Note 1. Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied for the financial year to 30 June 2023, unless otherwise stated. Corporate information The consolidated financial report of Sunstone Metals Limited and its controlled entities for the year ended 30 June 2023 was authorised for issue in accordance with a resolution of the Directors on 5 September 2023. Sunstone Metals Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. Its registered office and principal place of business is 9 Gardner Close, Milton QLD 4064. The Group is a for-profit entity. A description of the nature of the Consolidated Entity’s operations and its principal activities is included in the Directors’ report. (a) Basis of preparation The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The presentation currency is Australian dollars. The report has been prepared on the basis of the going concern and historical cost conventions. Going concern The Group incurred a loss of $1,880,048 for the year ended 30 June 2023. As at 30 June 2023 the Group has net cash reserves of $10,306,546 and a net current asset surplus of $9,107,009. The ability of the Group to continue as a going concern is principally dependent upon one or more of the following: – the ability of the company to raise additional capital in the future; and – the successful exploration and subsequent exploitation of the Group’s tenements While the Group has a strong cash position at 30 June 2023, an aggressive exploration and drilling program is planned on both the Bramaderos and El Palmar projects throughout the 2024 financial year. These conditions give rise to a material uncertainty which may cast significant doubt over the Company’s ability to continue as a going concern. The directors believe that the going concern basis of preparation is appropriate due to the following reasons: – The cash balance of the Group as at 30 June 2023 is $10,306,546; – To date the Group has funded its activities through issuance of equity securities and during the financial year ended 30 June 2023 successfully raised $12,000,000 before fees through a placement to sophisticated investors. It is expected that the Group will be able to fund its future activities through further issuances of equity securities; – The directors believe there is sufficient cash available for the Group to continue operating until it can raise sufficient further capital to fund its ongoing activities. Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. (b) Statement of compliance The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. (c) Basis of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Sunstone Metals Limited (“Company”, “Sunstone” or “Parent Entity”) as at 30 June 2023 and the results of all the subsidiaries for the financial period then ended. The Company and its subsidiaries together are referred to in this financial report as the Group or Consolidated Entity. Subsidiaries are all those entities (including structured entities) over which the Group has control. The group has control over 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 use its controlling power to affect those returns. Notes to the Financial Statements for the year ended 30 June 2023 38 Sunstone Metals Limited Annual Report 2023
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