MEDIA RELEASE
Austral Gold Limited
30 March 2023
Austral Gold Files 2022 Annual Report
Austral Gold Limited (“Austral” or “the Company”) (ASX: AGD; TSX-V: AGLD) is pleased to
announce that it has filed its Annual Report for the Financial Year Ended 31 December 2022.
About Austral Gold Limited
Austral Gold Limited is a gold and silver explorer and mining producer whose strategy is to expand
the life of its cash generating assets in Chile, restart its Casposo-Manantiales mine complex in
Argentina and build a portfolio of quality assets in Chile, the USA and Argentina organically
through exploration and via acquisitions and strategic partnerships. Austral owns a 100% interest
in the Guanaco/Amancaya mines in Chile and the Casposo-Manantiales mine complex (currently
on care and maintenance) in Argentina, a non-controlling interest in the Rawhide Mine in Nevada,
USA and a non-controlling interest in Ensign Gold which holds the Mercur project in Utah, USA.
In addition, Austral owns an attractive portfolio of exploration projects in the Paleocene Belt in
Chile (including those acquired in the 2021 acquisition of Revelo Resources Corp), and a 51%
interest in the Sierra Blanca 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:
Jose Bordogna
Chief Financial Officer
Austral Gold Limited
Jose.bordogna@australgold.com
+61 466 892 307
Ben Jarvis
Director
Austral Gold Limited
info@australgold.com
+61 413 150 448
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
2022
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022
www.australgold.com
TABLE OF
CONTENTS
Corporate Directory
Value Proposition
Chair’s Letter
Key Principles
Mineral Reserves and Resources
Review of Activities
Directors’ Report
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information
4
6
8
10
12
18
46
62
100
102
110
Austral Gold Limited
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Annual Report 2022
CORPORATE
DIRECTORY
Austral Gold Limited
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Annual Report 2022
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
Chair & Executive Director
Eduardo Elsztain
Vice Chair & 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
COMPANY SECRETARY
Chelsea Sheridan
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
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
LISTED
Australian Securities Exchange
ASX: AGD
TSX Venture Exchange
TSXV: AGLD
PLACE OF INCORPORATION:
Western Australia
*resigned effective 31 January 2023
Austral Gold Limited
5
Annual Report 2022
VALUE
PROPOSITION
Austral Gold Limited
6
Annual Report 2022
MINING OPERATIONS
POSITIVE cash flow from operations
since 2012
INSTALLED production capacity with
two 1,500 tpd agitation leaching plants
in Argentina and Chile
EXPLORATION STRATEGY
FIND High-Sulphidation gold
and silver deposits in a high-quality
land portfolio
STRATEGICALLY LOCATED in five
of the richest mineral endowments
in the Americas
BOARD/MANAGEMENT
PREVIOUS DISCOVERIES of world-class
deposits in the Americas
PROVEN SUCCESS doing business
in Argentina and Chile through managing
listed companies
Austral Gold Limited
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Annual Report 2022
CHAIR’S
LETTER
Austral Gold Limited
8
Annual Report 2022
As part of our 2022, strategic planning, we decided to sell SCRN
Properties Ltd, (“SCRN”) owner of the Pingüino project. The sales
process culminated in the sale of SCRN in Q1 2023 to E2 Metals
Limited (“E2”) (ASX:E2M) for total consideration of approximately
US$10 million. We believe this transaction is accretive for Austral,
as not only did we obtain US$2.5 million cash on closing, with
another US$2.5 million cash to be received over the next three
years, we retained exposure to the Pingüino project through the
receipt of 19.9% of E2’s common shares valued at US$4.7 million
plus options valued at US$0.6 million to acquire additional shares
of E2, provided our ownership position does not exceed 19.9%
of E2.
Since Austral Gold started its operations in 2011, gold and silver
prices fundamentals have remained strong, and we expect them
to remain attractive for the business in 2023, 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.
In summary, we continued to lay the foundation for the growth of
Austral Gold 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 three to four years, plus a further 10,000
gold equivalent ounces of production per year for the following
seven to eight years.
• Exploring the Paleocene and Indio belts in Chile and Argentina in
our search for High-Sulphidation (HS) gold and silver deposits.
• Continuing to explore our Casposo-Manantiales properties
in San Juan, Argentina while reviewing all exploration data to
develop an internal resource estimate and determine next steps.
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 and we look
forward to continuing to execute on our growth strategy in 2023.
WAYNE HUBERT
Chair
On behalf of the Board of Directors, I am pleased to present the
Austral Gold Limited (“Austral” or the “Company) Annual Report
for the financial year ended 31 December 2022 (“FY22”).
For Austral, 2022 proved to be a challenging year with important
milestones achieved to enable the advancement on our long-
term growth strategy. We continued to move forward with our
value proposition of maintaining sustainable mining operations to
support our exploration activities though the extension of the life
of our Guanaco/Amancaya mine complex and our search for large
High-Sulphidation (HS) gold and silver deposits. These activities
rely on our strong commitment to the well-being of our employees
and communities where we operate, including promotion of the
highest health, safety and environmental standards.
During FY22, our Guanaco-Amancaya mine complex continued
to be the primary source of the company’s cash flow with a total
of 27,686 gold-equivalent ounces produced and a gross profit of
US$10.2 million (excluding depreciation and amortisation) despite
lower production than our initial 2022 guidance of 35,000-40,000
gold-equivalent ounces. The lower production is mainly explained
by (i) restricted availability of the underground fleet, (ii) change in
the underground mine contractor at the beginning of the year,
and (iii) lower gold grades in certain areas of the Amancaya mine.
An important operational milestone achieved was the updated
independent technical report issued by SLR Consulting (Canada)
(“SLR”) dated 25 March 2022 that reflects a longer estimated life
of mine for the Guanaco/Amancaya operations to year 2033 by
combining production from the Guanaco and Amancaya mines
and from the reprocessing of heaps at Guanaco.
We believe that the heap reprocessing project will provide opera-
tional stability by providing low cost production. In January 2023, we
announced that production from the heaps is forecast for June 2023
and that we had significantly advanced with construction activities
and engineering studies. For the financial year ended 31 December
2023 (“FY23”), we project production of 11,000-11,500 gold equiva-
lent ounces (“GEOs)” from the heaps at significantly higher margins
than production from our underground Amancaya mine, which we
expect to produce 23,000-27,000 GEOs. Total production for 2023
is projected to increase to 34,000-38,000 GEOs.
During the year, the Guanaco-Amancaya operations continued to
support our brownfield and greenfield exploration activities that
totaled US$5.8 million in FY22.
Our brownfield activities were focused on our Casposo-Manantia-
les project in Argentina and on the Paleocene belt, near the vicinity
of our Guanaco/Amancaya mine complex in Chile.
To advance on our strategic objective of restarting profitable
mining operations at our Casposo-Manantiales project, we drilled
more than 7,000 meters in 2022. Our first drill program resulted
in the intersection of some high gold grades at the Manantiales
vein, opening the upside at depth and indicating the continuity of
mineralisation in the south ore-shoot. At our subsequent follow up
drill program in the fourth quarter, some holes intersected high gold
grades at the top and bottom of the central ore-shoot, indicating
possible continuity at depth.
On the greenfield exploration front, with the strategic objective
to find HS deposits, we focused on exploration activities in the
Paoleocene belt in Chile and the Indio belt in Argentina, where we
have earn-in agreements with third parties.
Austral Gold Limited
9
Annual Report 2022
KEY
PRINCIPLES
Austral Gold Limited
10
Annual Report 2022
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
MAXIMISE VALUE
CREATION FOR
STAKEHOLDERS
Austral Gold Limited
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Annual Report 2022
MINERAL
RESERVES AND
RESOURCES
Austral Gold Limited
12
Annual Report 2022
TABLE 1: SUMMARY OF MINERAL RESERVES
31 December 2022
Tonnes
Grade
Contained Metal
Classification
(000 t)
(g/t Au)
(g/t Ag)
(000 oz Au)
(000 oz Ag)
Underground
Proven
Probable
P + P
Open Pit
Proven
Probable
P + P
Heap
Proven
Probable
P + P
Guanaco and Amancaya Mine
32
116
148
-
1,607
1,607
5.81
5.84
5.83
Inesperada
-
1.05
1.05
14.42
16.94
16.40
-
14.39
14.39
Heap Reprocessing Project
6
22
28
-
54
54
15
63
78
-
744
744
10,189
0.68
3.16
221
1,037
-
-
-
-
-
10,189
0.68
3.16
221
1,037
Total Proven
Total Probable
Total P + P
See notes to Mineral Reserves on page 16.
Total
0.69
1.37
0.79
10,221
1,723
11,945
3.20
14.56
4.84
227
76
303
1,052
807
1,859
Austral Gold Limited
13
Annual Report 2022
TABLE 2: SUMMARY OF MINERAL RESOURCES
31 December 2022
Tonnes
Grade
Contained Metal
Classification
(000 t)
(g/t Au)
(g/t Ag)
(000 oz Au)
(000 oz Ag)
Underground
Measured
Indicated
M + I
Inferred
Open Pit
Measured
Indicated
M + I
Inferred
Heap
Measured
Indicated
M + I
Inferred
Total Measured
Total Indicated
Total M + I
Total Inferred
See notes to Mineral Resources on page 16.
Guanaco and Amancaya Mine
594
1,009
1,604
402
-
1,682
1,682
74
2.77
3.12
2.99
4.20
Insperada
-
1.05
1.05
0.91
13.00
17.98
16.14
8.51
-
14.38
14.38
12.40
Heap Reprocessing Project
53
101
154
54
-
57
57
2
248
584
832
110
-
778
778
30
11,366
0.67
3.10
246
1,133
-
11,366
1,907
11,961
2,692
14,652
2,383
-
0.67
0.55
Total
0.78
1.82
0.97
1.18
-
3.10
2.64
3.59
15.73
5.82
3.93
-
246
34
299
158
457
90
-
1,133
162
1,381
1,362
2,743
301
Austral Gold Limited
14
Annual Report 2022
TABLE 3: SUMMARY OF MINERAL RESERVES
31 December 2021
Tonnes
Grade
Contained Metal
Classification
(000 t)
(g/t Au)
(g/t Ag)
(000 oz Au)
(000 oz Ag)
Underground
Proven
Probable
P + P
Open Pit
Proven
Probable
P + P
Heap
Proven
Probable
P + P
Guanaco and Amancaya Mine
47
251
298
-
1,607
1,607
5.74
5.01
5.12
Inesperada
-
1.05
1.05
11.51
12.95
12.72
-
14.39
14.39
Heap Reprocessing Project
9
40
49
-
54
54
17
105
122
-
744
744
10,240
0.68
3.17
223
1,043
-
-
-
-
-
10,240
0.68
3.17
223
1,043
Total Proven
Total Probable
Total P + P
See notes to Mineral Reserves on page 16.
Total
0.70
1.58
0.84
10,287
1,859
12,146
3.21
14.20
4.89
232
95
326
1,060
848
1,909
Austral Gold Limited
15
Annual Report 2022
TABLE 4: SUMMARY OF MINERAL RESOURCES
31 December 2021
Classification
Underground
Measured
Indicated
M + I
Inferred
Open Pit
Measured
Indicated
M + I
Inferred
Heap
Measured
Indicated
M + I
Inferred
Total Measured
Total Indicated
Total M + I
Total Inferred
Tonnes
(000 t)
630
1,189
1,819
402
-
1,682
1,682
74
11,417
-
11,417
1,907
12,047
2,871
14,918
2,383
Grade
Contained Metal
(g/t Au)
(g/t Ag)
(000 oz Au)
(000 oz Ag)
Guanaco and Amancaya Mine
3.03
3.34
3.23
4.20
Insperada
-
1.05
1.05
0.91
Heap Reprocessing Project
0.67
-
0.67
0.55
Total
0.80
2.00
1.03
1.18
12.98
16.82
15.49
8.51
-
14.38
14.38
12.40
3.10
-
3.10
2.64
3.62
15.39
5.89
3.93
61
128
189
54
-
57
57
2
247
-
247
34
309
184
493
90
263
643
906
110
-
778
778
30
1,139
-
1,139
162
1,402
1,421
2,823
301
Notes to Mineral Reserves:
1.
2.
Mineral Reserves follow CIM (2014) definitions and are compliant with the JORC Code.
Mineral Reserves are reported on a 100% ownership basis and estimated at the
following cut-off grades:
• Amancaya: break-even cut-off grade of 3.04 g/t AuEq, and marginal cut-off
grades of 2.37 g/t AuEq and 1.37 g/t AuEq for SLS stopes and drifts respectively.
• Inesperada - pit discard cut-off grade of 0.40 g/t Au.
• Heap Leach Pads - Marginal cut-off grades for Heap Reprocessing have been
estimated as 0.20 g/t Au and 0.15 g/t Au for Heaps I and Heap II respectively, and
at zero cut-off for Heaps III.
Mineral Reserves are estimated using an average long term gold price of
US$1,700/oz and silver price of US$22/oz.
Amancaya AuEq was calculated as AuEq = Au + 0.0110 x Ag, based on prices
of US$1,700/oz Au and US$22/oz Ag and recoveries of Au and Ag of 93% and
79%, respectively.
3.
4.
5. The following parameters were used for the Amancaya Mineral Reserve estimate:
• A minimum mining width of 1.5 m was used for SLS stopes and 3.5 m for drifts.
• Stope dilution: 0.5 m in the hanging wall and 0.5 m in the footwall (1.0 m total).
• Drift dilution: 0.25 m in each of the side walls (0.5 m total).
6. Metallurgical recovery is 93% for gold and 79% for silver.
7. Bulk density is 2.5 t/m3.
8. The following parameters were used for the Inesperada Mineral Reserve estimate:
9.
• Dilution and mining recovery factors of 0% and 100% respectively were
applied.
• Metallurgical recovery is 80% for gold.
• Bulk density is 2.44 t/m3.
The following parameters were used for the Mineral Reserve estimate for the
Guanaco Heaps:
• Heap Leach Pad I: maximum of 5% dilution. The average dilution over the
LOM is 3.5%. Dilution grades are 0.18 g/t Au and 1.50 g/t Ag.
• Heap Leach Pad II: maximum of 5% dilution. The average dilution over the
LOM is 2.5%. Dilution grades are 0.13 g/t Au and 1.40 g/t Ag.
• Heap Leach Pad III: All internal dilution within the heap limits was included.
10. Metallurgical recoveries for Heaps I, II, and II are 54%, 70%, and 46% for gold
respectively.
