Alicanto Minerals
Annual Report 2017

Plain-text annual report

ABN 90 141 196 545 al ABN 81 149 126 858 Annual Report 2017 2 A L I C A N T OM I N E R A L S L I M I T E D 2017 Annual Report 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 34 35 59 60 64 66 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 Jamie Byrde Principal & Registered Office Suite 3, Level 3, 24 Outram Street WEST PERTH WA 6005 Telephone: (08) 6279 9425 Facsimile: (08) 6500 9989 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 Limited (‘Alicanto’) I am pleased to present to shareholders the Company’s Annual Report for the year ending 30 June 2017. This has been an exciting year of growth and achievement for our Company with the acquisition of the Ianna gold project in combination with significant advancement of the Arakaka gold project. Following those two key developments, among several milestones achieved by the Alicanto team in the past year, the Company has never been better poised for opportunity to substantially add value through discovery. The Arakaka Gold project continues to be progressed on both the Main Trend and Xenopsaris target areas with a high standard of technical work by Alicanto’s team and with strong technical support from Barrick Gold Corp. (“Barrick”). Barrick has incrementally accelerated exploration expenditure on the Arakaka project under the US$10m Earn-In Agreement announced 1 March 2016 as our exploration team continues to de-risk the exploration process and demonstrate significant bulk tonnage potential. Reconnaissance work reported over the past year has advanced Arakaka from a grassroots project to a more advanced targeted drill testing stage. The recently acquired Ianna gold project is an advanced stage exploration target with several drilled zones of open-ended mineralisation requiring follow-up. Alicanto’s management sees potential to substantially increase the tonnage potential of this mineralisation. Additionally, the Company has recently expanded the Ianna project area by acquiring adjoining ground, providing further potential for growth through new discoveries on previously undrilled targets. I thank our shareholders for their continued support throughout the year, and their support in the recent Rights Issue completed subsequent to the reporting period. I also welcome our more recent shareholders to the register. The team at Alicanto Minerals Limited 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 continue to be 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 Limited submit herewith the financial statements of the Company for the year ended 30 June 2017 in order to comply with the provisions of the Corporations Act 2001. 1. Directors The following persons were Directors of Alicanto Minerals Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Didier Murcia Mr Travis Schwertfeger Mr Hamish Halliday Non-Executive Chairman Managing Director Non-Executive Director 2. Principal Activities 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. 3. Operating Results The loss attributable to owners of the entity after providing for income tax amounted to $1,194,529 (2016: $1,479,742). 4. Dividends Paid or Recommended 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. 5. Financial Position The entity has $1,836,953 in cash and cash equivalents as at 30 June 2017 (2016: $1,216,247). 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. 6. Business Strategies & Prospects for the Forthcoming Year Alicanto Minerals Limited 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 Limited 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. 7. Significant Changes in the State of Affairs The following significant changes in the state of affairs of the entity occurred during the financial period: ▪ On 8 November 2016, the Company announced the entering into of a definitive agreement to acquire the Ianna Project in Guyana’s Northwest Mining District. o 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). The key terms of the agreement are: US$25,000 within 5 days after confirmation date; US$50,000 within 4 months after confirmation date and US$200,000 15 months after the completion date. Alicanto must keep the project tenements in good standing during the 36 month option period ending 7 November 2019. (refer to ASX announcement dated 8 November 2016). 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. Post Balance Date Events ▪ On 23 June 2017, the Company announced a Pro-rata Renounceable Rights Issue of which the key terms of the rights issue are as follows: o A pro-rata renounceable rights issue for one (1) new share for every four (4) shares held at an issue price of $0.14; and o One (1) free attaching listed option for every (2) new shares subscribed for exercisable at $0.28 on or before 28 July 2019; o Rights issue is partially underwritten by CPS Capital Group Pty Ltd for up to $1.0 million; o On 26 July 2017, the Company issued 18,214,062 new shares under the Rights Issue raising gross proceeds of $2,549,969; and o 9,107,031 free attaching new listed options were issued with an exercise price of $0.28 on or before 28 July 2019. ▪ On 18 August 2017, the company finalised the Rights Issue Shortfall and an additional placement to Sprott Group taking the total placement to $3.75m as follows: o Under the rights issue shortfall, 3,100,000 ordinary shares were allotted at $0.14 and 1,550,000 free attaching listed options exercisable at $0.28 on or before 28 July 2019 raising gross proceeds of $434,000; o The additional placement was finalised issuing 5,400,000 ordinary shares were allotted at $0.14 and 1,700,000 free attaching listed options exercisable at $0.28 on or before 28 July 2019 raising gross proceeds of $756,000. ▪ On 1 September 2017, the company announced finalising completion of several option agreements granting the Company the exclusive right to explore and acquire a 100% beneficial interest (“Agreements”) in mining permits totalling approximately 60km2 that are contiguous with the Company’s Ianna gold project. The additional tenure increases the Ianna Project to a 115km2 project area. 9. Review of Operations Alicanto Minerals Limited (‘Alicanto’ or ‘the Company’) (ASX: AQI) is an emerging mineral exploration company focused on the exploration and development of two gold projects 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). The Ianna Gold Project covers an area of 115km2 in the highly prospective Barama-Mazaruni Greenstone Belt in Guyana’s Northwest District and is located approximately 20km from Alicanto’s Arakaka Project. The permits are 100% held subject to various underlying option agreements held through a direct Guyanese subsidiary of the Company. Ianna is at an advanced exploration stage, with a number of mineralised discoveries in drilling requiring follow-up exploration activity to assess and define gold resource potential. 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 9. Review of Operations (continued) Figure 1 | Location of Arakaka and Ianna gold projects located in the Northwest Mining District of Guyana on modified geology from the Guyana Geology and Mines Commission’s Geological Map of Guyana, 1987. Corporate Financial Performance and Position The net operating loss after tax for the year ended 30 June 2017 was $1,194,529 (2016: $1,479,742). The loss for the period includes $265,900 (2016: $764,559) in exploration and evaluation expenditure and share based payment expenses of $468,966 (2016: $390,696) were also recognised during the financial year. As at 30 June 2017 the Company had cash of $1,836,953. Earn–in Agreement with Barrick Gold Corporation Alicanto and Barrick have entered into an Earn-in Agreement 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 US$8 million in exploration expenditures over four years, and US$2 million paid to Alicanto upon completion of the exploration earn-in expenditures. Having completed the minimum expenditure requirement of US$1.8m in the first contract year, Barrick may withdraw from the Earn- in Agreement with 60 days’ notice to Alicanto. Significant terms of the Earn-in Agreement are provided in the ASX announcement dated 1 March 2016. 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 9. Review of Operations (continued) As announced on 7 December 2016 Barrick elected to continue funding the Arakaka Gold Project into the second contract year, ending 31 December 2017 (“Contract Year”), Exploration activity with Alicanto as the operator continue and the Company’s proposals for US$3.0m exploration expenditure on the Arakaka Gold Project during the Contract Year (refer to ASX announcement dated 4 August 2017). The approved exploration budget includes over 7,000m of diamond core drilling in the Contract Year designed to both follow up on 2016 results as well as advancing early stage exploration at the extensive Arakaka Main Trend and Xenopsaris Target Areas within the larger Arakaka 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. Having completed US$4m in exploration expenditure, subsequent to the reporting period, Barrick currently retains the right to become operator of the Arakaka project at Barrick’s election. Following 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. Share Placements On 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 (1) free attaching option for every two (2) shares subscribed for. The options issued have a $0.23 strike price and a three year term expiring 28 July 2019. On 23 June 2017, the company announced a one (1) for four (4) Pro-rata Renounceable Rights Issue at an issue price of $0.14 and one (1) new listed option for each two (2) new shares subscribed for ($0.28, expiring 28 July 2019) to raise up to $3m. On 26 July 2017, the Company finalised the rights issue, raising total funds under the issue to $2,544,000. On the same day, the announcement of Shortfall and a Placement for $1,190,000 to Sprott Global Resources was made for the issue of 8,500,000 ordinary shares at $0.14 and 4,250,000 listed options ($0.28, expiring 28 July 2019). The raising under shortfall and placement was finalised on 18 August 2017. The total shares issued under the Rights Issue and Placement were 26,714,062 ordinary shares and 13,357,031 listed options. Overview of the Arakaka Gold Project The Arakaka Gold Project comprising over 300km2 of permits that are 100% held either directly by Alicanto’s wholly owned Guyanese subsidiary, or subject to various underlying option agreements. Barrick Gold Corporation (“Barrick”) has the option to earn a 65% 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” above). Alicanto’s Arakaka gold project 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. 