Annual Report 2022
Alto Metals Limited
ABN 62 159 819 173
CORPORATE DIRECTORY
Directors
Mr Richard Monti (Non-Executive Chairman)
Mr Matthew Bowles (Managing Director and CEO)
Dr Jingbin Wang (Non-Executive Director)
Mr Terry Wheeler (Non-Executive Director)
Company Secretary
Mr Graeme Smith
Principal registered office
Suite 9,
12-14 Thelma Street,
WEST PERTH, WA 6005
Telephone 08 9381 2808
Website: www.altometals.com.au
Email: admin@altometals.com.au
Auditor
Pitcher Partners BA&A Pty Ltd
Level 11, 12-14 The Esplanade
Perth WA 6000
Telephone 08 9322 2022
Share Registry
Automic Registry Services
Level 5, 126 Philip Street
Sydney NSW 2000
Australian Securities Exchange
ASX code: AME
“Alto’s ongoing major drilling
program in 2022 has continued
to deliver excellent results at the
Sandstone Gold Project,
including an almost doubling of
our open-pit, high-grade mineral
resources, which demonstrates
the huge scope to grow our gold
inventory beyond what is
currently defined. "
CONTENTS
CHAIRMAN’S LETTER
REVIEW OF OPERATIONS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
3
4
20
31
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL ASX INFORMATION
TENEMENT REPORT
33
34
35
36
62
63
68
71
CHAIRMAN’S LETTER
Dear Fellow Shareholders,
Welcome to the 2022 Annual Report for Alto Metals Limited, a year
which has seen significant milestones for our Company.
2022 was a significant year for your Company with milestones achieved in our exploration program, that have
laid the groundwork for what we fully expect to be significant changes in Alto’s development in the future.
Following on from the exploration success of last year’s record of 60,000 metres of drilling, we have committed
to a similar size drilling program at the Sandstone Project this year.
A key milestone of 2022 was the 92% increase in our Mineral Resource base to over 635,000 ounces of gold,
a figure we are currently aiming to substantially increase again in the new calendar year.
Our exploration team has, to their credit, dealt with the challenges many Australians have had to contend with
due to Covid-19 and the interruptions it has caused to their ongoing work.
We are grateful for their hard work and dedication under the stewardship of our Managing Director Matthew
Bowles and I thank all of them for their valuable contribution.
As always, we appreciate the support all our stakeholders have given us this past 12 months as we continue to
advance the Sandstone Gold Project.
We will continue to focus on our strategy of further resource growth and new discoveries, to build the foundations
to support a stand-alone gold operation. And I hope this is a journey you continue to share with us
Yours sincerely,
Richard Monti
Non-Executive Chairman
Dated this 30th day of September 2022
Alto Metals Limited | 2022 Annual Report
3
EXPLORATION HIGHLIGHTS OF 2022
Updated Mineral Resource to 12.4Mt @ 1.6 g/t gold for 635,000oz gold
• Updated JORC 2012 Mineral Resource Estimate of 12.4Mt @ 1.6 g/t gold for 635,000oz for the Sandstone
Gold Project, incorporating updates for Lord Nelson, Lord Henry, Havilah Camp and Vanguard Camp.
• Resource update represents an increase of 92% in contained gold at an average discovery cost of less
than A$14/oz.
• Updated Mineral Resources constrained within A$2,500/oz optimised pit-shells at a 0.5 g/t gold cut-off
and over 90% of total ounces within 160m from surface.
•
•
Shallow, high-grade resources remain open along strike and at depth at all deposits highlights the
strong potential to continue to grow the resource inventory with further drilling.
Excellent gold recoveries of ~96% in fresh rock returned from preliminary gold recovery testwork (avg.
of 93% across all rock types) demonstrates gold will be recoverable through a simple cyanide extraction
process.
• Rapid growth at Vanguard Camp with a tripling of the resource to 2.3Mt @ 2.0 g/t gold for 150,000oz
and mineralisation remaining open along a +2km long NW/SE trending corridor.
•
Substantial resource growth at Lord Nelson, increasing by 138% to 5.3Mt @ 1.6 g/t gold for 267,000oz
and mineralisation remains open.
• Mineral Resource Estimate excludes an update for Indomitable Camp. Recent high-grade gold results
outside the current resource and assays from planned drilling to be included in an update in the second half
of the year.
•
Located on granted mining licences and supported by excellent surrounding infrastructure.
Exploration Results – Lord Nelson
•
67m @ 2.3 g/t gold from 172m, incl. 6m @ 5.4 g/t gold from 179m (SRC 576)
The first phase of extensional RC drilling for CY2022, below the Lord Nelson pit returned significant results
including:
o
o
o
o
19m @ 1.5 g/t gold from 185m, inc. 1m @ 17.8 g/t gold from 198m (SRC 582)
27m @ 2.1 g/t gold from 221m, incl. 10m @ 3.0 g/t gold from 222m (SRC606)
12m @ 1.4 g/t gold from 50m, incl. 1m @ 10.2 g/t gold from 59m; and
11m @ 1.0 g/t gold from 84m (SRC 580)
o
11m @ 1.3 g/t gold from 156m, and 6m @ 3.0 g/t gold from 215m (SRC 579)
Alto Metals Limited | 2022 Annual Report
4
Exploration Results – Juno
• RC drilling to test up-dip and down-dip extensions of the Juno Lode within the granodiorite damage zone and
along the contact of the ultramafic footwall, have returned several significant gold intersections, including.
o 9m @ 3.8 g/t gold from 157m, incl. 5m @ 5.0 g/t gold from 160m (SRC 590)
o 7m @ 4.4 g/t gold from 163m (SRC586)
o 12m @ 2.1 g/t gold from 160m, incl. 1m @ 12.4 g/t gold from 169m (SRC593)
o 17m @ 1.6 g/t gold from 159m, incl. 3m @ 6.3 g/t gold from 171m (SRC589)
o 10m @ 1.3 g/t gold from 140m, incl. 5m @ 2.1 g/t gold from 144m (SRC585)
Exploration Results – Indomitable
• Results from ongoing drilling at Indomitable Camp have confirmed multiple near surface high-grade gold
intercepts and successfully extended the overall mineralisation both along strike and at depth. Significant
results include:
o 29m @ 4.4 g/t gold from 29m, incl. 1m @ 87.4 g/t gold from 45m (SRC613)
o 15m @ 3.8 g/t gold from 44m, incl. 2m @ 18.0 g/t gold from 49m; and
5m @ 4.1 g/t gold from 65m incl. 1m @ 12.3 g/t gold from 66m (SRC626)
o 7m @ 1.1 g/t gold from 83m and 1m @ 24.6 g/t gold from 143m (SRC620)
o 12m @ 1.6 g/t gold from 69m (SRC614)
o 4m @ 4.3 g/t gold from 113m and 10m @ 1.3 g/t gold from 173m (SRC619)
o 21m @ 2.0 g/t gold from 46m, incl. 1m @ 14.9 g/t gold from 61m and incl. 1m @ 6.3 g/t gold from
66m, and
11m @ 2.5 g/t gold from 92m, incl. 2m @ 7.0 g/t gold from 93m (SRC 574)
o 15m @ 2.2 g/t gold from 44m, incl. 2m @ 13.2 g/t gold from 45m; and
25m @ 1.2 g/t gold from 65m, incl. 1m @ 11.5 g/t gold from 71m (SRC 571).
o 16m @ 1.1 g/t gold from 76m, incl. 2m @ 5.3 g/t gold from 83m (SRC 557) – ended in mineralisation.
o 21m @ 1.1 g/t gold from 136m, incl. 6m @ 1.8 g/t gold from 136m and incl.
11m @ 1.0 g/t gold from 146m (SRC 566)
•
Extensional drilling at Indomitable and Indomitable North, includes:
o 13m @ 4.6 g/t gold from 24m, incl. 1m @ 31.8 g/t gold from 27m (SRC628)
o 15m @ 4.2 g/t gold from 30m incl. 1m @ 38.0 g/t gold from 35m (SRC629)
o 6m @ 2.1 g/t gold from 41m (SRC643)
o 6m @ 2.4 g/t gold from 69m incl. 1m @ 7.4g/t gold from 70m (SRC644)
o 44m @ 2.0 g/t gold from 58m incl. 14m @ 3.2 g/t gold from 84m (SRC663)
Alto Metals Limited | 2022 Annual Report
5
Sandstone Gold Project (100%)
Alto Metals Limited (“Alto” or the “Company”) and the entities it controls (together “the Group”) is a Western
Australian based company focused on the exploration and development of its 100% owned Sandstone Gold
Project, located the East Murchison Mineral Field of Western Australia. The Sandstone Gold Project (“Project”)
covers the vast majority of the Archaean Sandstone Greenstone Belt (Figure 2).
Since acquiring the Project in June 2016, Alto has compiled and reviewed a large legacy database ahead of a
series of focused exploration drilling campaigns which commenced in November 2016, and which have to date
defined JORC (2012) Mineral Resources of 635,000 ounces gold and numerous drill ready targets using a
systematic approach.
Figure 1: Location of Sandstone Gold Project within the East Murchison Gold Field, WA
Alto Metals Limited | 2022 Annual Report
6
Summary of Exploration Activity
During the year, the Company completed ~60,000 metres of drilling at the Lords Corridor, Vanguard camp,
Havilah, Maninga Marley and Indomitable camp, all located within the Company’s Alpha Domain. and continued
to receive a significant number of assays from infill, extensional and step-out drilling at the Lords Corridor,
Vanguard and Indomitable.
Alto Metals Limited | 2022 Annual Report
7
Exploration Strategy
Multiple regional targets across the entire Sandstone Gold Project: A systematic approach
Alto’s immediate exploration strategy remains focused on discoveries and resource growth within the Alpha
Domain which hosts the Lords corridor, Vanguard, Indomitable and Havilah. Based on the success of the
systematic approach to exploration to date, Alto is continuing to review the multiple other greenfield and
advanced brownfield targets that sit within the Sandstone Gold Project, as part of the Company’s longer term
strategy to advance the overall project pipeline to support a stand-alone operation.
Figure 2: Regional prospect map showing gold-in-soils over 1VD Magnetics highlighting the +20km long gold
corridor within the Alpha Domain and multiple brown and greenfield regional prospects within the Sandstone Gold
Project.
Alto Metals Limited | 2022 Annual Report
8
Sandstone Gold Project Mineral Resources as at 30 June 2022
Table 1: Total Mineral Resource Estimate for Sandstone Gold Project
JORC 2012 Mineral Resource Estimate for the Sandstone Gold Project
Classification
Total Indicated
Total Inferred
TOTAL
Tonnes (Mt)
Grade (g/t gold)
Contained gold (koz)
3.0
9.4
12.4
1.7
1.6
1.6
159
476
635
Updated Mineral Resources reported at a cut-off grade of 0.5 g/t gold. Mineral Resources for Indomitable are reported at a cut-off grade of
0.3 g/t gold. Minor discrepancies may occur due to rounding of appropriate significant figures.
Table 2: Total Mineral Resource Estimate for Sandstone Gold Project (by deposit)
Deposit
Lord Nelson
Lord Henry
Vanguard Camp
Havilah Camp
Indomitable Campa
Ladybirdb
TOTAL
Indicated
Inferred
Tonnage
(Mt)
Grade
g/t
Gold
(koz)
Tonnage
(Mt)
Grade
g/t
1.0
1.6
0.4
1.8
1.5
2.0
56
77
26
3.0
1.7
159
4.3
0.3
1.9
1.0
1.7
0.1
9.4
1.5
1.2
2.0
1.5
1.3
1.9
1.6
Gold
(koz)
211
13
124
46
74
8
Tonnage
(Mt)
Total
Grade
g/t
5.3
1.9
2.3
1.0
1.7
0.1
1.6
1.4
2.0
1.5
1.3
1.9
1.6
Gold
(koz)
267
90
150
46
74
8
635
476
12.4
Updated Mineral Resources reported at a cut-off grade of 0.5 g/t gold and are constrained within a A$2,500/oz optimised pit shells based on
mining parameters and operating costs typical for Australian open pit extraction deposits of a similar scale and geology. Mineral Resources
for Indomitable (reported at a cut-off grade of 0.3 g/t gold) and Ladybird deposits have not been updated. Minor discrepancies may occur
due to rounding of appropriate significant figures.
The references in this announcement to Mineral Resource estimates for the Sandstone Gold Project were reported in accordance with Listing
Rule 5.8 in the following announcements:
(a): Indomitable Camp: announcement titled: "Maiden Gold Resource at Indomitable & Vanguard Camps, Sandstone WA" 25 Sep 2018; and
(b): Ladybird: announcement titled: “Alto increases Total Mineral Resource Estimate to 290,000oz, Sandstone Gold Project” 11 June 2019.
(c): Lord Henry, Lord Nelson, Vanguard Camp & Havilah Camp: announcement titled: “Sandstone Mineral Resource increases to 635,000oz
of gold” 23 March 2022
The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous
market announcement noted above and that all material assumptions and technical parameters underpinning the Mineral Resource estimates
in the previous market announcement continue to apply and have not materially changed.
Alto Metals Limited | 2022 Annual Report
9
The Lords Corridor
The Lord Nelson and Lord Henry deposits are hosted predominantly within a +3km long, granodiorite intrusion
with sheared remnant ultramafic layers.
Troy Resources NL (Troy) previously mined the Lord Nelson deposit and produced 220,000 ounces of gold at
4.6 g/t. Troy also previously mined the Lord Henry deposit and produced 48,000 ounces of gold at 3.6 g/t.