11. Bulk density is 1.77 t/m3 for Heap I, 1.50 t/m3 for Heap II, and 1.70 t/m3 for Heap III.
12. Numbers may not add due to rounding.
Notes to Mineral Resources:
1.
Mineral Resources followed CIM (2014) definitions and are compliant with the
JORC Code.
2. Mineral Resources are reported on a 100% ownership basis.
3. Mineral Resources are inclusive of Mineral Reserves.
4.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
5. Mineral Resources are estimated at the following cut-off grades:
• Amancaya and Guanaco underground Mineral Resources: 2.90 g/t AuEq and
1.50 g/t AuEq, respectively.
• Inesperada open pit Mineral Resources: 0.38 g/t Au.
• Heap Leach Pads Mineral Resources: zero cut-off grade – the entire volume is
included.
6.
Mineral Resources at Guanaco and Amancaya are estimated using a long-term
gold price of US$1,750/oz and a silver price of US$22/oz. Mineral Resources at
Inesperada and Heap Leach Pads are estimated using a long-term gold price of
US$1,750/oz.
7. Gold equivalency (AuEq) was calculated as follows:
• Guanaco: AuEq = Au + 0.0106 x Ag based on a gold and silver price of $1,750/
oz and $22/oz respectively and recoveries of gold and silver of 95% and 80%,
respectively.
• Guanaco: AuEq = Au + 0.0106 x Ag based on a gold and silver price of $1,750/
oz and $22/oz respectively and recoveries of gold and silver of 95% and 80%,
respectively.
• Amancaya: AuEq = Au + 0.0107 x Ag based on a gold and silver price of
$1,750/oz and $22/oz respectively and recoveries of gold and silver of 93% and
79%, respectively.
Metallurgical recoveries are 93% for gold and 79% for silver for Amancaya, 95%
for gold and 80% for silver for Guanaco, 80% for gold for Inesperada, and 54%,
70%, and 46% for gold for Heaps I, II, and II, respectively.
A minimum mining width of 1.5 m is used for resource underground shapes for
the Amancaya and Guanaco mines.
8.
9.
10. Bulk densities are 2.5 t/m3 for Amancaya and Guanaco, 2.44 t/m3 for Inesperada,
and 1.77 t/m3 for Heap I, 1.50 t/m3 for Heap II, and 1.70 t/m3 for Heap III,
respectively.
11. Numbers may not add due to rounding.
Austral Gold Limited
16
Annual Report 2022
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, except for the deple-
tion of mineral resources in 2022. The Company ensures that
the Ore Reserves and Mineral Resource Estimates are subject
to appropriate levels of governance and internal controls. Gover-
nance 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 Execu-
tive 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 the depletion of Mineral Resources is based upon
information compiled by Pedro Hauyon, a Competent Person (CP
408) who is a registered member of the Comision Calificadora de
Competencias en Recursos y Reservas Mineras. Pedro Hauyon is
a full time employee of the company and has sufficient experience
that is relevant to the type of deposit and the mining methods of
exploitation under consideration and to the activity being under-
taken 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’. Pedro Hauyon
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
17
Annual Report 2022
REVIEW OF
ACTIVITIES
Austral Gold Limited
18
Annual Report 2022
REVIEW OF RESULTS
For the Year Ended 31 December 2022
The following report on the review of results for the year ended 31 December 2022 (“FY22”)
and 2021 (“FY21”) together with the consolidated financial report of Austral Gold Limited (the
Company) and its subsidiaries, (referred to hereafter as the Group).
PRINCIPAL ACTIVITIES
Produced 27,686 gold equivalent ounces at the Group’s Guanaco/ Amancaya mine complex;
Issued an updated Technical Report that increased the estimated life of mine of the Guanaco-Amancaya
Operation in accordance with NI-43-101 and JORC 2012;
Started the construction of the Heap Reprocessing project that is expected to provide ten years of production;
Continued its search for new discoveries with brownfield and greenfield exploration activity undertaken at the
Company’s existing projects in Argentina and Chile, which included more than 7,000 meters of drilling at the
Casposo-Manantiales project;
Expanded the footprint in the Indio Belt in Argentina through an earn-in agreement with Mexplort Perforaciones
Mineras S.A. (“Mexplort”), a subsidiary of Corporación América International (“Corporación América”) controlled
by Mr. Eduardo Eurnekian (a prominent businessman from Argentina) to acquire 50% of the mining rights in the
Jaguelito project, located in the Province of San Juan;
Signed a Share Sale Agreement with E2 Metals Limtied (“E2”) to sell SCRN Properties Limited (“SCRN”), the
owner of the Pingüino advanced exploration project, for a total consideration of approximately US$10 million.
(Transaction closed 1 March 2023)
There were no other significant changes in our principal activities during the period. All resolutions were passed at the Company’s 27
May 2022 Annual General Meeting.
Austral Gold Limited
19
Annual Report 2022
AUSTRAL GOLD EQUITY INVESTMENTS AND PROJECTS
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 mines in Chile and the
Casposo mine (on care and maintenance) in Argentina, a 19.9% interest in E2 Metals acquired in March 2023 through the sale of the
Pingüino project, a 24.74% interest in the Rawhide Mine in Nevada and a 11.91% interest in the Mercur project in Utah through the
equity investment in Ensign Minerals Inc. In addition, Austral owns an attractive portfolio of exploration projects in the Paleocene
Belt in Chile (including those acquired in the 2021 acquisition of Revelo Resources Corp), and a 51% interest in the Sierra Blanca
project in Santa Cruz, Argentina.
Rawhide Mine
Fallon Nevada,
USA
Mercur Project
Utah, USA
24%
WALKER LINE, NEVADA, USA
Rawhide Mine
Production
100%
PAELOCENE BELT, CHILE
Guanaco/Amancaya Mines
Production, Exploration
100%
TRIASSIC CHOIYOI BELT, ARGENTINA
Casposo Mine
Care & Maintenance, Exploration
50%
Option
INDIO BELT, ARGENTINA
Jaguelito
Exploration
19.9%
/51%**
DESEADO MASSIF, ARGENTINA
Pingüino Project* /Sierra Blanca
Advanced Exploration
Owned projects
Equity investments
12%
CARLIN TREND, UTAH, USA
Mercur Project
Exploration
Antofagasta,
Chile
San Juan Province,
Argentina
Santa Cruz Province,
Argentina
* On 1 March 2023, sold the Pingüino project
to E2 Metals for ~ US$10M including
19.9% of E2 Metals.
**Option to acquire remaining 49%
Austral Gold Limited
20
Annual Report 2022
AUSTRAL GOLD HAS
PRODUCED OVER
559,000 GOLD
EQUIVALENT OUNCES
AND DELIVERED
POSITIVE OPERATING
CASH FLOW SINCE
2012 THAT HAVE
FUNDED AUSTRAL’S
GROWTH INITIATIVES
Austral Gold Limited
21
Annual Report 2022
GUANACO AND AMANCAYA MINE COMPLEX
Background
The Guanaco and Amancaya mine complex remain the Company’s
flagship 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.
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
(‘Amancaya’) 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).
On 6 June 2017, Austral Gold completed the construction of a
new agitation leaching plant at Guanaco. At Amancaya, open-pit
mining operations began during the first half of 2017 while under-
ground operations at Guanaco started in 2018. The Amancaya ore
is delivered to the Guanaco plant for processing.
On 25 March 2022, the Technical report was updated and shows
an increase in the mine life at Guanaco/ Amancaya can support
production levels of 30,000-35,000 gold equivalent ounces over
the next three to four years plus a further 10,000 gold equivalent
ounces of production for the following seven to eight years from
the processing of heaps.
HIGHLIGHTS: GUANACO/AMANCAYA MINE COMPLEX
Location
Northern Chile (220km SSE Antofagasta City)
Metals
Gold and Silver
Ownership
100%
Status
Producing
Deposit Type
High Sulphidation (Guanaco) – Low Sulphidation
(Amancaya) Epithermal Deposits
Infrastructure
1,500 tpd milling circuit to agitation leaching and
Merrill-Crowe processing plant, and 3,000 tpd
crushing CC circuit and heap leaching process-
ing plant, administration building, laboratory,
warehouse, maintenance facilities, diesel power
generating units, water pipeline and tanks, fuel
tanks, and an accommodation complex
Austral Gold Limited
22
Annual Report 2022
HEAP REPROCESSING PROJECT
During the year, the Company launched the heap reprocessing
project. Construction activities required for the project started in
January 2023. We anticipate production from reprocessing the
heaps (the “Project”) to commence in June 2023 and forecast
annual 2023 production from the Project to be 11,000-11,500
GEOs. Total estimated Capex for construction of the Project is
estimated to be US$4.4M. The Company expects to fund the
Capex through internal cash generation, proceeds from the sale of
SCRN Properties Ltd. (owner of the Pingüino project) to E2 Metals
in March 2023, and additional financing including a US$1M related
party loan obtained in March 2023.
Heap Reprocessing Project
as of 15 March 2023
Austral Gold Limited
23
Annual Report 2022
Austral Gold Limited
24
Annual Report 2022
SAFETY AND ENVIRONMENTAL PROTECTION
During the year ended 31 December 2022, there were four lost-time
accident (LTA) and twelve nil-lost-time accidents (NLTA) involv-
ing employees of Guanaco/Amancaya and third party contrac-
tors. 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.
COMMUNITY ACTIVITIES
Austral Gold has an extensive history of being a committed neigh-
bor to the communities in which it operates.
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.
Austral Gold Limited
25
Annual Report 2022
REVIEW OF RESULTS OF OPERATIONS
Guanaco/Amancaya Operations
Mined Ore (t)
Processed (t)
Plant Grade Underground (g/t Au)
Plant Grade Heap (g/t Au)
Plant Grade Underground (g/t Ag)
Plant Grade Heap (g/t Ag)
Gold recovery rate (%)
Silver recovery rate (%)
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$/Ag Oz)
Sales volume
Year ended 31 December
2022
219,525
283,720
3.71
1.19
13.36
35.26
93.72
80.75
26,507
96,541
27,686
1,370
1,735
1,798
22
27,648
2021
155,210
233,794
4.20
-
13.70
-
93.9
83.5
29,938
87,050
31,142
1,175
1,739
1,797
25
35,838
* The cash cost (C1) includes: Mine, Plant, On-Site G&A, Smelting, Refining, and Royalties (excludes Corporate G&A). It is the cost of production per gold equivalent ounce.
** The All-in Sustaining Cost (AISC) includes: C1, Sustaining Capex, Brownfield Exploration, and Mine Closure Amortisation
*** AuEq ratio is calculated at: 82:1 Ag:Au during FY22 and 71:1 Ag:Au during FY21
KEY FINANCIAL RESULTS
Thousands of US$
Revenue
Gross profit
Gross profit %
Adjusted gross profit (excluding depreciation and amortisation)
Adjusted gross profit % (excluding depreciation and amortisation)
Adjusted earnings*
Adjusted earnings per share (basic and fully diluted)
(Loss) before income tax
(Loss) attributed to shareholders
(Loss) attributed to non-controlling interests
(Loss) per share (Basic)
(Loss) per share (diluted)
Comprehensive (loss)
Fiscal Year ended December 31
2022
49,710
2,566
5.2%
10,237
20.6%
2,204
0.004c
(9,581)
(8,257)
(9)
(1.35)c
(1.35)c
(8,283)
2021
64,390
12,270
19.1%
24,516
38.1%
17,628
0.029c
(4,686)
(7,324)
(4)
(1.20)c
(1.20)c
(7,397)
Note: Adjusted earnings and basic adjusted earnings per share are non-IFRS measures that the Company considers to better reflect normalized earnings as it eliminates
items that in management’s judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and readers are cautioned that
Adjusted earnings may not be comparable to similar measures presented by other companies. Further, readers are cautioned that Adjusted Earnings 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.
*see page 27.
Austral Gold Limited
26
Annual Report 2022
ADJUSTED EARNINGS
Thousands of US$
(Loss) before tax
Depreciation and amortisation
Other expense/(income)1
Severance of mining employees due to outsource of operations
Impairment of exploration and evaluation expenditure
Impairment of investment in associates
Care and maintenance
Loss on financial assets
Gain on sale of equipment
Equipment rental
Other
Net finance costs/(income)2
Interest income
Finance costs
Present value adjustment to mine closure provision
Share of loss of associates
Adjusted Earnings*
1 note 7 to the financial statements
2 note 9 to the financial statements
Thousands of US$
Cash & cash equivalents
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Net current liabilities
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)
Current ratio*
Total liabilities to net assets
*Current Assets divided by Current Liabilities
Fiscal Year ended December 31
2022
(9,581)
7,778
-
926
-
1,465
968
(485)
(298)
(321)
(4)
660
420
676
2021
(4,686)
12,403
487
1,322
5,189
1,559
512
(287)
-
(55)
-
477
(239)
946
2,204
17,628
Fiscal Year ended December 31
2022
926
22,305
75,012
29,820
18,682
48,815
(7,515)
7,382
1,264
1,925
911
11,482
10,556
0.75
0.99
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
0.88
0.72
Austral Gold Limited
27
Annual Report 2022
OPERATING AND FINANCIAL RESULTS
OF THE GROUP
During FY22, the Group realised a loss before and after income
tax of US$9.6m (FY21: $4.7m) and US$8.3m (FY21:US$7.3m),
respectively.
Revenues at existing operations totaled US$49.7m (FY21: $64.4m)
with gross profit (including depreciation and amortization) of
US$2.6m (5.2% margin) in FY22 compared to US$12.3m (19.1%
margin) in FY21.
The decrease in gross profit during FY22 from FY21 was mainly
driven by (i) lower sales of gold equivalent ounces (GEOs) (27,686
GEOs vs 31,142 GEOs in FY21), (ii) higher costs of production
due to lower grades and higher tones extracted as explained
below, and (iii) the robbery of 423 GEOs of gold precipitate, partially
offset by lower amortisation charges for the Guanaco/Amancaya
mine complex as a result of lower production and an increase in
estimated mineral resources as per the March, 2022 independent
Technical report1. FY21 gross profit was impacted by the sale of
6,185 GEO’s produced in 2020 at lower production costs than
incurred in FY21 and FY22. Production costs increased in FY22
due to an increase in ore processed, of which 45,728 tonnes were
processed from lower grade material at the historical heap pads
at Guanaco, and lower gold and silver grades.
