MEDIA RELEASE
Austral Gold Limited
31 March 2021
Austral Gold Files 2021 Annual Report
Austral Gold Limited (the “Company” or “Austral”) (ASX: AGD; TSX-V: AGLD) is pleased to
announce that it has filed its Annual Report for the Financial Year Ended 31 December 2021.
The Annual Report is available under the Company’s profile at www.asx.com.au and
www.sedar.com and on the Company’s website at www.australgold.com
About Austral Gold
Austral Gold Limited is a growing gold and silver mining, development and exploration company
building a portfolio of quality assets in Chile, the USA and Argentina. Austral owns 100% interest
in the Guanaco/Amancaya mine in Chile and the Casposo Mine (care and maintenance) in
Argentina, and a 26.46% interest in the Rawhide Mine in Nevada. In addition, Austral owns an
attractive portfolio of exploration projects in the Paleocene Belt in Chile (including those acquired
in the recent acquisition of Revelo Resources Corp) and a 100% interest in the Pingüino project
in Santa Cruz, Argentina. Austral Gold Limited is listed on the TSX Venture Exchange (TSX-V:
AGLD), and the Australian Securities Exchange. (ASX: AGD). For more information, please
consult Austral's website at (www.australgold.com).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Release approved by the Chief Executive Officer of Austral Gold, Stabro Kasaneva.
For additional information please contact:
Ben Jarvis
Director
Austral Gold Limited
info@australgold.com
+61 413 150 448
David Hwang
Company Secretary
Austral Gold Limited
info@australgold.com
+61 (2) 9698 5414
Austral Gold Limited ABN 30 075 860 472 ASX: AGD TSXV: AGLD
Level 5 126 Phillip St, Sydney NSW 2000 | T +61 2 9380 7233 | F +61 2 9251 7455 | info@australgold.com | www.australgold.com
EXCELLENCE IN
GOLD & SILVER
MINING
Annual Report for the year ended 31 December 2021
www.australgold.com
CORPORATE DIRECTORY
CHAIRMAN’S LETTER
KEY PRINCIPLES
REVIEW OF ACTIVITIES
DIRECTORS’ REPORT
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
4
6
8
10
36
58
96
98
ADDITIONAL INFORMATION
106
TABLE OF
CONTENTS
Austral Gold Limited
3
Annual Report 2021
CORPORATE
DIRECTORY
KEY MANAGEMENT
Stabro Kasaneva
Chief Executive Officer and Executive Director
Rodrigo Ramirez
Vice President of Operations
Raul Guerra
Vice-President of Exploration
Jose Bordogna*
Chief Financial Officer
DIRECTORS
Wayne Hubert
Chairman & Executive Director
Eduardo Elsztain
Vice Chairman & Non-Executive Director
Saul Zang
Non-Executive Director
Pablo Vergara del Carril
Non-Executive Director
Stabro Kasaneva
Chief Executive Officer and Executive Director
Robert Trzebski
Independent Non-Executive Director
Ben Jarvis
Independent Non-Executive Director
*resigned 28 February 2022
COMPANY SECRETARY
David Hwang
Automic Group
REGISTERED OFFICE
Level 5 126 Phillip Street
Sydney NSW 2000
Tel: +61 2 9380 7233
Email: info@australgold.com
Web: www.australgold.com
OTHER OFFICES
Santiago, Chile
Lo Fontecilla 201 of. 334
Santiago, Chile
Tel: +56 (2) 2374 8560
Buenos Aires, Argentina
Bolivar 108
Buenos Aires (1066) Argentina
Tel: +54 (11) 4323 7500
Fax: +54 (11) 4323 7591
Vancouver, Canada
170-422 Richards Street
Vancouver, BC V6B 2Z4
Tel: +1 604 868 9639
Austral Gold Limited
4
Annual Report 2021
LISTED
Australian Securities Exchange
ASX: AGD
TSX Venture Exchange
TSXV: AGLD
PLACE OF INCORPORATION:
Western Australia
SHARE REGISTRIES
Computershare Investor Services Australia
GPO Box 2975
Melbourne VIC 3001
Tel: 1300 850 505 (within Australia)
Tel: +61 3 9415 5000 (outside Australia)
Computershare Investor Services Canada
510 Burrard Street, 2nd Floor
Vancouver, BC V6C 3B9
Tel: +1 604 661 9400
Fax: +1 604 661 9549
AUDITORS
KPMG
www.kpmg.com.au
Austral Gold Limited
5
Annual Report 2021
CHAIRMAN’S
LETTER
DEAR SHAREHOLDERS
It’s been another busy year for Austral Gold as we continued to
move forward with our growth strategy.
We deployed a record amount of funding to exploration across the
Company’s projects in Argentina and Chile, and in nearby areas
where we have secured options over projects for future exploration
and possibly development potential. The results of our exploration
activities in Chile are best reflected in the updated independent
technical report by SLR Consulting (Canada) (“SLR”) released after
year end which encompasses drilling at our Guanaco/Amancaya
mines. The report shows an increase in the mine life at Guanaco/
Amancaya from one year in proven and probable reserves in 2020
to proven and probable reserves that can support production levels
of 30,000-35,000 gold equivalent ounces per year over the next
four to five years, plus a further 10,000 gold equivalent ounces of
production per year for the following seven to eight years.
In Argentina, in the Casposo – Manantiales district, the first phase
of drilling was completed across five veins. The next phase started
in early March 2022 and will focus on the newly discovered La
Puerta Oeste high grade vein system which has the potential for
broader mineralized zones. The Casposo mine is on care and
maintenance until a new zone has been delineated with several
years of ore reserves defined.
In addition, we have been active with respect to mergers and
acquisitions where we continued to pursue quality assets and
investments including:
• The acquisition of Revelo Resources Corp. (“Revelo”) which
included three projects located close to our pre-existing
Guanaco/Amancaya mining complex;
• Securing an interest in Ensign Minerals Gold Inc. (“Ensign”)
(current equity position of 11.93%) who owns 54 patented
claims, 370 unpatented claims, and 5 SITLA claims on South
Mercur, West Mercur and North Mercur in Utah, while Barrick
Gold Corporation (“Barrick”) owns the central Mercur mine area
which Ensign executed an option on during 2021;
• Continuing the consolidation of High Sulphidation deposits in
the Paleocene Belt in Chile by executing an Option agreement
with Pampa Metals where Austral may acquire up to an 80%
interest in the Cerro Blanco and Morros Blancos properties in
Chile held by Pampa Metals;
• Completing the first tranche to acquire 51% of the Sierra Blanca
project in Q3 2021;
• In February 2022, signing an offer letter with Mexplort where
Mexplort offered to grant us an earn-in option where we may
acquire a 50% interest in the Jaguelito project, located in the
Province of San Juan, Argentina, which is a High Sulphidation
deposit that has had 30,000 meters drilled. In addition, both
parties are to enter into a 50:50 Joint Venture (“JV”) to identify
and develop new precious metal projects located in the Indio
belt in the Province of San Juan, Argentina.
Unfortunately, the Rawhide mine, which is owned by Rawhide
Acquisition Holding LLC and where Austral Gold currently has
an equity position of 24.74%, had operational challenges in 2021
that resulted in the Company taking a full impairment charge on
its investment. Despite the impairment, we still believe the mine
has significant exploration potential and long-term development
upside. Our investment in Rawhide was made based on this
longer-term potential on the property.
Austral Gold Limited
6
Annual Report 2021
Since 2019, we have seen a positive trend for gold and silver prices, and we expect the price
of precious metals to remain strong
On a more positive note, we are most encouraged about the pros-
pects for our other equity investment made this year, being the
purchase of an interest in Ensign at a cost of US$0.8 million for
units consisting of shares and warrants at C$0.25 per unit. Based
on Ensign’s US$7.4 million financing in Q3 2021 at C$0.50 per
share, our investment has doubled in value.
Since 2019, we have seen a positive trend for gold and silver
prices, and we expect the price of precious metals to remain
strong in 2022 and be stable over the long-term due to negative
real interest rates and governments that have continued deficit
spending. Gold remains proven over the centuries as an asset
class without liabilities.
Our mine operating model changed in 2021 as we outsourced
underground operations at Amancaya. As part of the on-going
plan to increase productivity from operations, the technical team
worked on improving its oversight of key activities to improve the
efficiency of the production process. During Q4 2021, roles and
responsibilities were evaluated to better align the Company and its
contractors on underground exploitation, maintenance of mining
equipment and procurement of materials and spare parts. These
changes resulted in improved operational efficiencies.
Although our production decreased from 2020 to 31,142 gold
equivalent ounces, we recorded healthy EBITDA of US$4.8 million
and adjusted EBITDA of US$14.4 million while generating US$11.3
million in net cash flows from operating activities. For 2022, we
forecast an increase in production to 40,000-45,000 gold equiva-
lent ounces and that production will be higher in the second half of
the year. In addition, we expect to continue to deliver solid margins
and strong cash flows from operations.
On the financing front, we raised US$1.1 million from the exer-
cise of options from our investors who participated in the 2019
Rights Issue program that concluded on 18 October 2021, of
which ~US$0.7 million was received during 2021. In addition,
our committed lenders demonstrated their long-term belief in
the Company by refinancing current debt of US$3.5 million with
a three-year ESG facility (4.2% p.a.). During the first quarter of
2021, we also rewarded our shareholders with a dividend payment
of A$0.008 per share paying out approximately US$3.8 million.
During 2021 we continued to lay the foundation for our growth
strategy by:
• Increasing the mine life at Guanaco/Amancaya that can support
production levels of 30,000-35,000 gold equivalent ounces per
year over the next four to five years, plus a further 10,000 gold
equivalent ounces of production per year for the following seven
to eight years,
• Exploring the Paleocene Belt’s High Sulfidation systems in
Northern Chile to find a large Tier 1 deposit,
• Continuing to explore our Casposo-Manantiales properties in
San Juan, Argentina to restart profitable mining operations,
• Continue to explore our Pinguino-Sierra Blanca Complex in
Santa Cruz, Argentina in one of one of the most prominent
precious metal regions in the world, and
• Continued to invest in attractive mining opportunities in North
America including Ensign Minerals in Utah and the Rawhide
Mine in Nevada.
I would like to thank our shareholders for their continued support,
all of our employees and contractors, and our Board members for
their hard work and dedication during this year.
WAYNE HUBERT
Chairman
Austral Gold Limited
7
Annual Report 2021
KEY
PRINCIPLES
Austral Gold Limited
8
Annual Report 2021
Be socially and environmentally
responsible and strive to reduce
safety risks and operating costs
Be the preferred partner for companies,
communities and governments to operate
precious metal projects in the Americas:
currently focused on Chile, Argentina
and the USA
MAXIMIZE VALUE
CREATION FOR
STAKEHOLDERS
Austral Gold Limited
9
Annual Report 2021
KEY
PRINCIPLES
REVIEW OF
ACTIVITIES
Austral Gold Limited
10
Annual Report 2021
Rawhide Mine
Fallon Nevada,
USA
Mercur Project
Utah,
USA
100%
Interest
GUANACO/AMANCAYA
PROPERTIES
Operations
Exploration projects
100%
Interest
100%
Interest
CASPOSO
PINGÜINO
24.74%
Interest
11.93%
Interest
Guanaco/Amancaya
Antofagasta,
Chile
Casposo
San Juan Province,
Argentina
RAWHIDE MINE
MERCUR PROJECT
Pingüino
Santa Cruz Province,
Argentina
Austral Gold Limited (“Austral”) is a growing gold and silver mining, development and exploration company building a portfolio
of quality assets in Chile, the USA and Argentina. Austral owns a 100% interest in the Guanaco/Amancaya mine in Chile and the
Casposo Mine (care and maintenance) in Argentina, a 24.74% interest in the Rawhide Mine in Nevada and 11.93% interest in
the Mercur project in Utah through the equity investment in Ensign Minerals. In addition, Austral owns an attractive portfolio of
exploration projects in the Paleocene Belt in Chile (including those acquired in the February 2021 acquisition of Revelo Resources
Corp), a 13.6% interest in Pampa Metals and a 100% interest in the Pingüino project in Santa Cruz, Argentina; recently expanded
the district through the 2020 option agreement for the Sierra Blanca project.
Austral Gold Limited
11
Annual Report 2021
AUSTRAL GOLD HAS PRODUCED OVER 531,000 GOLD
EQUIVALENT OUNCES OVER THE LAST 11 YEARS.
SOUND CASH FLOWS HAVE FUNDED AUSTRAL’S
GROWTH INITIATIVES
5
6
3
,
1
5
8
8
0
,
1
5
8
8
8
6
4
,
*
4
1
0
5
5
,
8
5
0
0
3
,
0
5
9
2
1
,
First gold
doré bar
poured at
Guanaco
2011
Guanaco cash
flow positive
Guanaco
mineral
resources
increased
by 10%
2012
Purchased
15% stake in
Goldrock
Mines
Purchased
20% stake
in Argentex
Mining
2013
Acquired
Amancaya
Project
Acquired
51% of U/G
mining
contractor
Kinross
royalty
agreement
exited
2014
Acquired 51%
of Casposo
Mine
Acquired
Argentex
Mining
Dual listed
on TSX-V
2016
Achieved
low cash
costs of
US$548/
AuEq oz
2015
*
Includes production from Casposo (51%)
** Includes production from Casposo (70%)
Austral Gold Limited
12
Annual Report 2021
*
*
6
5
0
0
8
,
*
*
8
8
4
4
6
,
6
3
1
,
0
7
0
9
1
,
5
5
Acquired San
Guillermo &
Reprado Projects
Acquired additional
19% of Casposo
Mine
Updated FS for
mining projects
Finalized
construction of
new agitation
leaching plant
in Chile
First full year
operating the
new agitation
leaching in plant
Record combined
production
surpassing
80K Geo
Starts UG opera-
tions at Amancaya
Record individual
production at
Guanaco/
Amancaya
Placed Casposo
on Care &
Maintenance
Effectively
acquired
remaining 30% of
Casposo mine
Entered into North
America through
investment in the
Rawhide mine
2017
2018
2019
Record Adjusted
EBITDA of
US$46 million
Agreement to
acquire 100% of
Revelo Resources
(closed in 2021)
Agreements
to acquire
additional mining
concessions
near Guanaco/
Amancaya
Agreement to
acquire up
to 100% of
Sierra Blanca
in Argentina
2020
2
4
1
,
1
3
Adjusted
EBITDA
US$14,429
Acquired Revelo
Resources
Acquired
interest in
Ensign Gold
Record
exploration
activity
2021
Austral Gold Limited
13
Annual Report 2021
REVIEW OF RESULTS
OF OPERATIONS
Key
Operating
Results
2021
Rawhide Mine
(100% basis)
Guanaco/
Amancaya
Mines
Net to
Austral
Gold*
Guanaco/
Amancaya Mines
2020
Rawhide
Mine
(100% basis)
Net to
Austral
Gold*
Fiscal Year ended 31 December
Processed (t)
233,794
1,563,115
627,230
195,296
1,855,337
665,995
Gold produced
(Oz)
Silver produced
(Oz)
Gold Equivalent
Ounces (Oz)3
29,938
18,253
34,532
52,306
24,213
58,449
87,050
108,982
114,481
253,066
160,113
293,687
31,142
19,535
36,059
55,190
26,265
61,853
* Includes 100% of Guanaco/Amancaya and 2021 twelve month weighted average of 25.17% (2020-25.37%) at the Rawhide mine.
** AuEq ratio is calculated at 71:1 Ag:Au for FY21 and 88:1 Ag:Au during FY20 at the Guanaco/Amancaya mine and at 85:1 Ag:Au during FY21 and 78:1 during FY20 at the
Rawhide mine.
Austral Gold Limited
14
Annual Report 2021
BACKGROUND
The Guanaco and Amancaya mines remain the Company’s flag-
ship asset. Guanaco is located approximately 220km south-east
of Antofagasta in Northern Chile at an elevation of 2,700m and
45km from the Pan American Highway.
Guanaco is embedded in the Paleocene/Eocene belt, a geological
feature which runs north/south through the centre of the Antofa-
gasta region, Chile.
On 28 July 2021, Austral Gold entered into an Option agreement
with Pampa Metals (“Pampa) whereby Austral Gold may acquire
up to an 80% interest in the Cerro Blanco and Morros Blancos
properties (Chile) held by Pampa. However, Pampa can earn back
an 80% interest under the same terms and conditions as those
for Austral if studies indicate that copper is the most valuable
commodity instead of gold and silver.
Gold mineralisation at Guanaco is controlled by pervasively silici-
fied, sub-vertical east/northeast-west/southwest trending zones
with related hydro-thermal breccias.
Silicification grades outward into advanced argillic alteration and
further into zones with argillic and propylitic alteration. In the Cachi-
nalito vein system, most of the gold mineralisation is concentrated
between depths of 75m and 200m and is contained in horizon-
tally elongated mineralised shoots. The alteration pattern and the
mineralogical composition of the Guanaco mineralisation have
led to the classification as a high-sulfidation epithermal deposit.
In July 2014, the Company acquired the Amancaya Project (‘Aman-
caya’) from Yamana Gold Inc (TSX:YRI | NYSE:AUY) which is located
approximately 60km south-west of the Guanaco mine. Amancaya is
a low sulfidation epithermal gold-silver deposit consisting of eight
mining exploration concessions covering 1,755 hectares (and a
further 1,390 hectares of second layer mining claims).
At Amancaya, open-pit mining operations began during the first
half of 2017 while underground operations started in 2018. The
Amancaya ore is delivered to the Guanaco plant for processing.
On 14 November 2017, Austral Gold purchased a 100% interest
in the San Guillermo and Reprado gold-silver projects, located in
the emerging Amancaya precious metals district of northern Chile,
from Revelo Resources Corp. (TSX- V:RVL).
The San Guillermo property consists of concessions totaling
12,175 hectares that surround the company’s high-grade gold
and silver Amancaya operation. The Reprado Project consists
of concessions totaling 3,960 hectares situated approximately
20km north of Amancaya. Historical drilling undertaken by Teck
Resources Ltd intersected gold in low sulfidation quartz veins
trending essentially east-west.
A technical report on combined resources and construction of
a new agitation leaching plant at the Guanaco mine site was
completed in June 2017 and the commissioning phase was
completed in November 2017. The Technical report was updated
in March 2022 and shows an increase in the mine life at Guanaco/
Amancaya from one year in proven and probable reserves in 2020
to proven and probable reserves that can support production
levels of 30,000-35,000 gold equivalent ounces over the next four
to five years plus an additional 10,000 gold equivalent ounces of
production for the following seven to eight years.
On 4 February 2021, Austral Gold acquired Revelo Resources,
which owns three projects located close to the Group’s pre-
existing Guanaco/Amancaya mining complex.
Austral may exercise the initial 60% interest option within five
years from the date of the agreement by incurring US$3 million in
exploration expenses on the Properties as follows:
i. at least US$1 million in year 1; and
ii. an additional US$2 million in year 2
If the Group exercises the initial 60% interest option and earns a
60% interest in a property or the Properties, Austral may increase
its interest in each such property to an aggregate total of 65%
(“Stage 1”) within five years from the date of closing the Option
agreement for the following consideration on each Property:
a. minimum drilling of 15,000m,
b. studies required to complete a preliminary economic assess-
ment (“PEA”),
c. PEA by an internationally recognized engineering firm to the
standards, and in the form, prescribed under National Instru-
ment 43-101 (“NI 43-101”), and
d. minimum annual exploration expenditures on each property of
US$250,000.
After completion of this stage, both parties intend to form a Joint
Venture (JV) Company and execute a Shareholder Agreement
in respect of each Property subject to the JV. Any Property on
which a Preliminary Economic Assessment is not completed will
be returned to Pampa.
Additional terms of the agreement are disclosed in note 20 to the
financial statements.
The acquisition of Revelo and the option obtained on the Pampa
properties provided the Group with a leading role in the Paleocene-
Eocene Belt in Chile.
On 8 February 2022, Austral Gold Argentina SA (“AGASA”), a
subsidiary of Austral, accepted a binding offer letter to enter
into a Joint Venture signed a binding offer letter with Mexplort
Perforaciones Mineras S.A. (”Mexplort”) where the parties agreed
to enter into a Joint Venture Agreement to identify and develop new
precious metal projects located in the Indio belt in the Province
of San Juan, Argentina and Mexplort is to grant AGASA an earn-
in option whereby it may acquire a 50% interest in the Jaguelito
project “(50% interest”) held by Mexplort through a concession
granted by the Instituto Provincial de Exploraciones y Explotacio-
nes Mineras de la Provincia de San Juan (IPEEM) in October 2011.
Austral Gold Limited
15
Annual Report 2021
PRODUCTION
Guanaco/Amancaya Operations
Mined Ore (t)
Processed (t)
Average Plant Grade (g/t Au)
Average Plant Grade (g/t Ag)
Gold produced (Oz)
Silver produced (Oz)
Gold-Equivalent (Oz) ***
C1 Cash Cost of Production (US$/AuEq Oz)*
All-in Sustaining Cost (US$/Au Oz) *
Realised gold price (US$/Au Oz)
Realised silver price (US$/Ag Oz)
Sales volume
Year ended 31 December
2021
155,210
233,794
4.2
13.7
29,938
87,050
31,142
1,175
1,739
1,797
25
35,838
2020
196,194
195,296
8.5
43.9
52,306
253,066
55,190
723
1,021
1,765
21
49,995
* The cash cost (C1) includes: Mine, Plant, On-Site G&A, Smelting, Refining, and Royalties (excludes Corporate G&A). It is the cost of production per gold equivalent ounce.
** The All-in Sustaining Cost (AISC) includes: C1, Sustaining Capex, Brownfield Exploration, and Mine Closure Amortisation
*** AuEq ratio is calculated at:71:1 Ag:Au during FY21 and 88:1 Ag:Au during FY20
Production during FY21 at Guanaco/Amancaya was in compliance with the revised annual guidance provided in Q3 2021, although
it decreased by 43.6% to 31,142 gold equivalent ounces (29,938 gold ounces and 87,050 silver ounces) from 55,190 gold equivalent
ounces (52,306 gold ounces and 253,066 silver ounces) when comparing with FY20. The lower production in FY21 was mainly due to:
• lower throughput at the Amancaya mine,
• transition to a new mining contractor during Q1 2021
• production issues during the year including the lower availability of mining equipment, lower gold grades at Amancaya and tailing
issues that resulted in the shutdown of the plant during June 2021.
• Impact of covid protocols
During FY21, 155,210 tonnes were mined from the Amancaya underground operations.
Rawhide Operations (100% basis)
Processed (t)
Gold produced (Oz)
Silver produced (Oz)
Gold-Equivalent (Oz) *
* December 2021 twelve month weighted average of 25.17 % (2020-25.37%)
** AuEq ratio is calculated at 85:1 Ag:Au for FY21 (78:1 Ag:Au for FY20)
Year ended 31 December
2021
2020
1,563,115
1,855,337
18,253
108,982
19,535
24,213
160,113
26,265
Production during FY21 at Rawhide decreased by 25.6% to 19,535 gold equivalent ounces (18,253 gold ounces and 108,982 silver
ounces) from 26,265 gold equivalent ounces (24,213 gold ounces and 160,113 silver ounces) during FY20.
MINING
During the year ended 31 December 2021, 155,210 tonnes were
mined at the Amancaya underground operations. In March 2022,
the Company received an independent technical report prepared
by SLR Consulting (Canada) Ltd (“SLR”), The report shows an
increase in the mine life at Guanaco/Amancaya from one year in
proven and probable reserves in 2020 to proven and probable
reserves that can support production levels of 30,000-35,000
gold equivalent ounces over the next four to five years plus an
additional 10,000 gold equivalent ounces of production for the
following seven to eight years. We estimate of production from
the following sources:
• nearly two years from underground mining
• three years of open pit mining starting in 2023
• ten years of processing existing heap leach pads
SAFETY AND ENVIRONMENTAL PROTECTION
During the year ended 31 December 2021, there were five lost-time
accident (LTA) and sixteen nil-lost-time accidents (NLTA) involving
employees of Guanaco/Amancaya and third party contractors.
Safety and environmental protection are core values of the
Company. The implementation of best practice safety standards
along with a sound risk management program are key priorities
for Austral Gold.
COVID-19 IMPACT
The Company continued to address the COVID-19 pandemic and
minimize the potential impact at its operations. Austral places the
safety and well-being of its workforce and all stakeholders as its
highest priority. The Company continues to implement measures
and precautionary steps to manage and respond to the risks
associated with COVID-19 to ensure the safety of its employees,
contractors, suppliers, and surrounding communities where the
Company operates.
Austral Gold Limited
16
Annual Report 2021
COMMUNITY ACTIVITIES
Austral Gold has an extensive history of being a committed neigh-
bor to the communities in which it operates.
EXPLORATION
During 2020, we established a new exploration strategy which
includes the following:
Our support to the communities surrounding our projects in
Chile focuses mainly on education programs as we believe
that through education it is possible to improve citizens socio-
economic conditions and contribute to the youth population and
the overall community.
ENVIRONMENTAL
The environmental monitoring program implemented for the
Guanaco Amancaya Operation includes meteorology, air quality,
water quality, flora and fauna, archaeology. Air quality is monitored
at two locations in Guanaco and one in Amancaya. Meteorological
parameters are collected at one air quality station in Guanaco and
the air quality station in Amancaya. There is also a meteorological
station in Guanaco. independent from the air quality monitoring
system. Monitoring of flora and fauna is conducted in Punta del
Viento, Las Mulas and Pastos Largos approximately 30 km east
of Guanaco.