Lord Nelson deposit, hosted with the +3km Lords Granodiorite, is currently defined as an Indicated and Inferred
Resource of 5.3Mt at 1.6 g/t gold for 267,000oz reported at a 0.5 g/t gold cut-off, constrained within an A$2,500
pit shell, that extends over 1.2km strike, up to 400m wide and to 230m below surface.
The nature and style of mineralisation observed at the Lords granodiorite is the gold mineralisation sits within the
granodiorite ‘damage zone’ with higher-grade gold occurring along the margin of the ultramafic contact.
Figure 3: Plan view of the +3km Lords Corridor showing Lord Nelson, Orion and Juno lodes
Alto Metals Limited | 2022 Annual Report
10
Figure 4: Long section of Lord Nelson
RC drilling was completed during the year to test down-dip extensions of the Lord Nelson hanging wall and
footwall lodes beneath the historic pit and the results have successfully extended the mineralisation,
including a stand-out intercept of 67m @ 2.3 g/t gold from 172m (SRC 576).
Significant assay results received following the March 2022 resource update, include:
o 67m @ 2.3 g/t gold from 172m, incl. 6m @ 5.4 g/t gold from 179m (SRC 576)
o 19m @ 1.5 g/t gold from 185m, inc. 1m @ 17.8 g/t gold from 198m (SRC 582)
o 12m @ 1.4 g/t gold from 50m, incl. 1m @ 10.2 g/t gold from 59m; and
11m @ 1.0 g/t gold from 84m (SRC 580)
o 11m @ 1.3 g/t gold from 156m, and 6m @ 3.0 g/t gold from 215m (SRC 579)
o 9m @ 1.2 g/t gold from 146m, incl 2m @ 2.6 g/t gold from 150m (SRC581)
o 2m @ 5.1 g/t gold from 139m (SRC 584)
Final assays from the first phase of drilling at the Lords this calendar year include:
o 27m @ 2.1 g/t gold from 221m, incl. 10m @ 3.0 g/t gold from 222m (SRC606)
o 11m @ 1.0 g/t gold from 178m (SRC607)
Alto Metals Limited | 2022 Annual Report
11
Lords Corridor – Juno
Juno is the second new lode discovered within the Lords Corridor, from step-out drilling testing the strike and
plunge extensions of the Lord Nelson footwall and hanging wall lodes, following the discovery of the high-grade
Orion Lode.
Juno is considered a previously undiscovered extension of the mineralised zone below the Lord Nelson pit,
outside the current resource, which now extends for over 1 kilometre strike and remains open.
Assay results received during the year from RC drilling at Juno, testing up-dip and down-dip extensions within
the granodiorite damage zone and along the contact of the ultramafic footwall, have returned several significant
gold intersections, including.
o
o
o
o
o
9m @ 3.8 g/t gold from 157m, incl. 5m @ 5.0 g/t gold from 160m (SRC 590)
7m @ 4.4 g/t gold from 163m (SRC586)
12m @ 2.1 g/t gold from 160m, incl. 1m @ 12.4 g/t gold from 169m (SRC593)
17m @ 1.6 g/t gold from 159m, incl. 3m @ 6.3 g/t gold from 171m (SRC589)
10m @ 1.3 g/t gold from 140m, incl. 5m @ 2.1 g/t gold from 144m (SRC585)
These latest results have successfully extended mineralisation at Juno down dip and along strike;
highlighting the overall continuity of the high-grade mineralisation of the initial intersections previously reported,
including:
23m @ 1.7 g/t gold from 141m, incl. 5m @ 5.4 g/t gold from 154m (SRC444)
22m @ 1.6 g/t gold from 135m, incl. 5m @ 5.5 g/t gold from 152m (SRC449)
13m @ 5.1 g/t gold from 162m, incl. 3m @ 17.0 g/t gold from 168m (SRC443)
o
o
o
o
o
The discovery of Juno highlights the potential for additional repeat gold lodes along the Lords Corridor.
10m @ 2.1 g/t gold from 140m incl. 3m @ 6.3 g/t gold from 147m (SRC241)
20m @ 1.2 g/t gold from 116m incl. 3m @ 6.0 g/t gold from 125m (SRC240)
Figure 5: Aerial view illustrative schematic of the Lords Corridor looking south-east.
Alto Metals Limited | 2022 Annual Report
12
Vanguard – shallow, high-grade
The updated Indicated and Inferred mineral resource estimate for Vanguard and Vanguard North (together
Vanguard Camp) has tripled in size to 2.3Mt at 2.0 g/t gold for 150,000oz, reported at a 0.5 g/t gold cut-off,
constrained within an A$2,500 pit shell, and represents 24% of the total Mineral Resources.
Approximately 20,000m of RC and diamond drilling was completed at Vanguard Camp in 2021 and the successful
north-west/south-east extensional drilling has significantly contributed to the growth in the Mineral Resources.
Mineralisation at Vanguard Camp remains open and the rapid rate of growth demonstrates the potential to
continue increasing both the grade and scale of the Mineral Resources with further drilling.
Importantly, Vanguard Camp includes the high-grade Vanguard North deposit of 383kt @ 3.8 g/t gold for
47,000oz where recent drilling returned significant high-grade gold mineralisation which remains open down dip
and along strike.
Figure 6: Oblique 3D view of Vanguard Camp resource block models (0.5 g/t cut-off) constrained within
a A$2,500/oz optimised pit shell.
Vanguard is located only 5kms west of the Lords Corridor and hosted within a 20 kilometre NW/SE trending
corridor, of differentiated dolerite, which also hosts the Indomitable and Havilah deposits.
Vanguard and Vanguard North parallel trends are together defined over a strike length of 2kms and form part of
a major regional prospect to drive future resource growth within the Alpha Domain target area.
Alto Metals Limited | 2022 Annual Report
13
Figure 7: Vanguard Camp plan view block model of Resources (0.5 g/t cut-off) constrained within a A$2,500/oz
optimised pit shell.
Alto Metals Limited | 2022 Annual Report
14
During the year a number of assay results from of RC drilling at Vanguard and Vanguard North confirmed the
presence of high-grade gold mineralisation up to 147 g/t. Selected results from Vanguard resplits reported during
the year include:
o
o
o
o
o
o
o
11m @ 15.3 g/t gold from 40m, incl. 1m @ 147.2 g/t gold from 42m; (SRC286) – Vanguard
30m @ 1.9 g/t gold from 131m, incl. 3m @ 8.9 g/t gold from 153m; (SRC272) – Vanguard
8m @ 2.0 g/t gold from 144m, incl. 1m @ 5.1 g/t gold from 145m; (SRC270) – Vanguard
7m @ 2.5 g/t gold from 89m, incl. 1m @ 14.7 g/t gold from 95m; (SRC326) – Vanguard
12m @ 1.2 g/t gold from 204m, incl. 5m @ 2.2 g/t gold from 208m; (SRC325) – Vanguard
3m @ 8.6 g/t gold from 125m, incl. 1m @ 23.7 g/t gold from 126m; (SRC307) – Vanguard North
4m @ 3.0 g/t gold from 46m, incl. 1m @ 8.2 g/t gold from 47m; (SRC290) – Vanguard North
Figure 8: Vanguard Cross Section.
Alto Metals Limited | 2022 Annual Report
15
Indomitable Camp – shallow oxide gold footprint
The Indomitable deposit forms part of the Indomitable Camp, which is currently defined over a 2km strike length
and is hosted within the +20km NW/SE Indomitable/Vanguard/Havilah Trend that forms part of the priority ‘Alpha
Domain’ target area. Mineralisation is hosted within a package of mafic-ultramafic rocks, cross-cut by interpreted
major structures.
As part of the major drilling program at Sandstone, four diamond holes were completed for a total of 900.2 metres
at the Indomitable Camp, located within the main NW/SE trend, 10km NW of Vanguard. These four holes were
part of the Company’s maiden diamond drilling program to evaluate the nature of gold mineralisation and
understand the orientation of the structural controls to assist with future drill targeting.
In addition, RC drilling at the Indomitable Camp is focused to grow the current resource, testing strike extensions
of existing mineralisation along the main Indomitable trend and linking structures and the western side of the
interpreted fold closure which hosts Indomitable and Indomitable North deposits.
Drilling results received during the year have confirmed multiple near surface high-grade gold intercepts and
successfully extended the overall mineralisation both along strike and at depth, with significant results including:
o
o
o
o
o
o
o
o
29m @ 4.4 g/t gold from 29m, incl. 1m @ 87.4 g/t gold from 45m (SRC 613)
15m @ 3.8 g/t gold from 44m, incl. 2m @ 18.0 g/t gold from 49m; and
5m @ 4.1 g/t gold from 65m incl. 1m 12.3 g/t gold from 66m (SRC 626)
7m @ 1.1 g/t gold from 83m and 1m @ 24.6 g/t gold from 143m (SRC620)
18m @ 1.1 g/t gold from 32m incl. 1m @ 5.4 g/t gold from 37m and 5m @ 1.4 g/t gold from 101m (SRC623)
12m @ 1.6 g/t gold from 69m (SRC 614)
11m @ 1.1 g/t gold from 69m (SRC 616)
4m @ 4.3 g/t gold from 113m and 10m @ 1.3 g/t gold from 173m (SRC619)
11m @ 1.1 g/t gold from 168m incl. 1m @ 6.1 g/t gold from 178m (SRC622)
Figure 9: Oblique section of Indomitable Camp showing g/t*m drill results
Alto Metals Limited | 2022 Annual Report
16
Further results were announced from step -out drilling north of the Indomitable North deposit which have extended
mineralisation up to 500m north of the current resource and remains open. Latest results include:
o
o
o
o
o
o
o
o
o
o
13m @ 4.6 g/t gold from 24m, incl. 1m @ 31.8 g/t gold from 27m (SRC628)
15m @ 4.2 g/t gold from 30m incl. 1m @ 38.0 g/t gold from 35m (SRC629)
6m @ 2.1 g/t gold from 41m (SRC643)
6m @ 2.4 g/t gold from 69m incl. 1m @ 7.4g/t gold from 70m (SRC644)
10m @ 1.0 g/t gold from 2m (SRC645)
11m @ 1.1 g/t gold from 39m (SRC646)
44m @ 2.0 g/t gold from 58m incl. 14m @ 3.2 g/t gold from 84m (SRC663)
7m @ 2.1 g/t gold from 9m (SRC655)
3m @ 1.7 g/t gold from 8m and 9m @ 1.9 g/t gold from 92m incl. 1m @ 5.3 g/t gold from 97m (SRC659)
9m @ 1.0 g/t gold from 66m (SRC662)
Mineralisation at Indomitable North remains open in all directions.
Indomitable was not updated in the March 2022 mineral resource update and is anticipated to be included in the
next update planned for early in 2023.
dectectORETM in-field trials
Alto is trialling deployment of Portable PPB’s detectORETM technology, patented by the CSIRO, across a number
of our high priority targets, starting with Indomitable.
detectORETM has the potential to revolutionise gold exploration by allowing for the detection of low-level gold
concentration in the field using conventional pXRF, with results available in as little as eight hours. This
technology is expected to assist in rapidly defining and refining exploration targets, enabling real-time follow up
of live drill programs which will aid resource identification and making new discoveries
Figure 10: In-field R&D trials of dectectORETM at Indomitable
Alto Metals Limited | 2022 Annual Report
17
.
Figure 11: Plan View of Indomitable Camp showing recent results – simplified geological interpretation.
Alto Metals Limited | 2022 Annual Report
18
REVIEW OF OPERATIONS
Forward-Looking Statements
This report may include forward-looking statements. Forward-looking statements may generally be identified by
the use of forward-looking verbs such as anticipate, aim, expect, intend, plan or similar words, which are only
predictions and are subject to risks, uncertainties and assumptions which are outside the control of Alto Metals
Limited. Actual values, results or events may be materially different to those expressed or implied in this release.
Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Any
forward-looking statements in this release speak only at the date of issue. Subject to any continuing obligations
under applicable law and the ASX Listing Rules, Alto Metals Limited does not undertake any obligation to update
or revise any information or any of the forward-looking statements in this release or any changes in events,
conditions or circumstances on which any such forward-looking statement is based.
Competent Persons Statement
The information in this Report that relates to current and historical Exploration Results is based on information
compiled by Dr Changshun Jia, who is an employee and security holder of Alto Metals Limited. Dr Jia is a
Member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of
mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a
Competent Person as in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Jia consents to the inclusion in the
report of the matters based on the information in the context in which it appears.
Previously Reported Results
There is information in this report relating to Mineral Resource estimates, which have been cross referenced to
previous market announcements made by the Company. The Company confirms that it is not aware of any new
information or data that materially affects the information included in the relevant market announcements and,
in the case of estimates of Mineral Resources that all material assumptions and technical parameters
underpinning the Mineral Resources estimates in the relevant market announcement continue to apply and
have not materially changed. With regards to Exploration Results, please refer to ASX announcement for full
details on these exploration results. Alto Metals Ltd is not aware of any new information or data that materially
effects the information in the said announcements.
Alto Metals Limited | 2022 Annual Report
19
DIRECTORS’ REPORT
Your Directors submit their report together with the annual financial statements of Alto Metals Limited (“Alto” or
the “Company”) and the entities it controlled (together “the Group”) for the year ended 30 June 2022 and the
auditor’s review report thereon.
Directors
The names of the Directors who held office during or since the end of the year are:
Mr Richard Monti
Mr Matthew Bowles
Dr Jingbin Wang
Mr Terry Wheeler
Directors were in office for the entire year unless otherwise stated.