The Group’s results during FY22 were also impacted by the following:
i. Decrease in FY22 administration costs by US$0.4m to US$9.0m
(FY21:US$9.4) mainly due to transaction costs incurred in the
acquisition of Revelo in FY21 which resulted in a decrease
in consulting expenses in FY22, a decrease in withholding
taxes due to a decrease in intercompany dividends used to
fund certain non-revenue Group entities, partially offset by an
increase in staff costs due to severance of US$0.5m.
UPDATED MINERAL RESERVE AND
RESOURCE ESTIMATE
During FY22, the Group announced results of the updated Mineral
Reserve and Mineral Resource Estimates prepared by SLR
Consulting (Canada) Ltd. (“SLR”) in accordance with CIM Defini-
tions 2014, National Instrument 43-101 (“NI 43-101”) and Joint
Ore Reserves Committee Code, 2012 (JORC 2012) for the Group’s
100% owned Guanaco/Amancaya Operation in Chile, which
consists of the Guanaco Mine (Guanaco) and Inesperada satel-
lite deposit (Inesperada), the Amancaya Mine (Amancaya), and
the Guanaco heap leach pads (Heap Reprocessing project). The
Technical Report was filed on Sedar and on the Group’s website.
The highlights of the technical report on the Guanaco/Amancaya
operation, Antofagasta region, Chile report for NI 43-101 include:
• An increase in the mine life (LOM) until year 2033 (30K-35K
GEOs per year for four to five years and 10K GEO per year for
the next eight years).
• Base case Net Present Value (NPV) of US$77 million (AU$106
million) at a discount rate of 6.89% and an average gold price
of US$1,686/oz over the LOM.
• Undiscounted pre-tax free cash flows of US$132.7 million (post
tax US$102.6 million).
• Measured and Indicated Mineral Resources for the Guanaco-
Amancaya Operation are estimated to be 14.9 million tonnes
(Mt) grading 1.03 g/t Au and 5.89 g/t Ag.
• Proven and Probable Mineral Reserves for the Guanaco-Aman-
caya Operation are estimated to be 12.1 Mt grading 0.84 g/t Au
and 4.89 g/t Ag and containing 0.326 million ounces (Moz) Au
and 1.91 M oz Ag. The Heap Reprocessing material provides
the majority of the increase from previous estimates.
ii. Decrease in other expenses by US$6.9m to US$2.7m (FY21:
US$9.6m) mainly due to an impairment on investment in asso-
ciates of US$5.2m in FY21, and a decrease in the impairment
of exploration and evaluation expenditures to US$0.9m (FY21:
US$1.3m), including the impairment of the Cerro Blanco project
from the option agreement with Pampa Metals Corp.
FINANCIAL POSITION
The Group held cash and cash equivalents of US$0.9m at 31
December 2022 (2021: US$2.3m) or US$2.7m when combined with
the fair value of 900 unsold and unrefined gold equivalent ounces in
inventory of US$1.8m (2021: 1,400 unrefined gold equivalent ounces
with a fair value of US$2.5m).
iii. Decrease in net finance income by US$2.7m to US$0.2m (FY21:
US$3.0m) primarily due to a US$1.9m decrease in foreign
exchange gains to US$1.3m (FY21: US$3.2m) on the increase
in the value of the US dollar versus the Argentine and Chil-
ean currencies during FY22. The foreign exchange gains were
partially offset by US$0.4m from the increase in the present
value of the mine closure provisions (FY21: decrease of US$0.2
million) due to a decrease in the discount rate.
1 Technical Report on the Guanaco-Amancaya Operation, Antofagasta Region,
Chile Report for NI 43-101 dated 25 March 2022 and filed on 19 April 22 on
SEDAR under the Company’s profile at www.sedar.com and available on the
Company’s website at www.australgold.com.
Production for the year ended December 2022 decreased by
12.4% to 27,686 GEOs (26,507 gold ounces and 96,541 silver
ounces) from 31,142 GEOs (29,938 gold ounces and 87,050
silver ounces) during the year ended December 2021. The cost
of production (“C1”) per GEO increased to US$1,370 for the
year ended December 2022 from US$1,175 for the year ended
December 2021 while the all-in sustaining cost (“AISC”) per GEO
decreased to US$1,735 for the year ended December 2022 from
US$1,739 for the year ended December 2021. The increase in
costs of production were mainly due to lower average grades,
higher tonnes processed, and an increase in the cost of supplies
due to inflation.
Combined financial debt (borrowings and financial leases net of
cash & cash equivalents) increased by US$2.4m to US$10.6m at
31 December 2022 (31 December 2021: US$8.2m).
At 31 December 2022, the Group had net current liabilities of
US$7.5m (31 December 2021: US$2.8m). The increase from 31
December 2021 was mainly due to a decrease in gross profit on
sales that led to lower cash flow and an increase in trade and
other payables and short-term borrowings, which was partially
offset by the reclassification of the Pingüino project from non-
current assets held for sale (described below). The Group expects
its net current liability position to improve in FY23 mainly due to
an increase in production.
As described above, assets available for sale of US$8.3m were
reclassified from non-current assets as during November, the Group
entered into a Share Sale Agreement to sell SCRN Properties Ltd.,
owner of the Pingüino project and one of the Group’s companies
to E2 Metals Limited (ASX:E2M) for approximately US$10 million.
Trade and other receivables (current and non-current) increased
by US$0.5m to US$3.3m at 31 December 2022 (31 December
2021:US$2.9m). The increase was mainly due to receivables at
year end from the sale of equipment and spare parts at Casposo.
Austral Gold Limited
28
Annual Report 2022
Inventories decreased by US$1.7m to US$8.9m at 31 December
2022 (31 December 2021: US$10.6m) mainly due to a decrease in
materials and supplies and a decrease in the gold equivalent ounces
available for sale.
Prepaid income taxes (current and non-current) decreased by
US$2.7m to US$1.5m mainly due to the refund of taxes during
the year.
Current trade and other payables increased by US$5.4m to
US$15.7m at 31 December 2022 (31 December 2021: US$10.3m)
due to an increase in production costs, higher exploration in Q4
2022 and lower cash flow during the year. Non-current trade and
other payables were US$1.0m at 31 December 2022 (31 December
2021:US$nil) and represent the balance of the Group’s commitment
to incur US$2m on the Jaguelito project by August 2024.
Other financial assets decreased by US$1.1m from 31 December
2021 to US$0.6m (31 December 2021:US$1.7m) mainly due to the
variation in the value of the Group’s investment in shares of Pampa
Metals Corp. (CSE:PM).
Net assets decreased by US$8.3m from 31 December 2021 to
US$48.8m at 31 December 2022 (31 December 2021: US$57.1m)
following the net loss of the year.
CASH FLOW
During FY22, net cash provided from operating activities before
changes in working capital was US$2.7m (FY21: $4.4m) . After
considering changes in working capital, US$11.1m was provided
from operating activities (FY21:US$11.3m). The decrease was
primarily due to lower gross margins, partially offset by working
capital changes in FY22 as explained above.
Net cash used in investing activities decreased by US$6.8m to
US$11.7m during FY22 (FY21:US$18.5m) of which US$6.4m
were primarily used to fund additions to plant, property and equip-
ment (FY21:US$6.9m), and exploration and evaluation activities of
US$5.8m (FY21:US$8.4m).
Net cash used in financing activities decreased by US$2.1m to
US$0.8m during FY22 (FY21: US$2.9m) due to the net repayment
from interest, loans, borrowings and financial leases of US$0.8m
(FY21: net proceeds of US$0.3m). FY21 also included the payment
of a shareholder dividend totaling US$3.8m.
LIQUIDITY
Guidance
The Group forecasts 2023 production to increase to 34,000-38,000
GEOs due to annual production from the heaps reprocessing proj-
ect of 11,000-11,500 GEOs which it expects will start producing in
June 2023.
C1 is estimated at US$1,200-US$1,250 per GEO for 2023, with a
higher average C1 of US$1,450-US$1,500 during the first half of the
year mainly due to lower forecasted grades. During the second half
of the year, C1 is estimated to decrease to US$1,000-US$1,050 as
a result of lower costs of reprocessing material at the heaps.
Forecasted AISC for 2023 is estimated at US$1,400-US$1,450
per GEO, with higher average AISC costs of US$1,800-US$1,850
during the first half of the year and lower AISC costs of US$1,100-
US$1,150 during the second half of the year due to lower sustaining
capex required for the heaps operations.
Access to capital
The Group has a strong shareholder and has long standing bank-
ing relationships from which it expects it can obtain financing if
required. On 1 March 2023, the Group obtained a US$1M related
party loan.
Austral Gold Limited
29
Annual Report 2022
OUR
EXPLORATION
Austral Gold Limited
30
Annual Report 2022
TWO YEARS AGO, WE ESTABLISHED A NEW EXPLORATION
STRATEGY WHICH INCLUDES THE FOLLOWING:
Find high-sulfidation gold and silver deposits in a high quality land portfolio;
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
During FY22, the Group continued its search for new discoveries with brownfield and greenfield exploration activities undertaken at the
Company’s existing projects in Argentina and Chile including projects where the Company has option agreements.
MAIN ACTIVITIES FY22
1
2
3
4
CASPOSO-MANANTIALES PROJECT, ARGENTINA
During FY22, 6,585 metres DDH were drilled in 27 holes. There were two drilling programs during the year.
The first drilling program of 2022 of 2,321 meters were drilled in 12 diamond drill holes in Manantiales vein, La
Puerta, Awada and Fabiola targets. At the Manantiales vein high gold grades were intercepted, opening the
upside at depth and indicating the continuity of mineralisation in the south ore-shoot. The follow-up drilling
program at the Manantiales vein intercepted high gold grades at the top and bottom of the central ore-shoot,
indicating possible continuity at depth.
JAGUELITO PROJECT, ARGENTINA
(Option agreement)
As announced on 2 December 2022, a 5,000-metre drilling campaign began at the Jaguelito project in the San
Juan Province of Argentina as part of the first stage of the option agreement with Mexplort to acquire 50% of
the mining rights of the project.
SIERRA BLANCA PROJECT, ARGENTINA
(Option agreement)
During FY22, the first part of the second tranche to increase the Group’s participation from 51% to 80% was
completed by performing exploration activities totaling US$200,000 in the project. The remaining investment
for this tranche of US$400,000 is required by 15 September 2023 and is to include a minimum of 2,000 meters
of drilling.
MORROS BLANCOS PROJECT, CHILE
(Option Agreement)
As announced 28 April 2022, a phase I drilling campaign was completed with four of the five drillholes planned
at the Rosario del Alto target, totaling 1,020 meters. In addition, at the Morro Colorado target, delineation
confirmed the high-sulfidation features on the eastern block, where advanced argillic altered phreatomagmatic
rocks outcrop.
Austral Gold Limited
31
Annual Report 2022
EXPLORATION
IN CHILE
Austral Gold Limited
32
Annual Report 2022
EXPLORATION IN 2022
FOCUSED ON BROWNFIELD
AREAS IN THE SIERRA
INESPERADA (GUANACO)
DISTRICT / MORROS
BLANCOS/ CERRO
BUENOS AIRES.
GUANACO DISTRICT EXPLORATION
Sierra Inesperada Project, Chile
A combined RC and DDHH drilling campaign (phase III) was
completed with five drillholes. A zone with silver anomalies was
intercepted that suggests continuity at depth. No gold intercepts
of economic level were obtained. All drill holes crossed the phre-
atomagmatic complexes without reaching the feeder.
The most significant results obtained were:
RDIN-001:
• 6.0 meters @ 1.05 g/t gold and 2.7 g/t silver
• 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)
• 30.0 meters @ 21.6 g/t silver
• 60.0 meters @ 14.1 g/t silver
(including 6.0 meters @ 32.5 g/t silver)
At Morros Blancos, four diamond drill holes totaling 1,020 meters
were completed in three main phreatomagmatic complexes (Maar
Austral, Maar Central, Maar Oriental) identified in the delineation
stage at Rosario del Alto. All drill holes intercepted large columns
of phreatomagmatic rocks, confirming a high degree of preserva-
tion and continuity of the systems at depth. The phreatomagmatic
facies show a progression from crater-fill environments towards the
edges of the complexes. All recognized geological features such
as breccia rock type, hydrothermal alteration, and oxidation level
allow for vectoring towards the mineralised center of the system
in the next phase of drilling.
At the Morro Colorado target, delineation progressed where a ~2x1
km area with phreatomagmatic breccias affected by high-level
high sulfidation alteration was identified, developed in volcanic
sequences that include domes and blocks and ash deposits. This
structural block is in contact to the west with a domain character-
ized by lavas and numerous intrusive bodies, some of them with
evidence of porphyry-style alteration.
Cerro Buenos Aires Project, Chile
Five holes were drilled at the southern part of the property to
test the phreatomagmatic breccia boundaries related to CSAMT
anomalies in three targets defined in the delineation stage. Despite
having intercepted a large column of alteration, the results were
not significant. We plan to pursue the High Sulfidation targets in
the central and northern part of the property.
Austral Gold Limited
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EXPLORATION
IN ARGENTINA
Austral Gold Limited
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EXPLORATION IN 2022
FOCUSED ON BROWNFIELD
AREAS IN CASPOSO-
MANANTIALES, JAGUELITO
AND THE SIERRA BLANCA
PROJECTS
BACKGROUND
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%.
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.
Austral Gold Limited
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Annual Report 2022
SAN JUAN PROVINCE
CASPOSO-MANANTIALES PROJECT
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Annual Report 2022
Casposo-Manantiales Project
During FY22, 6,585 metres DDH were drilled in 27 holes. There were two drilling programs
during the year. The first drilling program of 2022 of 2,321 meters were drilled in 12 diamond
drill holes in Manantiales vein, La Puerta, Awada and Fabiola targets. At the Manantiales vein
high gold grades were intercepted, opening the upside at depth and indicating the continuity
of mineralisation in the south ore-shoot. The follow-up drilling program at the Manantiales
vein intercepted high gold grades at the top and bottom of the central ore-shoot, indicating
possible continuity at depth.
