Annual Report 2023
Alto Metals Limited
ABN 62 159 819 173
CORPORATE DIRECTORY
Directors
Mr Mark Connelly (Non-Executive Chairman)
Mr Matthew Bowles (Managing Director and CEO)
Mr Richard Monti (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 Company
Level 5, 191 St Georges Terrace
Perth WA 6000
Phone (within Australia): 1300 288 664
Phone (outside Australia): +61 2 9698 5414
Australian Securities Exchange
ASX code: AME
CONTENTS
REVIEW OF OPERATIONS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
4
15
27
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 28
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
29
30
31
32
60
61
66
68
REVIEW OF OPERATIONS
Review of Operations
About Alto Metals and the Sandstone Gold Project
Alto Metals Limited is a Western Australian based company focused on the exploration and development of its
100% owned Sandstone Gold Project, located in the East Murchison Mineral Field of Western Australia. The
Sandstone Gold Project comprises over 740km2 of granted tenure over the vast majority of the Archaean
Sandstone Greenstone Belt (Figure 1).
Since acquiring the Sandstone Gold Project, Alto has compiled and reviewed a large legacy database ahead of
a series of focused exploration drilling campaigns which have defined a current JORC (2012) Mineral Resource
of 832,000 ounces at 1.5 g/t gold (within A$2,500/oz optimized pit shells) 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 | 2023 Annual Report
4
REVIEW OF OPERATIONS
Updated Mineral Resource Estimate
Optimised and pit constrained resource increased to 832,000oz @ 1.5 g/t gold, capturing 80% of the total
unconstrained MRE.
During the financial year, the Company announced a significant Mineral Resource update at the Sandstone Gold
Project. The updated Mineral Resource incorporates updates for the Indomitable Camp (including a maiden
resource for Indomitable East and Musketeer), an update to Lord Nelson and a maiden Mineral Resource
estimate for Bull Oak. The updated Mineral Resource Estimates (MRE) were prepared by independent mining
industry consultants, Snowden Optiro and reported in accordance with the JORC Code (2012 Edition).
The updated MRE included all drilling completed up to the end of November 2022. Resource estimates for Lord
Henry, Vanguard, Vanguard North, Havilah Camp, Tiger Moth, Piper and Ladybird deposits are unchanged from
the Mineral Resources reported in March 2022, 25 September 2018 and 11 June 2019, respectively.
1
2
3
4
Updated Mineral Resources in this release includes Inferred and Indicated Resources and are optimised and constrained using A$2,500/oz pit shells. Mineral resources for
Ladybird, Piper and Tiger Moth are based on A$2,000/oz pit shells and have not been updated.
Refer to ASX announced dated 23 March 2022 “Sandstone Mineral Resource increases to 635,000oz gold”
Refers to the optimised and constrained Resources reported 3 April 2023.
All mineral resources are located within granted mining licences, with the exception of Indomitable East, Musketeer, Ladybird and Bull Oak.
Alto Metals Limited | 2023 Annual Report
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REVIEW OF OPERATIONS
Optimised pit-shell constrained MRE – 832,000oz @ 1.5 g/t gold
Open-pit optimisations have been performed by Snowden Optiro on the updated Mineral Resource using a
$2,500/oz gold price and reported at a 0.5 g/t gold cut-off, resulting in an optimised pit-shell constrained
Total Inferred and Indicated Mineral Resource Estimate totalling 17.6Mt at 1.5 g/t gold for 832,000oz of
contained gold.
The optimised pit shells are based on mining parameters and operating costs typical for Australian open pit
extraction deposits of similar scale and geology.
Table 1: Mineral Resource Estimate for Sandstone Gold Project, March 2023
Classification
Total Indicated
Total Inferred
TOTAL
Mineral Resource Estimate for the Sandstone Gold Project as at March 2023
Cut-off grade
(g/t gold)
Tonnes (Mt)
Grade (g/t
gold)
Contained gold (koz)
0.5
0.5
0.5
4.3
13.3
17.6
1.6
1.4
1.5
226
606
832
Updated Mineral Resources reported at a cut-off grade of 0.5 g/t gold within the optimised pit-shell. Minor discrepancies may occur due to
rounding of significant figures.
Only Indicated and Inferred categories of mineralisation that fall within the optimised pit shells are reported in the
optimised Mineral Resources. Mineralisation outside of the optimised pit shells (based on the current optimisation
parameters) has been excluded from the optimised Mineral Resource statement until such time as further drilling
and / or a refinement of optimisation parameters and gold price can be undertaken, to potentially convert
additional in-pit resources.
Over 27% of the Total MRE within the optimised pit-shells is in the Indicated category.
All resources contained in the Inferred category are due to the drill spacing at Indomitable, Vanguard,
Havilah and Ladybird and the historical nature of drilling at Lord Nelson, Lord Henry and Bull Oak. It is
reasonably expected that infill drilling and additional confirmatory drilling of the historical areas should
allow an upgrade of the Inferred Resources to a higher category.
Alto considers the total mineral resources (Table 1) for the Sandstone Gold Project have a reasonable prospect
of eventually being mined, taking into account the shallow nature of the deposits, the thickness and gold grades
of the deposits, which are located on granted mining or exploration leases, and proximity to existing infrastructure.
The updated 2023 MRE was optimised and pit-constrained using the same gold price and optimisation
parameters to provide continuity to the 2022 MRE.
Unconstrained MRE – 1Moz @ 1.4 g/t gold
The unconstrained Mineral Resource Estimate for the Sandstone Gold Project is, 23.5Mt at 1.4 g/t gold for
1,046,000oz of contained gold, using a 0.5 g/t gold cut-off (refer to Tables 2 and 5). The 214,000oz outside
the optimised pit-shell constrained MRE highlights the potential for additional in-pit resource growth
through refinement of optimisation parameters, an improving gold price and further drilling.
Table 2: Unconstrained Mineral Resources for Sandstone Gold Project, March 2023
Unconstrained Mineral Resources for the Sandstone Gold Project as at March 2023
Classification
Total Indicated
Total Inferred
TOTAL
Cut-off grade
(g/t gold)
Tonnes (Mt)
Grade (g/t
gold)
Contained gold (koz)
0.5
0.5
0.5
4.3
19.2
23.5
1.6
1.4
1.4
227
819
1,046
Unconstrained Mineral Resources reported at a cut-off grade of 0.5 g/t gold. Minor discrepancies may occur due to rounding of significant
figures.
Alto Metals Limited | 2023 Annual Report
6
REVIEW OF OPERATIONS
Next Steps – Future Resource Growth Potential
This latest Mineral Resource update is a significant increase in the total Mineral Resources at the Sandstone
Gold Project and provides strong encouragement that the Company can continue to grow its Resource Inventory
and progress its strategy to develop a stand-alone gold operation.
Significant potential for both shallow and deeper high-grade resource expansion remains, with the Company’s
exploration strategy continuing to focus on the Alpha Domain as a priority.
Importantly, when considering the exploration potential of the Sandstone Gold Project, over 70% of the current
Mineral Resources are less than 100m from surface and 90% are defined within the top 150m from
surface. The vast majority of the +740km2 project area is virtually untested below 100m.
Figure 2: Sandstone Gold Project –Mineral Resources hosted within the +20km gold corridor of the Alpha Domain
Alto Metals Limited | 2023 Annual Report
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REVIEW OF OPERATIONS
Exploration & Results
The Company completed a significant amount of exploration and resource drilling at Sandstone during the
financial year, with the programs focused on the 20km long NW/SE trending gold corridor of the Alpha Domain.