Information on Directors
Richard Monti (Non-Executive Chairman)
Mr Monti is a geologist with a successful career of over 30 years in the international mineral resource industry,
resulting in broad industry knowledge and strong strategic planning capabilities. He has first-hand working
knowledge of all aspects of the industry. He has been a Director on 15 ASX and TSX listed companies, covering
exploration and mining activities. Directorships include four as Chairman and sitting on numerous sub-
committees. Mr Monti has held roles at several international and Australian companies including Anaconda
Nickel, Azimuth Resources Limited, The North Group and The Normandy Group. He was a founding Director
of Azimuth Resources and the architect of the Company’s eventual take over for A$190m in 2013. Mr Monti
was Principal of Ventnor Capital from 2005 to 2010, a corporate advisory business supplying advice across the
commercial and corporate spectrum to junior and mid-size companies.
Directorships held in other listed entities: Boab Metals Ltd, Zinc of Ireland NL, Caravel Minerals Ltd and Black
Dragon Gold Corp (retired 11 August 2021).
There have been no other listed entity directorships in the last 3 years.
Matthew Bowles (Managing Director and Chief Executive Officer)
Mr Bowles is a senior corporate finance executive with extensive corporate advisory, private equity and capital
markets experience within the resources sector. He has a depth of experience in domestic and cross border
financing, joint venture and M&A transactions in Africa, the Americas and Australia.
Mr Bowles was previously the Chief Development Officer for a West African focused gold company. He
commenced his career with Rio Tinto where he worked for nine years in various corporate and commercial
roles, before moving to London to work in resources banking and finance. Since his return to Australia he has
held senior roles with global advisory firms focused on the resources sector.
Directorships held in other listed entities: WIA Gold Limited (formerly known as Tanga Resources Limited)
(resigned 8 September 2020).
Dr Jingbin Wang (Non-Executive Director)
Dr. Wang is a senior geologist with extensive international minerals experience, and has been Chairman of
Sinotech Minerals Exploration Co. Ltd since March 2004. He has a BSc in Mineral Prospecting & Exploration
from Central South University of Technology in Changsha, China, and a MSc and PhD in Magmatic Petrology
& Metallogeny and Geotectonics & Metallogeny from the same university.
He has been President of the prestigious Beijing Institute of Geology for Mineral Resources in China since 2002
and is an accomplished mining team leader with an excellent track record of discovering major deposits around
the world. Dr. Wang has also held the title of Vice-President of the China Nonferrous Metals Industry Association
since 2008 and was Executive Director of China Nonferrous Metals Resource Geological Survey from 2003-
2015. Dr. Wang is a leader in the non-ferrous metals industry in China with over 30 years' experience in mineral
resources exploration and mining.
Directorships held in other listed entities: There have been no listed entity directorships in the last 3 years.
Alto Metals Limited | 2022 Annual Report
20
DIRECTORS’ REPORT
Terry Wheeler (Non-Executive Director)
Mr Wheeler established Genalysis Laboratory Services in 1975 and grew the company into one of the largest
and most successful analytical companies in the southern hemisphere with over 300 technical staff. In 2007,
Genalysis Laboratory Services was purchased by Intertek Group plc.
Mr Wheeler is a Fellow of the Royal Australian Chemical Institute, a Member of the Australasian Institute of
Mining and Metallurgy Inc., a Member of the Association of Exploration Geochemists, and an Associate Member
of the International Association of Geoanalysts.
Directorships held in other listed entities: There have been no listed entity directorships in the last 3 years.
Company Secretary
Graeme Smith Mr Smith is a corporate governance and finance professional with over 30 years’ experience in
accounting and company administration. He is a Fellow of the Australian Society of Certified Practicing
Accountants, the Chartered Governance Institute and the Governance Institute of Australia. He is the principal
of Wembley Corporate which provides Company Secretarial, CFO, and Corporate Governance services to
public and private companies.
Principal Activities
The Group is a gold explorer holding a significant land position in the Archaean Sandstone Goldfield
approximately 600km north of Perth in the East Murchison Mineral Field of Western Australia.
The Sandstone Gold Project is an advanced exploration project which comprises both brown-field and green-
field exploration portfolio. The current mineral resource base of the SGP consists of 12.4Mt at 1.6 g/t Au for
635,000oz of gold (Indicated and Inferred, JORC 2012). Refer to Mineral Resource Table.
Alto’s immediate focus is to rapidly expand the current mineral resources with further exploration and step out
and infill drilling. The priority targets are shallow gold deposits (new deposits such as Vanguard, Indomitable
Camps, Havilah and Ladybird etc.), extension and primary zone discoveries in the vicinity of previously partial-
mined deposits (such as Lord Nelson, Lord Henry and Bulchina etc.) that could be profitably mined through
establishment of standalone oxide and primary gold mining operations at Sandstone.
Refer to the Operations Report starting on page 4 for details of the Group’s exploration activities during the year
Operating Results
The consolidated loss of the Group after providing for income tax amounted to $2,296,096 (2021: $1,810,766).
Financial Position
The net assets of the Group at 30 June 2022 are $25,394,529 (2021: $20,389,312). The cash and cash
equivalent of the Group at 30 June 2022 are $3,256,340 (2021: $5,108,054). The net current assets of the
Group at 30 June 2021 are $1,645,993 (2021: $3,617,001)
Risk Management
The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that
activities are aligned with the risks and opportunities identified by the Board. The Board believes that it is crucial
for all Board members to be a part of this process, and as such the Board has not established a separate risk
management committee. The Board has a number of mechanisms in place to ensure that management's
objectives and activities are aligned with the risks identified by the Board. These include the following:
Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders’
needs and manage business risk.
Implementation of Board approved operating plans and budgets and Board monitoring of progress against
these budgets.
COVID-19
The COVID-19 outbreak has continued to affect everybody in 2022. Measures taken by various governments
to contain the virus have affected economic activity. We have taken a number of measures to monitor and
Alto Metals Limited | 2022 Annual Report
21
DIRECTORS’ REPORT
prevent the effects of the COVID-19 virus such as safety and health measures for our people (like social
distancing and working from home).
At this stage, the impact on our business and results is limited. We will continue to follow the various national
institutes policies and advice and in parallel will do our utmost to continue our operations in the best and safest
way possible without jeopardising the health of our people.
Significant Changes in State of Affairs
Other than the capital raising of $7 million during the year, there have been no significant changes in the affairs
of the Group during the year.
Significant Events After the Reporting Date
No other matters or circumstances have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
Likely Developments and Expected Results
The Group expects to maintain the present status and level of operations and hence there are no likely
developments in the Group's operations.
Exploration Risk
Mineral exploration and development are high-risk undertakings, and there is no assurance that exploration
of the tenements will result in the discovery of an economic deposit. Even if an apparently viable deposit is
identified there is no guarantee that it can be economically exploited.
The future exploration activities of the Group may be affected by a range of factors including geological
conditions, limitations on activities due to permitting requirements, availability of appropriate exploration
equipment, exploration costs, seasonal weather patterns, unanticipated operational and technical difficulties,
industrial and environmental accidents and many other factors beyond the control of the Group.
Environmental Regulation and Performance
The Group is subject to significant environmental regulation in respect to its exploration activities. The Group
aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of
and is in compliance with all environmental legislation. The Directors of the Company are not aware of any
breach of environmental legislation for the year under review.
Dividends Paid or Recommended
No dividend has been paid or recommended.
Meetings of Directors
During the financial period, the following meetings of Directors were held. Attendances by each Director during
the period were as follows:
Directors' Meetings
Number eligible
to attend
9
9
9
9
Number
attended
9
9
8
8
R Monti
M Bowles
J Wang
T Wheeler
Alto Metals Limited | 2022 Annual Report
22
DIRECTORS’ REPORT
Indemnifying Officers or Auditor
During or since the end of the financial period, the Company has given an indemnity or entered into an
agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
• The Company has entered into agreements to indemnify all Directors and provide access to documents,
against any liability arising from a claim brought by a third party against the Company. The agreement
provides for the Company to pay all damages and costs which may be awarded against the Directors.
• The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the
capacity of Director of the Company, other than conduct involving a wilful breach of duty in relation to the
Company. The amount of the premium was $13,376 (2021: $11,040).
• No indemnity has been given to the Group’s auditors.
Options
At the date of this report, the following options were on issue over ordinary shares of the Company.
Date options granted
Number of unissued
shares under option
Exercise price per
option
Expiry date of
options
29 November 2019
7,500,000
$0.07
29 November 2023
Total options on issue
7,500,000
Performance Rights
At the date of this report, the following performance rights were on issue over ordinary shares of the Company.
Date performance rights granted
Number of unissued
shares under rights1
Expiry date of rights
25 November 2020
6,000,000
30 November 2023
29 October 2021
500,000
30 November 2023
Total performance rights on issue
6,500,000
1 Performance Rights on issue at 30 June 2022 were 13,000,000. On 8 July 2022, 6,500,000 performance rights
were converted to fully paid ordinary shares
LTI Rights
At the date of this report, there are 6.25 million fully paid ordinary shares issued under the LTI rights plan
which was approved by shareholders at the 2019 AGM. These rights expire on 29 November 2022 unless
exercised.
Non-audit Services
The following non-audit services were provided by the Group’s auditor, Pitcher Partners BA&A Pty Ltd, or
associated entities. The Directors are satisfied that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the
auditor independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the board to ensure they do not impact the impartiality and
objectivity of the auditor;
• None of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants (including Independence Standards).
Alto Metals Limited | 2022 Annual Report
23
DIRECTORS’ REPORT
Pitcher Partners BA&A Pty Ltd, or associated entities, received or are due to receive the following amounts for
the provision of non-audit services:
Tax compliance services
2022
$
1,700
2021
$
6,069
Corporate
During the year, 77.8 million shares were issued through placements and raised $7 million.
On 11 August 2020, the Company entered into a Loan Facility Agreement with major shareholder, Harvest Lane
Asset Management Pty Ltd for up to $1 million. The loan was not utilised and has now expired.
Substantial Shareholders
At year end, the following substantial shareholders were noted:
Holder
Number of Shares
Windsong Valley Pty Ltd & Marymount Pty Ltd
98.4 million
Westgold Resources Limited
GS Group Australia Pty Ltd (GSGA)
78.1 million
56.8 million
%
18.42%
14.60%
10.62%
Alto Metals Limited | 2022 Annual Report
24
DIRECTORS’ REPORT
This report details the nature and amount of each element of the remuneration of each of the key management
personnel (“KMP”) of the Group (defined as “Directors”, both Non-Executive and Executive).
REMUNERATION REPORT (AUDITED)
A. Remuneration Policy
The remuneration policy of Alto Metals Limited has been designed to align Directors objectives with shareholder
and business objectives by providing a fixed remuneration component, and offering specific long-term incentives
based on key performance areas affecting the Group’s financial results. The Board believes the remuneration
policy to be appropriate and effective in its ability to attract and retain the best Directors to run and manage the
Group, as well as create goal congruence between Directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Directors of the Company is as
follows:
The remuneration policy, setting the terms and conditions for the Managing Director (“MD”), was developed and
approved by the Board. The MD receives a base salary (which is based on factors such as length of service
and experience) and superannuation. The Board reviews the MD’s package periodically by reference to the
Group’s performance, the MD’s performance, and comparable information from industry sectors and other listed
companies in similar industries.
The MD is also entitled to participate in the employee share and option arrangements.
All remuneration paid to Directors is valued at the cost to the Company and expensed. Options given to Directors
are valued using the Black-Scholes methodology.
The Board policy is to remunerate Non-Executive Directors at the lower end of market rates for comparable
companies for time, commitment, and responsibilities. The Board determines payments to the Non-Executive
Directors and reviews their remuneration periodically based on market practice, duties and accountability.
Independent external advice is sought when required. 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. Fees for Non-
Executive Directors are not linked to the performance of the Group. To align Directors’ interests with shareholder
interests, the Non-Executive Directors are encouraged to hold shares in the Company.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’
investment objectives and KMP’s performance. The Group believes this policy will be effective in increasing
shareholder wealth.
From time to time, the Board may issue, at its discretion, cash bonuses, performance rights or incentive options
to KMP which are intended to reward the KMP or align the interests of the KMP with those of Shareholders.
Use of remuneration consultants
The Group did not employ the services of any remuneration consultants during the financial period ended 30
June 2022.
Voting and comments made at the Company’s 2021 Annual General Meeting (“AGM”)
The Company received approximately 99.7% of “yes” votes based on the number of proxy votes received on
its remuneration report for the 2021 financial year. The Company did not receive any specific feedback at the
AGM or throughout the year on its remuneration practices.
B. Details of Remuneration for Period Ended 30 June 2022
The following table outlines benefits and payment details, in respect to the financial year, as well as the
components of remuneration for each member of the KMP of the Group.
