Dacian Gold Limited
Annual Report 2016

Plain-text annual report

ABN 61 154 262 978 ANNUAL REPORT CORPORATE DIRECTORY DIRECTORS Rohan Williams Executive Chairman Barry Patterson Non-Executive Director Robert Reynolds Non-Executive Director Ian Cochrane Non-Executive Director COMPANY SECRETARY Kevin Hart REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS Suites 14-16 890 Canning Highway Applecross WA 6153 AUDITOR Grant Thornton Audit Pty Ltd 10 Kings Park Road West Perth WA 6005 SHARE REGISTRY Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace Perth WA 6000 STOCK EXCHANGE LISTING The Company’s shares are quoted on the Australian Securities Exchange. The home exchange is Perth, Western Australia. ASX CODE DCN – Ordinary shares COMPANY INFORMATION The Company was incorporated and registered under the Corporations Act 2001 in Western Australia on 23 November 2011. The Company is domiciled in Australia. CONTACT Telephone: 08 9226 4622 Facsimile: 08 9226 4722 Email: Website: info@daciangold.com.au www.daciangold.com.au TABLE OF CONTENTS Chairman’s Letter to Shareholders Review of Operations 2016 Mineral Resources & Ore Reserves Statement (DCN: 100%) Directors’ Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes In Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report ASX Additional Information Tenement Schedule 2 4 24 27 40 41 42 43 44 45 73 74 77 79 CORPORATE GOVERNANCE Please refer to the Company’s website www.daciangold.com.au for the 2016 Corporate Governance Statement and Policies. CHAIRMAN’S LETTER TO SHAREHOLDERS Dear Fellow Shareholder, It is with great pleasure that I present to you Dacian Gold’s fourth annual report. The 2016 year was the most significant year of your Company’s short history. In every respect it was a transformational year. In the 12 months to 30 June 2016, the Company’s share price has risen almost 600% from $0.43 to $2.90, making Dacian Gold one of the best performers on the ASX. The market capitalisation of Dacian Gold during this same period increased from $41 million to $380 million. During this significant increase in both share price and market capitalisation, the only equity contribution made during this period was a $25 million fully underwritten issue completed in November 2015 at a share price of $0.69. The $25 million equity raising financed much of the activities described in the pages that follow. The excellent market performance of Dacian Gold is attributed to the market’s growing recognition that the Mt Morgans Gold Project (MMGP) is a new, high quality gold project that has size, scale, significant exploration optionality and access to considerable existing infrastructure in Australia’s second largest gold district, at Laverton in WA. The last 12 months has seen three main areas of Company focus: a major, approximately 90,000m resource in-fill and extension drill program; the MMGP Feasibility Study and an ongoing exploration effort that is, and will remain, a Dacian Gold core corporate objective for many years to come. The 90,000m drilling program was all oriented diamond and RC drilling that was aimed at upgrading the Mineral Resource at our Westralia and Jupiter discoveries. The drill program was highly successful with a 176% increase in the Measured and Indicated Mineral Resource categories at Westralia (now at 905,000 ounces) and a corresponding 69% increase at Jupiter (now at 1,120,000 ounces). Numerous thick and high grade intersections were returned from the drill-out, several of which are highlighted in the following pages. The total Measured and Indicated Mineral Resource for the MMGP is now at 2.2 million ounces; and the total Mineral Resource inventory is at 3.3 million ounces, up almost four times from the 842,000 ounce resource base at the time of the Company’s November 2012 IPO. The Feasibility Study, which is investigating the MMGP as a +220,000 ounce per annum gold production centre, is nearing completion with results planned to be released in Q4 this calendar year. Fundamental to the Feasibility Study is the improved Measured and Indicated Mineral Resource base which are the subject of detailed underground mine designs at Beresford and Allanson, both at Westralia; and at Jupiter, where a large open pit mining complex measuring over 1.8km in strike is being designed. In addition to the mine design studies, other Feasibility work programs nearing completion include detailed metallurgical testwork studies, process plant and tailing storage facility design and associated site selection geotechnical studies; environmental studies; infrastructure layout designs that include; accommodation village, offices, workshops, power supply and reticulation; road networks; communication networks; surface and ground water studies including water exploration. The Dacian Gold Board will meet in late CY2016 to assess the results of the Feasibility Study with a view to proceeding to construction and development, should the results determine mine development is warranted; as well as a preferred financing route. If a decision to proceed with construction is made, it is envisaged the construction period will take place during CY2017, with gold production targeted for Q1 CY2018. As I mentioned at the beginning of this Chairman’s letter, 2016 has been a transformational year for your Company on every level. It has come about through the very hard working efforts of Dacian Gold employees, and on behalf of the Board, I would like to extend a sincere thank you to them for their professionalism and excellent work ethic. 2 The 2017 year will undoubtedly be another busy year for the Company. I am hoping that, with the commencement of recently started exploration programs on prospects like Cameron Well, Callisto and Jupiter Regional, we will make new gold discoveries and deliver on our vision of turning Mt Morgans into a long life and highly prosperous Western Australian gold mining operation. Thank you also to you, our shareholders, without whom there is not the support required to build Dacian Gold into a new Australian mid-tier gold producer. Rohan Williams Executive Chairman FY 2016 HIGHLIGHTS Mt Morgans Gold Project MMGP Mineral Resource now stands at 3.3 million ounces, with 2.2 million ounces in M&I categories, up 73% from last year Major 90,000m drill program completed ahead of open pit and underground mine design studies being completed as part of the MMGP Feasibility Study A total of 46,000m of diamond drilling completed at Westralia and 41,000m at Jupiter – made up of RC and diamond drilling Westralia M&I Mineral Resources up 176% to 905,000 ounces, whereas Jupiter M&I Resources up 69% to 1.12 million ounces. At Westralia, Inferred Mineral Resources of 715,000 ounces at a grade of 6.6 g/t Au lies below the M&I resources, thereby providing excellent potential for an increase to M&I resources with ongoing in-fill drilling Westralia Mineral Resource now totals 1.6 million ounces at a grade of 5.8 g/t Au, up from 5.1 g/t gold last year. Corporate Share price increased almost 600% from $0.43 to $2.90 Market capitalisation increased over 800% from $41 million to $380 million Dacian Gold was one of the best performing stocks on the ASX during FY2016 Institutional shareholders now own 38% of the Company, up from 15% Key management appointments made as well as strengthening the Board 3 REVIEW OF OPERATIONS INTRODUCTION AND DACIAN GOLD’S CORPORATE OBJECTIVE Dacian Gold’s Mt Morgans Gold Project (MMGP) is located 20km west of Laverton, being approximately 800km north-east of Perth in Western Australia (see Figure 1). The project area is a 520 km² contiguous tenement package comprising predominantly granted mining leases. The tenement package is situated in the Laverton gold district which is known to contain some 30 million ounces of gold, making it the second highest endowed gold district in Western Australia behind Kalgoorlie. The MMGP has been the Company’s sole focus since its IPO on the ASX in November 2012. In the three years since the Company’s IPO, Dacian has discovered two +1 million ounce gold deposits at Westralia and Jupiter (see Figure 2). In last year’s Annual Report the Company described the results of the Mt Morgans Scoping Study that was released to the market in late September 2015. More details on the results of the Scoping Study are contained below, however, it was clear to Company management that the MMGP was a project that showed considerable potential, and was therefore fast-tracked onto a detailed Feasibility Study. In November 2015, the Company announced a fully underwritten equity raising of $25 million (before costs) to be completed at an issue price of $0.69 per share. The equity raising was designed to finance an approximately 90,000m diamond and RC drilling program aimed at converting those Mineral Resources used in the Scoping Study that were already not in the Measured and Indicated categories to these higher confidence Mineral Resource categories. In addition, the $25 million equity financing was to enable the Company to complete the detailed Feasibility Study before the end of CY2016 and to provide working capital. Dacian Gold’s objective for CY2016 is to complete the MMGP Feasibility Study and to determine what level and style of financing is required to construct the MMGP assuming the MMGP Feasibility Study shows mine development is warranted. Figure 1: Location of Dacian’s Project area in Western Australia 4 Figure 2: Regional location map showing distribution of Dacian’s Westralia, Jupiter and Transvaal Prospects as well as major infrastructure items and proximal multi-million ounce gold deposits. The Company believes there is a reasonable chance the Feasibility Study will show the MMGP is a project that is likely to be developed. Subject to such a confirmation, Dacian Gold would undertake project construction in CY2017 ahead of gold production in Q1 of CY2018. It is clear to Dacian Gold that the MMGP is both highly endowed with gold mineralisation and under-explored, despite several companies holding the project area over the last 20 years. Testament to this is the fact that inside 4 years, Dacian Gold’s discoveries have increased the Mineral Resource base almost four-fold from 842,000 ounces at IPO to over 3,300,000 ounces at the time of this report. The Company is also confident that additional gold mineralisation will be discovered on the MMGP tenements, and accordingly the Company will retain an aggressive exploration campaign as a corporate objective for many years to come. 5 REVIEW OF OPERATIONS FEASIBILITY STUDY DRILLING PROGRAM The release to the ASX of the MMGP Scoping Study on 30 September 2015 showed the project had the potential to be a significant and likely low cost mid-tier WA-based gold producer, with the following key metrics: • An initial 7 year Life of Mine producing 1.2Moz of gold at an AISC of A$929/oz. • A site infrastructure capital expenditure of A$157M, which includes construction of a 2.5Mt/annum conventional CIL treatment plant. • Gold production was principally sourced from a large open pit mining complex at Jupiter and a large underground mine at Westralia. Total mined production amounted to 16.0Mt at 2.5g/t Au for 1.3Moz contained gold. The Life of Mine production of 1.2 Moz as depicted in the MMGP Scoping Study was based on detailed mine design studies on a combination of Measured, Indicated and Inferred Mineral Resources at the Westralia, Jupiter and Transvaal Prospects. At the time of the Scoping Study the Mt Morgans Mineral Resources totalled 3.0 million ounces of gold. Given the positive outcome of the Scoping Study, Dacian Gold completed a $25 million equity raising designed in part to fund a major resource in-fill drilling campaign. The drilling program had the specific objective of increasing the size of the Measured and Indicated Mineral Resource so that mine design studies completed as part of the MMGP Feasibility Study were able to potentially deliver an Ore Reserve base that could justify the commencement of mine development at Mt Morgans. The resource in-fill drilling was completed at the Westralia Deposit and the Jupiter Deposit. At Westralia 71 oriented diamond drill holes for 35,000m was drilled into the Allanson underground position and 24 oriented diamond drill holes for 11,000m was drilled into the Beresford underground position. At Jupiter, 313 RC drill holes for 34,000m and 37 oriented diamond drill holes for 7,000m were drilled. Cautionary Statement – Scoping Study Dacian Gold has concluded it has a reasonable basis for providing the forward looking statements that relate to the Mt Morgans Scoping Study that are included in this report. The detailed reasons for that conclusion are outlined in ASX announcement dated 30 September 2015, which has been prepared in accordance with the JORC Code (2012) and the ASX Listing Rules. The Company advises that the Scoping Study results, Production Targets and Forecast Financial Information contained in this report are preliminary in nature as the conclusions are based on low- level technical and economic assessments, and are insufficient to support the estimation of Ore Reserves or to provide an assurance of economic development at this stage. There is a low level of geological confidence associated with Inferred Mineral Resources used in the scoping study and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target itself will be realised. The stated Production Target is based on the Company’s current expectations of future results or events and should not be relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met. The Company confirms that all material assumptions underpinning the Production Target and Forecast Financial Information contained in the Company’s ASX announcement released on 30 September 2015 continue to apply and have not materially changed. 6 WESTRALIA DEPOSIT Introduction Gold mineralisation at Westralia was first discovered in 1896 and quickly led to the gazetting of the Mt Morgans township. By 1903, 200,000 ounces of gold had been mined from 191,000 tonnes of ore at Westralia confirming production grades of over 1 ounce of gold per tonne. The gold at Westralia occurs within a well-defined mineralised banded iron formation (BIF) unit from which approximately 900,000 ounces at a grade of 4.5 g/t gold was produced up to 1998; with the majority being sourced from within the Westralia open pit limits. Much of this pre-mined resource occurs over a horizontal strike distance of 1.5km and lies within 500m of the surface. Previous mining and on-site treatment of the deposit has demonstrated that the gold is free milling with recoveries of 91%-93% achieved historically from conventional site-based CIP/CIL processing. Resource In-Fill Drilling Activity As noted above the resource in-fill drilling activity during the year focused on Beresford at the south end of the Westralia ore system and Allanson, located at the northern end. Figure 3 below shows the location of Beresford and Allanson in relation to the Westralia open pit. Note the mineralisation remains open to the north, south and at depth. Figure 3: Longitudinal section of the 3km long Westralia Deposit Mineral Resource (yellow shading) showing the location of the recently completed 24 hole, 11,000m in-fill diamond drilling program at Beresford and the 71 hole, 35,000m in-fill drilling program at Allanson. Note the high proportion of +10g/t Au intersections from both drilling programs. 