The results of the environmental monitoring campaigns are regu-
larly submitted electronically to the Environmental Superinten-
dency (“SMA”) through the system set up in the SMA’s website
to upload the information. In addition, the monitoring results are
submitted to other government agencies such as the General
Water Directorate.
The Guanaco Amancaya Operation is in an arid area with infrequent
surface runoff resulting from precipitation. There is no discharge
of water to the environment from the Guanaco site. The process
plant, the heap leach pads and the tailing storage facility (“TSF”}
are operated as zero discharge facilities. The heap leach pads
are operated as closed circuits. The freshwater supply to be used
for industrial processes is required to offset evaporation losses.
The water collected from the surface water and wells is conveyed
to Guanaco by gravity through HDPE pipes. Currently the water
supply for Guanaco is mostly groundwater pumped from two main
wells. There are two additional small wells (for a total of four) that
provide small volumes of water. The water collected from the wells
is a small fraction of the total freshwater supply.
Flow monitoring is conducted at three locations in the area where
freshwater is taken from the natural ponds/creeks resulting from
spring water, which encompasses three sectors: Punta del Viento,
Las Mulas and Pastos Largos. Flow monitoring is also conducted
at the groundwater supply wells. Water quality monitoring is
conducted at five groundwater monitoring wells located down-
stream of the heap leach pads and the tailing storage facility.
There is no discharge of water to the environment from the Aman-
caya site. Freshwater is required only for road irrigation (dust
suppression) and domestic consumption. Currently the freshwater
supply is obtained by pumping water from one groundwater well
and conveying it by gravity through HDPE pipes. Flow monitoring
is conducted at the water supply well. Water quality monitoring is
conducted at four groundwater monitoring wells located down-
stream of the Amancaya site.
Water for domestic use is treated in potable treatment plants
installed at both Guanaco and Amancaya. Sanitary wastewater
is sent to sewage treatment plants and the treated effluent is used
for road irrigation and operation of drilling equipment for explora-
tion activities.
• Discover a new Tier I or II deposit(s) through exploration and
acquisition of new business;
• Discover brownfields ounces at Amancaya, Casposo and
Manantiales;
• Guanaco District: complete delineation at Sierra Inesperada to
drill the best ranked targets starting 2020;
• New Opportunities: Identify and consolidate third-party projects
with potential near existing Austral Gold infrastructure;
• Explore other oxide and deeper gold-rich sulfide mineralisation
opportunities in the Chilean Paleocene-Eocene Belt, which
include Sierra Inesperada, Cerro Buenos Aires, Morros Blancos
and Cerro Blanco.
During 2021, the Group focused on the following exploration
activities:
• organic growth at the Guanaco/Amancaya mine complex result-
ing in the discovery of two new veins and some very positive
drill results;
• At Sierra Inesperada in the Guanaco district, the Group contin-
ued to focus on the Sierra Inesperada area with drilling activi-
ties in the best ranked targets delineated for HS systems.
Drilling results confirmed HS hydrothermal activity controlled
by phreatomagmatic complexes and associated with silver
mineralisation confirmed silver mineralization vectoring to
potential blind gold mineralization in the Purisima breccia
complex.
• drilling campaign at its project Manantiales-Casposo in Argen-
tina, resulting in the interception of a blind ore-shoot opening the
upside to the south and the exploration potential to the north in
the protected block related to the Vallecito reverse fault.
• Exploration program at the Sierra Blanca project in Santa Cruz,
Argentina, in accordance with the Option Agreement executed
with New Dimension Resources on 13 October 2020. During
Q3 2021, the Company fulfilled its exploration commitment to
acquire a 51% interest in the project.
• Delineation completed at the Rosario del Alto (within the Morros
Blancos project located in the Paleocene Mineral Belt in north-
ern Chile and close to the Guanaco/Amancaya operating mines),
one of the two properties included in the Option agreement with
Pampa Metals.
• Exploration at Cerro Buenos Aires. Lab results from the five drill-
holes at Cerro Buenos Aires did not show any significant gold
intercepts. In addition, as the full multi-element geochemistry
did not show any significant silver values or clear distribution
patterns of pathfinder elements, the option agreement at Cerro
Buenos was terminated by year end.
• Preliminary targeting of the Pingüino and Sierra Blanca
district, based on geological mapping, Aster interpretation,
and geophysics.
Austral Gold Limited
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Annual Report 2021
EXPLORATION
IN CHILE
Austral Gold Limited
18
Annual Report 2021
EXPLORATION IN 2021
FOCUSED ON BROWNFIELD
AREAS IN THE AMANCAYA /
SIERRA INESPERADA
(GUANACO) DISTRICT /
CERRO BUENOS AIRES/
MORROS BLANCOS AND
CERRO BLANCO.
AMANCAYA MINE EXPLORATION
The exploration activities at the Amancaya Project focused on a
drilling campaign to validate the continuity of mineralisation along
strike and to depth with the goal of expanding the resources.
HIGHLIGHTS
Significant results were obtained from the deep drilling campaign
of the Amancaya Vein System which included the discovery of two
new veins, the Oeste and Este veins. Drilling highlights from assays
disclosed in the Group’s 2021 press releases include:
• DAM-002 1.35 meters @14.65 g/t gold and 50.60 g/t silver
including 42.43 g/t gold and 124 g/t silver over 0.44 meters
• DAM-003 2.07 meters @12.13 g/t gold and 57.50 g/t silver
including 21.01 g/t gold and 142.8 g/t silver over 0.88 meters
• DAM-008 2.53 meters @12.18 g/t gold and 8.50 g/t silver in the
Central Vein and 30m at 4.04 g/t gold and 7.50 g/t silver includ-
ing 4.14 meters @23.50 g/t gold and 29.30 g/t silver in a newly
discovered mineralized breccia zone at depth
• DAM-012 0.40 meters @41.89 g/t gold and 7.50 g/t silver
• DAM-016 1.8 meters @ 3.1 g/t gold and 1.5 g/t silver
• DAM-019 4.27 meters @ 7.81 g/t gold and 33.0 g/t silver
Exploration activities at Guanaco/Amancaya continued where
three of six drill holes in the Sur vein confirmed its continuity and
two of the five follow-up drillholes in the Oeste vein confirmed the
continuity of the structure at depth.
• DAM-024 2.41 meters @ 10.19 g/t gold and 55.2 g/t silver
• DAM-026 1.17 meters @ 24.98 g/t gold and 77.3 g/t silver
• DAM-028 0.60 meters @ 86.88 g/t gold and 6.9 g/t silver
(Sur Vein)
• DAM-029 0.80 meters @ 23.68 g/t gold and 1.9 g/t silver
(Sur Vein)
• DAM-032 2.26 meters @ 5.77 g/t gold and 5.3 g/t silver
(Sur Vein)
• DAM-035 1.50 meters @ 20.06 g/t gold and 4.8 g/t silver
(Oeste Vein)
• DAM-036 3.85 meters @ 5.18 g/t gold and 5.2 g/t silver
(Oeste Vein)
The most significant results were obtained in the Oeste Vein, where
two follow-up drill holes confirmed 100 meters of vertical continuity
of the structure in the previous drilled sections, whilst a third drill
hole (DAM-040) in a section in between, cut the structure in depth
where it is observed a narrow structure with a low grade.
At Veta Este, the continuity of the structure on the proposed strike
was not confirmed, as the follow-up program intercepted only
narrow veins. The interpretation suggests that it is a gently east
dipping splay structure between the North and South veins.
Austral Gold Limited
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Annual Report 2021
Morros Blancos and Cerro Blanco
On 28 July 2021, entered into an Option agreement with Pampa
Metals whereby Austral may acquire up to an 80% interest in the
Cerro Blanco and Morros Blancos properties (Chile) held by Pampa
Metals as described on page 15. Delineation was completed at
Rosario del Alto (within Morros Blanco), where key elements of
high-sulfidation systems were field validated, including four maar-
diatreme structures, multiple of phreatomagmatic breccias extend-
ing ~2x1 km and a preserved structural block based on shallow
volcanic features and high-level alteration, systematic surface
geochemistry prospection with 297 rock chip samples and over
450 spectrometry measurements validated extensive advanced
argillic alteration (~4x3 km) with preserved shallow levels and
newly acquired high-resolution ground magnetic data collected
on 38 North-South oriented lines (100 m spacing) which is being
processed by an external consultant. Preliminary results show
demagnetized areas, presumably due to an acidic hydrothermal
alteration with spatially matching phreatomagmatic features. Five
East -West oriented CSAMT lines (totalling 12 km) were surveyed
over favorably altered centers and confirmed subvertical cone-
shaped resistors over 10,000 ohms/m in 1D and 2D inversions.
ACQUISITION OF REVELO RESOURCES
As described in note 34 to the FY21 Financial statements, on
4 February 2021, Austral completed the acquisition of Revelo
Resources Corp. (“Revelo”) under a plan of arrangement (“the
Arrangement”) in Canada. Under terms of the Arrangement, Austral
acquired all Revelo shares and Revelo shareholders received total
consideration of US$6,977,713 comprised of cash of approxi-
mately US$920,353 (C$1,176,471) and 35,475,095 ordinary shares
of Austral valued at approximately US$6,060,654. Consequently,
Revelo became a wholly-owned subsidiary of Austral. Revelo’s
main assets are three exploration projects located close to the
Group’s Guanaco/Amancaya mining complex in Chile. As part of
the acquisition, the Group acquired a 19.9% interest in Pampa
Metals Corporation (CSX:PM) (“Pampa”). The Group’s interest in
Pampa was reduced to 13.6% as the Group returned 2,963,132
shares of Pampa as consideration for entering into the Option
agreement with Pampa.
Revelo´s Las Pampas project is a large property located in the heart
of the highly productive Paleocene Mineral Belt in northern Chile
that contains several important gold, silver and copper mines and
projects. Numerous indications of low-sulphidation, epithermal
gold and silver mineralization occur on the property, which is situ-
ated along geologic trend and a few kilometers to the southwest
of the prolific El Peñon mining district.
During 2021, Austral commenced exploration activities on Las
Pampas, Loro and Victoria Sur, the three main properties owned
by Revelo.
GUANACO DISTRICT EXPLORATION
During the year, the focus continued on the Sierra Inesperada
area with delineation and drilling activities. Drilling started with
Mina Inesperada and continued with a first phase drill campaign
at the Carla and Purisima veins. Seven maar-diatreme complexes
in the area were recognized suggesting that they are near entirely
preserved and affected by favorable hydrothermal alteration, being
relatively restricted to phreatomagmatic products. Geological
mapping focused on the identification of intra- maar structures and
phreatomagmatic facies as indicators of proximity to the positions
of the conduits.
Four targets at Sierra Inesperada were then tested with 20
diamond drillholes in two phases, confirming high sulfide (“HS”)
hydrothermal activity controlled by phreatomagmatic complexes
and associated with silver mineralisation. Integration of geological,
geophysical and geochemical interpretations suggest potential
blind gold mineralisation that was tested during 2021.
The latest drilling results confirmed silver mineralisation vector-
ing to potential blind gold mineralisation in Purisima breccia
complex. The most significant results disclosed in the Company’s
press releases dated 26 October 2021 and 28 January 2022 were
as follows:
• DIN-018B: 98.50 meters @ 19.2 g/t silver
(Including 24.0 meters @ 51.5 g/t silver and sub-
include 8.20 meters @ 0.25 g/t gold)
• DAM-027: 129.00 meters @ 34.0 g/t silver
(Including 55.0 meters @ 63.6 g/t silver and sub-
include 4.00 meters @ 0.27 g/t gold)
• RDIN-001: 6.0 meters @ 1.05 g/t gold and 2.7 g/t silver and
1.0 meter @ 1.99 g/t gold and 31.7 g/t silver
• RIN-001A: 41.0 meters @ 18.6 g/t silver
(including 8.0 meters @ 24.8 g/t silver) and
30.0 meters @ 21.6 g/t silver and;
60.0 meters @ 14.1 g/t silver
(including 6.0 meters @ 32.5 g/t silver)
All drill holes crossed the phreatomagmatic complexes without
reaching the feeder ducts. However, we believe there is still enough
space in the main gold deposition level to intercept a mineralized
conduit
PALEOCENE HS DISTRICT EXPLORATION
Cerro Buenos Aires
During December 2020, the Company entered into a purchase
option agreement for 36 mining concessions from Mr. Simunovic
Patricio. The Property is a potential HS project with a significant
hydrothermal alteration footprint. However, to date no anomalous
gold values have been reported in the sector which has been under
evaluation by various companies in the past as a possible copper
porphyry system. During 2021, we drilled five holes to test the
phreatomagmatic breccia borders related to CSAMT anomalies in
three targets defined in the delineation stage. Despite having inter-
cepted a large column of alteration, the results were not significant,
and we dismissed the potential for a productive high-sulfidation
system located in the southern sector of the property and recorded
an impairment of US$1.3m.
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Annual Report 2021
Austral Gold Limited
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Annual Report 2021
ARGENTINA
Austral Gold Limited
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Annual Report 2021
EXPLORATION IN
2021 FOCUSED
ON BROWNFIELD
AREAS IN CASPOSO-
MANANTIALES ON
AND THE SIERRA
BLANCA PROJECT
CASPOSO MINE
The Casposo mine is in the department of Calingasta, San Juan
Province, Argentina, approximately 150km from the city of San
Juan, and covers an area of 100.21km2. Casposo is a low sulfida-
tion epithermal deposit of gold and silver located in the eastern
border of the Cordillera Frontal geological province.
The Cordillera Frontal represents the eastern portion of the
Cordillera Principal that runs along the Chile-Argentine border for
approximately 1,500km. The Casposo gold– silver mineralisation is
Permian in age, and occurs in the extensive Permo-Triassic volca-
nic rocks of the Choiyoi Group, at both rhyolite, and underlying
andesitic rocks, where it is associated with NW-SE, E-W and N-S
striking banded quartz, chalcedony and calcite veins, typical of low
sulfidation epithermal environments. Post-mineralisation dykes
of rhyolitic, mafic, and trachytic composition often cut the vein
systems. These dykes, sometimes reaching up to 30m thickness,
are usually steeply dipping and north–south oriented. Mineralisa-
tion at Casposo occurs along a 10km long north- west to southeast
trending regional structural corridor, with the main Kamila Vein
system forming a 500m long sigmoidal set near the centre. The
Mercado Vein system is the northwest continuation of Kamila and
is separated by an east–west fault from the Kamila deposit.
In March 2016, Austral Gold acquired a controlling stake and
management of the Casposo gold and silver project. Since then,
Austral Gold undertook a complete revision of historical work
(geology, geochemistry, geophysics and drillings), and completed
a regional mapping at a 1:10,000 scale to identify potential oppor-
tunities for discovering additional mineralisation and ranking a
series of mine and brownfield exploration targets.
In March 2017, Austral Gold acquired an additional 19% of the
Casposo silver and gold project and in December 2019, it effec-
tively acquired the remaining 30%.
CARE AND MAINTENANCE
During the June 2019 quarter, Austral completed a comprehensive
review of operations, and as the mine operator, decided to tempo-
rarily place the mine on care and maintenance.
The Casposo Mine continues to be on care and maintenance
although exploration activities commenced during the December
2019 quarter with the goal of recommencing processing operations.
Austral Gold Limited
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Annual Report 2021
ARGENTINA EXPLORATION
Casposo — Manantiales Exploration
During Q1 2021, the delineation process was completed in the
Manantiales and Chimbuca veins resulting in the identification of
the main mineralisation control, based on the relogging of the entire
historical drilling, detailed geological mapping, new geochemistry
and the reprocessing of geophysical data.
Phase l drilling commenced in April 2021 and was completed in five
vein targets including 14 holes in 2,800 meters. At the Manantiales
vein, a blind ore-shoot was intercepted opening the upside to the
south and the exploration potential to the north in the protected
block related to Vallecito reverse fault. The most significant results,
disclosed in the Company’s press release dated 26 October 2021,
were as follows:
• MDH-021-56 1.44 meters @ 6.88 g/t gold and 10.6 g/t silver
• MDH-021-57 1.50 meters @ 5.05 g/t gold and 10.3 g/t silver
The holes drilled at Valentina, Julieta, Awada and Maya, did not
intercept significant mineralisation. However, the composition
and textures of the intercepted veins suggest potential at depth.
A new drill phase is under review and is expected to commence
during Q1 2022.
During 4Q 2021, surface geochemistry results were received from
samples taken at “La Puerta target,” and 34 of 63 samples have
Au and Ag anomalies (Au above 250 ppb). Two samples of Au high
grade were obtained (68.11 and 29.98 ppm of Au and values >
200 ppm Ag), that are associated with areas with strong veinlets
of quartz and intense silicification in host rock.
New geochemistry results from the channel CH-PO-04 included
4.7m with 8.09 g/t Au and 56.53 g/t Ag average (including 2.5m
with 14.59 g/t Au – 81.60 g/t Ag). These results confirm the poten-
tial for another style of mineralisation.
Austral Gold Limited
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Annual Report 2021
SANTA CRUZ PROVINCE
PINGÜINO AND SIERRA BLANCA PROJECTS
Pingüino Project
The Group owns 100% of the mineral rights of 20 properties with
over 51,000 hectares of land. These properties are located within
two prominent geographical features, the Deseado and Somun-
cura Massifs both of which have proven to host significant epith-
ermal precious metal deposits. The large epithermal vein swarm
at Pingüino contains indium-enriched vein-hosted base metal
mineralisation, as well as low sulphidation precious metal vein
mineralisation. The combination of these two types of mineralisa-
tion within the same property is unique for the province of Santa
Cruz and a significant asset for the Company.
The Silver-Gold-Zinc-Lead-Indium Pingüino Project is an advanced
stage development project located in south-central Argentina,
300km southwest of the city of Comodoro Rivadavia and 220km
northwest of Puerto San Julián. In the last 20 years, seven mines
have been constructed in Santa Cruz, making it one of the most
prolific precious metal provinces in the world, including large mines
such as Cerro Vanguardia and Cerro Negro.
The Pingüino Project lies in a vein field similar but smaller to Cerro
Vanguardia some 35kms north-west along same controlling struc-
ture as Pingüino deposit (225km strike length of veins vs 115 km
strike length of veins).
The project has year round access, is close to major infrastructure,
has no nearby communities and more than 70% of surface land
is owned by the Group.
Sierra Blanca Project
During 2020, the Group and New Dimension Resources Ltd. (TSX-
V:NDR) (“New Dimension”) signed an Agreement to acquire New
Dimension’s Sierra Blanca gold-silver project (the “Project”) in
Santa Cruz, near the Group’s Pingüino project.
With this transaction, Austral expanded the area of its Pingüino
project by securing an additional 7,000 hectares, resulting in a
new exploration cluster in the Province of Santa Cruz. In addition,
the exploration team carried out the inventory of the veins of both
projects to design the next exploration campaign.
2021 exploration activities included district mapping of the area,
remote sensing processing, sampling for talus fine geochemistry
and drilling relogging. The follow-up activities on the new target
confirmed favorable alteration related to Dome-Breccia complex.
Dating of a rhyolitic dome in the Dome-Breccia complex resulted
in the mean age of 165 ± 1.4 Ma, although a smaller population
of zircons results have an age of 153.6 Ma ± 1.9, as seen in the
Cerro Negro deposit. The US$100,000 work commitment was
met, and the Group earned 51% of Sierra Blanca. In accordance
with the Agreement, the Group intends to meet the additional
US$200,000 in exploration activities in 2022 (of which US$45,000
was incurred in 2021). To earn a further 29%, the Group will need
to incur another US$400,000 in 2023. Further details of the agree-
ment are disclosed in note 20 of the 2021 financial statements.
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Annual Report 2021
USA
Austral Gold Limited
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Annual Report 2021
RAWHIDE MINE /
ENSIGN GOLD
BACKGROUND
On 17 December 2019, Austral Gold’s US subsidiary, Austral-
Gold North America Corp. (“AGNA”), acquired an equity interest
in Rawhide Acquisition Holding LLC (“Rawhide”), a privately held
Delaware limited liability company that owns Rawhide Mining LLC
which in turn owns the Rawhide Mine located ~50 miles outside
of Fallon, Nevada, United States.
The Rawhide mine is a fully permitted operation that produces
gold and silver through an open pit heap leaching operation. In
2019, Rawhide received a mine expansion permit associated with
the Regent open pit. Rawhide is a historical mining operation that
started in the early 1900s located in the Walker Lane structural
zone, one of the most prolific gold mining districts in the world,
and is located 50 miles from Fallon, Nevada, USA. It is surrounded
by multiple 1.0 million+ gold oz deposits. Rawhide was formerly
operated as a subsidiary of Kennecott Corp. prior to Coral Reef
Capital partnering with Rawhide’s management team to acquire
the property from Rio Tinto Plc in 2010. Coral Reef Capital is the
controlling shareholder.
During December, 2019, Austral acquired an equity interest in
Rawhide, a privately held Delaware limited liability company that
owns Rawhide Mining LLC which in turn owns the Rawhide Mine
located ~50 miles outside of Fallon, Nevada, United States.
OVERVIEW OF RAWHIDE OPERATION
Gold was discovered at Rawhide in 1906, with intermittent small
scale production until Kennecott undertook open pit mining from
1990-2003, producing 1.4 million ounces of gold and 10.9 million
ounces of silver from 88 million tons. Residual heap leaching until
2010 recovered an additional 200 thousand ounces of gold and 1.9
million ounces of silver. Austral Gold has been advised by Rawhide
that from 2011-2018 its mining at the Rawhide property totaled 4.9
million tons, with 160,000 ounces of gold and 1.8 million ounces
of silver produced.
Gold-silver mineralization at Rawhide has been historically mined
from a series of low sulfidation epithermal veins, vein swarms and
replacement zones hosted by various basaltic to rhyolitic volcanic
units. The lower grade bulk tonnage mineralization that is the focus
of current operations occurs between structures within permeable
volcanic units and at intrusive contacts. Rawhide Mining received
a mine expansion permit covering the Regent satellite deposit, and
open pit mining commenced there in 2019. Regent highlights the
upside exploration and production optionality of Austral’s strategic
investment in the Rawhide mining operation.
Austral Gold Limited
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Annual Report 2021
During 2021 Rawhide exploration included:
• Completion of infill and step-out reverse circulation drilling at
Regent, the historical Rawhide open pits, and adjacent satellite
prospects. The results largely confirmed the gold-silver miner-
alisation already included in the current Regent mine plan and
did not delineate near-term mineable oxide mineralisation left in
the historical open pits. Drilling at the step-out targets confirmed
a priority exploration target south of the historical open pits;
• completed drilling and sampling, and initiated metallurgical
testing to characterize open pit back fill material as potential
sources for near term processing; and
• completed core drilling beneath the historical Rawhide open pit
to obtain mineralized sulfide material for metallurgical test work
EQUITY OWNERSHIP
As disclosed in note 21.1 to the December 2021 financial state-
ments, the Group increased its equity interest in Rawhide from
22.48% to 26.46% through the exercise of options during 2020.
During 2021, the Group invested an additional US$1,546,777.
Rawhide’s other major investors also invested in the Company
which resulted in the reduction of the Group’s interest to 24.74%
OPERATING ACTIVITIES
The following table summarizes the production figures of the
Rawhide mine (US) in which Austral has a 24.74% interest as of
31 December 2021.
Rawhide Operations
(100% basis)
Fiscal Year ended 31 December
2021
2020
Processed (t)
1,563,115
1,855,337
Gold produced (Oz)
Silver produced (Oz)
Gold-Equivalent (Oz)*
18,253
108,982
19,535
24,213
160,113
26,265
* December 2021 twelve month weighted average of 25.17 % (2020-25.37%).
** AuEq ratio is calculated at 85:1 Ag:Au for FY21 (78:1 Ag:Au for FY20)
The Group impaired 100% of its investment in Rawhide due to
its concerns about Rawhide’s ability to fund its operations as
Rawhide:
• incurred losses during 2021
• has shut down its mine and its only revenue source is process-
ing from the heaps
• is currently in negotiations with its major creditors to restructure
significant debt repayments
Rawhide continues to evaluate alternatives to turnaround the
business.
ENSIGN GOLD
As disclosed in note 21.2 to the financial statements, the Group
initially acquired a 19.96% equity interest in Ensign Gold Inc.,
(subsequently changed to Ensign Minerals Inc) (“Ensign”) through
the purchase of 5,950,000 Units consisting of 5,950,000 shares
and 2,975,000 warrants. The cost of each Unit was C$0.25. During
July 2021, Ensign Gold (“Ensign”) raised gross proceeds of US$7.4
million (C$9.16 million) through the issuance of equity at C$0.50/
share, a 100% increase from the Austral investment of C$0.25/
share. As a result of this financing and other minor share issu-
ances during 2021, the Group’s interest in Ensign at 31 December
2021 was reduced to 11.93%. Funds raised are expected to be
used mainly for exploration work commitments (US$4.8 million
(C$6 million)) over a two-year period and a final cash payment
of US$16 million (C$20 million) if Ensign exercises the option to
acquire Barrick’s 2,869 acre of mostly private ground as a result of
the option agreement with Barrick Gold for US$0.8 million signed
in Q2 2021.