Alto Metals Limited | 2022 Annual Report
25
DIRECTORS’ REPORT
Table of Benefits and Payments for the Period Ended 30 June 2022
Short-term benefits
Post-
employment
benefits
Cash bonuses1
Superannuation
Equity-
settled
share-based
payments
Options and
Performance
Rights
Total
Remuneration
performance
based
$
-
36,000
-
-
36,000
-
-
-
-
-
$
$
$
4,800
27,503
3,653
-
35,956
6,080
12,350
4,338
-
22,768
118,078
165,310
47,231
47,231
377,850
66,444
93,022
26,578
26,578
212,622
170,878
530,214
87,414
87,231
875,737
122,524
377,722
66,578
66,578
633,402
%
69%
31%
54%
54%
43%
54%
25%
40%
40%
34%
Salary,
fees and
leave
$
48,000
301,401
36,530
40,000
425,931
50,000
272,350
35,662
40,000
398,012
2022
R Monti
M Bowles
T Wheeler
J Wang
2021
R Monti
M Bowles
T Wheeler
J Wang
Equity instrument disclosures relating to KMP
Ordinary Shares
The number of ordinary shares held by each KMP of the Group during the financial period is as follows:
Balance at the
start of the period
Changes during
the period2
Balance at the end
of the period
2022
Ordinary Shares
R Monti
T Wheeler
J Wang
M Bowles
Total
666,667
83,522,062
-
6,250,000
90,438,729
2,222,222
14,427,584
444,444
-
17,094,250
2,888,889
97,949,646
444,444
6,250,000
107,532,979
(1) The cash bonus was linked to Mr Bowles at the discretion of the Board as a result of the Group’s performance for the year.
(2) Placement pursuant to shareholder approval
Alto Metals Limited | 2022 Annual Report
26
DIRECTORS’ REPORT
Options
The number of options on issue over ordinary shares of the Company held by each KMP of the Group during
the financial period is as follows:
Balance at the
start of the
period
Other changes
during the period
Balance at the
end of the
period
Vested and
exercisable
2022
Unlisted Options
R Monti
M Bowles
T Wheeler
J Wang
Total
Performance Rights
-
7,500,000
-
-
7,500,000
-
-
-
-
-
-
7,500,000
-
-
7,500,000
-
7,500,000
-
-
7,500,000
The number of performance rights in Alto Metals Limited held by each KMP of the Company during the
financial period is as follows:
Balance at the
start of the
period
Other changes
during the
period
Balance at the
end of the
period
Vested and
exercisable
2022
Performance Rights
R Monti
M Bowles
T Wheeler
J Wang
Total
Service Agreements
2,500,000
3,500,000
1,000,000
1,000,000
8,000,000
-
-
-
-
-
2,500,000
3,500,000
1,000,000
1,000,000
8,000,000
1,250,000
1,750,000
500,000
500,000
4,000,000
The Group has a formal employment contract with Matthew Bowles, MD & CEO. The employment contract for Mr Bowles
has no fixed term and does not prescribe how remuneration levels are to be modified from year to year. A summary of the
main provisions of these contracts for the year ended 30 June 2022 are set out below:
NAME
TERMS
Matthew Bowles
(Managing Director and CEO)
Base salary of $302,895 (exclusive of superannuation contributions), reviewed
annually.
6 months’ notice by Mr. Bowles. 12 months by Company, including upon change of
control.
Termination payments to reflect appropriate notice, except in cases of termination for
cause.
Mr. Bowles shall be eligible to participate in any Short Term or Long Term Incentive
Schemes that the Company may offer.
Alto Metals Limited | 2022 Annual Report
27
DIRECTORS’ REPORT
C. Share-based compensation
Incentive Option Scheme
Options, where appropriate, may be granted under the Alto Metals Limited Employee Share Option Plan
(“ESOP”). Options are granted under the plan for no consideration on terms and conditions considered
appropriate by the Board at the time of issue. Options are granted for up to a five year period. Options granted
under the plan carry no dividend or voting rights.
The ability for the employee to exercise the options is restricted in accordance with the terms and conditions
detailed in the ESOP. Each option will automatically lapse if not exercised within five years of the date of issue.
The exercise period may also be affected by other events as detailed in the terms and conditions in the ESOP.
The options vest as specified when the options are issued.
Long term incentive rights (LTI)
LTI rights to directors and employees are delivered under an Employee Share Plan (the “Plan”) that was adopted
by the Group pursuant to approval by shareholders at the Annual General Meeting held of 29 November 2019.
A material feature of the Plan is that the issue of ordinary shares to directors and employees can be by way of
provision of a limited-recourse, interest free loan, to be used for the purpose of subscribing for the shares. The
offer of a limited-recourse, interest free loan is based on a share price not less than the volume weighted
average price at which shares are traded on the ASX over the 10 trading days up to and including the date of
the issue of shares offered under the Plan, or such other price as the Board of Directors determines. The term
of each loan will be 3 years from the date of issue of the shares, subject to the earlier repayment in accordance
with the terms of the Plan.
After subscription, the shares are issued as ordinary shares, and the directors and employees enjoy the same
rights and benefits as other shareholders, apart from any vesting conditions that are attached and the fact the
shares cannot be sold until the loan is settled. Shares may be issued subject to vesting conditions relating to
achievement of milestones (such as period of employment) or escrow restrictions which must be satisfied before
the shares can be sold, transferred, or encumbered.
The nature of the Plan is to provide an incentive to cause the share price to rise over the term of a director’s
and employee’s service, as well as retaining the director’s and employee’s service, and hence there are no
specific performance conditions attaching to these shares. The shares are considered to be “in substance
options” or “long-term incentive rights” (“LTI rights”) under generally accepted accounting principles, and
accordingly are accounted for similar to options. The fair value of the LTI rights is estimated as at the date of
grant using the Black Scholes model taking into account the terms and conditions upon which the LTI rights are
granted and factors such as the share price at grant date, volatility of the share price and risk free rate.
Accounting standards require the value of the LTI rights to be brought to account over the expected term of
vesting the benefits to the holder.
Alto Metals Limited | 2022 Annual Report
28
DIRECTORS’ REPORT
D. Other Transactions with Directors and Key Management Personnel
During the year, a related party of M Bowles, a Director, provided media, marketing consulting & admin services
to the Group. All fees paid for such services were at market rates and on a normal arm’s length basis. Total
fees paid during the year were $14,636 (2021: $7,300). As at 30 June 2022 $Nil (2021: $Nil) was payable to
the related party.
Other than noted elsewhere in this report, no significant related party transactions have arisen during the year
ended 30 June 2022.
Group’s Performance
The table below sets out information about the Group’s earnings and movements in shareholder wealth for
the past five years up to and including the current financial year.
2022
2021
2020
2019
2018
Net loss after tax ($)*
(2,296,096)
(1,810,766)
(1,393,043)
(1,147,517)
(624,026)
Basic loss per share (cents)*
Share Price at year end (cents)
(0.47)
7.0
(0.46)
9.3
(0.48)
6.8
(0.55)
3.3
(0.36)
6.4
*Historical results have not been assessed and adjusted for the impact of new accounting standards.
----- End of Audited Remuneration Report -----
Alto Metals Limited | 2022 Annual Report
29
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the period ended 30 June 2022 has been received and can
be found on the following page.
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors on 30 September 2022.
Rounding amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the
amounts in the directors’ report and in the financial report have been rounded to the nearest dollar.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section
237 of the Corporations Act 2001.
Richard Monti
Non-Executive Chairman
Dated this 30th day of September 2022
Alto Metals Limited | 2022 Annual Report
30
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ALTO METALS LIMITED
In relation to the independent audit for the year ended 30 June 2022, to the best of my
knowledge and belief there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act
2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants
(including Independence Standards).
This declaration is in respect of Alto Metals Limited and the entities it controlled during the
year.
PITCHER PARTNERS BA&A PTY LTD
PAUL MULLIGAN
Executive Director
Perth, 30 September 2022
31
Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 June
Other income
Consulting expense
Depreciation
Employee benefits expense
Investor relations
Office rental and occupation expenses
Share registry and listing fees
Share based payments
Other expenses
Loss before income tax
Income tax (expense) / benefit
Loss for the year
Note
2
3
4
5
6
2022
$
150,746
(102,109)
(51,240)
(868,221)
(169,176)
(108,956)
(87,956)
(631,186)
(427,998)
(2,296,096)
-
2021
$
60,030
(225,785)
(17,495)
(535,709)
(161,975)
(68,679)
(121,639)
(268,932)
(470,582)
(1,810,766)
-
(2,296,096)
(1,810,766)
Other comprehensive income, net of tax
Items not to be reclassified to profit or loss in subsequent
periods
Changes in the fair value of equity instruments carried at fair
value through other comprehensive income
11
(20,000)
Other comprehensive (loss) / income for the period
(20,000)
15,000
15,000
Total comprehensive loss attributable to members of the
parent entity
(2,316,096)
(1,795,766)
Basic & Diluted loss per share (cents per share)
8
(0.47)
(0.46)
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2022 Annual Report
32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Equity instruments at fair value
Property, plant and equipment
Right of Use Assets
Exploration and evaluation
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Lease liability
Employee Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liability
Total Non- Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
9
10
11
12
13
14
15
13
13
16
17
2022
$
3,256,340
267,105
19,502
3,542,947
20,000
213,817
131,370
23,481,586
23,846,773
27,389,720
1,710,479
35,910
150,565
1,896,954
98,237
98,237
2021
$
5,108,054
298,683
10,071
5,416,808
40,000
170,715
-
16,561,596
16,772,311
22,189,119
1,691,632
-
108,175
1,799,807
-
-
1,995,191
1,799,807
25,394,529
20,389,312
42,563,659
1,156,523
(18,325,653)
25,394,529
35,645,566
773,303
(16,029,557)
20,389,312
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2022 Annual Report
33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June
Balance at 1 July 2020
Loss attributable to members of the entity for the period
Loss for the period
Other comprehensive income, net of tax
Total comprehensive loss for the period
Transaction with owners, directly in equity
Shares issued during the period
Options issued to Director
LTI rights issued to Director
Shares issued to creditors
Share issue transaction costs
Balance at 30 June 2021
Loss attributable to members of the entity for the period
Loss for the period
Other comprehensive income, net of tax
Total comprehensive loss for the period
Transaction with owners, directly in equity
Shares issued during the period
Performance Rights issued
Transfer from Share Based Payments Reserve to Issued Capital
for options exercised
Share issue transaction costs
Balance at 30 June 2022
The accompanying notes form part of these financial statements.
Issued Capital
$
24,583,726
Share Based
Payments
Reserve
$
516,871
Equity
Instruments at
FVOCI
Reserve
$
(27,500)
Accumulated
Losses
Total
$
(14,218,791)
$
10,854,306
-
-
-
11,422,840
-
-
-
(361,000)
35,645,566
-
-
-
7,000,000
-
227,966
(309,873)
42,563,659
-
-
-
-
318,932
-
(50,000)
-
785,803
-
15,000
15,000
(1,810,766)
-
(1,810,766)
-
-
-
-
-
-
-
-
-
-
(12,500)
(16,029,557)
-
-
-
-
(20,000)
(20,000)
(2,296,096)
-
(2,296,096)
-
631,186
(227,966)
-
-
-
-
-
-
-
-
-
1,189,023
(32,500)
(18,325,653)
(1,810,766)
15,000
(1,795,766)
11,422,840
318,932
-
(50,000)
(361,000)
20,389,312
(2,296,096)
(20,000)
(2,316,096)
7,000,000
631,186
-
(309,873)
25,394,529
Alto Metals Limited | 2022 Annual Report
34
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Interest paid
Payments to suppliers and employees
Other receipts
Note
2022
$
3,591
(3,703)
(1,674,640)
147,155
Net cash used in operating activities
18a
(1,527,597)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Payments for exploration and evaluation expenditure
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares during the period
Costs associated with shares issued during the period
Net payment of lease liabilities
Proceeds from related party loan
Repayment of related party loan
(70,157)
(6,922,679)
(6,992,836)
7,000,000
(309,873)
(21,408)
-
-
2021
$
5,149
-
(1,523,163)
54,881
(1,463,133)
(92,239)
(4,259,029)
(4,351,268)
11,422,840
(361,000)
-
200,000
(466,219)
Net cash provided by financing activities
6,668,719
10,795,621
Net (decrease)/increase in cash and cash equivalents
held
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at 30 June
9
(1,851,714)
5,108,054
3,256,340
4,981,220
126,834
5,108,054
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2022 Annual Report
35
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report includes the consolidated financial statements and notes of Alto Metals Limited (“the
Company”) and controlled entities (“the Group”). Alto Metals Limited is a listed public company, incorporated
and domiciled in Australia. The financial information is presented in Australian dollars.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001. Alto Metals Limited is a for-profit entity for the purpose of preparing the financial
statements.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which
they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes
also comply with International Financial Reporting Standards. Material accounting policies adopted in the
preparation of this financial report are presented below. They have been consistently applied unless otherwise
stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of investments.
The financial statements were authorised for issue by the Directors on 30 September 2022.
Rounding amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the
amounts in the directors’ report and in the financial report have been rounded to the nearest dollar.
Going concern
The financial report has been prepared on the basis of accounting principles applicable to a going concern,
which assumes the commercial realisation of the future potential of the Group’s assets and the discharge of
their liabilities in the normal course of business.
As disclosed in the financial report, the Group recorded an operating loss of $2,296,096 (2021: $1,810,766),
net current assets of $1,645,993 (2021: $3,617,001), net cash outflows used in operating activities of
$1,527,597 (2021: $1,463,133), net cash outflows used in investing activities of $6,992,836 (2021: $4,351,268)
and had cash and cash equivalents of $3,256,340 (2021: $5,108,054) for the year ended 30 June 2022.
The Board considers that the Group is a going concern. In arriving at this position the Directors have had regard
to the fact that based on the matters noted below the Group has, or in the Directors opinion, will have access
to, sufficient cash to fund administrative and other committed expenditure for a period of at least 12 months
from the date of signing this report. Specifically, the Directors’ conclusion is supported by the following:
• Obtaining additional funding as and when required to meet forecasted liabilities;
• The ability to reduce exploration and evaluation expenditures accordingly should the need arise through
the ongoing monitoring of cash reserves; and
• Receiving the continued support of its shareholders and creditors.
