Alita Resources Limited: FY2024 Interim Financial Analysis

Alita Resources Limited (“Alita”) has released its half-year financial report for the period ended 31 December 2024. This analysis covers key financial metrics, operational highlights, recent corporate actions, and provides insight into the company’s financial health and outlook for investors.

Key Financial Metrics

^*Revenue from discontinued operations – mining division sold in Nov 2023.
^**Includes discontinued operations (\$150.2m profit from divestment).

Historical Performance and Trends

Alita Resources’ financial position has undergone a dramatic transformation following the sale of its lithium-focused mining operations (Tawana Resources Pty Ltd and Lithco No.2 Pty Ltd) in November 2023. The prior year saw a \$150.2 million profit from discontinued operations, which is not recurring in the current period. The latest half-year profit of \$2.3 million (continuing operations) is primarily from finance income, with no revenue-generating operations during the period.

Divestments and Asset Sales

• In November 2023, Alita completed the sale of its main operating asset, the Bald Hill lithium mine, through the divestment of Tawana Resources Pty Ltd and Lithco No.2 Pty Ltd. Cash consideration of \$176.9 million was received, and a receivable of \$58.2 million for reimbursable taxes was recognized.
• The company has since ceased all operational mining activities and is currently reassessing its ongoing operations and strategic direction.

Exceptional Earnings and Unusual Fund Flows

• The exceptional profit in the prior year period was driven almost entirely by the gain on sale of discontinued operations.
• Current half-year profit is derived from interest on cash and escrowed funds, not from business activities.
• Funds held on trust (escrow) total \$100.3 million, pending resolution of substantial tax assessments with the Australian Tax Office (ATO). These funds may be released to Alita following settlement of the disputes.

Balance Sheet and Liquidity

• Cash and cash equivalents: \$1.6 million as at 31 Dec 2024 (down from \$2.3 million at June 2024).
• Funds held on trust: \$100.3 million (including accrued interest).
• Trade and other receivables: \$58.2 million (mainly tax reimbursement from the buyer of the mining business).
• Income tax payable: \$99.3 million – pending ATO resolution, matched by receivable and escrowed funds.
• Net assets: \$61.5 million, up from \$59.2 million at June 2024.

Legal, Tax, and Corporate Developments

• Alita is engaged in complex, ongoing negotiations with the ATO regarding tax assessments for the years 2019–2024. The outcome will determine the final release of escrowed funds and may affect future profitability and liquidity.
• Since exiting external administration in April 2024, the new board has focused on restoring statutory compliance and positioning the company for future initiatives.
• On 10 October 2025, Alita secured a \$2 million loan facility from Mineral Resources Limited (MinRes) to cover ongoing compliance and management costs. This facility has been fully drawn.
• No dividends have been declared or paid for the period.

Chairman’s Statement and Tone

“Since its appointment, the new Board has prioritised the restoration of statutory compliance, including financial reporting obligations, and has sought relevant regulatory extensions to support this process. The 2024 Annual Report was lodged with ASIC on 14 July 2025. Given the unique circumstances of the Company’s recent history, the preparation and lodgement of the 2024 Annual Report took a significant amount of time and effort from the Company, its auditors and legal advisors as a number of reporting extensions were granted by ASIC.
The Company continues to engage with its legal and taxation advisers to address complex issues arising from historical Notices of Assessment issued by the ATO for the income years ended 30 June 2019 through to 2024. In parallel, it has re-engaged with shareholders and professional stakeholders with the objective of positioning Alita for future corporate initiatives.”

Tone: The Chairman’s statement is factual and cautious, emphasizing compliance, legal/tax resolution, and stakeholder engagement rather than forward-looking optimism or aggressive growth.

Events Impacting the Business

• Major Asset Sale: Exit from lithium mining with business model now uncertain.
• Tax and Legal Uncertainty: Resolution of ATO disputes is critical; the bulk of Alita’s cash is escrowed until settlement.
• No ongoing operations: Currently, Alita has no trading business and is essentially a shell company awaiting tax resolution and potential repositioning.
• Funding Support: MinRes has provided guarantees for tax liabilities of divested subsidiaries and committed to ensuring at least \$25 million is available post-tax settlement for creditor obligations and future initiatives.

Directors’ Remuneration and Related Party Transactions

No specific details on directors’ remuneration or other related party transactions were disclosed, aside from standard compensation for key management personnel.

Conclusion and Investment Recommendations

Overall Assessment: Alita Resources is currently in a transitional phase. There are no operating businesses, and the company’s financials are dominated by proceeds from the recent asset sale and the complex tax situation with the ATO. The current profit is non-operational and derived from interest on escrowed funds. The release and use of these funds depend entirely on the final outcome of tax negotiations. No dividends are being paid, and the company has not communicated a new business strategy.

• If you are currently holding Alita shares:
  • Consider the stock as a special situation or shell company play. The main value proposition is tied to the eventual release of escrowed cash and the board’s ability to identify and execute a new corporate strategy once tax issues are resolved.
  • Maintain a cautious stance. Monitor regulatory, tax, and corporate updates closely. The risk profile is elevated due to the binary outcome of the ATO dispute and lack of an existing business model.
  • If you are risk-averse, consider reducing exposure as there is no earnings visibility or operational upside in the near term.
• If you are not currently holding Alita shares:
  • This is not an operating company and any future upside is speculative, subject to successful tax dispute resolution and the board’s ability to create shareholder value through new initiatives or asset acquisitions.
  • Investors should wait for clarity on tax outcomes and a clear strategic direction before considering entry, unless seeking exposure to high-risk, event-driven special situations.

Disclaimer: This analysis is based solely on the information provided in the December 2024 Alita Resources Limited half-year report. It does not constitute financial advice. Investors should conduct their own due diligence and seek professional advice tailored to their financial circumstances before making any investment decisions.

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