Best intercepts were at:
• MDH-02-60: 2.50 meters @ 9.73 g/t gold and 49 g/t silver
including: 0.90 meters @ 25.48 g/t gold and 125 g/t silver
• MDH-02-63: 4.40 meters @ 18.65 g/t gold and 58 g/t silver
• MDH-02-64: 2.35 meters @ 15.61 g/t gold and 81 g/t silver
• MDH-02-60: 2.50 meters @ 9.73 g/t gold and 49 g/t silver
• MDH-22-72: 6.10 m @ 11.77 gpt gold and 10.0 gpt silver
(including: 1.10 m @ 54.03 gpt gold and 21.40 gpt silver)
• MDH-22-68: 2.40 m @ 7.39 gpt gold and 18.0 gpt silver
(including: 1.30 m @ 12.93 gpt gold and 22.30 gpt silver)
Austral Gold Limited
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SAN JUAN PROVINCE
JAGUELITO PROJECT
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Annual Report 2022
Jaguelito Project
The Jaguelito project is an advanced exploration stage project located in located in one
of the main districts of precious metals worldwide; the El Indio – Pascua Lama district in
the Province of San Juan, Argentina. Its deposits, of the high sulfidation epithermal type
of Miocene age, include mines in production, construction and exploration. The Jaguelito
project covers an area of 11,000 approximately hectares, and over 150 holes (~30,000m)
were drilled by previous owners (Minera Peñoles, Minera IRL) between 1996 and 2009.
It is located approximately 225 kilometers northwest of the city of San Juan in Valle del
Cura, Iglesias Department, San Juan Province, Argentina. Its central coordinates are 29°
46’ 20” West Latitude, 69° 38’ 15 South Longitude and a variable altitude between 3,600
and 4,300 meters above sea level. Jagüelito is a high sulfidation epithermal deposit related
to a Miocene volcanism hosted in basement of Permo-Triassic age. Its mineralisation is
related to a hydrothermal system controlled by northeast-southwest oriented faults and
hosted in porouspermeable volcaniclastic units. These rocks allowed the circulation of
precursor acidic hydrothermal fluids that strongly altered the rocks through which they
circulated, generating a secondary porosity or vuggy silica, in the alteration cores. The high
porosity product of the alteration served as a conduit for the posthumous hydrothermal
fluids responsible for the mineralization of gold and silver.
Jaguelito represents a key pillar in Austral’s strategy to find High-Sulphidation projects
in mining friendly jurisdictions.
During December 2022, the company began a 5,000 meter drilling campaign at the
Jaguelito project in the San Juan Province of Argentina as part of the first stage of the
option agreement with Mexplort to acquire 50% of the project.
Drilling program overview:
We plan to complete the First Stage of approximately 5,000m of diamond drilling (DDH)
in 15 to 20 holes at Jaguelito Norte and Jaguelito Sur.
• At Jaguelito Norte, five drilling targets have been identified and in this stage at least three
targets are expected to be tested with 3,500 meters of DDH drilling. The program intends
to prioritise the Capote - Alcatraz sector under a new concept of gold ore control related
to northwest direction and to drill the La Cuña maar-diatreme complex, which we recently
identified as the main or major control of the hydrothermal system in the area. The third
target corresponds to the satellite body of the Guanaco Breccia.
• At Jaguelito Sur, preliminary work has identified five structures related to phreatomag-
matic activity that may control the alteration and possibly mineralisation in that sector.
Progress is being made in the delineation process and our objective is to define drilling
targets to be tested with 1,500 meters of drilling.
Austral Gold Limited
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Annual Report 2022
SANTA CRUZ PROVINCE
PINGÜINO PROJECT
SIERRA BLANCA PROJECT
Pingüino Project
On 1 March 2023, the Group sold 100% of the common shares of SCRN Properties Limited (“SCRN”), owner of the Pingüino project
to E2 Metals Limited (“E2”) (ASX:E2M).
Austral Gold Limited
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Annual Report 2022
During FY20, 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.
Sierra Blanca Project
FY21 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.
During FY22 work commitments of US$200,000 were completed,
as required under the first part of the second tranche of the Option.
The main activities were performed towards achievement of the
following goals: (i) complete district delineation and targeting
process to define drilling targets, (ii) revisit Vetarron area to iden-
tify new ore controls for additional drilling, (iii) remodel Chala and
Lucila veins to identify the potential extension and the upside in
depth, and (iv) complete the field evaluation of the Aster anomalies
and define a delineation program. The Company also conducted
spectrometric validation using talus fines and field samples in
addition to the reprocessing of historical geophysics.
An additional US$400,000 in exploration activities is required to
be incurred, including a 2,000 meter drilling campaign before the
end of Q3 2023 to increase our equity in the project from 51% to
80%. Further details of the agreement are disclosed in note 21 of
the 2022 financial statements.
Austral Gold Limited
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Annual Report 2022
EQUITY
INVESTMENTS
Austral Gold Limited
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Annual Report 2022
RAWHIDE MINE / ENSIGN
GOLD / PAMPA METALS
RAWHIDE
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.
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.
Background
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.
Rawhide Acquisition Holding LLC
The Group’s interest in the LLC is 24.74%. During 2021, the Group
impaired 100% of its investment in Rawhide due to its concerns
about Rawhide’s ability to fund its operations.
During 2022, Rawhide processed ore from its heaps. Rawhide is
currently working with its major debtor to restructure the business.
Austral Gold Limited
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Annual Report 2022
USA
MERCUR PROJECT
Austral Gold Limited
44
Annual Report 2022
ENSIGN MINERALS
As disclosed in note 22.2 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 consist-
ing 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
issuances during 2021 and 2022, the Group’s interest in Ensign at 31 December 2022 was reduced to 11.91% (31
December 2021-11.93%) Ensign requires funds 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 Group that during the 2021 field season, it drilled a total of 55 holes at the Mercur project, rang-
ing 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 drilling. 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.
Ensign advised the Group of the following activities during 2022:
• the 2022 exploration drill program commenced on June 5, 2022 and 10 core holes (1,778m) and 37 reverse
circulation holes (6,498m) were completed during the year.
• continued work on the updated resource model for Main and South Mercur and expect to finalise it in the first
quarter of 2023.
• continued discussions on various avenues to raise capital and belives it will be in a better position to raise capital
to fund an exploration program in 2023 following the release of the updated resource model. In addition, Ensign
continues to monitor the market for the potential to do an IPO.
PAMPA METALS CORP. (“PAMPA”)
The Company acquired shares in Pampa through the acquisition of Revelo Resources Corp. in February 2021. As of
31 December 2022, the Company held ~3.8 million shares of Pampa.
Pampa is a Canadian company listed on the Canadian Stock Exchange (CSE: PM) as well as the Frankfurt (FSE: FIRA)
and OTC (OTCQB®: PMMCF) exchanges. Pampa Metals owns a highly prospective, wholly owned, 47,400-hectare
portfolio of seven projects for copper, molybdenum and gold located along proven mineral belts in Chile, one of
the world’s top mining jurisdictions. In addition, the Company has an option agreement with Pampa as described
in note 21 to the financial statements.
Austral Gold Limited
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Annual Report 2022
DIRECTORS’
REPORT
Austral Gold Limited
46
Annual Report 2022
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 finan-
cial management.
Austral Gold Limited
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Annual Report 2022
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 Chair 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 Chair 2011 until August 2020
when he became Vice Chair
Austral Gold Limited
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Annual Report 2022
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
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Annual Report 2022
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
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Annual Report 2022
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
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Annual Report 2022
SENIOR MANAGEMENT
AND COMPANY SECRETARY
RODRIGO RAMIREZ
Vice President of Operations
RAUL GUERRA
Vice President of Exploration
JOSÉ BORDOGNA
Chief Financial Officer
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 from August 2020
until his resignation effective 31 January 2023.
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 and his
reappointment effective 1 May 2022.
Ms. Sheridan assumed the role of Company Secretary in August 2022. Ms.
Sheridan joined the Automic Group in January 2019 and has assisted the
former Company Secretary since starting with Automic. Ms. Sheridan holds
a diploma in Business Administration and an Affiliate of the Governance
Institute of Australia (GIA).
Corporate secretary since 31 August 2022
CHELSEA SHERIDAN
Automic Group, Company Secretary
Austral Gold Limited
52
Annual Report 2022
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 is based on market rates and is not
directly linked to the market value of the shares of Austral Gold.
At the most recent Annual General Meeting of the Company held
on 27 May 2022, 85.83% of votes cast at the meeting were in
favour of the adoption of the Remuneration Report.
Remuneration information for KMP is reported in US Dollars (US$).
All contractual arrangements for non-executive Directors and
the Chairman are denominated in US Dollars. The contractual
arrangements for the CEO, Vice President of Operations and Vice
President of Exploration are denominated in Chilean pesos (CLP)
while the contractual arrangement for the CFO is denominated in
Australian Dollars (AUD).
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.
The executive directors do not receive fees for being a director.
Total compensation for all non-executive directors, last voted on
by shareholders at the 2020 AGM, is not to exceed US$400,000
per annum. The director fee for the Vice-Chairman is US$100,000
per annum. Director fees for other non-executive directors are
US$50,000 per annum.
Non-executive directors do not receive performance-related
compensation and are not provided with retirement benefits apart
from statutory superannuation for Australian Total KMP (including
directors) in FY22 was US$2,444,080 (FY21-US$2,394,409).
DAVID HWANG
Mr. Hwang assumed the role of Company Secretary in July 2019
and resigned in August 2022 due to his resignation to Automic
Group. Mr. Hwang is an experienced corporate lawyer specialising
in listings on the ASX, equity capital markets and providing advice
on corporate governance and compliance issues.
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
5
4
4
4
5
5
5
B
5
5
5
5
5
5
5
A
3
3
N/A
N/A
N/A
N/A
3
B
3
3
N/A
N/A
N/A
N/A
3
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
53
Annual Report 2022
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 Chair
• Eduardo Elsztain
Non-Executive Vice Chair
• 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 (resigned effective 31 January 2023)
• José Bordogna
Chief Financial Officer
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 (‘at risk’) component. Performance is assessed
against financial 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 2022” 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.
12 months ended
31 December
2018
12 months ended
30 June
2019
12 months ended
31 December
2020
12 months ended
31 December
2021
12 months ended
31 December
2022
Sales Revenue
(US$’000)
Profit/(loss) before
tax (US$’000)
Basic EPS
(US cents per share)
Diluted EPS
(US cents per share)
Share price
(cents AUD/CDN)
Dividend
(cents AUD per
share)
122,767
102,209
88,223
64,390
49,710
(37,054)
9,508
14,335
(4,686)
(9,581)
(4.88)
0.97
1.36
(1.20)
(1.35)
(4.88)
0.93
1.34
(1.20)
(1.35)
6.0/6.0
9.0/8.5
21.0/22.0
8.5/8.0
0.039/0.035
–
–
0.009
0.008
-
Austral Gold Limited
54
Annual Report 2022
Details of Remuneration
Details of the nature and amount of each major element of the remuneration of each Director of the Group and each of the KMP of the
Group during the financial year were:
Twelve month period ended 31 December 2022
Primary
Post-employment
Share-based
Total
Cash and
accrued
Salary and
Fees
US$
Accrued
Cash
Bonus
US$1
Non-
monetary
benefits
US$
Superannuation
US$
Retirement/
Termination
benefits
US$
Equity
settled
Shares
US$
Options
US$
US$
E Elsztain
100,000
S Zang
R Trzebski
B Jarvis
50,000
45,347
45,347
P Vergara del Carril
50,000
Total non-
executive director
remuneration
290,694
W Hubert
144,000
-
-
-
-
-
-
-
Directors
Non-executive directors
293
293
4,352
-
-
-
-
4,653
4,653
-
4,938
9,306
Executive Director
-
-
-
S Kasaneva
337,750
352,236
26,911
Total Director
remuneration
772,444
352,236
31,849
9,306
Other Key Executives
R. Ramirez
273,503
284,350
8,104
R. Guerra3
245,038
127,005
14,884
-
-
J. Bordogna4
181,159
130,080
1,945
12,177
Total other
executive
remuneration
Total director and
executive officer
remuneration
699,700
541,435
24,933
12,177
1,472,144
893,671
56,782
21,483
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,293
50,293
54,352
50,000
50,000
304,938
144,000
716,897
1,165,835
565,957
386,927
325,361
1,287,245
2,444,080
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 Mr. Guerra resigned effective 31 January 2023. Per his settlement agreement, Mr. Guerra is to receive his 2022 bonus, a 2023 bonus of US$11,859, an exit bonus of
US$71,762 and US$10,081 of vacation owed net of assets purchased of US3,108. The amount is to be paid in six equal monthly installments in Chilean pesos commencing
February 2023 and ending July 2023.
4 Mr. Bordogna resigned effective 28 February 2022 and was re-hired effective 1 May 2022. During the period between Mr. Bordogna’s resignation and his employment
contract, Mr. Bordogna received US$8,000 in consulting fees which are included in the above remuneration.
Austral Gold Limited
55
Annual Report 2022
Twelve-month period ended 31 December 2021
Cash and
accrued
Salary and
Fees US$
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
295
291
–
–
4,511
4,438
–
–
4,438
–
5,097
8,876
Executive director
–
E Elsztain
100,000
S Zang
50,000
R Trzebski
45,562
B Jarvis
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 Guerra3
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 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
56
Annual Report 2022
Contractual Arrangement with Executive KMP at 31 December 2022
The table below represents the target remuneration mix for group executives in the current year. The variable remuneration is provided
at target levels.
Name
Term of Agreement
and notice period
Notice Period by
Either Party
Base
salary
Bonus performance
Bonus performance
conditions
Termination
payments
Stabro Kasaneva
Chief Executive
Officer
Rodrigo Ramirez
VP of Operations
Open
30 days
Base salary is paid in
Chilean pesos with no
FX adjustment clause
0% to 100%
of salary
Open
30 days
Base salary is paid in
Chilean pesos with no
FX adjustment clause
0% to 100%
of salary
Raul Guerra
VP of Exploration
Open
30 days
Base salary is paid in
Chilean pesos with no
FX adjustment clause
0% to 50% of salary
Jose Bordogna
Chief Financial
Officer
Open
1 month
Base salary is paid
in Australian dollars
with no FX adjustment
clause
0% to 100%
of salary
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
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, which
included various
financial objectives
related to marketing,
capital markets, funding
resources, financial
reporting and risk
management
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 2022 December 2021 December 2022 December 2021 December 2022 December 2021
47%
48%
63%
54%
Executive Directors
53%
Executive Officers
52%
37%
46%
44%
52%
69%
54%
56%
48%
31%
46%
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:
Wayne Hubert
Eduardo Elsztain
Saul Zang
Pablo Vergara
Robert Trzebski
Ben Jarvis
Stabro Kasaneva
Raul Guerra
Rodrigo Ramirez
Jose Bordogna
Total
Balance at 1
January 2022
2,545,500
461,294,560
1,640,763
68,119
-
250,000
7,881,230
801,000
279,514
45,724
474,806,410
Granted as
remuneration
Market purchases
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80,771
80,771
Balance at 31
December 2022
2,545,500
461,294,560
1,640,763
68,119
-
250,000
7,881,230
801,000
279,514
126,495
474,887,181
Austral Gold Limited
57
Annual Report 2022
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 395,000
stock options and Mr. Kasaneva holds nil shares of Ensign and
150,000 stock options.