On this basis no adjustments have been made to the financial report relating to the recoverability and
classification of the carrying amount of assets or the amount and classification of liabilities that might be
necessary should the Group not continue as a going concern. Accordingly, the financial report has been
prepared on a going concern basis.
Should the Group be unable to raise further debt or capital within the next 12 months with the initiatives detailed
above then there exists a significant uncertainty that the Group may in the future not be able to continue as a
going concern and may therefore be required to realise assets and extinguish liabilities other than in the
ordinary course of business with the amount realised being different from those shown in the financial
statements.
Alto Metals Limited | 2022 Annual Report
36
NOTES TO THE FINANCIAL STATEMENTS
(A)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent Alto
Metals Limited and all of the subsidiaries (including any structured entities). 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
the subsidiaries is provided in Note 19.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements 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 fully 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.
(B)
INCOME TAX
The income tax expense for the period comprises current income tax expense and deferred tax expense.
Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the period as well unused tax losses.
Current and deferred income tax expense is charged or credited directly to equity instead of profit or loss when
the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or liability, excluding a business combination, where there
is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of
the reporting period. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred
tax assets or liabilities are expected to be recovered or settled.
Alto Metals Limited | 2022 Annual Report
37
NOTES TO THE FINANCIAL STATEMENTS
(C)
PROPERTY, PLANT & EQUIPMENT
Property, Plant, and Equipment
Each class of property, plant, and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the historical cost basis.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the
Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
25%
Computers equipment
25-33%
Motor vehicles
25%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting 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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in profit or loss.
(D)
INTANGIBLE ASSETS
Recognition of intangible assets
Acquired intangible assets
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the
specific software.
Subsequent measurement
All intangible assets are accounted for using the cost model whereby capitalised costs are amortised on a
straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and
useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing.
The following useful lives are applied:
Software: 4 years
Amortisation has been included within depreciation, amortisation and impairment of non-financial assets.
Subsequent expenditures on the maintenance of computer software are expensed as incurred.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between
the proceeds and the carrying amount of the asset and is recognised in profit or loss within other income or
other expenses.
(E)
EXPLORATION & EVALUATION EXPENDITURE
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
Alto Metals Limited | 2022 Annual Report
38
NOTES TO THE FINANCIAL STATEMENTS
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
The Company may receive research and development (“R&D”) rebates from the Australian Taxation Office.
Where an R&D rebate can be directly attributable to an area of interest the R&D rebate is applied against the
area of interest. For any amounts that cannot be directly attributable to an existing area of interest the amount
will be recognised as grant income in profit or loss.
(F)
LEASES
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a
lease asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis
over the lease term.
Leases of 12-months or greater
(i)
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-
of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Unless the Company
is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised
right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the
lease term. Right-of-use assets are subject to impairment.
(ii)
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising
the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised
as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in
the assessment to purchase the underlying asset. Interest expense on lease liabilities is recognised in profit
or loss (presented as a component of office rental and occupation expense.)
(iii)
Leases - Estimating the incremental borrowing rate
When the Company cannot readily determine the interest rate implicit in the lease, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have
to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the
Company ‘would have to pay’, which requires estimation when no observable rates are available (such as for
subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms
and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The
Company estimates the IBR using observable inputs (such as market interest rates) when available and is
required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).
Alto Metals Limited | 2022 Annual Report
39
NOTES TO THE FINANCIAL STATEMENTS
(G)
FINANCIAL INSTRUMENTS
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument. For financial assets, this is equivalent to the date that the Group commits
itself to either the purchase or sale of the asset. Financial assets are derecognised when the contractual rights
to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and
rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or
expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15 Revenue from Contracts with Customers, all financial assets
are initially measured at fair value adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified into the following category upon initial recognition:
•
•
equity instruments at fair value through other comprehensive income (FVOCI)
amortised cost
Classification is determined by both:
•
•
The Group’s business model for managing the financial asset
The contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Equity instruments at fair value through other comprehensive income (“FVOCI”)
Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception
to be measured at FVOCI. Under this category, subsequent movements in fair value are recognised in other
comprehensive income and are never reclassified to profit or loss.
Classification and measurement of financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss (“FVPL”). Subsequently,
financial liabilities are measured at amortised cost using the effective interest method except for derivatives and
financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss (other than derivative financial instruments that are designated and effective as
hedging instruments). The Group has not designated any financial liabilities at FVPL.
(H)
IMPAIRMENT OF NON-FINANCIAL ASSETS
At each the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-
acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to
the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to
profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Alto Metals Limited | 2022 Annual Report
40
NOTES TO THE FINANCIAL STATEMENTS
(I)
EMPLOYEE BENEFITS
Short term employee benefits
Liabilities arising in respect of wages and salaries, annual leave and other employee benefits (other than
termination benefits) expected to be settled wholly before twelve months after the end of the reporting period
are measured at the (undiscounted) amounts based on remuneration rates which are expected to be paid when
the liability is settled.
The expected cost of short-term employee benefits in the form of compensated absences such as annual leave
is recognised in the provision for employee benefits. All other short-term employee benefit obligations are
presented as payables in the consolidated statement of financial position.
Other long-term employee benefits
The provision for other long-term employee benefits, including obligations for long service leave and annual
leave, which are not expected to be settled wholly before twelve months after the end of the reporting period,
are measured at the present value of the estimated future cash outflow to be made in respect of the services
provided by employees up to the reporting date. Expected future payments incorporate anticipated future wage
and salary levels, durations of service and employee turnover, and are discounted at rates determined by
reference to market yields at the end of the reporting period on high quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms
of the related obligation. For currencies in which there is no deep market in such high quality corporate bonds,
the market yields (at the end of the reporting period) on government bonds denominated in that currency are
used. Any remeasurements for changes in assumptions of obligations for other long-term employee benefits
are recognised in profit or loss in the periods in which the change occurs.
Other long-term employee benefit obligations are presented as current liabilities in the balance sheet if the
Group does not have an unconditional right to defer settlement for at least twelve months after the reporting
date, regardless of when the actual settlement is expected to occur. All other long-term employee benefit
obligations are presented as non-current liabilities in the consolidated statement of financial position.
Retirement benefit obligations
The Group makes superannuation contributions to the employee's defined contribution superannuation plan of
choice in respect of employee services rendered during the year. These superannuation contributions are
recognised as an expense in the same period when the related employee services are received. The Group's
obligation with respect to employee's defined contributions entitlements is limited to its obligation for any unpaid
superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid
superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when
the obligation is settled and are presented as current liabilities in the consolidated statement of financial position.
Equity-settled compensation
The Company operates an Incentive Option Scheme share-based compensation plan (“the Plan”). The bonus
element over the exercise price of the employee services rendered in exchange for the grant of shares and
options is recognised as an expense in profit of loss. The total amount to be expensed over the vesting period
is determined by reference to the fair value of the shares of the options granted. The issue of shares pursuant
to the Plan may be undertaken by way of provision of a limited-recourse, interest-free loan to be used for the
purposes of subscribing for the shares. The shares issued are fully paid ordinary shares in the capital of the
Company, issued on the same terms and conditions as the Company’s existing shares, other than being subject
to any Loan being extinguished or repaid under the terms of the Plan.
Although these are shares for legal and taxation purposes, Accounting Standards require they be treated as
options for accounting purposes.
Performance Rights
The Company measures the value of its performance rights using the listed price of the Company’s shares at
the date of granting of the rights, as the rights convert to ordinary shares at a ratio of 1:1. The Company then
determines the probability that performance conditions attaching to the rights will be met and the rights will
convert. Where the probability is greater than 50%, the full value is assigned to the rights. Where the probability
is less than 50%, no value is assigned to the rights. The value of the rights are then amortised into expense
evenly over the service period to the date of expiry, resulting in a share based payment expense in profit or loss
and accumulating in the Share based payment reserve in equity on the Consolidated Statement of Financial
Position.
Alto Metals Limited | 2022 Annual Report
41
NOTES TO THE FINANCIAL STATEMENTS
(J)
PROVISIONS
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
The amount recognised as a provision is the best estimate of the expenditure required to settle the present
obligation at the end of the reporting period.
(K)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the Consolidated Statement of Financial Position.
(L)
OTHER INCOME
Interest income is measured in accordance with the effective interest method.
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received, and all grant conditions will be met. Grants relating to expense items are recognised as income over
the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited
to deferred income at fair value and are credited to income over the expected useful life of the asset on a
straight-line basis.
All other income is stated net of the amount of goods and services tax.
(M)
TRADE AND OTHER PAYABLES
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
services received by the Group during the reporting period which remains unpaid. The balance is recognised
as a current liability with the amount being normally paid within 30 days of recognition of the liability.
(N)
GOODS AND SERVICES TAX (“GST”)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
Consolidated Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the Consolidated Statement of Cash Flows on a gross basis, except for the GST
component of financing activities, which are disclosed as operating cash flow.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(O)
EQUITY AND RESERVES
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with
the issuing of shares are deducted from share capital, net of any related income tax benefits.
Other components of equity include the following:
•
•
•
Retained earnings include all current and prior period retained profits.
Shared based payment reserves – comprises expenses recorded for share based payments.
Equity instruments at FVOCI reserve – comprises gains and losses relating to these types of financial
instruments.
(P)
EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to equity holders of the Company,
excluding any costs of service equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during
the period.
Alto Metals Limited | 2022 Annual Report
42
NOTES TO THE FINANCIAL STATEMENTS
Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financial costs associated with 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.
(Q)
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information that can significantly affect the amounts recognised in the
financial statements. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Outcomes within the next financial year that are different from the assumptions made could require a material
adjustment to the carrying amounts of the specific assets and liabilities affected by the assumptions.
Key Estimates — Impairment of Assets
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined.
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made
regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount
of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate
a number of key estimates.
No impairment has been recorded for the year ended 30 June 2022.
The key assumptions about the future, and other major sources of estimation uncertainty at the reporting date,
that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are outlined below.
Key Estimates – Share-based payments (Refer to note 4)
The Group measures the cost of equity settled share-based payments at fair value at the grant date using the
Black Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the
share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk
free interest rate for the term of the option.
Key Judgments – Benefit from Deferred Tax Losses
The future recoverability of the carried forward tax losses are dependent upon Group’s ability to generate
taxable profits in the future in the same tax jurisdiction in which the losses arise. This is also subject to
determinations and assessments made by the taxation authorities. The recognition of a deferred tax asset on
carried forward tax losses (in excess of taxable temporary differences) is dependent on management’s
assessment of these two factors. The ultimate recoupment and the benefit of these tax losses could differ
materially from management’s assessment.
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2022 because the Directors do not believe it is appropriate to regard
realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
•
•
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss and exploration expenditure to be realised;
the Group continues to comply with conditions for deductibility imposed by law; and
• no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for
the loss and exploration expenditure.
(R)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. There is
no material impact on any new or amended Accounting Standards and Interpretations adopted by the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Alto Metals Limited | 2022 Annual Report
43
NOTES TO THE FINANCIAL STATEMENTS
The following relevant standards and interpretations have been issued by the AASB but are not yet effective for
the year ending 30 June 2022:
AASB 2021-3 Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2021
and Other Amendments
AASB 1 – simplifies the application by a subsidiary that becomes a first-time adopter after its parent in
AASB 3 – updates references to the Conceptual Framework for Financial Reporting;
AASB 9 – clarifies the fees an entity includes when assessing whether the terms of a new or modified
AASB 2021-3 amends AASB 1 First-time Adoption of Australian Accounting Standards, AASB 3 Business
Combinations, AASB 9 Financial Instruments, AASB 116 Property, Plant and Equipment, AASB 137 Provisions,
Contingent Liabilities and Contingent Assets and AASB 141 Agriculture. The main amendments relate to:
(a)
relation to the measurement of cumulative translation differences;
(b)
(c)
financial liability are substantially different from the terms of the original financial liability;
(d)
AASB 116 – requires an entity to recognise the sales proceeds from selling items produced while
preparing PP&E for its intended use and the related cost in profit or loss, instead of deducting the amounts
received from the cost of the asset;
(e)
making; and
(f)
AASB 141 – removes the requirement to exclude cash flows from taxation when measuring fair value,
thereby aligning the fair value measurement requirements in AASB 141 with those in other Australian
Accounting Standards.
AASB 137 – specifies the costs that an entity includes when assessing whether a contract will be loss
AASB 2021-3 mandatorily applies to annual reporting periods commencing on or after 1 January 2022 and will
be first applied by the Group in the financial year commencing 1 July 2022.
The Group is in the process of assessing the likely impact of this accounting standard on the financial statements
of the Group.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture, AASB 2015-10: Amendments to Australian
Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and AASB 2017-5:
Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and
AASB 128 and Editorial Corrections
AASB 2014-10 amends AASB 10: Consolidated Financial Statements and AASB 128: Investments in
Associates and Joint Ventures to clarify the accounting for the sale or contribution of assets between an investor
and its associate or joint venture by requiring:
(a) a full gain or loss to be recognised when a transaction involves a business, whether it is housed in a
subsidiary or not; and
(b) a partial gain or loss to be recognised when a transaction involves assets that do not constitute a business,
even if these assets are housed in a subsidiary.
These amending standards mandatorily apply to annual reporting periods commencing on or after 1 January
2022 and will be first applied by the Group in the financial year commencing 1 July 2022.
The Group is in the process of assessing the likely impact of this accounting standard on the financial statements
of the Group.