7 REVIEW OF OPERATIONS ALLANSON DEPOSIT (formerly Morgans Underground) During the 2016 FY the Company released the results from the 71 diamond drill holes from the priority in-fill diamond drilling program at the Allanson Deposit. The principal aim of the in-fill drilling program at the Allanson Deposit was to complete a 50m x 50m diamond drill pattern over the Allanson Inferred Resource. The 50m x 50m in-fill drilling pattern provided sufficient geological confidence to contribute to the upgrade of 905,000 ounces of the 1.6 million ounce Westralia Mineral Resource to the Indicated and Measured resource categories. The results from the final diamond drill holes from the Allanson Deposit were released prior to the end of the 2016 FY (see ASX announcements of 1 June 2016, 21 March 2016 and 11 February 2016), with numerous excellent results including (see also Figure 4): • 3.6m @ 48.0 g/t Au from 527.4m in 15MMRD0064W1 • 3.0m @ 24.6 g/t Au from 269.6m in 16MMRD0048 • 5.6m @ 23.2 g/t Au from 469.3m in 16MMRD0068 • 4.3m @ 22.4 g/t Au from 317.7m in 16MMRD0105 • 6.2m @ 20.1 g/t Au from 419.8m in 15MMRD0034 • 4.3m @ 17.5 g/t Au from 421.4m in 16MMRD0041 • 1.2m @ 19.1 g/t Au from 207.6m in 16MMRD0092 • 2.9m @ 16.1 g/t Au from 230.2m in 15MMRD0037 • 1.9m @ 15.9 g/t Au from 196.8m in 16MMRD0052 • 4.0m @ 13.9 g/t Au from 528.0m in 15MMRD0064 • 4.5m @ 13.4 g/t Au from 252.5m in 15MMDD0060 • 2.1m @ 12.6 g/t Au from 284.1m in16MMRD0051 • 2.6m @ 11.9 g/t Au from 328.0m in 15MMRD0037 • 2.3m @ 8.1 g/t Au from 303.5m in 16MMRD0044 • 5.1m @ 7.4 g/t Au from 379.0m in 16MMRD0125 • 2.7m @ 7.2 g/t Au from 421.0m in 15MMRD0033 • 4.0m @ 7.0 g/t Au from 358.0m in 15MMRD0030 • 3.0m @ 6.5 g/t Au from 511.0m in 15MMRD0064W1 • 3.8m @ 6.1 g/t Au from 465.0m in 16MMRD0062 • 1 2.0m @ 5.7 g/t Au from 341.0m in 16MMRD0105 • 5.6m @ 5.1 g/t Au from 450.8m in 16MMRD0125 • 4.4m @ 5.0 g/t Au from 365.0m in 15MMRD0030 • 0.5m @ 26.8 g/t Au from 390.9m in 16MMRD0069 • 1.0m @ 11.9 g/t Au from 410.0m in 16MMRD0066 8 The principal mineralised surface at Allansons is located within the footwall banded iron formation (BIF) unit which lies at the base of the 80-100m thick Westralia BIF package. Subordinate mineralised BIF units lie in the hangingwall, or stratigraphically above, the principal mineralised footwall BIF unit. Interpretation of the drill intersection results from Allanson drill-out suggests two and possible three sub-parallel mineralised surfaces may be present. The Company is encouraged there may exist the possibility of multiple surfaces being accessed from the potential mine development Figure 4: Long section of the Allanson (formerly Morgans Underground) mineralisation showing results of the in-fill drilling program. The mineralisation measures 700m long and up to 400m in dip (or vertical) extent. 9 REVIEW OF OPERATIONS BERESFORD DEPOSIT (formerly Westralia Underground) Figure 3 (page 7) shows the location of the Beresford mineralisation at the south end of the Westralia ore system. As with the drilling completed at Allanson, the principal aim of the 24 hole, 11,000m in-fill resource drilling at Beresford was to complete a 50m x 50m in-fill diamond drill pattern over the upper portions of the Westralia Mineral Resource between 100m and 350m below the surface. Numerous high-grade intersections were returned from the completed 24-hole in-fill diamond drilling program, including (see ASX announcement 28 June 2016): • 3.3m @ 84.3 g/t Au from 212.2m in 16MMRD0165 • 1 3.2m @ 14.1 g/t Au from 275.0m in 16MMDD0149 • 4.8m @ 26.3 g/t Au from 424.0m in 16MMRD0167W1 • 3.7m @ 18.0 g/t Au from 323.4m in 16MMRD0169 • 6.4m @ 12.1 g/t Au from 437.0m in 16MMRD0159W2 • 2.0m @ 15.9 g/t Au from 405.0m in 16MMRD0161W1 • 1.7m @ 10.2 g/t Au from 307.0m in 16MMRD0147 • 2.5m @ 9.7 g/t Au from 296.3m in 16MMRD0169 • 3.2m @ 8.9 g/t Au from 316.0m in 16MMRD0175 • 1.9m @ 10.5 g/t Au from 435.0m in 16MMRD0167 • 1 2.3m @ 4.5 g/t Au from 422.5m in 16MMRD0167W2 A feature of several of the drill holes were the multiple high grade intersections returned from separate BIF units intersected in those holes. Detailed geological interpretation has led to the identification of individual BIF units that can be traced over many hundreds of metres, and referred to as Hangingwall BIF, Central BIF and Lower BIF (see Figure 5). All three BIF units (Hangingwall, Central and Lower) exhibit high grade gold mineralisation, with the Hangingwall and Central BIF units containing the majority of the gold mineralisation at Beresford. Figure 5: Cross section through 10375N showing high grade developed along each of the Hangingwall, Central and Lower BIF units for a vertical distance of over 400m. Note previously released Dacian Gold drill holes (13MMRD series) and historic underground drill holes confirm excellent BIF continuity and that the high grade mineralisation is present for over 400m in vertical extent. 10 Figure 6: Longitudinal section of the 1.6 Moz Westralia Deposit showing the distribution of Measured, Indicated and Inferred Mineral Resources. Updated Westralia Deposit Mineral Resource Following the 46,000m resource in-fill drilling program undertaken at Beresford and Allanson, the Company published a revised Mineral Resource estimate for the Westralia Deposit which resulted in a 176% increase in the Measured and Indicated Mineral Resource categories to 905,000 ounces of gold (refer ASX announcement 28 July 2016). The total Westralia Deposit Mineral Resource increased to 8.6Mt @ 5.8 g/t Au for 1.6 million ounces. Significantly the 46,000m drilling program saw the overall Westralia Deposit grade increase 15% to 5.8 g/t Au. Tabulated below is a summary of the updated Westralia Deposit Mineral Resource showing the proportion of the resource that comprises oxide, transitional and fresh rock types; and also the respective portions of the resource that comprise the Beresford, Allanson and Morgans North Mineral Resources. Figure 6 above is a long section showing the distribution of the Measured, Indicated and Inferred Mineral Resources that make-up the Westralia Deposit Mineral Resource. Westralia Deposit July 2016 Mineral Resource Estimate (2.0g/t Au Cut-off) Measured Indicated Inferred Total Type Oxide Transitional Fresh Total Tonnes Mt 0.02 0.02 0.4 0.4 Au g/t 6.6 3.7 5.0 5.0 Au Ounces 3,000 3,000 60,000 65,000 Tonnes Mt 0.01 0.2 4.6 4.8 Au g/t 4.6 3.6 5.5 5.5 Au Ounces 1,000 18,000 821,000 840,000 Tonnes Mt 0.2 3.3 3.4 Au g/t 4.8 6.5 6.5 Au Ounces 24,000 691,000 715,000 Tonnes Mt 0.02 0.3 8.3 8.6 Au g/t 6.0 4.2 5.9 5.8 Au Ounces 4,000 45,000 1,572,000 1,621,000 Westralia Deposit July 2016 Mineral Resource Estimate (2.0g/t Au Cut-off) Measured Indicated Inferred Total Type Beresford Allanson Morgans North Total Tonnes Mt 0.4 0.04 0.4 Au g/t 5.0 4.7 5.0 Au Ounces Tonnes Mt 60,000 6,000 3.4 1.1 0.3 65,000 4.8 Au g/t 5.1 7.2 3.7 5.5 Au Ounces Tonnes Mt 562,000 245,000 33,000 2.6 0.7 0.2 Au g/t 6.5 6.3 5.5 Au Ounces Tonnes Mt 540,000 137,000 38,000 6.4 1.7 0.5 Au g/t 5.7 6.9 4.2 Au Ounces 1,162,000 382,000 77,000 840,000 3.4 6.5 715,000 8.6 5.8 1,621,000 Note: Totals may differ due to rounding Mineral Resources reported on a dry basis 11 REVIEW OF OPERATIONS JUPITER DEPOSIT Introduction The Jupiter Deposit occurs in the eastern half of the MMGP being approximately 20km east-south-east of the Westralia Deposit. The Jupiter Deposit lies within the Jupiter Corridor which is defined as a 2km long north-south trend containing three main syenite bodies, which from south to north, are termed Ganymede, Heffernans and the Doublejay. Several smaller syenite dykes and intrusive bodies are found proximal to the three main syenites, and all are contained within the Jupiter Corridor. Approximately 150,000 ounces of gold was produced from Jupiter Open Pit now referred to as the Doublejay pits during the period 1994-1996. On-site treatment of the deposit demonstrated that the gold is free milling with recoveries of 91%-93% achieved historically from conventional CIP/CIL processing. Post the completion of mining activities in 1996, the remnant resources remaining at Jupiter were 800kt at 2.8 g/t for 73,000 ounces (above a 1.5 g/t lower cut-off grade). All remaining resources were situated below the base of the Doublejay pits. Very limited exploration continued at Jupiter post the cessation of mining activities in 1996 with only two diamond drill holes completed within the Jupiter Corridor until Dacian Gold commenced drilling in September 2013. Shortly after Dacian Gold commenced drilling, it discovered high grade mineralisation at Heffernans. Ongoing drilling and surface mapping programs confirmed the main control for the mineralisation that was discovered by Dacian Gold within the Jupiter Corridor was the north-south striking, shallow east-dipping Cornwall Shear Zone (CSZ). The CSZ lodes together with subordinate parallel lodes within the Doublejay, Heffernans and Ganymede syenite bodies give rise to the mineralisation within the Jupiter Deposit Mineral Resource that was used for the September 2015 MMGP Scoping Study. As observed at Westralia, a portion of the Scoping Study mining inventory used in the Jupiter open pit mine designs was Inferred Mineral Resource. Dacian Gold then embarked on a major 41,000m resource in-fill drilling program to improve the classification of the Jupiter Deposit Mineral Resource so that during the subsequent Feasibility Studies, a maiden Jupiter Ore Reserve can be established in order to determine if mine development could proceed. Resource In-Fill Drilling Activity The 41,000m resource in-fill drilling program comprised 313 RC drill holes for 34,000m to complete a 40m x 40m in- fill and resource extension drill program over the 2km long Jupiter Mineral Resource; and 7,000m of diamond drilling to be used for geotechnical assessment of the proposed open pit designs. 12 A combination of high grade intersections over 1-10m thickness and some very thick, lower grade intersections were returned from the drilling programs. Results were reported in ASX announcements dated 8 February 2016, 14 March 2016, 9 May 2016, 16 June 2016, and include: • 3.0m @ 106.9 g/t Au from 72m in 15JURC137 • 1.0m @ 43.6 g/t Au from 71m in 16JURC254 • 1.0m @ 39.8 g/t Au from 51m in 16JURC279 • 8.0m @ 26.3 g/t Au from 104min 15JURC114 • 2.0m @ 15.0 g/t Au from 36m in 16JURC287 • 3.0m @ 12.3 g/t Au from 87m in 15JURC209 • 4.0m @ 10.7 g/t Au from 28m in 16JURC221 • 01 2.0m @ 10.1 g/t Au from 39m in 16JURC332 • 6.0m @ 8.6 g/t Au from 42m in 16JURC318 • 01 8.0m @ 6.2 g/t Au from 158m in 16JURC254 • 06 7.0m @ 5.0 g/t Au from 145m (estimated true thickness is 35m) in 16JURC264 • 5.0m @ 3.3 g/t Au from 11m in 15JURC209 • 03 1.0m @ 2.7 g/t Au from 147m in 16JURC255 • 02 0.0 m @ 2.7 g/t Au from 14m in 16JURC399 • 01 8.0m @ 2.6 g/t Au from 148m in 16JURC312 • 6.0m @ 2.5 g/t Au from 38m in 16JURC378 • 13 3.0m @ 2.4 g/t Au from 87m in 16JURC311 • 010.0m @ 2.3 g/t Au from 246m in 16JURC143 • 01 1.0m @ 2.2 g/t Au from 30m in 16JURC211 • 02 2.0m @ 2.0 g/t Au from 95m in 16JURC288 • 010.0m @ 2.0 g/t Au from 6m in 16JURC216 • 015.0m @ 1.9 g/t Au from 71m in 16JURC255 • 01 1.0m @ 1.9 g/t Au from 12m in 16JURC326 • 08 7.1m @ 1.7 g/t Au from 244m and 38m @ 1.5 g/t Au from 385m in 16JUDD367 • 01 4.0m @ 1.6 g/t Au from 73m in 16JURC148 • 04 5.3m @ 1.5 g/t Au from 207.8m in 16JUDD403 • 01 7.0m @ 1.5 g/t Au from 238m in 16JUDD402 • 05 0.0m @ 1.5 g/t Au from 98m in 16JURC217 • 13 9.3m @ 1.3 g/t Au from 186.8m in 16JUDD409 • 07 9.4m @ 1.3 g/t Au from 123.6m in 16JUDD407 • 01 0.0m @ 1.2 g/t Au from 80m and 5m @ 5.1 g/t Au from 154m in 16JURC313 • 13 9.0m @ 1.2 g/t Au from 75m in 16JURC397 • 02 6.0m @ 1.1 g/t Au from 106m in 16JURC147 • 18 6.7m @ 1.0 g/t Au from 154m in 16JURD390 • 08 1.0m @ 1.1 g/t Au from 119m in 16JURC256 • 10 5.5m @ 1.0 g/t Au form 152.6m in 16JUDD406 • 16 7.0m @ 0.8 g/t Au from 162m in 16JURC321 • 08 9.0m @ 0.7 g/t Au from 216m in 16JURC312 • 06 9.0m @ 0.8 g/t Au from 90m and 93m @ 0.9 g/t Au from 193m in 16JURC303 • 08 2.0m @ 0.6 g/t Au from 0m in 16JURD390 13 REVIEW OF OPERATIONS Figure 7 is a plan projection of the 1.4 million ounce Jupiter Deposit showing all drilling completed as well as the distribution of the Measured, Indicated and Inferred Mineral Resources. Also shown in the location of the conceptual open pits derived from the 2015 Scoping Study. Figure 7: The 1.4 million ounce upgraded Jupiter Prospect Mineral Resource showing conceptual open pit outlines, drill density with maximum grade intersected; and resource classification outlines. 14 Figure 8 is an example of the successful extensional drilling conducted during the year. It shows extensive mineralisation intersected directly beneath the previously mined Jupiter (now called Doublejay) open pit, as well as below the conceptual open pit identified during the MMGP Scoping Study. The mineralisation is seen to continue for at least 140m below the historic open pit – which is the same depth the original pit mined to. Figure 8: Cross section through the Doublejay open pit at 2080N. Note the thick intersections of 133m @ 2.4 g/t Au and 186.7m @ 1.0 g/t Au lying directly below the existing open pit and the conceptual open pit design (grey / black dashed line). 15 REVIEW OF OPERATIONS Figure 9 is a cross section through the Heffernans deposit, located 960m south of Figure 8 above. It shows the results of the 40m x 40m resource in-fill drilling as well as the thick intersections returned from geotechnical drill holes that were designed to test the rock strength of the intended walls to the Heffernans open pit. The intersections returned from the geotechnical drilling are outside the conceptual pit shell derived from the Scoping Study. Figure 9: Cross section through Heffernans at 1120N showing the location of geotechnical drill holes 16JUDD367 and 16JUDD024. Note the significant thick intersections in 16JUDD367 below the conceptual open pit (red/yellow labels). Intersections from drilling completed in 2014 and 2015 are shown as red/white labels. Updated Jupiter Deposit Mineral Resource Following the 41,000m resource in-fill and extension drilling program undertaken at Jupiter, the Company published a revised Mineral Resource estimate for the Jupiter Deposit which resulted in a 69% increase in the Measured and Indicated Mineral Resource categories to 1,120,000 ounces of gold (refer ASX announcement 19 July 2016). Eighty- two percent of the total Jupiter Deposit Mineral Resource, increased to 33.7Mt @ 1.3 g/t Au for 1.4 million ounces, is now classified as Measured and Indicated Mineral Resource. Dacian Gold’s drilling at Jupiter in less than three years has increased the Mineral Resource base from 78,000 ounces to 1.4 million ounces. Of the total Mineral Resource 816,000 ounces lies within 150m of the surface giving rise to a significant 5,000 ounces per vertical metre level of endowment. 16 Tabulated below is a summary of the updated Jupiter Deposit Mineral Resource showing the proportion of the resource that comprises oxide, transitional and fresh rock types. July 2016 Mineral Resource Estimate (0.5g/t Cut-off Above 0mRL, 1.5g/t Cut-off Below 0mRL) Measured Indicated Inferred Total Jupiter Deposit Type Oxide Tonnes Mt Au g/t Au Ounces Tonnes Mt 0 2,000 1.0 3.1 52,000 18.8 58,000 Au g/t 1.4 1.2 1.4 Au Ounces Tonnes Mt 42,000 0.1 117,000 0.04 847,000 6.1 Au g/t 1.9 0.9 1.1 Au Ounces Tonnes Mt 6,000 1,000 1.1 3.2 223,000 25.9 3.5 Au g/t 1.4 1.2 1.4 0.5 Au Ounces 49,000 120,000 1,123,000 58,000 112,000 22.9 1.4 1,006,000 6.3 1.2 231,000 33.7 1.3 1,350,000 Transitional 0.04 Fresh Jupiter LG Stockpiles Total 1.0 3.5 4.5 1.2 1.7 0.5 0.8 The corresponding Mineral Resource tables for the respective portions of the Jupiter Deposit that comprise the Doublejay, Heffernans and Ganymede Mineral Resources are tabulated below: July 2016 Mineral Resource Estimate (0.5g/t Cut-off Above 0mRL, 1.5g/t Cut-off Below 0mRL) Measured Indicated Inferred Total Doublejay Deposit Type Oxide Transitional Fresh Total Tonnes Mt Au g/t 0.04 1.0 1.0 1.2 1.7 1.7 Au Ounces 0 2,000 52,000 54,000 Tonnes Mt 0.04 1.1 7.4 8.5 Au g/t 1.0 1.1 1.3 Au Ounces 1,000 36,000 302,000 1.3 339,000 Tonnes Mt Au g/t Au Ounces Tonnes Mt 0.04 1.1 69,000 10.4 Au g/t 1.0 1.1 1.3 Au Ounces 1,000 38,000 423,000 2.1 2.1 1.0 1.0 69,000 11.6 1.2 463,000 July 2016 Mineral Resource Estimate (0.5g/t Cut-off Above 0mRL, 1.5g/t Cut-off Below 0mRL) Heffernans Deposit Type Oxide Transitional Fresh Total Type Oxide Transitional Fresh Total Indicated Inferred Au g/t 1.4 1.3 1.5 1.5 Au Ounces 22,000 61,000 505,000 588,000 Tonnes Mt 0.03 0.03 3.4 3.4 Au g/t 2.2 0.9 1.2 1.2 Au Ounces 2,000 1,000 128,000 131,000 Ganymede Deposit July 2016 Mineral Resource Estimate (0.5g/t Au Cut-off) Indicated Inferred Au g/t 1.4 1.0 1.3 1.2 Au Ounces 19,000 19,000 40,000 79,000 Tonnes Mt 0.1 0.6 0.7 Au g/t 1.8 1.3 1.3 Au Ounces 4,000 0 26,000 31,000 Tonnes Mt 0.5 1.4 10.5 12.4 Tonnes Mt 0.4 0.6 1.0 2.0 Tonnes Mt 0.5 1.5 13.9 15.9 Tonnes Mt 0.5 0.6 1.6 2.7 Total Au g/t 1.4 1.3 1.4 1.4 Total Au g/t 1.5 1.0 1.3 1.3 Au Ounces 24,000 62,000 633,000 719,000 Au Ounces 23,000 20,000 66,000 109,000 17 REVIEW OF OPERATIONS MMGP FEASIBILITY STUDY The objective of the Mt Morgans Gold Project (MMGP) Feasibility Study is to deliver an Ore Reserve similar to the results obtained from the Scoping Study released to the ASX on 30 September 2015. If Dacian Gold is able to deliver a Feasibility Study result similar to the Scoping Study, then there is a high likelihood the Dacian Gold Board will decide to proceed with mine development and construction in early 2017. Key to achieving the positive results observed in the Scoping Study was the requirement to improve the confidence of the Mineral Resource which was successfully achieved through the completion of an approximately 90,000m RC and diamond drilling program (see section above titled Feasibility Study Drilling Program). As a result of this major drilling program, 1.12 million ounces of the Jupiter Deposit now sit in the Measured and Indicated Mineral Resource category and 905,000 ounces of the high grade Westralia deposit sits in the Measured and Indicated Mineral Resource categories. Dacian Gold also receives a significant benefit in its quest to develop the MMGP due to the extensive infrastructure that is already associated with the project and surrounding area. The MMGP is situated in a brownfields site that saw the production of over 1 million ounces of gold during the late 1990s; the majority of which were won from the Westralia and Jupiter Deposits. Examples of the in-place infrastructure include: • • Established townships with public airports at nearby Laverton and Leonora; Public and private road networks including sealed highways lie within the project tenure; • An existing excellent quality raw water source lies within the project area that previously was used in treatment of Mt Morgans ores; • A new gas pipeline transects the entire tenement package from west to east; • A Telstra telecommunications tower sits only 8km north of Westralia, within Dacian Gold tenure; and • An existing accommodation camp and office complex is in place; however will likely be replaced by a new accommodation village to be built on the same site as the previous accommodation village. 