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A N N U A L R E P O R T
2017
TABLE OF
CONTENTS
Chairman’s Letter to Shareholders
Review of Operations
2017 Mineral Resources &
Ore Reserves Statement
Directors’ Report
1
2
22
26
Auditor’s Independence Declaration 39
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
40
41
42
43
44
69
70
73
75
CORPORATE GOVERNANCE
Please refer to the Company’s website
www.daciangold.com.au for the 2017
Corporate Governance Statement and
Policies.
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
Level 2
1 Preston Street
Como WA 6152
AUDITOR
Grant Thornton Audit Pty Ltd
10 Kings Park Road
West Perth WA 6005
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 2
45 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 6323 9000
Facsimile: 08 6323 9099
Email:
Website:
info@daciangold.com.au
www.daciangold.com.au
CHAIRMAN’S LETTER TO SHAREHOLDERS
Dear Fellow Shareholder,
It is with much pleasure that I present to you Dacian Gold’s fifth annual report.
In last year’s annual report I commented that the 2016 financial year was the most significant year of your Company’s
short history. Whilst true at the time, it does pale against what the 2017 year has achieved. To borrow from the pages
that follow in the last 12 months, Dacian Gold has completed:
• A bankable feasibility study delivering an initial Ore Reserve of 1.2 million ounces;
• A $150 million senior bank facility from three highly regarded banks on very favourable terms to the
Company;
• A $136 million equity raising through the issue of 65.5 million new shares;
• Its first hedge program selling 52,000 ounces of gold in FY2020 at an average price of A$1,782 per
ounce; and
• All requisite permitting to build the Mt Morgans Gold Project.
With the funding locked away and the permitting in place, Dacian Gold has commenced the following project and
construction activities at Mt Morgans:
• started underground mining at Beresford;
• started construction of the new 2.5Mtpa CIL treatment facility near Jupiter;
• nearly completed construction of a 400-room accommodation village; and
• started construction of all the mine-support buildings, workshops, temporary power station, changerooms
etc at Westralia.
There are some excellent photographs in this annual report that clearly show the rate of advance of mine development
and construction on numerous fronts.
And we are also very busy on the exploration campaign having completed over 850 drill holes at Cameron Well alone
during the year. We believe Cameron Well is shaping up as an emerging gold discovery, and possibly the third large
mineralised system at Mt Morgans, after Westralia and Jupiter. We have just drilled the very first diamond drill holes
into Cameron Well and recorded our best ever intersection of 2.3m @ 311.3 g/t gold from a depth of just 100m below
the surface. This is the best intersection we have recorded from all 3,204 holes drilled for a total of 313,000m at Mt
Morgans over the last 5 years, since the IPO.
We are busy recruiting people for the project and to resource head office for when we are in production early next year.
This financial year we have added 31 people to the Dacian workforce – the majority site based, although this doesn’t
include contractors on site, which at the time of writing amounted to an additional 335 personnel.
Everyone in the Company is very focussed on our stated objective of joining the gold producer ranks in March next
year. There is still a lot to do of course, but the Company is very fortunate to have a dedicated and hardworking team
of Dacian people and contractors, whom together I am confident will deliver this project on time and on budget.
I would also like to extend my thanks to you, the Shareholders, who have supported the Company in its capital raising
endeavours over the last 12 months, and your genuine interest in how the Company is progressing.
Rohan Williams
Executive Chairman
1
REVIEW OF OPERATIONS
INTRODUCTION AND DACIAN GOLD’S CORPORATE OBJECTIVE
Dacian Gold’s Mt Morgans Gold Project (MMGP) is
located 25km west of Laverton, being approximately
750km north-east of Perth in Western Australia (see
Figure 1). The MMGP is a 520 km² tenement package
comprising predominantly granted mining leases. It is
situated in the Laverton gold district which is known to
contain approximately 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 less than five years
since the Company’s IPO, Dacian Gold has achieved the
following key milestones at the MMGP:
•
•
•
•
•
discovered two +1 million ounce gold deposits at
Westralia and Jupiter (see Figure 2);
published an initial Ore Reserve of 1.2 million
ounces of gold following the completion of a
bankable Feasibility Study;
published an expansion PFS totalling 1.7 million
ounces, including the Ore Reserve;
executed a A$150 million senior project debt
facility for project development;
completed A$136 million equity funding for
project development; and
•
commenced infrastructure construction and
underground mining.
It was during the 2017 financial year that Dacian Gold
completed the bankable Feasibility Study delivering an
initial 1.2 million ounce Ore Reserve, the expansion
PFS, the project financing, the equity financing and the
commencement of construction and underground mining
at the MMGP.
Each of the key achievements completed during FY2017
is described in more detail in the following pages under
the headings Project Construction and Mine Development,
Project Financing, MMGP Feasibility Study, Ore Reserves
and Expansion PFS. Also included in this Annual Report
are descriptions of exploration activities at Mt Morgans,
under Exploration and Drilling, as well as the Mineral
Resource and Ore Reserve Statement.
Dacian Gold’s corporate objective is to develop the
MMGP into a leading, high-margin, long-life goldfield,
with first gold production in Q1 of CY2018. In addition,
Dacian Gold will maintain aggressive exploration
programs at the MMGP so as to realise the undiscovered
gold endowment that Company management believes
exists within the MMGP.
Figure 1: Location of Dacian Gold’s Mt Morgans Project Area in Western Australia.
2
REVIEW OF OPERATIONS
MT MORGANS PROJECT CONSTRUCTION AND MINE DEVELOPMENT
Following completion of the A$150 million senior debt
facility in the December 2016 quarter and the A$136
million equity capital raising in early 2017, the Board
of Dacian Gold approved management to proceed with
development of the MMGP.
