Microsoft Word - CYL Annual Report 2015 Final (signed).docx

ABN 54 118 912 495

ANNUAL REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 30 JUNE 2015

CONTENTS PAGE

CORPORATE DIRECTORY 2

CHAIRMAN'S REVIEW 3

DIRECTORS' REPORT 4

AUDITOR'S INDEPENDENCE DECLARATION 29

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 31

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 32

CONSOLIDATED STATEMENT OF CASH FLOWS 33

NOTES TO THE FINANCIAL STATEMENTS 34

DIRECTORS' DECLARATION 57

INDEPENDENT AUDIT REPORT 58

CORPORATE GOVERNANCE STATEMENT 60

ADDITIONAL INFORMATION 65

1

Catalyst Metals Limited ABN 54 118 912 495 Annual Report 2015

CORPORATE DIRECTORY

DIRECTORS

Stephen Boston (Non-Executive Chairman) Robin Scrimgeour (Non-Executive Director) Gary Schwab (Non-Executive Director) Bruce Kay (Non-Executive Director)

COMPANY SECRETARY

Frank Campagna

REGISTERED OFFICE

44 Kings Park Road

West Perth, Western Australia 6005

Telephone: +618 6263 4423

Facsimile: +618 9284 5426

Email: [email protected] Website: www.catalystmetals.com.au

AUDITORS

RSM Bird Cameron Partners 8 St Georges Terrace

Perth, Western Australia 6000

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Hwy

Applecross, Western Australia 6153

Telephone: +618 9315 2333

Facsimile: +618 9315 2233

Email: [email protected] Website: www.securitytransfer.com.au

STOCK EXCHANGE LISTING

Catalyst Metals Limited is listed on ASX Limited Home Exchange - Perth

ASX code: CYL & CYLO

CHAIRMAN'S REVIEW

Dear Shareholder,

What a year for your Company - I am happy to report that 2015 was an extremely busy and productive period for the Company which resulted in a number of corporate strategies (which were initiated in 2014) being completed. In addition - and as a direct result of these strategies the Company was able to complete the largest and arguably the most successful exploration programme it has ever completed since it has been involved in Victoria.

On 12 September 2014, your Company announced completion of the Navarre Heads of Agreement. This transaction resulted in the regional consolidation of the entire Whitelaw Gold Belt (which extends for 75 kilometres north of Bendigo) under the control and single management of the Company. Any future discovery of gold along the Whitelaw Gold Belt will now result in the Company being a direct beneficiary (this was not previously the case until now).

In addition and much more importantly, on 13 March 2015 your Company was delighted to announce that the Company and its joint venture partner Providence Gold and Minerals Pty Ltd ('PGM') had executed an agreement with Gold Exploration Victoria Pty Ltd ('GEV') (a wholly owned subsidiary of Hancock Prospecting Pty Ltd) for GEV to sole fund up to $4.2million on exploration at the Four Eagles Gold Project to earn up to 50% of the Project. Under the farm-in agreement the parties formed a non- incorporated joint venture, with your Company maintaining its 50% equity in the Four Eagles Gold Project and its position as manager of the Project. The Board believes that the GEV agreement is an endorsement of the gold potential at Four Eagles and provides the necessary funding to test the large areas of gold mineralisation. Full details of this agreement are included in the Review of Operations.

Immediately following the announcement of the new Four Eagles Joint Venture with GEV and PGM, extensive field activity was commenced over a number of the Company's tenements in the Whitelaw Gold Belt (see Review of Operations section for more detail). The June 2015 Quarter saw field activities commence over four Joint venture exploration licences which included air core drilling, reverse circulation and mud drilling and seismic and gravity surveys. Additionally a Geology Manager was appointed to lead a well-qualified exploration team of contract geologists all of whom were sourced from the Bendigo district. The highlights of this work was reported on 22 June 2015 when your Company announced that 'Drilling delivers best gold intersections to date at Four Eagles Gold Project' and on 24 July 2015 which announced that 'Gold intersections confirm Four Eagles potential'. The programme generated a gold intersection of 41.0m @ 3.87g/t Au from 76 metres, which is the best gold intersection ever recorded at the Four Eagles Gold Project. This announcement was followed by another on 29 July 2015 which announced that 'High-grade gold mineralisation intersected in reconnaissance drilling at Tandarra Gold Project', reported that a reconnaissance air core drill hole had intersected 2 metres @ 33.1g/t Au, seven kilometres north of the Tomorrow Gold zone. Your Company is currently earning a 51% interest in the Tandarra Gold Project from Navarre Minerals Limited over a four year period.