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 9. Review of Operations (continued) 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 targets for reconnaissance work, but with sparse drilling completed previously to assess resource potential. Overview of the Ianna Gold Project Located in the highly prospective Barama-Mazaruni Greenstone Belt in Guyana’s Northwest Mining District (refer to Figure 1), the Ianna Project is a 115km2 land position situated less than 20km southeast from Alicanto’s ongoing exploration operations at the Arakaka Gold Project. Since acquisition of the project in November 2016, exploration activity by Alicanto has focused on surface mapping and sampling campaigns to verify and expand previously identified and drill tested gold mineralisation from historical work. From these programmes, six targets have been prioritised for drill testing by Alicanto planned for the December 2017 quarter. Highlights of the Ianna Gold Project include: ▪ Three extensive mineralised corridors delivering drill ready targets at six prospects covering over 8km of strike extent. ▪ Historical drilling has already delivered multiple ore grade intersections within 50m of surface; • • • • • 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. Reported exploration activity and planned drilling is focused on three corridors of mineralisation, including the Gomes-Ianna trend, the King’s Ransom trend, and the Eastern extension target areas (refer to Figure 2). The Gomes-Ianna and King’s Ransom trends are both host to mineralisation identified in existing drilling associated with extensive surface geochemical survey work, including over 12,400m of Reverse Circulation and 926m of diamond in historical drilling. The historical drilling covers limited strike extent to shallow depth, with ~95% of drilling testing less than 50m below surface and a significant proportion of holes ending in mineralisation (refer to ASX announcement dated 26 July 2016). The Project has 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. 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 9. Review of Operations (continued) Figure 2 | Regional Geology of the Barama-Mazaruni greenstone belt hosting the Arakaka Gold Project and the Ianna Gold Project areas, with major structural corridors and locations of key target areas within each Project. Operation Report | Arakaka Gold Project Arakaka Main Trend – Reconnaissance drilling A campaign of reconnaissance drilling was completed during the 2016-17 financial year covering over 30km of strike extent along three major mineralised structures within the 12km long and up to 1.7km wide Arakaka Main trend gold anomaly. A total of 42 holes totalling 4,705m of diamond drilling were completed on the Arakaka Main trend during the reporting period. The Reconnaissance drilling program is focused on understanding the tectono-stratigraphic framework of the Arakaka Main trend and to better constrain mineralising structures within the extensive surface soil geochemistry and geophysical anomalism identified within the Arakaka Main trend. Arakaka Main Trend reconnaissance drilling includes the first drill tests in the 6km gap in drilling between historical gold intercepts at Purple Heart (drilling up to 13.5m @ 7.36g/t Au, refer to ASX announcement dated 26 August 2016) and the 14-Mile target area drilling up to 4m @ 21.1g/t Au, refer to ASX announcement dated 17 September 2014). Extensions to Main Trend reconnaissance drilling at 14-Mile in 2017 total 17 diamond holes creating four new section lines adding geological definition to an additional 4.5km of the Arakaka Main Trend, and a width of 1.6km in an area of variable landform and regolith including extensive alluvial cover where surface sampling techniques have been assessed to have been ineffective. 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 9. Review of Operations (continued) Drilling was successful in confirming continuity of known identifying additional structural mineralised structures and corridors controlling mineralisation. Pervasive alteration and mineralisation structural architecture for the focusing of mineralising fluids and has identified three separate mineralised trends termed: a highly prospective indicates • Purple Heart Structure; • Central Structure; • Valley Structure. trend: The drilling has also identified numerous macro-scale folds within the metasediments which have historically been observed to focus gold mineralisation in the Purple Heart area of the Arakaka The reconnaissance program has also substantially increased the mapped extent of favourable diorite lithology within the Pepperpot and 14 mile target areas, substantially increasing volume potential for mineralisation on the Arakaka Main Trend. Figure 3 | 14 Mile Reconnaissance drilling site – ARDD227 Diamond core contained multiple occurrences of free gold (refer to Figure 5) in several drill holes targeting two of the major structures. Favourable sulphide mineralisation and pervasive hydrothermal alteration indicative of an extensive hydrothermal gold mineralising system are encountered on every line of drilling, with increasing intensity of mineralisation and alteration observed in drilling vectoring follow-up work into four priority prospect areas for targeted drilling (refer to Figure 4) in progress subsequent to the reporting period: • Concorde: Targeting the >2,5km Purple Heart structure as it merges with the Central Structure. Significant drill intercepts to date include 9.72m @ 1.44g/t, 5.1m @ 3.97g/t and 3m @2.69g/t gold. Significant intercepts in drilling are supported by extensive rock chipping, >500ppb Au in soil anomalism and mapping; • Revenge: Targeting the prospective Gold Hill Feldspar Porphyry unit folded into the mineralised Central Structure. Much of the area is buried beneath alluvial cover but small scale saprolite pits occur in areas of exposed upper saprolite. Rock chipping to date 5.7g/t Au and Auger results up to 6.52g/t Au. • Bonaventure: Targeting the extensions of significant drill intersections within the prospective Gold Hill Feldspar Porphyry unit. Drilling stepping out 850m to the West of existing drilling and 250m to the East within the >3.2km prospective corridor from intersected mineralisation at the Gold Hill pit including 4m @ 21.1g/t gold. The drilling is supported by extensive >500ppb soil anomalism, saprolite mining and mapping which define the current boundaries of the anomaly; • Cavalleria: Targeting stacked flexures on multiple mineralised structural horizons. The target lies beneath alluvial cover but drilling along strike shows increasing alteration and mineralisation vectors towards 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 9. Review of Operations (continued) Figure 4 | Overview of Arakaka Trend Geology and Drilling with 2017 Reconnaissance drill locations and 2016 better drilling intercepts (highlighted in pink background) and geology as mapped by Alicanto geologists. 2017 Barrick Earn-In Drilling 2016 Barrick Earn-in Drilling Figure 5 | Example of visible gold in diamond drill hole ARDD-015 (located within 1.2m @ 1.15g/t Au assay interval from 73m drill depth – adjacent to 1m @ 6.74g/t Au assay interval with no free gold observed sampled from 72m drill depth). 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 9. Review of Operations (continued) Xenops - Reconnaissance Drilling The Xenopsaris (or”Xenops”) target area is the southern extension of the >15km long Gomes Trend anomalism (refer to Figures 2 and 8), which is host to the Gomes Hill Prospect where significant drilled mineralisation requiring additional extension drilling includes better historical intercepts of 19.19m @ 3.4g/t gold from 65m, incl. 6m @ 6.25g/t gold in hole MD008, 17m @ 2.11g/t gold from 46m, incl. 4.25m @ 6.12g/t gold in hole MD002 and 11.0m @ 3.43g/t gold from 62m in TAK9717 (refer to ASX announcement dated 9 February 2015). The drilling program of 9 reconnaissance diamond holes totalling 1,218m is follow-up work on limited trenching activity reported 7 March 2017 totalling 1,105 linear meters of sampling confirming significant gold mineralisation correlating with favourable soil and auger sample anomalism. Trenching work confirmed the presence of interpreted diorites and identified a new diorite intrusion also associated with mineralisation. Reconnaissance drilling tests less than 1km strike extent of the open ended >7km extension to the southeast of Gomes Hill where mineralisation has been identified in soil and confirmed in auger drill sampling (refer to ASX announcement dated 11 March 2015). The drilling confirms mineralisation in the sub-surface, confirms structural interpretations for the area, and confirms continuation of favourable lithology. The drilling amounts to two section lines spaced >650m apart. The drilling was designed to establish a geological framework for the significant surface anomalism. Significant results from the drilling include (refer to ASX announcement dated 4 August 2017): • XDD002: 5.78m @ 0.78g/t Au from 68m and 1m @ 4.23g/t Au from 78m; • XDD005: 1.4m @ 9.14g/t Au from 23m; • XDD006: 1m @ 4.25g/t Au from 30m and 2.25m @ 3.73g/t Au from 124m; • XDD009: 3m @ 2.19g/t Au from 40m. The drilling identified a regional scale alteration system around mineralisation with a wide zone of proximal sericite-ankerite-pyrite alteration proximal to mineralised intercepts. Mineralisation is related to quartz-pyrite-gold veins observed across all lithological units. The extent and geometry of the favourable intrusions interpreted to be a primary control on mineralisation are being assessed with ongoing exploration activity, and the mineralisation remains open in all directions with potential to increase in volume and tenor with improved definition and refined targeting of structural and lithologic controls at Xenopsaris. Figure 6: Example of alteration profile observed approaching mineralisation in XDD006 (NQ Core). 