Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Financial Statements
For the Years Ended December 31, 2023 and 2022
Expressed in United States Dollars, Unless Otherwise Stated
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of Alta Copper Corp.
Opinion
We have audited the accompanying consolidated statements of Alta Copper Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity, consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended, in conformity with International Financial Reporting Standards ("IFRS").
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the consolidated financial statements, which describe the events and conditions that indicate the existence of material uncertainties that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Basis for Opinion
We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
The key audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the key audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the key audit matter below providing a separate opinion on the key audit matter or on the accounts or disclosures to which it relates.
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Key Audit Matter (continued)
Assessment of Impairment of Exploration and Evaluation Assets
Key Audit Matter Description
We identified the impairment assessment of exploration and evaluation assets as a key audit matter. As disclosed in Note 6 to the consolidated financial statements, the carrying value of the Company's exploration and evaluation assets was approximately $67.6 million as at December 31, 2023 (December 31, 2022: $66 million), which is material to the consolidated financial statements. In addition, the management's impairment assessment process is highly judgmental and is based on assumptions, which are affected by expected future market or economic conditions.
As discussed in Note 3 to the consolidated financial statements, the carrying value of exploration and evaluation assets is reviewed each reporting period to determine whether there is any indication of impairment or reversal of impairment.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures included, amongst others, the following:
- Performing a walkthrough to understand the Company's process related to assessment of impairment and related controls.
- Testing of assumptions and facts in management's impairment indicators assessment for reasonableness.
- Assessing the competence and objectivity of the Company's personnel involved in preparing the impairment assessment.
The accounting and measurement methods applied are in accordance with IFRS. We consider the underlying assumptions and measurement to be reasonable.
Other Information
Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
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Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are 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 it is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
The engagement partner on the audit resulting in this independent auditor's report is Akil Pervez.
Kreston GTA LLP
Chartered Professional Accountants
Markham, Canada
March 14, 2024
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Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Statements of Financial Position
Years Ended December 31, 2023 and 2022
(Expressed in United States Dollars)
As at | As at | ||||
December 31, | December 31, | ||||
2023 | 2022 | ||||
ASSETS | |||||
Current assets | |||||
Cash | $ | 2,416,254 | $ | 341,115 | |
Prepaid expenses and deposits | 160,412 | 88,256 | |||
Total current assets | 2,576,666 | 429,371 | |||
Non-current assets | |||||
Receivables | 47,087 | 42,180 | |||
Investment (note 4) | 167,439 | 327,000 | |||
Right-of-use assets (note 5) | - | 40,142 | |||
Advances towards Canadian projects (note 6) | 93,938 | 85,119 | |||
Exploration and evaluation assets (note 6) | 67,609,056 | 65,982,245 | |||
Equipment (note 7) | 8,620 | 13,505 | |||
Total assets | $ | 70,502,806 | $ | 66,919,562 | |
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities (notes 8 and 12) | $ | 274,007 | $ | 688,748 | |
Loans payable (note 9) | - | 1,527,977 | |||
Lease liability (note 5) | - | 14,882 | |||
Total current liabilities | 274,007 | 2,231,607 | |||
Non-current liabilities | |||||
Loans payable (note 9) | 30,243 | 29,532 | |||
Lease liability (note 5) | - | 31,345 | |||
Total liabilities | 304,250 | 2,292,484 | |||
Equity | |||||
Share capital (note 10) | 96,098,962 | 89,128,989 | |||
Reserves (note 10) | 15,514,138 | 15,359,962 | |||
Accumulated deficit | (41,414,544) | (39,861,873) | |||
Total equity | 70,198,556 | 64,627,078 | |||
Total liabilities and equity | $ | 70,502,806 | $ | 66,919,562 |
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Approved on behalf of the Board:
(Signed) "Steven Latimer" | Director | (Signed) "Giulio T. Bonifacio" | Director |
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Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Statements of Loss and Comprehensive Loss