Ensign is a privately held incorporated Canadian company. Austral
Chairman Wayne Hubert and CEO Stabro Kasaneva are directors
of Ensign Gold. Ensign is not a reporting issuer in any Province of
Canada, nor is it listed on any stock exchange. Ensign is currently
assembling a 5,000-hectare land package on favorable Carlin-
type gold deposit geology in the state of Utah with the goal of
consolidating the Mercur camp for the first time. Ensign owns
54 patented claims, 370 unpatented claims, and 5 SITLA claims
on South Mercur, West Mercur and North Mercur. Historically,
this region produced over 3 million ounces of gold and was shut
down over two decades ago when gold was selling for less than
$300 per ounce.
Ensign advised the Company that during the 2021 field season, it
drilled a total of 55 holes at the Mercur project, ranging in length
from 75 to 400 meters. At Main Mercur (the Barrick Option area)
50 holes were drilled for a total of 7,723 meters. The main goal
was to confirm mineralisation modelled using historic Barrick drill-
ing. Ensign believes the program was successful and confirmed,
and in some areas upgraded, the width and grades of modelled
mineralisation. Mineralisation was also encountered outside of the
model which is intended to be a target for the 2022 drill program.
At South Mercur 2 holes for 448 meters were drilled to extend
existing mineralisation. At West Mercur 3 shallow holes for 317
meters were drilled in an area of historic workings. For all areas,
initial assays have been received and are being evaluated subject
to final QA\QC protocol. In addition to the drilling program geologic
mapping and sampling were conducted throughout the property to
provide a better understanding of structural trends and alteration
patterns which Ensign believes will help in developing targets for
its 2022 program.
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Annual Report 2021
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Austral Gold Limited
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Annual Report 2021
TABLE 1: ORE RESERVES ESTIMATE
31 December 2021
Ore Reserves (JORC 2012 and CIM (2014))
Proven Reserves
Probable Reserves
Total Ore Reserves
Gold (Au)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Underground
Total Amancaya
Open Pit
Total Inesperada
47
47
0
0
5.74
5.74
0
0
Amancaya (Underground)
9
9
0
0
251
5.01
251
5.01
Inesperada
1,607
1.05
1,607
1.05
Guanaco Heap Leach Pads
Heap Leach Pads
10,240
0.68
Total Guanaco
10,240
0.68
Total Combined
10,287
0.70
223
223
232
0
0
0
0
40
40
54
54
0
0
298
5.13
298
5.13
1,607
1.05
1,607
1.05
10,240
0.68
10,240
0.68
49
49
54
54
223
223
326
1,859
1.58
95
12,146
0.84
Silver (Ag)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Amancaya (Underground)
Underground
Total Amancaya
Open Pit
Total Inesperada
47
47
0
0
11.51
11.51
0
0
17
17
0
0
251
12.95
105
298
12.72
122
251
12.95
105
298
12.72
122
Inesperada
1,607
14.39
744
1,607
14.39
744
1,607
14.39
744
1,607
14.39
744
Guanaco Heap Leach
Heap Leach Pads
10,240
3.17
1,043
Total Guanaco
10,240
3.17
1,043
0
0
0
0
0
0
10,240
3.17
1,043
10,240
3.17
1,043
Total Combined
10,287
3.21
1,060
1,859
14.2
848
12,146
4.89
1,909
Note: Numbers may not add in the above table due to rounding.
Austral Gold Limited
31
Annual Report 2021
TABLE 2: MINERAL RESOURCES ESTIMATE
31 December 2021
Mineral Resources (JORC 2012 and NI 43-101 Compliant)
Measured (Me)
Indicated (Ind)
Total (Me + Ind)
Inferred (Inf)
Gold (Au)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Underground
Total Amancaya
Underground
Total Inesperada
49
49
0
0
7.96
7.96
0.00
0.00
13
13
0
0
Amancaya
321
6.10
321
6.10
63
63
370
6.35
370
6.35
Inesperada
1,682
1.05
1,682
1.05
57
57
1,682
1.05
1,682
1.05
Guanaco Heap Leach
76
76
57
57
151
5.50
151
5.50
74
74
0.91
0.91
Total Guanaco
Heap Leach
11,417
0.67
247
11,417
0.67
247
0
0
0.00
0.00
0
0
Guanaco
11,417
0.67
247
1,907
0.55
11,417
0.67
247
1,907
0.55
Underground
581
2.61
Total Guanaco
581
2.61
49
49
868
2.31
868
2.31
65
65
1,448
2.43
113
250
3.42
1,448
2.43
113
250
3.42
Total Combined
12,047
0.80
309
2,871
2.00
184
14,918
1.03
493
2,383
1.18
27
27
2
2
34
34
28
28
90
Measured (Me)
Indicated (Ind)
Total (Me + Ind)
Inferred (Inf)
Silver (Ag)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal
(koz)
Amancaya
Underground
Total Amancaya
Open Pit
Total Inesperada
49
49
0
0
16.60
16.60
0.00
0.00
26
26
0
0
321
14.52
150
370
14.79
176
151
12.23
321
14.52
150
370
14.79
176
151
12.23
Inesperada
1,682
14.38
778
1,682
14.38
778
1,682
14.38
778
1,682
14.38
778
74
74
12.40
12.40
60
60
30
30
Total Guanaco
Heap Leach
11,417
3.10
1,139
11,417
3.10
1,139
0
0
Guanaco Heap Leach
0.00
0.00
0
0
Guanaco
11,417
3.10
1,139
1,907
2.64
162
11,417
3.10
1,139
1,907
2.64
162
Underground
581
12.67
237
868
17.67
493
1,448
15.67
729
250
6.26
Total Guanaco
581
12.67
237
868
17.67
493
1,448
15.67
729
250
6.26
50
50
Total Combined
12,047
3.62
1,402
2,871
15.39
1,421
14,918
5.89
2,823
2,383
3.93
301
Note: Numbers may not add in the above table due to rounding.
Austral Gold Limited
32
Annual Report 2021
TABLE 3: ORE RESERVES ESTIMATE
31 December 2020
Ore Reserves (JORC 2012 and NI 43-101 Compliant)Ore (JORC 2012 and NI 43-101 Compliant)
Proven Reserves
Probable Reserves
Total Ore Reserves
Gold (Au)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Underground
Total Guanaco
3
3
Underground
162
Total Amancaya
162
Total Combined
165
2.1
2.1
7.2
7.2
7.1
Guanaco
3
3
Amancaya
133
133
136
1.0
1.0
5.1
5.1
5.0
0.2
0.2
37
37
38
0.1
0.1
22
22
22
6
6
1.6
1.6
295
6.2
295
6.2
301
6.1
0.3
0.3
59
59
59
Silver (Ag)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Underground
Total Guanaco
65
65
Underground
170
Total Amancaya
170
Total Combined
235
6
6
33
33
25
Note: Numbers may not add in the above table due to rounding.
Guanaco
168
168
Amancaya
171
171
339
3
3
21
21
12
12
12
180
180
192
19
19
115
115
134
233
233
341
341
574
4
4
27
27
18
31
31
295
295
326
Austral Gold Limited
33
Annual Report 2021
TABLE 4: MINERAL RESOURCES ESTIMATE
31 December 2020
Mineral Resources (JORC 2012 and NI 43-101 Compliant)
Measured (Me)
Indicated (Ind)
Total (Me + Ind)
Inferred (Inf)
Gold (Au)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Guanaco
Underground
283
2.4
Total Guanaco
283
2.4
Open Pit
–
–
Underground
169
10.1
Total Amancaya
169
10.1
Total Combined
452
5.3
22
22
–
55
55
77
502
2.6
502
2.6
42
42
785
2.6
785
2.6
65
65
717
2.4
717
2.4
54
54
Amancaya
2
8.9
0.4
2
8.9
0.4
23
4.49
3
223
5.7
225
5.7
727
3.6
41
41
83
392
7.6
394
7.6
96
96
693
6.23
139
716
6.2
142
1,179
4.2
161
1,433
4.3
196
Silver (Ag)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Tonnes
(Kt)
Grade
(g/t)
Contained
Metal (koz)
Underground
283
23
210
502
Total Guanaco
283
23
210
502
Guanaco
17
17
278
785
278
785
Amancaya
Open Pit
–
–
–
2
Underground
169
52
283
223
Total Amancaya
169
52
283
225
Total Combined
452
34
493
727
Note: Numbers may not add in the above tables due to rounding.
81
14
14
16
4
98
2
392
102
394
19
16
81
30
30
489
489
4
380
384
717
717
23
693
716
15
15
37
17
18
342
342
28
387
415
380
1,179
23
873
1,433
16
757
Austral Gold Limited
34
Annual Report 2021
NOTES TO THE MINERAL RESOURCES
& ORE RESERVES STATEMENT
Guanaco and Amancaya Mines
The SLR Qualified Persons (QPs) for the Amancaya and Guanaco
Reserve and Resource Estimates include: Stephan R. Blaho,
MBA, P.Eng., SLR Principal Mining Engineer, Orlando Rojas,
MAIG, SLR Associate Principal Geologist, Rodrigo Barra, MAIG,
SLR Associate Principal Geologist, Varun Bhundhoo, ing., SLR
Project Mining Engineer, Andrew P. Hampton, M.Sc., P.Eng.,
SLR Principal Metallurgist, and Luis Vasquez, M.Sc., P.Eng, SLR
Senior Environmental Consultant and Hydrotechnical Engineer.
The Mineral Resources and Reserves are classified and reported
in accordance with CIM (2014) definitions as incorporated in NI
43-101, as well as JORC 2012, within the Guanaco and Aman-
caya Gold Project, Region II, Chile, dated 25 March, 2022, with
an effective date of 31 December 2021.
The Company confirms that the form and context in which the CP’s
findings are presented have not been materially modified from the
original market announcement. The Company ensures that the Ore
Reserves and Mineral Resource Estimates are subject to appropri-
ate levels of governance and internal controls. Governance of the
Company’s Ore Reserves and Mineral Resources development
and the estimation process is a key responsibility of the Executive
Management of the Company. The Chief Executive Officer of the
Company oversees the review and technical evaluations of the Ore
Reserves and Mineral Resource estimates.
Competent Persons Statements
The information in the report to which this statement is attached
that relates to Mineral Resources is based upon information
compiled by Sebastian Ramirez, a Competent Person (CP
165) who is a registered member of the Comision Calificadora
de Competencias en Recursos y Reservas Mineras. Sebastian
Ramirez is a full time employee of the company and has suffi-
cient experience that is relevant to the style of mineralisation and
the type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Sebastian Ramirez
consents to the inclusion in the report of matters based on his
information in the form and context in which it appears.
The information in the report to which this statement is attached
that relates to Ore Reserves is based upon information is based
on work supervised, or compiled on behalf of Robert Trzebski,
a Non-Executive Director of the Company. Dr. Trzebski, holds a
degree in Geology, PhD in Geophysics and is a member of the
Australasian Institute of Mining and Metallurgy (AusIMM) who
qualifies as a Competent Person as defined in the 2012 Edition of
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Dr Robert Trzebski consents to the
inclusion in the report of matters based on his information in the
form and context in which it appears.
Austral Gold Limited
35
Annual Report 2021
DIRECTORS’
REPORT
Austral Gold Limited
36
Annual Report 2021
REVIEW OF RESULTS
For the Year Ended 31 December 2021
The following report on the review of results for the year ended 31 December 2021 (“FY21”)
and 2020 (“FY20”) together with the consolidated financial report of Austral Gold Limited
(the Company) and its subsidiaries, (referred to hereafter as the Group).
PRINCIPAL ACTIVITIES
The principal activities of the Group during FY21 were:
• Gold and silver production at the Group’s Guanaco/ Amancaya mine complex;
• Transitioned to a new operational model at Amancaya by outsourcing the Underground Mine exploitation;
• Exploration activities seeking organic growth in the Company’s existing mining projects in Argentina and Chile;
• Continued seeking quality assets through M&A in stable jurisdictions through the acquisition of Revelo Resources Corp. (“Revelo”)
and an interest in Ensign Gold Inc. (“Ensign”);
• Acquisitions of additional mining concessions near the Group’s Guanaco/Amancaya mine complex;
• Engaged SLR Consulting (Canada) Ltd (“SLR”) to update the mineral resource and mineral reserve estimates at the Company’s
Guanaco-Amancaya mine complex.
• There were no other significant changes in our principal activities during the period. A summary of key operating results for FY21
and FY20 is set out in the following table for comparative purposes.
REVIEW OF RESULTS OF OPERATIONS
Fiscal Year ended 31 December
2021
2020
Key Operating Results
Guanaco/
Amancaya
Mines
Rawhide
Mine (100%
basis)
Net to
Austral
Gold*
Guanaco/
Amancaya
Mines
Rawhide
Mine (100%
basis)
Net to
Austral
Gold1,2
Processed (t)
233,794
1,563,115
627,230
195,296
1,855,337
665,995
Gold produced (Oz)
29,238
18,253
34,532
52,306
24,213
58,449
Silver produced (Oz)
87,050
108,982
114,481
253,066
160,113
293,687
Gold Equivalent Ounces (Oz)**
31,142
19,535
36,059
55,190
26,265
61,853
* Includes 100% of Guanaco/Amancaya and 2021 twelve month weighted average of 25.17% (2020-25.37%) at the Rawhide mine.
** AuEq ratio is calculated at 71:1 Ag:Au for FY21 and 88:1 Ag:Au during FY20 at the Guanaco/Amancaya mine and at 85:1 Ag:Au during FY21 and 78:1 during FY20 at the
Rawhide mine.
Austral Gold Limited
37
Annual Report 2021
Guanaco Operations
Mined Ore (t)
Processed (t)
Average Plant Grade (g/t Au)
Average Plant Grade (g/t Ag)
Gold produced (Oz)
Silver produced (Oz)
Gold-Equivalent (Oz) ***
C1 Cash Cost of Production (US$/AuEq Oz)*
All-in Sustaining Cost (US$/Au Oz) *
Realised gold price (US$/Au Oz)
Realised silver price (US$/Ag Oz)
Sales volume
Year ended 31 December
2021
155,210
233,794
4.2
13.7
29,938
87,050
31,142
1,175
1,739
1,797
25
35,838
2020
196,194
195,296
8.5
43.9
52,306
253,066
55,190
723
1,021
1,765
21
49,995
* The cash cost (C1) includes: Mine, Plant, On-Site G&A, Smelting, Refining, and Royalties (excludes Corporate G&A). It is the cost of production per gold equivalent ounce.
** The All-in Sustaining Cost (AISC) includes: C1, Sustaining Capex, Brownfield Exploration, and Mine Closure Amortisation
*** AuEq ratio is calculated at:71:1 Ag:Au during FY21 and 88:1 Ag:Au during FY20
Production during FY21 at Guanaco/Amancaya was in compliance with the revised annual guidance provided in Q3 2021, albeit it
decreased by 43.6% to 31,142 gold equivalent ounces (29,938 gold ounces and 87,050 silver ounces) from 55,190 gold equivalent
ounces (52,306 gold ounces and 253,066 silver ounces) when comparing with FY20. The lower production in FY21 was mainly due to:
• lower throughput at the Amancaya mine,
• transition to a new mining contractor during Q1 2021
• production issues during the year including the lower availability of mining equipment, lower gold grades at Amancaya and tailing
issues that resulted in the shutdown of the plant during June 2021.
During FY21; 155,210 tonnes were mined from the Amancaya underground operations. Management continues to evaluate opportuni-
ties to expand the mineral resources at the Guanaco and Amancaya mines.
Rawhide Operations (100% basis)
Processed (t)
Gold produced (Oz)
Silver produced (Oz)
Gold-Equivalent (Oz) *
Year ended 31 December
2021
1,563,115
18,253
108,982
19,535
2020
1,855,337
24,213
160,113
26,265
* December 2021 twelve month weighted average of 25.17 % (2020-25.37%)
** AuEq ratio is calculated at 85:1 Ag:Au for FY21 (78:1 Ag:Au for FY20)
Production during FY21 at Rawhide decreased by 25.6% to 19,535 gold equivalent ounces (18,253 gold ounces and 108,982 silver
ounces) from 26,265 gold equivalent ounces (24,213 gold ounces and 160,113 silver ounces) during FY20.
COVID-19 IMPACT
The Company continued to address the COVID-19 pandemic
and minimize the potential impact at its operations. Austral
places the safety and well-being of its workforce and all
stakeholders as its highest priority. The Company continues
to implement measures and precautionary steps to manage
and respond to the risks associated with COVID-19 to ensure
the safety of its employees, contractors, suppliers, and
surrounding communities where the Company operates.
Austral Gold Limited
38
Annual Report 2021
KEY FINANCIAL RESULTS
Key financial metrics
Thousands of US$
Revenue
Gross profit
Gross profit %
Adjusted gross profit (excluding depreciation and amortisation)
Adjusted gross profit % (excluding depreciation and amortisation)
EBITDA*
EBITDA per share (basic)
EBITDA per share (fully diluted)
Adjusted EBITDA**
Adjusted EBITDA per share (basic)
Adjusted EBITDA per share (fully diluted)
(Loss)/profit attributed to shareholders
(Loss)/profit attributed to non-controlling interests
(Loss) earnings per share (Basic)
(Loss) earnings earnings per share (diluted)
Comprehensive (loss) income
Fiscal Year ended December 31
2021
64,390
12,270
19.1%
24,516
38.1%
4,756
0.007
0.007
14,429
0.024
0.022
(7,324)
(4)
(1.20)
(1.20)
(7,397)
2020
88,223
38,045
43.1%
54,151
61.4%
30,963
0.055
0.054
45,962
0.082
0.080
7,667
-
1.36c
1.34c
7,612
Note: Readers are cautioned that Adjusted EBITDA does not have standardised meanings as prescribed by IFRS and may not be comparable to similar measures presented
by other companies. Further, readers are cautioned that Adjusted EBITDA should not replace profit or loss or cash flows from operating, investing and financing
activities (as determined in accordance with IFRS), as an indicator of the Company’s performance.
EBITDA AND ADJUSTED EBITDA
Thousands of US$
(Loss) Profit before tax
Depreciation and amortisation
Net finance (income) / costs
EBITDA*
Other expense / (income)***
Share of loss of associates
Adjusted EBITDA**
***note 7 to the financial statements excluding exploration expenses
Thousands of US$
Cash & cash equivalents
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Net current assets
Current loans and borrowings
Non-current loans and borrowings
Current financial leases
Non-current financial leases
Combined debt (borrowings and financial leases)
Combined net debt (net of cash & cash equivalents)
Combined debt to EBITDA
Combined net debt to EBITDA
Current ratio*
Total liabilities to net assets
*Current Assets divided by Current Liabilities
Fiscal Year ended December 31
2021
(4,686)
12,403
(2,961)
4,756
8,727
946
14,429
Fiscal Year ended December 31
2021
2,346
19,992
77,998
22,745
18,147
57,098
(2,753)
5,338
415
2,920
1,843
10,516
8,170
221%
172%
0.88
0.72
2020
14,335
16,267
361
30,963
14,492
507
45,962
2020
12,401
31,942
73,523
24,035
20,162
61,268
7,907
831
1,246
2,905
3,416
8,398
(4,003)
27%
(13%)
1.33
0.72
Austral Gold Limited
39
Annual Report 2021
OPERATING AND FINANCIAL RESULTS OF THE GROUP
EBITDA and adjusted EBITDA decreased to US$4.8m (7%) and US$14.4m (22%) during FY21 from US$31.0m (35%) and US$46.0m
(52%) during FY20.
During FY21, the Group realised a gross profit of US$12.3m or 19.1% (including US$12.2m of depreciation and amortisation) (FY20:
gross profit of US$38.0m or 43.1% including US$16.1m of depreciation and amortisation).
The Group’s loss attributable to shareholders during FY21 was US$7.3m (FY20: profit of US$7.7m).
The decrease in net profit during FY21 from FY20 was mainly due to lower production which also resulted in higher costs per gold
equivalent ounce. The lower production was slightly offset by higher realised gold and silver prices during FY21, and the sale of gold
and silver in inventory at 31 December 2020. Lower production was impacted by lower throughput at the mine, the transition to a new
mining contractor during Q1 2021, issues during the year including the lower availability of mining equipment, lower gold grades at
Amancaya and two unplanned shutdowns of the plant during the year.
The net profit during FY21 was also impacted by the following:
i. Higher administration costs, which were mainly due to transaction costs incurred in the acquisition of Revelo and higher staff
costs as a full year’s salary of the Corporate VP of Exploration was included during FY21 due to his appointment in August 2020.
In addition, administration costs during FY20 were lower by approximately US$0.6 million due to an accounting adjustment to
revalue the employee benefit plan based on an independent actuarial valuation.
ii. Decrease in other expenses as FY20 included the payment of bonuses and other benefits to mining employees at Guanaco/
Amancaya due to a new collective three year union agreement after the miners ‘strike during May/June 2020 and the cost to ter-
minate mining employees in December 2020 at Guanaco/Amancaya as a result of the Group’s decision to outsource the under-
ground mine operation at its 100% owned Amancaya mine and certain maintenance activities at Guanaco´s processing plant.
iii. Impairment charges of US$6.511m including the following:
a. Impairment of US$5.189m on the Group’s equity investment in Rawhide as explained in note 21.1 to the financial statements,
b. Impairment in exploration and evaluation expenditures which was primarily due to the Group’s decision to terminate its option
on certain concessions in Chile named Cerro Buenos Aires.
iv. Increase in net finance income primarily due to a foreign exchange gain of US$3.2m due to favorable fluctuations of the Argentine
and Chilean currencies against the US dollar.
Net gold equivalent ounces (GEOs) produced during FY21 decreased to 36,059 GEOs from 61,853 GEOs produced during FY20. The
GEOs produced during FY21 and FY20 includes our share of production (FY21 4,917 GEOs; FY20-3,405 GEOs) from the Rawhide
mine. Production from the Guanaco/ Amancaya mine complex during FY21 was 31,142 GEOs, a decrease of 43.6% from 55,190 GEOs
in FY20 as explained above.
Overall cash cost of production (“C1”)* and All-in sustaining costs (“AISC”) at Guanaco/Amancaya increased to US$1,175/AuEq oz and
US$1,739/ AuEq oz during FY21 compared to US$723AuEq oz and US$1,021/ AuEq oz in FY20. Despite the increase year over year,
costs decreased during the second half of FY21 as C1 and AISC were US$1,280/AqEq oz and US$2,011/AqEq oz during HY21. The
increase in costs was due to lower production during the year as fixed costs represent approximately 54% of total costs of production.
Austral Gold Limited
40
Annual Report 2021
FINANCIAL POSITION
Net assets decreased by US$4.2m from 31 December 2020 to US$57.1m at 31 December 2021 (31 December 2020: US$61.3m). The
decrease was mainly due to a decrease in working capital and an impairment charge on the Group’s equity investment in Rawhide.
Working capital decreased by US$10.7m to negative US$2.8m at 31 December 2021 (31 December 2020: working capital of US$7.9m).
The decrease in working capital arose mainly due to lower production that resulted in higher unit production costs and an increase
in short term borrowings. However, in January 2022, a US$3.5m pre-export facility due in October 2021 was converted to a 3-years
ESG facility with a fixed interest rate at 4.2% resulting in US$2.3 million reclassified to non-current debt, which improved the working
capital of the Company.
At 31 December 2021, the Group had a current ratio equal to 0.88 (31 December 2020: 1.33). Cash plus refined gold totaled US$4.8m,
(31 December 2020:US$24.1m) US$2.3m cash and cash equivalents (31 December 2020: US$12.4m) and ~1,400 refined gold ounces
in inventory with a fair value of ~US$2.5m (31 December 2020: 6,200 refined gold ounces with a fair value of ~US$11.7m).
Combined financial debt (borrowings and financial leases net of cash & cash equivalents) increased by US$2.1m to US$10.5m at 31
December 2021 (31 December 2020: US$8.4m).
Trade and other receivables (current and non-current) decreased by US$2.6m to US$2.9m at 31 December 2021 (31 December
2020:US$5.5m) mainly due to a decrease in trade receivables,
Inventories decreased by US$4.1m to US$10.6m at 31 December 2021 (31 December 2020: $US$14.7m) and was mainly due to a
decrease in gold and silver bullion. The allowance for inventory obsolescence was unchanged at US$1.6m at 31 December 2021 and
31 December 2020.
Trade and other payables decreased by US$0.1m to US$10.3m at 31 December 2021 (31 December 2020: US$10.4m) while income
tax payable decreased by US$6.0m to $nil at 31 December 2021 (31 December 2020: US$6.0m).
CASH FLOW
Net cash provided from operating activities before and after changes in assets and liabilities decreased to US$4.4m and US$11.3m
during the FY21 (FY20: US$36.9m and US$30.5m). The decrease was primarily due to stronger operational results during FY20
compared to FY21.
Cash used in investing activities totaled US$18.5m during FY21 (FY20: US$16.2m). Cash in FY21 was primarily used for additions to
plant, property and equipment (US$6.9m), exploration and evaluation activities (US$8.4m), and equity investments (US$2.7m).
Cash used in financing activities totaled US$2.9m during FY21 (FY20: US$11.0m) due to the net proceeds from loans, borrowings
and financial leases of US$0.5m including the of repayment of borrowings and financial leases, the payment of a dividend totaling
US$3.8m to shareholders and proceeds of US$0.7m from the exercise of shareholder options and that production will be higher in the
second half of the year.