18 During the course of the year, a considerable effort was made toward the MMGP Feasibility Study. Work programs undertaken during the year and nearing completion at the time of writing this report included: • Advancement of comprehensive metallurgical test-work programs from both Westralia and Jupiter using RC and diamond core samples obtained from the major resource in-fill drill program. • Collection of mine geotechnical data from core obtained from diamond drill holes that were part of the resource in-fill drill program. • Advancement of detailed process plant, tailings storage facility and site infrastructure design work by GR Engineering Services Ltd as required for feasibility cost estimation. • Completion of detailed civil geotechnical field investigations in and around the areas proposed for construction of the processing plant and associated tailings storage facility. • Engagement of specialist mining consultants Orelogy to complete open pit mining study work for the proposed Jupiter open pits and Entech to complete mining study work related to the Westralia underground mining complex. • Completion of environmental field surveys related to development of the project and as required for regulatory approvals. • Completion of field work to determine the groundwater regime around the proposed open pit and underground mines as input for mine geotechnical assessments and to determine dewatering requirements. • Continuation of groundwater exploration drilling programs to locate additional raw water supplies to supplement proposed supply from existing water bores within the project area. • Advanced discussions with relevant government agencies and stakeholders. • Recruitment of a Chief Financial Officer, Processing Manager and Mining Manager to assist with finalisation of the MMGP feasibility study and commence preparations for project development. Dacian Gold will release the results of the MMGP Feasibility Study in Q4 of CY2016. 19 REVIEW OF OPERATIONS EXPLORATION ACTIVITY As noted in the Dacian Gold’s Corporate Objective section above, the Company remains confident it will build on its initial success at Westralia and Jupiter; and continue to make new gold discoveries within the MMGP. It therefore remains a core Corporate Objective that Dacian Gold maintains an ongoing aggressive exploration initiative during its feasibility and potential construction campaigns. During the year, and in addition to the 90,000m RC and diamond drilling program it completed as part of the Westralia and Jupiter resource in-fill and extension drilling, Dacian Gold commenced reconnaissance exploration on several exciting new and under-explored prospects, named Cameron Well, Jupiter Regional and Callisto. JUPITER REGIONAL PROSPECT The Jupiter Regional Prospect is the area in an around the 1.4 million ounce Jupiter deposit. The Company completed an ultra-detailed ground magnetic survey by collecting magnetic readings along a 2km east-west line, for every 50m, over a 5km distance. The approximately 10km² survey involved the walking and collection of magnetic readings over a distance of 382 kilometres (see ASX announcement 4 November 2015). Figure 10 shows the result of the ultra-detailed magnetic survey in relation to the outline of the 1.4 million ounce Jupiter Deposit Mineral Resource. Several key drill targets are evident from the results of the magnetic survey and include from north to south: • • • The untested bulls-eye magnetic anomaly called Rosetta; as well as a smaller positive magnetic anomaly immediately south of Rosetta; The large Europa magnetic anomaly lying immediately east of the Jupiter Deposit resource outline; and The conspicuous linear trends labelled Corridor A and Corridor B that show a magnetic character similar to that seen inside the Jupiter Deposit Mineral Resource. At the time of writing this report, Dacian Gold has completed approximately 300 RAB drill holes along parts of Corridors A and B together with drill testing areas not previously explored south of and to the west of the Jupiter Deposit resource outline. Assays are awaited and will be released to the market once they are to hand. A single RC hole as drilled into Rosetta in late 2015 which intersected magnetic basalt associated with structure and low level gold mineralisation. Further follow-up work is warranted at Rosetta. Europa was tested with two diamond drill holes during early 2016. The purpose of the drilling was to identify the source of the magnetic anomaly ahead of more accurately defining its shape prior to diamond drill testing. The initial two diamond drill holes confirmed the source of the magnetic anomaly as magnetic basalt. Follow up three-dimensional magnetic modelling is planned for later in CY2016, with diamond drilling to occur afterwards. 20 Rosetta Doublejay Heffernans Europa Corridor B Corridor A Figure 10: Jupiter Regional ultra-detailed ground magnetics (TMI). The 1.4 million ounce Jupiter Deposit Mineral Resource is shown as yellow outline. Note the variable magnetic response from within the Mineral Resource envelope: mineralised syenites display both positive magnetism (red circular features as seen at Heffernans) and negative magnetism (blue circular features as seen at Doublejay). Also note the discrete and unexplained Europa and Rosetta positive magnetic anomalies as well as the linear trends of combined positive and negative magnetic anomalies within the newly identified Corridor A and Corridor B. All of the new magnetic anomalies and Corridors represent drill-ready targets. 21 REVIEW OF OPERATIONS CAMERON WELL PROSPECT The Cameron Well Prospect is located 5km east of Westralia and was last explored in the1990s. During its only previous exploration – some 15 years ago – significant intersections at shallow depths were returned, as shown in Figure 11. The intersections define near-flat, north-dipping gold lodes in an interpreted syenite complex; similar in style and host to that seen at the Jupiter and Wallaby gold deposits located 12km and 20km to the south-east respectively. Figure 11: Shallow high grade intersections returned from drilling completed at Cameron Well in the 1990s (note hole prefix 92- and 94- indicates the drilling was completed in 1992 and 1994 respectively). The drilling suggests flat, north dipping lodes are present within an interpreted syenite complex – analogous to that seen at the Jupiter and Wallaby deposit to the east. Note also NSA = no significant assay. As part of the 1990s drilling at Cameron Well, broad areas of highly anomalous gold was seen in an area less than 1km north of the cross section shown above in Figure 11. Both the broad areas of anomalism and the higher grade zones as seen in Figure 11 appear to be associated with a large ring-like magnetic anomaly interpreted to be caused by a syenite body; and is shown in Figure 12. The larger, broader anomaly is defined by wide-spaced reconnaissance RAB drilling on 100m x 100m centres. Dacian Gold management is highly encouraged that despite the broad nature of the reconnaissance drilling, the northern anomaly shown in Figure 12 contains 20 holes that intersect 1g/t – 3g/t Au; 5 holes that intersect 3g/t – 5g/t Au and 5 holes that intersect plus 5g/t Au. The combination of shallow high-grade, flat north-dipping lodes and strongly anomalous gold values intersected in the 100m x 100m spaced reconnaissance RAB drilling, all located on a circular magnetic feature thought to be a syenite, is highly encouraging. Given this level of mineralisation is seen over a distance of 2km makes it worthy of a significant exploration effort to more fully understand the extent and nature of this shallow, but extensively mineralised position. Dacian Gold have completed a 133 hole RAB program further defining the extents of the mineralisation over 2.5km x 2km (See ASX Announcement 1 September 2016). 22 CALLISTO PROSPECT Figure 12: Cameron Well Prospect showing anomalous areas in association with a large ring-like magnetic anomaly thought to represent a syenite intrusive. The high grade cross section seen in Figure 11 above is located within the southern approximately circular anomaly (with label of “Best Result of 7m@15g/t Au). The broad highly anomalous region in the larger shape at the top of the image. The Callisto Prospect lies 6km south of the Jupiter Deposit and 7km west of the world-class +8Moz Wallaby gold deposit. It is defined as a significant 1km long x 500m wide positive magnetic anomaly lying beneath approximately 85m of Lake Carey clay sediments and is situated 4km from the Lake Carey shoreline. Due to its remoteness and being in a difficult location to explore, it has only seen very minor historic exploration with a total of three previous holes drilled. None of the previous holes drilled explained the source of the magnetic anomaly. Dacian Gold believe the magnetic anomaly may be due to a large magnetic alteration event that is associated with the intrusion of syenite bodies as seen at the nearby Jupiter and Wallaby mines. At both Wallaby and Jupiter, the magnetic alteration event precedes a major gold mineralisation event. Dacian Gold has embarked on a scissor-diamond drilling program aimed at testing the source of the magnetic anomaly. Two 800m deep diamond holes will be drilled into the geophysically modelled magnetic body as shown below in Figure 13. Note the 2001 drill hole shown in Figure 13 was stopped short of testing the modelled magnetic body. At the time of writing this report, Dacian Gold was drilling the two holes. It will release the results of the drilling to the market as they become available. Figure 13: Modelling of the magnetic anomaly that defines the Callisto Prospect is to be tested by two 800m deep oriented scissor diamond drill holes, as shown. Note the location of the 2001 drill hole failed to test the interpreted magnetic model position. 23 2016 MINERAL RESOURCES & ORE RESERVES STATEMENT (DCN: 100%) MOUNT MORGANS GOLD PROJECT MINERAL RESOURCES AS AT 28 JULY 2016 Cut-off Grade Au g/t 0.5 0.5 1.5 0.5 2.0 0.5 2.0 2.0 Deposit King Street* Jupiter Jupiter UG Jupiter LG Stockpile Westralia Craic* Transvaal Ramornie Total Measured Indicated Inferred Total Mineral Resource Tonnes - 994,000 - 3,494,000 409,000 - 367,000 - Au g/t - 1.7 - 0.5 5.0 - 5.8 - Au Oz - Tonnes - 54,000 22,889,000 - 58,000 - - 65,000 4,769,000 - 69,000 68,000 404,000 - 156,000 Au g/t - 1.4 - - 5.5 8.2 5.3 4.1 Au Oz - Tonnes 532,000 1,006,000 5,739,000 - - 530,000 - 840,000 3,449,000 18,000 69,000 21,000 120,000 482,000 285,000 Au g/t Au Oz Tonnes 2.0 1.1 2.0 - 6.5 7.1 4.7 3.9 33,000 532,000 197,000 29,623,000 34,000 530,000 - 3,494,000 715,000 8,626,000 27,000 73,000 36,000 189,000 1,253,000 442,000 Au g/t 2.0 1.3 2.0 0.5 5.8 7.5 5.2 4.0 Au Oz 33,000 1,257,000 34,000 58,000 1,621,000 46,000 210,000 57,000 5,263,000 1.5 246,000 28,287,000 2.1 1,954,000 11,138,000 3.1 1,115,000 44,688,000 2.3 3,315,000 * JORC 2004 Mineral Resource Total Mineral Resources stated in the 2015 Mineral Resources and Ore Reserves Statement (MROR) for the Mount Morgans Gold Project was 41,730,000 tonnes at 2.2 g/t for 3,008,000 ounces (refer 2015 Annual Report). The change between the 2015 and 2016 MROR Statement were due to revised Mineral Resource estimates occurring at the Company’s 100% owned Westralia and Jupiter deposits. The Westralia Mineral Resource has increased from 9,269,000 tonnes at 5.1 g/t for 1,520,000 ounces to 8,626,000 tonnes at 5.8 g/t for 1,621,000 ounces (refer ASX releases 16 September 2015 and 28 July 2016). The Jupiter Mineral Resource has increased from 26,550,000 tonnes at 1.3 g/t for 1,085,000 ounces, to 29,623,000 tonnes at 1.3 g/t for 1,257,000 ounces (open pit) and 530,000 tonnes at 2.0 g/t for 34,000 ounces (underground). This Mineral Resource for Jupiter includes the split of open and underground resources reported (refer ASX releases 16 September 2015 and 19 July 2016). There is no change to the previously reported Mineral Resources for the King St, Craic, Jupiter LG stockpile, Transvaal and Ramornie deposits. MOUNT MORGANS GOLD PROJECT ORE RESERVES AS AT 15 SEPTEMBER 2015 Deposit Craic* Total Cut-off Au g/t 3.9 Proved Au g/t - - Tonnes - - Probable Total Au Oz Tonnes Au g/t Au Oz Tonnes Au g/t Au Oz - - 28,000 28,000 9.2 9.2 8,000 28,000 8,000 28,000 9.2 9.2 8,000 8,000 * JORC 2004 Ore Reserve CHANGES IN MINERAL RESOURCES SINCE 30 JUNE 2016 Since 30 June 2016 the Mineral Resource estimates for the Mount Morgans Gold Project have increased from 41,730,000 tonnes at 2.2 g/t for 3,008,000 ounces to 44,688,000 tonnes at 2.3 g/t for 3,315,000 ounces following revisions to Mineral Resource estimates for the Westralia and Jupiter deposits (refer ASX releases 19 July 2016 and 28 July 2016). There has been no change to the previously reported Ore Reserve for the Craic deposit since the 2015 MROR Statement. The Company confirms that all material assumptions and technical parameters pursuant to the mineral resource and Ore Reserve estimates at the time of the relevant market announcements continue to apply and have not materially changed. 24 GOVERNANCE Dacian Gold maintains strong governance and internal controls in respect of its estimates of Mineral Resources and Ore Reserves and the estimation process. Dacian ensures its sampling techniques, data collection, data veracity and the application of the collected data is at a high level of industry standard. Contract RC and diamond drilling with QA/QC controls approved by Dacian are used routinely. All completed holes are subject to downhole gyro or EMS surveys and collar coordinates surveyed with DGPS. All drill holes are logged by Dacian geologists. Diamond core is oriented and photographed. Dacian employs field QC procedures, including addition of standards, blanks and duplicates ahead of assaying which is undertaken using industry standards including fire assay at Intertek and Bureau Veritas laboratories in Perth and Kalgoorlie. Assay data is continually validated and stored in DataShed. Geological models and wireframes are built using careful geological documentation and interpretations, all of which are validated by peer review. Resource estimation is undertaken by independent consultants and reported under JORC 2012. Estimation techniques are industry standard and include block modelling using Ordinary Kriging. Application of other parameters including cut off grades, top cuts and classification are all dependent on the style and nature of mineralisation being assessed. Ore Reserve estimation is overseen by in house mining engineers using third party consultants to complete feasibility studies in mining, metallurgical, geotechnical, environmental and social matters. Results are verified by independent third party Ore Reserve specialist consultancies. 