The infrastructure required to construct and develop the
MMGP comprised a new 2.5Mtpa CIL treatment facility
and tailing storage facility (TSF); establishment of raw-
water supply infrastructure (Borefield), a 400-person
accommodation village, construction of mine service
area facilities (including offices, workshops, fuel storage
and power distribution) at both the Westralia and Jupiter
Mine areas; administration complex, reticulation of
overland power from the power station, re-establishment
of previously used haul roads and service roads and
installation of mobile phone, data, voice and radio
communications infrastructure.
The bankable Feasibility Study capital cost estimate to
build the project was initially A$172 million but later
reduced to A$149 million following recognition of
several material cost savings.
There are two principal work areas within the MMGP:
1. The Westralia underground mines (Beresford and
Allanson), the accommodation village and the
Westralia mine service facilities (administration,
workshops and temporary power station) which
are all centred close to the Westralia open pit and
historic Mt Morgans township that lie in the western
part of the MMGP (Figure 2); and
2.
Lying 15km to the east of the Westralia area is the
Jupiter mine area where the new treatment facility,
Jupiter mine service facilities, haul road and the
main gas-fired power station will be constructed.
The 2.5Mtpa CIL treatment facility and TSF, together with
the Borefield and mine service infrastructure at Jupiter
are to be built by GR Engineering Services Ltd (GRES)
under a guaranteed maximum price (GMP) engineering,
procurement and construction (EPC) contract, signed in
April 2017.
The underground mining contract for Beresford and
Allanson was awarded to RUC Cementation Mining
(RUC), also signed in April 2017.
Construction of infrastructure around the Westralia
Mine Area, including the accommodation village and
Westralia Mine Service facilities, is being managed by
Dacian Gold.
Figure 2: Location map showing Dacian Gold’s 100%-owned MMGP tenure (orange), including
the Westralia and Jupiter Deposits; and the Cameron Well Prospect. Also shown is the location of
existing and under construction infrastructure, as well as proximal multi-million ounce gold deposits.
3
REVIEW OF OPERATIONS
MMGP Project Construction – Jupiter Area
As noted above, the principal infrastructure being built
around the Jupiter area is the new 2.5Mtpa CIL treatment
facility and TSF; the permanent power station, the
main site administration complex and the Jupiter mine
workshops.
In April 2017 construction commenced on the 2.5Mtpa
CIL treatment facility and clearing of the mine service
area. Figure 3 shows the excellent progress made by
GRES in the 18 weeks from signing the EPC contract and
mobilising to site.
The EPC Contract is being undertaken on a GMP of
A$107.1 million with any under-run of the GMP to be
shared between the Company and GRES.
Figure 4 is a photograph of the transfer vault that will
sit under the coarse ore stockpile (refer Figure 3 for
location).
Figure 3: Mt Morgans 2.5Mtpa CIL treatment facility under construction (photograph taken on 28 August 2017), 18 weeks after GRES mobilised
to site following execution of the EPC contract on 18 April 2017. See Figure 10 showing conceptual layout and design of the treatment plant.
4
REVIEW OF OPERATIONS
Figure 4: - Construction of the Transfer Vault that will lie beneath the Coarse Ore Stockpile (refer Figure 3).
MMGP Project Construction – Westralia Area
The principal infrastructure being built around the
Westralia area is a 400 room accommodation village
and mine service facilities for the two new underground
mines located below the Westralia open pit (Beresford
and Allanson).
The accommodation village is being constructed on the
same site as the 1990s accommodation village (since
cleared and rehabilitated). Dacian Gold purchased a
high-quality, second hand camp that was built by BHP
for the Worsley Alumina upgrade that was completed in
2012.
Clearing for the accommodation village commenced in
late February 2017. Figure 5 is an aerial photograph of
the accommodation village taken in 2017 showing the
layout and progress of the village site.
The Westralia Mine Service Area (MSA) is located
immediately north-east of the Westralia open pit from
5
which the access portals to the Beresford and Allanson
underground mines are located. Construction of the
MSA commenced in April 2017, and upon completion,
will comprise:
• Dacian Gold and RUC mine administration complex
and change rooms;
•
First aid and mine rescue facilities;
ROM pad;
Light vehicle workshop; and
•
• Heavy vehicle workshop;
•
• 3MW temporary diesel-fired power station to supply
power to the underground operation, the MSA
generally and the Accommodation Village, located
1km north-west of the MSA.
Figure 6 is an aerial photograph of the Westralia MSA
taken in 2017.
REVIEW OF OPERATIONS
Figure 5: Mt Morgans accommodation village layout (as labelled).
Figure 6: Aerial view of the Westralia Mine Service Area layout and construction. Key sections are labelled.
6
REVIEW OF OPERATIONS
Mine Development
In April 2017, the Underground Mining Services
Contract for both the Beresford and Allanson mines was
executed with RUC Cementation Mining, and mining of
the Beresford Decline commenced. Figure 7 shows the
Ore Reserve mine plan for both Beresford and Allanson
beneath the Westralia open pit.
The decline and an associated vent drive are sited
approximately 20m above the Westralia pit floor near
the southern end of the Westralia open pit. The decline
heads south to commence mining the southern and upper
sections of the Beresford lodes.
Good initial progress has been made on the decline
development with performance approximately 300m
ahead of schedule at the time of this report. Figure 8
shows the decline location in respect of the planned
mining at Beresford, as well as a photo of the newly
excavated underground decline.
Figure 7: Mine plan layout of the Beresford (left hand side of image) and Allanson (right hand side of image) underground mines below the
Westralia open pit. Refer Figure 11 showing potential additional mining identified in the expansion PFS at both Beresford and Allanson.