The best RC drilling results from Indomitable during the period, drilled subsequent to the MRE update, included:
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
16m @ 13.1 g/t gold from 19m, incl. 3m @ 62.2 g/t gold from 29m, incl.1m @ 122.6 g/t gold from 29m.
5m @ 7.9 g/t gold from 32m, incl. 1m @ 23.4 g/t gold from 34m (SRC907)
5m @ 3.0 g/t gold from 34m, incl. 1m @ 11.6 g/t gold from 36m and 14m @ 2.2 g/t gold from 47m
incl 4m @ 5.5 g/t gold from 48m (SRC916)
6m @ 3.0 g/t gold from 95m, incl. 1m @ 11.0 g/t gold from 99m (SRC908)
6m @ 2.1 g/t gold from 46m, incl. 2m @ 5.2 g/t gold from 48m (SRC904)
10m @ 1.1 g/t gold from 82m, incl. 3m @ 2.0 g/t gold from 85m and
10m @ 1.2 g/t gold from 154m, incl. 5m @ 2.0 g/t gold from 157m (SRC913)
7m @ 1.0 g/t gold from 10m, incl. 1m @ 2.1 g/t gold from 13m (SRC909)
14m @ 2.6 g/t gold from 61m; incl. 1m @ 18.8 g/t gold from 62m (SRC961)
11m @ 3.4 g/t gold from 57m; incl. 1m @ 19.8 g/t gold from 60m (SRC962)
14m @ 1.1 g/t gold from 60m; incl. 1m @ 5.6 g/t gold from 64m (SRC963)
12m @ 1.0 g/t gold from 34m; incl. 3m @ 2.4 g/t gold from 41m (SRC964)
15m @ 3.1 g/t gold from 32m; incl. 1m @ 22.2 g/t gold from 33m (SRC944)
15m @ 2.1 g/t gold from 72m; and 1m @ 18.9 g/t gold from 83m (SRC949)
16m @ 1.2 g/t gold from 44m; incl. 1m @ 9.8 g/t gold from 46m (SRC959)
24m @ 2.2 g/t gold from 160m; incl. 16m @ 3.0 g/t gold from 167m (SRC941)
Figure 3: RC samples at Indomitable
Alto Metals Limited | 2023 Annual Report
8
REVIEW OF OPERATIONS
Reconnaissance drilling at the new Cessna prospect, located within the Indomitable Camp, has confirmed high-
grade mineralisation, including:
o
6m @ 1.6 g/t gold from 56m, incl. 4m @ 2.0 g/t gold from 58m (SRC928); and
16m @ 7.2 g/t gold from 65m, incl. 4m @ 24.2 g/t gold from 74m;
o
8m @ 2.0 g/t gold from 70m, incl. 1m @ 11.8 g/t gold from 71m (SRC929)
Significant results from historical first pass air-core (AC) drilling at Cessna include:
•
•
•
•
12m @ 3.1 g/t gold from 60m, incl. 6m @ 5.2 g/t gold from 60m (CSA010) (ended in mineralisation)
30m @ 1.0 g/t gold from 40m, incl. 10m @ 2.0 g/t gold from 44m (CSA011)
15m @ 1.3 g/t gold from 5m, incl. 7m @ 2.1 g/t gold from 7m (CSA012)
14m @ 1.3 g/t gold from 21m, incl. 1m @ 6.5 g/t gold from 31m (CSA005) (ended in mineralisation)
These latest assays from Cessna have confirmed mineralisation at Indomitable extends over 3.5kms of strike and
remains open in all directions. The Company believes the extent of shallow oxide mineralisation at Indomitable
Camp, is an indication of a potentially much larger gold system at depth.
Figure 4: Indomitable Camp plan view block model of Resources (0.5 g/t cut-off) constrained
within a A$2,500/oz optimised
Alto Metals Limited | 2023 Annual Report
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REVIEW OF OPERATIONS
Regional Exploration - Multiple regional targets across the entire Sandstone Gold Project
Based on the success of the systematic approach to exploration to date, Alto commenced a review of the multiple
other early greenfield and advanced brownfield targets within the +740km2 Sandstone Gold Project, as part of
the Company’s longer term strategy to continue to advance the overall project pipeline to support a stand-alone
operation. This review included the historic Oroya and Hacks Mines.
Figure 5: 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 | 2023 Annual Report
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REVIEW OF OPERATIONS
Review of historic Oroya & Hacks mines
The Oroya and Hacks mines were major gold producers, together accounting for almost 40% of the total gold
production from the Sandstone Greenstone Belt. The Oroya Mine produced 220,000oz at 16.5g/t gold from
underground mining between 1904-1920 and a further ~25,000oz at 2.3g/t gold from open pit mining from 1994-
1995. The historic Hacks Reef Black Range Mine produced 260,000t at 24 g/t gold for ~200,000oz gold from
underground mining, between 1907-1916.
Despite the historical production and numerous old workings over the areas, there has been limited modern
exploration undertaken over these prospects. The lack of recent exploration and numerous historic high-grade
drill results provides an exciting opportunity for Alto to re-explore these ‘long forgotten mines’ and fits with the
Company’s strategy of continuing to focus on growing its existing resource base within the Alpha Domain, while
progressing regional prospects.
A review of the historic Oroya and Hacks mines identified multiple near-mine high-grade gold targets
including;
• Potential extension of the Oroya Sandstone reef along NW strike, beyond the north end of the pit, which
has not been adequately tested, along with the down-dip extensions of the shallow west dipping Main reef.
• Testing the high-grade tenor of remnant mineralisation at Oroya and the unmined Juno Reef which have
the potential to add additional shallow resources in the near term.
• Historical results north of Hacks may represent the offset to the main Hacks high-grade reef on the north-
western side of the cross-course.
• Hacks West, a +16km2 target area is considered highly prospective for additional ‘repeat’ high-grade gold
reefs, which may link to the regional Youanmi shear corridor.
Figure 6: Location of the Oroya, Hacks and Hacks West prospects within the Sandstone Gold Project,
Western Australia.
Alto Metals Limited | 2023 Annual Report
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REVIEW OF OPERATIONS
Regional review outlines several lithium targets coincident with mapped pegmatites.
The Sandstone Greenstone Belt is considered to be highly prospective for lithium, given that within
Western Australia, the rare-element Lithium-Caesium-Tantalum (LCT) family of pegmatite deposits occur
dominantly within Archean greenstone belts in upper greenschist to amphibolite-facies, however, no previous
lithium exploration has ever been undertaken at the Sandstone Project.
Lithium focused exploration activity has recently increased in the Sandstone region, including Rio Tinto
Exploration Pty Limited, a wholly owned subsidiary of Rio Tinto Ltd (ASX :RIO) entering a joint venture earn-in
with Everest Metals (ASX:EMC) and acquiring additional ground contiguous to the Sandstone Project on the
eastern border and Sensore (ASX:S3N) farming into tenure held by Gateway Mining Ltd’s (ASX: GML) for lithium
focused exploration (see Figure 7).
Lithium Targeting work
regional
exploration work
Low-cost
undertaken by Alto has highlighted the
lithium prospectivity and identified numerous
lithium pegmatite
its 100%
in Western
owned, Sandstone Project,
Australia. This work includes
targets, at
• High-resolution satellite imagery and
multi spectral analysis has identified
several lithium pegmatite targets at
the Sandstone Project
•
•
work
Field
commenced,
has
identifying outcropping pegmatites
spatially coincident to several of the
targets located on the eastern flank of
the project area where Rio Tinto have
recently enter into a JV earn-in and
secured additional contiguous tenure,
focused on lithium exploration.