LIQUIDITY
Guidance
The Group forecasts 2022 production to increase to 35,000-40,000 gold equivalent ounces range with production to be higher in the
second half of the year and C1 and AISC of US$1,000-US$1,100 and US$1,300-US$1,400 respectively per gold equivalent ounce.
Access to capital
The Group has strong banking relationships from which it expects it can obtain financing if required.
Austral Gold Limited
41
Annual Report 2021
THE DIRECTORS
WAYNE HUBERT
Executive Chairman
EDUARDO ELSZTAIN
Vice-Chairman
Mr. Hubert is a mining executive with over 15 years’ experience
working in the South American resources sector. From 2006
until 2010 he was the Chief Executive Officer of ASX-listed
Andean Resources Limited and led the team that increased
Andean’s value from $70 million to $3.5 billion in four years.
Andean was developing a world-class silver and gold mine in
Argentina with a resource of over 5 million ounces of gold when
it was acquired by Goldcorp Inc. of Canada.
Mr. Hubert holds a degree in Chemical Engineering and a
Master of Business Administration. Mr. Hubert has held execu-
tive roles for Meridian Gold with experience in operations,
finance and investor relations. In addition to his role at Austral
Gold Limited, Mr. Hubert is currently serving as Chairman of
Revival Gold Inc. (TSX.V:RVG) (OTCQB:RVLGF) and Ensign
Minerals Inc. (private company), and is also the CEO and direc-
tor of InZinc Mining (TSX.V: IZN).
Director since 18 Oct 2011
Appointed Chairman August 2020
Mr. Eduardo Elsztain is chairman of IRSA Inversiones y Repre-
sentaciones S.A. (NYSE:IRS), one of Argentina’s largest and
most diversified real estate companies; and IRSA Commercial
Properties (NASDAQ:IRCP), with shopping centers, premium
office buildings, five-star hotels and residential developments.
He also serves as Chairman of Cresud (NASDAQ:CRESY) and
BrasilAgro (NYSE:LND), leading Latin American agricultural
companies that own directly and indirectly almost 1M HA of
farmland.
Mr. Elsztain is Chairman of Banco Hipotecario S.A.
(BASE:BHIP); and of BACS, Argentinean leading bank
specialized in providing innovative financial solutions to local
companies.
He is also member of the World Economic Forum, the Council
of the Americas, the Group of 50 and Argentina’s Business
Association (AEA). He is President of Fundacion IRSA, which
promotes education among children and young people;
President of TAGLIT — Birthright Argentina; Co-Founder of
Endeavor Argentina; and Vice- President of the World Jewish
Congress.
Mr. Elsztain has not held any other Directorships with Austra-
lian or Canadian listed companies in the last three years.
Director since 29 June 2007
Appointed Chairman 2011 until August 2020 when became Vice Chairman
Austral Gold Limited
42
Annual Report 2021
STABRO KASANEVA
Executive Director, Chief Executive Officer
SAUL ZANG
Non-Executive Director
Mr. Zang obtained a law degree from Universidad de Buenos
Aires. He is a founding member of the law firm Zang, Bergel
& Viñes.
Mr. Zang is an adviser and Member of the Board of Direc-
tors of the Buenos Aires Stock Exchange and provides legal
advice to national and international companies.
Mr. Zang currently holds:
i. Vice-Chairmanships on the Boards of IRSA (NYSE: IRS,
BASE: IRSA), IRSA Commercial Properties (NASDAQ:
IRCP, BASE: IRCP), Cresud (NASDAQ: CRESY, BASE:
CRES) and
ii. Directorships with Banco Hipotecario (BASE: BHIP), Brasil
Agro (NYSE: LND, BVMF:AGRO3), among others.
Mr. Zang has not held any other Directorships with Australian
or Canadian listed companies in the last three years.
Director since 7 Jun 2007
Mr. Kasaneva is a Geologist with a degree from the Universidad
Católica del Norte, Chile and has over 30 years of experience in
production geology, exploration and management of precious
metal mining operations.
Since Mr. Kasaneva joined Austral Gold in 2009, he has been
instrumental in transforming the Company by consolidating
the operations of the Guanaco Mine in Chile, restarting opera-
tions at the Casposo Mine in Argentina as well as identifying
a number of opportunities that represent the growth potential
for Austral Gold.
Throughout his career as a geologist, he worked on exploration
and production gaining vast experience in grade control, QA/
QC, modeling and geological resources estimation.
Mr. Kasaneva led Business Development Departments for
several years evaluating a number of mining business oppor-
tunities in South America, Central America and North America.
He has held the roles of General Manager of Mining Operations,
Vice-President of Operations and COO.
Mr. Kasaneva is a Director of Ensign Minerals Inc. (private
company).
Mr. Kasaneva has not held any Directorships with Australian or
Canadian listed companies in the last three years.
Director since 7 Oct 2009
Appointed COO until appointment as Chief Executive Officer August 2016
Austral Gold Limited
43
Annual Report 2021
THE DIRECTORS
BEN JARVIS
Non-Executive Director,
Member of the Audit Committee
PABLO VERGARA DEL CARRIL
Non-Executive Director,
Member of the Audit Committee
Mr. Jarvis is the Managing Director of Six Degrees Investor
Relations, an Australian advisory firm that provides investor
relations services to a broad range of companies listed on the
Australian Securities Exchange.
Mr. Jarvis was educated at the University of Adelaide where
he majored in Politics.
Mr. Jarvis is a director of Hip Resources Limited. Mr. Jarvis has
not held any other Directorships with Australian or Canadian
listed companies in the last three years.
Director since 2 Jun 2011
Mr. Vergara del Carril is a lawyer and is professor of Post-
graduate Degrees for Capital Markets, Corporate Law and
Business Law at the Argentine Catholic University.
He is a member of the International Bar Association, the
American Bar Association and the AMCHAM, among other
legal and business organisations. He is a founding Board
member of the recently incorporated Australian- Argentin-
ean Chamber of Commerce. He is a Board member of the
Argentine Chamber of Corporations and also an officer of
its Legal Committee. He is recognised as a leading lawyer in
Corporate, Real Estate, M&A, Banking & Finance and Real
Estate Law by international publications such as Chamber
& Partners, Legal 500, International Financial Law Review,
Latin Lawyer and Best Lawyer.
He is a Director of Banco Hipotecario SA. (BASE: BHIP),
Nuevas Fronteras (owner of the Intercontinental Hotel in
Buenos Aires), IRSA Commercial Properties (NASDAQ:
IRCP, BASE: APSA) and Emprendimiento Recoleta SA
(owner of the Buenos Aires Design Shopping Centre),
among other companies. Mr. Vergara del Carril is also a
Director of Guanaco Mining Company Limited and Guanaco
Capital Holding Corp.
Mr. Vergara del Carril has not held any other Directorships
with Australian or Canadian listed companies in the last
three years.
Director since 18 May 2006
Austral Gold Limited
44
Annual Report 2021
The Company’s Board believes that a
highly credentialed Board, with diverse
backgrounds, skills and perspectives, will
be effective in supporting and enabling
delivery of strong governance for the
Company and create value for the
Company’s shareholders.
The Board brings a broad mix of experi-
ence and skills to the Company including
in the areas of corporate governance,
legal, geological expertise and financial
management.
ROBERT TRZEBSKI
Non-Executive Director,
Chairman of the Audit Committee
Dr. Trzebski holds a degree in Geology, PhD in Geophys-
ics, Masters in Project Management and has over 30 years
of professional experience in mineral exploration, project
management and mining services.
He is currently Chief Operating Officer of Austmine Ltd. As
a fellow of the Australian Institute of Mining and Metallurgy,
Dr. Trzebski has acted as the Competent Person (CP) for the
Company’s ASX releases.
Dr. Trzebski is a non-executive director of Lake Resources
NL (ASX: LKE; OTC:LLKKF).
Dr. Trzebski has not held any other Directorships with Austra-
lian or Canadian listed companies in the last three years.
Director since 10 Apr 2007
Austral Gold Limited
45
Annual Report 2021
SENIOR MANAGEMENT AND COMPANY SECRETARY
Mr. Ramirez holds a Mining Engineering degree from the University of Chile.
He has been involved with the Company since it was founded, to recommission
the Guanaco mine in 2010. Mr. Ramirez has led mining and engineering activi-
ties since then, as well as all reviews and analysis of the Company’s growth
activities. Mr. Ramirez led the design and construction of the Company’s agita-
tion leach plant at Guanaco and assumed the role of VP of Operations in 2018
Prior to joining Austral, Mr. Ramirez held senior operational, planning and
execution roles at Antofagasta PLC and at Meridian Gold’s world class El Peñon
mine acquired by Yamana Gold.
Chief Operating Officer since June 2018 and Vice President of Technical Services from 7 August
2017 to June 2018
Raul Guerra assumed the role of Corporate VP Exploration in August 2020. He
brings more than 30 years of precious metal exploration experience to the Austral
Gold team. Most recently, he was Vice-President of Latin America for Barrick Gold
Corporation (Barrick). He has been involved in the discovery of more than 50 million
ounces of gold including two large greenfield discoveries at Barrick.
Mr. Guerra is a Geologist from the Universidad de Chile.
Appointed as VP of Exploration in August 2020
Vice President of Exploration since August 2020
Mr. Bordogna joined Austral Gold in 2013 as Controller and was promoted to CFO
in 2016. Since then, he has overseen all the corporate finance and accounting
activities, including equity and direct investments in mining related assets, listing
the company on the TSX-V, amongst others.
Mr. Bordogna is a Certified Public Accountant and holds a Global Executive MBA
(IE Business School) and a Master of International Business (The University of
Sydney). He is also CFA Candidate Level 3.
Prior to joining Austral Gold, he worked for the International Finance Corporation
(IFC) and Deloitte in Latin America. He has over 15 years’ experience in corporate
finance, M&A, investment banking and accounting roles.
Appointed 22 August 2016 and resigned effective 28 February 2022
Chief Financial Officer from August 2016 until his resignation on 28 February 2022
Mr. Hwang assumed the role of Company Secretary in July 2019. Mr. Hwang
is an experienced corporate lawyer specialising in listings on the ASX, equity
capital markets and providing advice on corporate governance and compli-
ance issues.
Corporate secretary since 31 July 2019
RODRIGO RAMIREZ
Vice President of Operations
RAUL GUERRA
Vice President of Exploration
JOSÉ BORDOGNA
Chief Financial Officer
DAVID HWANG
Automic Group, Company Secretary
Austral Gold Limited
46
Annual Report 2021
INDEMNITY AND INSURANCE OF AUDITOR
• The Company has not, during or since the end of the finan-
cial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by
the auditor.
• During the financial year, the Company has not paid a premium
in respect of a contract to insure the auditor of the Company or
any related entity.
REMUNERATION REPORT (AUDITED)
Remuneration Policy
The full Board of Austral Gold is responsible for determining remu-
neration policies in respect of executives and Key Management
Personnel (KMP).
The Company has a Remuneration Policy that aims to ensure
the remuneration packages of Directors and senior executives
properly reflect the person’s duties, responsibilities and level of
performance, as well as ensuring that remuneration is competitive
in attracting, retaining and motivating people of the highest quality.
The level of remuneration for non-executive Directors is consid-
ered with regard to the practices of other public companies and
the aggregate amount of fees paid to non-executive Directors
approved by shareholders.
At this stage, the level of remuneration is based on market rates
and is not directly linked to shareholders’ wealth.
DIRECTORS’ MEETINGS
The number of Directors’ meetings (including meetings of Commit-
tees of Directors) and number of meetings attended by each of the
Directors of the Company during the financial year were
Directors’
meetings
Audit
Committee
meetings
Director
Pablo Vergara del Carril
Robert Trzebski
Wayne Hubert
Eduardo Elsztain
Saul Zang
Stabro Kasaneva
Ben Jarvis
A
4
4
4
4
4
4
4
B
4
4
4
4
4
4
4
A
2
2
N/A
N/A
N/A
N/A
2
B
2
2
N/A
N/A
N/A
N/A
2
A: Number of meetings attended
B: Number of meetings held during the time the Director held office during the
financial year
SHARES AND OPTIONS
At the date of this report there are no options over the Company’s
ordinary shares.
During or since the end of the financial year, the Company has not
granted options over its ordinary shares.
INDEMNITY AND INSURANCE OF OFFICERS
Under a deed of access, indemnity and insurance, the Company
indemnifies each person who is a Director, secretary or officer of
Austral Gold Limited against:
• any liability (other than for legal costs) incurred by a Director,
secretary or officer in his or her capacity as an officer of the
Company or of a subsidiary of the Company; and
• reasonable legal costs incurred in defending an action for a
liability incurred or allegedly incurred by a secretary in his or
her capacity as an officer of the Company or of a subsidiary of
the Company.
The above indemnities:
• apply only to the extent the Company is permitted by law to
indemnify a Director, officer or secretary;
• are subject to the Company’s constitution and the prohibitions
in section 199A of the Corporations Act; and
• apply only to the extent and for the amount that a Director,
secretary or officer is not otherwise entitled to be indemnified
and is not actually indemnified by another person (including a
related body corporate or an insurer).
Austral Gold Limited
47
Annual Report 2021
The Key Management Personnel (KMP) during or since the end of the financial year were:
The Directors of the Group during or since the end of the financial year:
• Wayne Hubert
Executive Director
• Eduardo Elsztain
Non-Executive Vice Chairman
• Saul Zang
Non-Executive Director
• Pablo Vergara de Carril
Non-Executive Director
• Robert Trzebski
Non-Executive Director
• Ben Jarvis
Non-Executive Director
• Stabro Kasaneva
Chief Executive Officer and Director
The Senior Executive KMP during or since the end of the financial year:
• Rodrigo Ramirez
Vice President of Operations
• Raul Guerra
Vice-President of Exploration
• José Bordogna
Chief Financial Officer (resigned on 28 February 2022)
Remuneration of KMP
The Group has employment agreements with all executive KMP in accordance with the laws in the jurisdiction in which the KMP is
employed.
Remuneration of executive KMP is made up of a fixed component and a variable component. Performance is assessed against finan-
cial and non-financial indicators including production, safety, cost of production, sustaining capital investments, new business and
value accretive investments amongst others. The award of the variable component is fully discretionary as detailed in the `Contractual
Arrangement with Executive KMP in the “31 December 2021” table.
Link Between Remuneration and Performance
The Group aims to align its executive remuneration to its strategic and business objectives and the creation of shareholder value.
The table below shows the measures of the Group’s financial performance over the last 5 financial years as required by the
Corporations Act 2001. However, these are not necessarily consistent with the measures used in determining the variable amounts
of remuneration to be awarded to each KMP. Consequently, there may not always be a direct correlation between the statutory key
performance measures and the variable remuneration awarded.
6 months ended
31 December
2017
12 months ended
30 June
2018
12 months ended
31 December
2019
12 months ended
31 December
2020
12 months ended
31 December
2021
Sales Revenue
(US$’000)
Profit/(loss) before
tax (US$’000)
Basic EPS
(US cents per share)
Diluted EPS
(US cents per share)
Share price
(cents AUD/CDN)
Dividend
(cents AUD per
share)
48,867
122,767
102,209
88,223
64,390
(14,905)
(37,054)
9,508
14,335
(4,686)
(2.56)
(4.88)
0.97
1.36
(1.20)
(2.56)
(4.88)
0.93
1.34
(1.20)
15.0/13.0
6.0/6.0
9.0/8.5
21.0/22.0
8.5/8.0
0.009
–
–
0.009
0.008
Austral Gold Limited
48
Annual Report 2021
Details of Remuneration
Details of the nature and amount of each major element of the remuneration of each Director of the Group and each of the KMP of the
Group during the financial year were:
Twelve month period ended 31 December 2021
Primary
Post-employment
Share-based
Total
Cash and
accrued
Salary and
Fees
US$
Accrued
Cash
Bonus
US$1
Non-
monetary
benefits
US$
Superannuation
US$
Retirement/
Termination
benefits
US$
Equity
settled
Shares
US$
Options
US$
US$
Directors
Non-executive directors
295
291
4,511
–
–
–
–
4,438
4,438
–
5,097
8,876
Executive Director
–
E Elsztain
100,000
S Zang
R Trzebski
B Jarvis
50,000
45,562
45,562
P Vergara del Carril
50,000
Total non-
executive director
remuneration
291,124
W Hubert
144,000
–
–
–
–
–
–
-
S Kasaneva
349,963
318,959
2,863
Total Director
remuneration
785,087
318,959
7,960
8,876
Other Key Executives
R. Ramirez
282,919
257,852
2,934
R. Guerra
252,955
115,271
3,649
J. Bordogna
124,117
106,120
–
659,991
479,243
6,583
Total other
executive
remuneration
Total director and
executive officer
remuneration
1,445,078
798,202
14,543
8,876
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
127,7103
127,710
–
–
–
–
127,710
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,295
50,291
54,511
50,000
50,000
305,097
144,000
799,495
1,248,592
543,705
371,875
230,237
1,145,817
2,394,409
1 Accrued cash bonus defined as bonus earned during the year that has been paid or accrued (accrued maximum bonus for the year). Differences in calculation of maximum
bonus from salary as bonus calculation based on foreign exchange at year end versus the spot rates for salaries paid in local currencies of employees).
2 All salaries are paid in local currency and converted to USD by average FX — only for the purpose of preparing this table.
3 Value of one million shares issued based on market price of A$0.165 and and a foreign exchange rate of 0.774 at date of issue. Board discretionary issuance based on his
past performance, and as incentive for future performance, as Chief Executive Officer of the Group approved by shareholders on 27 May 2021
Austral Gold Limited
49
Annual Report 2021
Twelve-month period ended 31 December 2020
Cash and
accrued
Salary and
Fees US$
Primary
Accrued
Cash
Bonus
US$1
Non-
monetary
benefits
US$
Post-employment
Share-based
Total
Superannuation
US$
Retirement
benefits
US$
Shares
US$
Options
US$
US$
Directors
Non-executive directors
–
–
–
–
–
–
368
4,305
–
–
4,305
–
368
8,610
Executive director
–
–
–
–
E Elsztain
100,000
S Zang
50,000
W Hubert
33,833
R Trzebski
45,695
B Jarvis
45,695
P Vergara del Carril
50,000
Total non-
executive director
remuneration
325,223
W Hubert
60,000
–
–
–
–
–
–
–
-
S Kasaneva
326,358
364,973
Total Director
remuneration
711,581
364,973
368
8,610
Other Key Executives
–
–
–
–
–
–
–
–
R. Ramirez
263,828
295,053
R Guerra3
123,192
61,596
J Bordogna
108,010
86,377
495,030
443,026
Total Other
Executive
remuneration
Total director and
executive officer
remuneration
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
50,000
33,833
50,368
50,000
50,000
334,201
60,000
691,331
1,085,532
558,881
184,788
194,387
938,056
2,023,588
1,206,611
807,999
368
8,610
1 Accrued cash bonus defined as bonus earned during the year that has been paid or accrued
2 All salaries are paid in local currency and converted to USD by average FX — only for the purpose of preparing this table
3 Commenced employment during the third quarter of 2020.
Austral Gold Limited
50
Annual Report 2021
Contractual Arrangement with Executive KMP at 31 December 2021
Name
Stabro Kasaneva
Chief Executive
Officer
Term of Agreement
and notice period
Base salary
Bonus*
Bonus performance
conditions
Termination
payments
No fixed term
30 days notice
Base salary is paid in Chilean pesos
annually with no FX adjustment clause
Rodrigo Ramirez
VP of Operations
No fixed term
30 days notice
Base salary is paid in Chilean pesos
annually with no FX adjustment clause
Raul Guerra
VP of Exploration
No fixed term
30 days notice
Base salary is paid in Chilean pesos
annually with no FX adjustment clause
Jose Bordogna
Chief Financial
Officer
No fixed term
30 days notice
Base salary is paid in Argentine pesos
annually with no FX adjustment clause
0% to 100%
of salary
0% to 100%
of salary
0% to 50%
of salary
0% to 100%
of salary
At the discretion of the
Board based on Group
results and individual
performance
At the discretion of the
Chief Executive Officer
based on Group results and
individual performance
At the discretion of the
Chief Executive Officer
based on Group results and
individual performance
At the discretion of the
Chief Executive Officer
based on Group results and
individual performance
One month
salary per year of
employment
One month
salary per year of
employment
One month
salary per year of
employment
One month
salary per year of
employment
* The bonus relates to the 31 December 2021 (“2021”) year and is to be paid in cash. Jose Bordogna’s bonus was paid in February 2022 while the other KMPs bonuses will
not to be paid until the Board determines that operations have sufficiently improved. There are no ongoing service or performance conditions. For the 2021 year, Stabro
Kasaneva, Rodrigo Ramirez and Raul Guerra were awarded their maximum bonus, and Jose Bordogna was awarded 88% of his maximum bonus.
During August 2020, the Board engaged Hubert Mining Consultants to engage Wayne Hubert (director of the Group since October
2011) to serve as Executive Chairman of the Group. The Board approved the appointment by resolution but has not entered into a
formal agreement. Terms of the engagement are:
• No fixed term
• US$12,000 per month
• Minimum of 20 hours per month
• No payment upon termination
• No entitlement to bonus
Relative Proportion of Fixed vs Variable Remuneration Expense
The following table shows the relative proportions of executive remuneration that are linked to performance and those that are fixed,
based on the amounts disclosed as statutory remuneration expense in the tables above.
Name
Stabro Kasaneva
Rodrigo Ramirez
Raul Guerra
Jose Bordogna
Fixed remuneration
At risk — short-term incentive
At risk — long-term incentive
December 2021 December 2020 December 2021 December 2020 December 2021 December 2020
44%
52%
69%
54%
Executive Directors
56%
Executive Officers
48%
31%
46%
47%
47%
67%
56%
53%
53%
33%
44%
0%
0%
0%
0%
0%
0%
0%
0%
Equity Holdings
The movement during the financial year in the number of ordinary shares in the Company held, directly, indirectly or beneficially by each
key management person, including their related parties, is as follows:
Balance at 1
January 2021
Granted as
remuneration
Wayne Hubert
2,545,500
Eduardo Elsztain
451,679,060
Saul Zang
Pablo Vergara
Robert Trzebski
Ben Jarvis
1,640,763
68,119
-
-
-
-
-
-
-
-
Stabro Kasaneva
6,881,230
1,000,000
Raul Guerra
Rodrigo Ramirez
Jose Bordogna
801,000
279,514
22,000
-
-
-
Received on exercise
of options issued in
2019 rights issuance
-
9,615,500*
-
-
-
-
-
-
-
-
Total
463,917,186
1,000,000
9,615,500
Market
purchases
Balance at 31
December 2021
-
-
-
-
-
250,000
-
-
-
23,274
273,274
2,545,500
461,294,560
1,640,763
68,119
-
250,000
7,881,230
801,000
279,514
45,274
474,805,960
* Eduardo Elsztain beneficially held 9,615,500 options at 31 December 2019 related to the rights offering to shareholders made on the 15 October 2019. The options were
exercised during the year and no options remain unvested.
Austral Gold Limited
51
Annual Report 2021
Other transactions with KMP
Chairman Wayne Hubert and Chief Executive Officer Stabro Kasa-
neva are related to Ensign as they are board members of Ensign.
Mr. Hubert holds 1,964,865 common shares of Ensign and 175,000
stock options and Mr. Kasaneva holds nil shares of Ensign and
100,000 stock options.
Zang, Bergel & Viñes Abogados is a related party since two non-
executive Directors, Saul Zang and Pablo Vergara del Carril have
significant influence over this law firm based in Buenos Aires,
Argentina. Fees charged and expenses to reimbursement to
the Group for the year ended 31 December 2021 amounted to
US$112,458 (2020: US$148,696).
IRSA Inversiones y Representaciones S.A., IRSA Propiedades
Comerciales S.A. and Consultores Asset Management S.A. are
related parties as they are controlled by Non-executive Director
and Chairman, Eduardo Elsztain. During the year ended 31 Decem-
ber 2021 a total of US$68,071 was charged to the Company (2020:
US$62,047) in regard to IT services support, HR services, software
licenses building/office expenses and other fees.
This concludes the remuneration report, which has been audited.
Principal activities
The principal activities of the Group during FY21 were:
• Gold and silver production at the Group’s Guanaco/ Aman-
caya mine complex;
• Transitioned to a new operational model at Amancaya by
outsourcing the Underground Mine exploitation;
• Exploration activities seeking organic growth in the Com-
pany’s existing mining projects in Argentina and Chile;
• Continued seeking quality assets through M&A in stable ju-
risdictions through the acquisition of Revelo Resources Corp.
(“Revelo”) and an interest in Ensign Gold Inc. (“Ensign”);
• Acquisitions of additional mining concessions near the
Group’s Guanaco/Amancaya mine complex;
• Engaged SLR Consulting (Canada) Ltd (“SLR”) to update
the mineral resource and mineral reserve estimates at the
Company’s Guanaco-Amancaya mine complex. The update
is expected during Q1 2022.
• There were no other significant changes in our principal
activities during the period. A summary of key operating
results for FY21 and FY20 is set out in the following table for
comparative purposes.
