Alicanto Minerals
Annual Report 2016

Plain-text annual report

ABN 90 141 196 545 al ABN 81 149 126 858 Annual Report 2016 A L I C A N T OM I N E R A L S L I M I T E D 2016 Annual Report 2 Contents Corporate Directory Chairman’s Letter to Shareholders Directors’ Report Auditor’s Independence Declaration Financial Statements Directors’ Declaration Independent Auditor’s Report Additional Shareholder Information Schedule of Mineral Tenements 2 3 4 26 27 50 51 53 55 Alicanto Minerals Limited | 1 A L I C A N T OM I N E R A L S L I M I T E D Corporate Directory Non-Executive Chairman Didier Murcia AM Managing Director Travis Schwertfeger Non-Executive Directors Hamish Halliday Company Secretary Brett Dunnachie Principal & Registered Office 288 Churchill Avenue SUBIACO WA 6008 Telephone: (08) 6489 0700 Facsimile: (08) 6489 0710 Share Registry Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Auditors Stantons International Level 2, 1 Walker Avenue WEST PERTH WA 6005 Bankers National Australia Bank 50 St Georges Terrace PERTH WA 6000 Solicitors Steinepreis Paganin 16 Milligan Street PERTH WA 6000 Stock Exchange Listing Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: AQI Website Address www.alicantominerals.com.au Alicanto Minerals Limited | 2 A L I C A N T OM I N E R A L S L I M I T E D Chairman’s Letter to Shareholders Dear fellow shareholders, On behalf of the Directors of Alicanto Minerals Ltd (‘Alicanto’) I am pleased to present to shareholders the Company’s Annual Report for the year ending 30 June 2016. The past year has been a period of significant achievement for Alicanto. In March 2016 Alicanto announced that it had entered into a US$10 million Earn-In Agreement with Barrick Gold Corporation (‘Barrick’). As a Board, we are extremely pleased to work with Barrick as a funding partner on the Arakaka Project. We believe that it is a testament to both the technical capability of our team and the gold endowment potential of the Arakaka Gold Project that Alicanto has been selected as Barrick’s vehicle for entry into exploration of the Guiana Shield. Having entered into the Earn-In Agreement, the Company has commenced an initial diamond drilling campaign targeting several major structures within the Arakaka mineralized trend. The initial diamond drilling campaign will be followed up by broad spaced RC drilling over the coming months. The Board and management team remain focused on advancing the Arakaka Gold Project through the Barrick Farm-In Agreement. Alicanto will also continue to evaluate additional projects and opportunities within Guyana for potential joint venture or acquisition, with the focus on delivering further value for shareholders. I would like to thank our shareholders for their continued support throughout the year, and welcome our more recent shareholders to the register, including Barrick Gold Corporation and clients and affiliates of the Sprott Group of Companies. The team at Alicanto Minerals Ltd has worked hard and diligently these past twelve months and I look forward to the coming year with enthusiasm. It promises to be an exciting and busy year for the Company as the Guyana Gold Projects are advanced through focussed exploration. I look forward to meeting with you at the forthcoming Annual General Meeting. Didier Murcia AM Non-Executive Chairman Alicanto Minerals Limited | 3 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report The Directors of Alicanto Minerals Ltd submit herewith the financial statements of the Company for the year ended 30 June 2016 in order to comply with the provisions of the Corporations Act 2001. Directors 1. The following persons were Directors of Alicanto Minerals Ltd during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Didier Murcia Mr Travis Schwertfeger Non-Executive Chairman Managing Director Mr Hamish Halliday was appointed Non-Executive Director on 17 March 2016 and continues in office at the date of this report. Mr Matthew Bowles was a Non-Executive Director from the beginning of the year until his resignation on 11 April 2016. Principal Activities 2. The principal activity of the entity during the financial year was mineral exploration. There were no significant changes in the nature of the entity’s principal activities during the financial year. Operating Results 3. The loss attributable to owners of the entity after providing for income tax amounted to $1,479,742 (2015: $2,357,202). Dividends Paid or Recommended 4. The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report. Financial Position 5. The entity has $1,216,247 in cash and cash equivalents as at 30 June 2016 (2015: $810,126). The Directors believe the cash at year end and cash subsequently raised puts the entity in a sound financial position with sufficient capital to effectively explore its current landholdings. Business Strategies & Prospects for the Forthcoming Year 6. Alicanto Minerals Ltd is currently focused upon an aggressive exploration program for gold mineralisation on its current portfolio of projects in Guyana with the object of identifying commercial resources. Alicanto Minerals Ltd will also continue to consider and evaluate new mineral exploration opportunities within Guyana and throughout the rest of the world for further potential acquisitions which may offer value enhancing opportunities for shareholders. Material business risks that may impact the results of future operations include further exploration results, future commodity prices and funding. Significant Changes in the State of Affairs 7. The following significant changes in the state of affairs of the entity occurred during the financial period:  On 1 March 2016 Alicanto announced that it had signed an Earn-In Agreement with Barrick Gold Corporation (“Barrick”) at the Arakaka Gold Project in Guyana. Key terms of the Earn-In are as follows; - Barrick has the option to earn up to a 65% interest in the Arakaka Gold Project based on meeting total funding requirements of US$10.0m as follows: i) US$8.0m exploration expenditure over a four year period; and ii) US$2.0m cash paid to Alicanto at completion of earn-in expenditure. - A minimum spend of US$1.8m in 2016 prior to Barrick having the option to withdraw from the Earn-In. - Alicanto will initially remain the operator and as operator, will receive a management fee of the lesser of US$100,000 or 5% of the approved annual exploration expenditure. - Alicanto granted Barrick an exclusivity period and received exclusivity payments totalling US$292,000 during the period. US$217,000 will be applied to Barrick’s earn-in expenditure with the balance of US$75,000 utilised for Alicanto’s corporate costs.  On 14 March 2016 the Company issued 13.99 million shares at $0.075 raising $1,049,295. Alicanto Minerals Limited | 4 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations Alicanto Minerals Ltd (‘Alicanto’ or ‘the Company’) (ASX: AQI) is an emerging mineral exploration company focused on the exploration and development of the Arakaka Gold Project in Guyana, South America. The Arakaka Gold Project covers an area of over 300km2 located in a relatively underexplored area within the Northern Guiana Shield Geological Terrane. The project covers volcano-sedimentary Paleoproterozoic greenstone rocks which are highly prospective for high tonnage, orogenic style gold deposits. The permits are 100% held either directly by an Alicanto Guyanese subsidiary, or subject to various underlying option agreements. Barrick Gold Corporation (‘Barrick’) has the option to earn a 65 percent interest in the project after meeting US$10 million in funding requirements pursuant to an Earn-in Agreement (for additional information, see “Arakaka Gold Project Earn-in Agreement” below). Subsequent to the reporting period, the Company has also entered into a binding agreement, subject to the completion of due diligence, to acquire the Ianna Gold Project in Northwest Guyana. The Ianna Gold Project is located in the highly prospective Barama-Mazaruni Greenstone Belt in Guyana’s Northwest District and is located less than 25km from Alicanto’s flagship Arakaka Project. Corporate Financial Performance and Position The net operating loss after tax for the year ended 30 June 2016 was $1,479,742 (2015: $2,357,202). The loss for the period includes $764,559 (2015: $1,452,274) in exploration and evaluation expenditure and share based payment expenses of $390,696 (2015: $540,562) were also recognised during the financial year. As at 30 June 2016 the Company had cash of $1,216,247. Earn–in Agreement with Barrick Gold Corporation On 1 March 2016, Alicanto announced that it had entered into an Earn-in Agreement whereby Alicanto granted Barrick Gold Corporation (‘Barrick’) the exclusive right to acquire a 65% interest in the Arakaka Gold Project. Barrick may earn up to a 65% interest in the Arakaka Project by (i) sole funding US$8,000,000 in exploration expenditure within a four year earn-in period, and (ii) at completion of the earn-in period, paying an additional US$2,000,000 to Alicanto (“Earn-in Right”). Barrick may only withdraw from the Earn-in after contributing a minimum of US$1.8 million by the end of the first contract year, being 31 December 2016. For each subsequent year during the Earn-in period, Barrick has the option to continue funding exploration activities to retain its Earn-in Right, subject to minimum cumulative expenditure thresholds for each year and a total cumulative expenditure of US$8.0 million by 31 December 2019. If Barrick terminates the agreement and ceases to make contributions at any time during the earn-in period, Barrick will forfeit all rights and interest to the Arakaka Gold Project. While Alicanto is the operator, it will receive in any contract year the lesser of US$100,000 and 5% of the approved annual exploration expenditure towards overheads while utilising the Company’s highly experienced technical team to manage exploration. Barrick will have the right to become or appoint the operator at any time after one of the following occurs;    31 December 2017, provided Barrick has made minimum cumulative expenditure contributions of US$3.2 million as of such date; the date on which Barrick's exploration contributions first exceed US$4.0 million; or a change in control of Alicanto. If Barrick funds US$8.0 million in aggregate expenditures prior to 31 December 2019, Barrick can elect to make a payment to Alicanto of US$2.0 million to exercise its Earn-in Right and acquire a 65% interest in the Arakaka Gold Project. With the payment of the US$2.0 million to Alicanto, completing a total US$10.0 million contribution, Alicanto and Barrick will form an incorporated Joint Venture (Arakaka JV). Barrick is permitted to accelerate the balance of the US$8.0 million of expenditure funding at any time during the Earn-in period. Once the Arakaka JV is formed, the parties will each be required to contribute to further exploration and feasibility costs on a proportional basis for Alicanto to retain its 35% interest in the project. Should Alicanto not contribute its attributable costs of the JV prior to a decision to mine, the Company would dilute to no less than a 15% interest in the Arakaka JV. Alicanto would then be free carried and retain its 15% interest in the Arakaka JV to a decision to mine. Upon a notice of decision to mine by the Arakaka JV, Alicanto can elect to either contribute, or convert its interest in the project to a 2% net smelter royalty. As part of the Earn-in Agreement, Barrick agreed to subscribe to a private placement of fully paid Alicanto shares with 3.5 million shares at $0.075 per share being issued to Barrick within a broader private placement on 14 March 2016. Prior to entering into the Earn-In Agreement, Alicanto entered into an Exclusivity Agreement with Barrick which granted an exclusivity period to undertake due diligence procedures. As part consideration for granting the exclusivity period, Alicanto received US$75,000 to be used for corporate overheads which has been recognised as other income in the June 2016 Statement of Financial Performance. Alicanto Minerals Limited | 5 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Ianna Gold Project Acquisition – Binding Term Sheet Subsequent to the reporting period, the Company has entered into a binding agreement to acquire the Ianna Gold Project in Northwest Guyana (refer to ASX announcement dated 26 July 2016 and update provided 8 September 2016). The Ianna Gold Project is located in the highly prospective Barama-Mazaruni Greenstone Belt in Guyana’s Northwest District and is located less than 25km from Alicanto’s flagship Arakaka Project (refer to Figure 1). Alicanto is currently continuing with its due diligence procedures and has signed an amendment to extend the due diligence period to a total of 105 days from entering the binding agreement. Highlights of the Ianna Gold Project include:  Two extensive mineralised corridors delivering “Walk up” drill targets extending over 7km of strike extent.  Historical drilling has already delivered multiple ore grade intersections in the top 60m; - - - - - 50m @ 2.47g/t Au from 10m to end of hole 48m @ 1.19g/t Au from surface 14m @ 4.27g/t Au from 24m 12m @ 3.84g/t Au from 20m 12m @ 3.99g/t Au from surface  The Ianna Project contains both the structural and lithological setting considered ideal to host large scale gold deposits.  