Figure 8: Mine design of Beresford Ore Reserve showing location of the decline (left hand image) as well as a photo of the new underground
decline excavation (right hand photo). The decline commenced 20m above the pit floor of the Westralia open pit (not shown, refer Figure 7).
7
REVIEW OF OPERATIONS
PROJECT FINANCING
During the 2017 financial year, Dacian Gold completed
the financing for the development and construction of
the MMGP with a combination of debt funding (A$150
million) and equity funding (A$136 million). The equity
funding was completed by way of share placements
and a non-renounceable accelerated entitlement offer;
whereas the debt financing was completed under a senior
project debt facility with Westpac Banking Corporation,
Australia and New Zealand Banking Group and BNP
Paribas (Financiers).
The combined funding of A$286 million (excluding costs)
will finance project construction, mine development,
exploration programs, an over-run facility, head office
costs and general working capital requirements up to
planned cash flow in April 2018.
The A$150 million Facility (Facility) contained terms that
are highly favourable to the Company and reflect the
Financiers’ detailed understanding of the Project. Whilst
the full terms of the Facility are confidential, the key
points are:
•
Project development debt facility of A$140 million
and cost overrun facility of A$10 million;
• No requirement to fully draw this Facility and no
financial penalties should this Facility not be fully
drawn;
•
•
•
Five-year tenor with a fixed schedule of repayments
starting September 2018 through to December
2021;
The Facility can be repaid early at any time without
restriction or financial penalty;
Surplus operating cash flows (after debt service)
from September 2018 can be distributed from
the project to the parent company (Dacian Gold)
subject to certain conditions – providing cash for
Dacian Gold to use as it sees fit;
• No mandatory hedging required, but a
discretionary hedging facility is available for gold
and currency;
• Minimal level of cash reserving and no mandatory
cash sweeping;
•
Security is provided via a fixed and floating
charge over the assets of Dacian Gold’s operating
subsidiary – Mt Morgans WA Mining Pty Ltd;
• Corporate guarantee provided by Dacian
Gold only during the period of construction,
commissioning and ramp up – which falls away on
achieving Project Completion; and
•
The Facility is drawn down in stages when needed
with interest payable only on the amounts drawn.
Financial Close of the Facility and the first draw down of
A$45 million occurred in August 2017.
The A$136 million equity financing (excluding costs) was
completed in two separate raisings:
• A A$26 million share placement in December 2016
at a share price of $2.50 per share; and
• A fully underwritten A$110 million institutional
share placement and accelerated non-renounceable
entitlement offer completed in March at a share price
of $2.00 per share.
The combined equity offerings resulted in the issue of
65.5 million new shares. At the time of writing this
Annual Report, the Company had 204.6 million shares
on issue.
8
REVIEW OF OPERATIONS
MMGP FEASIBILITY STUDY, ORE RESERVES AND MMGP EXPANSION
PRE-FEASIBILITY STUDY
On 21 November 2016, Dacian Gold published the
MMGP Feasibility Study (Feasibility Study) and MMGP
expansion Pre-Feasibility Study (PFS).
•
The Feasibility Study showed the project had the potential
to be a significant and low cost mid-tier WA-based gold
producer, with the following key metrics:
• A maiden 8 year Ore Reserve of 18.6Mt @ 2.0g/t
Au for 1.2 million ounces of gold that is estimated
to produce gold at an all in sustaining cost (AISC)
of A$1,039/oz;
• A site infrastructure capital expenditure of A$172M
that was subsequently reduced to A$149M after
capital savings were identified;
• Mine establishment capital costs of A$48M at
Beresford and Allanson (together the Westralia
Mining Area) and Jupiter;
•
Total capital costs for the MMGP is now estimated
at A$197M;
• Gold production will be principally sourced from a
large open pit mining complex at Jupiter and two
underground mines at Westralia; and
Project payback of less than 21 months (using
A$1,600/oz gold price) and initial Ore Reserve
to payback period ratio of 4.3, confirming the
MMGP’s potential as a high quality mid-tier gold
production centre.
The MMGP expansion PFS (see Cautionary Statement
below), assessed the potential impact of expanding the
Westralia Mine Area, with key outcomes including:
•
Potential increase of Ore Reserves to 21.4Mt @
2.4g/t Au for 1.65 million ounces of gold;
•
•
•
•
Potential increase in mine life from 8 to 9 years;
Potential reduction in AISC to A$970-975/oz;
Potential average gold production of 197,000
ounces per annum for the first 7 years; and
Increase in required capital expenditure of only
A$3M.
CAUTIONARY STATEMENT
Dacian Gold has concluded it has a reasonable basis for providing the forward-looking statements that relate to the Mt
Morgans expansion PFS that is included in this Annual Report. The detailed reasons for that conclusion are outlined in ASX
announcement dated 21 November 2016, which has been prepared in accordance with the JORC Code (2012) and the ASX
Listing Rules.
The expansion PFS outcomes are underpinned by a declared Ore Reserves (73%) and include a minor contribution (27%)
of Inferred Mineral Resource. The Company notes that an Inferred Mineral Resource has a lower level of confidence and
that the JORC Code 2012 advises that to be an Inferred Mineral Resource it is reasonable to expect that the majority of the
Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration. Based on advice
from relevant Competent Persons, the Company is confident that a significant portion of the Inferred Mineral Resources for the
MMGP can be upgraded to Indicated Mineral Resources with further exploration work.
The MMGP’s geology and mineralisation are well understood. Detailed logging of all drill holes together with excellent mine
geological documentation undertaken during the mining at Westralia, Jupiter and Transvaal in the 1990s provides Dacian
Gold with a high level of confidence it understands the lithologies and mineralisation characteristics of the mines that comprise
the MMGP.
The Company confirms that all material assumptions underpinning the Production Target and Forecast Financial Information
contained in the Company’s ASX announcement released on 21 November 2016 continue to apply and have not materially
changed.