On 11 June 2015 the Company announced a non-renounceable Share Purchase Plan offer (at a subscription price of 32 cents per share) which closed on the 7 August 2015. The Company received applications for a total of 1,453,130 ordinary shares for gross subscription proceeds of $465,000. In June/July 2015, $65,000 was raised via the exercise of 216,667 options at 30 cents each.

Your Company enters the 2016 Financial year buoyed by the potential of the next exploration programme (which should start early in the March 2016 Quarter) at the Four Eagles Gold project in conjunction with our new joint venture partner GEV. Corporately your Company is currently well funded into 2016, however your board will continue to remain cost conscious and defensive with regards to the way in which it conducts its activities.

Your Board again acknowledges and would like to thank all of its shareholders for their continuing support of the longer term ambitions of the Company as it endeavours to pursue the joint venturer's objective of the discovery of a major virgin gold discovery under soil cover north of Bendigo. We are delighted to have secured GEV as our new joint venture partner and we look forward to what the future may bring through working together with them.

Stephen Boston

Chairman

30 September 2015

DIRECTORS' REPORT

The Directors of Catalyst Metals Limited present their report on the consolidated entity for the year ended 30 June 2015.

DIRECTORS

The names of the Directors in office at any time during or since the end of the financial year are: Stephen Boston

Robin Scrimgeour Gary Schwab Bruce Kay

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

COMPANY SECRETARY

Frank Campagna

FINANCIAL POSITION

The net assets of the Group are $688,077 as at 30 June 2015 (2014: $782,030).

CORPORATE STRUCTURE

Catalyst Metals Limited is a company limited by shares that is incorporated and domiciled in Australia.

PRINCIPAL ACTIVITIES

The principal activity of the Group during the financial year was mineral exploration and evaluation. There was no significant change in the nature of the activities during the year.

RESULTS OF OPERATIONS

The operating loss after income tax of the Group for the year ended 30 June 2015 was $240,105 (2014:

$1,023,864).

DIVIDENDS

No dividend has been paid during or is recommended for the financial year ended 30 June 2015.

REVIEW OF OPERATIONS

The Company has made major advances in 2015 at its flagship Whitelaw Gold Belt Project in Victoria. In September 2014, it concluded a transaction with Navarre Minerals Limited to farm-in to the Tandarra Exploration Licence EL4897 and in March 2015, it formed a joint venture with Gold Exploration Victoria Pty Ltd ('GEV') whereby GEV will spend up to $4.2 million to earn a 50% interest in the Four Eagles Gold Project. The Company has also applied for other Exploration Licences and now controls 75 kilometres of strike length along the Whitelaw fault corridor. (Figure 1)

Because of the increased focus on gold, the Company made the decision to allow the Everton molybdenum project (EL4866) to expire at the end of its five (5) year tenure.

DIRECTORS' REPORT

WHITELAW GOLD BELT

The term Whitelaw Gold Belt has been adopted because the Catalyst tenements are situated along the 100 kilometre long Whitelaw Fault which is considered to be extremely important in the genesis of gold deposits that have formed adjacent to the structure. Victorian government seismic and gravity data suggest that this large fault structure controlled the formation of the Bendigo gold deposits (historically approximately 22 million ounces produced at a grade of 15 g/t Au) as well as gold mineralisation at both the Four Eagles and Tandarra Gold Projects.

Catalyst believes that other high grade gold deposits are likely to occur along the Whitelaw Gold Belt because it is covered by Murray Basin sediments which means it was never tested by historic prospectors. The Company continues to consolidate its strong tenement holdings along this belt so it can participate in any future gold discoveries (Figure 1). In December 2014, the Company was granted an Exploration Licence EL5533 which covers the extension of the historic Sebastian gold deposit (Frederick the Great Mine) which produced high grade gold (186,000 ounces @ 10.4 g/t Au). Catalyst was also granted an Exploration Licence EL5521 in an area north of Pyramid Hill (Macorna Bore) to cover the extension of the Whitelaw gold trend.

Catalyst's tenement holdings in the Four Eagles Joint Venture were further consolidated with two new exploration licences EL5508 and ELA6604 being lodged. The location of these exploration licences is shown on Figure 1. ELA6604 has still not been granted at the date of this report.

The Company now manages exploration of the entire 75 kilometre strike length along the Whitelaw Tandarra fault corridor which is believed to be an important structure in the formation of gold deposits, and will share in any future gold discoveries that are made.

FOUR EAGLES JOINT VENTURE TERMS

On 13 March 2015, Catalyst and its joint venture partner, PGM, signed an agreement with GEV, for GEV to sole fund up to $4.2 million on exploration at the Four Eagles Gold Project, 70 kilometres north of Bendigo in Victoria (Figure 1) to earn up to 50% of the Project.