Further field mapping and sampling
is ongoing. Planning is underway for
an infill soil geochemistry program and
assays are currently pending
for
selected rock chip samples.
• No previous
lithium exploration
work ever been undertaken at the
Sandstone Project and, whilst early
stage, the Company considers the
results of this initial reconnaissance
and targeting work encouraging. Alto
has engaged CSA Global and Terra
Resources
its ongoing
to support
lithium targeting work.
Figure 7: Lithium targets and mapped pegmatites at the
Sandstone Project and surrounding tenure
Given the scale of the project and in response to third party interest in the lithium potential at Sandstone, Alto is
considering various options to maximise shareholder value, so that it can remain focused on gold exploration.
Alto Metals Limited | 2023 Annual Report
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REVIEW OF OPERATIONS
Table 1 & 2: Optimised pit-shell constrained Mineral Resource Estimate for Sandstone Gold Project
MINERAL RESOURCE – SANDSTONE
Table 1: Mineral Resource Estimate for Sandstone Gold Project, March 2023 (by deposit)
Reported at a cut-off grade of 0.5 g/t gold. Mineral Resources for Lord Henry, Vanguard Camp, Havilah Camp, Piper, Tiger Moth and
Ladybird deposits have not been updated. Minor discrepancies may occur due to rounding of appropriate significant figures.
Unconstrained MRE
Table 2: Unconstrained total classified resources for Sandstone Gold Project, March 2023 (by deposit)
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 Lord Henry, Vanguard Camp, Havilah Camp,
Piper, Tiger Moth and Ladybird deposits have not been updated. Minor discrepancies may occur due to
rounding of appropriate significant figures.
Alto Metals Limited | 2023 Annual Report
13
ProspectCut-OffTonnes (Mt)Grade (g/t)Gold Ounces (koz)Tonnes (Mt)Grade (g/t)Gold Ounces (koz)Tonnes (Mt)Grade (g/t)Gold Ounces (koz)Lord Nelson0.51.52.11003.51.41635.01.6263Lord Henry0.51.61.5770.31.2131.91.490Havilah0.50.91.4380.91.438Maninga Marley0.50.12.680.12.68Havilah Camp0.511.5461.01.546Vanguard0.50.42261.51.6771.91.7103Vanguard North0.50.43.8470.43.847Vanguard Camp0.50.42261.91.61242.32.0150Musketeer0.50.81.5400.81.540Indomitable0.50.80.9232.21.2813.01.1104Indomitable East0.511.1341.01.134Tiger Moth0.50.51.7280.51.728Piper0.50.1140.11.04Indomitable Camp0.50.80.9234.61.11875.41.2210Bull Oak0.51.91.1651.91.165Ladybird0.50.11.980.11.98Total0.54.31.622613.31.460617.61.5832Mineral Resource Estimate for the Sandstone Project - March 2023IndicatedInferredTOTAL
REVIEW OF OPERATIONS
The references in this report to Mineral Resource estimates for the Sandstone Gold Project were reported in
accordance with Listing Rule 5.8 in the following announcements:
(a): Lord Nelson, Indomitable, Bull Oak release: “Significant increase in shallow gold resources at Sandstone
Gold Project” 3 April 2023;
(b) Vanguard Camp, Havilah Camp, Lord Henry: release titled: "Sandstone Mineral Resource increases to
635,000oz gold" 23 March 2022;
(c): Indomitable Camp (Piper & Tiger Moth deposits): release "Maiden Gold Resource at Indomitable &
Vanguard Camps, Sandstone WA" 25 Sep 2018; and
(d): Ladybird: release “Alto increases Total Mineral Resource Estimate to 290,000oz, Sandstone Gold Project”
11 June 2019.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in the market announcements noted above and that all material assumptions and technical parameters
underpinning the Mineral Resource estimates in the previous market announcements continue to apply and
have not materially changed.
Competent Persons Statement
The information in this Report that relates to current and historical Exploration Results is based on information
compiled by Mr Michael Kammermann, who is an employee and shareholder of Alto Metals Ltd, and he is also
entitled to participate in Alto's Employee Incentive Scheme. Mr Kammermann 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 defined
in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves. Mr Kammermann consents to the inclusion in the report of the
matters based on the information in the context in which it appears.
Alto Metals Limited | 2023 Annual Report
14
DIRECTORS’ REPORT
Your Directors submit their report together with the annual financial statements of Alto Metals Limited (the
“Company”) and the entities it controlled (together “the Group”) for the year ended 30 June 2023 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 Mark Connelly (joined 17 October 2022)
Mr Richard Monti
Mr Matthew Bowles
Dr Jingbin Wang (retired 30 November 2022)
Mr Terry Wheeler (retired 30 November 2022)
Directors were in office for the entire year unless otherwise stated.
Information on Directors
Mark Connelly (Non-Executive Chairman)
Mark Connelly has a proven track record in the mining industry and over thirty years’ experience
In recent years he was the CEO of Papillon Resources and Adamus Resources. Both companies were acquired
in by way of takeovers with Papillon valued at over USD570m. Papillon was developing the Fekola gold deposit
in Mali and Adamus Resources was a gold production company based in Ghana.
Prior to this Mark Connelly worked held senior management roles at Inmet Mining and Newmont Mining and
also as COO at Endeavour Mining following its acquisition of Adamus Resources.
Mr Connelly is a Director of Calidus Resources Limited, Nickel Search Limited, Omnia Metals Limited, BeMetals
Corp Inc, Warriedar Resources Limited and Renegade Exploration Limited.
Within the last three years Mr Connelly has been a director of Barton Gold (January 2021 to April 2022),
Emmerson plc (July 2018 to June 2021), Tao Commodities Limited (May 2018 to May 2021), Primero Group
(April 2018 to February 2021), Oklo Resources Limited (July 2019 - May 20-22), Chesser Resources Limited
(Jul 2020 - Sept 2023).
Richard Monti (Non-Executive Director)
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, Nickel X
Limited 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
Alto Metals Limited | 2023 Annual Report
15
DIRECTORS’ REPORT
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: Nil.
Dr Jingbin Wang (Non-Executive Director) – Retired 30 November 2022
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.
Terry Wheeler (Non-Executive Director) – Retired 30 November 2022
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.
Company Secretary
Graeme 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
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 Sandstone Gold Project consists of 17.6Mt
at 1.5 g/t Au for 832,000oz 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 $2,528,144 (2022: $2,296,096).
Financial Position
The net assets of the Group at 30 June 2023 are $28,735,880 (2022: $25,394,529). The cash and cash
equivalent of the Group at 30 June 2023 are $1,075,068 (2022: $3,256,340).
Alto Metals Limited | 2023 Annual Report
16
DIRECTORS’ REPORT
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.
Significant Changes in State of Affairs
Other than the capital raising of $5 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
On 24 July 2023, the Group raised $5 million through the issue of approximately 96 million shares at an issue
price of $0.052 per share. No other 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.
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.
Material Business Risks
The objective of the Company is to create long-term shareholder value through the discovery, development,
and acquisition of technically and economically viable mineral deposits. To date, the Company has not
commenced production of any minerals, The material business risks faced by the Company that could have an
effect on the Company’s future prospects, and how the Company manages these risks include:
The Company may not identify an economic deposit
Despite positive exploration results on a number of projects, current and potential investors should understand
that mineral exploration, development and mining are high-risk enterprises, only occasionally providing high
rewards. The success of the Company also depends, among other things on successful exploration and/or
acquisition of resources, securing and maintaining title to tenements and consents, in accordance with budgets
and successful management of Alto’s operations. Exploration and mining activities may also be hampered by
force majeure circumstances, land claims and unforeseen mining problems. There is no assurance that
exploration and development of the mineral interests owned by the Company, or any other projects that may be
acquired in the future, will result in the discovery of mineral deposits which are capable of being exploited
economically. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably
exploited. If such commercial viability is never attained, the Company may seek to transfer its property interests
Alto Metals Limited | 2023 Annual Report
17
DIRECTORS’ REPORT
or otherwise realise value, or the Company may even be required to abandon its business and fail as a “going
concern”.