9
REVIEW OF OPERATIONS
MMGP Feasibility Study
Mining / Ore Reserves
The initial Ore Reserve for the MMGP is 18.6Mt @ 2.0g/t
Au for 1.2Moz over an initial mining and treatment
period of 8 years. Table 1 is a summary of the MMGP
Ore Reserve.
The MMGP is essentially a large underground mining
complex at Westralia and a single large open pit at
Jupiter, both feeding a new 2.5Mtpa CIL treatment
facility. Of the initial Ore Reserve, Jupiter contributes
approximately 80% of the tonnage feed to the treatment
plant for 54% of the ounces. Correspondingly, of the
initial Ore Reserve, the underground mines contribute
46% of the ounces to the treatment plant and only 20%
of the tonnage.
Given the high-grade and high-margin nature of the
Westralia Mine Area ores, all material mined from the
Beresford and Allanson underground mines is prioritised
as early production sources in the mining and treatment
schedules in order to maximise the cash-margin from the
early stage mining at Mt Morgans.
The Feasibility Study was managed by Dacian Gold
with several well-regarded mining consultants assisting
in the estimation of Ore Reserves, including Orelogy
Consulting Pty Ltd, Entech Pty Ltd, Peter O’Bryan &
Associates, Groundwater Resource Management Pty Ltd
and Blueprint Environmental Strategies. GR Engineering
Services Ltd completed all infrastructure designs and
costings including the 2.5Mtpa CIL treatment facility.
The MMGP Feasibility Study confirms a technically
and economically feasible gold project beginning its
life with an initial Ore Reserve of 18.6Mt @ 2.0g/t Au
for 1.2Moz over an 8 year period with an estimated
average AISC of A$1,039/oz (US$779/oz).
Key outcomes from the Feasibility Study include:
• 3.8Mt @ 4.5g/t Au for 557Koz is mined from
underground mines of which 492Koz is mined from
the Westralia Mine Area (Beresford and Allanson)
at an estimated AISC of A$837/oz (US$628/oz);
• 14.8Mt @ 1.4 g/t Au for 643Koz is mined from
a single open pit, 1.8km long, up to 650m wide
and 220m deep in the Jupiter Mine Area at an
estimated AISC of A$1,193/oz (US$895/oz);
•
Infrastructure capital costs of A$172M (US$129M)
which were subsequently reduced to A$149M;
• Mine-establishment capital costs of A$48M
(US$36M) at Beresford, Allanson and the Jupiter
open pit so the mines can deliver high grade
stocks to the ROM pad ahead of Q1 CY2018
commissioning of the 2.5Mtpa CIL treatment facility;
The Feasibility Study production schedule delivers
171Koz in year 1, 224Koz in year 2, 196Koz in
year 3 and 152Koz in year 4 as the impact of the
high-grade high-margin Westralia Mine Area ores
reduces with the depletion of its initial Ore Reserve;
The low-cost nature of the preferentially mined high-
grade ores from the Westralia Mine Area provides
a Project payback period of less than 21 months
using a $A1,600/oz (US$1,200/oz) gold price;
and
The initial Ore Reserve period to payback period
ratio of 4.3 confirms the MMGP as a new, high
quality Australian mid-tier gold production centre.
•
•
•
Proved Ore Reserves
Probable Ore Reserves
Total Initial Ore Reserves
COG
(g/t)
Tonnes
(Kt)
2.0
2.0
1.4
0.5
50
-
193
867
1,110
Au
g/t
4.9
-
4.7
1.7
2.4
Au
(Koz)
8
-
29
48
85
Tonnes
(Kt)
2,383
882
325
13,884
17,475
Au
g/t
4.2
5.7
3.4
1.3
2.0
Au
(Koz)
323
162
36
595
Tonnes
(Kt)
2,433
882
518
14,751
1,115
18,585
Au
g/t
4.2
5.7
3.9
1.4
2.0
Au
(Koz)
331
162
65
643
1,200
Beresford UG
Allanson UG
Transvaal UG
Jupiter OP
INITIAL ORE RESERVES
Table 1: Initial Ore Reserves for the Mt Morgans Gold Project. Rounding errors may occur.
10
REVIEW OF OPERATIONS
Westralia Mine
Jupiter Mine
The Westralia Mine Area comprises the Beresford and
Allanson underground mines, both of which lie beneath
the historic 900,000 ounce Westralia open pit, and both
of which contain the down dip-continuation of those lodes
mined in the historic open pit (see Figure 7).
The Jupiter Mine Area is a single large open pit measuring
1.8km long, up to 650m wide and up to 220m deep (see
Figure 9). The initial Ore Reserve at Jupiter is 14.8Mt
@ 1.4g/t Au for 643,000 ounces and with an average
strip ratio of 7.5 over its 8 year mine life.
Beresford’s initial Ore Reserve is 2.4Mt @ 4.2g/t Au for
331,000 ounces which is to be mined at an estimated
AISC of A$845/oz (US$634/oz), whereas the Allanson
initial Ore Reserve of 0.9Mt @ 5.7g/t Au for 162,000
ounces has a corresponding estimated AISC of A$819/
oz (US$614/oz).
The three closely-spaced gold deposits that are mined
within the single 1.8km long Jupiter open pit are
Doublejay, Heffernans and Ganymede. Each of the
three deposits can be mined and scheduled separately
and have been assumed for the Feasibility Study to follow
the production schedule:
The Transvaal Ore Reserve of 0.5Mt @ 3.9g/t Au for
65Koz, mines ore that lies beneath the previously mined
open pit and underground mine. The estimated AISC
is A$1,074/oz (US$806/oz) and is scheduled for
commencement of mining in 2020.
