CASTILE RESOURCES LTD — Capital/Financing Update 2020

Feb 11, 2020

Castile Resources Ltd ABN 93 124 314 085

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Level 6, 197 St Georges Terrace, Perth WA 6000 PO Box 7068 Cloisters Square WA 6850

T: +61 8 9462 3400 E: reception@castile.com.au W: www.castile.com.au

ASX ANNOUNCEMENT

10 February 2020

Castile Resources Ltd (ASX: CST) – Pro-Forma Statement of Financial Position

In accordance with ASX listing requirements, Castile Resources Ltd ( “Company” ) provides its pro-forma statement of financial position following raising gross proceeds of $19,968,861 before costs pursuant to the non-renounceable pro rata entitlement offer under the prospectus dated 3 December 2019.

Notes Current assets Cash & cash equivalents 1 Trade & other receivables 2 Total current assets Non-current assets Property, plant and equipment 3 Exploration and evaluation expenditure 4 Total non-current assets Total assets Current liabilities Trade & other payables Total current liabilities Non-current liabilities Deferred tax liabilities 5 Total non-current liabilities Total liabilities Net assets Equity Issued capital 6 Retained earnings 7 Total equity	30 June 2019 Pro forma Subsequent Event Adjustment Pro forma Adjustments Pro forma balance $ $ $ $ 67,816 - 18,915,406 18,983,223 578,725 (927,458) 348,755 22
	646,541 (927,458) 19,264,162 18,983,245
	206,966 65,455 - 272,421 15,981,491 796,307 - 16,777,798
	16,188,457 861,762 - 17,050,219
	16,834,998 (65,696) 19,264,162 36,033,464
	216 - - 216
	216 - - 216
	3,841,624 - (296,400) 3,545,224
	3,841,624 - (296,400) 3,545,224
	3,841,840 - (296,400) 3,545,440
	12,993,158 (65,696) 19,560,562 32,488,024
	2 (33,516) 19,310,777 19,277,263 12,993,156 (32,180) 249,785 13,210,761 12,993,158 (65,696) 19,560,562 32,488,024

Notes

Actual and Proposed Transactions to Arrive at the Pro-Forma Financial Information

The pro-forma historical financial information has been prepared by adjusting the statement of financial position of Castile Resources as at 30 June 2019 to reflect the financial effects of the following subsequent events which have occurred since 30 June 2019:

• (a) During August 2019, Castile Resources Ltd acquired two tenements adjacent to the Rover 1 Project for consideration of $650,000 (excluding GST) with associated stamp duty costs of $32,180. The acquisition was funded via a loan from Westgold Resources Ltd (“Westgold”);

• (b) Subsequent to 30 June 2019, costs totaling $245,278 (being $146,307 on exploration expenditure, $33,516 on capital raising costs and $65,455 on acquisition of plant and equipment) have been incurred as of the date of this report. These costs were funded via a loan from Westgold;

and the following pro forma transactions which are yet to occur, but are proposed to occur following completion of the capital raising:

• (c) The issue of 99,844,305 ordinary shares at $0.20 per share to raise $19,968,861 before costs of $988,000 (of which costs of $33,516 have been paid since 30 June 2019); and

• (d) The repayment of costs of the offer funded by Westgold of $98,970. The remaining balance of $249,785 owed by Castile to Westgold will be forgiven.

1: Cash & Cash equivalents

1: Cash & Cash equivalents
Cash and cash equivalents Audited balance as at 30 June 2019 Subsequent events: Funds received from Westgold Acquisition of tenements (including stamp duty) Costs incurred since 30 June 2019 Total Pro-forma adjustments: Gross proceeds from entitlement offer Costs of the offer Repayment of loan Total Pro-forma Balance	Pro forma $ 18,983,223
	67,816
	927,458 (682,180) (245,278)
	-
	19,968,861 (954,484) (98,970)
	18,915,407
	18,983,223

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2: Trade and other receivables

Included in trade and other receivables as at 30 June 2019, was a non-interest bearing unsecured loan receivable of $578,703 with its ultimate parent entity Westgold Resources Limited (“Westgold”). Westgold are funding the Company’s costs until such time that the Company successfully completes its initial public offering.