The Project host excellent Infrastructure, including existing camp facilities, airstrip and river port. Figure 1 | Location of the Arakaka Gold Project and Ianna Gold Project over Simplified Alicanto Geology of Northwest District in Guyana Alicanto Minerals Limited | 6 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Share Placements On 14 March 2016, Alicanto announced the completion of a share placement of 13.99 million shares at $0.075 per share raising $1.05 million. The funds raised from the Placement will be used to advance additional opportunities within Guyana and for working capital purposes. On the 28 July 2016 the company announced the completion of a share placement raising gross proceeds of $1.5 million. The shares were issued to clients and affiliates of the Sprott Group of companies. Under the placement Alicanto issued 11.6 million shares at $0.13 raising with one free attaching option for every two shares subscribed for. The options are to have a $0.23 strike price and a three year term. Greenstone Joint Venture Agreement Alicanto entered into a joint venture agreement with Greenstone Gold Inc. (Greenstone) to form an incorporated joint venture (JV), whereby an Alicanto Guyanese subsidiary will hold 80% of the issued capital, Greenstone to hold the remaining 20%. The JV will hold two prospecting licences (B22 & B23) and holds an option to acquire a 100% interest in four mining permits. Operations Report | Arakaka Gold Project Geologically, Guyana is underlain by the Guiana Shield, a Proterozoic aged craton that was contiguous with the Leo Mann Shield of West Africa prior to the opening of the Atlantic Ocean. As such, the geology of the Guiana Shield is similar in age, lithology and style of mineralisation to the prolific Birimian gold belts of West Africa. Alicanto’s Arakaka Gold Project covering >300km2 is located in Guyana’s under-explored Northwest District, host to the Barama- Mazaruni supergroup, within one of the last and among the least explored greenstone belts across the Guiana and West African Shields that is not yet host to substantial gold resources. The Arakaka Gold Project itself has been the source of more the 1Moz of alluvial and near surface gold production within Guyana, with a mining history that extends more than 100 years. The Project boasts good infrastructure, with an all-season road network, daily flights to within 10km of the property boundary, and deep water port facilities to within 15km of the property boundary. Over US$20m in exploration investment prior to Alicanto’s investment has been made into the Arakaka Gold Project, providing Alicanto with a high quality regional scale geophysical and surface geochemical datasets identifying extensive gold anomalism which defines multiple top tier drill targets, but with sparse drilling completed previously to assess potential gold endowment. Alicanto Minerals Limited | 7 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Figure 2 | Location Map – Arakaka Gold Projects Exploration Activities during the Year ending 30 June 2016 During the 2016 financial year, Alicanto exploration activity included initiating Diamond drilling in June 2016 funded by Barrick under the Earn-in Agreement. To date, the Company has completed 2,597m of diamond drilling in 17 holes targeting several major structures within the Arakaka mineralized trend. The company also progressed detailed mapping and compilation of geological datasets within the Arakaka Main Trend prior to commencement of drilling. Concurrent with the drilling program Alicanto personnel advanced surface geochemistry sampling programs for additional target identification and refining future drill targeting. In collaboration with Barrick, the Company has further refined geologic mapping and drill targeting with re-processing of historical geophysical datasets. Target areas within the Arakaka Gold Project being advanced by a range of exploration activities and methodologies include;  Arakaka Main Trend, a 12km long trend of gold anomalism where over 40 active and historical saprolite open pit gold workings of significance have been mapped. Within this corridor of extensive historical mining activity, six target areas have been identified and significant work completed on the 14-Mile, Purple Heart, Pepperpot, Powis, and Goat Hill target areas (Refer to Figures 3 & 4).  Gomes-Ianna Trend, a major, transfer structure/fault that potentially acts as a control on mineralisation within the Main Arakaka Trend, is a conjugate mineralised corridor itself hosting an open-ended >11km of surface gold anomalism at the Xenopsaris Target Area, with mineralisation confirmed in drilling at the Gomes Hill Prospect at the northwestern extent of the Xenopsaris area (Refer to Figures 3 & 5). Extensive and coherent gold anomalism identified in 2015 soil and 2015-16 auger drilling programs persist into the undrilled Xenopsaris target area to the southeast of the Gomes Hill Prospect.  Eyelash Area is a 5km long, +100ppb Au soil anomaly situated at the upstream extent of more than 20 kilometres of alluvial workings. The target area is host to significant historical gold production within the >5km of +100ppb gold anomalism from historical soil sampling programs, with multiple peak soil values exceeding 1g/t Au including 9.93g/t and 6.9g/t Au results (Refer to Figures 3 & 6). Alicanto Minerals Limited | 8 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Figure 3 | Target Area and Prospect locations within the Arakaka Gold Project >300km2 land position subject to Barrick Earn-in Agreement The Purple Heart and Pepperpot Target Areas have been incorporated into an extensive, detailed mapping campaign of the entire Arakaka Main Trend at 1:2,000 scale geology which, integrated with an assessment of historical gradient array IP datasets, has resulted in a revised geological and structural interpretation for the prospects. The historical drilling re-logged by Alicanto personnel is in context of a revised definition of the stratigraphic column generated from detailed and regional mapping campaigns. This updated geological work resulted in the identification of numerous untested targets across more than 1.5km of width and >2.4km of strike within the Purple Heart and Pepperpot areas. Diamond drilling completed in 2016 has identified mineralised structures previously un-tested in both the Purple Heart and Pepperpot Target Areas confirming more than 1.5km of width to the mineralised system within the >12km Arakaka Main Trend and identifying a number of prospects within each of the Target Areas for follow-up drilling. Additional structural and stratigraphic information, including discovery of nearly three times the amount of diorite at the Pepperpot area than inferred from surface exposure, has been compiled with regional scale geological mapping efforts subsequent to the reporting period to further re-define the wider geologic understanding and structural architecture of the greenstone belt. Targeted zones of gold anomalism are focused on shear zones located in and around diorite intrusions of various composition. Mineralisation ranges from bonanza style gold intercepts of visible gold in quartz veins to broad zones of disseminated mineralisation associated with arsenian-pyrite and pyrite-pyrrhotite sulphide mineralisation. Encouragingly both types of mineralisation are found within the same geological setting and so exhibit significant potential for bulk tonnage targets. The discovery of additional diorite intrusions at Pepperpot, along with the identification of both additional structures and structural complexities has generated a number of additional targets for drill testing going into 2017. Alicanto Minerals Limited | 9 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) The Purple Heart area is host to multiple saprolite pits on hill slopes adjacent to extensive alluvial workings in the Arakaka valley where historical drilling returning up to 13.5m @ 7.36g/t Au (Refer to ASX Release dated 26 August 2015) is located approximately 1.7km along strike to the southwest of the Pepperpot Target Area within the 12km long gold anomalous Arakaka main trend. Mineralisation potential extends beyond the existing workings along multiple parallel zones of anomalous Au geochemistry where un-drilled anomalies inclusive of peak soil results of up to 8.1g/t, 6.45g/t, and 3.55g/t Au are associated with favourable geological settings defined in limited historical drilling with encouraging results located proximal to exiting shallow pits and surface mapping. Drilling by both Alicanto and previous explorers confirms the potential of the Purple Heart area to host a bulk tonnage gold deposit, but further drilling is required to assess continuity and extent of mineralisation for the purpose of mineral resource definition. The Pepperpot Target area is host to favourable diorite intrusions that are strained and faulted by structures associated with mineralisation with >2.5km strike extent of extensive artisanal alluvial and eluvial workings, (refer to Figures 2 & 3). The mapped structural and lithologic settings at Pepperpot prospects are analogous to the drilled mineralisation at Purple Heart and are associated with high tenor surface gold anomalism. These analogous settings at Pepperpot located along favourable structural corridors within the Arakaka main trend are a high priority target for follow-up drill testing at the Arakaka Gold Project.  Diamond Drilling Diamond drilling activity completed during the reporting period totalled ten diamond core holes with 1,534m drilled, focused on the Pepperpot and Purple Heart Target Area at the Arakaka Gold Project. The diamond drilling completed to date is focussed on initial drill assessments of previously un-tested prospects in each of the target areas, including extensions of historic drill fences. The drilling completed advances multiple targets refined by exploration activities previously completed by Alicanto and furthered by Barrick funded exploration activity commenced in March of this year.  Auger Sampling The auger sampling program for Purple Heart and Pepperpot target delineation conducted in March/April totalled 186 auger sample sites (Refer to ASX release dated 1 June 2016). Gold anomalism in auger samples consistently confirms gold anomalism beneath extensive +100pbb Au anomalous trends in soils. Multiple anomalous zones have been intersected that include peak auger results of 3.2g/t and 2.3g/t Au potentially refining targeting of mineralised structures within a large footprint of alteration and gold anomalism.  Ground Geophysics In conjunction with the surface geochemical and mapping work, Alicanto is also working with Barrick to re-process historical IP ground geophysical data (refer to Figure 3). Previous explorers have completed a total of 69.4 line km of dipole-dipole IP and 119 line km of gradient array IP on the Arakaka Gold Project. Alicanto geologists have defined a detailed structural model and geological interpretation of the Arakaka Main Trend. Re- modelling and re-interpretation of both the gradient array and dipole-dipole spectral induced polarisation / resistivity geophysical methods (IP) in context of the varying physical properties measured and modelled in the revised geologic interpretation has identified high priority targets covered by shallow artisanal alluvial mining disturbance in the area. Alicanto Minerals Limited | 10 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Figure 4 | Plan map of the Purple Heart and Pepperpot Areas showing outlines of anomalous soil geochemistry, existing drill collars and interpreted geology. Historical drilling targeted only three of the multiple parallel lodes within the 1.5km wide corridor of anomalism, with limited drilling amounting to two single drill sections located 750m apart over the three lodes with visible gold and significant gold assay results encountered in many of the holes. Better drill intercepts from the limited historical drilling include;       13.5m @ 7.36g/t gold from 87m – PHD0801 1.9m @ 30.66g/t gold from 86m – PHD0802 10.8m @ 1.66g/t gold from 17m – PHD0805 10m @ 3.10 g/t gold from surface – ARD04 48m @ 1.84g/t gold from surface – ARD05 20.5m @ 1.43g/t gold from 65m – ROD0803 Alicanto Minerals Limited | 11 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Xenopsaris Area The Xenopsaris target area is the southern extension of the 11km long Gomes Trend gold anomalism (Refer to Figures 3 & 5), which is host to the Gomes Hill Prospect where significant drilled mineralisation requiring additional extension drilling includes better intercepts of 19.19m @ 3.4g/t Au from 65m, incl. 6m @ 6.25g/t Au in hole MD008, 17m @ 2.11g/t Au from 46m, incl. 4.25m @ 6.12g/t Au in hole MD002 and 11.0m @ 3.43g/t Au from 62m in TAK9717 (Refer to ASX release dated 9 February 2015). Mineralisation has been identified in soil and confirmed in auger drill sampling along the interpreted Temberlin Shear Zone, where numerous zones of +500ppb Au soils highlighted in previously reported results include multiple +1g/t Au results with peak values of 6.0g/t Au, 2.84g/t Au, and 1.65g/t Au (refer to ASX release dated 11 March 2015), Alicanto has intersected peak auger results including 10g/t and 3.7g/t Au (refer to ASX release dated 27 May 2015), with better auger results closely associated with higher grade soil assays on each line with anomalism continuing along the projection of the Temberlin Shear. Figure 5 | Plan map of the Gomes Hill Prospect and Xenopsaris Area targets showing existing drill collars, significant reported drill results, auger drilling locations, updated soil anomaly outlines, and interpreted geology. (*Refer to ASX release dated 11 March 2015, **Refer to ASX release dated 9 February 2015). Alicanto Minerals Limited | 12 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Eyelash Area The Eyelash mineralised corridor is located in the southwest portion of Arakaka Gold Project area subject to the Barrick Earn-in Agreement (Refer to Figures 3). The target area is host to significant historical gold production including substantial artisanal underground workings situated at the upstream extent of more than 20 kilometres of alluvial workings. The target area is defined by a >5km long anomalous gold corridor displaying consistent soil anomalism exceeding 100ppb Au hosting multiple peak soil values exceeding 1g/t Au including 9.93g/t Au soil at the Devi Prospect and 6.9g/t Au Soil at the Kelly Prospect (refer to Figure 6). Exploration results reported during the year at the Eyelash Area significantly expanded the footprint of high grade gold mineralisation within the extensive corridor of anomalism, and nine discrete targets within the Eyelash area have been defined by auger, soil and surface rock chip sampling that returned peak values of 142g/t, 41.8g/t, and 27.1g/t Au (refer to ASX release dated 14 July 2015). Compilation work in the December quarter has resulted in the definition of several drill ready targets at Eyelash. Figure 6 | Plan map of the Eyelash Area showing existing drill collars, interpreted geology and defined Prospect Area’s including the newly identified Devi and Kid prospect areas (2015-16 Reporting period results in red). The reported exploration results support Alicanto’s geological and structural model for the Eyelash area where new targets for drill testing are being generated and emphasize the significance of previously unidentified northeast striking mineralised structures coincident with ankerite-sericite-pyrite alteration at Eyelash, which spur off of the previously mapped dominant north-south structural control to mineralisation as defined in the Alicanto release dated 25 February 2015. Limited historical drilling totalling 837m in six holes (refer to ASX release dated 25 February 2015) completed