Years Ended December 31, 2023 and 2022
(Expressed in United States Dollars)
Year Ended | Year Ended |
December 31, | December 31, |
2023 | 2022 |
Operating expenses | ||||
Business development | $ | 237,853 | $ | 356,354 |
Legal and financing | 227,140 | 177,916 | ||
Public company | 140,142 | 61,960 | ||
Salaries and benefits | 119,127 | 166,373 | ||
General and administrative | 92,880 | 64,406 | ||
Audit, tax and accounting | 56,620 | 125,084 | ||
Amortization | 9,510 | 15,683 | ||
883,272 | 967,776 | |||
Other expenses | ||||
Share-based compensation - stock options | 386,540 | 1,204,104 | ||
Share-based compensation - deferred share units | 110,935 | 189,354 | ||
Share-based compensation - restricted share units | 152,367 | 216,973 | ||
(Gain) / loss on settlement of debt | - | 48,374 | ||
(Gain) / loss on foreign exchange | (9,952) | 27,136 | ||
Interest expense | 25,983 | 58,072 | ||
Loss before income tax | 1,549,145 | 2,711,789 | ||
Income tax payable / expense (note 15) | 3,526 | - | ||
Net loss | 1,552,671 | 2,711,789 | ||
Other comprehensive loss / (income) | ||||
Change in fair value of investment (note 4) | 174,050 | 207,368 | ||
Exchange difference on translation to presentation currency | (122,184) | (101,410) | ||
$ | 51,866 | $ | 105,958 | |
Total comprehensive loss | $ 1,604,537 | $ | 2,817,747 | |
Loss per share | ||||
Basic and diluted | $0.02 | $0.04 | ||
Weighted average number of common shares outstanding | ||||
Basic and diluted | 77,227,248 | 67,190,981 |
The accompanying notes to the consolidated financial statements are an integral part of these statements
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Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Statements of Cash Flows
Years Ended December 31, 2023 and 2022
(Expressed in United States Dollars)
Year Ended | Year Ended | ||||
December 31, | December 31, | ||||
2023 | 2022 | ||||
Operating activities | |||||
Net loss for the year | $ | (1,552,671) | $ | (2,711,789) | |
Adjustments for: | |||||
Amortization | 9,510 | 15,683 | |||
Share-based payments - stock options | 386,540 | 1,204,104 | |||
Share-based payments - deferred share units | 110,935 | 189,354 | |||
Share-based payments - restricted share units | 152,367 | 216,973 | |||
Loss on settlement of debt | - | 48,374 | |||
Interest expense | 25,983 | 58,072 | |||
Unrealised foreign exchange differences | 152,390 | 27,136 | |||
Changes in non-cash working capital items: | |||||
Accounts receivables | (4,907) | 12,896 | |||
Prepaid expenses | (72,156) | (60,097) | |||
Accounts payable and accrued liabilities | 31,179 | 257,210 | |||
Net cash provided by (used) in operating activities | $ | (855,341) | $ | (742,084) | |
Investing activities | |||||
Addition to exploration and evaluation assets | (1,455,092) | (815,041) | |||
Change in value added taxes paid | (172,324) | (79,400) | |||
Net cash used in investing activities | $ | (1,627,416) | $ | (894,441) | |
Financing activities | |||||
Issuance of common shares for cash, net of issuance costs | 5,297,688 | - | |||
Issuance of common shares for exercise of stock options | - | 303,046 | |||
Repayment of short-term loan | (815,529) | - | |||
Term loan received | - | 1,522,654 | |||
Principle repayments on lease liability | (18,774) | (19,278) | |||
Net cash provided by financing activities | $ | 4,463,385 | $ | 1,806,422 | |
Net increase/(decrease) in cash | 2,075,139 | 169,897 | |||
Cash, beginning of year | 341,115 | 170,218 | |||
Cash, end of year | $ | 2,416,254 | $ | 341,115 |
The accompanying notes to the consolidated financial statements are an integral part of these statements.
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Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023 and 2022
(Expressed in United States Dollars)
Reserves | |||||||||||||
Number of | Equity settled | Foreign | Available for | ||||||||||
Share capital | employee | Deficit | Total | ||||||||||
shares | currency | sale assets | |||||||||||
compensation | |||||||||||||
Balance, December 31, 2021 | 66,635,487 | $ | 88,482,043 | $ | 14,067,031 | $ | (405,004) | $ | 422,663 | $ | (37,150,084) | $ | 65,416,649 |
Share based payments - stock options | - | - | 1,196,077 | - | - | - | 1,196,077 | ||||||
Share based payments - deferred share units | - | - | 187,119 | - | - | - | 187,119 | ||||||
Share based payments - restricted share units | - | - | 227,235 | - | - | - | 227,235 | ||||||
Common shares issued upon exercising stock options | 1,307,500 | 495,917 | (192,511) | - | - | - | 303,406 | ||||||
Common shares issued upon exercising RSU's | 178,572 | 36,690 | (36,690) | - | - | - | - | ||||||
Shares issued to settle debts | 142,056 | 102,945 | - | - | - | - | 102,945 | ||||||
Shares issued for property | 25,000 | 11,394 | - | - | - | - | 11,394 | ||||||
Change in fair value of investment | - | - | - | - | (207,368) | - | (207,368) | ||||||