Zang, Bergel & Viñes Abogados is a related party since one non-
executive Director, Pablo Vergara del Carril has significant influ-
ence over this law firm based in Buenos Aires, Argentina. Fees
charged and expenses to reimbursement to the Group for the
year ended 31 December 2022 amounted to US$79,219 (2021:
US$112,458).
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 2022 a total of US$72,303 was charged to the Company (2021:
US$68,071) 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 FY22 were:
• Production of 27,686 gold equivalent ounces at the Group’s
Guanaco/ Amancaya mine complex;
• Issued an updated Technical Report that increased the esti-
mated life of mine of the Guanaco-Amancaya Operation in
accordance with NI-43-101 and JORC 2012;
• Started the construction of the Heap Reprocessing project that
is expected to provide ten years of production;
• Continued its search for new discoveries with brownfield and
greenfield exploration activity undertaken at the Company’s
existing projects in Argentina and Chile, which included more
than 7,000 meters of drilling at the Casposo-Manantiales
project;
• Expanded the footprint in the Indio Belt in Argentina through an
earn-in agreement with Mexplort Perforaciones Mineras S.A.
(“Mexplort”), a subsidiary of Corporación América International
(“Corporación América”) controlled by Mr. Eduardo Eurnekian (a
prominent businessman from Argentina) to acquire a 50% inter-
est in the Jaguelito project, located in the Province of San Juan;
• Signed a Share Sale Agreement with E2 Metals Limtied (“E2”)
to sell SCRN Properties Limited (“SCRN”), the owner of the
Pingüino project, for a total consideration of approximately
US$10 million.
• There were no other significant changes in our principal activi-
ties during the year.
Objectives
The group’s objectives for 2023 are to:
• Meet or exceed our production forecast of 34,000-38,000 gold
equivalent ounces
• Continue to explore the Paleocene Belt’s High Sulfidation
systems in Northern Chile to find a significant deposit,
• Continue to explore our Casposo-Manantiales properties in
San Juan, Argentina to restart profitable mining operations, and
• Continue to explore the Jaguelito project in San Juan and Sierra
Blanca in Santa Cruz, Argentina.
Events subsequent to reporting date
Effective 31 January 2023, the Group’s Vice President of Explora-
tion Raul Guerra resigned.
On 1 March 2023, the Group executed a loan agreement of US$1
million from two of its directors, with Eduardo Elsztain, the control-
ling shareholder loaning US$850,000.
Likely developments
The Group will continue to pursue its objectives for 2023.
Environmental
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 qual-
ity, 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 25 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 2022 (2021: 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 auditor; 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.
Dividends
No dividends were paid to shareholders during the year.
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.
Austral Gold Limited
58
Annual Report 2022
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the period ended
31 December 2022 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
2023 objectives described on page 58.
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
30 March 2023
Austral Gold Limited
59
Annual Report 2022
Austral Gold Limited
60
Annual Report 2022
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 2022 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.KPMG Jessica Dillon Partner Sydney 30 March 2023 Austral Gold Limited
61
Annual Report 2022
FINANCIAL
STATEMENTS
Austral Gold Limited
62
Annual Report 2022
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are reported in thousands of US$
Continuing operations
Sales revenue
Cost of sales (including depreciation and amortisation)
Gross profit
Other expenses
Administration expenses
Finance income
Finance costs
Share of loss of associates
(Loss) before income tax
Income tax benefit (expense)
(Loss) after income tax expense
(Loss) 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) for the year
Comprehensive (loss) attributable to:
Owners of the Company
Non-controlling interests
(Loss) per share (cents per share):
Basic (loss) per share
Diluted (loss) per share
The notes on pages (67) to (99) are an integral part of these consolidated financial statements.
For the year ended 31 December
Note
2022
2021
13
6
7
8
9
9
22
11
12
12
49,710
(47,144)
2,566
(2,676)
(9,007)
1,292
(1,080)
(676)
(9,581)
1,315
(8,266)
(8,257)
(9)
(8,266)
(17)
(8,283)
(8,274)
(9)
(8,283)
(1.35)
(1.35)
64,390
(52,120)
12,270
(9,578)
(9,393)
3,199
(238)
(946)
(4,686)
(2,642)
(7,328)
(7,324)
(4)
(7,328)
(69)
(7,397)
(7,393)
(4)
(7,397)
(1.20)
(1.20)
Austral Gold Limited
63
Annual Report 2022
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
All figures are reported in thousands of US$
As at 31 December
Note
2022
2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepaid income tax
Other financial assets
Inventories
Assets held for sale
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
Trade and other payables
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
15
16
17
18
15
19
20
21
22
11
23
24
26
20
23
25
26
20
24
11
27
28
29
30
926
2,422
1,076
641
8,946
8,294
2,346
1,818
3,510
1,717
10,601
-
22,305
19,992
904
476
4,054
42,257
27,261
60
-
75,012
97,317
1,054
750
1,217
42,007
32,322
628
20
77,998
97,990
15,690
10,263
770
4,053
7,382
1,925
-
4,224
5,338
2,920
29,820
22,745
1,003
10,934
1,264
911
35
4,535
18,682
48,502
48,815
-
9,233
415
1,843
9
6,647
18,147
40,892
57,098
109,114
109,114
(59,320)
(1,158)
179
48,815
(51,063)
(1,141)
188
57,098
The notes on pages (67) to (99) are an integral part of these consolidated financial statements.
Austral Gold Limited
64
Annual Report 2022
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the years ended 31 December 2022 and 2021
All figures are reported
in thousands of US$
Note
Issued
capital
Accumulated
losses
Reserves
Balance at 31 December 2020
102,177
(43,871)
2,962
Loss for the year
Expired share options
Foreign exchange movements from
translation of financial statements to US$
Total comprehensive income/ (loss)
Windup of Cachinalito Limitada
Acquisition of Sierra Blanca
Issued Capital
Options expired unexercised
Dividends paid
-
-
-
-
-
-
27
6,937
-
-
(7,324)
(321)
-
(7,645)
453
-
-
-
-
Balance at 31 December 2021
109,114
(51,063)
Balance at 31 December 2021
109,114
Loss for the year
Foreign exchange movements from
translation of financial statements to US$
Total comprehensive (loss)
Balance at 31 December 2022
-
-
-
109,114
(51,063)
(8,257)
-
(8,257)
(59,320)
The notes on pages (67) to (99) are an integral part of these consolidated financial statements
Non-
controlling
interest
-
(4)
-
-
Total
61,268
(7,328)
-
(69)
(4)
(7,397)
-
192
-
-
-
188
188
(9)
-
(9)
192
6,829
(4)
(3,790)
57,098
57,098
(8,266)
(17)
(8,283)
48,815
-
321
(69)
252
(453)
-
(108)
(4)
(3,790)
(1,141)
(1,141)
-
(17)
(17)
(1,158)
179
Austral Gold Limited
65
Annual Report 2022
AUSTRAL GOLD LIMITED FINANCIAL REPORT 2022
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 year
Cash and cash equivalents, at the end of the year
Net decrease in cash and cash equivalents
Causes of change in cash and cash equivalents
Operating activities
Loss after income tax
Adjustments for
Income tax benefit/(expense) recognized in loss
Income tax collection / (payments), net
Impairment of exploration and evaluation expenditure
Impairment of investment in associate
Depreciation and amortisation
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 entitlements
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 in inventory
(Increase) /decrease in trade and other receivables
Increase /(decrease) in trade and other payables
(Decrease)/Increase 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 other financial assets
Cash paid to acquire Revelo
Cash acquired in Revelo acquisition
Proceeds from sale of other financial assets
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 in cash and cash equivalents
The notes on pages (67) to (99) are an integral part of these consolidated financial statements
For the year ended 31 December
Note
2022
2021
2,346
926
(1,420)
12,401
2,346
(10,055)
(8,266)
(7,328)
22.1
20
21
19
22
16
35
35
32
(1,315)
2,134
926
-
7,778
(485)
1,089
(1,096)
-
238
27
676
968
2,674
1,655
(690)
7,626
(172)
11,093
(6,434)
535
(5,790)
(30)
(124)
(27)
-
-
135
(11,735)
11,735
(8,842)
(330)
(3,133)
(208)
-
-
-
(778)
(1,420)
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
(18,471)
4,513
(839)
(141)
(3,032)
(244)
656
(17)
(3,790)
(2,894)
(10,055)
Austral Gold Limited
66
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY
Austral Gold Limited (“the Company”) is a 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 2022 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 annual financial statements of the Group as at and for the year ended 31 December 2021 are available
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 financial statements are general purpose financial statements which have been prepared in accordance with Austra-
lian 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. They were
authorised for issue by the Company’s Board of Directors on 30 March 2023.
Details of the Group’s accounting policies are described in Note 40.
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 36.
3. GOING CONCERN
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal busi-
ness activities and the realisation of assets and settlements of liabilities in the ordinary course of business. For the year
ended 31 December 2022, the market fundamentals of gold and silver remained strong and the Group produced 27,686
gold equivalent ounces with sales revenue totaling US$49.710 million from sales of 27,648 gold equivalent ounces at
an average selling price per ounce of US$1,798 (year ended 31 December 2021: production of 31,142 gold equivalent
ounces and sales revenue of US$64.390 million from sales of 35,838 gold equivalent ounces at an average selling price
per ounce of US$1,797 including the sale of 4,010 gold equivalent ounces produced in the previous year).
During the year ended 31 December 2022, the Group incurred a net loss after tax of US$8.266 million (year ended 31
December 2021: US$7.328 million net loss after income tax) with net cash flows of US$11.093 million in 2022 (2021:
US$11.310 million) generated through operating activities. At 31 December 2022, the Group has net assets of US$
48.815 million and net current liabilities of US$7.515 million (31 December 2021: US$57.098 million and US$2.753
million, respectively). For the year ended 31 December 2022, the net increase of loans and borrowings was US$2.893
million (2021: US$3.674 million).
The Directors have prepared cashflow forecasts underpinning the basis of preparation as a going concern. These include
acknowledgement of the intrinsic operational risks of the business, the existing cash position of the Group, the ongoing
loan repayment requirements and the strategy to further support capital investment at the Amancaya/Guanaco mine
and other exploration and investment activities.
The 12 month cashflow forecast underpins the basis of preparation of the Group as a going concern and are dependent
on a combination of the following main assumptions:
• Continued support of existing financiers for short term and longer-term financing through the renewal of existing 360
days and 180 days pre-export facilities maturing in 2023;
• Source new financing of US$1.0M from related parties on 1 March 2023 (completed) and continued ongoing funding
support as required;
• Continued cash management controls including supply chain financing arrangements with trade creditors to defer
payment terms as required;
• Production from the heaps processing project forecast to commence in June 2023. For the financial year ended 31
December 2023, 11,000 – 11,500 gold equivalent ounces (‘GEOs’) are forecast to be produced at lower production
costs than from the Amancaya underground mine;
Austral Gold Limited
67
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
• Average 2023 prices realised per gold equivalent ounce of approximately US$1,800;
• Sale of SCRN Properties Ltd. owner of the Pingüino project (completed) - the Group received cash of US$2.5M on 1
March 2023 and an additional $2.5m is forecast to be received in 2024-2025;
• Sale of other non-core plant and equipment; and
• Deferral of certain exploration expenditures.
The going concern basis presumes that a combination of the above funding and operational solutions, as deemed
appropriate by the Directors, will be achieved and that the realisation of assets and settlement of liabilities will occur in
the normal course of business. The combined effect of the above represents a material uncertainty as to whether the
Group would continue as a going concern.
The Directors of the Group consider it appropriate that the Group will continue to fulfil all obligations as and when they
fall due for the foreseeable future and accordingly consider that the Group’s financial statements should be prepared on
a going concern basis. Accordingly, no adjustments have been made to the financial report relating to the recoverability
and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary
should the Group not continue as a going concern.
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 2022 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 25), 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 19).
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 “Exploration
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 25.
Austral Gold Limited
68
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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 2022 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
ii. 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)
iii. Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
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 2 of the fair value hierarchy.