in 2009 was focused on the north-south trending soil anomalies, and ineffectively tested the high grade northeast trending vein sets oriented sub-parallel to the drill direction. The newly identified northeast trending zones integrated with mapping, rock chip sampling and auger results have identified nine discrete targets at Eyelash that are un-drilled, or have not been effectively drill tested located on the highly prospective zones where the two controls on mineralisation are projected to intersect. Alicanto Minerals Limited | 13 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 8. Review of Operations (continued) Ianna Gold Project Acquisition The Ianna Gold Project is located in the northwest of Guyana, less than 25km southeast from existing exploration operations at the Arakaka Gold Project. The property is comprised of thirteen medium scale mining permits and a number of pre-existing small claims that lie within the medium scale mining permits and straddle key areas of interest and totals approximately 54km2. extensive associated with The Ianna Gold Project area is host to existing drilling surface geochemical survey work completed. Over and 926m’s 12,400m’s Reverse Circulation Diamond drilling historically covering limited strike extent drilling to shallow depth, with ~95% of drilling testing less than 50m below surface. Two corridors of mineralisation on the Ianna trend and the King’s Ransom trend have been identified within the Ianna Gold Project area from review of historical datasets and prioritised by Alicanto geologists for follow-up exploration activity on the Ianna trend and King’s Ransom The broad zones of mineralisation trend. to identified provide support considerable into aggressively expand exploration activities other prospects within the project area. project Ianna Gold The excellent infrastructure, including existing camp facilities, an existing airstrip and river port landing on the property, and can be accessed by road from the Arakaka Project area. has Figure 7 | Overview of Ianna project geology over simplified regional geology as mapped by AQI geologists Figure 8 | Ianna Target Area Prospect locations and summary of better historical intercepts (Refer to ASX release dated 26 July 2016) Alicanto Minerals Limited | 14 A L I C A N T OM I N E R A L S L I M I T E D Review of Operations (continued) Directors’ Report 8. About Guyana Guyana is located on the north east coast of South America, the official language is English and it is a member of the Commonwealth of Nations. The legal system of Guyana is based on English common law and it has a modern and transparent mining code and a Government that is supportive of mining. Geologically Guyana is underlain by the Guiana shield a Proterozoic aged craton that before the opening of the Atlantic Ocean was contiguous with the Leo Mann Shield of West Africa. As such there is significant geological continuity between the Guiana Shield and Birimian Shield of West Africa however, while Guyana hosts extensive greenstone coverage it remains significantly underexplored relative to West Africa. The Guiana Shield hosts numerous “World Class” (+3 million ounce) gold deposits with the majority of the known gold deposits located within a portion of the Shield that lies in greenstone belts within 200km of the coast. Project Generation The acquisition of the Arakaka Gold Project in 2013 delivered a core strategic asset in one of the most underexplored greenstone belts in the world. The Company intends to continuously evaluate additional projects within Guyana for potential joint venture or acquisition. In addition the Company shall also continue to evaluate projects in Australia and overseas, in gold, copper and other commodities to grow shareholder value. Mineral Resource Estimation As at 30 June 2016, Alicanto has not completed sufficient work to warrant mineral resource estimation and has no Mineral Resource holdings for its project areas located in Guyana, resulting in a 0% increase over the previous years reported resource holdings. Alicanto has adopted the following governance arrangements and internal controls for the preparation of mineral resource estimations for the Company to ensure any Mineral Resource or Ore Reserve estimations prepared by Alicanto are reported in accordance with the principles of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (JORC Code) and ASX Listing Rules. Exploration activity and material results acquired in support of Mineral Resource estimation is subject to regular internal review to confirm and compile exploration results on a continuous basis for disclosure to shareholders in accordance with ASX listing rule 5.7 and in accordance with requirements of the JORC Code. Compilation of exploration results is completed or overseen by Alicanto personnel that meet the requirements of a Competent Person in accordance with the principles of the JORC Code. Any documentation for the estimation of Mineral Resources or Ore Reserve must be prepared or overseen by a Competent Person in accordance with the principles of the JORC Code involving either Company personnel or an Independent Competent Person as deemed appropriate by Company management, with reporting of final documentation prepared in accordance with ASX listing rule(s) 5.8 and/or 5.9 as relevant to the consideration of modifying factors used in the estimation process. Matters Subsequent to the End of the Financial Year 9. On 14 June 2016 the company announced a proposed placement to raise gross proceeds of $1.5 million through a share placement to clients and affiliates of the Sprott Group of companies. The placement was subject to shareholder approval. Under the placement Alicanto issued 11.6 million shares at $0.13 raising with one free attaching option for every two shares subscribed for. The options are to have a $0.23 strike price and a three year term. On 27 July 2016 Alicanto announced shareholder approval for the Placement and completion of the Placement with the issue of shares and options on 28 July 2016. On 27 July 2016 the company announced that it has entered into a binding agreement to acquire the Ianna Gold Project in Northwest Guyana. The agreement is subject to a 105 day due diligence period. Upon completion of satisfactory due diligence, Alicanto will then maintain an exclusive option to acquire and operational access to the project for a 36 month period, which will be maintained with the following option payments; i) US$25,000 on the completion of due diligence; ii) US$50,000 within 4 months after completion of due diligence, and iii) US$200,000 within 15 months after completion of due diligence. During the option period Alicanto must keep tenements in good standing and ensure a minimum aggregate expenditure of US$600,000 on exploration and various land holding costs over a 24 month period. Alicanto can elect to acquire the property at any time subsequent to the US$50,000 option payment without further expenditure or option payment liabilities by paying either; i) a lump sum payment of US$3,000,000; or ii) a lump sum payment of US$1,350,000 and a 2% net smelter royalty (NSR). If an NSR is issued as consideration, the Company will retain a Right of Re-purchase of the NSR for 24 months after Completion, and at Alicanto’s election can acquire either: i) a 50% portion of the NSR by paying US$2,000,000; or ii) a 100% portion of the NSR by paying US$3,000,000. Following the expiry of the Right of Re-purchase period, the Company will retain a right of first offer for a further 36 month period to acquire all or a specified part of the NSR. There are no further material events subsequent to balance date. Alicanto Minerals Limited | 15 A L I C A N T OM I N E R A L S L I M I T E D Likely Developments and Expected Results of Operations Directors’ Report 10. The Consolidated Entity will continue its mineral exploration activity at and around its exploration projects with the object of identifying commercial resources. Material business risks that may impact the results of future operations include further exploration results, future commodity prices and funding. Further information on likely developments in the operations of the Company and the expected results of operations have not been included in the Annual Report because the Directors believe it would be likely to result in unreasonable prejudice to the Group. Environmental Regulation 11. The Company is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all appropriate regulations when carrying out any exploration work. Information on Directors and Company Secretary 12. Didier Murcia AM Qualifications Experience Non-Executive Chairman- appointed 30 May 2012 LLB, BJuris Mr Murcia holds a Bachelor of Jurisprudence and Bachelor of Laws from the University of Western Australia, and has over twenty five years’ experience in corporate, commercial and resource law. Mr Murcia is a Non-Executive Director of Gryphon Minerals Limited and Strandline Resources Limited and Chairman of Centaurus Metals Limited, all of which are listed on the Australian Securities Exchange. He is also Chairman of Perth law firm Murcia Pestell Hillard and the Honorary Consul for the United Republic of Tanzania. In January 2014, Mr Murcia was made a Member of the Order of Australia in recognition of his significant service to the international community. Interest in Securities Other Directorships Fully Paid Ordinary Shares 520,000 750,000 23 cent Options expiring 7 September 2018 750,000 0.1 cent Options expiring 30 April 2021 Gryphon Minerals Limited (since 28 July 2006) Centaurus Metals Limited (since 16 April 2009) Cradle Resources Limited (since 13 August 2013 to 8 May 2016) Strandline Resources Limited (since 23 October 2014) Travis Schwertfeger Managing Director- appointed 15 September 2014 Qualifications BSc Geological Engineering, MSc Ore Deposit Geology and Evaluation, MAIG Experience Mr Schwertfeger has over 18 years global industry experience as a geologist with positions in exploration, production, geology, business development and project valuation. He previously held senior technical roles with Newmont Mining Corporation and has worked on projects located in South America, West Africa and Australia with similar deposit style as the highly prospective Arakaka Gold Project. Mr Schwertfeger also has extensive corporate and management experience in both ASX and TSX-V listed mineral resource companies through previous Managing Director/CEO and corporate VP roles. Interest in Securities Fully Paid Ordinary Shares 23 cent Options expiring 7 September 2018 0.1 cent Options expiring 30 April 2021 200,000 1,500,000 2,000,000 Other Directorships International Goldfields Limited (since 3 May 2013 to 22 April 2016) Magnolia Resources Limited (since 7 June 2012 to 25 August 2015) Hamish Halliday Qualifications Non-Executive Director - appointed 17 March 2016 BSc (Geology), MAusIMM Experience Mr Halliday is a Geologist with a Bachelor of Science from the University of Canterbury and has over 20 years of corporate and technical experience in the mining industry. Mr Halliday has been involved in the discovery and acquisition of numerous projects over a range of commodities throughout four continents. Mr Halliday has founded and held executive and non-executive directorships with a number of successful listed exploration companies including Venture Minerals Ltd and Adamus Resources Ltd (‘Adamus’). He was CEO of Adamus from its inception through to successful completion of a feasibility study on its gold project in Ghana which is now in production. Interest in Securities Fully Paid Ordinary Shares 23 cent Options expiring 7 September 2018 6.5 cent Options expiring 25 March 2019 0.1 cent Options expiring 30 April 2021 5,665,000 1,500,000 1,000,000 1,000,000 Other Directorships Venture Minerals Limited (since 30 January 2008) Comet Resources Limited (since 16 December 2014) Renaissance Minerals Limited (since 25 February 2016 to 27 September 2016) Alicanto Minerals Limited | 16 A L I C A N T OM I N E R A L S L I M I T E D Information on Directors and Company Secretary (continued) Directors’ Report 12. Company Secretary Brett Dunnachie - BCom, CA. Mr Dunnachie is a Chartered Accountant with over 15 years’ experience in corporate, audit and company secretarial matters. Mr Dunnachie acts as the Chief Financial Officer of the Company and was appointed Company Secretary on 3 February 2011. Previously Mr Dunnachie was an audit manager at a major chartered accounting practice and is also experienced in IPO management, company secretarial services, financial accounting/reporting and ASX/ASIC compliance management. Mr Dunnachie is also currently Company Secretary for Venture Minerals Limited and Renaissance Minerals Limited. Audited Remuneration Report 13. The Directors are pleased to present your Company’s 2016 remuneration report which sets out remunerations information for Alicanto Minerals Ltd’s non-executive directors, executive directors and other key management personnel. The remuneration report is set out under the following headings: A. Directors and key management personnel disclosed in this report B. Remuneration governance C. Use of remuneration consultants D. Executive remuneration policy and framework E. Relationships between remuneration and Alicanto Minerals Ltd’s performance F. Non-Executive Director remuneration G. Voting and comments made at the Company’s 2015 Annual General Meeting H. Details of remuneration I. Details of share based compensation and bonuses J. K. Equity instruments held by key management personnel L. Loans to key management personnel M. Other transaction with key management personnel Service agreements Directors and key management personnel disclosed in this report A. This report details the nature and amount of remuneration for all key management personnel of Alicanto Minerals Ltd and its subsidiaries. The information provided within this remuneration report has been audited as required by section 308(C) of the Corporations Act 2001. The Individuals included in this report are: Non-Executive Directors Mr D Murcia Mr H Halliday Mr M Bowles Executive Directors Mr T Schwertfeger Non-Executive Chairman Non-Executive Director (appointed 17 March 2016) Non-Executive Director (until 11 April 2016) Managing Director Other Key Management Personnel Mr M Harden Mr B Dunnachie Chief Geologist Company Secretary Changes since the end of the reporting period None Remuneration governance B. The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees. As the whole Board only consists of three (3) members, the