The Company’s exploration activities being delayed due to lack of available equipment and services
The exploration activities of the Company requires the involvement of a number of third parties, including drilling
contractors, assay laboratories, consultants, other contractors, and suppliers. Demand for drilling equipment
and exploration related services in Western Australia fluctuates and can result in higher exploration costs,
delays in completing the Company’s exploration activities, and delays in the assessment and reporting of the
results. Should there continue to be high demand for exploration equipment and related services continue, there
may be delays in undertaking exploration activities, which may result in increased exploration costs and/or
increased working capital requirements for the Company which may have a material impact on the Company’s
operations and performance.
The Company’s operations will require further capital
The exploration and any development of the Company’s exploration properties will require substantial additional
financing. Failure to obtain sufficient financing may result in delaying, or the indefinite postponement of
exploration and development of the Company’s properties or even a loss of property interest. There can be no
assurance that additional capital or other types of financing will be available if needed or that, if available, the
terms of such financing will be favourable to the Company.
The Company may be adversely affected by fluctuations in commodity prices
The price of commodities fluctuates widely and are affected by numerous factors beyond the control of the
Company. Future production, if any, from the Company’s mineral properties will depend on the price of
commodities being adequate to make these properties economic. The Company currently does not engage in
any hedging or derivative transactions to manage commodity price risk. As the Company’s operations change,
this policy will be reviewed periodically.
Global financial conditions may adversely affect the Company’s growth and profitability
Many industries, including the mineral resource industry, are impacted by financial; market conditions. Some of
the key impacts include contraction in credit markets resulting in a widening of credit risk, devaluations and high
volatility in global equity markets, commodity prices, foreign exchange fluctuations and precious metal markets,
and a lack of market liquidity. Due to the current nature of the Company’s activities, a slowdown in financial
markets or other economic conditions may adversely affect the Company’s growth and ability to finance its
activities.
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
5
7
7
2
3
Number
attended
5
7
7
3
3
M Connelly
M Bowles
R Monti
J Wang
T Wheeler
Alto Metals Limited | 2023 Annual Report
18
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 $15,406 (2022: $13,376).
• 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
5,000,000
30 November 2023
29 October 2021
17 October 2022
500,000
30 November 2023
500,000
30 November 2023
12 December 2022
400,000
30 November 2023
12 December 2022
18,250,000
12 December 2026
Total performance rights on issue
24,650,000
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, the following LTI rights were on issue.
Date LTI rights granted
Number of unissued
shares under rights
Expiry date of rights
29 November 2019
6,250,000
29 November 2023
Total LTI rights on issue
6,250,000
For details of options and rights issued to Directors and Executives as remuneration, refer to the Remuneration
Report.
Non-audit Services
Alto Metals Limited | 2023 Annual Report
19
DIRECTORS’ REPORT
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).
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
Corporate
2023
$
5,000
2022
$
1,700
During the year, 78.3 million shares were issued through placements and raised $5 million.
Alto Metals Limited | 2023 Annual Report
20
REMUNERATION 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. There is no direct link between remuneration paid to Non-Executive Directors and
corporate performance.
From time to time, the Board may issue, at its discretion, issue performance rights or incentive options to KMP
which are intended to 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 2023.
Voting and comments made at the Company’s 2022 Annual General Meeting (“AGM”)
The Company received 99.8% of “yes” votes based on the number of proxy votes received on its remuneration
report for the 2022 financial year. The Company did not receive any specific feedback at the AGM or throughout
the year on its remuneration practices.
Alto Metals Limited | 2023 Annual Report
21
REMUNERATION REPORT
B. Details of Remuneration for Period Ended 30 June 2023
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.
Table of Benefits and Payments for the Period Ended 30 June 2023
Short-term benefits
Post-
employment
benefits
Cash bonuses
Superannuation
Equity-
settled
share-based
payments
Options and
Performance
Rights
Total
Remuneration
performance
based
Salary,
fees and
leave
$
42,500
48,000
315,326
15,221
16,666
437,713
48,000
301,401
36,530
40,000
425,931
2023
M Connelly1
R Monti
M Bowles
T Wheeler2
J Wang2
2022
R Monti
M Bowles
T Wheeler
J Wang
$
-
-
-
-
-
-
-
36,000
-
-
36,000
$
$
$
9,228
5,040
27,835
1,598
-
43,701
4,800
27,503
3,653
-
35,956
148,877
166,490
310,583
14,932
14,932
655,814
118,078
165,310
47,231
47,231
377,850
200,605
219,530
653,744
31,751
31,598
1,137,228
170,878
530,214
87,414
87,231
875,737
%
74%
76%
48%
47%
47%
58%
69%
31%
54%
54%
43%
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
Conversion of
Performance
Rights
Changes during
the period
Balance at the
end of the period
2023
Ordinary Shares
M Connelly1
R Monti
M Bowles
T Wheeler2
J Wang2
-
2,888,889
6,250,000
97,949,646
444,444
-
1,250,000
1,750,000
-
1,230,769
-
(97,949,646)
(444,444)
-
5,369,658
8,000,000
-
-
Total
107,532,979
3,000,000
(97,163,321)
13,369,658
1 Joined 17 Oct 2022
2 Retired 30 Nov 2022
Alto Metals Limited | 2023 Annual Report
22
REMUNERATION 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
2023
Unlisted Options
M Connelly
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
Issued
during the
period(a)
Other changes
during the
period
Balance at the
end of the
period
Vested and
exercisable
2023
Performance Rights
M Connelly
R Monti
M Bowles
T Wheeler
J Wang
Total
-
2,500,000
3,500,000
1,000,000
1,000,000
8,000,000
3,500,000
3,000,000
6,000,000
-
-
12,500,000
-
(1,250,000)*
(1,750,000)*
(1,000,000)
(1,000,000)
(5,000,000)
3,500,000
4,250,000
7,750,000
-
-
15,500,000
-
-
-
-
-
-
*
Converted during the year into fully paid ordinary shares
a. Refer to Note 4 – Share Based Payments
Service Agreements
The Group has a formal employment contracts with Matthew Bowles. 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 2023 are set out below:
NAME
Matthew Bowles
(Managing Director
CEO)
and
TERMS
Base salary of $329,365 (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 | 2023 Annual Report
23
REMUNERATION 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 29th 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 | 2023 Annual Report
24
REMUNERATION REPORT
D. Other Transactions with Directors and Key Management Personnel
During the year, BB Consulting & Communications, an entity related to the spouse of M Bowles, a Director of
the Group, provided social media consulting 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 $42,490 (2022: $14,636).
As at 30 June 2023 $Nil (2022: $Nil) was payable to BB Consulting & Communications.
Other than noted elsewhere in this report, no significant related party transactions have arisen during the year
ended 30 June 2023.
Group’s Performance
The table below sets out information about the Group’s earnings and movements in shareholder wealth for
the past five years up to and including the current financial year.
2023
2022
2021
2020
2019
Net loss after tax ($)*
(2,528,144)
(2,296,096)
(1,810,766)
(1,393,043)
(1,147,517)
Basic loss per share (cents)*
Share Price at year end (cents)
(0.44)
6.0
(0.47)
7.0
(0.46)
9.3
(0.48)
6.8
(0.55)
3.3
*Historical results have not been assessed and adjusted for the impact of new accounting standards.