Further information about the assumptions made in measuring fair values is included in Note 31 — 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
Royalty
Mining Fees
Gold precipitate stolen
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
Total cost of sales
Severance included in staff costs
For the year ended 31 December
2022
26,864
9,307
1,134
594
838
736
39,473
6,663
1,008
7,671
47,144
467
2021
23,535
10,668
1,480
576
-
3,615
39,874
10,122
2,124
12,246
52,120
453
Austral Gold Limited
69
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
7. OTHER EXPENSES/(INCOME)
All figures are reported in thousands of US$
Severance of mining employees due to outsource of operations
Impairment of exploration and evaluation expenditure (note 21)
Impairment of investment in associates (note 22.1)
Care and maintenance
Exploration expenses
Loss on financial assets
Gain on sale of equipment
Equipment rental
Other
Total other expenses/(income)
8. ADMINISTRATION EXPENSES
All figures are reported in thousands of US$
Consulting and professional services
Office and utility costs
Staff costs (1)
Non-executive director fees
Depreciation on equipment
Business, property and other taxes
Other
Total administration expenses
(1) Severance included in staff costs
9. NET FINANCE INCOME/COST
All figures are reported in thousands of US$
Interest income
Gain from foreign exchange
Total finance income
Interest expense
Interest expense on leases
Present value adjustment to mine closure provision
Total finance costs
Net finance income
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
For the year ended 31 December
2022
-
926
-
1,465
421
968
(485)
(298)
(321)
2,676
2021
487
1,322
5,189
1,559
851
512
(287)
-
(55)
9,578
For the year ended 31 December
2022
1,728
834
4,869
300
107
980
189
9,007
493
2021
1,995
1,030
4,212
300
157
1,457
242
9,393
-
For the year ended 31 December
2022
4
1,288
1,292
(452)
(208)
(420)
(1,080)
212
2021
-
3,199
3,199
(194)
(283)
239
(238)
2,961
For the year ended 31 December
2022
2021
113,343
99,200
212,543
85,512
136,215
221,727
Austral Gold Limited
70
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
11. INCOME TAX EXPENSE
All figures are reported in thousands of US$
(A) Income tax expense comprises:
Current income tax expense
Deferred income tax (benefit)/expense
Income tax
(B) Reconciliation of effective income tax rate:
Loss 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
Prior year income tax expense adjustments
Recognition of previously unrecognised deductible temporary differences and tax losses
Income tax
* Chile tax rate: 27% (31 December 2021: 27.0%). Argentina tax rate: 30-25% (31 December 2021: 25%)
For the year ended 31 December
2022
777
(2,092)
(1,315)
(9,581)
(2,874)
1,008
-
186
(921)
690
596
(1,315)
2021
75
2,567
2,642
(4,686)
(1,406)
(181)
1,557
261
1,587
69
755
2,642
All figures are reported
in thousands of US$
(C) Deferred tax assets and liabilities
31 December 2022
31 December 2021
Chile
Argentina
Other
Total
Chile
Argentina
Other
Total
224
69
-
1,932
650
5,860
-
268
-
177
-
44
45
686
-
631
-
-
191
-
-
-
-
-
-
224
113
45
2,618
650
7,226
13,717
-
-
-
-
-
268
191
177
71
69
-
1,517
540
3,239
-
280
-
511
-
77
78
438*
-
725*
521*
-
544*
1
-
-
-
-
-
71
146
78
1,955
540
7,628*
11,592
-
-
-
-
521
280
544
512
-
(1,550)
(7,226)
(8,776)
-
(1,752)*
(7,590)*
(9,342)
9,180
47
-
9,227
6,227
632
38
6,897
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
Allowance for tax carry forward
losses and deferred tax assets
Deferred tax assets
Deferred tax liabilities
Mining concessions
Deferred income
Property, plant and equipment
inflation adjustment
(12,512)
(774)
-
-
-
(415)
(415)
(368)
20
(8)
(380)
(368)
-
-
(61)
(61)
(61)
(12,512)
(12,809)
(774)
(476)
(45)
-
(13,762)
(12,854)
(4,535)
(6,627)
(20)
(6,627)
(4,403)
8
(49)
(61)
-
-
2,092
(2,224)
(4,535)
(6,627)
-
-
(612)
(612)
20
432
(75)
(337)
20
-
-
(58)
(58)
(20)
(12,809)
(45)
(670)
(13,524)
(6,627)
(23)
(3,994)
9
(6)
(66)
(2,567)
(20)
(6,627)
Deferred tax liabilities
(13,286)
Net deferred tax (liabilities)/assets
(4,106)
Movement in deferred tax balances
Opening balance
Exchange rate difference
Charged to profit or loss
Closing balance
(6,627)
-
2,521
(4,106)
Deferred tax assets have not been recognised in respect to tax losses for certain entities of the Group. See Note 38 for details.
* During the year ended 31 December 2022, the Group updated the amounts of certain 2021 accounts to better reflect the nature of the items.
Austral Gold Limited
71
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
12. EARNINGS PER SHARE
All figures are reported in thousands of US$
Net 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)
13. OPERATING SEGMENTS
For the year ended 31 December
2022
2021
(8,257)
(7,324)
612,311,353
612,311,353
600,584,618
600,584,618
(1.35)
(1.35)
(1.20)
(1.20)
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 identified
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 2022, the Group
earned 95% of its consolidated revenue from sales made to one customer (2021-100% 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 2022
For the year ended 31 December 2021
Guanaco/
Amancaya
Casposo
Group and
unallocated
items
Consolidated
Guanaco/
Amancaya
Casposo
Group and
unallocated
items
Consolidated
47,772
1,938
(39,473)
(7,671)
(1,290)
(4,791)
-
-
-
-
(395)
(666)
-
-
-
-
47,772
1,938
62,243
2,147
(39,473)
(39,874)
(7,671)
(12,246)
-
-
-
-
-
-
-
-
62,243
2,147
(39,874)
(12,246)
(991)
(2,676)
(1,578)
(1,891)
(6,109)1
(9,578)
(3,550)
(9,007)
(4,375)
(629)
(4,389)
(9,393)
(1,183)
730
665
212
1,270
1,851
(160)
2,961
-
-
(676)
(676)
-
-
(946)
(946)
1,822
(380)
(127)
1,315
(2,308)
(336)
2
(2,642)
(2,876)
(711)
(4,679)
(8,266)
5,279
(1,005)
(11,602)
(7,328)
Segment assets
Segment liabilities
64,518
39,708
15,332
5,783
17,467
3,011
97,317
48,502
68,033
35,733
13,027
4,265
Capital
expenditure
8,780
2,864
2,211
13,855
14,143
1,258
16,930
894
365
97,990
40,892
15,766
Austral Gold Limited
72
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
Geographic information:
All figures are reported in thousands of US$
Revenue by geographic location
Chile
Argentina
Australia
Canada
United States
Total revenue
All figures are reported in thousands of US$
Non-current assets by geographic location
Chile
Argentina
United States
Canada
British Virgin Islands
Australia
Total revenue
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
For the year ended 31 December
2022
2021
49,710
64,390
-
-
-
-
-
-
-
-
49,710
64,390
As at 31 December
2022
2021
60,074
14,768
60
-
110
-
58,650
18,610
628
-
110
-
75,012
77,998
As at 31 December
2022
926
-
926
2021
2,346
-
2,346
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
926
2,346
Risk Exposure
The Group’s exposure to interest rate risk is discussed in note 31. 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. TRADE AND OTHER RECEIVABLES
All figures are reported in thousands of US$
Current
Trade Receivables
Other current receivables
GST/VAT receivable
Total current receivables
Non-current
GST/VAT receivable
Other
Total non-current receivables
Allowance for doubtful accounts
Net non-current receivables
Trade debtors
The ageing of trade receivables is 0-30 days
>30 days
As at 31 December
2022
2021
808
611
1,003
2,422
1,117
339
1,456
(552)
904
808
-
86
212
1,520
1,818
1,022
346
1,368
(314)
1,054
86
-
Austral Gold Limited
73
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
15.1 Past due but not impaired
There were no receivables past due at 31 December 2022 (31 December 2021: nil).
15.2 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 31 for more information on the risk management policy of the Group and the credit quality of the receivables.
15.3 Key customers
The Group is reliant on two customers to which gold and silver produced from the Guanaco/Amancaya mines are sold.
The major customer purchased 95% (2021-60%) of sales and the other customers purchased the remaining 5% of
sales (2021-40%).
16. 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
2022
2021
23
590
28
-
641
32
1,543
86
56
1,717
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 Canadian listed mining companies nominated in C$ and sovereign
bonds nominated in ARS as at 31 December 2022 and 31 December 2021, 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 2022 there were no transfers between the financial instrument levels of hierarchy.
Key assumptions for warrants
Strike price
Annual volatility
Interest rate
Expiration date
17. INVENTORIES
All figures are reported in thousands of US$
Materials and supplies
Ore stocks
Gold bullion and gold in process
Total inventories
Ensign
C$1.50
55%
0.20%
18 February 2024
As at 31 December
2022
7,167
274
1,505
8,946
2021
8,086
132
2,383
10,601
* 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 2021:US$1,572k).
18. ASSETS FOR SALE
All figures are reported in thousands of US$
Transfers from property, plant and equipment
Transfers from exploration and evaluation expenditures
Assets held for sale
As at 31 December
2022
951
7,343
8,294
2021
-
-
-
On 25 November 2022, the Group entered into a Share Sale Agreement with E2 Metals Limited (“E2”) to sell the common
shares of its subsidiary, SCRN Properties Ltd., whose major assets are exploration assets and property and equipment.
As closing of the transaction is subject to several conditions including E2 shareholder approval of the total shares and
options to be issued by E2, the Group recorded the transaction as an asset held for sale at its carrying value.
Austral Gold Limited
74
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
All conditions for closing were met and the sale was completed on 1 March 2023.
On closing, the Group received US$2.5M of a total of US$5.0M due over three years, 49,751,970 shares of E2, which is
equal to 19.9% E2’s shareholding on a non-diluted basis and 15M options of E2. The value of the E2 shares at closing
was US$6.2 million (A$6.2 million) and are being held in escrow with 50% released on the first anniversary of the closing
date and 50% released on the second anniversary of the closing date. The value of the Black-Scholes model at closing
was US$0.6 million.
The US$2.5M in deferred cash payments is secured by a share mortgage over 51% of SCRN’s common shares until the
second cash installment is paid, at which time the share mortgage is to be reduced to 19%. The deferred cash payments
are to be received as follows:
• US$0.75 million on the first anniversary of the closing date;
• US$0.75 million on the second anniversary of the closing date; and
• US$1 million on the third anniversary of the closing date.
The Group also has the right to appoint one person to the E2 Board for as long as it holds at least nine percent (9%) of
E2’s outstanding shares.
19. MINE PROPERTIES
All figures are reported in thousands of US$
Mine Properties-31 December 2021
Cost
Accumulated depreciation
Carrying value — Mine Properties
Mine Properties – 31 December 2022
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 from exploration and evaluation expenditure
Transfers to property, plant and equipment
Increase (decrease) in provision for reclamation and rehabilitation
Amortization
Carrying amount at end of the year
Guanaco/
Amancaya
Casposo
Total
62,017
(60,800)
1,217
65,862
(61,808)
4,054
9,795
(9,795)
-
9,795
(9,795)
-
2022
1,217
30
3,585
(368)
598
(1,008)
4,054
71,812
(70,595)
1,217
75,657
(71,603)
4,054
2021
3,876
363
-
-
(898)
(2,124)
1,217
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 20)
with a total book value of US$42 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 internally
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 (2023-2033): US$1,800/oz-1,720/oz (31 December 2021 (2022-2033): US$1,610/oz –
US$1,720/oz
• Real Forecast Silver price (2023-2033):US$20/oz-23.25/oz (31December 2021 (2022-2033) US$22/oz– US$23.8/oz
• Life of mine operations based on the current model are forecast to end in 2033.
• Real Discount Rate (pre-tax): 7.5% (31 December 2021: 6.9%)
Austral Gold Limited
75
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
• Proven and Probable reserves and resource estimates to 31 December 2022 are based on an independent technical
report provided to the Group in 2022.
The sensitivity to +/- 10% variation in the gold price (US$1,582-1,933/oz) on the fair value of the Guanaco/Amancaya
project results in an impact of +/- US$18.0 million.
The sensitivity to +/- 10% variation in the discount rate (6.8%-8.3%) fair value of the Guanaco/Amancaya project results
in an impact of +/- US$1.6 million.
The sensitivity to +/- 10% variation in production costs on the fair value of the Guanaco/Amancaya project results in an
impact of +/- US$10.0 million.
None of these reasonable possible changes would result in a fair value below the book value of any of the projects.
20. PROPERTY, PLANT AND EQUIPMENT
All figures are reported in thousands of US$
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
Transfers from mining properties
Transfers to assets held for sale
Depreciation
Disposals
Depreciation on disposals
Carrying amount at end of the year
As at 31 December
2022
35,549
6,708
42,257
164,967
(129,418)
35,549
34,334
6,434
368
(952)
(4,590)
(1,687)
1,642
35,549
2021
34,334
7,673
42,007
161,185
(126,851)
34,334
34,725
6,897
-
-
(7,288)
(9)
9
34,334
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.
Austral Gold Limited
76
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
20.1 Reconciliation of carrying amount
Underground
Mine
Development
Plant
Mining
Equipment
Buildings
Heap
Land
Other
Total
76,175
35,312
20,972
13,817
4,895
-
404
-
565
(9)
763
-
81,070
35,716
21,528
14,580
5,663
336
262
42
-
-
-
-
-
-
-
-
-
-
(1,687)
-
-
-
(196)
(304)
-
-
-
-
105
368
139
-
-
815
7,206
154,297
-
-
270
-
6,897
(9)
815
7,476
161,185
-
-
-
-
26
-
(139)
-
6,434
368
-
(1,687)
(815)
(18)
(1,333)
86,733
36,052
19,907
14,318
612
-
7,345
164,967
Underground
Mine
Development
Plant
Mining
Equipment
Buildings
Heap
Land
Other
Total
59,408
25,241
16,901
11,240
4,150
-
1,775
-
541
(9)
633
-
63,558
27,016
17,433
11,873
Depreciation
3,378
590
-
-
-
-
309
(1,637)
238
-
(190)
(174)
66,936
27,606
15,915
11,937
17,512
8,700
4,095
2,707
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,782
119,572
189
-
7,288
(9)
6,971
126,851
75
(5)
(17)
4,590
(1,642)
(381)
7,024
129,418
815
505
34,334
19,797
8,446
3,992
2,381
612
-
321
35,549
Austral Gold Limited
77
Annual Report 2022
All figures are
reported in
thousands of
US$
Cost
Balance at
31, December
2020
Additions
Disposals
Balance at
31, December
2021
Additions
Transfer
from Mine
properties
Reallocation
Disposals
Transfers to
asset held for
sale
Balance at
31, December
2022
All figures are
reported in
thousands of
US$
Accumulated
depreciation
Balance at
31, December
2020
Depreciation
Disposals
Balance at
31, December
2021
Disposals
Transfers to
asset held for
sale
Balance at
31, December
2022
Carrying
amounts
At 31
December
2021
At 31
December
2022
Office
Vehicles
Machinery and
equipment
193
13
-
(98)
108
-
-
(99)
9
3,677
1,461
(231)
(1,830)
3,077
1,220
(5)
(1,748)
2,544
5,551
-
-
(1,063)
4,488
-
-
(333)
4,155
Total
9,421
1,474
(231)
(2,991)
7,673
1,220
(5)
(2,180)
6,708
NOTES TO THE FINANCIAL STATEMENTS
20.2 Right of use
All figures are reported
in thousands of US$
Balance at 31
December 2020
Additions
Disposals
Less depreciation
Balance at 31
December 2021
Additions
Disposals
Less depreciation
Balance at 31
December 2022
20.3 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 note 31 (d)
21. 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)
Transfers to assets held for sale
Transfers to mining properties
Impairment for the year
Carrying amount at end of the year
As at 31 December
2022
2021
2,026
953
2,979
1,925
911
2,836
3,078
1,893
4,971
2,920
1,843
4,763
For the year ended 31 December
2022
2021
32,322
6,793
(7,343)
(3,585)
(926)
27,261
18,941
14,703
-
-
(1,322)
32,322
(1) (2021) Includes the fair value of US$5.298 million of Exploration and Evaluation rights acquired from Revelo in 2021 (note 35)
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 2022 and 2021 relate mainly to exploration on the Guanaco and Casposo projects and the
exploration and evaluation expenditure on the Sierra Blanca project in Santa Cruz, Argentina.