Company does not have a remuneration committee and therefore the full board acts as the remuneration committee. The Board has established a broad remuneration policy which is consistent with the Company’s business objectives and designed to attract and retain high calibre individuals, align key management personnel remuneration with the creation of shareholder value and motivate executives to achieve challenging performance levels. The business and operational environment of the Company is dynamic and ever changing and so too is the remuneration policies. As such the broader remuneration policies, whilst currently under specific and detailed review, are by nature, always under consideration by the Board. Further information relating to the role of the Board and its responsibilities in relation to remuneration policies can be found within the Corporate Governance Statement which is available for inspection on the Company’s website http://www.alicantominerals.com.au/index.php/corporate-profile/corporate-governance. Use of remuneration consultants C. The Company has not engaged or contracted remuneration consultants during the financial year. Alicanto Minerals Limited | 17 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 13. Audited Remuneration Report (continued) D. Executive remuneration policy and framework Remuneration Policy The remuneration policy of Alicanto Minerals Ltd has been designed to align executives’ objectives with shareholder and business objectives by providing both fixed and discretionary remuneration components which are assessed on an annual basis in line with market rates. By providing components of remuneration that are indirectly linked to share price appreciation (in the form of options), executive, business and shareholder objectives are indirectly aligned. The board of Alicanto Minerals Ltd believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors to run and manage the Company, as well as create goal congruence between Directors and Shareholders. In determining competitive remuneration rates, the Board review local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes, benefit plans and share plans. Independent data is sourced to ensure that the company’s remuneration levels fall within the 50th to 75th percentile of companies in a similar industry group and with a similar market capitalisation. These ongoing reviews are performed to confirm that executive remuneration is in line with market practice and is reasonable in the context of Australian executive reward practices. The Board also ensures that the mix of executive compensation between fixed, variable, long-term, short-term and cash versus equity is appropriate. The Company endeavours to reduce cash expenditure by providing a greater proportion of compensation in the form of equity instruments. This allows cash-flows to be directed towards exploration programs with a view to improving the quality of our projects. There has been a salary freeze on all executive’s base salaries since 2013 which remained in place through to March 2016. Further, the Managing Director had taken a voluntary reduction of 50% in his executive portion of his salary from appointment to that position until this time. These measures formed part of broader cost reducing measures to ensure that the Company conserved cash reserves in order to maintain exploration activities whilst initially working through volatile market conditions. Remuneration Mix Fixed Remuneration All executives receive a base cash salary which is based on factors such as length of service and experience as well as other fringe benefits. All applicable executives also receive a superannuation guarantee contribution required by the government, which is currently 9.5% and do not receive any other retirement benefits. Short-term Incentives (STI) Under the Company’s current remuneration policy, executives can from time to time receive short-term incentives in the form of cash bonuses. The Board can use its discretion when paying bonuses, however they have currently determined relevant industry key performance targets such as, definition and growth of existing resources, targets and on-going Executive loyalty to the Company. The Board believes that the criteria of eligibility for short-term incentives appropriately aligns shareholder wealth and executive remuneration as the completion of key performance targets have the potential to increase share price growth. There were no cash bonuses paid out in the current financial year. Long-term Incentives (LTI) Executives are encouraged by the Board to hold shares in the Company and it is therefore the objective of the Company’s option scheme to provide an incentive for participants to partake in the future growth of the company and, upon becoming shareholders in the Company, to participate in the Company’s profits and dividends that may be realised in future years. The Board considers that this equity performance linked remuneration structure is effective in aligning the long-term interests of group executives and shareholders as there exists a direct correlation between shareholder wealth and executive remuneration. Alicanto Minerals Limited | 18 A L I C A N T OM I N E R A L S L I M I T E D Relationship between remuneration and Alicanto Minerals Limited’s performance Directors’ Report 13. Audited Remuneration Report (continued) E. The remuneration policy has been tailored to increase goal congruence between shareholders and executives. This has been achieved by the payment of short-term incentives, at the discretion of the non-executive directors, should relevant milestones be achieved and the issue of long-term incentive options. This structure rewards executives for both short-term and long-term shareholder wealth development. Non-Executive Director remuneration policy F. The Boards policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. Fees for non-executive directors are not linked to the performance of the group. Typically the Company will compare non-executive remuneration to companies with similar market capitalisations in the exploration and resource development business group. These ongoing reviews are performed to confirm that non-executive remuneration is in line with market practice and is reasonable in the context of Australian executive reward practices. Further to ongoing reviews, the maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. In addition to director fees, the Directors were issued options during the current financial year, which were approved by shareholders at the shareholder meetings held during the period. Options were issued to non- executives as they provide an indirect mechanism of aligning shareholder wealth and non-executive director remuneration. The remuneration policy, setting the terms and conditions for the non-executive directors was developed and approved by the Board. In determining competitive remuneration rates, the Board reviews local and international trends among comparative companies and industry generally. Reviews are performed to confirm that executive remuneration is in line with market practice and is reasonable in the context of Australian non-executive reward practices. There has been a salary freeze on all Non-Executive’s base salaries since 2013 through to March 2016 which formed part of broader cost reducing measures to ensure that the Company conserved cash reserves in order to maintain exploration activities whilst initially working through volatile market conditions G. Voting and comments made at the company’s 2015 Annual General Meeting The company received 100% of “Yes” votes on its remuneration report for the 2015 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. Alicanto Minerals Limited | 19 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 13. Audited Remuneration Report (continued) H. Details of Remuneration The Key Management Personnel of Alicanto Minerals Ltd for the year ending 30 June 2016 are set out in the table below. There have been no changes to the below named key management personnel since the end of the reporting period unless noted. Short-Term Employee Benefits Post Employment Securities Total Cash Salary & Fees $ Incentives $ Other Amounts $ Super- annuation $ Options3 $ $ 32,850 21,875 23,417 156,119 200,000 40,500 - - - - - - 1,708 497 1,329 - 2,078 2,225 40,047 53,396 - 74,605 77,846 26,971 1,708 14,831 125,320 297,978 - 1,708 - - 32,038 21,358 232,038 63,566 2016 Non-Executive Directors Mr D Murcia Mr H Halliday1 Mr M Bowles2 Executive Directors Mr T Schwertfeger Other Key Management Personnel Mr M Harden Mr B Dunnachie Total Remuneration 1: Mr H Halliday was appointed as a Director on 17 March 2016. 2: Mr M Bowles resigned as Non-Executive Director on 11 April 2016. 3: The fair value of the options is calculated at the date of grant using a Black-Scholes model, refer to Section I for further details of options issued 773,004 272,159 474,761 19,134 6,950 - in the June 2016 financial year 2015 Non-Executive Directors Mr D Murcia Mr M Bowles Mr M McKevitt1 Executive Directors Mr T Schwertfeger2 Other Key Management Personnel Mr M Harden Mr B Dunnachie Short-Term Employee Benefits Post Employment Securities Total Cash Salary & Fees $ Incentives $ Other Amounts $ Super- annuation $ Options3 $ $ 32,850 31,154 6,843 91,668 207,692 36,000 - - - - - - 2,392 2,392 498 - 2,960 - 53,338 106,677 - 88,580 143,183 7,341 1,894 8,708 25,938 128,208 - 2,392 - - 50,992 16,997 258,684 55,389 Total Remuneration 1: Mr M McKevitt resigned as Non-Executive Director on 15 September 2014. 2: Mr T Schwertfeger was appointed as a Director on 15 September 2014. 3: The fair value of the options is calculated at the date of grant using a Black-Scholes model. 406,207 9,568 - 11,668 253,942 681,385 No retirement benefits or equity securities were issued to any Director or other key management personnel of the entity during the financial year. Alicanto Minerals Limited | 20 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 13. Audited Remuneration Report (continued) I. Details of share-based compensation and bonuses Options are issued to directors and executives as part of their remuneration. The options are not always issued based on performance criteria and in the instances they are not, they are issued to the majority of directors and executives of Alicanto Minerals Ltd to increase goal congruence between executives, directors and shareholders. During the current financial year, incentive options have been issued to Directors and other key management personnel. The options vest upon achievement of performance based milestones as follows; i) Tranche 1 - 50% of the options shall vest on 28 February 2017 subject to remaining an officer, employee or consultant to the Company at the time of vesting; ii) Tranche 2 - The remaining 50% of the options shall vest upon the Company achieving one of the following milestones; - Barrick Gold Corporation continuing into the second contract year in accordance with the Earn-In Agreement at the Arakaka Project as announced on 1 March 2016; or - the Company announcing a 50 gram x metre/tonne Au significant drill intercept or greater at a 0.5 gram/tonne Au cut-off grade. The options issued to Directors were approved by shareholders at a General Meeting held 25 May 2016. Further details of options issued to Directors and key management personnel are as follows: Granted No. Options Granted as Part of Remuneration $ Total Remuneration Represented by Options Exercised No. Other changes No. Lapsed No. 30 June 2016 Non-Executive Directors Mr D Murcia Mr H Halliday Mr M Bowles Executive Director Mr T Schwertfeger 750,000 1,000,000 - 40,043 53,390 - 2,000,000 125,308 Other Key Management Personnel Mr M Harden Mr B Dunnachie 600,000 400,000 32,034 21,356 30 June 2015 Non-Executive Directors Mr D Murcia Mr M Bowles Mr M McKevitt Executive Director Mr T Schwertfeger 750,000 1,500,000 - 53,338 106,677 - 1,500,000 25,938 Other Key Management Personnel Mr M Harden Mr B Dunnachie 750,000 250,000 50,992 16,997 54% 69% - 42% 14% 34% 60% 75% - 20% 20% 31% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Alicanto Minerals Limited | 21 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 13. Audited Remuneration Report (continued) I. Details of share-based compensation and bonuses (continued) Issue Date Expiry Date % Vested in Year Exercise Price Number of Options 30 June 2016 Non-Executive Directors Mr D Murcia Mr H Halliday Mr M Bowles Executive Director Mr T Schwertfeger 25 May 16 25 May 16 - 30 Apr 21 30 Apr 21 - 25 May 16 30 Apr 21 Other Key Management Personnel Mr M Harden Mr B Dunnachie 25 May 16 25 May 16 30 Apr 21 30 Apr 21 30 June 2015 Non-Executive Directors Mr D Murcia Mr M Bowles Mr M McKevitt Executive Director Mr T Schwertfeger 08 Sept 14 08 Sept 14 - 07 Sept 18 07 Sept 18 - 27 Nov 14 07 Sept 18 Other Key Management Personnel Mr M Harden Mr B Dunnachie 12 Sept 14 12 Sept 14 07 Sept 18 07 Sept 18 0% 0% - 0% 0% 0% 100% 100% - 0% 100% 100% $0.001 $0.001 - 750,000 1,000,000 - $0.001 2,000,000 $0.001 $0.001 600,000 400,000 $0.23 $0.23 - 750,000 1,500,000 - $0.23 1,500,000 $0.23 $0.23 750,000 250,000 The value at grant date is calculated in accordance with AASB2 Share Based Payments utilising the Black Scholes Methodology. The following factors and assumptions were used in determining the fair value of options issued to key management personnel on grant date: Grant Date Expiry Date Exercise Price Fair Value Per Option Price of Shares on Grant Date Estimated Volatility Risk Free Interest Rate Dividend Yield 30 June 2016 25 May 16 30 June 2015 08 Sept 14 12 Sept 14 27 Nov 14 30 Apr 21 $0.001 $0.096 $0.097 07 Sept 18 07 Sept 18 07 Sept 18 $0.23 $0.23 $0.23 $0.07 $0.07 $0.03 $0.16 $0.16 $0.09 85% 85% 85% 85% 1.82% 2.98% 2.98% 2.31% 0% 0% 0% 0% Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future tender, which may not eventuate. The life of the options is based on historical exercise patterns, which may not eventuate in the future. J. Services Agreements Remuneration and other key terms of employment for the Executives, Non-Executives and Other Executives of Alicanto Minerals Ltd are formalised in executive service agreements. Major provisions of the agreements relating to remuneration are set out below: Mr D Murcia, Non-executive Chairman Term of Agreement – unspecified. Base fee of $30,000 exclusive of superannuation. Eligible to participate in the Company’s Employee Incentive Scheme. No termination benefit under any circumstances. Mr T Schwertfeger, Managing Director Term of Agreement – 12 months. Base fee of $240,000* inclusive