Under the farm-in agreement the parties formed a non-incorporated joint venture, with Catalyst maintaining its 50% equity in the Four Eagles Gold Project and remaining as manager of the Project. GEV has taken over the earn-in rights that Catalyst had with PGM, allowing GEV the right to earn up to 25% interest in the Project from PGM, subject to funding $2.1 million of expenditure.

Once this initial investment is completed, GEV will have the right to earn a further 25% interest from PGM subject to further exploration funding of $2.1 million, allowing it the option to earn up to 50% equity in the Project. PGM would then revert to a 2.5% Net Smelter Return royalty entitlement with Catalyst and GEV funding ongoing expenditure in relation to their ownership interests. Catalyst was reimbursed by GEV for some of its prior exploration expenditure as part of taking over Catalyst's current farm-in obligations.

Catalyst and GEV have also agreed to co-operate on an exclusive basis in relation to any further exploration or production opportunities within a designated area which is approximately 22,000 square kilometres in area (180 kilometres by 120 kilometres). As shown on Figure 2, this area covers the entire Whitelaw Gold Belt north of Bendigo and also extends into other gold districts in the region. The area has very favourable infrastructure in terms of road and rail access, power and water and there are six known gold plants within 100 kilometres of the Catalyst project areas.

FOUR EAGLES JOINT VENTURE EXPLORATION (EL4525, EL5295, EL5508, ELA6604)

Seismic and Gravity Survey

Activity commenced in April 2015 with a ground seismic and gravity geophysical survey to map the basement topography and possible ore bearing fault structures. Twelve (12) refraction seismic traverses were completed with reflection seismic being carried out on two of these traverses. Gravity readings were taken on all of the traverses. The survey covered an area of about six (6) square kilometres including the Discovery, Hayanmi and Boyd's Dam Prospects.

DIRECTORS' REPORT

Data interpretation shows that the seismic refraction survey seems to have identified the contact between oxidised and fresh Ordovician basement rocks rather than the base of the younger Murray basin sediments. The reflection seismic data are still being processed and may show some basement structure. Gravity data appear to be the most useful in interpretation of the mineralisation structures and will be used in 2016 to cover reconnaissance areas where information is scarce.

Hayanmi Prospect

The Hayanmi Prospect is one of three defined lines of gold mineralisation at the Four Eagles Gold Project (Figures 3a and 3b) and lies within the Eagle 3 Structure as shown on Figures 4 and 5. Both air core and reverse circulation drilling were carried out at Hayanmi during the year. The angled air core programme was designed to infill the 2.9 kilometre long mineralised zone to a spacing of about 200 metres although the proposed northern traverses were inaccessible because of flood irrigation. Twenty seven holes (27) were completed for a total of 3,944 drilled metres on seven east west traverses across the interpreted mineralised structure (Figures 4 and 5).

Three (3) reverse circulation (RC) drill holes were completed for a total of 450 metres and a further hole failed to reach basement. The programme was curtailed when wet weather made access difficult. The results of these holes are inconclusive as only one of the five traverses was completed and only 30% of the planned numbers of holes were drilled. The completed traverse contained only weak gold mineralisation but has possibly drilled to the east of the projected zone.

Most air core traverses contained at least one significant gold intersection with the best gold values from air core holes shown below. These intersections represent the final bulk leach assays from original one-metre samples collected at the drill rig:

• 41.0m @ 3.87g/t Au from 76 metres including 6.0 m @ 16.3g/t Au from 76 metres and 28.0m @ 2.03g/t Au from 90 metres (FE696)

• 3.0m @1.54g/t Au from 126 metres (FE700)

• 13.0m @ 2.6g/t Au including 5.0m @ 5.76g/t Au from 135 metres Au (FE700)

• 3.0m @ 2.86g/t Au from 75 metres (FE679)

• 6.0m @ 0.91g/t Au from 72 metres (FE681)

• 3.0m @ 2.57g/t Au from 84 metres (FE684)

• 3.0m @ 1.23g/t Au from 120 metres (FE686)

• 2.0m @1.45g/t Au from 91 metres (FE695)

  
  

  The intersection in FE696 is very significant as it lies in an area where the basement depth is about 40 metres and becoming increasingly shallow to the north where a 600 metre long zone remains untested. It is also important to note that most of the holes with gold intersections were at the western end of the traverses and the trend therefore remains open to the west and will require further drilling.

  
  

  All of the air core assays were obtained by assay using a bulk leach cyanide method on large two kilogram samples taken at one-metre intervals. They had initially been assayed at 3 metre intervals using 25-gram samples and an aqua regia digest followed by ICP-MS analysis. For reverse circulation samples, available assays are from one-metre intervals and 25-gram samples with aqua regia and ICP- MS. Anomalous samples were then re-assayed using the bulk cyanide leach method on the larger two kilogram sample.