During 2022, the Group impaired the Orca property acquired from Revelo for US$156,460 as it abandoned the property.
Jaguelito Option Agreement
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% of the mining rights 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 which was approved on 10 August 2022.
As at 31 December 2022, the Joint Venture Agreement had not been entered into. The consideration to acquire the 50%
interest is as follows:
Austral Gold Limited
78
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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. As of 31 December 2022, US$1 million of exploration
expenses was incurred and US$1 million was accrued as a non-current liability (note 23).
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 condi-
tions in (a-c) above to acquire a 50% interest in the Jaguelito project.
At the time of acquisition, the Jaguelito project had no probable and proven resources. The project was not in production
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.
Pampa Option Agreement
On 28 July 2021, the Group entered into an Option agreement which enabled it to acquire up to an 80% ownership inter-
est in two mining properties in northern Chile currently held by Pampa Metals Corporation (“Pampa”). During 2022, the
Group impaired US$769,350 related to Cerro Blanco after advising Pampa that it was withdrawing from the property.
Consideration for the Option consisted of the return of 2,963,132 shares of Pampa valued at US$0.827 million, 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 (completed); 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 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 (paid) (Year 2)
31 August 2023: $400,000 (Year 3)
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.
Austral Gold Limited
79
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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$0.4 million (Year 5)
At the time of acquisition, the Sierra Blanca project had no probable and proven resources. The project was not in produc-
tion and there was no mine plan to place them into production. For these reasons, the acquisition was accounted for as
an acquisition of assets and liabilities and not a business combination as defined under AASB3 and note 40.
Impairment for the year ended 31 December 2022 and 2021 relate to impairment on the exploration projects with no
expected value.
22. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
The Group’s interests in equity-accounted investees comprise an interest in a Rawhide Acquisition Holding LLC.
(“Rawhide”) that owns Rawhide Mining LLC, a gold and silver operating mine in Nevada, USA and an interest in Ensign
Gold Limited (“Ensign”) that is engaged in the acquisition, exploration, and development of precious metal mineral
properties primarily in the state of Utah, United States through its subsidiary, Ensign Gold (US) Corp. Subsequent to
acquiring the interest, Ensign changed its name to Ensign Minerals Inc.
All figures are reported in thousands of US$
Carrying amount of interest in associates
Carrying amount of interest in Ensign
Group’s total carrying amount of interest in associates
22.1 Investment in Rawhide
As at 31 December
2022
60
60
2021
628
628
During the year ended 31 December 2021, the Group recorded an impairment on its investment in Rawhide of
US$5,188,644 to reduce its carrying value to nil. During the year ended 31 December 2022, the Group advanced Rawhide
US$123,686. As the Group does not expect to recover this amount, the Group has recognised this amount in share of
loss of associates in the consolidated statement of profit or loss and other comprehensive income.
22.2 Investment in Ensign
All figures are reported in thousands of US$
Percentage ownership interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets (liabilities) (100%)
Group’s share of net liabilities
Carrying amount of interest in associate
As at 31 December
2022
11.91%
4,339
722
-
(14)
5,047
601
60
2021
11.93%
3,557
5,428
(6)
(170)
8,809
1,051
628
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$9.16 million) and during the remainder of the year issued additional
shares which reduced the Group’s interest to 11.91% as at 31 December 2022.
Austral Gold Limited
80
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
All figures are reported in thousands of US$
Revenue
(Loss) from continuing operations (100%)
Other comprehensive (loss) income (100%)
Total comprehensive (loss) (100%)
Group’s share of total (loss) and comprehensive income*
For the 12 months
ended 31 December
2022
For the period from
19 February 2021 to
31 December 2021
-
(4,636)
(122)
(4,758)
(567)
-
(3,330)
41
(3,289)
(451)
* Weighted average of 11.92% and 13.73% ownership in Ensign Minerals during the twelve month period ended 31 December 2022 and 31 December 2021, prorated for the
period 19 February 2021 to 31 December 2021, respectively.
23. TRADE AND OTHER PAYABLES
All figures are reported in thousands of US$
Current
Trade payables
Trade payables-supply chain financing arrangement
Accrued expenses
Royalty payable
Director fees
Other
As at 31 December
2022
2021
8,655
876
4,668
376
341
774
4,346
-
4,927
485
198
307
Total current trade and other payables
15,690
10,263
Non-Current
Other payables (note 21)
1,003
-
The Group participates in a supply chain financing arrangement (SCF) under which its supplier may elect to receive early
payment of their invoice from a bank by factoring their receivable from the Group. Under the arrangement, a bank agrees
to pay amounts to a participating supplier in respect of invoices owed by the Group and receives settlement from the
Group at a later date. The principal purpose of this arrangement is to facilitate efficient payment processing and enable
the willing suppliers to sell their receivables due from the Group to a bank before their due date.
The Group has not derecognised the original liabilities to which the arrangement applies because neither a legal release
was obtained, nor the original liability was substantially modified on entering into the arrangement. From the Group’s
perspective, the arrangement extends payment terms to six months. The Group incurs interest ranging from 8%-9%
per annum to the bank on the amounts due to suppliers. The Group therefore discloses the amounts factored by suppli-
ers within trade payables because the nature and function of the financial liability remain similar to those of other trade
payables but discloses disaggregated amounts in the notes. All payables under SCF are classified as current as at 31
December 2022.
The payments to the bank are included within operating cash flows because they continue to be part of the normal
operating cycle of the Group and their principal nature remains operating-i.e. payments for services required to earn
revenue. The payments to a supplier by the bank are considered non-cash transactions and amount to US$854,382 plus
accrued interest of US$21,633 as at 31 December 2022.
24. EMPLOYEE ENTITLEMENTS
All figures are reported in thousands of US$
Current
Salaries and bonuses
Employee entitlements
Total employee entitlements
As at 31 December
2022
2021
3,009
1,044
4,053
3,075
1,149
4,224
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$14.2 million (2021-US$14.9
million), including US$9.3 million (2021-US$10.7 million) in cost of sales and US$4.9 million (2021-US$4.2 million) in administration.
Non-current
Employee entitlements
35
9
Austral Gold Limited
81
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
Retirement benefits
Retirement benefits are to be paid upon the death of workers and for disability and retirement.
The methodology followed to determine the provision for all employees adhering to the agreements has considered turn-
over rates and the RV-2014 mortality table established by the Superintendency of Securities and Insurance to calculate
the reserves of life insurance in Chile according to the valuation method called Accumulated Benefit Valuation Method or
Accrued Benefit Cost. This methodology is established in AASB 119 Employee benefits on Retirement Benefits Costs. The
parameters of turnover rates, rates of increase of remunerations and discount rate have been determined by the Group.
25. PROVISIONS
All figures are reported in thousands of US$
Current
Mine closure
Other
Closing balance
Movement in non-current provisions
Opening balance
Additions
Increase/ (decrease) of provision for reclamation an rehabilitation
Exchange difference
Present value adjustment
Closing balance
As at 31 December
2022
2021
10,924
10
10,934
9,232
8
598
676
420
10,934
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 legislation,
mine closure dates, available technologies and engineering cost estimates. The carrying amounts of the mine closure
asset are disclosed in note 19.
As at 31 December 2022, the total restoration provision amounts to US$7.2m (31 December 2021–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$7.7m (31 December 2021– US$ 7.7m); and
Discount period: 4 years (Discount period based on expected timing of restoration activities). Discount rate: 1.7%
(2021- 4%)
As at 31 December 2022, the total restoration provision amounts to US$3.8m (31 December 2021: US3.6m) for the
Casposo mine. The present value of the restoration provision was determined based on the following assumptions:
Undiscounted rehabilitation costs: US$3.9m; and Discount rate: 2.2% (2021–US$4.2m and 11.24%)
26. LOANS AND BORROWINGS
All figures are reported in thousands of US$
Current
Loan facilities
Total current loans and borrowings
Non-current
Loan facilities
Closing balance
As at 31 December
2022
2021
7,382
7,382
1,264
1,264
5,338
5,338
415
415
Loan Facilities
At 31 December 2022, the current and non-current Loan facilities are to be repaid over 11 months and 48 months
respectively at an annual average interest rate of 6.9% (2021–5.5%).
Austral Gold Limited
82
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
Reconciliation of movements of liabilities to cash flows arising from financing activities
Loans
2,077
4,513
(839)
-
143
(141)
5,753
5,753
11,735
(8,842)
-
330
(330)
8,646
Leasing
6,321
-
(3,032)
1,474
244
(244)
4,763
4,763
-
(3,133)
1,220
194
(208)
2,836
Value (US$)
Carrying value (US$)
Interest rate (%)
Maturity date
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 31 December 2021
Balance at 1 January 2022
Change from financing cash flows
Proceeds from loans and borrowings
Repayments
Other changes
New leases
Interest expense
Interest paid
Balance at 31 December 2022
Lender
BCI
Santander Bank
BCI
Santander Bank
Santander Bank
BCI
Santander Bank
Santander Bank
Santander Bank
Santander Bank
BCI
BCI
BCI
BCI
Santander Bank
Total
27. ISSUED CAPITAL
All figures are reported in thousands of US$
Fully paid ordinary shares
Number of ordinary shares
Weighted average number of ordinary shares
62,097
1,000,000
62,370
500,000
500,000
77,000
250,000
250,000
500,000
3,600,000
1,000,000
500,000
500,000
500,000
3,500,000
12,801,467
63,292
1,018,990
63,668
508,020
506,700
78,909
252,753
252,865
505,624
415,120
1,029,092
512,645
504,812
502,495
2,430,556
8,645,541
6.92
6.05
7.49
7.91
7.20
6.97
7.64
7.34
7.64
5.54
6.63
6.95
8.88
6.19
4.27
20 January 2023
8 March 2023
21 March 2023
17 April 2023
21 April 2023
24 April 2023
02 May 2023
03 May 2023
05 May 2023
19 June 2023
21 July 2023
17 August 2023
17 November 2023
27 November 2023
25 January 2025
As at 31 December
2022
109,114
612,311,353
612,311,353
2021
109,114
612,311,353
600,584,618
Austral Gold Limited
83
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
Movements in ordinary share capital
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
Balance at 31 December 2022
Number of
oridinary shares
566,070,265
35,475,095
1,000,000
9,765,993
-
612,311,353
612,311,353
US$000’s
102,177
6,061
128
774
(26)
109,114
109,114
Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number
of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The ordinary shares do not have any par value.
28. ACCUMULATED LOSSES
All figures are reported in thousands of US$
Accumulated losses at beginning of year
Net (loss) for the year
Transfer from share option reserve
Transferred from profit reserve
Accumulated losses at end of year
29. 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 end of year
Share option reserve
Balance at beginning of year
Unlisted options exercised
Unlisted options expired unexercised
Transfer to accumulated losses
Balance end of year
Business combination reserve
Balance at beginning of year
Windup of Cachinalito Limitada
Balance end of year
Profit appropriation reserve
Balance at beginning of year
Dividend paid
Balance end of year
Total reserves
For the year ended 31 December
2022
(51,063)
(8,257)
-
-
(59,320)
2021
(43,871)
(7,324)
(321)
453
(51,063)
For the year ended 31 December
2022
251
(17)
234
-
-
-
-
-
(1,406)
-
(1,406)
14
-
14
(1,158)
2021
320
(69)
251
(209)
(108)
(4)
321
-
(953)
(453)
(1,406)
3,804
(3,790)
14
(1,141)
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.
Austral Gold Limited
84
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
Profit appropriation Reserve
Transfers up to the net income earned during the year may be transferred from accumulated losses and paid as a dividend.
30. NON-CONTROLLING INTEREST
All figures are reported in thousands of US$
Non-controlling interest in subsidiaries comprise
Acquired as part of subsidiary
Non-controlling interest during the year
Balance end of the year
For the year ended 31 December
2022
-
(9)
179
2021
188
-
188
During November 2021, the Group completed the work commitment to acquire 51% of Sierra Blanca S.A as disclosed in note 21.
30.1 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$
Cash and cash equivalents
Exploration and evaluation rights
Accounts payable and accrued liabilities
Related party liabilities
Total identifiable net assets acquired
31. 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
2022
2021
926
3,326
641
16,693
8,646
2,836
2,346
2,872
1,717
10,263
5,753
4,763
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$.
At 31 December 2022, the Group was exposed to foreign exchange risk through the following financial assets and
liabilities denominated in currencies other than the Group’s functional currency (thousands of US$).
The following significant exchange rates have been applied.
Austral Gold Limited
85
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
USD
ARS
CLP
AUD
CDN
Average rate
Year-end spot rate
2022
139.84
850.28
1.44
1.25
2021
93.34
777.85
1.33
1.29
2022
177.06
855.86
1.48
1.35
2021
102.62
844.69
1.38
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 2022 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.
Effect in thousands of USD
31 December 2022
Profit or loss
Equity, net of tax
Strengthening
Weakening
Strengthening
Weakening
ARS (70% movement)
CLP (10% movement)
AUD (5% movement)
CDN (2% movement)
31 December 2021
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
Borrowings
Financial leases
688
(585)
-
-
(688)
585
-
-
688
(585)
-
-
(688)
585
-
-
Strengthening
Weakening
Strengthening
Weakening
401
229
-
2
(401)
(229)
-
(2)
401
229
-
2
(401)
(229)
-
(2)
Argentinian Peso
(ARS)
Chilean Peso
(CLP)
Australian Dollar
(AUD)
Canadian Dollar
(CAD)
75
1,599
23
709
-
5
17
1,128
-
6,799
-
-
10
20
-
30
-
-
24
9
590
40
-
-
Austral Gold Limited
86
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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$.
The Group has resolved that for the present time the production should remain unhedged. The Group considers exposure
to commodity price fluctuations within reasonable boundaries to be an integral part of the business.
2500
2000
1500
1000
500
0
2004
2005
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Gold Price (US$/oz)
Silver Price (US$/oz)
60
50
40
30
20
10
0
Sensitivity to Changes in Commodity Prices (Gold and Silver)
The below sensitivity analysis demonstrates the after tax effect on the profit/(loss) and equity which could result if there
were changes in the gold and silver commodity prices by +/- 10% of the actual commodity prices realised by the Group.
All figures are reported
in thousands of US$
10 % increase in gold and silver prices
10 % decrease in gold and silver prices
Effect on profit/(loss) For the year ended
31 December
Effect on equity For the year ended 31
December
2022
4,971
(4,971)
2021
6,439
(6,439)
2022
4,971
(4,971)
2021
6,439
6,439
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.