25 2016 MINERAL RESOURCES & ORE RESERVES STATEMENT (DCN: 100%) COMPETENT PERSON STATEMENT The Mineral Resources and Ore Reserves Statement is based on, and fairly represents, information and supporting documentation prepared by the respective competent persons named below. The Mineral Resources Statement as a whole has been approved by Mr Rohan Williams. Mr Williams is a holder of shares and options in, and is the Executive Chairman and a full-time employee of, the Company, and is a Member of the Australasian Institute of Mining and Metallurgy. Mr Williams has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Williams has approved the Mineral Resources and Ore Reserves Statement as a whole and consents to its inclusion in the Annual Report in the form and context in which it appears. The information in this report that relates to the Mineral Resource is based on information compiled by Mr Rohan Williams who is a director and full time employee of Dacian Gold Limited and a Member of The Australasian Institute of Mining and Metallurgy. Mr Williams has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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. Mr Williams consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to Mineral Resources (other than Westralia, Jupiter, Ramornie and Transvaal), Exploration Targets and Exploration Results is based on information compiled by Mr Rohan Williams, a director and full time employee of Dacian Gold Limited and a Member of The Australasian Institute of Mining and Metallurgy. The information in this report that relates to Mineral Resource estimates for Westralia, Jupiter, Ramornie and Transvaal (not including Jupiter low-grade stockpile) is based on information compiled by Mr Shaun Searle, a Senior Consultant Geologist and full time employee at RungePincockMinarco and a Member of Australian Institute of Geoscientists. The information in this report that relates to Ore Reserves is based on information compiled by Mr Bill Frazer, a director and full time employee of Mining One Pty Ltd and a Member of The Australasian Institute of Mining and Metallurgy. Mr Williams and Mr Frazer have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Williams and Mr Frazer consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. All information relating to Mineral Resources and Ore Reserves (other than the King Street and Craic) were prepared and disclosed under the JORC Code 2012. The JORC Code 2004 Mineral Resource and Ore Reserve have not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last updated. 26 DIRECTORS’ REPORT The Directors present the financial statements of Dacian Gold Limited (“the Company”) and its controlled subsidiaries (“the Group”) for the year ended 30 June 2016. In order to comply with the provisions of the Corporations Act 2001, the Directors Report is as follows: DIRECTORS The following persons were Directors of Dacian Gold Limited during or since the end of the year and up to the date of this report, were in office for this entire period unless stated otherwise: Rohan Williams BSc (Hons), MAusIMM (Executive Chairman) Mr Williams was founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its $7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed Australian gold producer. Serving as the merged group’s Chief Strategic Officer until the end of 2011, Mr Williams resigned as a Non-Executive Director of Alacer Gold Corp on 10 September 2013. Prior to his time with Avoca Resources Ltd, Mr Williams worked with WMC Resources Limited where he held Chief Geologist positions at St Ives Gold Mines and the Norseman Gold Operation. He has 25 years of experience, including over 19 years in the world class Kalgoorlie-Norseman gold belt. Mr Williams also serves on the Board of the Telethon Kids Institute. On 14 March 2014 Mr Williams became Executive Chairman of the Company. Prior to this date Mr Williams undertook the Chairman’s role on a Non-Executive basis. Other than as stated above Mr Williams has not served as a Director of any other listed companies, in the 3 years immediately before the end of 2016 financial year. Robert Reynolds MAICD, MAusIMM (Non-Executive Director) Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia Minerals to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until 23 August 2011. With over 35 years commercial experience in the mining sector, Mr Reynolds has worked on mining projects in a number of locations including Australia, Africa and across the Oceania region and has extensive experience in mineral exploration, development and mining operations. Mr Reynolds was a long term Director of Delta Gold Limited and was a Director of Extorre Gold Mines Limited when it was acquired by Yamana Gold for CAD$414 million on 22 August 2012. Mr Reynolds currently holds Directorships with Canadian companies Rugby Mining Limited and Exeter Resource Corporation. Mr Reynolds was previously a Director of ASX listed companies Chesser Resources, Convergent Minerals Limited and Global Geoscience Limited. Other than as stated above Mr Reynolds has not served as a Director of any other listed companies, in the 3 years immediately before the end of 2016 financial year. 27 DIRECTORS’ REPORT Barry Patterson ASMM, MAusIMM, FAICD (Non-Executive Director) Mr Patterson is a mining engineer with over 50 years of experience in the mining industry and is a co-founder, and Non-Executive Director, of ASX listed GR Engineering Limited. Mr Patterson was also a founding shareholder of leading engineering services provider JR Engineering, which became Roche Mining after being taken over by Downer EDI in 2002. He also co-founded contract mining companies Eltin, Australian Mine Management and National Mine Management. Mr Patterson has served as a Director of a number of public companies across a range of industries. He was formerly the Non-Executive Chairman of Sonic Healthcare Limited for 11 years, during which time the company’s market capitalisation increased from $20 million to $4 billion, and Silex Systems Limited. Other than as stated above Mr Patterson has not served as a Director of any other listed companies, in the 3 years immediately before the end of 2016 financial year. Ian Cochrane BCom LLB (Appointed 26 February 2016) (Non-Executive Director) Mr Cochrane is a corporate lawyer and was widely regarded as one of Australia’s leading M&A lawyers until his retirement from the practice of law in December 2013. Educated in South Africa where he completed degrees in Commerce and Law, he immigrated to Australia in 1986 and joined national law firm Corrs Chambers Westgarth and then Mallesons Stephen Jaques, specialising in Mergers & Acquisitions. In 2006, Mr Cochrane co-established boutique law firm Cochrane Lishman, which was eventually acquired by the global law firm Clifford Chance in early 2011. Mr Cochrane is currently the Chairman of VOC Group Limited and a Director and Deputy Chairman of diversified ASX- listed mining services group Ausdrill Limited. He is also a Director of Wright Prospecting Pty Ltd and Ardross Estates Pty Ltd. He was previously Chairman of Little World Beverages Limited which produced the Little Creatures beers and was taken over by Lion Nathan in 2012. He was also previously a Director of Rugby WA and the West Australian Ballet. Other than as stated above Mr Cochrane has not served as a Director of any other listed companies, in the 3 years immediately before the end of 2016 financial year. COMPANY SECRETARY Kevin Hart B.Comm, FCA Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 27 November 2012. He has over 25 years’ experience in accounting and the management and administration of public listed entities in the mining and exploration industry. He is currently a partner in an advisory firm, Endeavour Corporate, which specialises in the provision of company secretarial and accounting services to ASX listed entities. 28 INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY The following relevant interests in shares and options of the Company were held by the Directors as at the date of this report: Director Rohan Williams Robert Reynolds Barry Patterson Ian Cochrane Number of fully paid ordinary shares Number of options over ordinary shares 5,924,637 2,575,000 5,031,819 196,464 5,000,000 300,000 300,000 300,000 The Directors’ interests in options over ordinary shares as at the date of this report include the following options that are currently vested and exercisable: Director Rohan Williams Robert Reynolds Barry Patterson Ian Cochrane Number of options vested and exercisable 3,000,000 300,000 300,000 300,000 Further details of the vesting conditions applicable to these options are disclosed in the remuneration report section of this Directors’ Report. SECURITIES Shares During the period the Company issued 36,256,254 ordinary fully paid shares at 69 cents per share pursuant to a fully underwritten accelerated institutional and retail non-renounceable entitlement offer and share placement raising approximately $25 million before costs. During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of options as follows (there were no amounts unpaid on the shares issued): Date options granted Issue price of options ($) Number of shares issued 9 October 2012 28 February 2014 83 cents each 56 cents each 750,000 500,000 Options At the date of this report unissued ordinary shares of the Company under option are: Number of Options 5,400,000 500,000 1,000,000 2,000,000 1,500,000 1,650,000 300,000 500,000 Exercise Price 83 cents each 56 cents each 64 cents each 45 cents each 121 cents each 122 cents each 205 cents each 372 cents each Expiry Date 9 October 2017 28 February 2019 24 September 2019 17 November 2019 30 September 2020 31 January 2021 28 February 2021 30 June 2021 29 DIRECTORS’ REPORT DIVIDENDS No dividends have been paid or declared since the start of the financial year and the Directors do not recommend the payment of a dividend in respect of the financial year. PRINCIPAL ACTIVITIES The principal activity of the Company during the financial year was mineral exploration and development activities at its wholly owned Mt Morgans Gold Project in Western Australia. There have been no significant changes in the nature of these activities during the financial year. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group during the financial year, not otherwise disclosed in this report. REVIEW OF OPERATIONS Operating results and financial position The net loss after income tax for the financial year was $21,832,884 (30 June 2015: $8,048,428). Included in this loss for the financial year is an amount of $19,141,580 (30 June 2015: $6,501,354) in respect of exploration and evaluation costs not capitalised, and increases to provisions for rehabilitation liabilities of $52,076 (2015: $670,669). At the end of the financial year the Group had $9,648,425 (30 June 2015: $4,624,894) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure is $8,131,847 (30 June 2015: $8,131,847). Summary of Activities During the 2016 financial year the Company has maintained its high level of exploration activity, primarily focused on the Westralia and Jupiter deposits at the Mt Morgans Gold Project. The Company plans to complete the definitive Feasibility Study and pursue project financing by the end of calendar year 2016. The Group has incurred exploration and feasibility costs of over $21.8 million during the 2016 financial year, which has included completing in excess of 127,500 metres of drilling, comprising over 49,000 metres of diamond core drilling, over 53,000 metres of RC drilling and over 25,000 metres of RAB and air core drilling. As a result of the extensive infill and extensional drill programs undertaken during the 2016 financial year, the Company announced Mineral Resource upgrades in July 2016. Refer to ASX announcements dated 19th and 28th July 2016 for Jupiter and Westralia respectively. Since the end of the financial year the Company has commenced regional exploration programs and continues to advance the Mt Morgans Gold Project Feasibility Study targeting first production in the first quarter of calendar year 2018. The Company expects to announce maiden Ore Reserves for Jupiter and Westralia in the near future. The Group incurred exploration and feasibility costs of $19,141,580 during the 12 months ended 30 June 2016 (30 June 2015: $6,501,354). Further details of the Company’s activities including significant drill results returned for the 2016 financial year are included in the Review of Operations in this Annual Report. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant ASX releases and the form and context of the announcements have not been materially modified. In the case of estimates of Mineral Resources, the Company confirms that all material assumptions and technical parameters underpinning the relevant market announcements continue to apply and have not materially changed. 30 EVENTS SUBSEQUENT TO THE REPORTING DATE There has not arisen in the interval between the end of the reporting period and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Group intends to continue to undertake appropriate exploration and evaluation activities sufficient to maintain tenure of its prospective mineral properties, until such time that informed decisions can be made in order to commercially exploit or relinquish such properties. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group holds various exploration licences to regulate its exploration activities in Australia. These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities. So far as the Directors are aware, all exploration activities have been undertaken in compliance with all relevant environmental regulations. OFFICER’S INDEMNITIES AND INSURANCE During the year the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the Directors named in this report. The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy. The Company has not provided any insurance for an auditor of the Company. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the Corporations Act 2001. 31 DIRECTORS’ REPORT NON-AUDIT SERVICES During the year Grant Thornton the Company’s auditor, has not performed any other services in addition to their statutory duties: Total remuneration paid to auditors during the financial year: Audit and review of the Company’s consolidated financial statements 32,251 32,978 2016 $ 2015 $ Other services Total - - 32,251 32,978 The Board considers any non-audit services provided during the year by the auditor and satisfies itself that the provision of any non-audit services during the year by the auditor is compatible with, and does not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services are reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor; and • the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. 32 REMUNERATION REPORT (AUDITED) Remuneration paid to Directors and Officers of the Group is set by reference to such payments made by other ASX listed companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the specific skills and experience of the Directors and Officers. Details of the nature and amount of remuneration of each Director, and other Key Management Personnel if applicable, are disclosed annually in the Company’s Annual Report. Remuneration Committee The Board has adopted a formal Remuneration Committee Charter which provides a framework for the consideration of remuneration matters. The Remuneration & Nomination Committee is responsible for reviewing and making recommendations to the Board which has ultimate responsibility for the following remuneration matters: 1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key Management Personnel; and 2. Implementing employee incentive and equity based plans and making awards pursuant to those plans. Non-Executive Remuneration The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same industry, for their time, commitment and responsibilities. Non-Executive Remuneration is not linked to the performance of the Company, however to align Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term incentives. 1. Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s Annual General Meeting; 2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits; 3. Non-Executive superannuation benefits are limited to statutory superannuation entitlements; and 4. Participation in equity based remuneration schemes by Non-Executive Directors is subject to consideration and approval by the Company’s shareholders. The maximum Non-Executive Directors fees, payable in aggregate are currently set at $500,000 per annum. Executive Director and Other Key Management Personnel Remuneration Executive remuneration consists of base salary, plus other performance incentives to ensure that: 1. Remuneration packages incorporate a balance between fixed and incentive pay, reflecting short and long term performance objectives appropriate to the Company’s circumstances and objectives; and 2. A proportion of remuneration is structured in a manner to link reward to corporate and individual performances. Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies) and are reviewed regularly to ensure market competitiveness. Use of Remuneration Consultants To date the Company has not engaged external remuneration consultants to advise the Board on remuneration matters. 33 DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) Incentive Plans The Company provides long term incentives to Directors and Employees pursuant to the Dacian Gold Limited Employee Option Plan, which was last approved by shareholders on 16 November 2015. The Board, acting in remuneration matters: 1. Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when those targets are achieved; 2. Reviews and improves existing incentive plans established for employees; and 3. Approves the administration of the incentive plans, including receiving recommendations for, and the consideration and approval of grants pursuant to such incentive plans. Engagement of Non-Executive Directors Non-Executive Directors conduct their duties under the following terms: 1. A Non-Executive Director may resign from his/her position and thus terminate their contract on written notice to the Company; and 2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their period of office (if applicable). Payment is made in lieu of any notice period if termination is initiated by the Company, except where termination is initiated for serious misconduct. In consideration of the services provided by Mr Robert Reynolds, Mr Barry Patterson and Mr Ian Cochrane as Non- Executive Directors, the Company will pay them $60,000 plus statutory superannuation per annum. Messrs Reynolds, Patterson and Cochrane are also entitled to fees for other amounts as the Board determines where they perform special duties or otherwise perform extra services or make special exertions on behalf of the Company. During the financial year ended 30 June 2016, the Company incurred no costs in respect of additional services provided by Directors. Engagement of Executive Directors The terms of Mr Rohan Williams Executive Services Agreement governing his role as Executive Chairman are summarised below. In respect of his engagement as Executive Chairman, Mr Williams will receive a base salary of $438,000 per annum inclusive of statutory superannuation (Total Fixed Remuneration, TFR). Any increase in salary is subject to the discretion of the Board. The Company or Mr Williams may terminate the contract at any time by the giving of six months’ notice. In addition, there are certain specific termination notice periods applicable to Company change of control events or ill health. The Company may elect to pay Mr Williams in lieu of part or all of the notice period specified in the contract. Mr Williams may also receive a short term performance based reward in the form of a cash bonus up to, 40% of the TFR. The performance criteria, assessment and timing of which are determined at the discretion of the Board. Mr Williams may participate in the Dacian Gold Limited Employee Option Plan and other long term incentive plans adopted by the Board. 34 Engagement of Executives Mr Grant Dyker commenced in the capacity of Chief Financial Officer on 10 February 2016. The terms of Mr Dyker’s employment contract are summarised below. Mr Dyker will receive a base salary of $328,500 per annum inclusive of statutory superannuation. The Company or Mr Dyker may terminate the contract at any time by the giving of six months’ notice. In addition, there are certain specific termination notice periods applicable to Company change of control events or ill health. The Company may elect to pay Mr Dyker in lieu of part or all of the notice period specified in the contract. Mr Dyker may be invited to participate in incentive schemes. The performance criteria, assessment and timing of which are determined at the discretion of the Board. Mr Dyker may participate in the Dacian Gold Limited Employee Option Plan and other long term incentive plans adopted by the Board. Voting and comments made at the Company’s 2015 Annual General Meeting (‘AGM’) At the last AGM 99.9% of the shareholders voted to adopt the remuneration report for the year ended 30 June 2015. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. Short Term Incentive Payments The Board may, at its sole discretion, set the Key Performance Indicators (KPIs) for the Executive Directors or other Executive Officers. The KPIs are chosen to align the reward of the individual Executives to the strategy and performance of the Company. Performance objectives, which may be financial or non-financial, or a combination of both, are determined by the Board. No Short Term incentives are payable to Executives where it is considered that the actual performance has fallen below the minimum requirement. Following a performance evaluation process in respect of the 12-month period ended 31 December 2015, Short Term incentive payments were made to Executives. The Executive Chairman sets the KPIs for other members of staff, monitors actual performance and may recommend payment of short term bonuses to certain employees to the Board for approval. Shareholding Qualifications The Directors are not required to hold any shares in Dacian Gold under the terms of the Company’s constitution. Consequences of Company Performance on Shareholder Wealth In considering the Company’s performance and benefits for shareholder wealth, the Board provide the following indices in respect of the current financial year and previous financial years: 2016 2015 2014 2013 Loss for the year attributable to shareholders $21,832,884 $8,048,428 $5,620,640 $5,806,907 Closing share price at 30 June $2.90 $0.43 $0.35 $0.17 As an exploration company the Board does not consider the loss attributable to shareholders as one of the performance indicators when implementing Short Term Incentive Payments. The Board considers that the success of exploration and feasibility programs, safety and environmental performance, the securing of funding arrangements and responsible management of cash resources and the Company’s other assets are more appropriate performance indicators to assess the performance of management. 35 DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) Remuneration Disclosures Current Directors and Key Management Personnel of the Group have been identified as: Mr Rohan Williams Executive Chairman Mr Ian Cochrane Non-Executive Director (Appointed 26 February 2016) Mr Barry Patterson Non-Executive Director Mr Robert Reynolds Non-Executive Director Mr Grant Dyker (ii) Chief Financial Officer (Appointed 4 February 2016) The details of the remuneration of each Director and member of Key Management Personnel of the Company is as follows: 30 June 2016 Short Term Post Employment Other Long Term Base Salary and consulting fees Short Term Incentive Superannuation Contributions Value of Options (i) $ $ $ $ Current Directors and Key Management Personnel: Rohan Williams 403,000 160,000 35,000 142,268 Ian Cochrane Barry Patterson Robert Reynolds 20,000 46,667 46,667 Grant Dyker (ii) 116,667 - - - - 1,900 4,433 4,433 155,904 - - Value of Options as Proportion of Remuneration % 19.2% 87.7% 0.0% 0.0% Total $ 740,268 177,804 51,100 51,100 11,083 75,668 203,418 37.2% TOTAL 633,001 160,000 56,849 373,840 1,223,690 (i) The fair value of options is calculated at the date of grant using the Black Scholes option pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed in the above tables is the portion of the fair value of the options recognised in the reporting period. (ii) Mr Dyker was appointed Chief Financial Officer on 4 February 2016 and commenced his role 10 February 2016. 30 June 2015 Short Term Post Employment Other Long Term Base Salary and consulting fees Short Term Incentive Superannuation Contributions Value of Options (i) $ $ $ $ Total $ Current Directors and Key Management Personnel: Rohan Williams 403,000 Barry Patterson Robert Reynolds 40,000 40,000 TOTAL 483,000 - - - - 35,000 162,737 600,737 3,800 3,800 5,243 5,243 49,043 49,043 42,600 173,223 698,823 Value of Options as Proportion of Remuneration % 27.1% 10.7% 10.7% 36 (i) The fair value of options is calculated at the date of grant using the Black Scholes option pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed in the above tables is the portion of the fair value of the options recognised in the reporting period. Details of Performance Related Remuneration Total Short Term incentives paid to Directors or Key Management Personnel of the Company during the period ended 30 June 2016 was $160,000. No Short Term incentives were paid to Directors or Key Management Personnel of the Company during the financial year ended 30 June 2015. Options Granted as Remuneration 2016 During the 2016 financial year there were 300,000 options over unissued shares issued to the Company Director Mr Ian Cochrane, pursuant to the Dacian Gold Limited Employee Option Plan. Details of the options issued to Mr Cochrane are as follows: Grant Date Exercise price per Option Expiry Date Number of Options Granted Vesting Date Total Value of Options Granted 26 February 2016 $2.05 each 28 February 2021 300,000 26 February 2016 $155,904 During the 2016 financial year there were 1,500,000 options over unissued shares issued to Executive Mr Grant Dyker, pursuant to the Dacian Gold Limited Employee Option Plan. Details of the options issued to Mr Dyker are as follows: Grant Date Exercise price per Option Expiry Date Number of Options Granted Vesting Date 5 February 2016 $1.22 each 31 January 2021 750,000 31 January 2018 5 February 2016 $1.22 each 31 January 2021 375,000 31 January 2019 5 February 2016 $1.22 each 31 January 2021 375,000 31 July 2019 Total Value of Options Granted $224,333 $112,166 $112,166 2015 During the 2015 financial year there were 2 million options over unissued shares issued to the Company’s Executive Chairman Mr Rohan Williams, pursuant to the terms of his Executive Services Agreement and following shareholder approval of the issue at the Company’s 2014 annual general meeting. Details of the options issued to Mr Williams are as follows: Grant Date Exercise price per Option Expiry Date Number of Options Granted Vesting Date Total Value of Options Granted 18 November 2014 46 cents each 17 November 2019 2,000,000 18 November 2016 $201,320 Exercise of Options Granted as Remuneration There were no ordinary shares issued on the exercise of options previously granted as remuneration to Directors or Key Management Personnel of the Company during either the financial year ended 30 June 2015 or 30 June 2016. 37 DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) Equity instrument disclosures relating to key management personnel Option holdings Key Management Personnel have the following interests in unlisted options over unissued shares of the Company. 2016 Name Balance at start of the year Received during the year as remuneration Other changes during the year Balance at the end of the year Vested and exercisable at the end of the year R Williams I Cochrane R Reynolds B Patterson G Dyker Share holdings 5,000,000 - - 300,000 300,000 300,000 - - - 1,500,000 - - - - - 5,000,000 3,000,000 300,000 300,000 300,000 1,500,000 300,000 300,000 300,000 - The number of shares in the Company held during the financial year by key management personnel of the Company, including their related parties are set out below. There were no shares granted during the reporting period as compensation. 2016 Name R Williams R Reynolds B Patterson I Cochranei G Dykerii Balance at start of the year Acquisitions pursuant to share placements Other changes during the year Balance at the end of the year 5,200,000 2,100,000 4,100,000 - - 724,637 475,000 931,819 - - - - - 196,364 137,455 5,924,637 2,575,000 5,031,819 196,364 137,455 1. Ian Cochrane was appointed as a Director of the Company on 26 February 2016. The amount of shares held above represents his shareholdings at his date of appointment. 2. Grant Dyker was appointed as Chief Financial Officer on 4 February 2016. The amount of shares held above represents his shareholdings at his date of appointment. Loans made to key management personnel No loans were made to key personnel, including personally related entities during the reporting period. Other transactions with key management personnel During the financial year ended 30 June 2016 there have been no other transactions with, and are no amounts owing to or owed by Key Management Personnel. There were no other transactions with key management personnel. End of Remuneration Report 38 AUDITOR’S INDEPENDENCE DECLARATION A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on the following page. This report is made in accordance with a resolution of the Directors. DATED at Perth this 1st day of September 2016. Rohan Williams Executive Chairman 39 AUDITOR’S INDEPENDENCE DECLARATION Auditor’s Independence Declaration To the Directors of Dacian Gold Limited Level 1 10 Kings Park Road West Perth WA 6005 Correspondence to: PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Dacian Gold Limited for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants C A Becker Partner - Audit & Assurance Perth, 1 September 2016 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 40 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016 Revenue Total Revenue Employee expenses Share based employee expense Depreciation and amortisation expenses Corporate expenses Occupancy expenses Marketing expenses Financing expenses Consolidated 30 June 2016 30 June 2015 Note $ $ 3 3 18 10 332,412 301,561 332,412 301,561 (1,237,520) (563,361) (629,723) (295,179) (245,595) (215,319) (304,702) (136,151) (146,796) (80,816) (160,672) (62,065) (31,202) (3,539) Exploration costs expensed and written off 11 (19,193,656) (7,172,023) Administration and other expenses Loss before income tax (438,605) (154,031) (22,056,059) (8,380,923) Income tax benefit/(expense) 4 223,175 332,495 Net loss for the period attributable to the members of the parent entity Other comprehensive Income (21,832,884) (8,048,428) - - Total comprehensive result for the period attributable to the members of the parent entity 17 (21,832,884) (8,048,428) Loss per share Basic and diluted loss per share (cents) 5 (18.5) (8.4) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 41 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Other financial assets Property, plant and equipment Exploration and evaluation assets Total non-current assets Total assets Current liabilities Borrowings Trade and other payables Total current liabilities Non-current liabilities Provisions Trade and other payables Total non-current liabilities Total liabilities Net assets Equity Issued capital Share based payments reserve Accumulated losses Total equity Consolidated 30 June 2016 30 June 2015 Note $ $ 7 8 9 10 11 12 13 14 13 15 17 17 9,648,425 4,624,894 90,123 418,034 9,738,548 5,042,928 34,211 34,211 748,125 396,225 8,131,847 8,131,847 8,914,183 8,562,283 18,652,731 13,605,211 - 18,265 3,378,228 1,437,632 3,378,228 1,455,897 1,966,676 1,914,600 48,560 - 2,015,236 1,914,600 5,393,464 3,370,497 13,259,267 10,234,714 53,515,696 29,204,822 1,321,449 774,886 (41,577,878) (19,744,994) 13,259,267 10,234,714 The above statement of financial position should be read in conjunction with the accompanying notes. 