Objectives
The group’s objectives for 2022 are to:
• Meet or exceed our production forecast of 40,000-45,000
gold equivalent ounces
• Continue to explore the Paleocene Belt’s High Sulfidation
systems in Northern Chile to find a large Tier 1 deposit,
• Continue to explore our Casposo-Manantiales properties in
San Juan, Argentina to restart profitable mining operations,
• Continue to explore our Pinguino-Sierra Blanca Complex in
Santa Cruz, Argentina in one of one of the most prominent
precious metal regions in the world, and
• Continue to invest in attractive mining opportunities in North
America.
Events subsequent to reporting date
During February 2022, the Group signed a binding offer letter
with Mexplort Perforaciones Mineras S.A. (”Mexplort”) where the
parties agreed to enter into a Joint Venture Agreement to identify
and develop new precious metal projects located in the Indio belt
in the Province of San Juan, Argentina and Mexplort is to grant
AGASA an earn-in option whereby it may acquire a 50% interest
in the Jaguelito project “(50% interest”) held by Mexplort through
a concession granted by the Instituto Provincial de Exploraciones
y Explotaciones Mineras de la Provincia de San Juan (IPEEM) in
October 2011
During February 2022, the Group’s CFO Jose Bordogna resigned.
During March 2022, the Group announced the results from the
technical report on the Guanaco-Amancaya mine complex.
Likely developments
The Group will continue to pursue its objectives for 2022.
Environmental regulation
The Group’s operations are subject to environmental regulation in
the areas where it operates, Chile and Argentina.
The Group is committed to achieving a high standard of environ-
mental performance.
The environmental monitoring program implemented for the
Guanaco Amancaya Operation includes meteorology, air quality,
water quality, flora and fauna, archaeology. Air quality is monitored
at two locations in Guanaco and one in Amancaya. Meteorological
parameters are collected at one air quality station in Guanaco and
the air quality station in Amancaya. There is also a meteorological
station in Guanaco. independent from the air quality monitoring
system. Monitoring of flora and fauna is conducted in Punta del
Viento, Las Mulas and Pastos Largos approximately 30 km east
of Guanaco. Additional details are provided on page 17 of the
annual report.
Auditors
KPMG continues in office as auditors in accordance with the
requirements of the Corporations Act 2001.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit
services provided during the period by the auditor are outlined
in note 10 to the financial statements. There were no non-audit
services provided by KPMG in 2021 (2020: Nil).
The Directors are satisfied that the provision of non-audit services
during the period by the auditor (or by another person or firm on
the auditor’s behalf), is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in
note 10 during the period do not compromise the external auditor’s
independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity of
the audi- tor; and
• none of the services undermine the general principles relat-
ing to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board, including reviewing
or auditing the auditor’s own work, acting in a management or
decision-making capacity for the company, acting as advocate
for the company or jointly sharing economic risks and rewards.
Austral Gold Limited
52
Annual Report 2021
Dividends
An unfranked dividend of A$0.008 per share was paid to share-
holders on 19 March 2021 for a total of US$3.79 million.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on
behalf of the Company or intervene in any proceedings to which
the Company is a party for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the period ended
31 December 2020 has been received and is included in this report.
Signed in accordance with a resolution of Directors at Sydney.
Rounding of Amounts
The Company is a company of the kind referred to in ASIC Instru-
ment 2016/191, dated 1 April 2016, and in accordance with that
Instrument amounts in the Directors’ Report and the financial
report are rounded off to the nearest thousand dollars, unless
otherwise indicated.
Signed in accordance with a resolution of Directors made pursuant
to s.298(2) of the Corporations Act 2001.
Review of prospects for future years
The Group’s prospects for are based on the achievement of its
growth strategy including:
1. Increasing the mine life at Guanaco/Amancaya, which is
supported by the March 2022 SLR report extending the mine life
to 2033 and extracting the gold and silver resources profitably.
2. Exploring the Paleocene Belt’s High Sulfidation systems in
Northern Chile to find a large Tier 1 deposit
3. Continuing to explore our Casposo-Manantiales properties
in San Juan, Argentina to restart profitable mining operations
4. Continue to explore our Pinguino-Sierra Blanca Complex in
Santa Cruz, Argentina in one of one of the most prominent
precious metal regions in the world
5. Continued to invest in attractive mining opportunities in North
America.
The achievement of these objectives are subject to several risks
including business integration risks; uncertainty of production,
development plans and cost estimates, commodity price fluc-
tuations; political or economic instability and regulatory changes;
environmental risks, currency fluctuations, the state of the capital
markets, uncertainty in the measurement of mineral reserves and
resource estimates, the Group’s ability to attract and retain quali-
fied personnel and management, potential labour unrest, reclama-
tion and closure requirements for mineral properties; unpredictable
risks and hazards related to the development and operation of a
mine or mineral property that are beyond the Company’s control,
and the availability of capital to fund all of the Company’s projects.
Note that these risks are not exhaustive of all risks.
For and on behalf of the board
Robert Trzebski
Director
31 March 2022
Austral Gold Limited
53
Annual Report 2021
Austral Gold Limited
54
Annual Report 2021
1 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Austral Gold Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Austral Gold Limited for the financial year ended 31 December 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG Jessica Dillon Partner Sydney 31 March 2022 Austral Gold Limited
55
Annual Report 2021
Austral Gold Limited
56
Annual Report 2021
Austral Gold Limited
57
Annual Report 2021
FINANCIAL
STATEMENTS
Austral Gold Limited
58
Annual Report 2021
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are reported in thousands of US$
For the year ended 31 December
Note
2021
2020
Continuing operations
Sales revenue
Cost of sales
Gross profit
Other expenses
Administration expenses
Net finance income/(costs)
Share of loss of associates
(Loss)/ profit before income tax
Income tax expense
(Loss)/profit after income tax expense
(Loss)/profit attributable to:
Owners of the Company
Non-controlling interests
Items that may not be classified subsequently to profit or loss
Foreign currency translation
Total comprehensive (loss)/income for the year
Comprehensive income/(loss) attributable to:
Owners of the Company
Non-controlling interests
Earnings per share (cents per share):
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
The notes on pages (63) to (95) are an integral part of these consolidated financial statements.
13
6
7
8
9
21
11
12
12
64,390
(52,120)
12,270
(9,578)
(9,393)
2,961
(946)
(4,686)
(2,642)
(7,328)
(7,324)
(4)
(7,328)
(69)
(7,397)
(7,393)
(4)
(7,397)
(1.20)
(1.20)
88,223
(50,178)
38,045
(14,774)
(8,068)
(361)
(507)
14,335
(6,668)
7,667
7,667
-
7,667
(55)
7,612
7,612
-
7,612
1.36
1.34
Austral Gold Limited
59
Annual Report 2021
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
All figures are reported in thousands of US$
As at 31 December
Note
2021
2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepaid income tax
Other financial assets
Inventories
Total current assets
Non-current assets
Other receivables
Prepaid income tax
Mine properties
Property, plant and equipment
Exploration and evaluation expenditure
Investments accounted for using the equity method
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Income tax payable
Employee entitlements
Loans and borrowings
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions for reclamation and rehabilitation
Loans and borrowings
Lease liabilities
Employee entitlements
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
Non-controlling interest
Total equity
14
16
17
15
16
18
19
20
21
11
22
23
25
19
24
25
19
23
11
26
27
28
29
2,346
1,818
3,510
1,717
10,601
19,992
1,054
750
1,217
42,007
32,322
628
20
77,998
97,990
12,401
4,357
112
404
14,668
31,942
1,108
799
3,876
44,146
18,941
4,221
432
73,523
105,465
10,263
10,371
-
4,224
5,338
2,920
6,034
3,894
831
2,905
22,745
24,035
9,233
415
1,843
9
6,647
18,147
40,892
57,098
109,114
(51,063)
(1,141)
188
57,098
11,050
1,246
3,416
24
4,426
20,162
44,197
61,268
102,177
(43,871)
2,962
-
61,268
The notes on pages (63) to (95) are an integral part of these consolidated financial statements.
Austral Gold Limited
60
Annual Report 2021
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the years ended 31 December 2021 and 2020
All figures are reported
in thousands of US$
Note
Issued
capital
Accumulated
losses
Reserves
Non-
controlling
interest
Balance at 31 December 2019
101,682
Profit for the year
Profits transferred to profit reserve
Foreign exchange movements from
translation of financial statements to US$
Total comprehensive income/ (loss)
Issued Capital
Dividend paid
-
-
-
-
495
-
26
(44,238)
7,667
(7,300)
-
367
-
-
Balance at 31 December 2020
102,177
(43,871)
Balance at 31 December 2020
102,177
Loss for the year
Expired share options
Foreign exchange movements from
translation of financial statements to US$
Total comprehensive (loss)/ income
Windup of Cachinalito Limitada
Acquisition of Sierra Blanca
Issued Capital
Options expired unexercised
Dividends paid
-
-
-
-
-
-
26
6,937
-
-
(43,871)
(7,324)
(321)
-
(7,645)
453
-
-
-
-
Balance at 31 December 2021
109,114
(51,063)
The notes on pages (63) to (95) are an integral part of these consolidated financial statements
(713)
-
7,300
(55)
7,245
(74)
(3,496)
2,962
2,962
-
321
(69)
252
(453)
-
(108)
(4)
(3,790)
(1,141)
-
-
-
-
-
-
-
-
(4)
-
-
(4)
-
192
-
-
-
188
Total
56,731
7,667
-
(55)
7,612
421
(3,496)
61,268
61,268
(7,328)
-
(69)
(7,397)
-
192
6,829
(4)
(3,790)
57,098
Austral Gold Limited
61
Annual Report 2021
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
All figures are reported in thousands of US$
Changes in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents, at the end of the year
Net (decrease)/ increase in cash and cash equivalents
Causes of change in cash and cash equivalents
Operating activities
(Loss)/profit after income tax
Adjustments for
Income tax expense recognized in profit or loss
Income tax payments
Impairment of goodwill
Impairment of exploration and evaluation expenditure
Impairment of investment in associate
Depreciation and amortisation
Interest received
Gain on sale of equipment
Non-cash net finance charges
Provision for reclamation and rehabilitation
Inventory write-down
Allowance for doubtful accounts
Non-cash employee compensation
Share of loss of associates
Loss in fair value of other financial assets
Net cash from operating activities before change in assets and liabilities
Changes in working capital:
Decrease/(increase) in inventory
(Increase) /decrease in trade and other receivables
Decrease in trade and other payables
Increase /(decrease) in employee entitlements
Net cash provided through operating activities
Cash flows from investing activities
Additions to plant, property and equipment
Proceeds from sale of inventory and equipment
Payment for investment in exploration and evaluation
Payment for investment in mine properties
Payment for equity investments, net of costs
Payment for purchase of a property option
Cash paid to acquire Revelo
Cash acquired in Revelo acquisition
Proceeds from sale of other financial assets
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Interest paid on loans and borrowings
Repayment of lease liabilities
Interest paid on leases
Proceeds from exercise of options net of costs
Transaction costs related to issuance of shares
Dividends paid
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
The notes on pages (63) to (95) are an integral part of these consolidated financial statements
For the year ended 31 December
Note
2021
2020
12,401
2,346
(10,055)
9,196
12,401
3,205
(7,328)
7,667
21.1
2,808
19
20
18
21
34
34
2,642
(9,383)
-
1,322
5,189
12,403
-
(287)
366
(1,910)
24
(199)
112
946
512
4,409
4,043
2,808
(281)
331
11,310
(6,897)
518
(8,390)
(363)
(2,720)
-
(920)
14
287
-
6,668
-
926
748
-
16,267
(4)
(114)
742
767
286
123
591
507
1,774
36,948
(4,653)
1,316
(1,860)
(1,269)
30,482
(7,624)
366
(3,329)
(1,036)
(2,708)
(2,000)
-
-
99
4
(18,471)
(16,228)
4,513
(839)
(141)
(3,032)
(244)
656
(17)
(3,790)
(2,894)
(10,055)
1,072
(4,940)
(177)
(3,495)
(434)
421
-
(3,496)
(11,049)
3,205
Austral Gold Limited
62
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY
Austral Gold Limited (“the Company”) is a for profit company limited by shares that is incorporated and domiciled in
Australia. The Company’s shares are publicly traded on the Australian Securities Exchange under the symbol AGD and
on the TSX Venture Exchange under the symbol AGLD.
These consolidated financial statements (“financial statements”) as at and for the year ended 31 December 2021 comprise
the Company and its subsidiaries (together referred to as the “Group”). The nature of the operations and principal activi-
ties of the Group are described in the Directors’ Report.
The consolidated financial statements are general purpose financial statements which have been prepared in accordance
with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate for profit oriented entities. The consolidated financial statements also
comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.
The consolidated annual financial statements of the Group as at and for the year ended 31 December 2020 are avail-
able upon request from the Company’s registered office at Level 5, 126 Phillip Street, Sydney NSW 2000, Australia
at www.australgold.com.
2. BASIS OF PREPARATION
The consolidated financial statements have been prepared under the historical cost convention, except for certain
financial assets and liabilities which are stated at fair value. These financial statements were authorised for issue by the
Company’s Board of Directors on 31 March 2022. Details of the Group’s accounting policies are included in Note 39.
2.1 Functional and Presentation currency
These consolidated financial statements are presented in United States dollars (US$), which is the Group’s functional
currency. The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with the legislative instrument, amounts in the audited financial statements have been
rounded off to the nearest thousand dollars, unless otherwise stated.
2.2 Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supple-
mentary information about the parent entity is disclosed in note 35.
3. GOING CONCERN
For the year ended 31 December 2021, the Group incurred a loss after income tax of US$7.328 million (year ended 31
December 2020: profit after income tax of US$7.667 million) from continuing operations and generated net cash flows
from operating activities of US$11.310 million (year ended 31 December 2020: net cash flow from operating activities of
US$30.482 million). At 31 December 2021, the group has net current liabilities of US$2.753 million (31 December 2020:
net current assets of US$7.907 million). In 2022, the Group has restructured US$3.5m of current loans and borrowings
payable as at 31 December 2021, resulting in US$2.3m of the current loan and borrowing being reclassified to non-current.
The loss after income tax reflects lower production at the Amancaya/Guanaco mine impacted by lower throughput, the
transition to a new mining contractor at the start of the 2021 year, reduced availability of mining equipment, lower gold
grades, and two unplanned shutdowns of the plant during the year. In addition, there were impairment charges on the
Group’s investment in Rawhide and Cerro Bueno Aires exploration and evaluation assets in Chile.
The Directors have prepared cashflow forecasts underpinning the basis of preparation as a going concern. These include
acknowledgement of the existing cash position of the Group, ongoing loan repayment requirements and the strategy to
further support exploration and capital investment at the Amancaya/Guanaco mine and other exploration activities. Given
the issues associated with production at the Amancaya/Guanaco mine, the Directors have enacted measures and have
further planned measures to manage going concern, of which the key assumptions in the forecasts along with their risks
and uncertainties to the cashflows of the Group are:
• Improvements in production at the Amancaya/Guanaco mine, in particular from increasing the underground mine fleet
through rent and leasing of additional equipment (during February to April 2022), and contracting a new mine operator
(in February 2022), both of which will require a short transition period before the full benefits can be realised;
• Market prices for gold and silver remaining high;
• Deferring certain exploration expenditures and action plans to reduce capital expenditures; and
• Continued support of existing financiers for short term and longer-term financing. The Group successfully restructured
existing loan facilities in January 2022, deferring repayment for a significant portion of debt and lowering the interest
rate applicable, and the Directors remain confident in the support of their financiers for additional facilities if required.
The going concern basis presumes a combination of the above operational and funding solutions, as deemed appro-
priate by the Directors, will be achieved, and that the realisation of assets and settlement of liabilities will occur in the
normal course of business. Notwithstanding the confidence of the Directors, there is material uncertainty as to whether
the Group will continue as a going concern.
Austral Gold Limited
63
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
The Directors consider that there is a basis to expect the Group will be able to meets its commitments and accordingly,
the financial report has been prepared on a going concern basis.
4. USE OF ESTIMATES AND JUDGEMENTS
In preparing these financial statements, Management has made judgements, estimates and assumptions that affect
the application of the accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospec-
tively. Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment in the year ended 31 December 2021 are detailed below:
Carrying value of Mine Properties
The Group estimates its ore reserves and mineral resources annually at each year end, based on information compiled
by Competent Persons as defined in accordance with the Australasian code for reporting Exploration Results, Mineral
Resources and Ore Resources (JORC code 2012). The estimated quantities of economically recoverable reserves
are based upon interpretations of geological models and require assumptions to be made regarding factors such as
estimates of short and long-term exchange rates, estimates of short and long-term commodity prices, future capital
requirements and future operating performance. Changes in reported reserves estimates can impact the carrying amount
of mine development (including mine properties, property, plant and equipment and exploration and evaluation assets),
the provision for mine closure provisions (further details on the mine disclosure provision are included in note 24), the
recognition of deferred tax assets (further details on deferred tax assets are included in note 11), as well as the amount
of amortisation charged to the statement of profit or loss.
Impairment
Significant judgements, estimates and assumptions are required in determining value in use or fair value less costs of
disposal. This is particularly so in the assessment of long life assets. It should be noted that the CGU recoverable amounts
are subject to variability in key assumptions including, but not limited to, gold and silver prices, currency exchange rates,
discount rates, production profiles and operating and capital costs. A change in one or more of the assumptions used
to determine value in use or fair value less costs of disposal could result in a change in a CGU’s recoverable amount
(further details on the value of the CGU’s are included in note 18).
Carrying value of exploration and evaluation assets
The Group tests at each reporting date whether there are any indicators of impairment as identified by AASB 6 “Explora-
tion for and Evaluation of Mineral Resources”. Where indicators of impairment are identified, the recoverable amounts of
the assets are determined and an impairment is recorded when the carrying value exceeds recoverable value. In assess-
ing indicators of impairment, assumptions relating to whether the exploration and evaluation activity will be recouped
through successful development and exploitation of the area are made.
Mine closure provisions
Obligations associated with exploration and mine properties are recognised when the Group has a present obligation,
the future sacrifice of the economic benefits is probable, and the provision can be measured reliably. The provision is
measured at the present value of the future expenditure and a corresponding rehabilitation asset is also recognised. On
an ongoing basis, the rehabilitation will be remeasured in line with the changes in the time value of money (recognised
as an expense and an increase in the provision), and additional disturbances (recognised as additions to a correspond-
ing asset and rehabilitation liability). The calculation of this provision requires assumptions such as application of envi-
ronmental legislation, mine closure dates, available technologies and engineering cost estimates. The related carrying
amounts are disclosed in note 24.
Measurement of fair values
The Group has established a control framework with respect to the measurement of fair values. Estimates and underly-
ing assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. Information
about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the
year ended 31 December 2021 are detailed below:
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial
and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
i. Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities
i. Level 2 — inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly (i.e.
as prices), or indirectly (i.e. derived from prices)
i. Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Austral Gold Limited
64
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which
the change has occurred.
The Group holds listed equity securities on the Australian and Canadian stock exchanges and listed Argentine sovereign
bonds at fair value, which are measured at the closing bid price at the end of the reporting period. These financial assets
are held at fair value fall within Level 1 of the fair value hierarchy. The Group also holds options which rely on estimates
and judgements to calculate a fair value for these financial instruments using the Black Scholes model. These financial
assets held at fair value fall within Level 3 of the fair value hierarchy.
Further information about the assumptions made in measuring fair values are included in Notes 17—Other financial
assets and 30 — Financial instruments.
5. CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ADOPTION OF NEW/AMENDED AASB AND
AASB INTERPRETATIONS
Adoption of other narrow scope amendments to IFRSs and IFRS Interpretations
A number of new standards and amendments to standards are effective for annual periods beginning after 1 January
2022 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in
preparing these consolidated financial statements as the impact of adoption was not significant to the Group’s Consoli-
dated Financial Statements.
6. COST OF SALES
All figures are reported in thousands of US$
Production
Staff costs
Royalties
Mining Fees
Inventory movements
Total cost of sales before depreciation and amortisation expense
Depreciation of plant and equipment
Amortisation of mine properties
Total depreciation and amortisation expense
Severance included in staff costs
7. OTHER EXPENSES/(INCOME)
All figures are reported in thousands of US$
Settlement of union agreement at Guanaco/Amancaya
Severance of mining employees due to outsource of operations
Impairment of goodwill
Impairment of exploration and evaluation expenditure
Impairment of investment in associates (note 21.1)
Care and maintenance
Exploration expenses
Loss on financial assets
Gain on sale of equipment
Other
Total other expenses/(income)
For the year ended 31 December
2021
23,535
10,668
1,480
576
3,615
39,874
10,122
2,124
12,246
453
2020
18,020
17,843
1,962
474
(4,227)
34,072
14,068
2,038
16,106
1,608
For the year ended 31 December
2021
-
487
-
1,322
5,189
1,559
851
512
(287)
(55)
9,578
2020
4,963
4,278
926
748
-
1,983
282
1,774
(114)
(66)
14,774
Austral Gold Limited
65
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
8. ADMINISTRATION EXPENSES
All figures are reported in thousands of US$
Consulting and professional services
Office and utility costs
Staff costs
Non-executive director fees
Depreciation on equipment
Other
Total administration expenses
Severance included in staff costs
9. NET FINANCE INCOME/(COSTS)
All figures are reported in thousands of US$
Interest income
Gain from foreign exchange
Total finance income
Interest expense
Interest expense on leases
Total finance costs
Present value adjustment to mine closure provision
Net finance income / (costs)
10. AUDITOR’S REMUNERATION
All figures are reported in thousands of US$
Audit and review services:
Auditors of the Group-KPMG
Audit and review of financial statements-Group
Audit and review of financial statements-controlled entities
11. INCOME TAX EXPENSE
All figures are reported in thousands of US$
(A) Income tax expense comprises:
Current tax expense
Deferred tax expense/(benefit)
Income tax
(B) Reconciliation of effective income tax rate
(Loss)/Profit before tax
Prima facie income tax (benefit)/expense calculated at 30%
Difference due to blended overseas tax rate*
Impairment of investment in associates
Share of loss of associates
Non-deductible expenses
Temporary differences not brought into account
Recognition of carry-forward tax losses
Income tax
For the year ended 31 December
2021
1,995
1,030
4,212
300
157
1,699
9,393
-
2020
1,427
1,095
3,754
334
161
1,297
8,068
42
For the year ended 31 December
2021
-
3,199
3,199
(194)
(283)
(477)
239
2,961
2020
4
535
539
(214)
(434)
(648)
(252)
(361)
For the year ended 31 December
2021
2020
85,512
136,215
221,727
92,885
144,700
237,585
For the year ended 31 December
2021
75
2,567
2,642
(4,686)
(1,406)
(181)
1,557
261
1,587
69
755
2,642
2020
7,450
(782)
6,668
14,335
4,300
(720)
-
152
2,755
149
32
6,668
* Chile tax rate: 27.0% (31 December 2020: 27.0%). Argentina tax rate: 25% (31 December 2020: 30%)
Austral Gold Limited
66
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported
in thousands of US$
(C) Deferred tax assets and liabilities
Deferred tax assets
Other receivable
Inventory
Mining concessions brought
into account
Accrual for mine closure
Financial assets
Tax losses carried forward
Property, plant and equipment
Payroll accrual
Other
Leasing
Tax losses not brought into account
Deferred tax assets
Deferred tax liabilities
Mining concessions
Deferred income
31 December 2021
31 December 2020
Chile
Argentina
Other
Total
Chile
Argentina
Other
Total
71
69
-
1,517
540
3,239
-
280
-
511
-
-
77
78
319
-
15
106
-
36
1
-
-
-
-
-
-
71
146
78
147
69
-
1,836
540
2,037
540
9,951
13,205
-
-
-
-
106
280
36
512
(9,913)
(9,913)
-
-
326
-
884
-
-
84
198
302
245
632
-
102
-
-
6,227
632
38
6,897
4,003
1,563
(12,809)
(45)
-
-
-
(12,809)
(10,672)
-
(45)
2,266
-
-
-
-
-
-
-
147
153
198
2,339
540
9,965
10,210
-
-
-
-
632
326
102
884
(9,965)
(9,965)
-
-
-
5,566
(10,672)
2,266
Property, plant and equipment
inflation adjustment
Financial assets
-
-
Deferred tax liabilities
(12,854)
Net deferred tax (liabilities)/assets
(6,627)
Movement in deferred tax balances
(612)
(58)
(670)
-
(612)
20
-
(58)
(20)
-
(13,524)
(6,627)
(8,406)
(4,403)
-
-
(1,040)
(23)
(1,063)
(91)
(1,131)
432
-
(23)
(23)
(91)
(9,560)
(3,994)
Opening balance
Exchange rate difference
Charged to profit or loss
Closing balance
(4,403)
432
(23)
(3,994)
(5,645)
1,229
(20)
(4,436)
-
(75)
9
(66)
-
(2,224)
(6,627)
(337)
20
(6)
(20)
(2,567)
1,242
(6,627)
(4,403)
(349)
(448)
432
9
(12)
(23)
(340)
782
(3,994)
Deferred tax assets have not been recognised in respect to tax losses for certain entities of the Group. See Note 37 for details.