----- End of Audited Remuneration Report -----
Alto Metals Limited | 2023 Annual Report
25
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 29 September 2023.
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.
Mark Connelly
Non-Executive Chairman
Dated this 29th day of September 2023
Alto Metals Limited | 2023 Annual Report
26
AUDITOR'S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ALTO METALS LIMITED AND ITS CONTROLLED
ENTITIES
In relation to the independent audit for the year ended 30 June 2023, to the best of my
knowledge and belief there have been:
(i) No contraventions of the auditor independence requirements of the Corporations Act 2001;
and
(ii) no contraventions of APES 110 Code of Ethics for Professional Accountants (including
Independence Standards).
This declaration is in respect of Alto Metals Limited and its controlled entities during the year.
PITCHER PARTNERS BA&A PTY LTD
PAUL MULLIGAN
Executive Director
Perth, 29 September 2023
27
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 June
Other income
Consulting expense
Depreciation
Employee benefits expense
Exploration & Evaluation expenses
Investor relations
Office rental and occupation expenses
Share based payments
Share registry and listing fees
Other expenses
Loss before income tax
Income tax (expense) / benefit
Loss for the year attributable to members of the parent
entity
Note
2
3
4
5
6
2023
$
95,457
(80,421)
(85,077)
(646,481)
(78,853)
(193,809)
(88,591)
(987,953)
(110,267)
(352,149)
(2,528,144)
-
2022
$
150,746
(102,109)
(51,240)
(868,221)
(19,535)
(169,176)
(108,956)
(631,186)
(87,956)
(408,463)
(2,296,096)
-
(2,528,144)
(2,296,096)
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
(10,000)
Other comprehensive income / (loss) for the period
(10,000)
(20,000)
(20,000)
Total comprehensive loss attributable to members of the
parent entity
(2,538,144)
(2,316,096)
Basic & Diluted loss per share (cents per share)
8
(0.44)
(0.47)
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2023 Annual Report
28
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
2023
$
1,075,068
70,133
15,430
1,160,631
10,000
187,071
233,462
28,720,181
29,150,714
30,311,345
1,162,043
89,036
172,890
1,423,969
151,496
151,496
1,575,880
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
1,995,191
28,735,880
25,394,529
48,105,200
1,436,858
(20,806,178)
28,735,880
42,563,659
1,156,523
(18,325,653)
25,394,529
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2023 Annual Report
29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June
Balance at 1 July 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
Balance at 1 July 2022
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
Share issue transaction costs
Balance at 30 June 2023
Issued Capital
Share Based Payments
Reserve
$
35,645,566
$
785,803
Equity
Instruments at
FVOCI Reserve
$
(12,500)
Accumulated
Losses
$
(16,029,557)
-
-
-
7,000,000
-
227,966
(309,873)
42,563,659
-
-
-
-
(20,000)
(20,000)
(2,296,096)
-
(2,296,096)
-
631,186
(227,966)
-
-
-
-
-
-
-
-
-
1,189,023
(32,500)
(18,325,653)
Total
$
20,389,312
(2,296,096)
(20,000)
(2,316,096)
7,000,000
631,186
-
(309,873)
25,394,529
42,563,659
1,189,023
(32,500)
(18,325,653)
25,394,529
-
-
5,738,069
-
(196,528)
48,105,200
-
-
-
(10,000)
(10,000)
(650,000)
940,335
-
-
-
1,479,358
(42,500)
(2,528,144)
-
(2,528,144)
-
47,619
-
(20,806,178)
(2,528,144)
(10,000)
(2,538,144)
5,088,069
987,954
(196,528)
28,735,880
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2023 Annual Report
30
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June
Note
2023
$
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Interest paid
Payments to suppliers and employees
Other receipts
Net cash used in operating activities
18a
18,017
-
(1,459,793)
77,440
(1,364,336)
2022
$
3,591
(3,703)
(1,674,640)
147,155
(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
Payment of lease liabilities
Net cash provided by financing activities
(1,928)
(5,691,679)
(5,693,607)
(70,157)
(6,922,679)
(6,992,836)
5,088,070
(152,528)
(58,871)
4,876,671
7,000,000
(309,873)
(21,408)
6,668,719
Net decrease in cash and cash equivalents held
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at 30 June
9
(2,181,272)
(1,851,714)
3,256,340
1,075,068
5,108,054
3,256,340
The accompanying notes form part of these financial statements.
Alto Metals Limited | 2023 Annual Report
31
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 29 September 2023.
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 $2,528,144 (2022: $2,296,096),
net current liabilities of $263,338 (2022: net current assets of $1,645,993), net cash outflows used in operating
activities of $1,364,336 (2022: $1,527,597), net cash outflows used in investing activities of $5,693,607 (2022:
$6,992,836) and had cash and cash equivalents of $1,075,068 (2022: $3,256,340) for the year ended 30 June
2023.
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:
• Subsequent to year end, the Group raised $5 million through the issue of approximately 96 million
shares at an issue price of $0.052 per share as disclosed within Note 20.
• The Group has the ability to curtail administrative, discretionary exploration and overhead cash outflows
as and when required.
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.
(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.
Alto Metals Limited | 2023 Annual Report
32
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 | 2023 Annual Report
33
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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)
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.
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 receives research and development (“R&D”) grants 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.
(E)
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.
Alto Metals Limited | 2023 Annual Report
34
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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).
(F)
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.
Alto Metals Limited | 2023 Annual Report
35
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
(G)
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.
(H)
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 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.
Alto Metals Limited | 2023 Annual Report
36
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 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 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 a Black & Scholes valuation on the date of
granting of the rights. 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.
(I)
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.
Alto Metals Limited | 2023 Annual Report
37
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
Alto Metals Limited | 2023 Annual Report
38
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 2023.
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 2023 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.
The following relevant standards and interpretations have been issued by the AASB but are not yet effective for
the year ending 30 June 2023:
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current, AASB 2020-6 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-current – Deferral of Effective Date
AASB 2020-1 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.
Alto Metals Limited | 2023 Annual Report
39
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 2020-6 defers the mandatory effective date of amendments that were originally made in AASB 2020-1
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 Consolidated Entity in the financial year
commencing 1 July 2023.
The likely impact of this accounting standard on the financial statements of the Group has not been determined.
AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
AASB 2021-5 amends AASB 112 Income Taxes to clarify the accounting for deferred tax transactions that, at
the time of the transaction, give rise to equal taxable and deductible temporary differences. In specified
circumstances, entities are exempt from recognising deferred tax when they recognise assets or liabilities for
the first time. The amendments clarify that the exemption does not apply to transactions for which entities
recognise both an asset and a liability and that give rise to equal taxable and deductible temporary differences.
This amending standard mandatorily apply 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 likely impact of this accounting standard on the financial statements of the Group has not been determined.
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.
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 2021-2 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 | 2023 Annual Report
40
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2: OTHER INCOME
Interest received
Government grants
Gold Sales1
2023
$
18,017
-
77,440
95,457
2022
$
3,591
73,016
74,139
150,746
1. Gold sales related to the refining of gold nuggets received pursuant to a royalty agreement 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:
Performance Rights continued to vest during the period (i)
Performance Rights issued during the period (ii) (iii)
2023
$
1,240,607
123,533
22,325
28,847
(768,831)
646,481
2023
$
170,873
817,080
987,953
2022
$
2,047,694
143,939
31,666
45,441
(1,400,519)
868,221
2022
$
631,186
-
631,186
(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.
On 29 October 2021 an additional 1,000,000 Performance Rights were issued under the Company’s
Employee Share Plan.