AASB 2021-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current, AASB 2021-6 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-current – Deferral of Effective Date
AASB 2021-1 amends AASB 101 Presentation of Financial Statements to clarify requirements for the
presentation of liabilities in the statement of financial position as current or non-current. It requires a liability to
be classified as current when entities do not have a substantive right to defer settlement at the end of the
reporting period.
AASB 2021-6 defers the mandatory effective date of amendments that were originally made in AASB 2021-1
so that the amendments are required to be applied for annual reporting periods beginning on or after 1 January
2023 instead of 1 January 2022. They will first be applied by the Company in the financial year commencing 1
July 2023.
Alto Metals Limited | 2022 Annual Report
44
NOTES TO THE FINANCIAL STATEMENTS
The Group is in the process of assessing the likely impact of this accounting standard on the financial statements
of the Group.
AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies
and Definition of Accounting Estimates
AASB 2021-1 amends AASB 7 Financial Instruments: Disclosures, AASB 101 Presentation of Financial
Statements, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, AASB 134 Interim
Financial Reporting and AASB Practice Statement 2 Making Materiality Judgements. The main amendments
relate to:
(a) AASB 7 – clarifies that information about measurement bases for financial instruments is expected to be
material to an entity’s financial statements;
(b) AASB 101 – requires entities to disclose their material accounting policy information rather than their
significant accounting policies;
(c) AASB 108 – clarifies how entities should distinguish changes in accounting policies and changes in
accounting estimates;
(d) AASB 134 – to identify material accounting policy information as a component of a complete set of financial
statements; and
(e) AASB Practice Statement 2 – to provide guidance on how to apply the concept of materiality to accounting
policy disclosures.
AASB 2021-2 mandatorily applies to annual reporting periods commencing on or after 1 January 2023 and will
be first applied by the Group in the financial year commencing 1 July 2023.
The Group is in the process of assessing the likely impact of this accounting standard on the financial statements
of the Group.
Alto Metals Limited | 2022 Annual Report
45
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2: OTHER INCOME
Interest received
Government grants
Gold Sales1
2022
$
3,591
73,016
74,139
150,746
2021
$
5,149
54,881
-
60,030
1 Gold sales related to the refining of gold nuggets received pursuant to third party prospector tribute agreements and are
not considered ongoing or material.
NOTE 3: EMPLOYEE BENEFITS EXPENSE
Salary, Wages & Director Fees
Superannuation
Provision for leave
Taxes
Salary & superannuation transferred to Capitalised Exploration
NOTE 4: SHARE-BASED PAYMENTS
Share based payments recognised during the year are:
Accrual cancelled for services received
Performance Rights issued(i)(ii)
2022
$
2,047,694
143,939
31,666
45,441
(1,400,519)
868,221
2022
$
-
631,186
631,186
2021
$
1,324,574
87,169
43,898
17,051
(936,983)
535,709
2021
$
(50,000)
318,932
268,932
(i) On 25 November 2020, Shareholders approved the issue of 8,000,000 Performance Rights to Messrs
Bowles, Monti, Wheeler and Wang, Directors of the Group. These were issued on 1 December 2020 along
with an additional 4,000,000 Performance Rights under the Company’s Employee Share Plan.
(ii) On 29 October 2021 an additional 1,000,000 Performance Rights were issued to employees under the
Company’s Employee Share Plan.
(iii) The fair value of these Performance Rights granted was estimated as at the date of grant using the Black
Scholes model taking into account the terms and conditions upon which the Performance Rights were
granted and factors such as the share price at grant date, volatility of the share price and risk free rate. An
expense of $631,186 was recognised for the year ended 30 June 2022 (2021: $318,932).
The Performance Rights are subject to the following vesting conditions:
(a) The Performance Rights will vest, subject to the satisfaction of the following performance milestones
being met before the Expiry Date and the relevant holder being an employee, office-bearer or
consultant of the Company at the time of the milestone being satisfied, or as otherwise determined by
the Board.
(b) Performance Rights will vest upon the Company announcing a Joint Ore Reserves Committee
(JORC) 2012 compliant Mineral Resource within the Sandstone Gold Project, as follows:
Alto Metals Limited | 2022 Annual Report
46
NOTES TO THE FINANCIAL STATEMENTS
JORC 2012 compliant Mineral Resource
located within the Sandstone Gold
Project
% of Class Performance
Rights Eligible for Vesting
Performance Rights
Vested @ 30 June 2022
at least 500,000 ounces of Gold
at least 1,000,000 ounces of Gold
50%
100%
Yes
No
(c) A Performance Right for which Vesting Condition has not been satisfied expires on the date which is
three (3) years from issue of that Performance Right.
Change of control
In the event that the Sandstone Gold Project is sold or a Change of Control Event (as defined in the Plan rules)
occurs or the Board determines that either such an event is likely to occur before the Vesting Conditions are
met, the Board will have a discretion whether to allow the vesting of the Performance Rights and on what terms.
When determining the vesting of the Performance Rights, the Directors will take into consideration a number of
criteria, but in particular the value to shareholders as a result of the event.
Valuation of Share Based Payments
A summary of the key assumptions used in applying the Black Scholes model to the share based payments
recognised is as follows:
Number of instruments
Date of grant
Share price at grant date
Volatility factor1
Risk free rate
Expected life of instrument (years)
Valuation per instrument
Exercise price per instrument
Vesting conditions
Number of instruments exercisable as at 30 June 2022
Performance
Rights issued
Performance
Rights issued
12,000,000
25-Nov-20
$0.10
77.54%
0.11%
3 years
$0.10
-
As above
6,000,000
1,000,000
29-Oct-21
$0.10
68.51%
0.16%
2 years
$0.10
-
As above
500,000
1 Expected volatility is based on historic volatility of the Company’s shares over recent trading periods, aligned to the
expected life of the options.
NOTE 5: OTHER EXPENSES
Included in the loss for the period are the following items of expenses:
Accounting and audit fees
Computers and software expense
Exploration and Evaluation Expenses
Insurance
Legal fees
Travel and accommodation
Other
2022
$
39,275
83,179
19,535
33,002
39,567
22,237
191,203
427,998
2021
$
47,830
72,110
-
28,839
122,295
14,498
185,010
470,582
Alto Metals Limited | 2022 Annual Report
47
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6: INCOME TAX
(a) Income tax (benefit)/expense
Current tax
Deferred tax
Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable on profit from ordinary activities before
income
tax is reconciled to the income tax expense as follows:
Prima facie tax on operating loss at 30% (2021: 30%)
Add / (Less) tax effect of:
Entertainment
Share based payments
Cash flow boost payment
Deferred tax asset not brought to account
Income tax benefit attributable to operating loss
(b) Deferred tax assets
Tax Losses
Provisions and Accrual
Capital Raising and business-related costs
Plant and Equipment under lease
Investments revalued through equity
Set-off deferred tax liabilities
Net deferred tax assets
(c) Deferred tax liabilities
Exploration expenditure
Prepayments
Set-off deferred tax assets
Net deferred tax liabilities
(d) Deferred income tax (revenue)/expense included in income
tax expense comprise:
Increase in deferred tax assets
Increase in deferred tax liabilities
Non-recognition of deferred tax position
Revaluation of deferred tax position due to change in tax rate
Net deferred income tax
(e) Deferred income tax related to items charged or credited
directly to equity
Increase in deferred tax assets
Decrease in deferred tax liabilities
Non-recognition of deferred tax position
Revaluation of deferred tax position due to change in tax rate
Net deferred income tax
(f) Deferred tax assets not brought to account
Unused tax losses for which no deferred tax asset has been
recognised
2022
$
-
-
-
2021
$
-
-
-
(574,024)
(543,230)
5,992
157,797
-
410,235
-
2,864
80,680
(15,000)
474,686
-
7,657,482
47,483
162,857
694
20,000
7,888,516
(7,888,516)
-
(5,870,397)
(4,875)
(5,875,272)
5,875,272
-
6,570,363
64,201
143,586
-
18,000
6,796,150
(6,796,150)
-
(4,968,479)
(3,021)
(4,971,500)
4,971,500
-
(2,257,901)
1,765,198
188,595
304,108
-
(2,140,693)
1,562,207
578,487
-
-
82,468
-
(79,468)
(3,000)
-
108,301
(4,500)
(103,801)
-
-
7,657,482
6,570,363
Alto Metals Limited | 2022 Annual Report
48
NOTES TO THE FINANCIAL STATEMENTS
Temporary differences for which no deferred tax asset has been
recognised
(5,644,237)
(4,745,714)
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2022 because the Directors do not believe it is appropriate to regard
realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
the Group derives future assessable income of a nature and of an amount sufficient to enable the
benefit from the deductions for the loss and exploration expenditure to be realised;
the Group continues to comply with conditions for deductibility imposed by law; and
•
• no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for
•
the loss and exploration expenditure.
NOTE 7: AUDITORS’ REMUNERATION
Remuneration of the auditor of the Group for:
- Auditing or reviewing the financial report by Pitcher Partners
BA&A Pty Ltd
Remuneration of the auditor, or associated entities, of the Group for
non-audit services:
- Tax compliance services
NOTE 8: LOSS PER SHARE
2022
$
2021
$
32,865
28,358
1,700
6,069
2022
$
2021
$
(a) Reconciliation of earnings to loss
Earnings used in the calculation of basic EPS
(b) Weighted average number of ordinary shares outstanding during
the period used in calculation of basic EPS
Basic & diluted loss per share (cents per share)
Antidilutive options on issue not used in dilutive EPS calculation
Antidilutive performance rights on issue not used in dilutive EPS
calculation
(2,296,096)
(1,810,766)
490,030,087
390,260,110
(0.47)
7,500,000
13,000,000
(0.46)
7,500,000
12,000,000
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank
Reconciliation of cash
Cash at the end of the financial period as shown in the
Consolidated Statement of Cash Flows is reconciled to items in the
Consolidated Statement of Financial Position as follows:
Cash and cash equivalents
NOTE 10: TRADE AND OTHER RECEIVABLES
CURRENT
GST receivable
Trade and other receivables
2022
$
3,256,340
2021
$
5,108,054
3,256,340
5,108,054
2022
$
224,272
42,833
267,105
2021
$
264,662
34,021
298,683
Alto Metals Limited | 2022 Annual Report
49
NOTES TO THE FINANCIAL STATEMENTS
There are no balances within trade and other receivables that contain assets that are impaired and are past
due. It is expected these balances will be received when due.
Included in trade and other receivables is a security bond of $42,833 (2021: $32,823) which is subject to an
indemnity guarantee for a rental agreement.
NOTE 11: FINANCIAL INSTRUMENTS
Note 1(G) provides a description of each category of financial instrument and related accounting policies. The
carrying amounts of financial assets and financial liabilities in each category are as follows:
30 June 2022
Financial assets
Cash and cash equivalents(i)
Trade and other receivables(i)
Equity instruments(ii)
Total financial assets
Financial liabilities
Trade and other payables(i)
Lease liabilities(iii)
Total financial liabilities
30 June 2021
Financial assets
Cash and cash equivalents(i)
Trade and other receivables(i)
Equity instruments(ii)
Total financial assets
Financial liabilities
Trade and other payables(i)
Total financial liabilities
Amortised
Cost
$
FVOCI
$
3,256,340
267,105
-
3,523,445
(1,710,479)
(134,147)
(1,844,626)
5,108,054
298,683
-
5,406,737
-
-
20,000
20,000
-
-
-
-
-
40,000
40,000
(1,691,632)
(1,691,632)
-
-
(i)
The carrying amount of the following financial assets and liabilities is considered reasonable
approximation of fair value:
- cash and cash equivalents
- trade and other receivables
- trade and other payables
- loan and borrowings
(ii)
Equity instruments at fair value through other comprehensive income
Balance at the beginning of the reporting period
Add revaluation increments/(decrements)
2022
$
40,000
(20,000)
20,000
2021
$
25,000
15,000
40,000
Equity instruments are shares held in an ASX listed entity, Enterprise Metals Ltd, and were revalued in the
current period based on the share sale price at reporting date. Fair value has been determined by reference
to quoted market prices.