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, including receivables from
government authorities, 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.
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.
Austral Gold Limited
87
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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 2022
Financial liabilities
Trade and other payables
Borrowings
Leasing
Total 31 December 2022 liabilities
31 December 2021
Financial liabilities
Trade and other payables
Borrowings
Leasing
Total 31 December 2021 liabilities
32. DIVIDENDS
All figures are reported in thousands of US$
Dividends paid
33. COMMITMENTS
All figures are reported in thousands of US$
Operating leases not recognised as liabilities
15,690
4,367
1,405
21,462
10,263
4,960
1,539
16,762
-
3,226
621
3,847
-
434
1,539
1,973
1,003
1,296
953
3,252
-
422
1,893
2,315
-
-
-
-
-
-
-
-
16,693
8,889
2,979
28,561
10,263
5,816
4,971
21,050
For the year ended 31 December
2022
-
As at 31 December
2022
-
1,003
616
-
616
2021
3,790
2021
-
-
-
-
-
Exploration commitment at the reporting date and recognised as liabilities (note 23)
Capital expenditure not recognized as liabilities
Within one year
Two to five years
Total Capital expenditure not recognized as liabilities
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$0.9m during the next year to maintain legal rights to all of its properties.
Austral Gold Limited
88
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
34. SUBSIDIARIES
Subsidiaries
Country of Incorporation
% owned as at 31 December
2022
2021
Guanaco Mining Company Limited
British Virgin Islands
Guanaco Compañía Minera SpA
Minera Mena Chile Ltda
SCM Pampa Buenos Aires Ltda
Minera Celeste Chile Ltda
Minera Serena Chile Ltda
SMC Montezuma Ltda
Casposo Energías Renovables S.A.U.
Austral Gold Argentina S.A.
Sierra Blanca S.A.
Chile
Chile
Chile
Chile
Chile
Chile
Argentina
Argentina
Argentina
Austral Gold North America Corp.
United States
Austral Gold Canada Limited
SCRN Properties Ltd.
Casposo Argentina Limited
Revelo Resources Corp.
1388631 BC Ltd
35. ACQUISITION OF REVELO
Canada
Canada
Canada
Canada
Canada
100.000
99.998
99.99
99.99
99.99
99.99
99.99
100.000
99.970
51.000
100.000
100.000
100.000
100.000
100.000
100.000
100.000
99.998
99.99
99.99
99.99
99.99
99.99
100.000
99.970
51.000
100.000
100.000
100.000
100.000
100.000
100.000
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 total-
ing approximately US$920,353 (C$$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$6,060,654.
35.1 Assets and liabilities assumed
The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition.
All figures are reported in thousands of US$
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
89
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
36. 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
(Loss)/ profit for the year
Total comprehensive (loss)/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$xm between BAF and Guanaco Compañía Minera SpA.
37. RELATED PARTY TRANSACTIONS
37.1 KMP holdings of shares and share options at 31 December 2022
As at 31 December
2022
334
73,260
13,515
13,515
59,745
109,114
(48,963)
(406)
59,745
(1,293)
(1,296)
A*
None
None
2021
1,008
73,935
12,893
12,893
61,042
109,114
(47,670)
(402)
61,042
3,452
3,383
A*
None
None
• Mr. Eduardo Elsztain holds 461,294,560 shares directly and indirectly in Austral Gold Limited. (31 December 2021—
461,294,560 shares)
• Mr. Saul Zang holds 1,640,763 shares directly in Austral Gold Limited. (31 December 2021— 1,640,763 shares)
• Mr. Pablo Vergara del Carril holds 68,119 shares directly in Austral Gold Limited. (31 December 2021—68,119)
• Mr. E. Elsztain and Mr. S. Zang are Directors of IFISA which holds 380,234,614 shares (31 December 2021—380,234,614)
• Mr. P. Vergara del Carril, Mr. E. Elsztain and Mr. S Zang are Directors of Guanaco Capital Holding Corp which holds
38,859,957 shares. (31 December 2021—38,859,957)
• Mr. Stabro Kasaneva holds 7,881,230 shares indirectly in Austral Gold Limited. (31 December 2021—7,881,230)
• Mr. Wayne Hubert holds 2,545,500 shares indirectly in Austral Gold Limited. (31 December 2021—2,545,500)
• Mr. Raul Guerra holds 801,000 shares directly in Austral Gold Limited. (31 December 2021—801,000)
• Mr. Rodrigo Ramirez holds 279,514 shares directly in Austral Gold Limited. (31 December 2021—279,514)
• Mr. Ben Jarvis holds 250,000 shares directly in Austral Gold Limited (31 December 2021—250,000)
• Mr. Jose Bordogna holds 126,495 shares directly in Austral Gold Limited. (31 December 2021—45,724)
37.2 Directors and Key Management Personnel Remuneration
The aggregate compensation made to Directors and other members of Key Management Personnel of the Group is set
out below.
All figures are reported in thousands of US$
Short-term employment benefit
Share based payment
Total
For the year ended 31 December
2022
2,444,080
-
2,444,080
2021
2,267,188
127,710
2,394,898
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 395,000 stock options and Mr. Kasaneva holds nil
shares of Ensign and 150,000 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 2022 amounted to US$79,219 (2021: US$112,458).
Austral Gold Limited
90
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS
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 2022 a total of US$72,303 was charged to and reimbursed by the Company (2021: US$68,071) in
regard to IT services support, HR services, software licenses building/office expenses and other fees.
37.3 Ultimate parent entity
The Parent Entity is controlled by IFISA with a 62.1% non-diluted and diluted interest in Austral Gold Limited and is
incorporated in Uruguay.
The ultimate beneficial owner of IFISA is Eduardo Elsztain.
38. UNRECOGNISED DEFERRED TAX ASSETS
In certain entities of the Group, deferred tax assets have not been recognised in respect of the following items, because
it is not probable that future taxable profit will be available against which the Group can use the benefits.
The ability of the Group to utilise Australian, Argentina, US or Canadian tax losses will depend on the applicability and
compliance with the respective country’s tax laws regarding continuity of ownership or same or similar business tests.
All figures are reported in thousands of US$
Australia
Tax losses
Capital losses
All figures are reported in thousands of US$
Canada
Tax losses
All figures are reported in thousands of US$
USA
Tax losses
All figures are reported in thousands of US$
Argentina
Tax losses
Deferred tax assets
All figures are reported in thousands of US$
Total
Tax losses
Capital losses
Deferred tax assets
39. SUBSEQUENT EVENTS
As at 31 December
2022
Expiry
2021
Expiry
13,505
2,187
no-expiry
no-expiry
14,462
2,342
no-expiry
no-expiry
As at 31 December
2022
Expiry
2021
Expiry
5,123
2036-2043
5,232
2035-2042
As at 31 December
2022
Expiry
2021
Expiry
5,405
no-expiry
5,405
no-expiry
As at 31 December
2022
Expiry
2021
Expiry
2,524
3,676
2023-2027
no-expiry
2,840
2022-2026
4,168
no-expiry
As at 31 December
2022
26,557
2,187
3,676
2021
27,941
2,342
4,168
39.1 On 1 March 2023, the Group completed the sale of SCRN Properties Ltd., owner of the Pingüino property to E2 Metals
as disclosed in note 18.
39.2 On 1 March 2023, the Group received a loan from two of its directors for an aggregate of US$1M, The loans are due in
six months and bear interest at an annual rate of 8% per annum.
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40. 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 2022, the Group updated the classification of certain disclosures to better reflect
the nature of the items.
Comparative amounts in the profit and loss and other comprehensive income and notes to the financial statements
were re-stated as follows:
31 December
2021
$000’s
Re-stated financial statement captions
31 December
2021
$000’s
Previous financial statement captions
Profit or loss and other comprehensive income
Net finance income/(costs)
Note 11 (C) – Deferred tax assets and liabilities
Argentina
Accrual for mine closure
Tax carryforward losses
2,961
Finance income
Finance costs
2,961
Argentina
319
Accrual for mine closure
15
Tax carryforward losses
Property, plant and equipment
106 Property, plant and equipment
Other
36
Other
Allowance for tax carry forward losses
and deferred tax assets
-
Allowance for tax carry forward losses and
deferred tax assets
Other
Tax carryforward losses
Allowance for tax carry forward losses
and deferred tax assets
Note 33 - Commitments
Exploration commitments at the
reporting date and not recognised as
liabilities
Within one year
Two to five years
Note 38 – Unrecognised Deferred Tax Assets (Gross)
Canada
Tax losses
USA
Tax losses
Argentina
Tax losses
Other
9,951
Tax carryforward losses
Allowance for tax carry forward losses and
deferred tax assets
(9,913)
514
Exploration commitments at the
reporting date and not recognised as
liabilities
872 Within one year
3,488
Two to five years
4,360
Canada
18,042
Tax losses
USA
3,974
Tax losses
Argentina
-
Tax losses
Deferred tax assets
- Deferred tax assets
24,358
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3,199
(238)
2,961
438
725
521
544
(1,752)
7,628
(7,590)
514
-
-
-
5,232
5,405
2,840
4,168
17,645
NOTES TO THE FINANCIAL STATEMENTS
40.1
40.2
40.3
40.4
40.5
40.6
40.7
40.8
40.9
40.10
40.11
40.12
40.13
40.14
40.15
40.16
40.17
40.18
40.19
40.20
40.21
40.22
40.23
40.24
40.25
40.26
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
Assets held for sale
New, revised or amending Accounting Standards and Interpretations adopted
40.1 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 34 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.
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40.2 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.
40.3 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.
Foreign currency
The financial statements are presented in United States Dollars (US$), which is the Group’s functional and presentation currency.
40.4 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.
40.5 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
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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.
40.6 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
40.7 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.
40.8 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.
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40.9 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.
40.10 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.
40.11 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.
40.12 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.
40.13 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.
40.14 Provisions
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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.
40.15 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.
40.16 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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40.17 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;
40.17.1.1 has transferred substantially all the risks and rewards of the asset; or
40.17.1.2 has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred
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.
40.18 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.
40.19 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.
40.20 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.
40.21 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.
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40.22 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.
40.23 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.
40.24 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.
40.25 Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if it is highly prob-
able that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to
sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities
on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit
assets, investment property or biological assets, which continue to be measured in accordance with the Group’s other
accounting policies. Impairment losses on initial classification as held-for-sale or held-for distribution and subsequent
gains and losses on remeasurement are recognised in profit or loss.
40.26 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 Corporations Regulations 2001 and other mandatory
professional reporting requirements;
2. the attached consolidated financial statements and notes thereto comply with Inter-
national Financial Reporting Standards as issued by the International Accounting
Standards Board as described in note 1 to the consolidated 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 2022 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 Corpora-
tions 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
30 March 2023
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INDEPENDENT
AUDITOR’S
REPORT
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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 2022 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 2022 • 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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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 cash inflows and outflows, including capital expenditures, for feasibility, timing, 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; • Reading Directors minutes and relevant correspondence with the Group’s advisors to understand the Group’s ability to raise additional shareholder funds, and assess the level of associated uncertainty; • 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. Austral Gold Limited
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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 Guanaco/Amancaya 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. Carrying value of Guanaco/Amancaya mine assets and plant & equipment (US$42 million) Refer to Notes 19 “Mine properties” and 20 “Property, plant and equipment” to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s Guanaco/Amancaya mine properties and plant & equipment are a significant portion (43%) of the Group’s total assets. The recoverable value of the Guanaco/Amancaya cash generating unit (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 costs of developing areas of interest and producing silver and gold; - future production costs, 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; 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/Amancaya CGU. The assumptions evaluated are those relating to commodity prices, production costs 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, production costs and discount rate within a reasonably possible range to identify those assumptions at higher Austral Gold Limited
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• 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, production costs and discount rate, reducing available headroom. This drives additional audit effort specific to their feasibility and consistency of application. 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 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 (US$27.2 million) Refer to Note 21 “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 (28%) of the Our procedures included: • evaluating the Group’s accounting policy to recognise E&E assets using the criteria in the Austral Gold Limited
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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, 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; and • 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. 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. 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 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 Austral Gold Limited
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fund continued activities. We identified those areas relying on alternate funding sources and evaluated the capacity of the Group to secure such funding. 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 • 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. 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 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. Report on the Remuneration ReportOpinion In our opinion, the Remuneration Report of Austral Gold Limited for the year ended 31 December 2022, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 53 to 58 of the Directors’ report for the year ended 31 December 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Jessica Dillon Partner Sydney 30 March 2023 ADDITIONAL
INFORMATION
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Forward Looking Statements
IIn 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 2023 the total issued capital of Austral Gold Limited was 612,311,353 ordinary shares. 547,604,352 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. 63,707,001 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 2023
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
379
579
543
247
298
99
139
15,928
291,198
1,499,954
36,694,563
7,108,286
7,349,945
559,351,478
0.00%
0.05%
0.24%
5.99%
1.16%
1.20%
91.35%
100%
SUBSTANTIAL SHAREHOLDERS
The Company has been notified of the following substantial shareholdings as at 28 February 2023:
2,284
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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TWENTY LARGEST SHAREHOLDERS
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
15,502,212
2.53%
EMX ROYALTY CORPORATION
9,381,770
1.53%
HSBC CUSTODY NOMINEES
9,244,452
1.51%
STABRO KASANEVA
7,881,230
1.29%
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
7,034,241
1.15%
CITICORP NOMINEES PTY LIMITED
4,700,774
0.77%
WAYNE HUBERT
2,545,500
0.42%
MRS ANNA VORONTSOVA
2,312,594
0.38%
10
HEPHAESTUS CONSULTING SERVICES
1,760,308
0.29%
11
SAUL ZANG
1,640,763
0.27%
12
ASOCIACION ISRAELITA ARGENTINA
1,158,265
0.19%
13
MR POH SENG TAN
1,100,000
0.18%
14
FUSION ELECTRICS (AUST) PTY
1,000,000
0.16%
15
MS LEANNE MARION HUNTER
1,000,000
0.16%
16
MRS NICOLA PAULINE COURT
900,000
0.15%
17
MR PHILIP BOMFORD
850,000
0.14%
18
MR DEAN MICHAEL MATHEWS
843,800
0.14%
19
TAYLOR FAMILY INVESTMENTS PTY
800,000
0.13%
20
NATIONAL NOMINEES LIMITED
712,386
0.12%
Total
Other
531,662,855
86.83%
80,648,498
13.17%
Total Shares on issue
612,311,353
100%
*Beneficial holdings
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www.australgold.com