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 $170,873 was recognised for the year ended 30 June 2023 (2022: $631,186).
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 | 2023 Annual Report
41
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4: SHARE-BASED PAYMENTS (continued)
Milestone
% of Class Performance
Rights Eligible for Vesting
Performance Rights
Vested @ 30 June 2023
JORC 2012 compliant Mineral Resource of .5 million
ounces of gold located within the Sandstone Gold
Project
JORC 2012 compliant Mineral Resource of 1 million
ounces of gold located within the Sandstone Gold
Project
50%
100%
Yes
Yes (d)
(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.
(d) Performance Rights have vested but have not yet been issued.
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 2023
Performance
Rights issued
Performance
Rights issued
12,000,000
25-Nov-20
$0.10
77.54%
0.11%
3 years
$0.10
-
As above
5,000,000
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.
(ii) On 17 October 2022 the Company issued 500,000, Performance Rights to incoming director Mr Mark
Connelly. On 12 December 2022 an additional 400,000 Performance Rights were issued under the
Company’s Employee Share Plan.
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 $33,994 was recognised for the year ended 30 June 2023 (2022: $Nil).
The Performance Rights above have vested as they have met the conditions of the relevant performance
milestone of a JORC 2012 compliant Mineral Resource of 1 million ounces of gold located within the
Sandstone Gold Project.
Alto Metals Limited | 2023 Annual Report
42
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4: SHARE-BASED PAYMENTS (continued)
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
Performance
Rights issued
Performance
Rights issued
500,000
17-Oct-22
400,000
12-Dec-22
$0.07
100%
3.35%
1 year
$0.10
-
$0.07
100%
3.07%
1 year
$0.07
-
As above
As above
Number of instruments exercisable as at 30 June 2023
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.
Nil
Nil
(iii) On 30 November 2022, Shareholders approved the issue of 12,000,000 Performance Rights to Messrs
Connelly, Bowles and Monti, directors of the Company. These were issued on 12 December 2022 along
with an additional 6,250,000 Performance Rights under the Company’s Employee Share Plan.
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 $783,086 was recognised for the year ended 30 June 2023 (2022: $Nil).
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:
JORC 2012 compliant Mineral
Resource located within the Sandstone
Gold Project
% of Class Performance
Rights Eligible for
Vesting
Performance Rights
Vested @ 30 June 2023
JORC 2012 compliant Mineral Resource
of 1.5 million ounces of gold located within
the Sandstone Gold Project
Completion of a Feasibility Study
50%
50%
No
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.
Alto Metals Limited | 2023 Annual Report
43
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4: SHARE-BASED PAYMENTS (continued)
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
Performance
Rights issued
Performance
Rights issued
12,000,000
30-Nov-22
$0.07
100%
3.51%
4 years
$0.10
-
6,250,000
12-Dec-22
$0. 07
100%
3.07%
4 years
$0.10
-
As above
As above
Number of instruments exercisable as at 30 June 2023
1 Expected volatility is based on historic volatility of the Company’s shares over recent trading periods, aligned to the
Nil
Nil
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
Conferences and Seminars
Insurance
Legal fees
Travel and accommodation
Other expenses
NOTE 6: INCOME TAX
(a) Income tax (benefit)/expense
Current tax
Deferred tax
2023
$
(74,230)
(37,258)
(92,221)
(40,882)
(43,102)
(52,827)
(11,629)
(352,149)
2023
$
-
-
-
2022
$
(39,275)
(83,179)
(52,128)
(33,002)
(39,567)
(22,237)
(139,075)
(408,463)
2022
$
-
-
-
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 25% (2021: 30%)
Add / (Less) tax effect of:
Entertainment
Share based payments
Research and development costs
Deferred tax asset not brought to account
Income tax benefit attributable to operating loss
Alto Metals Limited | 2023 Annual Report
(632,029)
(574,024)
4,169
246,988
29,183
351,688
-
5,992
157,797
-
410,235
-
44
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6: INCOME TAX (continued)
(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
Temporary differences for which no deferred tax asset has been
recognised
9,382,543
52,910
127,248
1,768
22,500
9,586,968
(9,586,968)
-
(7,180,045)
(3,858)
(7,183,903)
7,183,903
-
7,657,482
47,484
162,857
694
20,000
7,888,516
(7,888,516)
-
(5,870,397)
(4,876)
(5,875,272)
5,875,272
-
(1,772,517)
1,334,154
438,363
-
-
(2,257,901)
1,765,198
188,595
304,108
-
(40,632)
-
40,632
-
-
82,468
-
(79,468)
(3,000)
-
9,382,543
7,657,482
(6,979,477)
(5,644,237)
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2023 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.
Alto Metals Limited | 2023 Annual Report
45
NOTES TO THE FINANCIAL STATEMENTS
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
2023
$
2022
$
36,390
32,865
Remuneration of the auditor, or associated entities, of the Group for
non-audit services:
- Tax compliance services
2,600
1,700
NOTE 8: LOSS PER SHARE
(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
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
2023
$
2022
$
(2,528,144)
(2,296,096)
579,478,176
490,030,087
(0.44)
7,500,000
(0.47)
7,500,000
24,250,000
13,000,000
2023
$
1,075,068
2022
$
3,256,340
1,075,068
3,256,340
2023
$
5,303
64,830
70,133
2022
$
224,272
42,833
267,105
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 (2022: $42,833) which is subject to an
indemnity guarantee for two rental agreements.
Alto Metals Limited | 2023 Annual Report
46
NOTES TO THE FINANCIAL STATEMENTS
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 2023
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 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
Amortised
Cost
$
FVOCI
$
1,075,068
70,133
-
1,145,201
(1,162,043)
(240,532)
(1,402,575)
3,256,340
267,105
-
3,523,445
(1,710,479)
(134,147)
(1,844,626)
-
-
10,000
10,000
-
-
-
-
-
20,000
20,000
-
-
-
(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
(ii)
Equity instruments at fair value through other comprehensive income
Balance at the beginning of the reporting period
Add revaluation increments/(decrements)
2023
$
20,000
(10,000)
10,000
2022
$
40,000
(20,000)
20,000
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 | 2023 Annual Report
47
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
2023
$
184,434
(163,436)
20,998
92,933
(66,453)
26,480
139,593
-
139,593
2022
$
182,506
(151,745)
30,761
92,933
(49,470)
43,463
139,593
-
139,593
Total property, plant and equipment
187,071
213,817
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
- Depreciation expense
Carrying amount at the end of the period
Totals
Opening balance
- Additions
- Depreciation expense
Carrying amount at the end of period
30,761
1,928
(11,691)
20,998
43,463
-
(16,983)
26,480
139,593
-
-
139,593
213,817
1,928
(28,674)
187,071
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
Alto Metals Limited | 2023 Annual Report
48
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13: LEASES
Accounting Policies
(i)
Right-of-use assets
The Group 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 Group 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 Group 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 Group and payments of penalties for terminating a lease, if the lease term
reflects the Group 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 Group 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.
(iii)
Leases - Estimating the incremental borrowing rate
When the Group 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 Group 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 Group ‘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 Group 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).