12. EARNINGS PER SHARE
All figures are reported in thousands of US$
Net profit/(loss) attributable to owners
Weighted average number of shares used as the denominator
Number for basic earnings per share
Number for diluted earnings per share
Basic earnings per ordinary share (cents)
Diluted earnings per ordinary share (cents)
For the year ended 31 December
2021
(7,324)
2020
7,667
600,584,618
600,584,618
562,581,929
572,718,453
(1.20)
(1.20)
1.36
1.34
Austral Gold Limited
67
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
13. OPERATING SEGMENTS
Management have determined the operating segments based on reports reviewed by the Chief Operating Decision Maker
(“CODM”). The CODM considers the business from both an operations and geographic perspective and has identi-
fied two reportable segments, Guanaco/Amancaya which is based in Chile and Casposo which is based in Argentina.
The CODM monitors the performance in these two regions separately. During the year ended 31 December 2021, the
Group earned 100% of its consolidated revenue from sales made to three customers, of which sales to each customer
exceeded 10% (2020-100% of its consolidated revenue from sales made to three customers, of which sales to each
customer exceeded 10%).
All figures are
reported in
thousands of US$
Revenue:
Gold
Silver
Cost of sales
Depreciation
and amortisation
expense
Other expense
Administration
expenses
Finance income
(costs)
Share of loss of
associates
Income tax
(expense)/ benefit
Segment
(loss)/profit
For the year ended 31 December 2021
For the year ended 31 December 2020
Guanaco/
Amancaya
Casposo
Group and
unallocated
items(1)
Consolidated
Guanaco/
Amancaya
Casposo
Group and
unallocated
items (1)
Consolidated
62,243
2,147
(39,874)
(12,246)
-
-
-
-
-
-
-
-
62,243
2,147
82.210
5,413
(39,874)
(34,072)
(12,246)
(16,106)
-
-
-
-
-
-
-
-
82,810
5,413
(34,072)
(16,106)
(1,578)
(1,891)
(6,109) (2)
(9,578)
(12,103)
(2,149)
(522)
(14,774)
(4,375)
(629)
(4,389)
(9,393)
(4,193)
(671)
(3,204)
(8,068)
1,270
1,851
(160)
2,961
(462)
1,450
(1,349)
(361)
-
-
(946)
(946)
-
-
(507)
(507)
(2,308)
(336)
2
(2,642)
(6,224)
(397)
(47)
(6,668)
5,279
(1,005)
(11,602)
(7,328)
15,063
(1,767)
(5,629)
7,667
Segment assets
Segment liabilities
68,033
35,733
13,027
4,265
Capital
expenditure
14,143
1,258
16,930
894
365
97,990
40,892
77,124
38,681
12,701
4,091
15,640
105,465
1,425
44,197
15,766
10,599
638
225
11,462
(1) includes only the Group’s share of loss of associates and corporate costs
(2) Includes impairment on investment in Rawhide of US$5,189m
Geographic information:
All figures are reported in thousands of US$
Revenue by geographic location
Chile
Argentina
United States
Canada
British Virgin Islands
Australia
Total revenue
For the year ended 31 December
2021
2020
64,390
88,223
-
-
-
-
-
-
-
-
-
-
64,390
88,223
Austral Gold Limited
68
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported in thousands of US$
Non-current assets by geographic location
Chile
Argentina
United States
Canada
British Virgin Islands
Australia
Total non-current assets
14. CASH AND CASH EQUIVALENTS
All figures are reported in thousands of US$
Cash at call and in hand
Short-term investments
Total cash and cash equivalents
Reconciliation of Cash
As at 31 December
2021
2020
58,650
18,610
628
-
110
-
51,468
17,722
4,221
2
110
-
77,998
73,523
As at 31 December
2021
2,346
-
2,346
2020
12,285
116
12,401
Cash at the end of the financial year as shown in the Statement of Cash Flows, is reconciled to items in the Statement of Financial
Position as follows:
Cash and cash equivalents
2,346
12,401
Risk Exposure
The Group’s exposure to interest rate risk is discussed in note 30. The maximum exposure to credit risk at the reporting date is the
carrying amount of each class of cash and cash equivalents mentioned above.
15. INVENTORIES
All figures are reported in thousands of US$
Materials and supplies
Ore stocks
Gold bullion and gold in process
Total inventories
As at 31 December
2021
8,086
132
2,383
10,601
2020
8,538
776
5,354
14,668
* Ore stock inventories require estimates and assumptions most notably in regard to grades, volumes, densities, future completion costs and ultimate sale price. Such
estimates and assumptions may change as new information becomes available which may impact upon the carrying value of inventory. The allowance for inventory
obsolescence forming part of the above balance is US$1,572k (31 December 2020:US$1,548k).
Austral Gold Limited
69
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
16. TRADE AND OTHER RECEIVABLES
All figures are reported in thousands of US$
Current
Trade Receivables
Other current receivables
Loan receivable
GST/VAT receivable
Total current receivables
Allowance for doubtful accounts
Net current receivables
Non-current
GST/VAT receivable
Loan receivable
Other
Total non-current receivables
Allowance for doubtful accounts (included in GST/VAT receivable and other)
Net non-current current receivables
Trade debtors
The ageing of trade receivables is 0-30 days
16.1 Past due but not impaired
As at 31 December
2021
86
212
-
1,520
1,818
-
1,818
1,022
-
346
1,368
(314)
1,054
86
2020
2,285
1,072
312
868
4,537
(180)
4,357
1,044
12
385
1,441
(333)
1,108
2,285
There were no receivables past due at 31 December 2021 (31 December 2020: nil).
16.2 Fair value and credit risk
Due to the short-term nature of trade receivables, their carrying amount is assumed to approximate their fair value. Refer
to note 30 for more information on the risk management policy of the Group and the credit quality of the receivables.
16.3 Key customers
The Group is reliant on three customers to which gold and silver produced from the Guanaco/Amancaya mines are sold.
The major customer purchased 60% (2020-40%) of sales and the other two customers purchased the remaining 40%
of sales (2020-42%).
17. OTHER FINANCIAL ASSETS
All figures are reported in thousands of US$
Current
Listed bonds — level 1
Listed equity securities — level 1
Ensign warrants — level 3*
Rawhide warrants— level 3*
Total current other financial assets at fair value
As at 31 December
2021
2020
32
1,543
86
56
1,717
34
370
-
-
404
The table above sets out the Group’s assets and liabilities that are measured and recognised at fair value at the end of
each reporting period with any movements recorded through the profit and loss statement.
Listed equity securities and bonds are shares of a Canadian listed mining company denominated in Canadian dollars
and sovereign bonds nominated in Argentine pesos as at 31 December 2021 and 31 December 2020, respectively.
Fair value hierarchy
Refer to note 4 of these financial statements for details of the fair value hierarchy.
Transfers
During the year ended 31 December 2021 there were no transfers between the financial instrument levels of hierarchy.
Austral Gold Limited
70
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
*Key assumptions for warrants
Strike price
Annual volatility
Interest rate
Expiration date
18. MINE PROPERTIES
All figures are reported in thousands of US$
Mine Properties – 31 December 2020
Cost
Accumulated depreciation
Carrying value — Mine Properties
Mine Properties – 31 December 2021
Cost
Accumulated depreciation
Carrying value — Mine Properties
All figures are reported in thousands of US$
Costs carried forward in respect of areas of interest
Carrying amount at the beginning of the year
Additions
Transfers to Exploration and Evaluation expenditure
Decrease in provision for reclamation and rehabilitation
Amortization
Carrying amount at end of the year
Ensign
C$1.50
55%
0.20%
Rawhide
US$2.82
42%
0.06%
31 December 2023
30 June 2022
Guanaco/
Amancaya
Casposo
Total
62,552
(58,676)
3,876
62,017
(60,800)
1,217
9,795
(9,795)
-
9,795
(9,795)
-
72,347
(68,471)
3,876
71,812
(70,595)
1,217
For the year ended 31 December
2021
2020
3,876
363
-
(898)
(2,124)
1,217
6,484
1,036
(1,079)
(527)
(2,038)
3,876
Carrying value — Guanaco/Amancaya
The Guanaco and Amancaya mines have been determined by Management to be a single cash generating unit (“CGU”).
The fair value less cost of disposal, is used to assess the recoverable value of the CGU. The mine properties noted
above and the property, plant and equipment that is an intrinsic part of the mine and its structure (included in note 19)
with a total book value of US$39 million are included in determining the carrying value of the CGU for the purposes of
assessing for impairment.
Management have assessed the fair value to be above book value of the Guanaco/Amancaya project and therefore
no impairment charge has been applied to the assets for the current year. An impairment test was also performed by
an independent party using the discounted cash flow model (DCF) as the primary valuation methodology along with a
crosscheck method using comparable listed market values.
Main assumptions of the DCF model for impairment test purposes are as follows:
• Real Forecast Gold price (2022-2033): US$1,610/oz-1,720/oz (31 December 2020 (2021-2024): US$1,554/oz –
US$1,871/oz)
• Real Forecast Silver price (2022-2033): US$22/oz-23.8/oz (31 December 2020 (2021-2024) US$18.70/oz – US$23.1/oz)
• Life of mine operations based on the current model are forecast to end in 2033.
• Real Discount Rate (pre-tax): 6.9% (31 December 2020: 6.4%)
• Proven and Probable reserves and resource estimates to 31 December 2021 are based on an independent technical
report provided to the Group in 2022.
The sensitivity to +/- 10% variation in the gold price (US$1,449-1,892/oz) on the fair value of the Guanaco/Amancaya
project results in an impact of +/- US$19.3 million.
The sensitivity to +/- 10% variation in the discount rate (4.5%-5.5%) fair value of the Guanaco/Amancaya project results
in an impact of +US$2.2 million/-US$1.8 million.
The sensitivity to +/- 10% variation in production costs on the fair value of the Guanaco/Amancaya project results in an
impact of +/- US$11.4 million.
The sensitivities do not lead to a fair value below the book value of the project.
Austral Gold Limited
71
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
19. PROPERTY, PLANT AND EQUIPMENT
All figures are reported in thousands of US$
Property, plant and equipment owned
Right-of-use-assets
Property, plant and equipment owned
Cost
Accumulated depreciation
Carrying amount at end of the year
Movements in carrying value
Carrying amount at beginning of the year
Additions
Depreciation
Disposals
Depreciation on disposals
Carrying amount at end of the year
As at 31 December
2021
34,334
7,673
42,007
161,185
(126,851)
34,334
34,725
6,897
(7,288)
(9)
9
2020
34,725
9,421
44,146
154,297
(119,572)
34,725
37,515
7,624
(10,411)
(3)
-
34,334
34,725
The majority of the property, plant and equipment is included in the Guanaco/Amancaya Cash Generating Unit (“CGU”).
Property, plant and equipment that does not form part of the Guanaco CGUs are being carried at the lower of their book
value and recoverable amount. The Casposo property, plant and equipment is recorded at salvage value as it is currently
not being used.
19.1 Reconciliation of carrying amount
All figures are
reported in
thousands of
US$
Cost
Balance at 31,
December 2019
Additions
Disposals
Balance at 31
December 2020
Additions
Disposals
Balance at 31
December 2021
Underground
Mine
Development
Plant
Mining
Equipment
Buildings
Land
Other
Total
70,457
34,911
20,678
12,913
815
7,109
146,883
5,718
-
401
-
362
(68)
1,037
(133)
-
-
106
(9)
7,624
(210)
76,175
35,312
20,972
13,817
815
7,206
154,297
4,895
-
404
-
565
(9)
763
-
-
-
270
-
6,897
(9)
81,070
35,716
21,528
14,580
815
7,476
161,185
Austral Gold Limited
72
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported
in thousands of US$
Underground
Mine
Development
Accumulated depreciation
Plant
Mining
Equipment
Buildings
Land
Other
Total
Balance at 31,
December 2019
Depreciation
Disposals
Balance at 31
December 2020
Depreciation
Disposals
Balance at 31
December 2021
Carrying amounts
53,771
22,210
16,128
10,740
5,637
3,031
-
-
841
(68)
630
(130)
59,408
25,241
16,901
11,240
4,150
1,775
-
-
541
(9)
633
-
63,558
27,016
17,433
11,873
-
-
-
-
-
-
-
6,519
109,368
272
(9)
10,411
(207)
6,782
119,572
189
-
7,288
(9)
6,971
126,851
At 31 December 2020
At 31 December 2021
16,767
17,512
10,071
8,700
4,071
4,095
2,577
2,707
815
815
424
505
19 (ii) Right of use
All figures are reported
in thousands of US$
Office
Vehicles
Machinery and
equipment
292
-
(99)
193
13
-
(98)
108
5,189
322
(1,834)
3,677
1,461
(231)
(1,830)
3,077
7,436
-
(1,885)
5,551
-
-
(1,063)
4,488
Balance at 31
December 2019
Additions
Less depreciation
Balance at 31
December 2020
Additions
Disposals
Less depreciation
Balance at 31
December 2021
19 (iii) Lease payments*
All figures are reported in thousands of US$
Undiscounted
Less than a year
Greater than a year
Discounted
Less than a year
Greater than a year
*Expiration dates are disclosed in not note 30 (d)
34,725
34,334
Total
12,917
322
(3,818)
9,421
1,474
(231)
(2,991)
7,673
As at 31 December
2021
2020
3,078
1,893
4,971
2,920
1,843
4,763
3,179
3,553
6,732
2,905
3,416
6,321
Austral Gold Limited
73
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
20. EXPLORATION AND EVALUATION EXPENDITURE
All figures are reported in thousands of US$
Costs carried forward in respect of areas of interest:
Carrying amount at the beginning of the year
Additions (1)
Impairment for the year
Transfers from Mining Properties
Carrying amount at end of the year
(1) Includes the fair value of US$5.298 million of Exploration and Evaluation rights acquired from Revelo (note 34).
For the year ended 31 December
2021
2020
18,941
14,703
(1,322)
-
32,322
15,281
3,329
(748)
1,079
18,941
The recovery of the carrying amount of the exploration and evaluation assets is dependent on the successful development
and commercial exploitation or sale of the areas of interest. This balance mainly relates to expenditures at the Guanaco,
Casposo and Pingüino exploration projects and the fair value of the properties acquired from Revelo.
Additions for the year ended 31 December 2021 and 2020 relate mainly to exploration on the Guanaco and Casposo
projects and the exploration and evaluation expenditure acquired from Revelo and expenditures on the Sierra Blanca
project in Santa Cruz, Argentina.
Pampa Option Agreement
On 28 July 2021, the Group entered into an Option agreement which enables it to acquire up to an 80% ownership inter-
est in two mining properties in northern Chile currently held by Pampa Metals Corporation (“Pampa”). Consideration for
the Option consisted of the return of 2,963,132 shares of Pampa valued at US$0.827million, which reduced the number
of Pampa shares held by Austral to 5,926,264. Austral may exercise the initial 60% interest option within five years from
the date of the agreement by incurring US$3 million in exploration expenses on the Properties as follows:
i. at least US$1 million in year 1; and
i. an additional US$2 million in year 2
If the Group exercises the initial 60% interest option and earns a 60% interest in a property or the Properties, Austral
may increase its interest in each such property to an aggregate total of 65% (“Stage 1”) within five years from the date
of closing the Option agreement for the following consideration on each Property:
a. minimum drilling of 15,000m,
b. studies required to complete a preliminary economic assessment (“PEA”),
c. PEA by an internationally recognized engineering firm to the standards, and in the form, prescribed under National
Instrument 43-101 (“NI 43-101”), and
d. minimum annual exploration expenditures on each property of US$250,000.
After completion of this stage, both parties intend to form a Joint Venture (JV) Company and execute a Shareholder
Agreement in respect of each Property subject to the JV. Any Property on which a Preliminary Economic Assessment is
not completed will be returned to Pampa.
The Group may at its sole discretion, elect to earn an additional 15% interest to increase its interest to 80% in a property
or the Properties (“Stage 2”) by completing the following activities within 5 years from providing notice to Pampa that it
intends to reach Stage 2:
a. minimum drilling of 10,000m,
b. studies required to complete a bankable feasibility study (“BFS”), and
c. BFS by an internationally recognized engineering firm to the standards, and in the form, prescribed under NI 43-101.
If Austral does not complete these activities, then Pampa will be named operator of a property or the Properties and may
increase its ownership from 35% to 80% by completing these activities, on the same conditions established for Austral.
Sierra Blanca Agreement
The significant terms of the transaction to acquire the Sierra Blanca signed with New Dimension Guernsey Ltd. in
October 2020 include the payment of US$100,000 cash (paid) on signing and work commitments of US$700,000. The
transaction is being accounted for as an acquisition of an asset and the future work commitments are to be paid before
the following dates:
31 August 2021: $100,000 (paid) (Year 1)
31 August 2022: $200,000 (Year 2)
31 August 2023: $400,000 (Year 3)
Austral Gold Limited
74
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
As the work commitments in Year 1 were incurred, the Group acquired a 51% interest in Sierra Blanca S.A., which resulted
in Exploration and Evaluation rights of US$392,000, the non-controlling interest at the time of acquisition, for total cash
consideration of US$200,000. If the work commitments in Year 2 and Year 3 are incurred, the Group will acquire an
additional 29% interest. Expenditures may be incurred earlier than the work commitment dates.
If 80% of the project is earned, the Group has an option to purchase the final 20% of the project for a total of US$2.3
million cash and US$1.6 million in work commitments as follows:
31 August 2024: Cash of US$0.5 million and work commitments of US$0.4 million (Year 4)
31 August 2025: Cash of US$1.0 million and work commitments of US$0.4 million (Year 5)
At the time of acquisition, the Sierra Blanca project had no probable and proven resources. The project was not in produc-
tion and there was no mine plan to place them into production. For these reasons, the acquisition was accounted for as
an acquisition of assets and liabilities and not a business combination as defined under AASB3 and note 39.
Impairment for the year ended 31 December 2021 and 2020 relate to impairment on the exploration projects with no
expected value.
Buenos Aires 1 to 199
During December 2020, the Group entered into an option agreement to acquire certain mining concessions in Chile
named Buenos Aires from 1 to 199.The total cost of the option was US$5.05 million (“Fixed Price”) and was to be paid
in Chilean pesos over 48 months. Upon execution of the agreement, the Group paid US$0.1 million. During the year
ended 31 December the Group incurred US$1.222 million in exploration expenditures. As no significant gold intercepts
were discovered, the option agreement was terminated and US$1.322 million of exploration expense was written off
as impaired.
Sierra Armarilla
During December 2020, the Group also entered into an agreement to acquire the Sierra Amarilla properties (334 hectares)
from SQM (SQM:NYSE). The total consideration was US$40,000 (paid) plus a 1% NSR royalty over precious metals sold
from those properties.
21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
The Group’s interests in equity-accounted investees comprise an interest in a Rawhide Acquisition Holding LLC.
(“Rawhide”) that owns Rawhide Mining LLC, a gold and silver operating mine in Nevada, USA and an interest in Ensign
Gold Limited (“Ensign”) that is engaged in the acquisition, exploration, and development of precious metal mineral
properties primarily in the state of Utah, United States through its subsidiary, Ensign Gold (US) Corp. Subsequent to
acquiring the interest, Ensign changed its name to Ensign Minerals Inc.
All figures are reported in thousands of US$
Carrying amount of interest in associates
Carrying amount of interest in Rawhide
Carrying amount of interest in Ensign
Group’s total carrying amount of interest in associates
21.1 Investment in Rawhide
All figures are reported in thousands of US$
Percentage ownership interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets (liabilities) (100%)
Group’s share of net liabilities
Carrying amount of interest in associate prior to impairment
Impairment on investment in Rawhide (note 7)
Carrying amount of interest in associate after impairment
As at 31 December
2021
-
628
628
As at 31 December
2021
24.74%
26,425
25,251
(33,207)
(16,695)
1,774
439
5,189
(5,189)
-
2020
4,221
-
4,221
2020
26.46%
23,873
18,145
(33,504)
(11,047)
(2,533)
(670)
4,221
-
4,221
Austral Gold Limited
75
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported in thousands of US$
Revenue
(Loss) from continuing operations (100%)
Other comprehensive income (100%)
Total comprehensive income (100%)
Group’s share of total (loss) and comprehensive income (24.23%)*
For the year ended 31 December
2021
45,491
(2,041)
-
(2,041)
(495)
2020
42,623
(1,999)
-
(1,999)
(507)
Weighted average of 24.23% and 25.37% ownership in the Rawhide Mine during the years ended 31 December 2021 and 31 December 2020 respectively.
i. On 17 December 2019, the Group made an initial purchase of approximately 22.48% (21.28% on a fully diluted basis)
directly from Rawhide for a purchase price of US$3,957,406, of which US$2,000,000 was paid in cash at closing. The
balance of US$1,957,406 was paid on 31 January 2020. Transaction costs of US$19,016 were incurred. In addition, on
17 December 2019, the Group entered into option agreements with three existing unit owners to acquire an additional
3.795% of the issued and outstanding Rawhide Units for a total of US$750,813. The Group exercised these options
during 2020. During the year ended 31 December 2020, the Group recorded a loss of US$507,093 representing the
share of the loss incurred by Rawhide adjusted for the impact of differences in accounting policies of the Group and
Rawhide (including the application of AASB 16).
ii. During the year ended 31 December 2021, the Group invested an additional US$1,546,777 in Rawhide to acquire
additional units in Rawhide which reduced its interest to 24.74% and recorded a loss of US$494,830 (year ended 31
December 2020-US$507,093) representing the share of the loss incurred by Rawhide adjusted for the impact of AASB
16 based on their ownership interest throughout the year.
iii. During the year, the Group determined its investment in Rawhide was impaired and recognised an impairment charge
of US$5,188,644. The impairment was based on the Group’s assessment of the recoverable value, sustained losses
and profitability of the entity likely requiring financial reorganization in the future.
21.2 Investment in Ensign
All figures are reported in thousands of US$
Percentage ownership interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets (100%)
Group’s share of net assets
Carrying amount of interest in associate
As at 31 December
2021
11.93%
3,557
5,428
(6)
(170)
8,809
1,051
628
2020
-
-
-
-
-
-
-
-
i. During February 2021, the Group acquired 5,950,000 units (19.96%) of Ensign Gold Inc, a Canadian entity that
changed its name to Ensign Minerals Inc. (“Ensign”) on 21 July 2021. Ensign is currently assembling a 5,000-hectare
land package on Carlin-type gold deposit geology in the state of Utah. Two of Ensign’s five board members are board
members of Austral. The Group paid C$0.25 per Unit, for an aggregate purchase price of approximately US$1,173,107
(C$1,487,500). Each Unit consists of one Class A share (each, a “Share”) in the capital of Ensign and one-half of one
transferable share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to purchase
one additional Share at an exercise price will C$1.50 for a period of 36 months, subject to an acceleration provision
that will accelerate expiration of the Warrants if the closing sale price for a Share on a public market exceeds C$2.00
for 30 consecutive trading days. In addition, for a period of 12 months from the date of acquisition, Austral agreed to
not acquire more than 19.99% of Ensign’s shares without the prior written consent of Ensign.
ii. As two directors of Austral Gold are on Ensign’s board of directors, the Group has determined that Austral has significant
influence over Ensign and accounts for its investment in Ensign using the equity method of accounting.
iii. During July 2021, Ensign raised US$7.4 million (C$9.16 million) and during the remainder of the year issued additional
shares which reduced the Group’s interest to 11.93%.
Austral Gold Limited
76
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported in thousands of US$
Revenue
(Loss) from continuing operations (100%)
Other comprehensive income (100%)
Total comprehensive (loss) (100%)
Group’s share of total (loss) and comprehensive income*
*Prorated weighted average for the year of 13.73%
22. TRADE AND OTHER PAYABLES
All figures are reported in thousands of US$
Current
Trade payables
Accrued expenses
Royalty payable
Director fees
Other
Total trade and other payables
23. EMPLOYEE ENTITLEMENTS
All figures are reported in thousands of US$
Current
Salaries and bonuses
Employee entitlements
Total Employee entitlements
For the period from 19 February to 31
December 2021
-
(3,330)
41
(3,289)
(451)
As at 31 December
2021
2020
4,346
4,927
485
198
307
10,263
4,775
3,956
659
429
552
10,371
As at 31 December
2021
2020
3,075
1,149
4,224
2,579
1,315
3,894
The current provision for employee entitlements includes all unconditional entitlements in accordance with the applicable
legislation. The entire amount is presented as current, since the Group does not have an unconditional right to defer payment. The
entire balance of employee benefits is expected to be settled within the next 12 months.
Total employee salary, benefits and bonuses of the Group in the profit and loss statement was US$14.9 million (2020-US$21.6
million), including US$10.7 million (2020-US$17.8 million) in cost of sales and US$4.2 million (2020-US$3.8 million) in administration.
Non-Current
Employee entitlements
9
24
Retirement benefits
Retirement benefits are to be paid upon the death of workers and for disability and retirement.
The methodology followed to determine the provision for all employees adhering to the agreements has considered turn-
over rates and the RV-2014 mortality table established by the Superintendency of Securities and Insurance to calculate
the reserves of life insurance in Chile according to the valuation method called Accumulated Benefit Valuation Method or
Accrued Benefit Cost. This methodology is established in AASB 119 Employee benefits on Retirement Benefits Costs. The
parameters of turnover rates, rates of increase of remunerations and discount rate have been determined by the Group.