of superannuation. Payment of a termination benefit on early termination by the Company, other than for gross misconduct, equal to 3 months base fee, being payment in lieu of the specified termination notice period. Eligible to participate in the Company’s Employee Incentive Scheme. *Note that given the market conditions over the previous years, Mr Schwertfeger had agreed to a voluntary reduction of 50% of his executive base salary in order for the company to conserve funds. The voluntary reduction remained in place through to March 2016. Alicanto Minerals Limited | 22 A L I C A N T OM I N E R A L S L I M I T E D Services Agreements (continued) Directors’ Report 13. Audited Remuneration Report (continued) J. Mr H Halliday, Non-executive Director Term of Agreement – unspecified. Base fee of $75,000 exclusive of superannuation. Eligible to participate in the Company’s Employee Incentive Scheme. No termination benefit under any circumstances. Mr M Harden, Chief Geologist Term of Agreement – unspecified. Base salary of $200,000 gross. Payment of a termination benefit on early termination by the company, other than for gross misconduct, equal to 12 weeks base fee, being payment in lieu of the specified termination notice period. Eligible to participate in the Company’s Employee Incentive Scheme. Mr B Dunnachie, Company Secretary Term of Agreement – unspecified. Base fee of $63,000. Payment of a termination benefit on early termination by the company, other than for gross misconduct, equal to 3 months base fee, being payment in lieu of the specified termination notice period. Eligible to participate in the Company’s Employee Incentive Scheme. Equity instruments held by key management personal K. The tables on following page show the number of: (i) Shares in the company; and (ii) Options over ordinary shares in the Company that were held during the financial year by key management personnel of the group, including their close family members and entities that relate to them. During the period, 416,650 shares were issued to Mr M Harden in lieu of salary, there were no further shares granted during the reporting period as compensation. Balance at the start of the year Received on exercise of options Other changes Balance at the end of the year 2016 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwertfeger Mr H Halliday1 Mr M Bowles2 Other key management personnel Mr M Harden Mr B Dunnachie 2015 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwerertfeger3 Mr M Bowles Mr M McKevitt4 Other key management personnel Mr M Harden Mr B Dunnachie 520,000 - - 2,375,001 350,000 140,000 520,000 - 2,375,001 10,000 350,000 140,000 1: Mr H Halliday was appointed as a Director on 17 March 2016. 2: Mr M Bowles resigned as Non-Executive Director on 11 April 2016. 3: Mr T Schwertfeger was appointed as a Director on 15 September 2014. 4: Mr M McKevitt resigned as Non-Executive Director on 15 September 2014. - - - - - - - - - - - - - 200,000 5,665,000 (2,375,001) 416,650 - - - - (10,000) - - 520,000 200,000 5,665,000 - 766,650 140,000 520,000 - 2,375,001 - 350,000 140,000 Alicanto Minerals Limited | 23 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 13. Audited Remuneration Report (continued) K. Equity instruments held by key management personal (continued) Exercised Balance at start of the year Granted as remuneration 2016 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwertfeger Mr H Halliday1 Mr M Bowles2 1,250,000 1,500,000 - 3,500,000 750,000 2,000,000 1,000,000 - Other key management personnel Mr M Harden Mr B Dunnachie 1,750,000 450,000 600,000 400,000 2015 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwertfeger3 Mr M Bowles Mr M McKevitt4 500,000 - 2,000,000 500,000 750,000 1,500,000 1,500,000 - Other key management personnel Mr M Harden Mr B Dunnachie 1,000,000 200,000 750,000 250,000 1: Mr H Halliday was appointed as a Director on 17 March 2016. 2: Mr M Bowles resigned as a Director on 11 April 2016. 3: Mr T Schwertfeger was appointed as a Director on 15 September 2014. 4: Mr M McKevitt resigned as a Director on 15 September 2014. Other changes Balance at end of the year Vested and exercisable (500,000) - - (3,500,000) 1,500,000 3,500,000 3,500,000 - 750,000 1,500,000 2,500,000 - (1,000,000) (200,000) 1,350,000 650,000 750,000 250,000 - - - (500,000) 1,250,000 1,500,000 3,500,000 - 1,250,000 - 3,500,000 - - - 1,750,000 450,000 1,750,000 450,000 - - - - - - - - - - - - Loans to key management personnel L. There were no loans made to directors of Alicanto Minerals Ltd and other key management personnel of the group, including their close family members or entities related to them. Other transactions with key management personnel M. Mr D Murcia is a Non-Executive Director of Gryphon Minerals Limited which shares office and administration service costs on normal commercial terms and conditions. Mr D Murcia is a Director of Murcia Pestell Hililard a company which provides legal services on normal commercial terms and conditions. Mr H Halliday is a Non-Executive Director of Venture Minerals Limited which shares office and administration service costs on normal commercial terms and conditions. Recharges from Director related entities: Recharge of costs by Gryphon Minerals Limited Recharge of costs by Venture Minerals Limited Purchases from Director related entities Purchases for legal services from Murcia Pestell Hilliard Lawyers 2016 $ 23,401 8,103 Consolidated 2015 $ 16,035 - 72,808 28,087 Outstanding balances arising from recharges/purchases with Director Related Parties: Current payables 2,147 4,251 End of Remuneration Report. Alicanto Minerals Limited | 24 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 14. Unissued ordinary shares of Alicanto Minerals Ltd under option at the date of this report are as follows: Shares under Option Date Options Granted Expiry Date Exercise Price Number under Option 22 Nov 13 12 Sep 14 27 Nov 14 02 Apr 15 25 May 16 15 Jul 16 28 Jul 16 21 Nov 17 07 Sept 18 07 Sept 18 25 Mar 19 30 Apr 21 31 Jul 19 28 Jul 19 $0.320 $0.230 $0.230 $0.065 $0.001 $0.130 $0.230 1,250,000 6,800,000 1,500,000 2,000,000 6,970,000 348,000 5,800,000 No option holder has any right under the options to participate in any other share issue of the Company or any other entity. Proceedings on behalf of the Company 15. 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 these proceedings. The Company was not a party to any such proceedings during the year. 16. Meetings of Directors The number of Directors' meetings held during the financial year that each Director who held office during the financial year was eligible to attend and the number of meetings attended by each Director were: Director Mr D Murcia Mr T Schwertfeger Mr H Halliday – appointed 17 Mar 16 Mr M Bowles – resigned 11 Apr 16 Directors Meetings Number Eligible to Attend 5 5 2 4 Meetings Attended 5 5 2 3 Insurance of Officers 17. Subsequent to the financial year end, Alicanto Minerals Ltd has paid a premium of $6,950 (2015: $9,568) to insure the directors and secretary of the Company and its controlled entities. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Auditors Independent Declaration & Non-Audit Services 18. The lead auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found on page 26 of the Directors’ report. No fees were paid or payable to the auditors for non-audit services performed during the year ended 30 June 2016. Signed in accordance with a resolution of the Board of Directors. Travis Schwertfeger Managing Director Perth Western Australia, 28 September 2016 Competent Persons Statement The information in this report that relates to Exploration Results is based on information compiled by Mr Travis Schwertfeger, a Competent Person who is a Member of The Australian Institute of Geoscientists. Mr Schwertfeger is a full time employee as Managing Director for the company. Mr Schwertfeger has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Schwertfeger consents to their inclusion in the report of the matters based on his information in the form and context in which it appears. Alicanto Minerals Limited | 25 A L I C A N T OM I N E R A L S L I M I T E D Financial Statements Contents Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report 28 29 30 31 32 50 51 These financial statements are the consolidated financial statements of the consolidated entity consisting of Alicanto Minerals Ltd and its subsidiaries. The financial statements are presented in the Australian currency. Alicanto Minerals Ltd is a Company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Alicanto Minerals Limited 288 Churchill Avenue Subiaco WA 6008 A description of the nature of the consolidated entity's operations and its principal activities is included in the review of operations and activities on pages 5 to 15 in the Directors’ report, both of which is not part of these financial statements. The financial statements were authorised for issue by the directors on 28 September 2016. The Company has the power to amend and reissue the financial statements. Through the use of the internet, the Company has ensured that its corporate reporting is timely, complete, and available globally at minimum cost to the Company. All press releases, financial statements and other information are available on our website: www.alicantominerals.com.au. Alicanto Minerals Limited | 27 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2016 Revenue from continuing operations Other income Administrative costs Consultancy expense Employee benefits expense Share based payment expenses Occupancy expense Compliance and regulatory expenses Insurance expenses Depreciation expense Finance costs Exploration expensed (Loss) before income tax Income tax (expense)/benefit (Loss) attributable to owners Other comprehensive income: Items that may be reclassified to profit or loss - Exchange differences on translation of foreign operations Items that will not be classified to profit or loss Total comprehensive (loss) attributable to owners Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share) Note 3(a) 3(b) 4(a) 23 4(b) 4(c) 10 6(a) 15(b) 17 17 Consolidated 2016 $ 25,917 167,870 (104,117) (152,040) (173,466) (390,696) (17,592) (44,475) (10,335) (13,786) (2,463) (764,559) 2015 $ 21,819 - (117,525) (45,433) (136,402) (540,562) (12,027) (41,185) (27,168) (3,207) (3,238) (1,452,274) (1,479,742) (2,357,202) - - (1,479,742) (2,357,202) 26,260 - 1,347 - (1,453,482) (2,355,855) (2.4) N/A (5.0) N/A The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 28 Consolidated Statement of Financial Position As at 30 June 2016 Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Property, plant and equipment Exploration and evaluation expenditure Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Provisions Total Current Liabilities Total Liabilities Net Assets Equity Contributed equity Reserves Accumulated losses Total Equity Note 7 8 9 10 11 12 13(a) 15(c) Consolidated 2016 $ 1,216,247 46,034 1,262,281 151,480 611,288 762,768 2015 $ 810,126 117,989 928,115 53,412 611,288 664,700 2,025,049 1,592,815 495,793 33,104 528,897 528,897 56,509 17,612 74,121 74,121 1,496,152 1,518,694 7,577,323 1,527,908 (7,609,079) 6,537,079 1,110,952 (6,129,337) 1,496,152 1,518,694 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 29 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2016 Consolidated Balance at 1 July 2014 Total comprehensive income for the year: Loss for the year Foreign exchange differences Transactions with owners in their capacity as owners: Contributions of equity (net of transaction costs) Share based payment transactions Contributed Equity Accumulated Losses $ $ Foreign Currency Translation Reserve $ Option Reserve Total $ $ 4,142,549 (3,772,135) 17,828 551,215 939,457 - - - (2,357,202) - (2,357,202) - 1,347 1,347 - - - (2,357,202) 1,347 (2,355,855) 2,394,530 - 2,394,530 - - - - - - - 540,562 540,562 2,394,530 540,562 2,935,092 Balance at 30 June 2015 6,537,079 (6,129,337) 19,175 1,091,777 1,518,694 Balance at 1 July 2015 Total comprehensive income for the year: Loss for the year Foreign exchange differences 6,537,079 (6,129,337) 19,175 1,091,777 1,518,694 - - - (1,479,742) - (1,479,742) - 26,260 26,260 - - - (1,479,742) 26,260 (1,453,482) Transactions with owners in their capacity as owners: Contributions of equity (net of transaction costs) Share based payment transactions 1,040,244 - 1,040,244 - - - - - - - 390,696 390,696 1,040,244 390,696 1,430,940 Balance at 30 June 2016 7,577,323 (7,609,079) 45,435 1,482,473 1,496,152 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 30 Consolidated Statement of Cash Flows For the Year Ended 30 June 2016 Cash Flows from Operating Activities Receipts from customers (inclusive of goods and services tax) Exclusivity payment received Payments to suppliers and employees Interest received Payments for exploration and evaluation Contributions received from farm-in partners Note Consolidated 2016 $ 2015 $ 50,935 105,918 (448,222) 5,317 (1,760,971) 1,462,559 - - (372,263) 21,819 (1,532,204) - Net cash (outflow) from operating activities 18 (584,464) (1,882,648) Cash Flows from Investing Activities Purchase of property, plant and equipment Net cash (outflow) from investing activities Cash Flows from Financing Activities Proceeds from issue of shares Share issue transaction costs Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the start of the year (32,993) (32,993) (49,911) (49,911) 1,049,295 (25,717) 2,490,162 (95,632) 1,023,578 2,394,530 406,121 810,126 461,971 348,155 810,126 Cash and cash equivalents at the end of the year 7 1,216,247 Amounts relating to payments to suppliers and employees as set out above are inclusive of goods and services tax. The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 31 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 Summary of Significant Accounting Policies 1. The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to the financial years presented, unless otherwise stated. These financial statements cover Alicanto Minerals Limited as a consolidated entity consisting of Alicanto Minerals Limited and its subsidiaries (‘the consolidated entity’ or ‘the group’). Basis of preparation (a) These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements and the Corporations Act 2001. (i) (ii) Compliance with IFRS The financial statements of Alicanto Minerals Limited also comply with Australian Equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements and notes as presented comply with International Financial Reporting Standards (IFRS). Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for sale financial assets. (iii) Going concern The financial statements have been prepared on the going concern basis of accounting which assumes that the Group will be able to meet its commitments, realise its assets, discharge its liabilities in the ordinary course of business and meet exploration budgets and have sufficient working capital. In arriving at this position, the Directors recognise the Group is dependent on various funding and corporate alternatives to meet these commitments including share placements and/or corporate activity in relation to its exploration assets. The Directors believe that at the date of signing the financial statements there are reasonable grounds to believe that having regard to matters set out above, the Group will be able to raise sufficient funds to meet its obligations as and when they fall due. In the event that the Group does not achieve the matters set out above there is significant uncertainty whether the Group will 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 amounts stated in the financial statements. (b) (i) Principles of consolidation Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Alicanto Minerals Limited as at 30 June 2016 and the results of all subsidiaries for the year then ended. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of subsidiaries is provided in Note 26. The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statement of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group. Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of comprehensive income. (ii) Joint arrangements Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. Alicanto Minerals Limited is not involved in any joint arrangements. (iii) Jointly operations Alicanto Minerals Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. Alicanto Minerals Limited is not involved in any joint operations. Alicanto Minerals Limited | 32 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 Summary of Significant Accounting Policies (continued) Segment reporting 1. (c) Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors. Revenue recognition (d) Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for the business activities as follows: (i) Interest income Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset. Income tax (e) The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Leases (f) Leases of property, plant and equipment where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long-term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of profit or loss and other comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the lease term. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of profit or loss and other comprehensive income on a straight-line basis over the period of the lease. Impairment of assets (g) At each reporting date the Board assesses whether there is any indication that an asset may be impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. (h) 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, and bank overdrafts. Alicanto Minerals Limited | 33 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 Summary of Significant Accounting Policies (continued) Trade and other receivables 1. (i) Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade and other receivables are generally due for settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. Amounts that are known to be uncollectible are written off by reducing the carrying amount directly. Exploration and evaluation expenditure (j) Exploration, evaluation and development expenditure is expensed as incurred other than for the capitalisation of acquisition costs. Property, plant and equipment (k) All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial year in which they are incurred. Depreciation on assets is calculated using the reducing balance method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: Plant and equipment - office Furniture and equipment - office Plant and equipment - field Motor vehicles 40.0% 20.0% 20.0% 22.5% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 1(g)). Gains and losses on disposals are determined by comparing proceeds received with the carrying amount. These are included in the statement of profit or loss and other comprehensive income. (l) Intangibles Acquired minerals rights Acquired minerals rights comprise exploration and evaluation assets including ore reserves and minerals resources which are acquired as part of: - - business combinations recognised at fair value at the date of acquisition; and asset acquisitions recognised at cost. Acquired minerals rights are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: - - such costs are expected to be recouped through successful development and exploitation or from sale of the area: or exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing. Acquired minerals rights in respect of areas of interest which are abandoned are written off in full against profit or loss in the year in which the decision to abandon the area is made. For acquired minerals rights in an area of interest that are developed, costs are classified as mine property and development from commencement of development and amortised when commercial production commences on a unit of production basis over the estimated economic reserves of the mine. (m) (i) (ii) Investments and other financial assets Classification The company classifies its financial assets as available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at the end of each reporting date. Available-for-sale financial assets Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term. Alicanto Minerals Limited | 34 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 Summary of Significant Accounting Policies (continued) Investments and other financial assets (continued) 1. (m) (iii) Measurement Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income. (iv) Impairment The company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. If there is objective evidence of impairment of available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period. Trade and other payables (n) These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Provisions (o) 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. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet 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. (p) (i) Employee benefits Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented in payables. (ii) Other long-term employee benefit obligations The liability for long service leave and annual which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as present value of expected future wage payments to be made. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting regardless of when the actual settlement is expected to occur. (iii) Share-based payments The company provides benefits to employees (including directors) of the company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined using a 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 volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of shares of Alicanto Minerals Limited (‘market conditions’). Alicanto Minerals Limited | 35 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 Summary of Significant Accounting Policies (continued) Contributed equity 1. (q) Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. (r) (i) (ii) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with the dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and services tax (‘GST’) (s) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of 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 taxation authority is included with other receivables or 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 taxation authority, are presented as operating cash flow. (t) (i) (ii) Foreign currency translation Functional and presentation currency Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is Alicanto Minerals Limited’s functional and presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges, qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available for sale financial assets are included in the fair value reserve in equity. (iii) Group companies The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:  Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet  Income and expenses for the statement of profit or loss and other comprehensive income are translated at average exchange rates, and  All resulting exchange differences are recognised in other comprehensive income. Alicanto Minerals Limited | 36 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 (u) New accounting standards and interpretations A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily applicable to the group have not been applied in preparing these consolidated financial statements. Those which may be relevant to the group are set out below. The group does not plan to adopt these standards early. (i) AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing 1 January 2018) The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. Key changes made to this standard that may affect the Group on initial application include certain simplifications to the classification of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. The directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s financial instruments. (ii) AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019). AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee effectively treating all leases as finance leases. Short term leases (less than 12 months) and leases of a low value are exempt from the lease accounting requirements. Lessor accounting remains similar to current practice. The directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s recognition of leases and disclosures. (iii) AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations [AASB 1 & AASB 11] AASB 2014-3 amends AASB 11 Joint Arrangements to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business. The amendments require: the acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in AASB 3 Business Combinations, to apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting Standards except for those principles that conflict with the guidance in AASB 11 the acquirer to disclose the information required by AASB 3 and other Australian Accounting Standards for business   combinations This Standard also makes an editorial correction to AASB 11. The directors anticipate that the adoption of these amendments will not have a material impact on the financial statements. (iv) Other standards not yet applicable There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions Critical accounting estimates and judgements 2. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The company makes estimates and assumptions concerning the future. The resulting accounting estimates and judgements may differ from the related actual results and may have a significant effect on the carrying amount of assets and liabilities within the next financial year and on the amounts recognised in the financial statements. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (a) (b) Capitalisation of acquisition costs on exploration projects Acquisition costs incurred in acquiring exploration assets are carried forward where right of tenure of the area of interest is current. These costs are carried forward in respect of an area that has not at balance sheet date reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Share based payment transactions The group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model, using the assumptions detailed in note 23. Alicanto Minerals Limited | 37 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 3. Revenue (a) Revenue from continuing operations Equipment rental Interest received Total revenue from continuing operations (b) Other income Management fees from farm-in partners Exclusivity fee Foreign exchange gain Total other income 4. Expenses (a) Employee benefits expense Salaries and wages expense Defined contribution superannuation expense Total employee benefits expense (b) Depreciation expense Plant and equipment – office Plant and equipment – field Plant and equipment – motor vehicle Total depreciation expense (c) Finance costs Interest and finance charges paid or payable Total finance costs 5. Auditor’s Remuneration Remuneration of the auditor of the group Auditing or reviewing the financial statements Other assurance services Non-assurance services Total auditor remuneration 2016 $ 20,600 5,317 25,917 30,335 105,918 31,617 167,870 158,635 14,831 173,466 2,835 3,853 7,098 13,786 2,463 2,463 2016 $ 19,571 - - 19,571 Consolidated 2015 $ - 21,819 21,819 - - - 128,220 8,182 136,402 3,207 - - 3,207 3,238 3,238 2015 $ 23,558 - - 23,558 Consolidated Alicanto Minerals Limited | 38 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 6. (a) Income Tax Expense Income tax expense Current tax Deferred tax Total income tax expense Deferred income tax expense included in income tax expense comprises: - (Increase) in deferred tax assets (note 6(c)) - Increase in deferred tax liabilities (note 6(d)) Consolidated 2016 $ 2015 $ - - - - - - - - - - - - (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit from continuing operations before income tax expense Tax (tax benefit) at the tax rate of 30% (1,479,742) (443,922) (2,357,202) (707,161) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: - Share based payments - Other non-deductible amounts - Unrecognised tax losses 117,209 124,737 201,976 162,169 85,377 459,615 Income tax benefit (c) Deferred tax assets Tax lossesA Employee benefits Other accruals Set-off deferred tax liabilities (note 6(d)) Net deferred tax assets (d) Deferred tax liabilities Exploration expenditure Other Set-off deferred tax assets (note 6(c)) Net deferred tax liabilities - - - - - - - - - - - - - - - - - - - - - - - - (e) Tax losses Unused tax losses for which no deferred tax asset has been recognized Potential tax benefit at 30% (f) Unrecognised temporary differences Unrecognised deferred tax asset relating to capital raising costs 4,952,593 1,485,778 4,270,208 1,281,062 66,935 98,929 A: The deferred tax asset attributable to tax losses does not exceed taxable amounts arising from the reversal of existing assessable temporary differences. Alicanto Minerals Limited | 39 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 7. (a) (b) (c) 8. (a) Cash & Cash Equivalents Total cash and cash equivalents Cash at bank and in hand Deposits at call Total cash and cash equivalents Consolidated 2016 $ 1,216,247 - 1,216,247 2015 $ 310,126 500,000 810,126 Note that cash includes $318,330 in funds received from farm-in partners and held on trust for current and future exploration programs. Cash at bank and on hand Cash on hand is non-interest bearing. Cash at bank bears interest rates between 0.00% and 0.95% (2015: 0.00% and 1.50%). Cash at bank and on hand Deposits at call as at June 2015 were bearing interest at 2.25%. There were no deposits at call as at June 2016. Trade & Other Receivables Current Other receivables Prepayments Total current trade and other receivables 32,255 13,779 46,034 31,032 86,957 117,989 (b) Past due and impaired receivables As at 30 June 2016, there were no other receivables that were past due or impaired (2015: nil). 