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 9. Review of Operations (continued) (cid:1)(cid:3)(cid:3)(cid:4)(cid:3)(cid:3)(cid:5)(cid:3)(cid:3)(cid:6)(cid:3)(cid:3)(cid:1)(cid:3)(cid:3)(cid:7)(cid:3)(cid:3)(cid:8)(cid:3)(cid:3)(cid:9) (cid:10) (cid:3)(cid:5)(cid:3)(cid:7)(cid:3)(cid:11)(cid:3)(cid:12)(cid:3)(cid:1)(cid:3)(cid:4)(cid:3)(cid:13)(cid:3)(cid:3)(cid:4)(cid:3)(cid:5)(cid:3)(cid:10) (cid:3)(cid:5)(cid:3)(cid:8)(cid:3)(cid:11)(cid:3)(cid:14) A favourable structural setting for the formation of significant mineralisation was established with the confirmation of a regional scale antiformal fold hinge against the high-strain Temberlin structure. This structural setting is similar to those observed at regionally significant gold deposits including the 13.7Moz Gros Rosebel deposit (Iamgold) and 6Moz Meriam deposit (Newmont) in Suriname. With the level of understanding provided by the reconnaissance drilling at Xenops further trenching is proposed of the >15km Gomes-Xenopsaris anomalous trend for 2017 to help define specific drill targets. Figure 7: Example of gold mineralisation observed in XDD006 (NQ Core), photo taken at x10 magnification of core at 126.0m from 2.25m @ 3.73g/t Au from 124m reported interval. Xenops - Trenching Recent exploration activity focuses on several well defined zones of +500ppb Au surface anomalism within the >7km long mineralised corridor southeast of Gomes Hill prospect defined by extensive +100ppb Au anomalism within soils. Previous exploration activity includes multiple +1g/t Au results with peak soil values of 6.0g/t Au, 2.84g/t Au, and 1.65g/t Au (refer to ASX announcement dated 11 March 2015). Auger drilling was utilised to better refine the location of potentially economic mineralisation within broad zones of soil anomalism. Better results from auger drilling included 10g/t and 3.7g/t Au proximal to reported trenching (refer to ASX announcement dated 11 March 2015). These previous soil and auger programs has followed up with 1,105m’s of trenching, with location and summaries of trench results provided in Figure 8 below (refer to ASX announcement dated 7 March 2017):  Xenopsaris Peak Rock Chips: 162g/t, 33.7g/t, 28.1g/t & 27.5g/t gold;   22m @ 2.02g/t gold within a broader 37m @ 1.45g/t gold in XETR007; 6m @ 8.33g/t gold and 3m @ 2.04g/t gold in XETR010. The compilation of trenching assay results with detailed mapping and existing datasets has defined three new prospects for potential drilling at the Xenopsaris target area. The lithologic and structural complexity of the Xenopsaris target is also host to multiple diorite intrusions which are associated with gold at several prospects through the district. This favourable geological setting is complemented by the extensive surface anomalism and is culminating into a highly prospective area for drilling targeting requiring additional exploration.  Beaker Prospect: High grade rock chips up to 162.23g/t gold within a continuous zone of mineralisation including 22m @ 2.02g/t gold within 37m @ 1.45g/t gold in XETR007;  Gonzo Prospect: High grade rock chips up to 5.44g/t gold within a zone of 6m @ 8.33g/t gold in XETR010;  Fozzie Prospect: High grade rock chips up to 33.68g/t gold in XETR002 and 17m @ 0.69g/t gold in XETR005. Alicanto Minerals Limited | 13 Directors’ Report 9. Review of Operations (continued) Figure 8 | Xenopsaris Area with trench locations and summary of exploration activity over previously reported gold surface anomalies and Alicanto interpreted geology. June 2017 quarter drill collars and trench locations in Magenta Xenops - Soil Geochemistry During the reporting period, a series of soil sampling campaigns dovetailed in with Main Trend drilling programs have yielded extensions to gold anomalism at the Xenopsaris target area, including a new northeast trending mineralised structure intersecting the Gomes/Ianna corridor at the northern extent of the Xenopsaris extension identified as the Scooter Prospect (refer to Figure 9). The Scooter prospect is sub-parallel to the Arakaka trend where surface geochemical sampling delivered a large, open-ended anomaly extending >1.6km peaking at 3.05g/t gold in soils within the Arakaka Gold Project. At Scooter, a large diorite body has been mapped in numerous small saprolite workings. Identified gold anomalism and artisanal workings are focused on the favourable rheological contrast between the identified Diorite body and the surrounding metasediments. The anomalism remains open in all directions. 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 Directors’ Report 9. Review of Operations (continued) Figure 9 | Plan map of the Scooter and Gomes Hill Prospects and Xenopsaris Area targets showing existing drill collars, better significant reported drill results, updated soil anomaly outlines, and Alicanto interpreted geology. (*refer to ASX announcement dated 9 February 2015, **refer to ASX announcement dated 27 May 2015) Continued mapping and compilation of recent soil sampling in the northeast of the Xenopsaris trend has highlighted two further >100ppb Au in soil, with the new Statler gold anomaly extending >1.5km in length with a maximum soil sample result of 1.56g/t Au within the Gomes-Ianna Corridor. Adjacent to the Statler anomaly, in mirrored stratigraphy, the Waldorf gold anomaly tracks the western side of a north-northwest trending ridgeline that is well suited for future trenching activities. Further trenching and reconnaissance phase drilling is needed to better define the geometry of favourable diorite intrusions in the area to identify discrete targets for drilling to assess the gold resource potential for the area. 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 Directors’ Report 9. Review of Operations (continued) Eyelash - Trenching Four trenches totalling approximately 624 linear metres were completed in the Eyelash area during January. Two trenches successfully intersected mineralisation at the Kid Prospect and the Pancho Prospect areas (refer to ASX announcement dated 7 March 2017), with better results from initial 3m sampling returning: • • 24m @ 1.16g/t gold within a broader 54m @ 0.59g/t gold that extends to the end of the trench and better rock chips returning 26.5g/t, 22.5g/t and 22.15g/t gold – EYTR002; 12m @ 0.67g/t gold and rock chips up to 14.2g/t gold – EYTR001. Vein orientation studies based on selective rock chip sampling completed during trench mapping and channel sampling activities are ongoing, and resampling of anomalous zones on 1m intervals is planned for the coming month. Figure 10 | Eyelash Target area summary map with trench locations and summary of better previous results by prospect area in context of surface gold anomalism and Alicanto regional geology interpretation. 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 Directors’ Report 9. Review of Operations (continued) Operation Report | Ianna Gold Project Alicanto’s exploration program at Ianna during the reporting period was focused on defining discrete, drill-ready targets on multiple trends of mineralisation through the project area in a lead-up to a targeted drill campaign on the Ianna Project planned for the December 2017 quarter. The surface exploration program operated from April to early August with soil, channel sampling and auger sampling programs in conjunction with detailed geological mapping and interpretation of multi-element geochemistry datasets collected from pXRF analysis to better define geologic interpretations advanced drilling planning for the coming year. Recent mapping and multi-element geochemistry interpretation has refined the geometry and extent of the Ianna Intrusion. This update to the local geology significantly expands the potential volume of the Ianna intrusion, a favourable lithology for mineralisation in the Project. Assay results announced subsequent to the reporting period have also extended the soil grid coverage over previously unexplored areas of the property expanding the prospective footprint of the Ianna hydrothermal gold system. Follow up auger sampling confirming mineralisation in the saprolite further refined drill targeting (refer to ASX announcements dated 5 July and 13 September 2017). Figure 11 | Overview of Ianna project Exploration Targets over simplified regional geology as mapped by Alicanto geologists showing locations of recent soil sampling (in context of historical soil contours) and historical RC drilling. 