Austral Gold Limited
77
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
24. PROVISIONS
All figures are reported in thousands of US$
Non current
Mine closure
Other
Closing balance
Movement in non current provisions
Opening balance
Additions
Reductions
Exchange difference
Present value adjustment
Closing balance
As at 31 December
2021
9,136
97
9,233
11,050
93
(898)
(773)
(239)
9,233
Mine closure provision
Provision for rehabilitation work has been recognised in relation to estimated future expenditures including rehabilitating
mine sites, dismantling operating facilities and restoring affected areas. These future cost estimates are discounted to
their present value. The calculation of this provision requires assumptions such as application of environmental legis-
lation, mine closure dates, available technologies and engineering cost estimates. The carrying amounts of the mine
closure asset are disclosed in note 18.
As at 31 December 2021, the total restoration provision amounts to US$5.7m for Guanaco/Amancaya mine. The present
value of the restoration provision was determined based on the following assumptions:
Undiscounted rehabilitation costs: US$7.7m; and
Discount period: 5 years (Discount period based on expected timing of restoration activities). Discount rate: 4% (2020-
0.50%)
As at 31 December 2021, the total restoration provision amounts to US$3.6m for the Casposo mine. The present value
of the restoration provision was determined based on the following assumptions:
Undiscounted rehabilitation costs: US$4.2m; and Discount rate: 11.24% (2020–11.49%)
25. LOANS AND BORROWINGS
All figures are reported in thousands of US$
Current
Loan facilities
Total current loans and borrowings
Non-current
Loan facilities
Closing balance
As at 31 December
2021
5,338
5,338
415
415
2020
831
831
1,246
1,246
Loan Facilities
At 31 December 2021, the current and non-current Loan facilities are to be repaid over six months and eighteen months
respectively at an annual average interest rate of 5.5% (2020–5.5%). In January 2022, US$3.5m of the current loan
payable to Santander bank was restructured whereby the interest rate was lowered to 4.2% and the term of the loan
was extended to three years resulting in US$2.3 million reclassified to non-current debt.
Austral Gold Limited
78
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
Reconciliation of movements of liabilities to cash flows arising from financing activities
Balance at 1 January 2021
Change from financing cash flows
Proceeds from loans and borrowings
Repayments
Other changes
New leases
Interest expense
Interest paid
Balance at December 2021
Balance at January 2020
Change from financing cash flows
Proceeds from loans and borrowings
Repayment
Other changes
New leases
Interest expense
Interest paid
Balance at December 2020
Loans
2,077
4,513
(839)
-
143
(141)
5,753
5,948
1,072
(4,940)
Leasing
6,321
-
(3,032)
1,474
244
(244)
4,763
9,494
-
(3,495)
-
322
174
434
(177)
(434)
2,077
6,321
Lender
Santander Bank
Santander Bank
BCI
Total
Value (US$)
Carrying value (US$)
Interest rate (%)
Maturity date
3,500.000
3,600,000
1,000,000
8,100,000
3,500,000
1,246,154
1,007,583
5,753,737
2.30
5.54
2.00
26 January 2022*
23 June 2023
27 June 2022
* Only interest paid on loan from initial expiry date of 21 October 2021 until restructuring of the loan on 26 January 2022
26. ISSUED CAPITAL
All figures are reported in thousands of US$
Fully paid ordinary shares
Number of ordinary shares
Weighted average number of ordinary shares
Movements in ordinary share capital
Balance at 31 December 2019
Exercise of options
Share issue costs pursuant to exercise of options
Balance at 31 December 2020
Share issuance pursuant to acquisition of Revelo
Share issuance to management
Exercise of options
Share issue costs pursuant to exercise of options
Balance at 31 December 2021
As at 31 December
2021
109,114
612,311,353
600,584,618
Number of
ordinary shares
559,393,259
6,677,006
-
566,070,265
35,475,095
1,000,000
9,765,993
-
2020
102,177
566,070,265
562,581,929
US$’000
101,682
504
(9)
102,177
6,061
128
774
(26)
612,311,353
109,114
Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number
of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The ordinary shares do not have any par value.
All figures are reported in thousands of US$
Unlisted Options to acquire ordinary fully paid shares
at A$0.092 expired on 18 October 2021
As at 31 December
2021
-
2020
10,136,524
Austral Gold Limited
79
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
27. ACCUMULATED LOSSES
All figures are reported in thousands of US$
Accumulated losses at beginning of year
Net (loss)/profit for the year
Transfer from share option reserve
Transferred from/(to) profit reserve
Accumulated losses at end of year
28. RESERVES
All figures are reported in thousands of US$
Foreign currency translation reserve
Balance at beginning of year
Foreign exchange movements from translation of financial instruments to US dollars
Balance at end of year
Share option reserve
Balance at beginning of year
Unlisted options exercised
Unlisted options expired unexercised
Transfer to accumulated losses
Balance at end of year
Business combination reserve
Balance at beginning of year
Windup of Cachinalito Limitada
Balance at end of year
Profit appropriation reserve
Balance at beginning of year
Transfer from accumulated losses
Dividend paid
Balance at end of year
Total reserves
For the year ended 31 December
2021
(43,871)
(7,324)
(321)
453
(51,063)
2020
(44,238)
7,667
-
(7,300)
(43,871)
For the year ended 31 December
2021
320
(69)
251
(209)
(108)
(4)
321
-
(953)
(453)
(1,406)
3,804
-
(3,790)
14
(1,141)
2020
375
(55)
320
(135)
(74)
-
-
(209)
(953)
-
(953)
-
7,300
(3,496)
3,804
2,962
Foreign Currency Translation Reserve
Exchange differences arising on translation of the non-US$ denominated non-monetary balances of Group Companies
are recognised in the foreign currency translation reserve. The reserve is recognised in profit or loss when the net invest-
ment is disposed of.
Business Combination Reserve
Created on the acquisition of non-controlling interests The reserve is reversed when the entity acquired is sold or wound up.
Share Option Reserve
Options granted/issued as share-based payments and a capital raise are recognised in the share option reserve.
Profit appropriation Reserve
Transfers up to the net income earned during the year may be transferred from accumulated losses and paid as a dividend.
29. NON-CONTROLLING INTEREST
All figures are reported in thousands of US$
Non-controlling interest in subsidiaries comprise
Acquired as part of subsidiary
For the year ended 31 December
2021
188
2020
-
During November 2021, the Group completed the work commitment to acquire 51% of Sierra Blanca S.A as disclosed
in note 20.
29.1 Assets and liabilities assumed
The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition
Austral Gold Limited
80
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported in thousands of US$
Cash and cash equivalents
Exploration and evaluation rights
Accounts payable and accrued liabilities
Related party liabilities
Total identifiable net assets acquired
30. FINANCIAL INSTRUMENTS
2
423
(4)
(29)
392
Financial risk management objectives
The Group’s principal financial instruments comprise borrowings, receivables, listed equity securities, cash and short-
term deposits. These activities expose the Group to a variety of financial risks: market risk (interest rate risk and foreign
currency risk), credit risk, price risk and liquidity risk.
The Group recognises the importance of risk management and has adopted a Risk Management and Internal Compliance
and Control policy which describes the role and accountabilities of management and of the Board. The Directors manage
the different types of risks to which the Group is exposed by considering risk and monitoring levels of exposure to the
main financial risks by being aware of market forecasts for interest rates, foreign exchange rates, commodity and market
prices. The Group’s exposure to credit risk and liquidity risk is monitored through general business budgets and forecasts.
The Group holds the following financial instruments:
All figures are reported in thousands of US$
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Borrowings
Financial leases
a. Market Risk
As at 31 December
2021
2020
2,346
2,872
1,717
10,263
5,753
4,763
12,401
5,465
404
10,371
2,077
6,321
i. Foreign Currency Risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign currency exchange rate fluctuations.
Foreign exchange rate risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the functional currency of the Group. The risk is measured using cash
flow forecasting. Foreign currency risk is minimal as most of the transactions are settled in US$.
As at 31 December 2021, the Group was exposed to foreign exchange risk through the following financial assets and
liabilities denominated in currencies other than the Group’s functional currency (thousands of US$).
The following significant exchange rates have been applied.
USD
ARS
CLP
AUD
CDN
Average rate
Year-end spot rate
2021
93.34
777.85
1.33
1.25
2020
71.95
761.50
1.45
1.34
2021
102.62
844.69
1.38
1.27
2020
84.05
711.00
1.30
1.27
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Argentine peso, Chilean peso, Australian dollar, Canadian dollar
and US dollar against all other currencies at 31 December would have affected the measurement of financial instruments
denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales
and purchases.
Austral Gold Limited
81
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
Effect in thousands of USD
31 December 2021
Profit or loss
Equity, net of tax
Strengthening
Weakening
Strengthening
Weakening
ARS (22% movement)
CLP (19% movement)
AUD (6% movement)
CDN (1% movement)
31 December 2020
ARS (22% movement)
CLP (19% movement)
AUD (6% movement)
CDN (1% movement)
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Financial leases
401
229
-
2
(401)
(229)
-
(2)
401
229
-
2
(401)
(229)
-
(2)
Strengthening
Weakening
Strengthening
Weakening
397
476
2
-
(397)
(476)
(2)
-
397
476
2
-
(397)
(476)
(2)
-
Argentinian Peso
(ARS)
Chilean Peso
(CLP)
Australian Dollar
(AUD)
Canadian Dollar
(CAD)
127
1,964
32
288
11
156
4,978
-
3,929
-
13
27
-
100
-
12
11
1,543
32
-
ii. Price Risk
The Group’s revenues are exposed to fluctuations in the price of gold, silver and other prices. Gold and silver produced
is sold at prevailing market prices in US$.
The Group has resolved that for the present time the production should remain unhedged. The Group considers exposure
to commodity price fluctuations within reasonable boundaries to be an integral part of the business.
2500
2000
1500
1000
500
0
60
50
40
30
20
10
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018 2019 2020 2021
Gold Price (US$/oz)
Silver Price (US$/oz)
Sensitivity to Changes in Commodity Prices (Gold and Silver)
The below sensitivity analysis demonstrates the after tax effect on the profit/(loss) and equity which could result if there
were changes in the gold and silver commodity prices by +/- 10% of the actual commodity prices realised by the Group.
All figures are reported
in thousands of US$
Effect on profit/(loss) For the year ended
Effect on equity
31 December 2021
31 December 2020
31 December 2021
31 December 2020
10 % increase in gold and silver prices
10 % decrease in gold and silver prices
6,439
(6,439)
8,822
(8,822)
6,439
6,439
8,822
(8,822)
iii. Interest Rate Risk
The Group’s main interest rate risk arises from finance leases. The Group’s borrowings are at fixed rates and therefore
do not carry any variable interest rate risk. Changes in interest rates are not expected to have a significant impact on
the Group.
Austral Gold Limited
82
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
a. Financial Market Risk
The financial market risk is the risk that the fair value or future cash flows of the financial instruments will fluctuate
because of changes in market prices, which occurs due to the Group’s investment in listed securities where share prices
can fluctuate over time. This risk however is not deemed to be significant as these investments are held for long term
strategic purposes and therefore movement in the market prices do not impact the short-term profit or loss or cash
flows of the Group.
The group holds listed government bonds, and listed equity securities (note 4). These are classified as level 1 within the
fair value hierarchy as per AASB 7 “Financial Instruments”.
b. Credit Risk
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of
any allowance for doubtful debts, as disclosed in the statement of financial position and notes to the financial statements.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the
Group’s policy to securitise its other receivables. Cash and cash equivalents are held at reputable financial institutions.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad
debts is not significant. There are no significant concentrations of credit risk.
c. Liquidity Risk
The liquidity of the Group is managed to ensure sufficient funds are available to meet financial commitments in a timely
and cost effective manner.
Management continuously reviews the Group’s liquidity position through cash flow projections based upon the current
life of mine plan to determine the forecast liquidity position and maintain appropriate liquidity levels.
d. Maturities of financial liabilities
The tables below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows.
All figures reported in thousands of US$
6 months
6-12 months
1-5 years
> 5 years
Total
Consolidated
31 December 2021
Financial liabilities
Trade and other payables
Borrowings
Leasing
Total 31 December 2021 liabilities
31 December 2020
Financial liabilities
Trade and other payables
Borrowings
Leasing
Total 31 December 2020 liabilities
31. DIVIDENDS
All figures are reported in thousands of US$
Dividends paid
10,263
4,960
1,539
16,762
10,371
469
1,590
12,430
-
434
1,539
1,973
-
456
1,590
2,046
-
422
1,893
2,315
-
1,301
3,553
4,854
-
-
-
-
-
-
-
-
10,263
5,816
4,971
21,050
10,371
2,226
6,733
19,330
For the year ended 31 December
2021
3,790
2020
3,496
An unfranked dividend of A$0.008 per share was paid on 19 March 2021 (2020-A$0.009 per share was paid on 24
July 2020). The Group has no franking credits.
Austral Gold Limited
83
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
32. COMMITMENTS
All figures are reported in thousands of US$
Operating leases not recognised as liabilities
As at 31 December
2021
-
2020
-
To maintain legal rights to its properties, the Group pays fees for mining concessions and exploration. It anticipates that it will need to pay approximately US$0.872m
during the next year to maintain legal rights to all of its properties
Exploration commitment not recognised as liabilities
Exploration commitments at the reporting date and not recognised as liabilities
Within one year
Two to five years
Total Exploration commitments not recognised as liabilities
33. SUBSIDIARIES
872
3,488
4,360
550
5,100
5,650
Country of Incorporation
% owned as at 31 December
2021
2020
Subsidiaries
Guanaco Mining Company Limited
British Virgin Islands
Guanaco Compañía Minera SpA
Ingenieria y Mineria Cachinalito Limitada *
Casposo Energías Renovables S.A.U.
Austral Gold Argentina S.A.
Sierra Blanca S.A.
Chile
Chile
Argentina
Argentina
Argentina
Austral Gold North America Corp.
United States
Argentex Mining Corporation
SCRN Properties Ltd.
Casposo Argentina Limited
Revelo Resources Corp.
* Wound up during 2021
34. ACQUISITION OF REVELO
Canada
Canada
Canada
Canada
100.000
99.998
-
100.000
99.970
51.000
100.000
100.000
100.000
100.000
100.000
100.000
99.998
100.000
100.000
99.970
-
100.000
100.000
100.000
100.000
0.000
On 4 February 2021, the acquisition of Revelo was finalised under a statutory plan of arrangement (“the Arrangement”)
in Vancouver, Canada between Austral Gold and Revelo Resources Corp. (“Revelo”). Under terms of the Arrangement,
in exchange for each common share of Revelo, Revelo shareholders received (i) 0.9184 ordinary shares of Austral, and
(ii) C$0.03045715 per share in cash. Austral Gold issued an aggregate of 35,475,095 common shares and paid cash
totaling approximately US$920,353 (CDN$1,176,471) to Revelo shareholders. Under the Arrangement Austral paid
liabilities of Revelo totaling US$923,121.
At the time of acquisition, Revelo’s main assets were its exploration properties and 7,798,747 shares of Pampa Metals
Corp “Pampa”. Based on the listed price of Pampa of approximately US$0.351 (C$0.45), the total shares were valued at
US$2,745,432. The projects held by Revelo were not in production and there were no plans to place them into produc-
tion. For these reasons, the acquisition was accounted for as an acquisition of assets and liabilities and not a business
combination as defined under AASB3.
The fair value of the Austral ordinary shares issued was based on the listed price of the Company at the date of issue on
4 February 2021, approximately US$0.171 (AUD $0.225) per share, which valued the share consideration transferred
at US$6,060,654.
34.1 Assets and liabilities assumed
The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition.
All figures are reported in thousands of US$
As at 4 February 2021
Cash and cash equivalents
Trade and other receivables
Other financial assets
Exploration and evaluation expenditure
Accounts payable and accrued liabilities
Related party liabilities
Total identifiable net assets acquired and purchase consideration
14
29
2,745
5,298
(924)
(181)
6,981
Austral Gold Limited
84
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
35. PARENT ENTITY INFORMATION
All figures are reported in thousands of US$
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Reserves
Total shareholders’ equity
Profit for the year
Total comprehensive income for the year
Details of any guarantees entered into by the parent entity in relation to the debts
of its subsidiaries
Details of any contingent liabilities of the parent entity
Details of any contractual commitments by the parent entity for the acquisition
of property, plant or equipment
A* Austral Gold Limited is guarantor for the credit facility of US$0.3m between BAF and Guanaco Compañía Minera SpA.
36. RELATED PARTY TRANSACTIONS
36.1 KMP holdings of shares and share options at 31 December 2021
As at 31 December
2021
1,008
73,935
12,893
12,893
61,042
109,114
(47,670)
(402)
61,042
3,452
3,383
A*
None
None
2020
1,011
67,795
13,176
13,176
54,619
102,177
(47,326)
(231)
54,620
2,727
2,672
A*
None
None
• Mr. Eduardo Elsztain holds 461,294,560 shares directly and indirectly in Austral Gold Limited. (31 December 2020—
451,679,060 shares and 9,615,500 options)
• Mr. Saul Zang holds 1,640,763 shares directly in Austral Gold Limited. (31 December 2020— 1,640,763 shares and
136,730 options)
• Mr. Pablo Vergara del Carril holds 68,119 shares directly in Austral Gold Limited. (31 December 2020—68,119)
• Mr. E. Elsztain and Mr. S. Zang are Directors of IFISA which holds 380,234,614 shares (31 December 2020—380,234,614)
• Mr. P. Vergara del Carril, Mr. E. Elsztain and Mr. S Zang are Directors of Guanaco Capital Holding Corp which holds
38,859,957 shares. (31 December 2020—35,870,730 and 2,989,227 options)
• Mr. Stabro Kasaneva holds 7,881,230 shares indirectly in Austral Gold Limited. (31 December 2020—6,881,230)
• Mr. Wayne Hubert holds 2,545,500 shares indirectly in Austral Gold Limited. (31 December 2020—2,545,500)
• Mr. Raul Guerra holds 801,000 shares directly in Austral Gold Limited. (31 December 2020—801,000)
• Mr. Rodrigo Ramirez holds 279,514 shares directly in Austral Gold Limited. (31 December 2020—279,514)
• Mr. Ben Jarvis holds 250,000 shares directly in Austral Gold Limited (31 December 2020—nil)
• Mr. Jose Bordogna holds 45,724 shares directly in Austral Gold Limited. (31 December 2020—22,000)
36.2 Directors and Key Management Personnel Remuneration
The aggregate compensation made to Directors and other members of Key Management Personnel of the Group is set
out below.
All figures are reported in thousands of US$
Short-term employment benefit
Share based payment
Post employment benefits
Total
For the year ended 31 December
2021
2,267,188
127,710
-
2020
2,023,588
-
-
2,394,898
2,023,588
Austral Gold Limited
85
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
Other transactions with related parties
Chairman Wayne Hubert and Chief Executive Officer Stabro Kasaneva are related to Ensign as they are board members
of Ensign. Mr. Hubert holds 1,964,865 common shares of Ensign and 175,000 stock options and Mr. Kasaneva holds nil
shares of Ensign and 100,000 stock options.
Zang, Bergel & Viñes Abogados is a related party since one non-executive Director, Pablo Vergara del Carril has significant
influence over this law firm based in Buenos Aires, Argentina. Fees charged and expenses reimbursed by the Group for
the year ended 31 December 2021 amounted to US$112,458 (2020: US$148,696).
IRSA Inversiones y Representaciones S.A., IRSA Propiedades Comerciales S.A. and Consultores Asset Management
S.A. are related parties as they are controlled by Non-executive Director and Chairman, Eduardo Elsztain. During the year
ended 31 December 2021 a total of US$68,071 was charged to and reimbursed by the Company (2020: US$62,047) in
regard to IT services support, HR services, software licenses building/office expenses and other fees.
36.3 Ultimate parent entity
The Parent Entity is controlled by IFISA with a 62.1% non-diluted and diluted interest in Austral Gold Limited and is
incorporated in Uruguay.
The ultimate beneficial owner of IFISA is Eduardo Elsztain.
37. UNRECOGNISED DEFERRED TAX ASSETS
In certain entities of the Group, tax losses have not been recognised as deferred tax assets in respect of the following
items, because it is not probable that future taxable profit will be available against which the Group can use the benefits.
Australia
Tax losses
Capital losses
Canada
Tax losses
As at 31 December 2021
US$ ‘000
14,462
2,342
Expiry
No Expiry
No Expiry
18,042
2022-2042
The ability of the Group to utilise Australian or Canadian tax losses will depend on the applicability and compliance with the
respective Australian or Canadian tax laws regarding continuity of ownership or same or similar business tests.
United States
Tax losses
3,974
No Expiry
The ability of the Group to utilise Australian, US or Canadian tax losses will depend on the applicability and compliance
with the respective Australian or Canadian tax laws regarding continuity of ownership or same or similar business tests.
38. SUBSEQUENT EVENTS
38.1 During February 2022, the Group signed a binding offer letter with Mexplort Perforaciones Mineras S.A. (”Mexplort”)
where the parties agreed to enter into a Joint Venture Agreement to identify and develop new precious metal projects
located in the Indio belt in the Province of San Juan, Argentina and Mexplort is to grant Austral Gold Argentina S.A.,
a subsidiary company in Argentina, an earn-in option whereby it may acquire a 50% interest in the Jaguelito project
“(50% interest”) held by Mexplort through a concession granted by the Instituto Provincial de Exploraciones y Explo-
taciones Mineras de la Provincia de San Juan (IPEEM) in October 2011. The consideration to acquire the 50% interest
is as follows”
a. US$2 million in exploration expenditures on Jaguelito within two years from the approval of the Option by IPEEM
(the “First Stage”), including drilling a minimum of 5,000 meters.
b. US$2 million in exploration expenditures on Jaguelito within two years after completing the First Stage (the “Second
Stage”), and
c. US$3 million payment to Mexplort if the Board of the JV Company approves the construction of the project based
on a bankable feasibility study (“BFS”).
The Group committed to the first US$2 million and must comply with the conditions in (a-c) above to acquire a 50%
interest in the Jaguelito project.
38.2 In January 2022, US$3.5m of the current loan payable to Santander bank was restructured whereby the interest rate
was lowered to 4.2% and the term of the loan was extended to three years resulting in US$2.3 million reclassified to
non-current debt.
Austral Gold Limited
86
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39. SIGNIFICANT ACCOUNTING POLICIES
The group has consistently applied the following accounting policies to all periods presented in these consolidated
financial statements, except if mentioned otherwise (see also Note 5).
Change in classification
During the year ended 31 December 2021, the Group updated the classification of certain expenses, assets and cash
flow items to better reflect the nature of the items.
Comparative amounts in the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of financial position and consolidated statement of cash flows were re-stated as follows:
Previous financial statement captions
Profit or loss and other comprehensive
income
31 December 2020
$000’s
Re-stated financial statement captions
31 December 2020
$000’s
Cost of sales
(34,072) Cost of sales
Depreciation and amortisation expense
(16,106)
Administration expenses
(7,907) Administration expenses
Depreciation and amortisation expense
(161)
Other (expense) income
(Loss)/gain on financial assets
Statement of financial position
Current assets
Trade and other receivables
Non-current assets
Trade and other receivables
Statement of cash flows
(13,000) Other (expense) income
(1,774)
(73,020)
4,469
Trade and other receivables
Prepaid income tax
1,907
Trade and other receivables
Prepaid income tax
6,376
Repayment of loans and borrowings
(5,117) Repayment of loans and borrowings
Interest paid on loans and borrowings
(5,117)
(50,178)
(8,068)
(14,774)
(73,020)
4,357
112
1,108
799
6,376
(4,940)
(177)
(5,117)
Austral Gold Limited
87
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
Set out below is an index of the significant accounting policies.
39. 1
39.2
39.3
39.4
39.5
39.6
39.7
39.8
39.9
39.10
39.11
39.12
39.13
39.14
39.15
39.16
39.17
39.18
39.19
39.20
39.21
39.22
39.23
39.24
39.25
Basis of consolidation
Revenue recognition
Goods and services tax (GST)/ Value added tax (VAT)
Foreign currency
Mine properties
Exploration and evaluation expenditure
Property, plant and equipment
Cash and cash equivalents
Income tax
Inventories
Trade and other receivables
Trade and other payables
Interest bearing liabilities
Provisions
Leases
Impairment of non-financial assets
De-recognition of financial assets and financial liabilities
Contributed equity
Earnings per share
Borrowing costs
Employee leave benefits
Segment reporting
Share-based payment arrangements
Capital management
New, revised or amending Accounting Standards and Interpretations adopted
39.1 Basis of consolidation
A subsidiary is any entity over which the Group has control. The Group controls an entity when the Group 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. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
A list of subsidiaries is contained in note 33 to the financial statements. The financial statements of the subsidiaries are
prepared for the same reporting periods as the parent company using consistent accounting policies.
All intercompany balances and transactions between entities in the Group, including any unrealised profits or losses,
have been eliminated on consolidation.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting.
Non-controlling interests in the equity and results of the subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of financial position and statement of changes in equity of the Group.
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets
acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit
or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Austral Gold Limited
88
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39.2 Revenue Recognition
Under AASB 15, the sale of minerals is recognised at the transfer of control or point of sale, which is when the customer
has taken delivery of the goods, the risks and rewards have been transferred to the customer and there is a valid contract.
Determining the timing of the transfer of control at a point in time or over time requires judgement.
The Group has an agreement with the refinery and sales are made via correspondence or an on-line trading platform
with the customer.