9. Property, Plant and Equipment Year ended 30 June 2015 Opening net book amount Additions Disposals/write-offs Depreciation charge Effect of exchange rates Closing net book amount At 30 June 2015 Cost or fair value Accumulated depreciation Net book amount Year ended 30 June 2016 Opening net book amount Additions Disposals/write-offs Depreciation charge Effect of exchange rates Closing net book amount At 30 June 2016 Cost or fair value Accumulated depreciation Net book amount Consolidated Plant & Equipment Office $ Plant & Equipment Field $ Motor Vehicles Total $ $ 5,557 4,100 - (3,207) - 6,450 11,986 (5,536) 6,450 6,450 3,750 - (2,835) - 7,365 15,736 (8,371) 7,365 3,961 13,351 - (3,775) 598 14,135 18,240 (4,105) 14,135 14,135 30,847 - (3,853) (1,883) 39,246 45,309 (6,063) 39,246 - 39,961 - (6,562) (572) 32,827 39,961 (7,134) 32,827 32,827 69,444 - (7,098) 9,696 104,869 110,010 (5,141) 104,869 9,518 57,412 - (13,544) 26 53,412 70,187 (16,775) 53,412 53,412 104,041 - (13,786) 7,813 151,480 171,055 (19,575) 151,480 Alicanto Minerals Limited | 40 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 10. (a) Exploration & Evaluation Expenditure Non-current Opening balance Exploration and evaluation costs Contributions received from farm-in partners Exploration expensed Total non-current exploration and evaluation expenditure (b) Recoverability of capitalised costs Exploration expenditure is expensed as incurred. Consolidated 2016 $ 611,288 2,111,929 (1,347,370) (764,559) 611,288 2015 $ 611,288 1,452,274 - (1,452,274) 611,288 Acquired minerals rights are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: - Such costs are expected to be recouped through successful development and exploitation or from sale of the area: or - Exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing. Acquired minerals rights in respect of areas of interest which are abandoned are written off in full against profit or loss in the year in which the decision to abandon the area is made. 11. Trade & Other Payables Current Trade payables Contributions received from farm-in partners held on trust Total current trade & other payables No trade or other payables are considered past due. 12. Provisions Current Employee entitlements Total current provisions Consolidated 2016 $ 349,858 145,935 495,793 2015 $ 56,509 - 56,509 33,104 33,104 17,612 17,612 Alicanto Minerals Limited | 41 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 13. (a) Contributed Equity Issued capital Ordinary shares (fully paid) Total contributed equity (b) Ordinary Shares Consolidated Consolidated 2016 Shares 2015 Shares 2016 $ $ 2015 $ $ 72,036,251 72,036,251 57,629,001 57,629,001 7,577,323 7,577,323 6,537,079 6,537,079 Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a poll is called, otherwise each shareholder has one vote on a show of hands. Options Information relating to options including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 14. (c) Date Shares Issue Price Contributed Equity 13. (d) Movements in issued capital Opening Balance 1 July 2014 Share issue Share issue Share issue Share issue Less: Transaction costs Closing Balance at 30 June 2015 - Opening Balance 1 July 2015 Share issue Share issue Less: Transaction costs Closing Balance at 30 June 2016 05 Aug 14 29 Aug 14 10 Sep 14 24 Jun 15 - 14 Mar 16 14 Mar 16 34,900,001 3,970,000 4,218,000 6,030,000 8,511,000 57,629,001 57,629,001 416,650 13,990,600 72,036,251 $0.150 $0.150 $0.150 $0.042 $0.040 $0.075 Total $ 4,142,549 595,500 632,700 904,500 357,462 (95,632) 6,537,079 6,537,079 16,666 1,049,295 (25,717) 7,577,323 Expiry date Exercise price Balance at start of year Granted during the year Exercised during the year Cancelled/ lapsed during the year Balance at end of the year 14. (a) Share Options 2016 unlisted share option details 31 Jul 15 31 Jul 15 31 May 16 21 Nov 17 07 Sept 18 25 Mar 19 30 Apr 21 $0.200 $0.300 $0.200 $0.320 $0.230 $0.065 $0.001 Weighted average exercise price 2015 unlisted share option details 31 Jul 15 31 Jul 15 31 May 16 21 Nov 17 07 Sept 18 25 Mar 19 $0.200 $0.300 $0.200 $0.320 $0.230 $0.065 Weighted average exercise price 5,850,000 500,000 3,550,000 1,250,000 8,300,000 2,000,000 - 21,450,000 $0.208 5,850,000 500,000 3,550,000 1,250,000 - - 11,150,000 $0.218 - - - - - - 6,970,000 6,970,000 $0.001 - - - - 8,300,000 2,000,000 10,300,000 $0.198 - - - - - - - - - - - - - - - - - 5,850,000 500,000 3,550,000 - - - - 9,900,000 $0.205 - - - - - - - - - - - 1,250,000 8,300,000 2,000,000 6,970,000 18,520,000 $0.132 5,850,000 500,000 3,550,000 1,250,000 8,300,000 2,000,000 21,450,000 $0.208 Alicanto Minerals Limited | 42 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 15. Reserves (a) Unlisted option reserve Opening balance Unlisted options issued as remuneration during the year Closing balance 2016 $ 1,091,777 390,696 1,482,473 Consolidated 2015 $ 551,215 540,562 1,091,777 The unlisted option reserve records items recognised on valuation of director, employee and contractor share options. Information relating to options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 14. (b) Functional currency translation reserve Opening balance Exchange differences arising on translation of foreign operations Closing balance 19,175 26,260 45,435 17,828 1,347 19,175 Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The reserve is recognised in the statement of profit or loss when the net investment is disposed of. (c) Total reserves Unlisted option reserve Exchange differences arising on translation of foreign operations Closing balance 1,482,473 45,435 1,527,908 1,091,777 19,175 1,110,952 Financial Instruments, Risk Management Objectives and Policies 16. The Consolidated Entity’s principal financial instruments comprise cash and cash equivalents. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the group. The Consolidated Entity also has other financial instruments such as trade and other receivables and trade and other payables which arise directly from its operations. For the year under review, it has been the Consolidated Entity’s policy not to trade in financial instruments. The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below: (a) Interest Rate Risk The Groups exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate for each class of financial assets and financial liabilities comprises: Consolidated 2016 Financial assets Cash and cash equivalents Trade & other receivables (current) Financial Liabilities Trade and other payables (current) Weighted Average Interest Rate % Floating Interest Rate $ Fixed Interest $ Non- interest Bearing $ 2016 Total $ 0.57 0.00 0.00 660,569 - 660,569 - - - - - - - 555,678 32,255 587,933 1,216,247 32,255 1,248,502 495,793 495,793 495,793 495,793 Alicanto Minerals Limited | 43 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 16. Financial Instruments, Risk Management Objectives and Policies (continued) Consolidated 2015 Financial assets Cash and cash equivalents Trade & other receivables (current) Financial Liabilities Trade and other payables (current) 1.78 0.00 0.00 Weighted Average Interest Rate % Floating Interest Rate $ Fixed Interest $ 500,000 - 500,000 Non- interest Bearing $ 99,196 31,032 130,228 2015 Total $ 810,126 31,032 841,158 210,930 - 210,930 - - - - 56,509 56,509 56,509 56,509 The maturity date for all cash, trade & other receivable and trade and payable financial instruments included in the above tables is one year or less from balance date. The maturity for the non-current trade and other receivables is between 1 and 3 years from balance date. Sensitivity analysis The Consolidated Entity’s main interest rate risk arises from cash and cash equivalents with variable and fixed interest rates. At 30 June 2016 the group’s exposure to interest rate risk is not considered material. (b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. The group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The group does not have any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the company’s maximum exposure to credit risk. (c) Liquidity risk The group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Due to the dynamic nature of the underlying businesses, the group aims at ensuring flexibility in its liquidity profile by maintaining the ability to undertake capital raisings. Funds in excess of short term operational cash requirements are generally only invested in short term bank bills. 17. Earnings per Share (a) Earnings/(Loss) Earnings/(loss) used in the calculation of basic EPS (b) Weighted average number of ordinary shares (‘WANOS’) WANOS used in the calculation of basic earnings per share: 18. Cash Flow Information Consolidated 2016 $ 2015 $ (1,479,742) (2,357,202) 61,871,136 46,986,454 Reconciliation of cash flows from operating activities with loss from ordinary activities after tax: Profit/(loss) from ordinary activities after income tax Depreciation Share based payments Net exchange differences Changes in assets and liabilities: - Decrease/(Increase) in operating receivables & prepayments - Increase/(Decrease) in operating trade and other payables Net cash (outflows) from Operating Activities (1,479,742) 13,786 407,362 15,306 71,955 386,869 (584,464) (2,357,202) 13,544 540,562 (6,180) (86,886) 13,514 (1,882,648) Alicanto Minerals Limited | 44 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 19. Commitments Exploration/tenure commitments Not longer than one year Longer than one year, but not longer than five years Longer than five years Total exploration commitments 2016 $ 712,270 3,722,618 - 4,434,888 Consolidated 2015 $ 653,595 2,614,380 - 3,267,975 In order to maintain rights of tenure to exploration/mining tenements subject to these agreements, the group would have the above discretionary exploration and tenure expenditure requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable per the above maturities. If the group decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the balance sheet may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations. 20. (a) Segment Information Description of segments Management has determined the operating segments based on the reports reviewed by the chief operating decision maker that are used to make strategic decisions. For the purposes of segment reporting the chief operating decision maker has been determined as the board of directors. The board monitors the entity primarily from a geographical perspective, and has identified two operating segments, being exploration for mineral reserves and the corporate/head office function in Australia. (b) Segment information provided to the board of directors The segment information provided to the board of directors for the reportable segments for the year ended 30 June 2016 is as follows: Exploration Australia $ Corporate $ 2016 Total segment revenue Equipment rental Interest revenue Depreciation and amortisation expense Guyana $ 20,600 20,600 - (10,951) Total segment (loss) before income tax (735,782) Total segment assets Total segment liabilities 2015 Total segment revenue Interest revenue Depreciation and amortisation expense 884,583 434,138 - - - Total segment (loss) before income tax (1,452,274) Total segment assets Total segment liabilities 712,537 19,239 Total $ 25,917 20,600 5,317 (13,786) 5,317 - 5,317 (2,835) (743,960) (1,479,742) 1,140,466 2,025,049 94,759 528,897 21,189 21,819 (3,207) 21,189 21,819 (3,207) (904,928) (2,357,202) 880,278 1,592,815 54,882 74,121 - - - - - - - - - - - - - (c) Measurement of segment information All information presented in part (b) above is measured in a manner consistent with that in the financial statements. Alicanto Minerals Limited | 45 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 20. (d) Segment Information (continued) Segment revenue No inter-segment sales occurred during the current financial year. The entity is domiciled in Australia. A detailed breakdown of other revenue is as follows; Equipment rental - Guyana Interest received - Australia Total revenue from continuing operations (Note 3a) 2016 $ 20,600 5,317 25,917 Consolidated 2015 $ - 21,819 21,819 (e) 21. Reconciliation of segment information Total segment revenue, total segment profit/(loss) before income tax, total segment assets and total segment liabilities as presented in part (b) above, equal total entity revenue, total entity profit/(loss) before income tax, total entity assets and total entity liabilities respectively, as reported within the financial statements. Events Occurring After the Balance Sheet Date On the 14 June 2016 the company announced a proposed placement to raise gross proceeds of $1.5 million through a share placement to clients and affiliates of the Sprott Group of companies. The placement was subject to shareholder approval. Under the placement Alicanto will issue 11.6 million shares at $0.13 raising with one free attaching option for every two shares subscribed for. The options are to have a $0.23 strike price and a three year term. On 27 July 2016 Alicanto announced shareholder approval for the Placement and completion of the Placement with the issue of shares and options on 28 July 2016. On 27 July 2016 the company announced that it has entered into a binding agreement to acquire the Ianna Gold Project in Northwest Guyana. The agreement is subject to a 105 day due diligence period. Upon completion of satisfactory due diligence, Alicanto will then maintain an exclusive option to acquire and operational access to the project for a 36 month period, which will be maintained with the following option payments; i) US$25,000 on the completion of due diligence; ii) US$50,000 within 4 months after completion of due diligence, and iii) US$200,000 within 15 months after completion of due diligence. During the option period Alicanto must keep tenements in good standing and ensure a minimum aggregate expenditure of US$600,000 on exploration and various land holding costs over