• Heffernans: 323Koz mined at an estimated AISC of
A$1,108 (US$831/oz);
• Doublejay: 268Koz mined at an estimated AISC of
A$1,241 (US$931/oz); and
• Ganymede: 52Koz mined at an estimated AISC of
A$1,485 (US$1,114/oz).
Figure 9: Jupiter Mine Area open pit Ore Reserve design in blue, with the historic open pit mine in brown.
11
REVIEW OF OPERATIONS
Processing
Over 100 cyanide-leach tests on top of extensive
comminution and gravity recovery tests of ores from
Beresford, Allanson and Jupiter have determined an
average expected recovery of 90.7% for the new
2.5Mtpa MMGP processing facility. This compares
favourably with the historic recovery achieved from the
old Mt Morgans CIP/CIL treatment plant (since removed)
which recorded a recovery of 91.4% from a 10 year
treatment history during the 1990s that processed over
10 million tonnes of ore and produced over 740,000
ounces of gold.
The main ore feed sources for the historic treatment facility
during the 1990s at Mt Morgans were Westralia, Jupiter
and Transvaal. The main ore feed sources for the newly
proposed 2.5Mtpa CIL treatment plant at the MMGP
is also Westralia (Beresford and Allanson), Jupiter and
Transvaal.
The proposed process design for the new plant
incorporates an SABC configuration (primary crush,
SAG mill, pebble crush and ball mill, see Figure 10
and compare with Figure 3) which is similar to the
configuration used during the 1990s at Mt Morgans.
The crushing and milling of ores is designed to produce a
P80 passing 106 microns. The MMGP ores exhibit coarse
gold able to be recovered using gravity concentrators.
Leach residence time will be 28 hours. Gold doré will
be smelted on site and transported to the refinery prior
to sale.
The process flowsheet for the new 2.5Mtpa CIL treatment
facility at the MMGP is similar to many other treatment
plants seen throughout the Western Australian gold fields.
Treatment costs are estimated at A$17.88 per tonne of
ore processed.
For the Feasibility Study, power was to be provided by a
diesel-fuelled 20MW power station built close to the site
of the treatment plant near to the Jupiter open pit mine. It
is anticipated the power station will be constructed under
a build-own-operate arrangement. Dacian Gold has
since determined gas-fired power as the preferred power
solution at Mt Morgans.
A breakdown of ore mined and ounces produced over
the initial 8 year Ore Reserve, by year, is shown in Table
2.
Figure 10: 3D-image of new 2.5Mtpa CIL treatment facility with Jupiter open pit in the background.
12
REVIEW OF OPERATIONS
UG Mined
OP Mined
TOTAL MINED
Ore Treated
Gold
Produced
2017
2018
2019
2020
2021
2022
2023
2024
2025
Kt
g/t
Koz
Kt
g/t
Koz
Kt
g/t
Koz
3,834
4.5
558
14,752
1.4
643
18,585
2.0
1,200
38
3.4
4
4
0.7
0.1
42
3.1
4
734
5.3
124
1,201
1,221
4.2
164
4.3
167
613
4.7
93
27
5.1
4
1,869
1,713
1,585
1,986
3,124
2,503
1,861
1.2
72
1.6
90
1.1
55
1.2
77
1.5
152
1.2
93
1.6
97
2,602
2,914
2,806
2,599
3,151
2,503
1,861
2.3
197
2.7
254
2.5
222
2.0
170
1.5
156
1.2
93
1.6
97
107
2.3
8
107
2.3
8
Kt
18,585
1,991
2,500
2,507
2,500
2,500
2,500
2,507
1,581
Recovery
90.7%
90.8%
90.7%
90.6%
90.2%
89.9%
89.6%
88.7%
85.3%
Koz
1,089
171
224
196
152
130
82
100
33
Table 2: Feasibility Study mining and gold production schedule for the MMGP initial Ore Reserves
Infrastructure Capital Costs
Project Permitting and Scheduling
The original estimated capital cost for all MMGP
infrastructure was A$172M (US$129M). As noted
above, this capital cost has now been reduced to
A$149M after identifying several capital savings from
areas including the treatment plant and the second-
hand accommodation village.
All regulatory approvals required to commence mining
and construction at the MMGP are in place. Table 3 is
a project schedule showing key deliverables leading to
gold production in Q1 CY2018.
Table 3: MMGP milestones and Project delivery schedule
13
REVIEW OF OPERATIONS
MMGP Expansion Pre-Feasibility Study (PFS)
Reported at the same time as the MMGP Feasibility Study
on 21 November 2016, the Company also released
the results of the MMGP expansion PFS assessing the
potential impact of expanding the Westralia Mine Area.
The expansion PFS does not include any changes to the
mining of the Jupiter and Transvaal Ore Reserves. Key
outcomes from the expansion PFS include:
•
•
The MMGP production may increase from an Ore
Reserve of 18.6Mt @ 2.0g/t Au for 1.2 million
ounces to 21.4Mt @ 2.4 g/t Au for 1.7 million
ounces;
The corresponding MMGP Ore Reserve AISC
may improve from A$1,039/oz (US$779/oz) in
the current Feasibility Study to a possible AISC of
A$970-975/oz (US$730-735/oz);
• A potential increase of the Westralia Mine Area
Ore Reserve of 492,000 ounces at an estimated
AISC of A$837/oz (US$628/oz) to 938,000
ounces at a possible AISC of A$795-805/oz
(US$595-605/oz);
• A potential average gold production of 197,000
ounces per annum for the first 7 years;
•
The mine life increases from 8 years in Ore Reserve
to potentially 9 years; and
• An assumed additional capital expenditure
of approximately $3 million to increase the
capacity of the tailings storage facility. No other
infrastructure, material changes to permitting
or financing requirements are assumed to be
necessary for the PFS.