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 9. Review of Operations (continued) The surface mapping and sampling program phase of this year’s program was completed in early August, and additional results of sampling are now completed over the Kings Ransom and Eastern Extension trends, highlighting several additional targets for initial drill testing include the following six areas: • Eastern Extension: New Target, Undrilled: o Newly identified mineralised corridor of regional significance; o A 250m wide Granodiorite intrusive hosts observed mineralisation in the locality. Mineralisation is associated with sheeted to stockwork quartz-pyrite veining which has been observed throughout the intrusive. The intrusive is undrilled; o >700m long and >300m wide zone of artisanal (“Porknokker”) workings focused on the highly strained margins of the intrusive body; o Channel samples to 6m @ 6.91g/t gold, 30m @ 0.27g/t gold from 0m to EOC, 16m @ 0.3g/t gold from 0m; o Mineralisation is unconstrained along strike with the strike potential concealed by low-lying, swampy areas. • Kings Ransom Extension: New Target: o >90m wide zone of >100ppb gold in Auger; o Peak trench results of 21m @ 9.93g/t gold and 20m @ 6.75g/t gold; o Peak auger result: 1.14g/t gold located >1.2km along strike from 12m @ 3.99g/t gold in historical RC drilling. • B-Zone: previous announced, Undrilled: o Pressure shadow target between the Ianna granodiorite and the volcaniclastic country rock. An undrilled target with > 1.4km of +0.5g/t gold in soils; o Peak rock chip of 251g/t gold; o Peak soil results of 5.74g/t gold and 5.57g/t gold in soils; New results include: o 18m at 0.54g/t gold in representative channel sampling across the mineralised trend. • C - Zone: previously announced, Undrilled: o >1km long zone of >0.5g/t gold-in-soil anomalism host to significant auger anomalism; o Peak Soil 37g/t gold; New results include: o Peak Auger: 1.55g/t gold within >100m wide zone of >100ppb gold in Auger; o 22m @ 1.66g/t gold from channel samples and 26m @ 0.44g/t gold. • D – Zone: previously announced, follow-up and extension testing of drilled intercepts: o >800m along strike from the Bushmaster area which intersected up to 50m @ 2.47g/t gold from 10m to EOH, 48m @ 1.19g/t gold from 0m, 14m @ 4.27g/t gold from 24m and 12m @ 3.84g/t gold from 20m in RC drilling. New results include: o Channel sampling to 4m @ 1.08g/t gold and 2m @ 2.5g/t gold • A-Zone: previously announced, drilled mineralisation requiring follow-up: o Sheared contact of the Ianna intrusion with extensive porknocker mining and sparse drilling to date, including better intercepts of 16m @1.17g/t gold and 6m @3.08g/t gold from 28m drill depth. Including Money Pit, the largest artisanal saprolite pit in the area. o o Peak Soil: 66.9g/t gold; o Peak Rock Chips: 242g/t Au, 70g/t Au. 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 Directors’ Report 9. Review of Operations (continued) A-Zone target area Alicanto geologists have mapped out the North-Eastern contact of the Ianna Granodiorite intrusive body which is coincident with the largest artisanal mining pits in the Ianna area including the Money, Fern Leaf and Sweetheart pits (refer to Figures 11 and 12). Mineralisation is observed in the pits as tension vein arrays of quartz-gold (+/- fuchsite) veins both within the Granodiorite intrusive and within high strain talc schist units. The competency contrasts between the rigid granodiorite and ductile talc-schists make for a favourable setting for bulk tonnage gold deposits. High strain zones within the Granodiorite are frequently exploited by syn-late mafic dykes, making them easy to map using portable XRF lithogeochemistry discrimination. These internal shear zones represent gold bearing fluid pathways cutting through the granodiorite that are known to host mineralisation in West African analogues and could significantly increasing the volume potential for mineralisation. Recent mapping and rock chipping of the A-Zone target area anomaly has better defined the position of the highly strained contact between the granodiorite and surrounding intermediate metavolcanics which represents the regional scale Gomes-Ianna shear zone. Sampling within the artisanal pits has returned rock chip results of up to 251g/t Au from zones of 1-3cm stacked quartz veining with pyrite boxworks to the selvedge within highly altered granodiorite. The A-Zone (eastern margin) target area anomaly has only been subjected to limited historical RC drilling with much of it deemed ineffective. Significant results historically returned from the A-Zone target area anomaly include: • HR003: 10m @ 1.16g/t Au from 48m; • HR006: 19m @ 0.93g/t Au from 1m; • HR012: 16m @ 1.17g/t Au from 6m; • HR015: 6m @ 1.24g/t Au from 42; • SR094: 8m @ 1.82g/t Au from 48m. Figure 12 | Overview of Ianna project geology over simplified Alicanto regional geology. 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 9. Review of Operations (continued) C-Zone Gold Anomaly Recent soil sampling to the east of the A-Zone target area anomaly has identified a >2.2km long and up to 900m wide +100ppb Au in soil anomaly on 400m spaced soil lines with a peak value of 37g/t Au in soil. The soil anomalism is open along strike to the southeast is entirely undrilled (refer to Figure 13). The C-Zone gold in soil anomalism is coincident with multiple, mapped talc schist shear zones identified coincident with higher tenor (>0.5g/t Au) soil anomalism within the metasediment country rock of the Ianna area. The identification of significant widths of gold anomalism away from the Ianna Granodiorite has significant implications for the overall prospectivity of the Ianna area by greatly increasing the footprint for potential mineralisation. The area will require follow-up with auger in-fill on soil sampling and reconnaissance diamond drilling. Figure 13 | Geological map showing the geology and location of the A-Zone target area and C-Zone gold anomalies with highlighted rock chip and soil anomalism. 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 9. Review of Operations (continued) About Guyana The Co-operative Republic of Guyana is located on the northern coast of South America and is a member of the Caribbean Community (CariCom). The English speaking country has a long history of mining and gold production which has been open to foreign investment from only recent times following the enactment of the 2004 Land Tenure Act. Guyana’s history and social acceptance of mining make Guyana a favourable mining jurisdiction, with relatively low risk for environmental and community issues versus comparable jurisdictions and a modern mining law overseen by a dedicated geology and mines commission. The positive jurisdiction combined with its highly prospective and under-explored mineral potential makes it an excellent destination for exploration and mining, with three gold mines financed by foreign investment announcing commercial production in 2016, and a history of substantial gold, bauxite and diamond mining operations. 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 (refer to Figure 14). Figure 14 | Location Map - Arakaka Gold Project 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. Alicanto has increased its footprint within the in the highly prospective Barama-Mazaruni Greenstone Belt in Guyana’s Northwest District with the acquisition of the Ianna Gold Project located less than 25km from Alicanto’s flagship Arakaka Project in late 2016 (refer to Figure 1). 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 elsewhere, in gold, copper and other commodities to grow shareholder value. 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 9. Review of Operations (continued) Mineral Resource Estimation As at 30 June 2017, 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. 10. Likely Developments and Expected Results of Operations 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. 11. Environmental Regulation 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. 12. Information on Directors and Company Secretary Didier Murcia AM Qualifications Non-Executive Chairman- appointed 30 May 2012 LLB, BJuris Experience 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 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 28 cent Listed Options expiring 28 July 2019 23 cent Options expiring 7 September 2018 0.1 cent Options expiring 30 April 2021 522,500 1,250 750,000 750,000 Centaurus Metals Limited (since 16 April 2009) Strandline Resources Limited (since 23 October 2014) Gryphon Minerals Limited (28 July 2006 to 13 October 2016) Cradle Resources Limited (13 August 2013 to 8 May 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 Directors’ Report 12. Information on Directors and Company Secretary (continued) Travis Schwertfeger Managing Director- appointed 15 September 2014 Qualifications BSc Geological Engineering, MSc Ore Deposit Geology and Evaluation, MAIG Experience Mr Schwertfeger has over 20 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 28 cent Listed Options expiring 28 July 2019 23 cent Options expiring 7 September 2018 0.1 cent Options expiring 30 April 2021 300,000 50,000 1,500,000 2,000,000 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 Limited and Adamus Resources Limited (‘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 28 cent Listed Options expiring 28 July 2019 23 cent Options expiring 7 September 2018 6.5 cent Options expiring 25 March 2019 0.1 cent Options expiring 30 April 2021 5,825,000 75,000 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) Blackstone Minerals Limited (since 30 August 2016) Renaissance Minerals Limited (25 February 2016 to 27 September 2016) Company Secretary Jamie Byrde BCom CA Appointed - 16 March 2017 Mr Byrde is a Chartered Accountant with over 13 years’ experience in corporate, audit and company secretarial matters. Previously Mr Byrde has held positions providing corporate advisory services, financial accounting/reporting and ASX/ASIC compliance management. Mr Byrde is also currently Company Secretary for Blackstone Minerals Limited and Venture Minerals Limited. 