Right-to-use assets recognised and
movements during the year
Opening net carrying amount
Additions
Depreciation expense
Net carrying amount
Lease liabilities and movements during the year
Opening net carrying amount
Additions
Interest expense
Payments
Closing net carrying amount
Current
Non-current
2023
$
131,370
158,495
(56,403)
233,462
2023
$
134,147
158,494
6,762
(58,871)
240,532
89,036
151,496
240,532
2022
$
-
155,555
(24,185)
131,370
2022
$
-
155,555
3,703
(25,111)
134,147
35,910
98,237
134,147
Alto Metals Limited | 2023 Annual Report
49
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13: LEASES (continued)
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
NOTE 14: EXPLORATION AND EVALUATION
Exploration and evaluation – at cost
Exploration and evaluation - movement
Opening balance
Exploration and evaluation expenditure
Closing balance
Projects
Sandstone North
Hacks
Raffertys
Marley Well
Twin Reef
Black Hill
Mt Dwyer
Hancocks
Maynard Hills
Coonayunna Spring
Indomitable
Vanguard
Maninga Marley
Lord Henry
Lord Nelson
Wirraminna
2023
$
-
-
2022
$
59,400
59,400
2023
$
2022
$
28,720,181
23,481,586
23,481,586
5,238,595
28,720,181
16,561,596
6,919,990
23,481,586
2,582,254
3,013,013
6,241,720
3,524,553
564,023
237,528
221,637
326,713
95,457
99,685
4,102,861
2,549,432
476,281
1,145,303
3,539,273
1,898,020
2,188,204
5,257,624
3,415,531
473,591
127,153
96,558
253,992
32,154
-
2,191,587
2,493,777
445,569
1,127,284
3,480,542
448
$28,720,181
-
$23,481,586
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 2023 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 | 2023 Annual Report
50
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15: TRADE AND OTHER PAYABLES
CURRENT – UNSECURED LIABILITIES
Trade and other payables
Accrued expenses
2023
$
1,107,792
54,251
1,162,043
2022
$
1,536,104
174,375
1,710,479
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
612,815,479 (2022: 528,037,512) Fully paid ordinary shares
48,105,200
42,563,659
48,105,200
42,563,659
Fully paid ordinary shares have no par value, carry one vote per share and carry the right to dividends.
2023
$
2022
$
(b) Ordinary shares
The following movements in ordinary
share capital occurred during the
reporting period:
Balance at beginning of the period
Shares issued during the period
2023
No.
2023
$
2022
No.
2022
$
528,037,512
42,563,659
450,259,736
35,645,566
Conversion of Performance Shares
6,500,000
36,153,848
21,354,887
10,000,000
10,769,232
10-Nov-22
19-Dec-22
22-Dec-22
22-Dec-22
Prior year
19 Nov 2021
17 Dec 2021
Write Back options exercised
650,000
2,350,000
1,388,068
650,000
700,000
60,683,526
5,461,517
17,094,250
1,538,483
-
227,966
Costs associated with equity raisings
Balance at end of the period
612,815,479
(196,527)
48,105,200
-
528,037,512
(309,873)
42,563,659
Alto Metals Limited | 2023 Annual Report
51
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16: ISSUED CAPITAL (continued)
(c) Performance Rights
2023
No.
2022
No.
The following movements in
performance rights occurred during the
reporting period:
Balance at beginning of the period
13,000,000
12,000,000
Issued during the period
Cancelled during the period
Vested during the period(i)
Prior year
Issued during the period
19,150,000
(1,000,000)
(6,500,000)
24,650,000
1,000,000
13,000,000
(i)6,500,000 performance rights vested during the year end of 30 June 2023 at
$0.10 per performance right
(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
LTI rights expired during the period
Prior year
LTI rights issued during the period
LTI rights expired 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
Options exercised during the period
Prior year
Options transferred to issued capital
Balance at end of period (100%
vested)
(f) Capital Management
2023
No.
2022
No.
6,250,000
6,250,000
6,250,000
6,250,000
2023
No.
2023
$
2022
No.
2022
$
7,500,000
120,901
7,500,000
348,867
7,500,000
120,901
7,500,000
120,901
(227,966)
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 2023 therefore has no externally imposed capital
restrictions.
Alto Metals Limited | 2023 Annual Report
52
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
2023
$
(42,500)
1,479,358
1,436,858
2023
$
(32,500)
(10,000)
(42,500)
2022
$
(32,500)
1,189,023
1,156,523
2022
$
(12,500)
(20,000)
(32,500)
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
Tfr Performance Rights to issued Capital
Balance at end of the period
2023
$
2022
$
1,189,023
987,953
(47,618)
(650,000)
1,479,358
785,803
631,186
(227,966)
-
1,189,023
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:
(Increase)/decrease in prepayments
(Increase)/decrease in other assets
(Decrease)/increase in payables
Cash flow used in operations
2023
$
(2,528,144)
2022
$
(2,296,096)
85,077
987,953
4,072
22,325
64,381
(1,364,336)
51,240
631,186
-
(9,431)
42,390
53,114
(1,527,597)
Alto Metals Limited | 2023 Annual Report
53
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18: CASH FLOW INFORMATION (continued)
(b) Change in liabilities from financing activities
Lease liabilities (Refer
Note 13)
Opening
balance
1-Jul-22
134,147
134,147
Additions
during the year
Interest
expense
Payments
Closing
balance
30-Jun-23
158,494
6,762
(58,871)
158,494
6,762
(58,871)
240,532
240,532
NOTE 19: CONTROLLED ENTITIES
Details of Controlled Entities
Cue Metals Pty Ltd
Sandstone Exploration Pty Ltd
Country of
Incorporation
Australia
Australia
Class of Shares
2023
2022
Ordinary
Ordinary
100%
100%
100%
100%
Percentage
Owned %
NOTE 20: EVENTS SUBSEQUENT TO REPORTING DATE
On 24 July 2023, the Group raised $5 million (before costs) through the issue of approximately 96 million
shares at an issue price of $0.052 per share. No other 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 up 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 2023. The totals of remuneration paid to KMP during
the year are as follows:
Short-term employee benefits (i)
Post-employment benefits
Share based payments
2023
$
437,713
43,701
655,814
1,137,228
2022
$
461,931
35,956
377,850
875,737
(i)
A portion of short-term employee benefits are paid to director-related parties.
Other Related Party Transactions
During the year, BB Consulting & Communications, an entity related to the spouse of M Bowles, a Director of
the Group, provided social media consulting 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 $42,490 (2022: $14,636).
As at 30 June 2023 $Nil (2022: $Nil) was payable to BB Consulting & Communications.
Alto Metals Limited | 2023 Annual Report
54
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
2023
$
829,520
3,837,310
4,666,830
2022
$
743,570
3,276,730
4,020,300
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 risk 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 is that to its alliance partners and that is limited to the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the Consolidated Statement of Financial
Position and Notes to the Financial Statements.
There are no material amounts of collateral held as security at 30 June 2023. 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
2023
$
2022
$
Cash and cash equivalents
- AA Rated
9
1,075,068 3,256,340
(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
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.
Alto Metals Limited | 2023 Annual Report
55
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23: FINANCIAL INSTRUMENT RISK (continued)
The financial liabilities of the Group include trade and other payables, and loans and borrowings, as disclosed
in the Statement of Financial Position. All trade and other payables are non-interest bearing and due within 12
months of the reporting date. All loans and borrowings are interest bearing and due within 12 months 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 realization. Actual timing
may therefore differ from that disclosed.
Within 1 Year
1 to 5 Years
2023
$
2022
$
2023
$
2022
$
Total
2023
$
2022
$
Financial
liabilities due for
payment
Trade and other
payables
Lease liabilities
Total
outflows
expected
(c) Market risk
1,162,043
1,690,479
-
-
1,162,043
1,690,479
96,924
40,797
152,848
99,868
249,772
140,665
1,258,967
1,731,276
152,848
99,868
1,411,815
1,831,144
The Board meets on a regular basis to analyse currency and interest rate exposure and to evaluate treasury
management strategies in the context of the most recent economic conditions and forecasts.
