WA Kaolin : Appendix 4D and Half Year Report

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Appendix 4D

WA Kaolin Limited

ABN 56 083 187 017

FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Results for announcement to the market

Extracts of the WA Kaolin Limited results for the half year ended 31 December 2021

Revenues from continuing activities

Loss from ordinary activities after tax attributable to members

Comprehensive loss for the period attributable to members

Down 0.4% to $565,804

Down 77.7% to $4,057,802

Down 77.7% To $4,057,802

For personal

Dividends	Amount per share	Franked amount per
share
Interim dividend		Nil		Nil
Final dividend		Nil		Nil
Record date for determining entitlements to the dividend	N/A
Other information
Net asset backing per ordinary share	($0.003) per share (2020: $0.02 per share)
Net tangible asset backing per ordinary share	($0.003) per share (2020: $0.003 per share)

Additional Appendix 4D disclosure requirements can be found in the Directors' Report and the 31 December 2021 half-year financial statements.

For personal use only

WA Kaolin Limited

WA Kaolin Limited

ABN 56 083 187 017

Interim Financial Report

31 December 2021

For personal use only

Contents

Corporate Information

Directors' Report

Auditor's Independence Declaration

Statement of Profit or Loss and Other Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Directors' Declaration

Independent Auditor's Review Report

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WA Kaolin Limited

CORPORATE INFORMATION

ABN 56 083 187 017

Directors

Dr John White (Non-Executive Chairman)

Mr Alfred Baker (Executive Director)

Ms Cathy Moises (Non-Executive Director)

Mr Linton Putland (Non-Executive Director)

Mr Cameron Baker (Alternate Director)

Company secretary

Mr. Michael Kenyon

Registered office

Lot 3 Ward Road

EAST ROCKINGHAM WA 6168

Telephone:

[phone]

Principal place of business

Lot 3 Ward Road

EAST ROCKINGHAM WA 6168

Telephone: [phone]

Website: www.wakaolin.com.au

Share registry

Automic Share Registry

126 Phillip Street
SYDNEY NSW	2000
Telephone:	1300 288 664

Solicitors

Gilbert & Tobin

Level 16 Brookfield Place Tower

2/123 St George's Terrace

PERTH WA	6000
Telephone:	[phone]

Bankers

National Australia Bank

255 George Street

SYDNEY NSW 2000

Auditors

BDO Audit (WA) Pty Ltd

Level 9, Mia Yellagonga Tower

5 Spring Street

PERTH WA 6000

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WA Kaolin Limited

DIRECTORS' REPORT

The directors of WA Kaolin Limited (the "Company") submit the financial report for the half year ended 31 December

2021. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The names of directors who held office throughout the period and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Dr John White

Mr Alfred Baker

Ms Cathy Moises

Mr Linton Putland

Mr Cameron Baker (Alternate)

Principal Activities

The principal activities of the Company were the development of its mineral resources of high-grade premium kaolinised granite, construction of a new proprietary production facility in Wickepin, Western Australia and value-adding processes.

Financial Results and Review of Operations

Financial Results

The Company recorded a net loss after tax for the half year of $4.1m (31 December 2020: $18.2m), of which $1.1m was

for a share-based payments expense (31 December 2020: $4.1m), $1.4m for interest on borrowings (31 December 2020:

$1.6m) and $Nil of fair value adjustments to convertible notes (31 December 2020: $8.9m). Significant non-cash expenses like those mentioned are typical for a Company that completed an IPO and subsequently listed on the ASX.

Financial Position

At 31 December 2021, the Company had cash reserves of $1.9m (30 June 2021: $10.9m).

Although the net asset position of the Company reduced to ($0.8m) as at 31 December 2021 (30 June 2021: $2.1m), this will change materially as a result of a recent capital raising event completed during the first half of calendar year 2022 (refer to "Significant Events after Reporting Date" below).

Review of Operations

Health, Safety and Environment

The Company is pleased to report that there were no significant health, safety or environmental incidents during the half year.

Operations

The Company has current operations in a Company-owned facility in East Rockingham, Western Australia, where it operates a small-scale production plant producing beneficiated kaolin utilising its K99 Process. The Company also conducts mining operations at its mining tenement in East Wickepin, Western Australia, and transfers ore to East Rockingham for processing. The Company then sells the kaolin to customers directly and through a network of distributors both in Australia and overseas.

The Company is sole owner of a mining lease, a general-purpose lease, a miscellaneous licence and retention licences which comprise the Wickepin Kaolin Project (Project). The Project, which is one of the largest known remaining kaolin resources in the world, contains an Ore Reserve of 30.5 million tonnes which is included in the Mineral Resource (reported in accordance with JORC 2012) of 644.5 million tonnes of high-grade premium kaolinised granite.

The Company is primarily focused on establishing itself as the preferred supplier of high-grade premium kaolin products globally through:

• construction of a scaled-up processing plant in East Wickepin, utilising the K99 Process;
• progressive increase in production to circa 200,000 tonnes per annum through the plant planned by the end of 2022;
• expansion of production capacity at the Wickepin plant to 400,000 tonnes per annum within 3 years through the installation of a second stage of K99 production equipment;
• negotiation of sales agreements for product on suitable commercial terms with acceptable counterparties;

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