When the customer is the refinery, the control of the metals is transferred at the metal availability date. The metal availability
date is when the metals are available for pricing by the refinery. If the customer is not the refinery, revenue is recognized
when the metals are transferred to the customer upon receipt and the customer obtains control of the metals. Invoices
are payable two business days after the metal availability date. At the Guanaco/Amancaya mine revenue was recognized
when silver/gold doré bars were shipped to the refinery which was taken to be the point in time at which the customer
accepted the material and related risk and rewards of ownership transferred. When the customer is a refinery, control
occurs when material is received and when the customer is not a refinery, control occurs when the ounces of metals are
received. The price is set by the market using the London gold market.
39.3 Goods and services tax (GST)/ Value added tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST/VAT, except where the amount of GST/ VAT
incurred is not recoverable from the tax authorities. In these circumstances the GST/VAT is recognised as part of the cost
of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are
shown inclusive of GST/VAT. Cash flows are presented in the statement of cash flows on a gross basis, except for the
GST/VAT component of investing and financing activities, which are disclosed as operating cash flows.
39.4 Foreign currency
The financial statements are presented in United States Dollars (US$), which is the Group’s functional and presentation
currency.
Foreign currency transactions
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the
exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign
currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-
monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at
the date of the transaction. Foreign currency differences are generally recognised in profit or loss and presented within
finance costs.
Foreign currency transactions are translated into US$ using the exchange rates prevailing at the dates of the transac-
tions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
Austral Gold Limited
89
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39.5 Mine Properties
Mines in production represent the aggregated exploration and evaluation expenditure and capitalised development
costs in respect of areas of interest in which mining is ready to or has commenced. Mine development costs are deferred
until commercial production commences, at which time they are depreciated on a units-of-production basis of gold
equivalent ounces over mineable reserves. Once production commences, further development expenditure is classified
as part of the cost of production, (e.g. stripping costs) unless substantial future economic benefits can be established.
Amortisation
Aggregated costs on productive areas are amortised over the life of the area of interest to which such costs relate on
the units-of-production basis.
Deferred stripping costs
Deferred stripping costs represent certain mining costs, principally those that relate to the stripping of waste, which
provides access so that future economically recoverable ore can be mined. Stripping (i.e. overburden and other waste
removal) costs incurred in the production phase of a surface mine are capitalised to the extent that they improve access
to an identified component of the ore body and are subsequently amortised on a systematic basis over the expected
useful life of the identified component of the ore body.
Capitalised stripping costs are disclosed as a component of Mine Properties. Components of an ore body are determined
with reference to mine plans and take account of factors such as the geographical separation of mining locations and/
or the economic status of mine development decisions. Capitalised stripping costs are initially measured at cost and
represent an accumulation of costs directly incurred in performing the stripping activity that improves access to the
identified component of the ore body, plus an allocation of directly attributable overhead costs. The amount of stripping
costs deferred is based on a relevant production measure which uses a ratio obtained by dividing the tonnage of waste
mined by the quantity of ore mined for an identified component of the ore body. Stripping costs incurred in the period
for an identified component of the ore body are deferred to the extent that the current period ratio exceeds the expected
waste to ratio for the life of the identified component of the ore body. Such deferred costs are then charged against the
statement of profit or loss when the stripping ratio falls below the mine ratio. These are a function of the mine design and
therefore any changes to the design will generally result in changes to the ratio. Changes in other technical or economic
parameters that impact on reserves may also have an impact on the component ratio even though they may not impact
the mine design. Changes to the mine plan, identified components of an ore body, stripping ratios, units of production
and expected useful life are accounted for prospectively. Deferred stripping costs form part of the total investment in a
cash generating unit, which is reviewed for impairment if events or changes in circumstances indicate that the carrying
value may not be recoverable.
39.6 Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is capitalised in respect of each identifiable area of interest and carried
forward in the statement of financial position where rights to tenure of the area of interest are current; and one of the
following conditions is met:
i. such costs are expected to be recouped through successful development and exploitation of the area of interest or
alternatively, by its sales; or
ii. exploration and/or evaluation activities in the area of interest have not, at reporting date, yet reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and
significant operations in the area are continuing.
Expenditure relating to pre-exploration activities, including costs incurred prior to the Group having an exploration license,
is written off to the profit or loss during the period in which the expenditure is incurred.
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.
Accumulated expenditure on areas that have been abandoned, or are considered to be of no value, are written off in the
year in which such a decision is made.
When the technical and commercial feasibility of an undeveloped mining project has been demonstrated, the project
enters the construction phase. The cost of the project assets are transferred from exploration and evaluation expenditure
and reclassified into construction phase and include past exploration and evaluation costs, development drilling and
other subsurface expenditure. When full commercial operation commences, the accumulated costs are transferred into
Mine Properties or an appropriate class of property, plant and equipment.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the
area according to the production output basis.
Austral Gold Limited
90
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39.7 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation
The depreciated amount of property, plant and equipment is recorded either on a straight-line basis or on the production
output basis to the residual value of the asset over the lesser of mine life or estimated useful life of the asset.
Depreciation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are
reflected prospectively in current and future periods only. Depreciation is expensed, except those that are included in
the amount of exploration assets as an allocation of production overheads. Fixed assets except for underground mine
development are depreciated on a straight line basis over three years. The depreciation rate used in underground mine
development is provided for over the life of the area of interest on a production output basis. Assets that are idle or no
longer ready for use are not depreciated but are separately tested for impairment and where the recoverable value is
less than the book value of the asset, an impairment is recorded.
De-recognition and disposal
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between net disposal proceeds and
the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is de-recognised.
39.8 Cash and cash equivalents
Cash includes:
i. cash on hand and at call deposits with banks or financial institutions; and
ii. other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.
39.9 Income tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by reporting date.
Deferred income tax is provided on all temporary differences at reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
i. when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a trans-
action that is not a business combination and that, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; or
ii. when the taxable temporary difference is associated with investments in subsidiaries, associates, or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
i. when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
ii. when the deductible temporary difference is associated with investments in subsidiaries, associates, or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary differ-
ence can be utilised.
The carrying amount of any deferred income tax assets recognised is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply for the year when the asset
is realised or the liability is settled, based on tax laws that have been enacted or substantively enacted at reporting date.
Income taxes relating to items recognised directly to equity are recognised in equity and not in profit or loss. Deferred tax
assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
Austral Gold Limited
91
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39.10 Inventories
Materials and supplies used in production are stated at the lower of cost and net realisable value on a ‘first in first out’
basis. Cost comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity.
If the ore stockpile is not expected to be processed in 12 months after reporting date, it is included in non-current assets
and the net realisable value is calculated on a discounted cash flow basis. Stockpiles are measured by estimating the
number of tonnes added and removed from the stockpile, the number of contained ounces based on assay data, and
the estimated recovery percentage. Stockpile tonnages are verified to periodic surveys.
Gold bullion and gold-in-process are valued at the lower of cost and net realisable value. Net realisable value is deter-
mined using the prevailing metal prices.
39.11 Trade and other receivables
Trade accounts receivable, amounts due from related parties and other receivables represent the principal amounts due
at balance date plus accrued interest and less, where applicable, net of provisions for doubtful accounts.
39.12 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. They are measured at amortised cost and are not discounted. The amounts are unsecured and
are usually paid within 30 days of recognition.
39.13 Interest bearing liabilities
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method. Where there is an unconditional
right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are clas-
sified as non-current.
39.14 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.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and where appropriate,
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
Mine closure provision
Close-down and restoration costs include the dismantling and demolition of infrastructure and the removal of residual
materials and remediation of disturbed areas. Provisions for close-down and restoration costs do not include any addi-
tional obligations which are expected to arise from future disturbances. The costs are based on the net present value of
the estimated future costs of a closure.
Estimated changes resulting from new disturbances, updated cost estimates including information from tenders, changes
to the lives of operations and revisions to discount rates are capitalised within the property, plant and equipment. These
costs are then depreciated over the lives of the assets to which they relate.
The amortisation or “unwinding” of the discount applied in establishing the net present value provisions is charged to
the income statement in each period as part of finance costs.
The cost of property, plant and equipment includes the estimated cost of dismantling and removing infrastructure and
restoring the site to the extent that such cost is recognised as a provision.
Austral Gold Limited
92
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
39.15 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period for time in exchange for consideration.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consid-
eration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases
of property the Group has elected not to separate non-lease components and account for the lease and non-lease
components as a single lease component.
Right of use
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease
term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-
of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as
those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources
and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
39.16 Impairment of non-financial assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to sell or value in use, is compared to the asset’s carrying value.
Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit or loss. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax rate.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives or more frequently if
events or circumstances indicate that the carrying value may be impaired.
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.
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NOTES TO THE FINANCIAL STATEMENTS
39.17 De-recognition of financial assets and financial liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derec-
ognised when:
i. the rights to receive cash flows from the asset have expired; or
ii. the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full
without material delay to a third party under a ‘pass- through’ arrangement; or
iii. the Group has transferred its rights to receive cash flows from the asset and either;
39.17.1.1
has transferred substantially all the risks and rewards of the asset; or
39.17.1.2
has neither transferred nor retained substantially all the risks and rewards of the asset but has trans-
ferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the
extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over
the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration received that the Group could be required to repay.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the
original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised
in profit or loss.
39.18 Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
39.19 Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the parent,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
39.20 Borrowing costs
Borrowing costs are recognised as an expense when incurred unless they are attributable to qualifying assets, in which
case they are then capitalised as part of the assets.
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NOTES TO THE FINANCIAL STATEMENTS
39.21 Employee leave benefits Short-term employee benefits
Liabilities for employees’ entitlements to wages and salaries, annual leave and other employee entitlements expected
to be settled within 12 months of the reporting date are recognised in the current provisions in respect of employees’
services up to reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabili-
ties for non- accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience
of employee departures, and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible,
the estimated cash outflows.
Superannuation
The Company contributes to employee superannuation funds. Contributions made by the Company are legally enforce-
able and contributions are made in accordance with the requirements of the Superannuation Guarantee Legislation.
39.22 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (“CODM”).
The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been
identified as the Chief Executive Officer.
39.23 Share-based payment arrangements
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally
recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount
recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market
performance conditions are expected to be met, such that the amount ultimately recognised is based on the number
of awards that meet the related service and non-market performance conditions at the vesting date. For share-based
payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between expected and actual outcomes.
39.24 Capital management
The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. Management monitors the return on capital, as well as the level of dividends
to ordinary shareholders.
The Group maintains strong relationships with its lenders, including banks which provide the Group with borrowings and
lines of credit, and the gold refinery that the Group has an agreement with, and other customers of the Group that may
fund the purchase of gold and silver in advance of delivery.
39.25 New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
AASB that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpreta-
tions did not have any significant impact on the financial performance or position of the Group.
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DIRECTORS’
DECLARATION
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IN THE DIRECTORS’ OPINION:
1. the attached consolidated financial statements and notes thereto comply with
the Corporations Act 2001, the Accounting Standards, the Corporations Regu-
lations 2001 and other mandatory professional reporting requirements;
2. the attached consolidated financial statements and notes thereto comply
with International Financial Reporting Standards as issued by the Interna-
tional Accounting Standards Board as described in note 1 to the consoli-
dated financial statements;
3. the attached consolidated financial statements and notes thereto give a true
and fair view of the Group’s financial position as at 31 December 2021 and of
its performance for the 12 months ended on that date; and
4. there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
The Directors have been given the declarations required by section 295A of the
Corporations Act 2001. Signed in accordance with a resolution of Directors made
pursuant to section 295(5)(a) of the Corporations Act 2001.
Signed on behalf of the Directors by:
Robert Trzebski
Director
Sydney
31 March 2022
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INDEPENDENT
AUDITOR’S
REPORT
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1 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of Austral Gold Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Austral Gold Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated Statement of financial position as at 31 December 2021; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 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 fulfilled our other ethical responsibilities in accordance with these requirements. Austral Gold Limited
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2 Material uncertainty related to going concern We draw attention to Note 3, “Going Concern” in the financial report. The conditions disclosed in Note 3, indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of this matter. In concluding there is a material uncertainty related to going concern we evaluated the extent of uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going concern. This included: • Analysing the cash flow projections by: • Evaluating the underlying data used to generate the projections for consistency with other information tested by us, our understanding of the Group’s intentions, and past results and practices; • Assessing the planned levels of operating and capital expenditures for consistency of relationships and trends to the Group’s historical results, particularly in light of recent loss making operations, results since year end, and our understanding of the business, industry and economic conditions of the Group; • Assessing significant non-routine forecast cash inflows and outflows for feasibility, quantum and timing. We used our knowledge of the client, its industry and current status of those initiatives to assess the level of associated uncertainty. • Reading correspondence with existing and potential financiers to understand the financing options available to the Group, and assess the level of associated uncertainty resulting from renegotiation of existing debt facilities, and negotiation of additional/revised funding arrangements; • Evaluating the Group’s going concern disclosures in the financial report by comparing them to our understanding of the matter, the events or conditions incorporated into the cash flow projection assessment, the Group’s plans to address those events or conditions, and accounting standard requirements. We specifically focused on the principle matters giving rise to the material uncertainty. Key Audit Matters In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the Key Audit Matters: • Carrying value of mine assets and plant and equipment • Carrying value of exploration and evaluation assets 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. Austral Gold Limited
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3 Carrying value of Guanaco/Amancaya mine assets and plant & equipment ($39.0mmillion) Refer to Notes 18 “Mine properties” and 19 “Property, plant and equipment” to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s mine properties and plant & equipment are a significant portion (44%) of the Group’s total assets. The recoverable value of the Guanaco/Amancaya cash generating unite (CGU) is based on the Group’s fair value less costs of disposal model for the CGU, and this is a key audit mater due to: • the high level of judgement used in evaluating key assumptions applied by the Group in the Guanaco/Amancaya CGU model, which are affected by expected future operating performance and market conditions, including: - level of resources and reserves capable of being produced economically, as reported in the Group’s external expert Reserve Report; - forecast cost of developing areas of interest and producing silver and gold; - future production volumes and timing; and - specific discount rate applied in the model. These forward-looking assumptions necessitate additional scrutiny by us due to: • the inherent uncertainties in auditing these assumptions which are forward looking and / not based on observable data; • the consistency of application of assumptions and the fluctuations in forecast silver and gold (commodity) pricing increasing the risk of inaccurate forecasting; and • the sensitivity of assumptions in the Group’s Guanaco/Amancaya CGU model such as commodity prices and discount rate, reducing available headroom. This drives additional audit effort specific to their feasibility and consistency of application. Our procedures included: • testing the design and implementation of the management review control associated with the approval of the fair value less costs of disposal model used to assess the recoverable amount of the Group’s Guanaco/Amancaya CGU; • evaluating the fair value less costs of disposal methodology used by the Group for consistency with the requirements of the Accounting Standards; • working with our valuations specialists we critically evaluated the Group’s key assumptions used to determine the recoverable amount of the Guanaco/AmancayaCGU. The assumptions evaluated are those relating to commodity prices, and discount rate based on our knowledge of the industry, publicly available data of comparable entities, and published forecast price expectations of industry commentators; • working with our valuations specialists we considered the sensitivity of the Guanaco/Amancaya CGU model by varying key assumptions. The assumptions considered include commodity prices and discount rate within a reasonably possible range to identify those assumptions at higher risk of impairment, inconsistency in application and to focus our further procedures; • checking the forecast cost of developing areas of interest and producing silver and gold, future productions volumes and timing to those within the Group’s Reserves Report, Board approved plans and budgets. We assessed these against our understanding of the business and industry trends; • assessing the level of resources and reserves capable of being produced economically by examining mine closure Austral Gold Limited
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4 plans and the Group’s Reserve Report with the Group’s key operational and finance personnel; • assessing the historical accuracy of budgeting and forecasting by the Group to inform our evaluation of forecasts incorporated in the Guanaco/Amancaya CGU model; • evaluating the scope, competence, and objectivity of the Group’s external expert engaged and assess the completeness and accuracy of the key assumptions used by the external expert. Working with our valuation specialist, this involved challenging the key assumptions and assessing the framework applied based on our understanding of the business and industry and the procedures the expert performed. This is to assist the Group prepare the Group’s Reserve Report as utilised within the Guanaco/Amancaya CGU model and, • assessing the financial report disclosures based on our understanding obtained from our testing and the requirements of the accounting standards. Carrying value of exploration and evaluation assets ($32.3 million) Refer to Note 20 “Exploration and evaluation expenditure” to the Financial Report The key audit matter How the matter was addressed in our audit Exploration and evaluation expenditure capitalised (‘E&E’) is a key audit matter due to: • the significant of the balance (33%) of the Group’s total assets; • the greater level of audit effort to evaluate the Group’s application of the requirements of the industry specific accounting standard AASB 6 Exploration for and Evaluation of Mineral Resources in particular the conditions allowing capitalisation of relevant expenditure and presence of impairment indicators. The presence of impairment indicators would necessitate a detailed analysis by the Group of the value of E&E, Our procedures included: • evaluating the Group’s accounting policy to recognise E&E assets using the criteria in the accounting standard; • testing the design and implementation of the management review control associated with the approval of the impairment assessment used to assess the carrying value of the E&E assets; • evaluating the Group’s determination of areas of interest for consistency with the definition in the accounting standard based on the Group’s planned work programs and Austral Gold Limited
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5 therefore given the criticality of this to the scope and depth of our work, we involved senior team members to challenge the Group’s determination that no such indicators existed. In assessing the conditions allowing capitalisation of relevant expenditure, we focus on: • the determination of the areas of interest (areas); • documentation available regarding the rights to tenure, via licensing, and compliance with relevant conditions, to maintain current rights to an area of interest and the Group’s intention and capacity to continue the relevant E&E activities; • the Group’s determination of whether the E&E assets are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and In assessing the presence of impairment indicators, we focused on those that may draw into question the commercial continuation of E&E activities for the areas of interest where significant capitalised E&E assets exist. In addition to the assessments above, and given the financial position of the Group, we paid particular attention to: • the impact of changes in gold and silver prices to the Group’s strategy and intentions; and • the ability of the Group to fund the continuation of activities; results of exploration activity of each area of interest. • for each area of interest, we assessed the Group’s current rights tenure by examining the ownership of the relevant license to government registries and agreements in place with other parties. We also tested for compliance with conditions, such as minimum expenditure requirements, on a sample of licenses; • testing the Group’s additions to E&E assets for the period by evaluating a sample of recorded expenditure for consistency to underlying records, the capitalisation requirements of the Group’s accounting policy and the requirements of the accounting standard; • evaluating Group documents, such as minutes of director’s meetings and ASX market announcements, for consistency with the Group’s stated intentions for continuing E&E activities in certain areas. We corroborated this through interviews with key operational and finance personnel; • analysing the Group’s determination of recoupment through successful development and exploration of the area by evaluating the Group’s documentation of planned future work programs and project and corporate budgets for a sample of areas; • assessing the impact of changes in the gold and silver prices to the Group’s modelling underlying their decision for commercial continuation of activities; and • obtaining project and corporate budgets identifying areas with existing funding and those requiring alternate funding sources. We compared this for consistency with areas of E&E activities, for evidence of the ability to fund continued activities. We identified those areas relying on alternate funding sources and evaluated the capacity of the Group to secure such funding. Austral Gold Limited
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6 Other Information Other Information is financial and non-financial information in Austral Gold Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • 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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They 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 the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.This description forms part of our Auditor’s Report. Austral Gold Limited
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7 Report on the Remuneration ReportOpinion In our opinion, the Remuneration Report of Austral Gold Limited for the year ended 31 December 2021, complies with Section 300A of the Corporations Act 2001. Directors’ 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 responsibilities We have audited the Remuneration Report included in pages 47 to 52 of the Directors’ report for the year ended 31 December 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG Jessica Dillon Partner Sydney 31 March 2022 7 Report on the Remuneration ReportOpinion In our opinion, the Remuneration Report of Austral Gold Limited for the year ended 31 December 2021, complies with Section 300A of the Corporations Act 2001. Directors’ 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 responsibilities We have audited the Remuneration Report included in pages 47 to 52 of the Directors’ report for the year ended 31 December 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG Jessica Dillon Partner Sydney 31 March 2022 ADDITIONAL
INFORMATION
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Forward Looking Statements
In this annual report that are not historical facts are forward-looking statements. Forward-looking statements are statements that are not historical, and consist primarily of
projections — statements regarding future plans, expectations and developments. Words such as “expects”, “intends”, “plans”, “may”, “could”, “potential”, “should”, “antici-
pates”, “likely”, “believes” and words of similar import tend to identify forward-looking statements. All forward-looking statements are subject to a variety of known and unknown
risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including, without limitation, business integration risks;
uncertainty of production, development plans and cost estimates, commodity price fluctuations; political or economic instability and regulatory changes; currency fluctuations,
the state of the capital markets, uncertainty in the measurement of mineral reserves and resource estimates, Austral’s ability to attract and retain qualified personnel and manage-
ment, potential labour unrest, reclamation and closure requirements for mineral properties; unpredictable risks and hazards related to the development and operation of a mine
or mineral property that are beyond the Company’s control, the availability of capital to fund all of the Company’s projects and other risks and uncertainties identified under the
heading “Risk Factors” in the Company’s continuous disclosure documents filed on the ASX and SEDAR. You are cautioned that the foregoing list is not exhaustive of all factors
and assumptions which may have been used. Austral cannot assure you that actual events, performance or results will be consistent with these forward-looking statements, and
management’s assumptions may prove to be incorrect. Austral’s forward-looking statements reflect current expectations regarding future events and operating performance
and speak only as of the date hereof and Austral does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expecta-
tions or opinions should change other than as required by applicable law. For the reasons set forth above, you should not place undue reliance on forward-looking statements.
CORPORATE GOVERNANCE STATEMENT
Austral Gold Limited and its subsidiaries have adopted the corporate governance framework and practices set out in its Corporate
Governance Statement. The Corporate Governance Statement is available on the Company’s website at www.australgold.com.
STATEMENT OF ISSUED CAPITAL
As at 28 February 2022 the total issued capital of Austral Gold Limited was 612,311,353 ordinary shares. 548,399,462 shares were
quoted on the Australian Securities Exchange under the code AGD. The only shares of the Company on issue are fully paid ordinary
shares. None of these shares are restricted securities or securities subject to voluntary escrow within the meaning of the Listing Rules
of the Australian Securities Exchange. 63,911,891 shares were quoted on the Toronto Venture Exchange under the code AGLD.
There are no restrictions on the voting rights attached to the fully paid ordinary shares. On a show of hands, every member present in
person, by proxy, by attorney or by representative shall have one vote. On a poll, every member present in person, by proxy, by attorney
or by representative shall have one vote for every share held.
DISTRIBUTION OF FULLY PAID ORDINARY SHARES
As at 28 February 2022
Holders
Shares held
% of issued capital
Size of Holding
1 - 100
101 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 50,000
50,001 - 100,000
>100,000
372
557
553
239
289
90
122
15,708
281,127
1,553,818
1,875,083
7,254,743
6,663,974
594,666,900
0.00%
0.05%
0.25%
0.31%
1.18%
1.09%
97.12%
100%
SUBSTANTIAL SHAREHOLDERS
The Company has been notified of the following substantial shareholdings as at 28 February 2022:
2,222
612,311,353
Registered Holder
HSBC Custody Nominees
(Australia) Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees
(Australia) Limited
HSBC Custody Nominees
(Australia) Limited
Beneficial Holder
Shares Held
Inversiones Financieras
Del Sur SA (IFISA)
Inversiones Financieras
Del Sur SA (IFISA)
Guanaco Capital
Holding Corp
380,234,614
47,658,462
35,870,730
Eduardo Elsztain
35,573,716
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Rank
Name
No. of shares % of issued capital
1
2
3
4
5
6
7
8
9
EDUARDO SERGIO ELSZTAIN
461,294,560
75.34%
MICHAEL D WINN
13,735,558
2.24%
EMX ROYALTY CORPORATION
9,381,770
1.53%
STABRO KASANEVA
7,881,230
1.29%
CITICORP NOMINEES PTY LIMITED
6,397,257
1.04%
CS THIRD NOMINEES PTY LIMITED
3,755,995
0.61%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
2,768,375
0.45%
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
2,727,042
0.45%
MRS ANNA VORONTSOVA
2,312,594
0.38%
10
MS LEANNE MARION HUNTER
1,800,000
0.29%
11
SAUL ZANG
1,640,763
0.27%
12
TIMOTHY BEALE
1,546,308
0.25%
13
CS FOURTH NOMINEES PTY LIMITED
1,462,185
0.24%
14
BNP PARIBAS NOMINEES PTY LTD
1,422,961
0.23%
15
ASOCIACION ISRAELITA ARGENTINA TZEIRE AGUDATH JABAD
1,158,265
0.19%
16
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
1,150,523
0.19%
17
FUSION ELECTRICS (AUST) PTY LTD
1,000,000
0.16%
18
MRS NICOLA PAULINE COURT
900,000
0.15%
19
MARIO SZOTLENDER
1,148,862
0.19%
20
PUTNEY HOLDINGS CO LP
808,859
0.13%
Total
Other
524,293,107
85.63%
88,018,246
14.37%
Total Shares on issue
612,311,353
100%
*Beneficial holdings
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Austral Gold Limited
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www.australgold.com