The initial Ore Reserves of the Westralia Mine Area sit
along strike, above, and are geologically continuous
with an Inferred Mineral Resource of 3.5Mt @ 6.5g/t Au
for 715,000 ounces.
By applying the same mine design parameters used in
estimating the Westralia Mine Area Ore Reserves to
the contiguous Inferred Mineral Resource, it shows the
potential for an increased production scenario of the
MMGP to 21.4Mt @ 2.4g/t Au for 1.7 million ounces.
The potential future expanded production profile from
1.2 million ounces of Ore Reserves to 1.7 million ounces
as determined from the expansion PFS, accounts for a
38% increase in ounces. Significantly, the 1.7 million
ounces remains underpinned by 73% high confidence
Ore Reserves, and assumes a successful upgrade and
conversion of the lower confidence Mineral Resources at
depth.
No material changes to the Westralia mineralisation
is anticipated at depth, and the potential AISC of the
expanded MMGP potential production profile improves
from A$1,039/oz in the Ore Reserve to A$970-975/
oz (US$730-735/oz), in the case of the expansion PFS.
14
REVIEW OF OPERATIONS
Expansion PFS – Mining
The individual production sources for the potential
1.7 million ounces considered in the expansion PFS
is shown in Table 4. The only change from the Ore
Reserve production sources described above under the
MMGP Feasibility Study section is from the Beresford
and Allanson underground mines. This expansion PFS
does not contain any material from the Jupiter Mine Area
MMGP Expansion PFS Mining Summary
and the Transvaal underground mine additional to the
defined Ore Reserves.
Figure 11 shows the extent of the possible production
of the Beresford and Allanson underground mines,
considered in the PFS.
COG (g/t)
Tonnes (Kt)
Au (g/t)
Au (Koz)
Beresford UG
Allanson UG
Transvaal UG
Jupiter OP
PFS Total Mining
2.0
2.0
1.4
0.5
% of PFS comprising Ore Reserves (ounces)
73%
Forecast AISC
A$970-975/oz
US$730-735/oz
4,540
1,590
520
14,750
21,400
18,590
4.7
5.0
3.9
1.4
2.4
2.0
682
256
65
643
1,650
1,200
Table 4: MMGP expansion PFS production sources and forecast key metrics.
Figure 11: Westralia Mine Area isometric view showing the extent of Ore Reserve mine development and stoping at Beresford and Allanson (blue)
and the potential future production considered in the expansion PFS (green).
15
REVIEW OF OPERATIONS
EXPLORATION AND DRILLING
Cameron Well Prospect
The Cameron Well Prospect is a large and high-quality
gold target located only 9km north-west from where the
Company is building a new 2.5Mtpa treatment facility
(see Figure 2). Since the mid-1990s, when minor
exploration identified shallow gold mineralisation, there
has been negligible exploration undertaken at Cameron
Well.
Dacian Gold’s first exploration campaign into the Cameron
Well area was a 133-hole, wide-spaced reconnaissance
drilling program (see ASX release 1 September 2016).
Since then the Company has completed an additional
722 aircore/RAB drill holes (see ASX releases of 1 May
2017 and 21 June 2017).
Dacian Gold’s exploration drilling has confirmed an
extensive zone of mineralisation and anomalism within
the near-surface oxide material over an area in excess
of 6km² at Cameron Well. The drilling completed by
Dacian Gold is a combination of aircore and RAB
drilling, which is designed to drill through the near-
surface oxide material without drilling into fresh rock.
Given the general reconnaissance nature of aircore and
RAB drilling, much of Dacian Gold’s exploration drilling
was initially completed on a 100m x 100m drilling grid
or a broader 200m x 100m drill pattern.
Following Dacian Gold’s recognition of outcropping
and mineralised syenite centrally located within a 1.1km
diameter magnetic complex (named the Cameron Well
Syenite Complex - see ASX announcement 7 February
2017), it has completed a 50m x 50m infill drilling grid
over the magnetic complex.
In total, Dacian Gold has now drilled 855 aircore/RAB
drill holes for a total of 34,359m; the average drill hole
depth (or depth of oxidised material at surface) is 40m.
The large-scale +6km² oxide gold anomaly at Cameron
Well defined by the 855 drill holes completed by Dacian
Gold is shown in plan view in Figure 12.
Figure 12: The Cameron Well Prospect showing the +6km² Oxide Gold Anomaly which contains
the circular Cameron Well Syenite Complex (labelled) now drilled to 50m x 50m drill-centres using
aircore/RAB drilling (highlighted by grey box). The Oxide Gold Anomaly is based on Total Gold
intersected in the broad-spaced reconnaissance aircore/RAB drilling.
16
REVIEW OF OPERATIONS
There is no Mineral Resource associated with the
Cameron Well Prospect, however, given the extensive
nature of near-surface mineralisation and anomalism
the Company has identified, it is optimistic that there is
excellent potential for the discovery of both near-surface
oxide and deeper fresh rock-hosted gold mineralisation.
Clearly, any new Mineral Resource discovery at Cameron
Well has the potential to provide a material benefit to the
MMGP.
Key outcomes returned from the aircore/RAB drill holes
drilled during the FY2017 year include:
• Numerous mineralised and highly anomalous
intersections were returned;
•
•
The syenite that is centrally located within the
Cameron Well Syenite Complex is larger than the
mineralised Heffernans syenite at Jupiter;
Four bedrock targets identified within the Cameron
Well Syenite Complex are ready for immediate
drill testing, including a 1.5km long gold-bearing
structure; and
• Much of the magnetically altered rocks within the
Cameron Well Syenite Complex are resistive to
weathering which may be due to the silicification
effects associated with gold mineralisation.