42 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016 Consolidated Issued capital Accumulated losses Share based payments reserve $ $ $ Total $ At 1 July 2014 29,227,606 (11,696,566) 479,707 18,010,747 Total comprehensive result for the period: - Loss for the period - (8,048,428) - Costs incurred on release of securities from escrow (22,784) - Movement in share based payments reserve in respect of options vesting - - - - - (8,048,428) (22,784) 295,179 295,179 At 30 June 2015 At 1 July 2015 29,204,822 (19,744,994) 774,886 10,234,714 29,204,822 (19,744,994) 774,886 10,234,714 Total comprehensive result for the period: - Loss for the period - (21,832,884) - Issue of capital from capital raising - Issue of capital from exercise of options 25,016,818 653,500 - Costs incurred in respect of capital raised (1,442,604) - Movement in share based payments reserve in respect of options vesting - Transfer from share based payments reserve to issued capital on exercise of options - 83,160 - - - - - - - - - (21,832,884) 25,016,818 653,500 (1,442,604) 629,723 629,723 (83,160) - At 30 June 2016 53,515,696 (41,577,878) 1,321,449 13,259,267 The above statement of changes in equity should be read in conjunction with the accompanying notes. 43 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016 Cash flows from operating activities Interest received Other income Research & development tax concession income Interest paid Consolidated 30 June 2016 30 June 2015 Note $ $ 316,771 243,506 15,641 69,730 555,670 - (1,623) (3,539) Payments for exploration and evaluation (17,412,277) (5,527,770) Payments to suppliers and employees (2,142,236) (968,478) Net cash used in operating activities 7 (18,668,054) (6,186,551) Cash flows from investing activities Proceeds on redemption of bonds and security deposits Payments for bonds and security deposits Payments for plant and equipment Net cash used in investing activities Cash flows from financing activities - - (525,564) (525,564) 16,335 (34,211) (65,470) (83,346) Proceeds from issue of share capital (net of issue costs) 24,235,414 - Repayment of borrowings Payments on release of securities from escrow Net cash used in financing activities Net increase/(decrease) in cash held Cash at the beginning of the period Cash at the end of the period (18,265) (31,310) - 24,217,149 (22,784) (54,094) 5,023,531 (6,323,991) 4,624,894 10,948,885 9,648,425 4,624,894 7 7 The above statement of cash flows should be read in conjunction with the accompanying notes. 44 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation of financial report These financial statements are general purpose financial statements, which have been prepared in accordance with requirements of the Corporations Act 2001 and comply with other requirements of the law. The accounting policies below have been consistently applied to all of the years presented unless otherwise stated. The financial statements have been prepared on a historical cost basis, except for available for sale investments and derivative financial instruments which have been measured at fair value. Cost is based on the fair values of consideration given in exchange for assets. The financial statements are presented in Australian dollars. These financial statements have been prepared on the going concern basis. The financial report of the Company was authorised for issue in accordance with a resolution of Directors on 1st September 2016. Statement of Compliance The financial report of the Group complies with Australian Accounting Standards, which include Australian Equivalents to International Financial Reporting Standards (AIFRS), in their entirety. Compliance with AIFRS ensures that the financial report also complies with International Financial Reporting Standards (IFRS) in their entirety. The Company is a for profit entity for the purpose of preparing the financial statements. Going Concern Basis for Preparation of Financial Statements These financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. As at 30 June 2016, the Group has net current assets of $6,360,320 (2015: $3,587,031). These net current assets are considered sufficient by the Directors to meet all current minimum exploration expenditure commitments, settle all debts as and when they become due as well as operating cash outflows of the Group. In addition, should the Company require, the Board are confident of raising sufficient capital to fund the short term exploration and feasibility programs as well as fund the working capital requirements of the Group. Material accounting policies adopted in the presentation of these financial statements are presented below: (b) Revenue Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, allowances and amounts collectable on behalf of third parties. Interest income Interest income is recognised on a time proportion basis and is recognised as it accrues. (c) Income Tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. 45 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income tax (continued) Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantially enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims are recognised as a tax benefit in the year in which the claim is lodged with the Australian Tax Office. (d) Other Taxes Revenues, expenses and assets are recognised net of the amount of GST except: • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. (e) Financing Costs Net financing costs comprise interest payable on borrowings calculated using the effective interest method. Borrowing costs are expensed as incurred and included in net financing costs. (f) Cash and Cash Equivalents Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. 46 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Trade and Other Receivables Trade receivables, which generally have 30–90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified. (h) Property, plant and Equipment Property, plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the asset as a replacement only if it is eligible for capitalisation. The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Depreciation is calculated on a straight-line basis or written down value over the estimated useful life of the assets as follows: Office & computer equipment 25%-50% straight line Fixtures and fittings 33% written down value Plant and equipment 33% written down value Motor Vehicles 33% written down value (i) Impairment The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. This assessment for impairment is discussed further in note 1(j). (ii) 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 the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is de-recognised. (i) Exploration and Evaluation Expenditure Exploration and evaluation costs are written off in the year they are incurred, apart from acquisition costs and those costs that are incurred on an area of interest that contains a JORC Ore Reserve. Capitalised exploration and evaluation expenditures in relation to specific areas of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: (i) the rights to tenure of the area of interest are current; and (ii) at least one of the following conditions is also met: (a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or (b) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. 47 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Exploration and Evaluation Expenditure (continued) Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. ( j) Impairment of Assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated as a re- valuation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at the re-valued amount, in which case the reversal is treated as a re-valuation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. 48 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Trade and Other Payables Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. (l) Interest Bearing Liabilities All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised. (m) Share Based Payments Equity Settled Transactions: The Group provides benefits to employees (including senior executives) of the Group in the form of Options, whereby employees render services in exchange for Options (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of the Options is determined by using an appropriate valuation model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the underlying Shares to which the Option relates (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the Option (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects: (i) the extent to which the vesting period has expired; and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. No expense is recognised for Options that do not ultimately vest, except for Options where vesting is only conditional upon a market condition. If the terms of an Option are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the Option, or is otherwise beneficial to the employee, as measured at the date of modification. If an Option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled Option and designated as a replacement award on the date that it is granted, the cancelled Option and new awards are treated as if they were a modification of the Option, as described in the previous paragraph. 49 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (n) Share Capital Shares are classified as equity. Incremental costs directly attributable to the issue of Shares pursuant to the Offer or Options are shown in equity as a deduction, net of tax, from the proceeds of issue. (o) Basis of consolidation The financial statements consolidate those of Dacian Gold Limited and all of its subsidiaries as at 30 June 2016. The parent controls a subsidiary if it is exposed, or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June. All transactions and balances between controlled entities are eliminated on consolidation, including unrealised gains and losses resulting from intra-group transactions. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with accounting policies adopted by the Company. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Non-controlling interests, presented as part of equity, represent the portion of a subsidiaries profit or loss and net assets that is not held by the Company. The company attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. (p) Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. Accounting for capitalised mineral exploration and evaluation expenditure The Group’s accounting policy is stated at 1(i). A regular review is undertaken of each area of interest to determine the reasonableness of the continuing carrying forward of costs in relation to that area of interest. Mine restoration provisions estimates The calculation of rehabilitation and closure provisions (and corresponding capitalised closure cost assets where necessary) rely on estimates of costs required to rehabilitate and restore disturbed land to its original condition. These estimates are regularly reviewed and adjusted in order to ensure that the most up to date data is used to calculate these balances. Significant judgement is required in determining the provision for mine rehabilitation as there are many transactions and other factors that will affect the ultimate costs required to rehabilitate the mine site. Factors that will affect this liability include future development, changes in technology, price increases, changes in interest rates and changes in legislation. Currently the Group bases its mine restoration provision on information provided by the Departments of Mines and Petroleum. 50 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Critical accounting estimates and judgements (continued) Measurement of share based payments The Group records charges for share based payments. For option based share based payments, management estimate certain factors used in the option pricing model. These factors include volatility and exercise date of options. If these estimates vary the share based payment expense would have been different. (q) Adoption of new and revised accounting standards In the financial year ended 30 June 2016, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2015. It has been determined by the Group that, there is no impact, material or otherwise, of the new and revised standards and interpretations on its business and therefore no change is necessary to Group accounting policies. The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the financial year ended 30 June 2016. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies. NOTE 2 SEGMENT INFORMATION The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics. The Group’s sole activity is mineral exploration wholly within Australia, therefore it has aggregated all operating segments into the one reportable segment being mineral exploration. The reportable segment is represented by the primary statements forming these financial statements. 51 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 3 REVENUE AND EXPENSES Loss for the year includes the following specific income and expenses: Gain on disposal of assets Other income Interest income Legal expenses Insurance Office rent Employee expenses: Salaries and wages Director fees and consulting expenses Defined contribution superannuation Consultant expenses Other employment expenses Less: allocated to exploration project costs NOTE 4 INCOME TAX a) Income tax expense Current income tax: Current income tax charge (benefit) Current income tax not recognised Research and development tax concessioni Deferred income tax: Relating to origination and reversal of timing differences Deferred income tax benefit not recognised Income tax expense/(benefit) reported in the Statement of Profit or Loss and Other Comprehensive Income Year ended 30 June 2016 Year ended 30 June 2015 $ - 15,641 316,771 21,990 79,591 87,595 $ 909 69,730 230,922 3,198 35,057 30,495 3,246,853 1,442,864 113,333 292,483 - 80,000 133,115 - 342,617 104,231 (2,757,766) (1,196,849) 1,237,520 563,361 (6,451,576) (2,195,264) 6,451,576 (223,175) 2,195,264 (332,495) 6,845,277 2,125,563 (6,845,277) (2,125,563) (223,175) (332,495) i The Research and tax concession benefit recognised in the year ended 30 June 2016 relates to an application made in respect of qualifying expenditure incurred during the 2013 financial year and lodged with AusIndustry during the period. 52 NOTE 4 INCOME TAX (CONTINUED) b) Reconciliation of income tax expense to prima facie tax payable Loss from continuing operations before income tax expense (22,056,059) (8,380,923) Year ended 30 June 2016 Year ended 30 June 2015 $ $ Tax at the Australian rate of 30% (2015 – 30%) Tax effect of permanent differences: Non-deductible expenses Research and development tax concession Capital raising costs claimed Tax effect of other differences: (6,616,818) (2,514,277) 189,927 (223,175) (167,272) 88,554 (332,495) (80,716) Net deferred tax asset benefit not brought to account 6,594,163 2,506,439 Tax (benefit)/expense (223,175) (332,495) c) Deferred tax – Statement of Financial Position Liabilities Prepaid expenses Capitalised exploration expenditure - (2,016) (2,115,457) (2,439,554) (2,115,457) (2,441,570) Assets Revenue losses available to offset against future taxable income 13,633,829 7,436,385 Rehabilitation provision Employee leave provisions Other financial assets Accrued expenses Deductible equity raising costs Net deferred tax asset/(liability) 590,003 60,094 8,874 9,069 429,675 574,380 20,815 - 18,000 162,799 14,731,544 8,212,379 12,616,087 5,770,809 Deferred tax assets have been recognised to the extent that they extinguish deferred tax liabilities of the Company as at the reporting date. Net deferred tax assets have not been recognised, in either reporting period, in respect of amounts in excess of deferred tax liabilities. 