(iii)
Lease liabilities – refer to note 13 for details
Alto Metals Limited | 2022 Annual Report
50
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
NON-CURRENT
Plant and equipment – cost
Accumulated depreciation
Motor vehicles – cost
Accumulated depreciation
Land and Building – cost
Accumulated depreciation
2022
$
182,506
(151,745)
30,761
92,933
(49,470)
43,463
139,593
-
139,593
2021
$
163,895
(141,831)
22,064
92,933
(32,330)
60,603
88,048
-
88,048
Total property, plant and equipment
213,817
170,715
a) Reconciliation of Carrying Amounts
Plant and Equipment
Opening balance
- Additions
- Depreciation expense
Carrying amount at the end of the period
Motor Vehicles
Opening balance
- Additions
- Depreciation expense
Carrying amount at the end of the period
Land and Buildings
Opening balance
- Additions
Carrying amount at the end of the period
Totals
Opening balance
- Additions
- Depreciation expense
Carrying amount at the end of period
NOTE 13: LEASES
Right-to-use assets recognised and
movements during the year
Opening net carrying amount
Additions
Depreciation expense
Net carrying amount
22,064
18,611
(9,914)
30,761
60,603
-
(17,140)
43,463
88,048
51,545
139,593
170,715
70,156
(27,054)
213,817
2022
$
-
155,555
(24,185)
131,370
1,690
24,307
(3,933)
22,064
6,233
67,933
(13,563)
60,603
88,048
-
88,048
95,971
92,240
(17,496)
170,715
2021
$
-
-
-
-
Alto Metals Limited | 2022 Annual Report
51
NOTES TO THE FINANCIAL STATEMENTS
Lease liabilities and movements during the year
Opening net carrying amount
Additions
Interest expense
Payments
Closing net carrying amount
Current
Non-current
2022
$
-
155,555
3,703
(25,111)
134,147
35,910
98,237
134,147
2021
$
-
-
-
-
-
-
-
-
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of
12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a
straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease
liabilities and are expensed as incurred. The expense relating to payments not included in the measurement of
the lease liability is as follows:
Short term leases
2022
$
59,400
59,400
2021
$
68,679
68,679
Total cash outflow for leases for the year ended 30 June 2022 was $84,511 (2021:$68,679)
NOTE 14: EXPLORATION AND EVALUATION
Exploration and evaluation – at cost
Exploration and evaluation - movement
Opening balance
Exploration and evaluation expenditure
Impairment of exploration and evaluation
Closing balance
2022
$
2021
$
23,481,586
16,561,596
16,561,596
6,919,990
-
23,481,586
11,354,999
5,206,597
-
16,561,596
The Directors’ assessment of the carrying amount for the Group’s exploration and evaluation assets was after
consideration of prevailing market conditions; previous expenditure for exploration work carried out on the
tenements; and the potential for mineralisation based on the Group’s and independent geological reports. The
ultimate value of these assets is dependent upon recoupment by commercial development or the sale of the
whole or part of the Group’s interests in these exploration and evaluation assets for an amount at least equal to
the carrying value. There may exist on the Group’s exploration and evaluation assets, areas subject to claim
under Native Title or containing sacred sites or sites of significance to Aboriginal people. As a result, the Group’s
exploration and evaluation assets or areas within the tenements may be subject to exploration and mining
restrictions.
As at 30 June 2022, the Directors have concluded that there remains an expectation that the carrying amount
of the Group’s exploration and evaluation assets will be recovered in full on the basis of the above factors, and
hence no impairment triggers exist. Consequently, no detailed impairment assessment has been performed.
Alto Metals Limited | 2022 Annual Report
52
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15: TRADE AND OTHER PAYABLES
CURRENT – UNSECURED LIABILITIES
Trade and other payables
Accrued expenses
2022
$
1,536,104
174,375
1,710,479
2021
$
1,552,795
138,837
1,691,632
All amounts in trade and other payables are short term and the carrying values are considered a reasonable
approximation of fair value. Refer to Note 22 related party transactions for payable balances with related parties.
NOTE 16: ISSUED CAPITAL
(a) Issued capital
528,037,512 (2021: 450,259,736) Fully paid ordinary shares
42,563,659
35,645,566
42,563,659
35,645,566
Fully paid ordinary shares have no par value, carry one vote per share and carry the right to dividends.
2022
$
2021
$
(b) Ordinary shares
The following movements in ordinary share
capital occurred during the reporting
period:
2022
No.
2022
$
2021
No.
2021
$
Balance at beginning of the period
450,259,736
35,645,566
293,373,781
22,408,726
60,683,526
17,094,250
-
5,461,517
1,538,483
227,966
Shares issued during the period
19 Nov 2021
17 Dec 2021
Write Back options exercised
Prior year
Options exercised at $0.07 per share
Shares issued 2 Oct 2020
Shares issued 9 Oct 2020
Shares issued 16 Dec 2020
Shares issued 15 Feb 2022
Lapse of 25,000,000 Performance Shares
Costs associated with equity raisings
-
Balance at end of the period
528,037,512
(309,873)
42,563,659
70,613,544
73,007,311
1,391,250
11,333,334
540,515
1
-
4,942,949
5,475,548
104,344
850,000
50,000
2,175,000
(361,001)
450,259,736
35,645,566
(c) Performance rights
Balance at beginning of the period
Performance rights issued during the period(i)
Balance at end of the period
2022
No.
12,000,000
1,000,000
13,000,000
2021
No.
-
12,000,000
12,000,000
Alto Metals Limited | 2022 Annual Report
53
NOTES TO THE FINANCIAL STATEMENTS
(d) LTI rights
The following movements in LTI rights occurred during
the reporting period:
Balance at beginning of the period
LTI rights issued during the period
Balance at end of the period
(e) Unlisted Options
The following movements in unlisted options occurred during
the reporting period:
Balance at beginning of the period
Transfer exercised Options to issued Capital
Balance at end of the period
Balance at beginning of the period
Options exercised during the period
Options lapsed during the period
Balance at end of the period
(f) Performance shares
The following movements in performance shares occurred during
the reporting period:
Balance at beginning of the period
Performance shares lapsed during the period
Balance at end of the period
Balance at beginning of the period
Performance shares converted during the period
Balance at end of the period
(i)
Refer to Note 4 (ii) for details.
(g) Capital Management
2022
No.
2021
No.
6,250,000
-
6,250,000
6,250,000
-
6,250,000
2022
$
2021
$
348,867
(227,966)
120,901
348,867
-
348,867
No.
No.
7,500,000
-
-
7,500,000
78,842,567
(70,613,544)
(729,023)
7,500,000
2022
$
2021
$
No.
-
-
-
-
-
-
2,175,000
(2,175,000)
-
No.
25,000,000
(25,000,000)
-
The Directors’ objectives when managing capital are to ensure that the Group can fund its operations and
continue as a going concern, so that it may continue to provide returns for shareholders and benefits for other
stakeholders. The Group has no debt as at 30 June 2022 therefore has no externally imposed capital
restrictions.
The focus of the Group’s capital risk management is the current working capital position against the
requirements of the Group to meet exploration programmes and corporate overheads. The Group’s strategy is
to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings or alternative funding arrangements as required. The Group’s working capital
position, being current assets less current liabilities as at 30 June 2022 is a surplus of $1,645,993 (2021:
$3,617,001).
Alto Metals Limited | 2022 Annual Report
54
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17: RESERVES
Equity instruments at FVOCI Reserve
Share based payments reserve
Movements in reserves
Equity instruments at FVOCI Reserve
Balance at beginning of the period
Add revaluation increments during the period
Balance at end of the period
2022
$
(32,500)
1,189,023
1,156,523
2022
$
(12,500)
(20,000)
(32,500)
2021
$
(12,500)
785,803
773,303
2021
$
(27,500)
15,000
(12,500)
This reserve is used to record the fair value movements of the Group’s equity instruments in accordance its
accounting policy.
Share-based payments reserve
Balance at beginning of the period
Issue of performance rights during the period(i)
Write Back value of exercised options
Issue of shares to creditors for services received
Balance at end of the period
2022
$
785,803
631,186
(227,966)
-
1,189,023
2021
$
516,871
318,932
-
(50,000)
785,803
This reserve is used to record the value of equity benefits provided to Directors, employees and third parties
of the Group in accordance with its accounting policy.
(i)
Refer to Note 4 for details.
NOTE 18: CASH FLOW INFORMATION
(a) Reconciliation of Cash Flow from Operations with loss after
Income Tax
Loss after income tax
Cash flows excluded from loss attributable to operating activities
Non-cash flows in loss from ordinary activities:
Depreciation
Share based payments
Interest expense
Changes in assets and liabilities:
Decrease in receivables
Increase in prepayments
Decrease in other assets
Increase / (Decrease) in payables
Cash flow used in operations
2022
$
(2,296,096)
2021
$
(1,810,766)
51,240
631,186
-
-
(9,431)
42,390
53,114
(1,527,597)
17,495
268,932
16,219
24,191
(756)
50,405
(28,853)
(1,463,133)
Alto Metals Limited | 2022 Annual Report
55
NOTES TO THE FINANCIAL STATEMENTS
(b) Change in liabilities from financing activities
Opening
balance
1-Jul-21
-
-
Additions
during the year
Interest
expense
Payments
155,555
3,703
(25,111)
155,555
3,703
(25,111)
Closing
balance
30-Jun-22
134,147
134,147
Lease liabilities (Refer
Note 13)
(c) Credit Standby Facilities
On 11 August 2020, the Company entered into a Loan Facility Agreement with shareholder, Harvest Lane
Asset Management Pty Ltd for up to $1 million. The loan was not utilised and has subsequently expired.
NOTE 19: CONTROLLED ENTITIES
Percentage
Owned %
Details of Controlled Entities
Country of
Incorporation
Class of Shares
2022
2021
Sandstone Exploration Pty Ltd
Australia
Ordinary
100%
100%
NOTE 20: EVENTS SUBSEQUENT TO REPORTING DATE
No matter or circumstance has arisen since the end of the financial year, which significantly affected or may
significantly affect the operations of the Group, the results of those operations or the state of affairs of the
Group in subsequent financial periods.
NOTE 21: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions, no more favourable than
those available to other parties, unless otherwise stated.
KMP Compensation
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid to each
member of the Group’s KMP for the year ended 30 June 2022. The totals of remuneration paid to KMP during
the year are as follows:
Short-term employee benefits
Post-employment benefits
Share based payments
Other Related Party Transactions
2022
$
461,931
35,956
377,850
875,737
2021
$
398,012
22,768
212,622
633,402
During the year, a related party of M Bowles, a Director, provided media, marketing consulting & admin services
to the Group. All fees paid for such services were at market rates and on a normal arm’s length basis. Total
fees paid during the year were $14,636 (2021: $7,300). As at 30 June 2022 $Nil (2021: $Nil) was payable to
the related party.
Alto Metals Limited | 2022 Annual Report
56
NOTES TO THE FINANCIAL STATEMENTS
NOTE 22: COMMITMENTS
Expenditure commitments
The Group has entered into certain obligations to perform minimum work on mineral tenements held. The
Group is required to meet tenement minimum expenditure requirement which are set out below. These may
be varied or deferred on application and are expenditures expected to be met in the normal course of
business.
- not later than 12 months
- between 12 months and 5 years
NOTE 23: FINANCIAL INSTRUMENT RISK
2022
$
743,570
3,276,730
4,020,300
2021
$
710,970
3,256,080
3,967,050
The Group’s financial instruments consist mainly of deposits with banks, short-term and long-term investments,
accounts receivable and payable and short-term fixed rate loans. The main purpose of non-derivative financial
instruments is to raise finance for Group operations. The Group does not speculate in the trading of derivative
instruments.
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market
risk consisting of interest rate, and equity price risk.
(a) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties
of contract obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or company of receivables
under financial instruments entered into by the Group.
Credit risk exposures
The maximum exposure to credit risk, excluding the value of any collateral or other security, at the reporting
date of recognised financial assets is the carrying amount of those assets, net of any allowance for credit losses,
as disclosed in the Consolidated Statement of Financial Position and Notes to the Consolidated Financial
Statements.
There are no material amounts of collateral held as security at 30 June 2022. Trade and other receivables are
expected to be settled within 30 days and there is no history of credit losses.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance
with approved Board policy. Such policy requires that surplus funds are only invested with counterparties with
a Standard and Poor’s rating of at least AA-. The following table provides information regarding the credit risk
relating to cash and money market securities based on Standard and Poor’s counterparty credit ratings.
Note
2022
$
2021
$
Cash and cash equivalents
- AA Rated
9
3,256,340 5,108,054
(b) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring
sufficient cash and marketable securities are available to meet the current and future commitments of the Group.
The Board constantly monitors the state of equity markets in conjunction with the Group’s current and future
Alto Metals Limited | 2022 Annual Report
57
NOTES TO THE FINANCIAL STATEMENTS
funding requirements, with a view to initiating appropriate capital raisings or alternative funding arrangements
as required. Any surplus funds are invested with major financial institutions.
The financial liabilities of the Group include trade and other payables, and lease liabilities, as disclosed in the
Consolidated Statement of Financial Position. All trade and other payables are non-interest bearing and due
within 12 months of the reporting date. All lease liabilities are interest bearing and due within 3 years of the
reporting date.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities. Cash flows
realised from financial assets reflects management’s expectation as to the timing of realisation. Actual timing
may therefore differ from that disclosed.
Within 1 Year
1 to 5 Years
Total
2022
$
2021
$
2022
$
2021
$
2022
$
2021
$
Financial liabilities due
for payment
Trade and other payables
1,690,479
1,605,576
-
Lease liabilities
40,797
-
99,868
Total expected outflows
1,731,276
1,605,576
99,868
-
-
-
1,690,479
1,605,576
140,665
-
1,831,144
1,605,576
(c) Market risk
Market risk is the risk that changes in market prices, such as interest rates will affect the Group’s income or the
value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments. Interest
rate risk is managed by closely monitoring the interest rates at various financial institutions and using fixed rate
debt.
At the reporting date the Group’s only exposure to interest rate risk is related to the balance of its cash and
cash equivalents. The following table represents the Group’s exposure to interest rate risk:
Variable rate instruments
2022
2021
Cash and cash equivalents
3,256,340
5,108,054
A change of 1% (2021: 1%) in variable interest rates would not have a significant effect on the Group.
(d) Equity price risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group and
classified on the Consolidated Statement of Financial Position as equity instruments at fair value through other
comprehensive income.
Listed investments have been valued at the quoted market bid price at the end of reporting period, adjusted for
transaction costs expected to be incurred. At 30 June 2022, the effect on total comprehensive loss and equity
as a result of changes in listed equity prices, with all other variables remaining constant would be as follows:
Alto Metals Limited | 2022 Annual Report
58
NOTES TO THE FINANCIAL STATEMENTS
Listed equity price -10%
Listed equity price +10%
Carrying
Amount
$
20,000
40,000
Total
comprehensive
loss
$
(2,000)
(4,000)
Equity
$
(2,000)
(4,000)
Total
comprehensive
loss
$
2,000
4,000
Equity
$
2,000
4,000
30 June 2022
30 June 2021
(e) Net Fair Values
Cash and cash equivalents, trade and other receivables and trade and other payables are short-term in nature
whose carrying value is equivalent to fair value.