Table 5 lists several of the mineralised intersections
returned from the 50m x 50m drilling within the Cameron
Well Syenite Complex. Figure 13 shows the location of
several of the intersections (see also ASX releases of 1
May 2017 and 21 June 2017). The widespread extent
of mineralised intersections from within the Cameron
Well Syenite Complex is clearly evident in Figure 13.
Drill hole
Intersection
From (m)
17CWAC0533
4m @ 15.2 g/t Au
17CWAC0279
4m @ 4.0 g/t Au
17CWAC0336
8m @ 3.3 g/t Au
including
4m @ 6.4 g/t Au
8
8
0
4
17CWRB0317
15m @ 1.0 g/t Au
20*
including
4m @ 2.2 g/t Au
17CWAC0367
4m @ 3.4 g/t Au
17CWAC0843
4m @ 3.2 g/t Au
17CWAC0716
4m @ 3.0 g/t Au
17CWAC0335
2m @ 4.9 g/t Au
and
5m @ 0.8 g/t Au
17CWAC0375
4m @ 2.0 g/t Au
17CWAC0838
4m @ 1.8 g/t Au
17CWAC0719
8m @ 1.3 g/t Au
17CWAC0269
8m @ 1.1 g/t Au
and
14m @ 1.1 g/t Au
17CWAC0237
8m @ 1.6 g/t Au
17CWAC0291
7m @ 1.5 g/t Au
17CWAC0374
4m @ 1.5 g/t Au
17CWRB0315
5m @ 1.3 g/t Au
17CWAC0406
4m @ 1.2 g/t Au
17CWAC0431
4m @ 1.1 g/t Au
17CWAC0365
4m @ 1.1 g/t Au
17CWAC0337
8m @ 0.5 g/t Au
and
5m @ 1.1 g/t Au
20
20
36
24*
38^
52*
24
48
20
28
44*
40*
44*
12
0*
32
16
28
28
45
Table 5: Significant intersections from aircore/RAB drilling within
the Cameron Well Syenite Complex. Note * denotes gold at end of
hole (an open intersection) and ^ denotes visible gold seen in logging
the drill chips.
17
REVIEW OF OPERATIONS
Figure 13 also shows the centrally located syenite body
within the core of the Cameron Well Syenite Complex.
The syenite body measures 500m x 200m in size with
approximately half of this dimension outcropping and
containing mineralised quartz veins assaying up to
12.1g/t Au (see ASX release of 7 February 2017). The
Cameron Well syenite is physically similar in appearance
and approximately twice the size of the mineralised
Heffernans syenite at Jupiter, located 10km to the south-
east.
Figure 13: Location of significant intersections from in-fill drilling program of the Cameron Well
Syenite Complex (intersection from depth is shown in brackets). Note the position of a large 500m
x 200m syenite body centrally located in the core of the 1.1km diameter Cameron Well Syenite
Complex (black and white dotted outline).
18
REVIEW OF OPERATIONS
Westralia Exploration Activity
In order to accurately place the initial mine development
for the planned stopes into the upper sections of the
Beresford orebody, Dacian Gold completed 24 surface
diamond drill holes in the second quarter of CY2017
(see ASX release 15 May 2017).
•
•
The hangingwall and central BIFs are the better
mineralised lode structures;
The two high grade shoot directions are steep (ca.
60 degrees) south and flat (ca. 20 degrees) to the
north; and
Numerous high-grade results were received from the
drilling program confirming:
•
The extensive nature of gold mineralisation within
banded iron formation (BIF) units at Beresford;
• Additional and potentially early mining opportunities
exist in the upper part of the Beresford mine with
high grade intersections reported outside the Ore
Reserve (see Table 6 and Figure 14).
Intersection from inside Ore Reserve
Intersection from outside Ore Reserve
Drill hole id
Intersection
16MMRD0164W1
16.5m @ 10.9g/t Au
17MMDD0343
17MMDD0339
17MMDD0349
17MMDD0341
17MMDD0337
17MMDD0335
17MMDD0345
17MMDD0353
4.4m @ 11.2g/t Au
3.0m @ 10.7g/t Au
3.3m @ 9.3g/t Au
0.9m @ 19.5g/t Au
4.8m @ 3.7g/t Au
5.0m @ 2.1g/t Au
5.4m @ 4.6g/t Au
12.1m @ 3.4g/t Au
From
265.6m
223.4m
130.0m
237.7m
203.7m
178.9m
157.0m
167.0m
235.3m
Intersection
From
and
12m @ 2.2g/t Au
204.0m
and
and
and
and
and
1.7m @ 56.5g/t Au
7m @ 31.0g/t Au
2.9m @ 9.4g/t Au
1.9m @ 46.8g/t Au
189.0m
174.0m
198.0m
288.0m
Table 6: Significant intersections from the surface diamond drilling program into the upper levels of the planned Beresford Ore Reserve. Note the
right-hand column reports significant intersections from outside the Ore Reserve from the same drill holes.
Figure 14: Coarse visible gold with pyrite in drill hole 17MMDD0335 which returned 7m @ 31 g/t Au including 1.45m @ 135.2 g/t Au from
outside of the Beresford Ore Reserve.
19
REVIEW OF OPERATIONS
Jupiter Exploration Activity
During the year, the Company drilled 722 reconnaissance
RAB/aircore drill holes to test for potential mineralisation
in previously undrilled areas lying adjacent to, and
contiguous with, the planned 643,000 ounce Jupiter
open pit.
close to the planned open pit. Figure 15 shows the
level of the newly discovered anomalism/mineralisation
and the location of the planned Jupiter open pit. Key
anomalies are named South Cornwall, East Heffernans
and Devon.
The results of all 722 holes confirm there are large areas
of near-surface anomalism/mineralisation lying very
Many of the better intersections are shallow (less than
20m below surface), with several shown in Table 7.
