,087,381
28,043,160
5.77%
7.76%
Number
Ordinary
% Held of Issued
Ordinary Capital
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
54
38
47
573
424
11,983
103,337
387,820
26,256,100
459,702,681
0.00
0.02
0.08
5.40
94.50
1,136
486,461,921
100.00
h. Unmarketable Parcels as at 25 March 2024
559 fully paid ordinary shareholders holding less than a marketable parcel of shares.
i. On-Market Buy-Back
There is no current on-market buy-back.
- 49 -
Kula Gold Limited
Number of Ordinary
Fully Paid Shares Held
% Held of Issued
Ordinary Capital
28,087,381
24,000,000
21,000,000
18,939,000
17,500,000
13,250,000
12,000,000
12,000,000
10,500,000
10,000,000
10,000,000
9,888,003
9,500,000
8,000,000
7,526,755
6,000,000
6,000,000
6,000,000
5,200,000
5,000,000
5,000,000
4,250,000
4,230,000
4,000,000
4,000,000
3,700,000
5.77%
4.93%
4.32%
3.89%
3.60%
2.72%
2.47%
2.47%
2.16%
2.06%
2.06%
2.03%
1.95%
1.64%
1.55%
1.23%
1.23%
1.23%
1.07%
1.03%
1.03%
0.87%
0.87%
0.82%
0.82%
0.76%
265,571,139
54.59%
j.
Restricted Securities
12,000,000 fully paid ordinary shares. Release from escrow on 3 April 2024.
650,000 unlisted options exercisable at $0.06 expiring 1 July 2026.
5,000,000 unlisted options exercisable at $0.02 expiring 1 July 2026.
5,000,000 unlisted options execrable at $0.05 expiring 1 July 2027.
2,000,000 performance shares.
k.
20 Largest Shareholders — Ordinary Shares as at as at 25 March 2024
Rank Name
1.
MERCHANT HOLDINGS PTY LTD
2.
3.
ACUITY CAPITAL INVESTMENT MANAGEMENT PTY LTD
HONGKONG NOBLEFULL LIMITED
4.
HENGGELER SUPER PTY LTD
5.
J FOGARTY SUPERANNUATION PTY LTD
6.
N & J MITCHELL HOLDINGS PTY LTD
7.
SENTINEL EXPLORATION LIMITED
G & S MART PTY LTD
8.
TROCA ENTERPRISES PTY LTD
9.
MR JAY HUGHES & MRS LINDA HUGHES
MR RICHARD ALEXANDER CALDWELL
10.
CROESUS MINING PTY LTD
11.
TROCA ENTERPRISES PTY LTD
12.
G & S MART PTY LTD
13.
CITICORP NOMINESS PTY LIMITED
14.
COLLEGE SEARCH PTY LTD
MRS TERESA DI PASQUALE
MR KARL HENGGELER
15.
MRS CONCETTA DI PASQUALE
16.
ICE COLD INVESTMENTS PTY LTD
MRS TERESA DI PASQUALE
17.
KALARRA HOLDINGS PTY LTD
18.
M & K KORKIDAS PTY LTD
19.
RGR INTERNATIONAL PTY LTD
MR COSIMINO DI PASQUALE
20.
MRS TERESA DI PASQUALE & MR COSIMINO DI PASQUALE
TOTAL
2
Principal registered office
As disclosed in the corporate information of this Annual Report.
3
Registers of securities
As disclosed in the corporate information of this Annual Report.
4
Stock exchange listing
Quotation has been granted for the fully paid ordinary shares of the Company on all Member Exchanges of the Australian Securities Exchange Limited,
as disclosed in the corporate information of this Annual Report.
5
Use of funds
The Group has used its funds in accordance with its business objectives.
- 50 -
Interest in mining tenements (as at date of this report)
Kula Gold Limited
Tenement No.
Project
Interest
Grant Date
E70/5513
E70/5599
E70/5645
E70/5660
E70/5703
E70/5452
E70/6603
E28/2942
E28/3029
E77/2621
E77/2709
E77/2753
E77/2768
E77/2806
E77/2756
E77/2757
E77/2762
E77/2766
Brunswick
Brunswick
Brunswick
Brunswick
Brunswick
Kirup
Kirup
Lake Rebecca
Lake Rebecca
Marvel Loch
Rankin Dome1
Rankin Dome1
Rankin Dome1
Southern Cross
Westonia
Westonia
Westonia
Westonia
100%
100%
100%
100%
100%
70%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
23 Feb 21
26 Jul 21
6 May 21
28 Apr 21
26 May 21
4 Jan 21
21 Mar 24
21 Apr 20
10 Mar 21
3 Sept 20
8 Oct 21
8 Oct 21
26 Mar 21
19 Jul 22
8 Oct 21
8 Oct 21
8 Oct 21
8 Oct 21
1 On 9 August 2022, the Company entered into a binding Farm-In Agreement with Australian Critical Minerals Limited (ASX: ACM)
in respect of the Company’s non-core Rankin Dome Project comprising of three tenements being E77/2709, E77/2753 &
E77/2768. (Refer ASX Announcement, Farm-in & Joint Venture Agreement – Rankin Dome). On 29 June 2023, ACM was admitted
to the official list of the ASX and therefore has met all conditions precedent in the binding Farm-In Agreement. As at the date of
this report, the Company held a 100% interest in the Rankin Dome Project tenements.
- 51 -