Cumulative translation adjustment | - | - | - | 101,410 | - | - | 101,410 | ||||||
Net loss | - | - | - | - | - | (2,711,789) | (2,711,789) | ||||||
Balance, December 31, 2022 | 68,288,615 | $ | 89,128,989 | $ | 15,448,261 | $ | (303,594) | $ | 215,295 | $ | (39,861,873) | $ | 64,627,078 |
Shares issued via private placement, net | 12,842,498 | 5,681,938 | - | - | - | - | 5,681,938 | ||||||
Shares issued for services | 694,444 | 366,950 | - | - | - | - | 366,950 | ||||||
Share based payments - stock options | - | - | 386,562 | - | - | - | 386,562 | ||||||
Share based payments - deferred share units | - | - | 151,835 | - | - | - | 151,835 | ||||||
Share based payments - restricted share units | - | - | 91,966 | - | - | - | 91,966 | ||||||
Shares issued upon exercising deferred share units | 449,135 | 202,674 | (202,674) | - | - | - | - | ||||||
Shares issued upon exercising restricted share units | 261,781 | 114,180 | (114,180) | - | - | - | - | ||||||
Shares issued to settle debts | 1,616,348 | 596,017 | - | - | - | - | 596,017 | ||||||
Shares issued to acquire property | 37,500 | 8,214 | - | - | - | - | 8,214 | ||||||
Restricted share units - cancelled | - | - | (129,391) | - | - | - | (129,391) | ||||||
Change in fair value of investment | - | - | - | - | (165,397) | - | (165,397) | ||||||
Cumulative translation adjustment | - | - | - | 122,184 | 13,271 | - | 135,455 | ||||||
Net loss | - | - | - | - | - | (1,552,671) | (1,552,671) | ||||||
Balance, December 31, 2023 | 84,190,320 | $ | 96,098,962 | $ | 15,632,379 | $ | (181,410) | $ | 63,169 | $ | (41,414,544) | $ | 70,198,556 |
The accompanying notes to the consolidated financial statements are an integral part of these statement
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Alta Copper Corp. (formerly "Candente Copper Corp.")
Consolidated Financial Statements
Years Ended December 31, 2023 and 2022
(Expressed in United States Dollars, Unless Otherwise Stated)
1. Nature of operations and going concern
Alta Copper Corp. and its subsidiaries (the "Company") are engaged in the exploration of its mining properties located in Peru. Its principal property is the Cañariaco Copper Project in the District of Lambayeque. The Company was incorporated on May 1, 1997 under the Business Corporation Act of British Columbia and its principal office is located at Suite 801-1112 West Pender Street, Vancouver British Columbia, V6E 2S1.
The principal subsidiaries of the Company are as follows:
Subsidiary name | Interest held as at | Functional |
December 31, 2023 | currency | |
Cañariaco Copper Peru S.A.C. ("Cañariaco") | 100% | US Dollars |
Cañariaco Copper (BVI) Corp. | 100% | US Dollars |
Inversiones Mineras Las Palmas S.A. | 100% | US Dollars |
Cobriza Metals Corp. | 100% | CDN Dollars |
Cobriza Metals (BVI) Corp. | 100% | US Dollars |
Cobriza Metals Peru S.A.C. | 100% | US Dollars |
The Company's common shares are listed on the Toronto Stock Exchange ("TSX") and the Lima Stock Exchange under the trading symbol "ATCU" and OTCQX Best Market under the symbol "ATCUF".
These condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. For the year ended December 31, 2023, the Company incurred a net loss of $1,552,672. As at December 31, 2023, the Company had $41,414,544 in cumulative losses since inception and excess of current assets over current liabilities of $2,397,170, (December, 31, 2022 excess of current liabilities over current assets $1,802,236).
The Company does not generate cash flows from operations and accordingly, the Company will need to raise additional funds. The Company can consider raising additional funds by way of the issuance of securities, sale of a project royalty interest, project streaming arrangement, project joint venture and divestiture of non-core assets. Although, the Company has been successful in raising funds in the past there can be no assurance that the Company will be able to raise sufficient funds in the future, in which case the Company may be unable to meet its obligations as they come due in the normal course of business. The Company is subject to sovereign risk, including political and economic instability, changes in existing government regulations relating to mining, as well as currency fluctuations and local inflation. These factors are material uncertainties that may cast significant doubt regarding the Company's ability to continue as a going concern. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts on the statement of financial position.
2. Statement of compliance
These consolidated financial statements have been prepared in compliance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and are presented in United States dollars.
These consolidated financial statements were approved and authorised for issue by the Board of Directors of the Company on March 11, 2024.
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Alta Copper Corp. published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 00:40:01 UTC.