Loan - Westgold Statutory receivables Total trade and other receivables (pro forma balance) Audited balance as at 30 June 2019 Subsequent events: Funds received to fund acquisition of tenements Funds received since 30 June 2019 for working capital Total Pro-forma adjustments: Repayment of loan to Westgold Forgiveness of debt from Westgold Total Pro-forma Balance 3: Property, plant and equipment Property, plant and equipment Audited balance as at 30 June 2019 Subsequent events: Acquisition of motor vehicle Total Pro-forma Balance	Pro forma $ - 22
	22
	578,725
	(682,180) (245,278)
	(927,458)
	98,970 249,785
	348,755
	22
	Pro forma $ 272,421
	206,966
	65,455
	65,455
	272,421

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4: Exploration and evaluation expenditure

Exploration and evaluation expenditure Audited balance as at 30 June 2019 Subsequent events: Acquisition of tenements Exploration expenditure since 30 June 2019 Total Pro-forma Balance 5: Deferred tax liability Deferred tax liability Audited balance as at 30 June 2019 Pro-forma adjustments: Tax effect on capital raising costs Total Pro-forma Balance	Pro forma $ 16,777,798
	15,981,491
	650,000 146,307
	796,307
	16,777,798
	Pro forma $ 3,545,224
	3,841,624
	(296,400)
	(296,400)
	3,545,224

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6: Equity

Issued capital Audited balance as at 30 June 2019 Subsequent events: Costs of the offer paid since 30 June 2019 Total Pro-forma adjustments In specie distribution Shares issued pursuant to prospectus Costs of the offer Tax effect of costs of the offer Total Pro-forma Balance	Number of shares 2	Pro forma $ 19,277,263
		$ 2
	99,865,816 99,844,305 - -	(33,516)
		(33,516)
		- 19,968,861 (954,484) 296,400
	199,710,121	19,310,777
	199,710,121	19,277,263

Executive Options

Pursuant to Mr Mark Hepburn’s employment agreement with the Company Mr Hepburn will be issued with 2,000,000 Executive Options each with an exercise price of $0.25 expiring 3 years from the date of issue with the following vesting period:

• (i) 1,000,000 Options will vest and become exercisable one year from the date the Options are issued; and

• (ii) 1,000,000 Options will vest and become exercisable two years from the date the Options are issued.

The total fair value of the options using a Black & Scholes Option Valuation model are $230,000. No expense has been recognised in the pro-forma financial statements as the options relate to future services to the Company.

The assumptions used in determining the fair value of the options were as follows:

The assumptions used	in determining t
Spot price	$0.20
Exercise price	$0.25
Expiry period	3 years
Expected volatility	100%
Risk free rate	0.62%

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7: Retained earnings

7: Retained earnings
Retained earnings Audited balance as at 30 June 2019 Subsequent Events Stamp duty on acquisition of tenements Total Pro-forma adjustments: Loan forgiveness Total Pro-forma Balance	Pro forma $ 13,210,761
	12,993,156
	(32,180)
	(32,180)
	249,785
	249,785
	13,210,761

Subsequent Events

Subsequent to 30 June 2019 the following events have occurred which have been reflected in the proforma adjustments:

• (a) During August 2019, Castile Resources Ltd acquired two tenements adjacent to the Rover 1 Project for consideration of $650,000 excluding GST with associated stamp duty costs of $32,180. The acquisition was funded via a loan from Westgold; and

• (b) Subsequent to 30 June 2019, costs totaling $245,278 (being $146,307 on exploration expenditure, $33,516 on capital raising costs and $65,455 on acquisition of plant and equipment) have been incurred as of the date of this report. These costs were funded via a loan from Westgold.

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