53 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 Year ended 30 June 2016 Year ended 30 June 2015 $ $ NOTE 4 INCOME TAX (CONTINUED) d) Deferred tax – Statement of Profit or Loss and Other Comprehensive Income Liabilities (Increase)/decrease in prepaid expenses (Increase)/decrease in accrued income 2,016 - (871) 3,775 (Increase)/decrease in capitalised exploration expenditure 324,097 (2,007,558) Assets Increase/(decrease) in revenue losses available to offset against future taxable income 6,197,443 3,996,941 Increase/(decrease) in rehabilitation provision Increase/(decrease) in employee leave provisions Increase/(decrease) in other financial assets Increase/(decrease) in accruals Increase/(decrease) in deductible equity raising costs 15,623 39,279 8,874 (8,931) 266,876 201,201 9,850 - (2,527) (75,248) Deferred tax benefit/(expense) not recognised 6,845,277 2,125,563 The deferred tax benefit of tax losses not brought to account will only be obtained if: (i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses to be realised; (ii) The Company continues to comply with the conditions for deductibility imposed by tax legislation; and (iii) No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses. All unused tax losses of $45,446,094 (2015: $24,787,951) were incurred by Australian entities. 54 NOTE 5 EARNINGS PER SHARE a) Basic earnings per share Loss attributable to ordinary equity holders of the Company b) Diluted earnings per share Loss attributable to ordinary equity holders of the Company Year ended 30 June 2016 Year ended 30 June 2015 Cents (18.5) (18.5) $ Cents (8.4) (8.4) $ c) Loss used in calculation of basic and diluted loss per share Loss after tax from continuing operations (21,832,884) (8,048,428) (d) Weighted average number of shares used as the denominator Weighted average number of shares used as the denominator in calculating basic and dilutive loss per share No. No. 118,222,614 96,100,000 At 30 June 2016 the Company has on issue 13,150,000 (2014: 10,150,000) unlisted options over ordinary shares that are not considered to be dilutive as the potential increase in shares on issue would decrease the loss per share. NOTE 6 DIVIDENDS No dividends were paid or proposed during the financial year ended 30 June 2015 or 30 June 2016. The Company has no franking credits available as at 30 June 2015 or 30 June 2016. 55 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 7 CASH AND CASH EQUIVALENTS Cash at bank1 Deposits at call2 Year ended 30 June 2016 Year ended 30 June 2015 $ $ 6,138,645 4,594,144 3,509,780 30,750 9,648,425 4,624,894 1 Cash at bank earns interest at floating rates based on daily deposit rates. 2 Short term deposits, the duration of which is dependent on the immediate cash requirements of the Group. These deposits earn interest at the respective short term interest rates. At 30 June 2015 or 30 June 2016 the Group had no undrawn committed borrowing facilities. Reconciliation to the Statement of Cash Flows: For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise cash on hand and at bank and investments in money market instruments, net of any outstanding bank overdrafts. Cash and cash equivalents as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: Cash and cash equivalents 9,648,425 4,624,894 Non-cash financing and investing activities: There have been no non-cash financing and investing activities for the year ended 30 June 2016 (30 June 2015: Nil). Cash balances not available for use: There are no amounts included in cash and cash equivalents not available for use as at 30 June 2016. Other than an amount of $30,750 on deposit in respect of the Company’s corporate credit card facility there were no amounts included in cash and cash equivalents not available for use at 30 June 2015. During the period the terms of the facility were amended and the deposit was redeemed. 56 NOTE 7 CASH AND CASH EQUIVALENTS (CONTINUED) Reconciliation of loss after tax to net cash outflow from operating activities: Loss from ordinary activities after income tax (21,832,884) (8,048,428) Year ended 30 June 2016 Year ended 30 June 2015 $ $ Depreciation Share based payments expense Movement in assets and liabilities: (Increase)/decrease in prepaid expenses (Increase)/decrease in accrued income (Increase)/decrease in other receivables Increase/(decrease) in rehabilitation provision 245,595 215,319 629,723 295,179 6,720 (2,905) 332,495 (319,911) (5,540) 52,076 (53,950) 670,669 Increase/(decrease) in employee leave provisions 130,930 32,832 Increase/(decrease) in trade and other payables 1,772,831 1,024,644 Net cash flow from operating activities (18,668,054) (6,186,551) NOTE 8 TRADE AND OTHER RECEIVABLES Current assets R&D Concession tax benefit receivable Other receivables - 90,123 332,495 85,539 90,123 418,034 The R&D concession included in the 30 June 2015 prior period comparative relates to an application made in respect of qualifying expenditure incurred during the 2014 financial year. This amount was received from the Australian Taxation Office during the period. The R&D concession recognised in the current period of $223,175, as referred to in note 4 relates to qualifying expenditure incurred during the 2013 financial year. This amount was also received from the Australian Taxation Office during the period. The Group has no trading activity and as such has no trading receivables. The Group does not consider any of its current receivables to be subject to impairment. 57 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 9 OTHER FINANCIAL ASSETS Non-current assets Security Bonds and Deposits: Balance at the start of the financial year Bonds redeemed during the financial year Bonds paid during the financial year Year ended 30 June 2016 Year ended 30 June 2015 $ $ 34,211 - - 16,335 (16,335) 34,211 34,211 34,211 Other financial assets at 30 June 2016 represent a security deposit of $34,211 in respect of the Company’s lease of its Perth administration office. NOTE 10 PROPERTY, PLANT AND EQUIPMENT Carrying values Office and computer equipment: 232,758 (177,399) 55,359 940,661 (528,959) 411,702 83,709 (43,834) 39,875 272,572 (143,345) 129,227 111,962 748,125 182,904 (124,892) 58,012 629,427 (396,170) 233,257 70,082 (26,516) 43,566 161,753 (100,363) 61,390 - 396,225 Cost Depreciation Plant and equipment: Cost Depreciation Fixtures and fittings: Cost Depreciation Motor vehicles: Cost1 Depreciation Work in progress: Cost 58 NOTE 10 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Year ended 30 June 2016 Year ended 30 June 2015 $ $ Reconciliation of movements Office and computer equipment: Opening net book value Additions Depreciation Plant and equipment: Opening net book value Additions Depreciation Fixtures and Fitting: Opening net book value Additions Depreciation Motor Vehicles: Opening net book value Additions Depreciation Work in Progress: Additions 58,012 49,854 (52,507) 55,359 233,257 311,234 (132,789) 411,702 43,566 13,627 (17,318) 39,875 61,390 110,818 (42,981) 129,227 111,962 111,962 91,587 25,163 (58,738) 58,012 348,145 - (114,888) 233,257 14,715 40,307 (11,456) 43,566 91,627 - (30,237) 61,390 - - 1 Included in the net book value of motor vehicles as at 30 June 2015 of $61,390 are assets secured under finance leases of $49,098. The Group had no assets secured under finance lease at 30 June 2016. Details of finance lease liabilities are included at note 12 and note 20b. 748,125 396,225 59 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 Year ended 30 June 2016 Year ended 30 June 2015 $ $ NOTE 11 DEFERRED EXPLORATION AND EVALUATION EXPENDITURE Deferred exploration costs at the start of the financial year Exploration and evaluation costs incurred Movement in provision for rehabilitation costs1 8,131,847 19,141,580 52,076 8,131,847 6,501,354 670,669 Exploration and evaluation costs expensed and written off (19,193,656) (7,172,023) 8,131,847 8,131,847 The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is dependent upon the successful development or commercial exploitation of the respective areas. 1 The Group reviews its estimate for likely rehabilitation costs on an annual basis, and recognises the change in the resulting provision as an expense in the Statement of Profit or Loss and Other Comprehensive Income in line with the accounting policy for exploration and evaluation expenditure. Refer note 14 for details of the provision at the balance sheet date. NOTE 12 BORROWINGS Current liabilities Finance lease due within 12 months Non-current liabilities Finance leases due after 12 months - - 18,265 - The Group had no borrowings at 30 June 2016. Included in borrowings as at 30 June 2015 are amounts of $18,265 owing in respect of finance lease liabilities in respect of the acquisition of motor vehicles included as assets of the Group. See Note 19 for financial instrument disclosures relating to borrowings. There are no other financing facilities available to the Group as at 30 June 2016 (30 June 2015: Nil). 60 NOTE 13 TRADE AND OTHER PAYABLES Current liabilities Trade and other payables Accrued expenses Employee leave liabilities Non-current liabilities Employee leave liabilities Year ended 30 June 2016 Year ended 30 June 2015 $ $ 2,665,370 1,308,248 561,105 151,753 60,000 69,384 3,378,228 1,437,632 48,560 - Trade payables are non-interest bearing and normally settled on 30 day terms. See Note 19 for financial instrument disclosures relating to trade and other payables. NOTE 14 PROVISIONS Non-current liabilities Rehabilitation provision 1,966,676 1,914,600 The rehabilitation provision relates to the estimated obligations in relation to the environmental rectification works at the Mt Morgans Gold Project. Reconciliation of movements in Rehabilitation Provision: Balance at the start of the financial year Increase/(decrease) in rehabilitation provision during the financial year (note 11) 1,914,600 1,243,931 52,076 670,669 Balance at the end of the financial year 1,966,676 1,914,600 NOTE 15 ISSUED CAPITAL a) Ordinary shares The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares respectively held by them. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value. There is no limit to the authorised share capital of the Company. 61 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 15 ISSUED CAPITAL (CONTINUED) 2016 No. 2015 No. 2016 $ 2015 $ 133,306,254 96,100,000 53,515,696 29,204,822 b) Share capital Issued share capital c) Share movements during the year Balance at the start of the financial year 96,100,000 96,100,000 29,204,822 29,227,606 Share issue Exercise of options Less share issue costs 36,256,254 950,000 - - - - 25,016,818 736,660 - - (1,442,604) (22,784) Balance at the end of the financial year 133,306,254 96,100,000 53,515,696 29,204,822 During the period the Company issued 36,256,254 ordinary fully paid shares at 69 cents per share pursuant to a fully underwritten accelerated institutional and retail non-renounceable entitlement offer and share placement raising approximately $25 million before costs. d) Option plan Information relating to the Dacian Gold Limited Employee Option Plan is set out in note 18. NOTE 16 OPTIONS Options on issue at the start of the financial year Options issued Options exercised 30 June 2016 30 June 2015 No No 10,150,000 3,950,000 (950,000) 7,150,000 3,000,000 - 13,150,000 10,150,000 62 NOTE 16 OPTIONS (CONTINUED) a) Options issued during the year During the financial year the Company issued 3,950,000 options over unissued shares (2015: 3,000,000), as follows: Options issued to: Number of options Exercise price Expiry date An officer and employees of the Company pursuant to the Dacian Gold Limited Employee Option Plan An officer and employees of the Company pursuant to the Dacian Gold Limited Employee Option Plan A Director of the Company pursuant to the Dacian Gold Limited Employee Option Plan An employee of the Company pursuant to the Dacian Gold Limited Employee Option Plan b) Options exercised during the year 1,500,000 $1.22 30 September 2020 1,650,000 $1.22 31 January 2021 300,000 $2.05 28 February 2021 500,000 $3.72 30 June 2021 During the financial year the Company issued 950,000 shares on the exercise of options (2015: Nil). c) Options on issue at the balance date The number of options outstanding over unissued ordinary shares at 30 June 2016 is 13,150,000 (2015: 10,150,000). The terms of these options are as follows: Number of options outstanding Exercise price Expiry date 5,700,000 500,000 1,000,000 2,000,000 1,500,000 1,650,000 300,000 500,000 83 cents 56 cents 64 cents 45 cents $1.22 $1.22 $2.05 $3.72 9 October 2017 28 February 2019 24 September 2019 17 November 2019 30 September 2020 31 January 2021 28 February 2021 30 June 2021 e) Subsequent to the balance date No options have been granted subsequent to the balance date and to the date of signing this report. Subsequent to balance date and to the date of signing this report 300,000 options have been exercised at 83 cents per share. 63 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 16 OPTIONS (CONTINUED) (f) Reconciliation of movement of options over unissued shares during the period including weighted average exercise price (WAEP) 2016 2015 No. WAEP (cents) No. WAEP (cents) Options outstanding at the start of the yeari 10,150,000 71.0 7,150,000 Options granted during the year 3,950,000 159.6 3,000,000 Options exercised during the year (950,000) 68.8 - Options outstanding at the end of the year 13,150,000 97.7 10,150,000 80.2 52.3 - 72.0 i Number and WAEP of options outstanding at 1 July 2015 has been adjusted in accordance with the terms and conditions of the Dacian Gold Limited Employee Option Plan. Details of the adjustment are noted below. Adjustment to exercise price of unlisted options As a result of the Company undertaking a pro rata entitlement offer of securities which was completed on 1 December 2015, the exercise price of a number of classes of options over unissued shares in the Company issued prior to the offer has been recalculated. The resulting reduction in exercise price, reflected in the table below, was calculated in accordance with the terms and conditions of the options on issue and the Company’s employee share option plan. Further details of the Dacian Gold Limited Employee Option Plan are included at note 18. Date granted Number of options Expiry date Original exercise price Amended exercise price 9 October 2012 6,150,000 9 October 2017 28 February 2014 1,000,000 28 February 2019 25 September 2014 1,000,000 24 September 2019 18 November 2014 2,000,000 17 November 2019 5 October 2015 1,500,000 30 September 2020 84 cents 57 cents 65 cents 46 cents $1.22 83 cents 56 cents 64 cents 45 cents $1.21 Please note that any vesting conditions in relation to the options on issue remain unchanged. (g) Weighted average contractual life The weighted average contractual life for un-exercised options is 33 months (2015: 30 months). 64 NOTE 17 ACCUMULATED LOSSES AND RESERVES 2016 2015 Accumulated losses Share based payments reserve (i) Accumulated losses Share based payments reserve (i) $ $ $ $ Balance at the beginning of the year (19,744,994) 774,886 (11,696,566) 479,707 Loss for the period (21,832,884) - (8,048,428) Transfer from share based payments reserves to issued capital on exercise of options Share based payments for the period - - (83,160) 629,723 - - - - 295,179 Balance at the end of the year (41,577,878) 1,321,449 (19,744,994) 774,886 (i) The share based payments reserve is used to recognise the fair value of options issued but not exercised. NOTE 18 SHARE BASED PAYMENTS During the financial year 3,950,000 options over unissued shares were issued pursuant to the Company’s Employee Share Option Plan. These options have been valued and included in the financial statements over the periods that they vest. The share based payments expense for the period of $629,723 (30 June 2015: $295,179) relates to the fair value of options apportioned over their respective vesting periods. Basis and assumptions used in the valuation of options. The options issued during the year were valued using the Black-Scholes option valuation methodology. Date granted Number of options granted Exercise price (cents) Expiry date Risk free interest rate used Volatility applied Value per Option (cents) 5 October 2015 1,500,000 5 February 2016 1,650,000 26 February 2016 28 June 2016 300,000 500,000 122 122 205 372 30 September 2020 31 January 2021 28 February 2021 30 June 2021 2.06% 2.00% 2.00% 1.75% 65% 60% 60% 60% 25.10 29.91 51.97 88.92 Historical volatility has been used as the basis for determining expected share price volatility. A discount of 30% in respect of a lack of marketability has been applied to the Black-Scholes option valuation to reflect the non-negotiability and non-transferability of the unlisted options granted. 