  
  

  On 22 June 2015, the Company released an announcement which included full location data on the 27 air core holes drilled as well as a Summary of Sampling Techniques and Reporting of Exploration Results according to the JORC Code 2012 Edition. Further location data and the Summary of Sampling Techniques and Reporting of Exploration Results for the Hayanmi RC drill holes were included in the June 2015 Quarterly Report. Previous intersections shown on Figures 3, 4 and 5 have been reported under the 2004 JORC Code.

  
  

  Boyd's Dam Prospect

  The Boyd's Dam Prospect is one of three defined lines of gold mineralisation at the Four Eagles Gold Project (Figures 3, 6 and 7) and lies within the Eagle 4 Structure. Current and historic drilling results are shown in plan and longitudinal projection on Figures 6 and 7.

  DIRECTORS' REPORT

  
  

  The angled RC programme was designed to test the mineralised zone where previous air core drilling had located gold mineralisation over a 700 metre strike length. Five (5) RC holes have been completed for a total of 567 metres and final assays are shown below. Thirteen (13) RC holes had been planned for Boyd's Dam but mechanical and operational delays meant that the full programme could not be completed before the onset of grain sowing and wet weather. The programme will be completed in late 2015 or early 2016.

  
  

  Four of the five holes contained at least one significant gold intersection with the best gold values shown below:

  
  

• 6.0m @ 3.77g/t Au including 1.0 m @ 7.82 from 44 metres (FERC010)

• 6.0m @ 1.11g/t Au from 79 metres (FERC010)

   3.0m @ 1.02g/t Au, 1.0 m @ 1.41g/t Au, and 1.0 m @ 3.56g/t Au from 87 metres (FERC009)

• 2.0m @ 1.07g/t Au from 66 metres (FERC011B)

• 2.0m @ 3.58g/t Au from 87 metres (FERC011B)

• 1.0m @ 3.29g/t Au from 79 metres (FERC 017A)

• 3.0m @ 1.57g/t Au from 106 metres (FERC017A)

• 1.0m @ 1.39g/t Au from 113 metres (FERC017A)

The intersections suggest that there are two parallel zones of gold mineralisation at Boyd's Dam but more angled drilling is required. The location of the intersections are shown on the plan and long section views (Figures 5 and 7) and extend the zone of mineralisation shown in drill holes FE415 (3 metres

@ 36.6g/t Au from 57 metres, FERC 002 (1 metre @ 18.3g/t au from 127 metres and FERC 003 (2 metres @ 6.2g/t Au from 49 metres).

All of these assays have been completed by both 25-gram samples using aqua regia digest and ICP-MS and larger two kilogram samples using a total cyanide leach method and good correlation between the assays shows that the gold is evenly distributed throughout the sample. This is very important for grade estimation in any future resource estimation and suggests that the nugget gold issues of Bendigo are minimal at Four Eagles.

On 24 July 2015, the Company released full location data on the five RC holes drilled at Boyd's Dam together with a Summary of Sampling Techniques and Reporting of Exploration Results according to the JORC Code 2012 Edition. Further information was provided in the June 2015 Quarterly Report.

Four Eagles JV Reconnaissance Exploration

Reconnaissance air core drilling was undertaken in two areas during the June 2015 quarter. Five holes for 645 metres were completed on the interpreted Eagle 1 Structure (Figure 2a) but failed to intersect any significant gold mineralisation. Basement depths ranged from 50 to greater than 111 metres.

At Macorna Bore north of Pyramid Hill, six (6) holes were drilled for a total of 770 metres. Basement was encountered at depths from 95 metres to 112 metres with most holes intersecting hard rocks that were interpreted to be Ordovician sediments that had been hornfelsed by the nearby granites (Comment: hornfels is a term used for a rock that has been heated up and transformed by the heat from a molten magma, eg granite).

One weakly anomalous zone of 3 metres @ 0.122 g/t Au was recorded in drill hole ACM006 from 102 metres downhole and also had weakly anomalous arsenic geochemistry. These holes were located on Exploration Licence 5508.

DIRECTORS' REPORT

Figure 1 - Plan showing tenements under Catalyst management in the North Bendigo Gold Belt

DIRECTORS' REPORT

Figure 2: Catalyst GEV Designated Area

DIRECTORS' REPORT

Figure 3a: Four Eagles Gold Project showing gold zones and drill holes

DIRECTORS' REPORT

Figure 3b: Four Eagles Gold Project showing intersections for Figure 3a

Figure 4: Hayanmi Prospect plan view showing gold trends and drill holes