(i)
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
2023
2022
Cash and cash equivalents
1,075,068
3,256,340
A change of 1% (2022: 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.
Alto Metals Limited | 2023 Annual Report
56
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23: FINANCIAL INSTRUMENT RISK (continued)
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 2023, the effect on profit and equity as a result of changes
in listed equity prices, with all other variables remaining constant would be as follows:
Listed equity
price -10%
Listed equity price
+10%
Carrying
Amount
$
Net
Loss
$
Equity
$
Net
Loss
$
30 June 2023
10,000
(1,000)
(1,000)
1,000
30 June 2022
20,000
(2,000)
(2,000)
2,000
Equity
$
1,000
2,000
(e) Net Fair Values
Cash and cash equivalents, trade and other receivables, loan and borrowings and trade and other payables are
short-term investments 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 2023
$
$
$
$
Level 1 Level 2 Level 3
Total
Financial Assets
Equity instruments at FVOCI
10,000
10,000
Year ended 30 June 2022
Financial Assets
Equity instruments at FVOCI
20,000
-
-
20,000
Alto Metals Limited | 2023 Annual Report
57
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 (2022: Nil)
2023
$
2022
$
1,075,066
70,133
15,430
3,256,338
267,105
19,502
1,160,629
3,542,945
10,000
187,071
233,462
28,739,718
29,170,251
30,330,880
1,162,043
89,036
172,890
1,423,969
151,496
151,496
20,000
131,370
213,817
23,501,123
23,866,310
27,409,255
1,710,479
35,910
150,565
1,861,044
98,237
98,237
1,575,465
1,995,191
28,755,415
25,414,064
48,105,200
1,436,858
(20,786,643)
28,755,415
42,563,659
1,156,523
(18,306,118)
25,414,064
(2,528,144)
(2,276,561)
(10,000)
(20,000)
(2,538,144)
(2,296,561)
Alto Metals Limited | 2023 Annual Report
58
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25: CONTINGENT LIABILITIES
As at 30 June 2023 the Group has bank guarantees to the value of $42,833 (2022: $42,833) 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 | 2023 Annual Report
59
DIRECTORS’ DECLARATION
The Directors declare that:
1. The financial statements for the financial year ended 30 June 2023, and notes set out on pages 28 to
59 are in accordance with the Corporations Act 2001, including:
a. complying with 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.
Mark Connelly
Non-Executive Chairman
Dated this 30th day of September 2023
Alto Metals Limited | 2023 Annual Report
60
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 2023, the consolidated statement of profit or loss and 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 2023 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 confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the Company, would be in the same terms if given to the
directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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.
61
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 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 2023, the Group held capitalised
exploration and evaluation expenditure of
$28,720,181.
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
impairment
indicators present, we consider this to be a key
audit matter.
there are
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.
Testing a sample of transactions by sighting
evidence of signed contracts, related invoices
and comparing the amount recognised as
deferred exploration and evaluation assets is in
accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources.
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
included within the financial report.
the disclosures
62
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
How our audit addressed the key audit matter
Our procedures included, amongst others:
Obtaining an understanding of and evaluating the
design and implementation of the 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.
Assessing the Group’s accounting policy as set
out within Note 1(h) for compliance with the
requirements of AASB 2 Share-based Payment.
Assessing
the adequacy of
included in the financial report.
the disclosures
Key Audit Matter
Share based payments
Refer to Note 1(H) & 4
Share based payments represent $987,953 of the
Group’s expenditure.
Share based payments must be recorded at fair
value of the service provided, or in the absence of
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 payment expense to be a key
audit matter.
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 2023, 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
63
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
The directors of the Group 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.
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
intentional omissions,
involve collusion,
from error, as
misrepresentations, or the override of internal control.
fraud may
forgery,
• 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.
64
ALTO METALS LIMITED
ABN 62 159 819 173
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ALTO METALS LIMITED
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.
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 21 to 25 of the directors’ report
for the year ended 30 June 2023. In our opinion, the Remuneration Report of Alto Metals
Limited, for the year ended 30 June 2023, complies with section 300A of the Corporations Act
2001.
Responsibilities
The directors of the Group 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, 29 September 2023
65
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 28 September 2023.
(a)
Twenty largest holders of quoted equity securities
Position Holder Name
WINDSONG VALLEY PTY LTD
Holding
% IC
107,155,416
15.00%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
70,141,603
GS GROUP AUSTRALIA PTY LTD
PRECISION OPPORTUNITIES FUND LTD
NATIONAL NOMINEES LIMITED
LION SELECTION GROUP LTD
56,754,212
28,761,538
24,970,174
19,230,769
SINOTECH (HONG KONG) CORPORATION LIMITED
17,291,250
OLGEN PTY LTD
15,899,998
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,376,748
SILVERLIGHT HOLDINGS PTY LTD
11,182,781
BNP PARIBAS NOMS PTY LTD
WERSMAN NOMINEES PTY LTD
ATLANTIC CAPITAL PTY LTD
HARDROCK CAPITAL PTY LTD
CROWNLUXE INVESTMENT LTD
DELPHI UNTERNEHMENSBERATUNG
AKTIENGESELLSCHAFT
CITICORP NOMINEES PTY LIMITED
MR ALAN CONIGRAVE
GREATCITY CORPORATION PTY LTD
WERSMAN NOMINEES PTY LTD
8,680,275
8,243,589
8,000,000
7,660,000
7,500,000
6,872,222
6,373,664
5,500,000
5,369,658
5,343,589
9.82%
7.95%
4.03%
3.50%
2.69%
2.42%
2.23%
1.73%
1.57%
1.22%
1.15%
1.12%
1.07%
1.05%
0.96%
0.89%
0.77%
0.75%
0.75%
Total
433,307,486
60.67%
Total issued capital - selected security class(es)
714,200,095
100.00%
Alto Metals Limited | 2023 Annual Report
66
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
HORIZON GOLD LIMITED
GS GROUP AUSTRALIA PTY LTD
(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
107.2 million
15.00%
60.8 million
56.7 million
8.5%
7.95%
Holders
Total Units
% Issued
Share Capital
325
441
304
698
463
142,313
1,184,015
2,509,729
30,429,226
0.02%
0.17%
0.35%
4.26%
679,934,812
95.20%
2,231
714,200,095
100.00%
The number of fully paid ordinary shareholdings held in less than marketable parcels is 1,091 (based on a share
price of $0.046).
(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
(f)
Corporate governance statement
UNLISTED
OPTIONS $0.07
EXP 29/11/2023
7,500,000
1
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 | 2023 Annual Report
67
ADDITIONAL ASX INFORMATION
TENEMENT REPORT
As at 30 June 2023
Alto Metals Ltd and its 100% owned subsidiary, on a consolidated basis at 30 June 2023
Tenement
Location
Interest
Registered Holder
Lease
Status
E57/1029
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1030
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1031
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1033
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1044
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1072
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1101
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1108
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1153
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1228
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1232
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
E57/1233
Sandstone, WA
-
Sandstone Exploration Pty Ltd
Application
M57/646
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
M57/647
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
M57/650
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
M57/651
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
M57/652
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
M57/658
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Application
M57/662
Sandstone, WA
M57/663
Sandstone, WA
-
-
Sandstone Exploration Pty Ltd
Application
Sandstone Exploration Pty Ltd
Application
P57/1377
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
P57/1378
Sandstone, WA
100%
Sandstone Exploration Pty Ltd
Granted
P57/1529
Sandstone, WA
-
Sandstone Exploration Pty Ltd
Application
Alto Metals Limited | 2023 Annual Report
68