65 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 18 SHARE BASED PAYMENTS (CONTINUED) Dacian Gold Limited Employee Option Plan The establishment of the Dacian Gold Limited Employee Option Plan (‘the Plan”) was last approved by a resolution of the shareholders of the Company on 16 November 2015. All eligible Directors, executive officers and employees of Dacian Gold Limited who have been continuously employed by the Company are eligible to participate in the Plan. The Plan allows the Company to issue free options to eligible persons. The options can be granted free of charge and are exercisable at a fixed price in accordance with the Plan. Options issued under the Plan have vesting periods prior to exercise, except under certain circumstances whereby options may be capable of exercise prior to the expiry of the vesting period. During the financial year ended 30 June 2016, 3,950,0000 (30 June 2015: 3,000,000) options over unissued shares were issued to a Director and employees, pursuant to the terms of the Dacian Gold Limited Employee Share Option Plan. NOTE 19 FINANCIAL INSTRUMENTS The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Group’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. The Board of Directors has the overall responsibility for the risk management framework and has adopted a Risk Management Policy. (a) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from transactions with customers and investments. Trade and other receivables The nature of the business activity of the Group does not result in trading receivables. The receivables that the Company does experience through it’s normal course of business are short term and the most significant recurring by quantity is receivable from the Australian Taxation Office, the risk of non-recovery of receivables from this source is considered to be negligible. Cash deposits The Directors believe any risk associated with the use of predominantly only one bank is addressed through the use of at least an A-rated bank as a primary banker and by the holding of a portion of funds on deposit with alternative A-rated institutions. Except for this matter the Group currently has no significant concentrations of credit risk. The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level of credit risk, and as such no disclosures are made. (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for liquid finance resources to finance the Group’s current and future operations, and consideration is given to the liquid assets available to the Group before commitment is made to future expenditure or investment. 66 NOTE 19 FINANCIAL INSTRUMENTS (CONTINUED) (b) Liquidity risk (continued) The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Carrying amount Contractual cash flows 6 months or less 6-12 months 1-2 years 2-5 years More than 5 years $ $ $ $ $ $ $ 2016 Trade and other payables 2,665,370 2,665,370 2,665,370 2,665,370 2,665,370 2,665,370 2015 Trade and other payables 1,308,248 1,308,248 1,308,248 - - - Finance lease liabilities 18,265 19,886 17,046 2,840 1,326,513 1,328,134 1,325,294 2,840 - - - - - - - - - - - - - - - (c) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising any return. Interest rate risk The Group has significant cash assets which may be susceptible to fluctuations in changes in interest rates. Whilst the Company requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future expenditure, which prevents the cash assets being committed to long term fixed interest arrangements; the Group does mitigate potential interest rate risk by entering into short to medium term fixed interest investments. The Group does not have any direct contact with foreign exchange or equity risks other than their effect on the general economy. At the reporting date the interest profile of the Group’s interest-bearing financial instruments was: Fixed rate instruments Financial assets Variable rate instruments Financial assets Carrying amount ($) 30 June 2016 30 June 2015 3,509,780 - 6,138,645 4,624,894 67 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 19 FINANCIAL INSTRUMENTS (CONTINUED) Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. Profit or loss Equity 1% increase 1% decrease 1% increase 1% decrease 2016 Fixed & variable rate instruments 96,484 (96,484) 96,484 (96,484) 2015 Fixed & variable rate instruments 46,249 (46,249) 46,249 (46,249) (d) Fair values Fair values versus carrying amounts The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet are as follows: 2016 Carrying amount Fair value 2015 Carrying amount Fair value $ $ $ $ Cash and cash equivalents Trade and other receivables Borrowings 9,648,425 9,648,425 4,624,894 4,624,894 90,123 90,123 - - 418,034 (18,265) 418,034 (18,265) Trade and other payables (2,665,370) (2,665,370) (1,308,248) (1,308,248) Net financial assets 7,073,178 7,073,178 3,716,415 3,716,415 (e) Impairment losses The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting date. No impairment expense or reversal of impairment charge has occurred during the reporting period, other than the write off of deferred exploration assets at note 11. 68 NOTE 20 COMMITMENTS (a) Operating lease commitments: Due within 1 year Due after 1 year but not more than 5 years Due after more than 5 years Year ended 30 June 2016 Year ended 30 June 2015 $ $ 97,680 41,400 - 92,082 135,584 - 139,080 227,666 The operating lease commitment relates to the lease of the Group’s Perth office and car parking for a 36 month term from 1 December 2014. The lease includes an option to extend for an additional 3 year period following expiry of the initial lease term on 30 November 2017. (b) Finance lease commitments: Finance lease arrangements in respect of the purchase of 2 vehicles were fully repaid at the end of the financial year, see Note 12. Details of the cash obligations in relation to the finance leases are included at note 19b. Due within 1 year Due after 1 year but not more than 5 years Due after more than 5 years - - - - 18,265 - - 18,265 Finance lease liabilities are secured over the underlying assets, see Note 10. (c) Capital commitments: The Company has no capital commitments contracted for at 30 June 2016 (30 June 2015: Nil). (d) Exploration commitments The Group has certain obligations for payment of tenement rent, shire rates and to perform minimum exploration work on mineral leases held. These obligations may vary over time, depending on the Group’s exploration programmes and priorities. At 30 June 2016, the Group had satisfied all of its exploration commitments pursuant to the leases, which are currently approximately $3,138,118 per annum. 69 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 21 CONTINGENCIES Contingent liabilities Other than the below there are no material contingent liabilities at the reporting date. The Company must pay Macquarie Bank a royalty of 1% of gross revenue earned on 491,617 troy ounces of gold produced on the Tenements and sold to an offtaker. Contingent assets There are no material contingent assets at the reporting date. NOTE 22 RELATED PARTY DISCLOSURES Other than the key management personnel related party disclosure in the Remuneration Report and in note 23, there are no related party transactions to report. NOTE 23 KEY MANAGEMENT PERSONNEL (a) Directors and key management personnel The following persons were Directors or Key Management Personnel of the Company during the current and prior financial year: Rohan Williams Executive Chairman Robert Reynolds Non-Executive Director Barry Patterson Non-Executive Director Ian Cochrane Non-Executive Director Grant Dyker Chief Financial Officer There were no other persons employed by or contracted to the Company during the financial year, having responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly. (b) Key management personnel compensation Details of key management personnel remuneration are contained in the Audited Remuneration Report in the Directors’ Report. A summary of total compensation paid to key management personnel during the year is as follows: 2016 $ 793,001 373,840 56,849 1,223,690 2015 $ 483,000 173,223 42,600 698,823 Total short-term employment benefits Total share based payments Total post-employment benefits 70 NOTE 24 EVENTS SUBSEQUENT TO THE REPORTING DATE There has not arisen in the interval between the end of the reporting period and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years. NOTE 25 AUDITORS REMUNERATION Total remuneration paid to auditors during the financial year: Audit and review of the Company’s financial statements Other services Total NOTE 26 CONTROLLED ENTITIES Parent Entity Dacian Gold Limited Subsidiaries Dacian Gold Mining Pty Ltdi Mt Morgans WA Mining Pty Ltdi Year ended 30 June 2016 Year ended 30 June 2015 $ $ 32,251 - 32,251 32,978 - 32,978 Ownership Interest 2016 % 100 100 2015 % - - i During the year on 26 April 2016, these companies were incorporated. They are fully owned subsidiaries of the Company. The entities were dormant at 30 June 2016. 71 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 27 PARENT ENTITY Financial statements and notes for Dacian Gold Limited, the legal parent entity are provided below; Financial position Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shareholders equity Issued capital Share based payments reserve Accumulated losses Total equity Financial performance Loss for the year Other comprehensive income/)loss) Total comprehensive loss Parent 30 June 2016 30 June 2015 $ $ 9,738,548 8,914,183 5,042,928 8,562,283 18,652,731 13,605,211 3,378,228 2,015,236 5,393,464 1,455,897 1,914,600 3,370,497 53,515,696 29,204,822 1,321,449 774,886 (41,577,878) (19,744,994) 13,259,267 10,234,714 (21,832,884) (8,048,428) - - (21,832,884) (8,048,428) The contingent liabilities and commitments of the parent entity are consistent with those disclosed in the financial report. 72 DIRECTORS’ DECLARATION FOR THE YEAR ENDED 30 JUNE 2016 In the opinion of the Directors of Dacian Gold Limited (the ‘Company’): a. The accompanying financial statements and notes of the Company and of the consolidated entity are in accordance with the Corporations Act 2001, including: i. ii. give a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2016 and of its performance for the year then ended; and comply with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements. b. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. c. The financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016. This declaration is signed in accordance with a resolution of the Board of Directors. DATED at Perth this 1st day of September 2016. Rohan Williams Executive Chairman 73 INDEPENDENT AUDITOR’S REPORT Independent Auditor’s Report To the Members of Dacian Gold Limited Level 1 10 Kings Park Road West Perth WA 6005 Correspondence to: PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au Report on the financial report We have audited the accompanying financial report of Dacian Gold Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2016, the 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 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 74 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion In our opinion: a b the financial report of Dacian Gold Limited is in accordance with the Corporations Act 2001, including: i ii giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001; and the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements. Report on the remuneration report We have audited the remuneration report included in pages 33 to 38 of the directors’ report for the year ended 30 June 2016. 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 responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. 75 INDEPENDENT AUDITOR’S REPORT Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Dacian Gold Limited for the year ended 30 June 2016, complies with section 300A of the Corporations Act 2001. GRANT THORNTON AUDIT PTY LTD Chartered Accountants C A Becker Partner - Audit & Assurance Perth, 1 September 2016 76 ASX ADDITIONAL INFORMATION Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was applicable as at 24 August 2016. A. DISTRIBUTION OF EQUITY SECURITIES Analysis of numbers of shareholders by size of holding: Distribution Number of Shareholders Securities Held 1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 More than 100,000 TOTALS 517 480 171 319 81 1,568 There are 63 shareholders holding less than a marketable parcel of ordinary shares. 264,097 1,281,015 1,365,068 10,253,230 120,442,844 133,606,254 B. SUBSTANTIAL SHAREHOLDERS An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below: Shareholder Name Number of Shares % of Shares BANK OF NOVA SCOTIA COMMONWEALTH BANK OF AUSTRALIA 10,850,000 8,011,497 8.18% 6.00% 77 ASX ADDITIONAL INFORMATION C. TWENTY LARGEST SHAREHOLDERS Shareholder Name Number of Shares % of Shares HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CITICORP NOMINEES PTY LIMITED J P MORGAN NOMINEES AUSTRALIA LIMITED TODTONA PTY LTD VITESSE PTY LTD POLLY PTY LTD SGJ INVESTMENTS PTY LTD SANPOINT PTY LTD DALRAN PTY LTD REDLAND PLAINS PTY LTD KINGARTH PTY LTD ARIKI INVESTMENTS PTY LIMITED REDASO PTY LTD NATIONAL NOMINEES LIMITED ROGO INVESTMENTS PTY LIMITED CAUTIOUS PTY LTD BNP PARIBAS NOMS PTY LTD SANDHURST TRUSTEES LTD MR KENNETH JOSEPH HALL KINGARTH PTY LTD TOTALS D. VOTING RIGHTS 23,478,841 11,660,960 11,235,035 5,381,819 5,100,000 5,031,819 5,031,819 4,800,000 4,666,608 4,163,298 4,100,000 3,909,727 3,067,473 2,965,245 2,575,000 2,351,819 1,389,964 1,255,170 1,227,273 1,130,682 17.57 8.73 8.41 4.03 3.82 3.77 3.77 3.59 3.49 3.12 3.07 2.93 2.30 2.22 1.93 1.76 1.04 0.94 0.92 0.85 104,522,552 78.23 In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. E. RESTRICTED SECURITIES The Company has no restricted securities. 78 TENEMENT SCHEDULE AS AT 24TH AUGUST 2016 Tenement Type Tenement Status Location Ownership E E E E E E E E E E G G G G G G L L L L L M M M M M M M M M M M M M M M M M M M 39/1950 39/1951 39/1952 39/1967 38/2951 39/1310 39/1713 39/1714 39/1715 39/1787 39/0001 39/0002 39/0003 39/0004 39/0005 39/0006 39/0010 39/0057 39/0244 39/0245 39/0246 38/0395 38/0396 38/0548 38/0595 38/0848 39/0018 39/0036 39/0208 39/0228 39/0236 39/0240 39/0248 39/0250 39/0261 39/0264 39/0272 39/0273 39/0282 39/0287 Application Application Application Application Granted Granted Granted Application Application Application Granted Granted Granted Granted Granted Granted Granted Granted Application Application Application Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Lake Carey WA Lake Carey WA Lake Carey WA Lake Carey WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) 79 TENEMENT SCHEDULE AS AT 24TH AUGUST 2016 Status Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Application Granted Granted Granted Granted Granted Granted Granted Granted Location Ownership Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Tenement Type Tenement 39/0291 39/0295 39/0304 39/0305 39/0306 39/0333 39/0380 39/0390 39/0391 39/0392 39/0393 39/0394 39/0395 39/0403 39/0441 39/0442 39/0443 39/0444 39/0497 39/0501 39/0502 39/0503 39/0504 39/0513 39/0745 39/0746 39/0747 39/0799 39/0937 39/0938 39/0993 39/1107 38/4093 38/4094 38/4095 39/4800 39/4801 39/4807 39/4808 39/4810 M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M P P P P P P P P 80 Tenement Type Tenement P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P 39/4811 39/4812 39/4813 39/4814 39/4815 39/5358 39/5359 39/5360 39/5361 39/5362 39/5363 39/5364 39/5365 39/5366 39/5367 39/5368 39/5369 39/5370 39/5371 39/5372 39/5374 39/5375 39/5377 39/5378 39/5379 39/5380 39/5381 39/5382 39/5383 39/5384 39/5385 39/5386 39/5387 39/5388 39/5389 39/5390 39/5391 39/5392 39/5393 39/5394 Status Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Location Ownership Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) 81 TENEMENT SCHEDULE AS AT 24TH AUGUST 2016 Tenement Type Tenement P P P P P P P P P P P P P P P P 39/5425 39/5426 39/5427 39/5461 39/5469 39/5475 39/5476 39/5477 39/5478 39/5479 39/5490 39/5491 39/5492 39/5493 39/5494 39/5498 Status Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Application Location Ownership Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) 82 www.daciangold .com. au 

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