a 24 month period. Alicanto can elect to acquire the property at any time subsequent to the US$50,000 option payment without further expenditure or option payment liabilities by paying either; i) a lump sum payment of US$3,000,000; or ii) a lump sum payment of US$1,350,000 and a 2% net smelter royalty (NSR). If an NSR is issued as consideration, the Company will retain a Right of Re-purchase of the NSR for 24 months after Completion, and at Alicanto’s election can acquire either: i) a 50% portion of the NSR by paying US$2,000,000; or ii) a 100% portion of the NSR by paying US$3,000,000. Following the expiry of the Right of Re-purchase period, the Company will retain a right of first offer for a further 36 month period to acquire all or a specified part of the NSR. There are no further material events subsequent to balance date. Alicanto Minerals Limited | 46 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 22. Related Party Transactions (a) Parent entity The ultimate parent entity within the group is Alicanto Minerals Limited. (b) Subsidiaries Interests in subsidiaries are set out in note 26. (c) Key management personnel compensation Short-term employee benefits Post-employment benefits Share-based payments Total key management personnel compensation (d) Transactions with Director Related Parties The following transactions occurred with related parties: Recharges from director related entities: Recharge of costs by Gryphon Minerals Limited Recharge of costs by Venture Minerals Limited 2016 $ 481,711 19,134 272,159 773,004 2016 $ 23,401 8,103 Consolidated 2015 $ 415,775 11,668 253,942 681,385 Consolidated 2015 $ 16,035 - Purchases from director related entities Purchases for legal services from Murcia Pestell Hilliard Lawyers 72,808 28,087 Outstanding balances arising from recharges/purchases with Director Related Parties: Current payables 2,147 4,251 (e) 23. (a) (b) Terms and conditions of related party transactions Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. Share Based Payments Fair value of listed options granted The fair value of listed options granted is calculated as the market value prevailing at the date on which the options are authorised for issue. No listed options were issued during the year. Fair value of unlisted options granted The weighted average fair value of the options granted during the year was $0.096 (2015: $0.05). The price was calculated by using the Black-Scholes European Option Pricing Model applying the following inputs: $0.001 Weighted average exercise price: 5 Years Weighted average life of the option: $0.097 Weighted average underlying share price: Expected share price volatility: 85.0% Risk free interest rate between: 1.82% Discount factor for lack of marketability 0% (2015: $0.20) (2015: 4 Years) (2015: $0.13) (2015: 85.0%) (2015: 1.87% to 2.98%) (2015: 20.0%) Peer volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future tender, which may not eventuate. The life of the options is based on historical exercise patterns, which may not eventuate in the future. Total share-based payment transactions recognised during the year were as set out in (d) below. Details of other options movements and balances are set out in note 14. Alicanto Minerals Limited | 47 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 23. Share Based Payments (continued) (c) Fair value of unlisted shares issued During the year, 416,650 fully paid ordinary shares were issued to employees in lieu of salary. Total fair value of the shares issued was $16,666 (2015: $Nil). (d) Reconciliation of share based payments Options issued to directors, employees and consultants Shares issued in lieu of salary Consolidated 2016 $ 390,696 16,666 407,362 2015 $ 540,562 - 540,562 24. Contingent Liabilities Alicanto has entered into a number of agreements on the exploration tenure at the Arakaka Project and there are contingent liabilities that exist as follows; i) Purchase of alluvial rights should the company wish to progress to development which is to a maximum of US$2.2 million in cash. ii) Net smelter royalties of up to 2.5%. There are no further contingent liabilities outstanding at the end of the year. 25. Interest in Farm-in/Farm-out Arrangements Alicanto announced on 1 March 2016 that is had entered into an Earn-in Agreement with Barrick Gold Corporation (“Barrick”) whereby the Company granted Barrick the exclusive right to acquire a 65% interest in the Arakaka Gold Project. Barrick may earn up to a 65% interest in the Arakaka Project by meeting US$10 million in funding requirements, including; i) US$8 million in exploration expenditures over four years; and ii) US$2 million paid to Alicanto upon completion of the exploration earn-in expenditures. Barrick may only withdraw from the Earn-in Agreement after contributing a minimum of US$1.8 million by the end of the first contract year, being 31 December 2016. For each subsequent year during the Earn-in period, Barrick has the option to continue funding exploration activities to retain its Earn-in Right, subject to minimum cumulative expenditure thresholds for each year and a total cumulative expenditure of US$8.0 million by 31 December 2019. If Barrick terminates the agreement and ceases to make contributions at any time during the earn-in period Barrick will forfeit all rights and interest to the Arakaka Gold Project. Alicanto will remain the operator during the first two years of the Earn-in and it will receive in any contract year the lesser of US$100,000 and 5% of the approved annual exploration expenditure towards overheads while utilising the Company’s highly experienced technical team to manage exploration. Barrick will have the right to become or appoint the operator at any time after one of the following occurs; i) ii) iii) 31 December 2017, provided Barrick has made minimum cumulative expenditure contributions of US$3.2 million as of such date; the date on which Barrick's exploration contributions first exceed US$4.0 million; or a change in control. If Barrick funds US$8.0 million in aggregate expenditures prior to 31 December 2019, Barrick can elect to make a payment to Alicanto of US$2.0 million to exercise its Earn-in Right and acquire a 65% interest in the Arakaka Gold Project. With the payment of the US$2.0 million to Alicanto, completing a total US$10.0 million contribution, Alicanto and Barrick will form an incorporated Joint Venture (Arakaka JV). Barrick is permitted to accelerate the balance of the US$8.0 million of expenditure funding at any time during the Earn-in period. Once formed, the parties will each be required to contribute to further exploration and feasibility costs on a proportional basis for Alicanto to retain its 35% interest in the project. Should Alicanto not contribute its attributable costs of the JV prior to a decision to mine, the Company would dilute to no less than a 15% interest in the Arakaka JV. Alicanto would then be free carried and retain its 15% interest in the Arakaka JV to a decision to mine. Upon a notice of decision to mine by the Arakaka JV, Alicanto can elect to either contribute, or convert its interest in the project to a 2% net smelter royalty. Alicanto Minerals Limited | 48 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2016 26. Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b): Name of entity Equity HoldingA Country of incorporation Class of shares Alicanto Minerals WA Pty Ltd StrataGold Guyana Inc. Calrissian (Guyana) Resources Inc. Manticore Resources (Guyana) Inc. Australia Guyana Guyana Guyana Ordinary Ordinary Ordinary Ordinary A: The proportion of ownership interest is equal to the proportion of voting power held. 26. Parent Entity Information (a) Assets Current assets Non-current assets Total assets (b) Liabilities Current liabilities Non-current liabilities Total liabilities (c) Equity Contributed equity Reserves Accumulated losses Total equity (d) Total comprehensive income/(loss) for the year (Loss) for the year Other comprehensive income for the year Total comprehensive (loss) for the year (e) Capital commitments Not longer than one year Longer than one year, but not longer than five years Longer than five years Total capital commitments The parent entity has not guaranteed any loans for any entity during the year. 2016 % 100 100 100 80 2015 % 100 100 - - Company 2016 $ 1,133,101 580,219 1,713,320 413,114 - 413,114 7,557,323 1,482,473 (7,739,590) 1,300,206 (1,508,984) - (1,508,984) - - - - 2015 $ 873,828 579,304 1,453,132 54,882 - 54,882 6,537,079 1,091,777 (6,230,606) 1,398,250 (4,458,851) - (4,458,851) - - - - Alicanto Minerals Limited | 49 Director’s Declaration In the Directors’ opinion: (a) the financial statements and notes set out on pages 27 to 49 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the financial position as at 30 June 2016 and of its performance for the financial year ended on that date; and the audited remuneration disclosures set out on pages 17 to 24 of the Directors’ report comply with section 300A of the Corporations Act 2001; and there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. (b) (c) (d) The Directors have been given the declarations required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors. Travis Schwertfeger Managing Director Perth, Western Australia, 28 September 2016 Alicanto Minerals Limited | 50 Additional Shareholder Information Corporate Governance Statement In accordance with ASX Listing Rule 4.10.3 the company’s Corporate Governance Statement can be found on the company’s website, refer to http://www.alicantominerals.com.au/index.php/corporate-profile/corporate-governance. Shareholding The distribution of members and their holdings of equity securities in the holding company as at 23 September 2016 were as follows: Number Held as at 23 September 2016 1- 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and above Holders of less than a marketable parcel: 11. Substantial Shareholders The names of the substantial shareholders listed on the company’s register as at 23 September 2016: Shareholder Harmanis Holdings Pty Ltd Javelin Minerals Inc Exploration Capital Partners 2014 LP Hamish Halliday Bank of Nova Scotia Symorgh Investments Pty Ltd Voting Rights - Ordinary Shares Class of Equity Securities Fully Paid Ordinary Shares 10 48 108 306 89 561 Number 6,000,333 5,925,737 5,769,751 5,665,000 5,290,000 4,188,333 In accordance with the holding company's Constitution, on a show of hands every member present in person or by proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Options Unlisted options Unlisted options Unlisted options Unlisted options Unlisted options Unlisted options Exercise price Expiry date Number of options Number of holders $0.320 $0.230 $0.065 $0.230 $0.130 $0.001 21 November 2017 7 September 2018 25 March 2019 28 July 2019 31 July 2019 30 April 2021 1,250,000 8,300,000 2,000,000 5,800,000 348,000 6,970,000 2 10 2 43 1 10 Alicanto Minerals Limited | 53 Additional Shareholder Information (continued) Twenty Largest Shareholders The names of the twenty largest ordinary fully paid shareholders as at 23 September 2016 are as follows: Shareholder Merrill Lynch Australia Nominees Pty Ltd HSBC Custody Nominees Pty Ltd Harmanis Holdings Pty Ltd Javelin Minerals Inc Mctavish Industries Pty Ltd Symorgh Investments Pty Ltd Simon Bolster Mctavish Industries Pty Ltd Symorgh Investments Pty Ltd Clare Saunders Ballarine Gold Pty Ltd Celestino Menchaca Swancave Pty Ltd Evan Hillard Far East Capital Pty Ltd Hendrick Hartmann Marcus Harden Citicorp Nominees Pty Ltd JP Morgan Nominees Australia Pty Ltd Moonboolie Pty Ltd Number % Held of Issued Ordinary Capital 11,146,695 9,865,063 6,000,333 5,925,737 3,850,000 2,585,000 2,360,501 1,720,000 1,603,333 1,400,000 1,019,092 1,000,000 1,000,000 1,000,000 880,000 863,840 766,650 695,787 606,800 500,000 54,788,831 13.33% 11.80% 7.17% 7.09% 4.60% 3.09% 2.82% 2.06% 1.92% 1.67% 1.22% 1.20% 1.20% 1.20% 1.05% 1.03% 0.92% 0.83% 0.73% 0.60% 65.53% Alicanto Minerals Limited | 54 Tenement Listing As at 23 September 2016 Project Location Tenement Interest Tassawini Project Arakaka Project Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana PL 01/2005, GS14: S-15 PL 34/2005, GS14: S-16 V-04/MP/000, MP 47/98 V-5/MP/000, MP 23/01 V-5/MP/001, MP 24/01 V-5/MP/002, MP 25/01 Y-33/000/04, PPMS/680/04 Y-33/001/04, PPMS/681/04 Y-31/000/04, PPMS/463/04 Y-31/001/04, PPMS/464/04 J-81/000/02, PPMS/884/02 J-81/001/02, PPMS/885/02 J-81/002/02, PPMS/886/02 J-59/000/2000, PPMS/1057/2002 J-59/001/2000, PPMS/1058/2002 J-59/002/2000, PPMS 1059/2002 J-59/003/2000, PPMS/1060/2002 J-59/004/2000, PPMS/1061/2002 J-59/005/2000, PPMS/1062/2002 J-59/006/2000, PMS/1063/2002 J-59/007/2000, PPMS/1064/2002 J-59/008/2000, PPMS/1065/2002 J-59/009/2000, PPMS/1066/2002 J-59/010/2000, PPMS/1067/2002 J-59/011/2000, PPMS/1068/2002 J-59/012/2000, PPMS/1069/2002 J-59/013/2000, PPMS/1070/2002 J-59/014/2000, PPMS/1071/2002 51/002/94, Ituni #1 51/003/94, Ituni #2 51/324/74, May Jars, Jars#1, Jars#2 P-109/000/2000, PPMS/809/2001 P-109/001/2000, PPMS/810/2001 P-109/002/2000, PPMS/811/2001 P-109/003/2000, PPMS/812/2001 P-109/004/2000, PPMS/813/2001 P-109/005/2000, PPMS/814/2001 P-128/000/02, PPMS/707/02 P-128/001/02, PPMS/708/02 P-128/002/02, PPMS/709/02 P-128/003/02, PPMS/710/02 P-128/004/02, PPMS/711/02 P-17/000, PPMS/0222/1994 P-17/001, PPMS/0223/1994 P-8/000/94, PPMS/0074/1994 P-8/001, PPMS/73/1994 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Alicanto Minerals Limited | 55 Tenement Listing (continued) Arakaka Project (continued) Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana Guyana P-8/002, PPMS/75/1994 51/2005/235, Dennis #1 51/2005/236, Dennis #2 51/2005/237, Dennis #3 51/2005/238, Dennis #4 51/1983/034, Wintime 51/1983/035, Intime 51/1984/028, Ester aka Esta S-267/000/07, PPMS/629/07 S-269/000/07, PPMS/631/07 P-9/000, PPMS/76/94 P-9/001, PPMS/77/94 P-9/002, PPMS/78/94 Y-1/MP/000/06, MP 91/2007 K-132/000/09, PPMS/1310/09 K-132/001/09, PPMS/1311/09 PL 10/2014, GS14: S-62 PL 11/2014, GS14: S-63 P-175/MP/000/2015 P-175/MP/001/2015 P-175/MP/002/2015 P-184/MP/000/2015 PL-09/2011, GS14: B-22 PL-10/2011, GS14: B-23 P-633/000, PPMS/1190/2015 P-633/001, PPMS/1191/2015 P-633/002, PPMS/1192/2015 P-633/003, PPMS/1193/2015 P-633/004, PPMS/1194/2015 P-633/005, PPMS/1195/2015 P-642/000, PPMS/123/2016 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 80% 80% 80% 80% 100% 100% 100% 100% 100% 100% 100% Exploration License Prospecting License Prospecting License Medium Scale Notes E: PL: PPMS: MP: Mining Permit Alicanto Minerals Limited | 56 

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