13. Audited Remuneration Report The Directors are pleased to present your Company’s 2017 remuneration report which sets out remunerations information for Alicanto Minerals Limited’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 Limited’s performance; F. Non-Executive Director remuneration policy; G. Voting and comments made at the Company’s 2016 Annual General Meeting; H. Details of remuneration; I. Details of share based compensation and bonuses; J. K. Equity instruments held by key management personnel; Loans to key management personnel; L. Other transaction with key management personnel. Service agreements; 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) M. Loans to key management personnel; N. Other transaction with key management personnel. A. Directors and key management personnel disclosed in this report This report details the nature and amount of remuneration for all key management personnel of Alicanto Minerals Limited 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 Non-Executive Chairman Non-Executive Director Executive Directors Mr T Schwertfeger Managing Director Other Key Management Personnel Mr M Harden Mr J Byrde Mr B Dunnachie Chief Geologist Company Secretary (appointed 16 March 2017) Company Secretary (resigned 15 March 2017) Changes since the end of the reporting period None B. Remuneration Governance 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 the Company’s website http://www.alicantominerals.com.au/index.php/corporate-profile/corporate-governance. Statement which inspection available for on is C. Use of remuneration consultants The Company has not engaged or contracted remuneration consultants during the financial year. D. Executive remuneration policy and framework Remuneration Policy The remuneration policy of Alicanto Minerals Limited 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 Limited 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. 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 13. Audited Remuneration Report (continued) D. Executive remuneration policy and framework (continued) 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. 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 | 25 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) E. Relationship between remuneration and Alicanto Minerals Limited’s performance 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. F. Non-Executive Director remuneration policy 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 was 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 2016 Annual General Meeting The company received 99.85% of “Yes” votes on its remuneration report for the 2016 financial year (2015: 100%). The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. Alicanto Minerals Limited | 26 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 Limited for the year ending 30 June 2017 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 $ 49,275 78,563 219,178 210,000 50,700 18,563 Incentives $ - - - - - Other Amounts $ Super- annuation $ Options3 $ $ 1,778 1,778 - 3,562 32,038 42,717 83,091 126,620 1,778 20,822 85,434 327,212 1,778 1,333 445 - - - 172,897 17,087 - 384,675 69,120 19,008 2017 Non-Executive Directors Mr D Murcia Mr H Halliday Executive Directors Mr T Schwertfeger Other Key Management Personnel Mr M Harden Mr B Dunnachie1 Mr J Byrde Total Remuneration 1: Mr Dunnachie resigned on 15 March 2017. 2: Mr Byrde appointed on 16 March 2017 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 in the June 2016 1,009,726 626,279 350,173 24,384 8,890 - and 2017 financial year 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 Short-Term Employee Benefits Post Employment Securities Total Cash Salary & Fees $ 32,850 21,875 23,417 156,119 200,000 40,500 Incentives $ - - - - - - Other Amounts $ Super- annuation $ Options3 $ $ 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 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. No retirement benefits or equity securities were issued to any Director or other key management personnel of the entity during the financial year. 272,159 474,761 19,134 6,950 - 773,004 Alicanto Minerals Limited | 27 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 Limited to increase goal congruence between executives, directors and shareholders. Options issued – 30 June 2017 Options issued in the current financial year, incentive options have been issued to key management personnel. The options vest upon achievement of performance based milestones as follows: i) 100% of the options shall vest on 28 February 2018 subject to remaining an employee of the company. Options issued – 30 June 2016 Options issued in the prior 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: ii) Tranche 1 - 50% of the options vested on 28 February 2017 subject to remaining an officer, employee or consultant to the Company at the time of vesting; iii) 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. 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 2017 Non-Executive Directors Mr D Murcia Mr H Halliday Executive Director Mr T Schwertfeger Other Key Management Personnel - - - Mr M Harden Mr B Dunnachie3 Mr J Byrde 30 June 2016 Non-Executive Directors Mr D Murcia Mr H Halliday1 Mr M Bowles2 Executive Director Mr T Schwertfeger 900,000 - - 750,000 1,000,000 - 32,038 42,717 85,434 172,897 17,087 - 40,043 53,390 - 2,000,000 125,308 Other Key Management Personnel Mr M Harden Mr B Dunnachie3 600,000 400,000 32,034 21,356 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 B Dunnachie resigned on 15 March 2017. 4. Mr J Byrde appointed on 16 March 2017 39% 34% 26% 45% 25% - 54% 69% - 42% 14% 34% - - - - (400,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Alicanto Minerals Limited | 28 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) Issue Date Expiry Date % Vested in Year Exercise Price Number of Options 30 June 2017 Non-Executive Directors Mr D Murcia Mr H Halliday 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 M Harden Mr B Dunnachie 30 June 2016 Non-Executive Directors Mr D Murcia Mr H Halliday Executive Director Mr T Schwertfeger Mr T Schwertfeger 25 May 16 4 Oct 16 25 May 16 25 May 16 25 May 16 27 Nov 14 25 May 16 Other Key Management Personnel Mr M Harden Mr B Dunnachie 25 May 16 25 May 16 30 Apr 21 30 Apr 21 30 Apr 21 30 Apr 21 30 Apr 21 07 Sept 18 30 Apr 21 30 Apr 21 30 Apr 21 100% 100% 100% 100% 53% 100% 0% 0% 0% 0% 0% 0% $0.001 $0.001 750,000 1,000,000 $0.001 2,000,000 $0.001 $0.001 $0.001 $0.001 $0.001 $0.23 $0.001 $0.001 $0.001 600,000 900,000 600,000 750,000 1,000,000 1,500,000 2,000,000 600,000 400,000 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 2017 4 Oct 16 30 June 2016 25 May 16 30 Apr 21 $0.001 $0.309 $0.31 30 Apr 21 $0.001 $0.096 $0.097 85% 85% 1.70% 1.82% 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 Limited 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. From 1 August 2017, this fee increased to $60,000 exclusive of superannuation. Eligible to participate in the Company’s Employee Incentive Scheme. No termination benefit under any circumstances. Alicanto Minerals Limited | 29 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) J. Services Agreements (continued) Mr T Schwertfeger, Managing Director Term of Agreement – 12 months. Base fee of $240,000* inclusive of superannuation. From 1 August 2017, this fee increases to $270,000 exclusive of superannuation. In addition to his base salary and non-cash benefits, Mr Schwertfeger is entitled to be paid a cash bonus equal to 9 months of his salary, should a recommended takeover be made to the Company, as a result of which the Bidder is successful in acquiring at least 51% of the Company. 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 from commencement of employment through to March 2016. Mr H Halliday, Non-executive Director Term of Agreement – unspecified. Base fee of $75,000 exclusive of superannuation (From 1 August 2017 the base fee increased to $100,000 for a consulting element) 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 $210,000 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 J Byrde, Company Secretary – Appointed 16 March 2017. Term of Agreement – Agreement is held with related entity and charged on an even proportion across three related entities. Base fee of $54,750. 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. K. Equity instruments held by key management personnel 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, no shares were issued to employees. There were no further shares granted during the reporting period as compensation. Alicanto Minerals Limited | 30 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) Balance at the start of the year Received on exercise of options Other changes Balance at the end of the year 2017 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwertfeger Mr H Halliday Other key management personnel Mr M Harden Mr B Dunnachie3 2016 Directors of Alicanto Minerals Limited 520,000 200,000 5,665,000 766,650 140,000 Mr D Murcia Mr T Schwertfeger Mr H Halliday1 Mr M Bowles2 Other key management personnel Mr M Harden Mr B Dunnachie3 520,000 - - 2,375,001 350,000 140,000 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 B Dunnachie resigned 15 March 2017. - - - - - - - - - - - - - - - (140,000) - 200,000 5,665,000 (2,375,001) 416,650 - 520,000 200,000 5,665,000 766,650 - 520,000 200,000 5,665,000 - 766,650 140,000 Balance at start of the year Granted as remuneration Exercised Other changes Balance at end of the year Vested and exercisable 2017 Directors of Alicanto Minerals Limited Mr D Murcia Mr T Schwertfeger Mr H Halliday1 1,500,000 3,500,000 3,500,000 Other key management personnel - - - Mr M Harden Mr B Dunnachie3 Mr J Byrde 1,350,000 650,000 100,000 900,000 - - 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 Dunnachie3 1,750,000 450,000 600,000 400,000 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 B Dunnachie resigned 15 March 2017. L. Loans to key management personnel - - - - - - - - - - - - - - - - (650,000) - (500,000) - - (3,500,000) 1,500,000 3,500,000 3,500,000 2,250,000 - 100,000 1,500,000 3,500,000 3,500,000 - 1,500,000 3,500,000 3,500,000 1,350,000 - 100,000 750,000 1,500,000 2,500,000 - (1,000,000) (200,000) 1,350,000 650,000 750,000 250,000 There were no loans made to directors of Alicanto Minerals Limited and other key management personnel of the group, including their close family members or entities related to them. Alicanto Minerals Limited | 31 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) M. Other transactions with key management personnel Mr D Murcia was formally 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 Hillard a company which provides legal services on normal commercial terms and conditions. Mr H Halliday is a Non-Executive Director of Venture Minerals Limited and Blackstone Minerals 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 Recharge of costs by Blackstone Minerals Limited Purchases from Director related entities Purchases for legal services from Murcia Pestell Hilliard Lawyers 2017 $ 15,520 39,008 16,004 Consolidated 2016 $ 23,401 8,103 - 38,198 72,808 Outstanding balances arising from recharges/purchases with Director Related Parties: Current payables 3,856 2,147 End of Remuneration Report. 