Fair value measurement hierarchy
AASB 13 Fair value measurement: requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
(a) Level 1 – the instrument has quoted prices (unadjusted) in active markets for identical assets and
liabilities;
(b) Level 2 – a valuation technique is used using inputs other than quoted priced within Level 1 that are
observable for the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from
prices); or
(c) Level 3 – a valuation technique is used using inputs that are not based on observable market data
(unobservable inputs).
The table below classifies financial instruments recognised in the Consolidated Statement of Financial Position
according to the fair value measurement hierarchy stipulated in AASB 13 Fair value measurement.
Year ended 30 June 2022
$
$
$
$
Level 1 Level 2 Level 3
Total
Financial Assets
Equity instruments at FVOCI
20,000
Year ended 30 June 2021
Financial Assets
Equity instruments at FVOCI
40,000
-
-
-
20,000
-
40,000
Alto Metals Limited | 2022 Annual Report
59
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24: PARENT ENTITY DISCLOSURES
(a) Financial Position of Alto Metals Limited
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Equity instruments at fair value
Right of Use Assets
Property, plant and equipment
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liability
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liability
TOTAL NON - CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
(b) Financial Performance of Alto Metals Limited
Loss for the year
Other comprehensive (loss) / income
Total comprehensive loss
The parent entity has no commitments as at year end (2021: Nil)
2022
$
3,256,338
267,105
19,502
2021
$
5,108,052
298,683
10,071
3,542,945
5,416,806
20,000
131,370
213,817
23,501,123
23,866,310
27,409,255
1,710,479
35,910
150,565
1,896,954
98,237
98,237
40,000
170,715
16,561,598
16,772,313
22,189,119
1,691,632
-
108,175
1,799,807
-
-
1,995,191
1,799,807
25,414,064
20,389,312
42,563,659
1,156,523
(18,306,118)
25,414,064
35,645,566
773,303
(16,029,557)
20,389,312
(2,276,561)
(1,810,766)
(20,000)
15,000
(2,296,561)
(1,795,766)
Alto Metals Limited | 2022 Annual Report
60
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25: CONTINGENT LIABILITIES
As at 30 June 2022 the Group has bank guarantees to the value of $42,833 (2021: $32,822) to secure rental
bonds.
NOTE 26: OPERATING SEGMENTS
The Directors have considered the requirements of AASB 8 Operating Segments and the internal reports that
are reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded that
at this time there are no separately identifiable segments. The Group remains focused on mineral exploration
over areas of interest solely in Western Australia.
Alto Metals Limited | 2022 Annual Report
61
DIRECTORS’ DECLARATION
The Directors declare that:
1. The financial statements for the financial year ended 30 June 2022, and notes set out on pages 32 to
61 are in accordance with the Corporations Act 2001, including:
a. complying with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory reporting requirements; and
b. giving a true and fair view of the Group’s financial position as at 30 June 2022 and of their
performance for the financial year ended on that date;
2.
In their opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable; and
3. A statement that the attached financial statements are in compliance with International Financial
Reporting Standards has been included in the notes to the financial statements.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Richard Monti
Non-Executive Chairman
Dated this 30th day of September 2022
Alto Metals Limited | 2022 Annual Report
62
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Alto Metals Limited (the “Company”) and its controlled entities
(the “Group”), which comprises the consolidated statement of financial position as at 30 June 2022,
the consolidated statement of profit and loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the “Code”) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 to the consolidated financial report which indicates that the Group
incurred a net loss of $2,296,096 during the year ended 30 June 2022 (2021: $1,810,766), and as of
that date, the Group had net current assets of $1,645,993 (2021: $3,617,001). The Group incurred net
cash outflows used in operating activities of $1,527,597 (2021: $1,463,133), net cash outflows used in
investing activities of $6,992,836 (2021: $4,351,268) and had cash and cash equivalents of
$3,256,340 (2021: $5,108,054) for the year ended 30 June 2022.
These conditions, along with other matters as set forth in Note 1, indicate the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
63
Pitcher Partners BA&A Pty LtdAn independent Western Australian Company ABN 76 601 361 095.Level 11, 12-14 The Esplanade, Perth WA 6000Registered Audit Company Number 467435.Liability limited by a scheme under Professional Standards Legislation.Adelaide Brisbane Melbourne Newcastle Perth SydneyPitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key Audit Matter
How our audit addressed the key audit matter
Capitalisation of exploration and evaluation
expenditure
Refer to Note 14 to the financial report.
As at 30 June 2022, the Group held capitalised
exploration and evaluation expenditure of
$23,481,586.
The carrying value of exploration and evaluation
expenditure is assessed for impairment by the
Group when facts and circumstances indicate that
the capitalised exploration and evaluation
expenditure may exceed its recoverable amount.
The determination as to whether there are any
indicators to require the capitalised exploration
and evaluation expenditure to be assessed for
impairment involves a number of judgments
including but not limited to:
• Whether the Group has tenure of the relevant
area of interest;
• Whether the Group has sufficient funds to
meet the relevant area of interest minimum
expenditure requirements; and
• Whether there is sufficient information for a
decision to be made that the relevant area of
interest is not commercially viable.
Due to the significance to the Group’s financial
report and the level of judgment involved in
assessing whether there are impairment
indicators present, we consider this to be a key
audit matter.
Share-based Payments
Refer to Note 1(i) & 4
Share-based payments represent $631,186 of the
Group’s expenditure.
Share-based payments must be recorded at fair
value of the service provided, or in the absence of
64
Our procedures included, amongst others:
Obtaining an understating of and evaluating
the design and implementation of the
processes and controls associated with the
capitalisation of exploration and evaluation
expenditure, and those associated with the
assessment of impairment indicators.
Examining the Group’s right to explore in the
relevant area of interest, which included
obtaining and assessing supporting
documentation. We also considered the
status of the exploration licences as it related
to tenure.
Considering the Group’s intention to carry out
significant exploration and evaluation activity
in the relevant area of interest, including an
assessment of the Group’s cash-flow
forecast models, discussions with senior
management and directors as to the
intentions and strategy of the Group.
Reviewing management’s evaluation and
judgement as to whether the exploration
activities within each relevant area of interest
have reached a stage where the commercial
viability of extracting the resource could be
determined.
Assessing the adequacy of the disclosures
included within the financial report.
Our procedures included, amongst others:
Obtaining an understanding of and evaluating
the design and implementation of the
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
such, at the fair value of the underlying equity
instrument granted.
Under Australian Accounting Standards, equity
settled awards are measured at fair value on the
measurement date taking into consideration the
probability of the vesting conditions (if any)
attached. This amount is recognised as an
expense either immediately if there are no vesting
conditions, or over the vesting period if there are
vesting conditions.
In calculating the fair value there are a number of
judgements management must make, including
but not limited to:
• Estimating the likelihood that the equity
instruments will vest;
• Estimating expected future share price
volatility;
• Expected dividend yield; and
• Risk-free rate of interest.
Due to the significance to the Group’s financial
report and the level of judgment involved in
determining the valuation of the share-based
payments, we consider the Group’s calculation of
the share-based payments expense to be a key
audit matter.
processes and controls associated with the
preparation of the valuation model used to
assess the fair value of share-based
payments, including those relating to volatility
of the underlying security and the
appropriateness of the model used for
valuation.
Critically evaluating and challenging the
methodology and assumptions of
management in their preparation of valuation
model, including management’s assessment
of likelihood of vesting, agreeing inputs to
internal and external sources of information
as appropriate, which includes below but not
limited to:
• Estimating the likelihood that the equity
instruments will vest;
• Estimating expected future share price
volatility;
• Expected dividend yield; and
• Risk-free rate of interest.
Assessing the Group’s accounting policy as
set out within Note 1(i) for compliance with
the requirements of AASB 2 Share-based
Payment.
Assessing the adequacy of the disclosures
included in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2022, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
65
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
66
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 25 to 29 of the directors’ report for the
year ended 30 June 2022. In our opinion, the Remuneration Report of Alto Metals Limited, for the
year ended 30 June 2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PITCHER PARTNERS BA&A PTY LTD
PAUL MULLIGAN
Executive Director
Perth, 30 September 2022
67
ADDITIONAL ASX INFORMATION
Additional information required by the ASX Listing Rules and not shown elsewhere in the report is as follows.
The information is current as at 29 September 2022.
(a)
Twenty largest holders of quoted equity securities
Position Holder Name
Windsong Valley Pty Ltd
Westgold Resources Limited & Associates
78,050,879
14.60%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
GS Group Australia Pty Ltd
National Nominees Limited
Sinotech (Hong Kong) Corporation Limited
Olgen Pty Ltd
BNP Paribas Noms Pty Ltd
Silverlight Holdings Pty Ltd
Atlantic Capital Pty Ltd
Crownluxe Investment Ltd
Delphi Unternehmensberatung Aktiengesellschaft
Citicorp Nominees Pty Limited
Ms Xiaoxia Liu
Peter Erman Pty Limited
Mrs Lucy Fei
Greatcity Corporation Pty Ltd
Sailors Of Samui Pty Ltd
Cord Investments Pty Ltd
Longreach Capital Pty Ltd
Holding
% IC
98,449,646
18.42%
56,754,212
10.62%
22,223,626
17,291,250
15,899,998
12,064,543
11,182,781
8,000,000
7,500,000
6,872,222
6,190,040
5,115,881
5,000,000
4,500,000
4,138,889
3,840,000
3,300,000
3,191,666
4.16%
3.23%
2.97%
2.26%
2.09%
1.50%
1.40%
1.29%
1.16%
0.96%
0.94%
0.84%
0.77%
0.72%
0.62%
0.60%
0.57%
Mr Dermot Michael Ryan & Mrs Vivienne Eleanor Ryan
3,059,029
Total
372,624,662
69.61%
Total issued capital - selected security class(es)
534,537,512
100.00%
Alto Metals Limited | 2022 Annual Report
68
ADDITIONAL ASX INFORMATION
(b)
Substantial Shareholders
The names of the substantial shareholders and the number of shares in which they have a relevant interest are:
Holder Name
Windsong Valley Pty Ltd & Marymount Pty Ltd
Westgold Resources Limited & Associates
GS Group Australia Pty Ltd (GSGA)
(c)
Distribution of equity securities
Holding Ranges
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
above 10,000 up to and including 100,000
above 100,000
Totals
Holding
Balance
% IC
98.4 million
18.42%
78.1 million
14.60%
56.8 million
10.62%
Holders
Total Units
% Issued
Share Capital
327
446
285
596
346
145,156
1,203,774
2,312,631
24,517,852
0.03%
0.23%
0.43%
4.59%
506,358,099
94.73%
2,000
534,537,512
100.00%
The number of fully paid ordinary shareholdings held in less than marketable parcels is 922 (based on a share
price of $0.06).
(d)
Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e)
Unquoted securities
The names of the security holders holding more than 20% or more of any unlisted class of security, other than
those securities issued or acquired under an employee incentive scheme, are listed below:
Atlantic Capital Pty Ltd
Total Holders
UNLISTED
OPTIONS $0.07
EXP 29/11/2023
7,500,000
1
Alto Metals Limited | 2022 Annual Report
69
ADDITIONAL ASX INFORMATION
(f)
Corporate governance statement
The Directors support and adhere to the principles of corporate governance, recognising the need for the highest
standard of corporate behaviour and accountability. Please refer to the corporate governance statement and
the Appendix 4G released to ASX and posted on the Company website. The Directors are focused on fulfilling
their responsibilities individually, and as a Board, for the benefit of all the Company’s stakeholders. That involves
recognition of, and a need to adopt, principles of good corporate governance. The Board supports the guidelines
on the “Principles of Good Corporate Governance and Recommendations – 4th Edition” established by the ASX
Corporate Governance Council. Given the size and structure of the Company, the nature of its business
activities, the stage of its development and the cost of strict and detailed compliance with all of the
recommendations, it has adopted a range of modified systems, procedures and practices which enables it to
meet the principles of good corporate governance. The Company’s practices are mainly consistent with those
of the guidelines and where they do not correlate with the recommendations in the guidelines the Company
considers that its adopted practices are appropriate to it.
Alto Metals Limited | 2022 Annual Report
70
ADDITIONAL ASX INFORMATION
TENEMENT REPORT
As at 30 June 2022
Tenement
Location
Interest
Registered Holder
E57/1029
Sandstone, WA
E57/1030
Sandstone, WA
E57/1031
Sandstone, WA
E57/1033
Sandstone, WA
E57/1044
Sandstone, WA
E57/1072
Sandstone, WA
E57/1101
Sandstone, WA
100%
100%
100%
100%
100%
100%
100%
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
E57/1153
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Lease
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
E57/1228
Sandstone, WA
E57/1232
Sandstone, WA
E57/1233
Sandstone, WA
M57/646
Sandstone, WA
M57/647
Sandstone, WA
M57/650
Sandstone, WA
M57/651
Sandstone, WA
M57/652
Sandstone, WA
P57/1377
Sandstone, WA
P57/1378
Sandstone, WA
E57/1108
Sandstone, WA
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
Sandstone Exploration Pty Ltd
Application
Sandstone Exploration Pty Ltd
Application
Sandstone Exploration Pty Ltd
Application
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Granted
Granted
Granted
Sandstone Exploration Pty Ltd
Granted
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Sandstone Exploration Pty Ltd
Granted
Granted
Granted
Granted
Alto Metals Limited | 2022 Annual Report
71