14. Shares under Option Unissued ordinary shares of Alicanto Minerals Limited under option at the date of this report are as follows: 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 24 July 17 18 Aug 17 21 Nov 17 07 Sept 18 07 Sept 18 25 Mar 19 30 Apr 21 31 Jul 19 28 Jul 19 28 Jul 19 28 Jul 19 $0.320 $0.230 $0.230 $0.065 $0.001 $0.130 $0.230 $0.280 $0.280 1,250,000 6,800,000 1,250,000 2,000,000 6,250,000 348,000 5,960,000 9,107,031 4,250,000 No option holder has any right under the options to participate in any other share issue of the Company or any other entity. 15. Proceedings on behalf of the Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of these proceedings. The Company was not a party to any such proceedings during the year. Alicanto Minerals Limited | 32 A L I C A N T OM I N E R A L S L I M I T E D Directors’ Report 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 17. Insurance of Officers Directors Meetings Number Eligible to Attend 7 7 7 Meetings Attended 7 7 7 Subsequent to the financial year end, Alicanto Minerals Limited has paid a premium of $8,890 (2016: $6,950) 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. 18. Auditors Independent Declaration & Non-Audit Services The lead auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found on page 34 of the Directors’ report. No fees were paid or payable to the auditors for non-audit services performed during the year ended 30 June 2017. Signed in accordance with a resolution of the Board of Directors. Travis Schwertfeger Managing Director Perth Western Australia, 28 September 2017 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 | 33 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 36 37 38 39 40 59 60 These financial statements are the consolidated financial statements of the consolidated entity consisting of Alicanto Minerals Limited and its subsidiaries. The financial statements are presented in the Australian currency. Alicanto Minerals Limited is a Company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Alicanto Minerals Limited Suite 3, Level 3, 24 Outram Street WEST PERTH WA 6005 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 22 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 2017. 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 | 35 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2017 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: Note 3(a) 3(b) 4(a) 23 4(b) 4(c) 10 6(a) Consolidated 2017 $ 156,584 157,946 (195,433) (82,814) (353,604) (468,966) (10,468) (58,743) (30,605) (36,175) (6,351) (265,900) 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) (1,194,529) (1,479,742) - - (1,194,529) (1,479,742) 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 15(b) 30,050 26,260 - Total comprehensive (loss) attributable to owners (1,164,479) (1,453,482) Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share) 17 17 (1.3) N/A (2.4) 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 | 36 Consolidated Statement of Financial Position As at 30 June 2017 Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Trade and Other Receivables 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(a) 8(b) 9 10 11 12 13(a) 15(c) Consolidated 2017 $ 2016 $ 1,836,953 84,836 1,216,247 46,034 1,921,789 1,262,281 20,000 239,550 611,288 870,838 - 151,480 611,288 762,768 2,792,627 2,025,049 503,289 60,005 563,294 563,294 495,793 33,104 528,897 528,897 2,229,333 1,496,152 9,117,041 1,915,900 (8,803,608) 7,577,323 1,527,908 (7,609,079) 2,229,333 1,496,152 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 37 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2017 Consolidated Balance at 1 July 2015 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 $ $ 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) 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 Balance at 1 July 2016 Total comprehensive income for the year: Loss for the year Foreign exchange differences 7,577,323 (7,609,079) 45,435 1,482,473 1,496,152 - - - (1,194,529) - (1,194,529) - 30,050 30,050 - - - (1,194,529) 30,050 (1,164,479) Transactions with owners in their capacity as owners: Contributions of equity (net of transaction costs) Share based payment transactions 1,331,394 208,324 1,539,718 - - - - - - - 357,942 357,942 1,331,394 566,266 1,897,660 Balance at 30 June 2017 9,117,041 (8,803,608) 75,485 1,840,415 2,229,333 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. Alicanto Minerals Limited | 38 Consolidated Statement of Cash Flows For the Year Ended 30 June 2017 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 2017 $ 2016 $ 290,706 - (708,970) 18,856 (4,499,662) 4,297,548 50,935 105,918 (448,222) 5,317 (1,760,971) 1,462,559 Net cash (outflow) from operating activities 18 (601,522) (584,464) Cash Flows from Investing Activities Purchase of property, plant and equipment Payments for security deposits 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 Cash and cash equivalents at the end of the year 7 (186,467) (20,000) (32,993) - (206,467) (32,993) 1,566,870 (138,175) 1,049,295 (25,717) 1,428,695 1,023,578 620,706 1,216,247 1,836,953 406,121 810,126 1,216,247 2016 $ 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 | 39 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies 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) (b) (i) 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. Principles of consolidation Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Alicanto Minerals Limited as at 30 June 2017 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. Segment reporting (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. ii) Equipment Hire Equipment hire income is recognised through the rental of exploration equipment as part of the Barrick Earn-In agreement. Alicanto Minerals Limited | 40 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies (continued) 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. Trade and other receivables (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: Alicanto Minerals Limited | 41 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies (continued) Property, plant and equipment (continued) (k) 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. (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. Alicanto Minerals Limited | 42 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies (continued) 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’). (q) Contributed equity 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. Alicanto Minerals Limited | 43 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies (continued) 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. (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 16 will not have a material impact on the Group’s recognition of leases and disclosures. Alicanto Minerals Limited | 44 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 1. Summary of Significant Accounting Policies (continued) (iii) AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (applicable to annual reporting periods commencing on or after 1 January 2018). This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control over a subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or joint venture and requires that: - - - a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the extent of the unrelated investor’s interest in that associate or joint venture; the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or joint venture; and any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The remaining gain or loss should be eliminated against the carrying amount of the remaining investment. The directors anticipate that the adoption of AASB 2014-10 will not have a material impact on the Group’s Financial Statements. (iv) AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1 January 2018). When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles- based model. Apart from a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers. This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue. The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process: identify the contract(s) with a customer; identify the performance obligations in the contract(s); ▪ ▪ ▪ determine the transaction price; ▪ ▪ allocate the transaction price to the performance obligations in the contract(s); and recognise revenue when (or as) the performance obligations are satisfied. The directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s Financial Statements. (v) 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 2. Critical accounting estimates and judgements 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) (c) 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. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences when management considers that it is probable that future taxable profits will be available to utilise those temporary differences. Alicanto Minerals Limited | 45 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 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 2017 $ 133,592 22,992 156,584 157,114 - 832 157,946 332,782 20,822 353,604 6,548 10,098 19,529 36,175 6,351 6,351 2017 $ 29,598 - - 29,598 Consolidated 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 Consolidated 2016 $ 19,571 - - 19,571 Alicanto Minerals Limited | 46 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 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 2017 $ 2016 $ - - - - - - - - - - - - (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 27.5% (2016: 30%) (1,194,529) (328,495) (1,479,742) (443,922) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: - Share based payments - Other non-deductible amounts - Unrecognised tax losses 128,966 80,346 119,183 117,209 124,737 201,976 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 27.5% (2016: 30%) (f) Unrecognised temporary differences Unrecognised deferred tax asset relating to capital raising costs 5,385,985 1,481,145 4,952,593 1,485,778 57,404 66,935 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 | 47 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 7. (a) Cash & Cash Equivalents Total cash and cash equivalents Cash at bank and in hand Deposits at call Total cash and cash equivalents Consolidated 2017 $ 2016 $ 836,953 1,000,000 1,836,953 1,216,247 - 1,216,247 Note that cash includes $398,905 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 0.60% (2016: 0.00% and 0.95%). Cash at bank and on hand Deposits at call as at June 2017 were bearing interest at between 2.10% and 2.55%. There were no deposits at call as at June 2016. Trade & Other Receivables Current Other receivables Prepayments Total current trade and other receivables Non-Current Deposits Total non-current trade and other receivables 70,158 14,678 84,836 20,000 20,000 32,255 13,779 46,034 - - (b) (c) 8. (a) (b) (c) Past due and impaired receivables As at 30 June 2017, there were no other receivables that were past due or impaired (2016: nil). Alicanto Minerals Limited | 48 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 Consolidated Plant & Equipment Office $ Plant & Equipment Field $ Motor Vehicles Total $ $ 9. Property, Plant and Equipment Year ended 30 June 2016 Opening net book amount Additions Depreciation charge Effect of exchange rates Closing net book amount At 30 June 2016 Cost or fair value Accumulated depreciation Net book amount Year ended 30 June 2017 Opening net book amount Additions Depreciation charge Effect of exchange rates Closing net book amount At 30 June 2017 Cost or fair value Accumulated depreciation Net book amount 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. 6,450 3,750 (2,835) - 7,365 15,736 (8,371) 7,365 7,365 8,951 (4,376) - 11,940 24,687 (12,747) 11,940 14,135 30,847 (3,853) (1,883) 39,246 45,309 (6,063) 39,246 39,246 50,324 (12,270) 254 77,554 94,002 (16,448) 77,554 32,827 69,444 (7,098) 9,696 104,869 110,010 (5,141) 104,869 104,869 77,431 (19,529) (12,715) 150,056 183,393 (33,337) 150,056 53,412 104,041 (13,786) 7,813 151,480 171,055 (19,575) 151,480 151,480 136,706 (36,175) (12,461) 239,550 302,082 (62,532) 239,550 Consolidated 2017 $ 2016 $ 611,288 4,563,448 (4,297,548) (265,900) 611,288 611,288 2,111,929 (1,347,370) (764,559) 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. Alicanto Minerals Limited | 49 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 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 2017 $ 104,384 398,905 503,289 2016 $ 349,858 145,935 495,793 60,005 60,005 33,104 33,104 13. (a) Contributed Equity Issued capital Ordinary shares (fully paid) Total contributed equity (b) Ordinary Shares Consolidated Consolidated 2017 Shares 2016 Shares 2017 $ $ 2016 $ $ 85,256,251 85,256,251 72,036,251 72,036,251 9,117,041 9,117,041 7,577,323 7,577,323 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 Total $ Contributed Equity 13. (d) Movements in issued capital Opening Balance 1 July 2015 Share issue Share issue Less: Transaction costs Closing Balance at 30 June 2016 - Opening Balance 1 July 2016 Share issue Exercise of Options Exercise of Options Exercise of Options Exercise of Options Exercise of Options Less: Transaction costs Closing Balance at 30 June 2017 14 Mar 16 14 Mar 16 - 28 Jul 16 06 Oct 16 08 Feb 17 16 Feb 17 10 Mar 17 22 Mar 17 57,629,001 416,650 13,990,600 72,036,251 72,036,251 11,600,000 250,000 400,000 375,000 525,000 70,000 85,256,251 $0.040 $0.075 $0.13 $0.301 $0.097 $0.097 $0.097 $0.097 6,537,079 16,666 1,049,295 (25,717) 7,577,323 7,577,323 1,508,000 75,279 38,845 36,417 50,984 6,798 (176,605) 9,117,041 Alicanto Minerals Limited | 50 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 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 2017 unlisted share option details 21 Nov 17 07 Sept 18 25 Mar 19 28 July 19 31 July 19 30 Apr 21 $0.320 $0.230 $0.065 $0.23 $0.13 $0.001 Weighted average exercise price 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 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 - - - 5,960,000 348,000 900,000 7,208,000 $0.20 - - - - - - 6,970,000 6,970,000 $0.001 - (250,000) - - - (1,370,000) (1,620,000) $0.04 - - - - - - - - - - - - - - - - - 5,850,000 500,000 3,550,000 - - - - 9,900,000 $0.205 1,250,000 8,050,000 2,000,000 5,960,000 348,000 6,500,000 24,108,000 $0.16 - - - 1,250,000 8,300,000 2,000,000 6,970,000 18,520,000 $0.132 15. Reserves (a) Unlisted option reserve Opening balance Unlisted options issued Exercise of options Closing balance 2017 $ 1,482,473 507,396 (149,454) 1,840,415 Consolidated 2016 $ 1,091,777 390,696 - 1,482,473 2016 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. This includes expense recognised to the Profit and Loss of $468,966 and $38,430 recognised in share issue costs. (b) Functional currency translation reserve Opening balance Exchange differences arising on translation of foreign operations Closing balance 45,435 30,050 75,485 19,175 26,260 45,435 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 1,840,415 75,485 1,915,900 1,482,473 45,435 1,527,908 Alicanto Minerals Limited | 51 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 16. Financial Instruments, Risk Management Objectives and Policies 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 2017 Financial assets Cash and cash equivalents Trade & other receivables (current) Trade & other receivables (non-current) Financial Liabilities Trade and other payables (current) 1.43% 0.00 2.10% 0.00 Weighted Average Interest Rate % Floating Interest Rate $ Fixed Interest $ Non- interest Bearing $ 350,688 - - 350,688 1,000,000 - 20,000 1,020,000 486,265 84,836 - 571,101 - - 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 $ 0.57 0.00 0.00 660,569 - 660,569 - - 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 2017, 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. Alicanto Minerals Limited | 52 2017 Total $ 1,836,953 84,836 20,000 1,941,789 - - - - - - - 503,289 503,289 503,289 503,289 Non- interest Bearing $ 555,678 32,255 587,933 2016 Total $ 1,216,247 32,255 1,248,502 495,793 495,793 495,793 495,793 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 16. (c) Financial Instruments, Risk Management Objectives and Policies (continued) 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 2017 $ 2016 $ (1,194,529) (1,479,742) 83,419,703 61,871,136 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 (1,194,529) 36,175 468,966 24,364 (38,803) 102,305 (601,522) (1,479,742) 13,786 407,362 15,306 71,955 386,869 (584,464) 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 2017 $ 372,500 2,676,250 - 3,048,,750 Consolidated 2016 $ 712,270 3,722,618 - 4,434,888 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. Segment Information (a) 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. Alicanto Minerals Limited | 53 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 20. Segment Information (continued) (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 $ 2017 Total segment revenue Equipment rental Interest revenue Depreciation and amortisation expense Guyana $ 133,592 133,592 - (31,798) Total segment (loss) before income tax (282,154) Total segment assets Total segment liabilities 2016 Total segment revenue Equipment rental Interest revenue Depreciation and amortisation expense 925,003 434,910 20,600 20,600 - (10,951) Total segment (loss) before income tax (735,782) Total segment assets Total segment liabilities 884,583 434,138 Total $ 156,584 133,592 22,992 (36,175) 22,992 - 22,992 (4,377) (912,375) (1,194,529) 1,867,624 2,792,627 128,384 5,317 - 5,317 (2,835) 563,294 25,917 20,600 5,317 (13,786) (743,960) (1,479,742) 1,140,466 2,025,049 94,759 528,897 - - - - - - - - - - - - - - (c) Measurement of segment information All information presented in part (b) above is measured in a manner consistent with that in the financial statements. (d) 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) 2017 $ 133,592 22,992 156,584 Consolidated 2016 $ 20,600 5,317 25,917 (e) 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. 21. Events Occurring After the Balance Sheet Date ▪ On 23 June 2017, the Company announced a Pro-rata Renounceable Rights Issue of which the key terms of the rights issue are as follows: o A pro-rata renounceable rights issue for one (1) new share for every four (4) shares held at an issue price of $0.14; and o One (1) free attaching listed option for every (2) new shares subscribed for exercisable at $0.28 on or before 28 July 2019; o Rights issue is partially underwritten by CPS Capital Group Pty Ltd for up to $1.0 million; Alicanto Minerals Limited | 54 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 21. Events Occurring After the Balance Sheet Date (continued) o On 26 July 2017, the Company issued 18,214,062 new shares under the Rights Issue raising gross proceeds of $2,549,969; and o 9,107,031 free attaching new listed options were issued with an exercise price of $0.28 on or before 28 July 2019. ▪ On 18 August 2017, the company finalised the Rights Issue Shortfall and an additional placement to Sprott Group taking the total placement to $3.75m as follows: o Under the rights issue shortfall, 3,100,000 ordinary shares were allotted at $0.14 and 1,550,000 free attaching listed options exercisable at $0.28 on or before 28 July 2019 raising gross proceeds of $434,000; o The additional placement was finalised issuing 5,400,000 ordinary shares were allotted at $0.14 and 1,700,000 free attaching listed options exercisable at $0.28 on or before 28 July 2019 raising gross proceeds of $756,000. ▪ As announced on the ASX on 1 September 2017, the company executed several option agreement granting the Company exclusive rights to explore and acquire a 100% beneficial interest in mining permits totalling approximately 60km2 that are contiguous with the Company’s Ianna Gold Project. The agreements with the five private owners of various permits and claims total US$108,000 with option periods ranging from 2 to 4 years. The various agreements total US$111,000 over the next 12 months; ▪ There are no further material events subsequent to balance date. 22. Related Party Transactions (a) (b) Parent entity The ultimate parent entity within the group is Alicanto Minerals Limited. 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 Recharge of costs by Blackstone Minerals Limited 2017 $ 635,169 24,384 350,173 1,009,726 Consolidated 2016 $ 481,711 19,134 272,159 773,004 2017 $ 15,520 39,008 16,004 Consolidated 2016 $ 23,401 8,103 - Purchases from director related entities Purchases for legal services from Murcia Pestell Hilliard Lawyers 38,198 72,808 Outstanding balances arising from recharges/purchases with Director Related Parties: Current payables 3,856 2,147 (e) 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. Alicanto Minerals Limited | 55 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 23. Share Based Payments (a) (b) 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 During the year 7,208,000 unlisted options were issued, with the weighted average fair value of the options granted during the year being $0.0472 (2016: $0.096). The price was calculated by using the Black-Scholes European Option Pricing Model applying the following inputs: 2017 $0.197 Weighted average exercise price: 3.2 Years Weighted average life of the option: $0.27.7 Weighted average underlying share price: Expected share price volatility: 85.0% Risk free interest rate between: 1.80% Discount factor for lack of marketability 0% (2016: $0.001) (2016: 5Years) (2016: $0.097) (2016: 85.0%) (2016: 1.82%) (2016: 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 are as set out in (d) below. Details of other options movements and balances are set out in note 14. (c) Fair value of unlisted shares issued During the year, nil fully paid ordinary shares were issued to employees in lieu of salary. Total fair value of the shares issued was nil (2016: $16,666). (d) Reconciliation of share based payments Options issued to directors, employees and consultants Shares issued in lieu of salary Consolidated 2017 $ 468,966 - 468,966 2016 $ 390,696 16,666 407,362 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%. As per the Ianna Project Acquisition as finalised and announced on the ASX on 8 November 2016, the company has a contingent liability that exists as follows: i) ii) Can elect to acquire the property for a lump sum of US$3.0m or; A lump sum payment of US$1.35m and a net smelter royalty of up to 2.0%. 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 it 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. Alicanto Minerals Limited | 56 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 25. Interest in Farm-in/Farm-out Arrangements (continued) 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) 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 iii) 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. 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. Banner (Guyana) Inc. Australia Guyana Guyana Guyana Guyana Ordinary Ordinary Ordinary Ordinary Ordinary A: The proportion of ownership interest is equal to the proportion of voting power held. 2017 % 100 100 100 80 100 2016 % 100 100 100 80 - Alicanto Minerals Limited | 57 Notes to Alicanto Minerals Limited Financial Statements For the year ended 30 June 2017 26. Subsidiaries (continued) 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 (f) Guarantees The parent entity has not guaranteed any loans for any entity during the year. (g) Contingent Liabilities The parent entity has no contingent liabilities at the end of the financial year. 2017 $ 1,835,684 604,794 2,440,478 527,289 - 527,289 9,117,041 1,840,415 (9,044,267) 1,913,189 (1,304,677) - (1,304,677) - - - - 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) - - - - Alicanto Minerals Limited | 58 Director’s Declaration In the Directors’ opinion: (a) the financial statements and notes set out on pages 35 to 58 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 2017 and of its performance for the financial year ended on that date; and (b) (c) (d) the audited remuneration disclosures set out on pages 23 to 32 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. 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 2017 Alicanto Minerals Limited | 59 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 18 September 2017 were as follows: Number Held as at 18 September 2017 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 Class of Equity Securities Fully Paid Ordinary Shares 23 39 110 283 112 567 Class of Equity Securities Listed Options 10 48 17 85 23 183 The names of the substantial shareholders listed on the company’s register as at 18 September 2017: Shareholder Exploration Capital Partners 2014 LP Harmanis Holdings Pty Ltd Hamish Halliday Symorgh Investments Pty Ltd Voting Rights - Ordinary Shares Number 9,996,845 7,000,333 5,825,000 5,638,333 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 8,050,000 2,000,000 5,960,000 348,000 6,250,000 2 9 2 43 1 7 Alicanto Minerals Limited | 64 Additional Shareholder Information (continued) Twenty Largest Shareholders The names of the twenty largest ordinary fully paid shareholders as at 18 September 2017 are as follows: Shareholder Number MERRILL LYNCH AUST NOM PL HARMANIS HLDGS PL JAVELIN MINERALS INC CITICORP NOM PL HSBC CUSTODY NOM AUST LTD BNP PARIBAS NOM PL HALLIDAY HAMISH PETER J P MORGAN NOM AUST LTD SIMON JAMES SYD BOLSTER R SYMORGH INV PL MCTAVISH IND PL SYMORGH INV PL BELLARINE GOLD PL SAUNDERS CLARE FAR EAST CAP PL SWANCAVE PL HILLARD EVAN CAMPBELL HARDEN MARCUS GATTY MARK A T + H L BNP PARIBAS NOMS PL 27,041,432 7,000,333 4,619,456 4,571,502 4,457,289 3,879,746 3,850,000 3,813,828 3,150,266 2,585,000 1,870,000 1,653,333 1,626,099 1,400,000 1,312,500 1,250,000 1,000,000 891,650 860,500 816,077 77,649,011 % Held of Issued Ordinary Capital 24.10% 6.24% 4.12% 4.07% 3.97% 3.46% 3.43% 3.40% 2.81% 2.30% 1.67% 1.47% 1.45% 1.25% 1.17% 1.11% 0.89% 0.79% 0.77% 0.73% 69.20% Twenty Largest Listed Option Holders The names of the twenty largest Listed Option Holders as at 18 September 2017 are as follows: Shareholder MERRILL LYNCH AUST NOM PL SABET HOSSEIN SIMON JAMES SYD BOLSTER R PLAN-1 PL QI ZI JUAN ANIKAVA PL CAMERON SARAH BEYNON ROBERT + JULIE CAFFIERI JIMMY F + L CAFFIERI JIMMY F + L VETTER ANTHONY JOHN + J J P MORGAN NOM AUST LTD GATTY MARK A T + H L ROOKHARP INV PTY ZAPPIA NOM PL LEATHER MARK FAR EAST CAP PL SULESKI STOJCE SWANCAVE PL PARKER IAN M P + C S Number 4,250,000 1,425,581 345,026 328,571 314,286 236,500 214,286 200,000 178,572 178,572 165,000 161,250 151,250 150,000 142,857 131,570 131,250 125,000 125,000 125,000 9,079,571 % Held of Listed Options 31.82% 10.67% 2.58% 2.46% 2.35% 1.77% 1.60% 1.50% 1.34% 1.34% 1.24% 1.21% 1.13% 1.12% 1.07% 0.99% 0.98% 0.94% 0.94% 0.94% 67.99% Alicanto Minerals Limited | 65 Tenement Listing (continued) As at 18 September 2017 Project Location Tenement Interest as at 18 September 2017 Tassawini Guyana Arakaka Guyana 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 25/01 100% 100% 100% 100% 100% PL-02/2016, GS14:S-26 100% PL-03/2016, GS14:S-31 100% PL-04/2016, GS14:S-39 100% Y-33/000/04, PPMS/680/04 100% Y-33/001/04, PPMS/681/04 100% Y-31/000/04, PPMS/463/04 100% Y-31/001/04, PPMS/464/04 100% J-81/000/02, PPMS/884/02 100% J-81/001/02, PPMS/885/02 100% J-81/002/02, PPMS/886/02 100% J-59/000/2000, PPMS/1057/2002 100% J-59/001/2000, PPMS/1058/2002 100% J-59/002/2000, PPMS 1059/2002 100% J-59/003/2000, PPMS/1060/2002 100% J-59/004/2000, PPMS/1061/2002 100% J-59/005/2000, PPMS/1062/2002 100% J-59/006/2000, PMS/1063/2002 100% J-59/007/2000, PPMS/1064/2002 100% J-59/008/2000, PPMS/1065/2002 100% J-59/009/2000, PPMS/1066/2002 100% J-59/010/2000, PPMS/1067/2002 100% J-59/011/2000, PPMS/1068/2002 100% J-59/012/2000, PPMS/1069/2002 100% J-59/013/2000, PPMS/1070/2002 100% J-59/014/2000, PPMS/1071/2002 100% 51/002/94, Ituni #1 100% 51/003/94, Ituni #2 100% 51/324/74, May 100% Jars, Jars#1, Jars#2 P-109/000/2000, PPMS/809/2001 100% P-109/001/2000, PPMS/810/2001 100% P-109/002/2000, PPMS/811/2001 100% P-109/003/2000, PPMS/812/2001 100% P-109/004/2000, PPMS/813/2001 100% P-109/005/2000, PPMS/814/2001 100% 100% P-128/000/02, PPMS/707/02 100% P-128/001/02, PPMS/708/02 100% P-128/002/02, PPMS/709/02 100% P-128/003/02, PPMS/710/02 100% P-128/004/02, PPMS/711/02 100% P-17/000, PPMS/0222/1994 100% P-17/001, PPMS/0223/1994 100% P-8/000/94, PPMS/0074/1994 100% P-8/001, PPMS/73/1994 Alicanto Minerals Limited | 66 Tenement Listing (continued) Project Location Tenement Interest as at 18 September 2017 Arakaka Guyana Ianna 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 B-19/MP/000 D-15/MP/000 D-16/MP/000 R-31/MP/002 R-31/MP/003 R-31/MP/004 R-31/MP/005 R-31/MP/000 R-31/MP/001 J-10/MP/000 J-14/MP/000 J-14/MP/001 J-14/MP/002 B-19/MP/000 Baggie Owen #1 Owen Emillio Anita Joy #2 Joy #3 Patsy Patsy #1 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80%1 80%1 80%1 80%1 80% 80% 100% 100% 100% 100% 100% 100% 100% 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 Alicanto Minerals Limited | 67 Tenement Listing (continued) Project Location Tenement Ianna Guyana Karen Karen #1 Sherry Sherry #1 Sherry #2 Tracy Queen Queen #1 Nick Nick #1 Ray Ray #1 Jeff Interest as at 18 September 2017 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 100%2 Notes E: PL: PPMS: MP: Exploration License Prospecting License Prospecting License Medium Scale Mining Permit Alicanto Minerals Limited | 68 

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