Figure 15: Isometric view of the results of the 722-hole reconnaissance RAB/aircore drilling program along with
the location of the planned 643,000 ounce Jupiter open pit, shown in blue. All drilling is colour-coded to show the
maximum gold in the drill hole (sampling over 4m intervals). Note the extensive anomalism developed south of the
planned open pit (South Cornwall), east (East Heffernans) and south-east (Devon). The dominant ore-hosting structure
at Jupiter, the Cornwall Shear Zone, is shown in yellow.
Drill hole
Intersection
16JUAC0568
16m @ 1.63 g/t Au
including
4m @ 5.63 g/t Au
16JUAC0552
4m @ 4.50 g/t Au
16JUAC0611
4m @ 3.15 g/t Au
16JUAC0646
3m @ 2.25 g/t Au
16JUAC0553
4m @ 1.97 g/t Au
16JUAC0654
12m @ 0.74 g/t Au
16JUAC0627
8m @ 0.75 g/t Au
16JUAC0555
8m @ 0.67 g/t Au
From
12m
20m
16m
4m
56m
4m
4m
56m
4m
Table 7: - Significant shallow intersections of reconnaissance aircore
drilling from the South Cornwall target which is defined as a coherent
1.3km long gold anomaly.
The 1km long East Heffernans anomaly lies immediately
adjacent to, and in places is contiguous with, the planned
eastern wall of the Jupiter open pit (see Figure 15). Better
results from the East Heffernans are tabled in Table 8.
Drill hole
Intersection
16JUAC0398
4m @ 3.57 g/t Au
16JUAC0362
4m @ 0.94 g/t Au
and
8m @ 0.21 g/t Au
16JUAC0365
3m @ 1.20 g/t Au
From
20m
20m
32m
36m
Table 8: - Significant shallow intersections of reconnaissance aircore
drilling from the East Heffernans target which is defined as a coherent
1km long gold anomaly
20
REVIEW OF OPERATIONS
Europa
The previously undrilled Europa magnetic anomaly, lying
immediately south-east of the planned Doublejay sub-pit
at Jupiter, was drill tested with three diamond drill holes
early in the 2017 financial year. Two of the drill holes
intersected mineralisation with 16JUDD404 returning
4.5m @ 6.7g/t Au from 475m and 16JUDD405 returned
4.2m @ 1.7g/t Au from 297.8m with sheared basalt.
Visible gold in quartz veining within syenite was evident
in the 16JUDD404 intersection (see ASX announcement
10 October 2016).
Callisto
Dacian Gold completed lake diamond drilling at the
Callisto Prospect located 7km south of the Jupiter mine
and 7km west of the 8 million ounce Wallaby gold mine
late in the 2016 calendar year. Three lake diamond drill
holes were drilled using specialist lake drilling equipment
at Callisto for 2,285m (see ASX announcement 10
October 2016).
The Callisto Prospect is a large pipe-like and unexplained
strong magnetic anomaly measuring 1,200m long by
800m. It has a classic “donut” style magnetic anomaly
analogous to the large Wallaby gold mine, 7km to the
east.
Whilst minor intervals of the magnetic rocks that were
similar in magnetic intensity to that targeted were
intersected by the Dacian Gold drilling, the large body
of magnetic rocks that were considered to account for the
magnetic anomaly, were not intersected. The Company
interprets the large magnetic body to lie at a depth in
excess of 700m below surface, beneath that tested by
the three diamond drill holes completed.
Drill hole 16CADD001 did intersect a significant zone
of sericite-silica-albite alteration over 106m width (true
width unknown) at a depth of around 220m below
surface. Abundant extensional quartz veins and minor
pyrite / pyrrhotite developed was seen in the drill core.
Minor, sub-1 gram gold intersections, were observed in
places throughout the broad alteration zone.
The combination of a major gold-bearing structure and
alteration zone with the presence of the targeted magnetic
rocks (albeit at narrower than targeted intervals),
confirms the veracity of the Callisto target. The Company
will assess all of the geological and geophysical data
collected from the three diamond drill holes, with a view
of recommencing exploration at Callisto in the 2017
calendar year.
21
2017 MINERAL RESOURCES & ORE RESERVES
STATEMENT
MOUNT MORGANS GOLD PROJECT MINERAL RESOURCES AS AT 30 JUNE 2017
Cut-off
Grade
Au
g/t
0.5
0.5
1.5
0.5
2.0
0.5
2.0
2.0
Tonnes
-
994,000
-
3,494,000
409,000
-
367,000
-
Measured
Indicated
Inferred
Total Mineral Resource
Au
g/t
-
1.7
-
0.5
5.0
-
5.8
-
Au
Oz
-
Tonnes
-
54,000
22,889,000
-
58,000
65,000
-
68,000
-
-
-
4,769,000
69,000
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
Deposit
King Street*
Jupiter
Jupiter UG
Jupiter LG Stockpile
Westralia
Craic*
Transvaal
Ramornie
TOTAL
* JORC 2004
Total Mineral Resources stated in the 2016 Mineral Resources and Ore Reserves Statement (MROR) for the Mount
Morgans Gold Project was 44,688,000 tonnes at 2.3 g/t Au for 3,315,000 ounces (refer 2016 Annual Report).
Total Mineral Resources between the 2016 and 2017 MROR Statements remain unchanged.
MOUNT MORGANS GOLD PROJECT ORE RESERVES AS AT 30 JUNE 2017
Deposit
Beresford UG
Allanson UG
Transvaal UG
Jupiter OP
Cut-off
Au g/t
2.0
2.0
1.4
0.5
Tonnes
50,000
-
193,000
867,000
INITIAL ORE RESERVE
1,110,000
Proved
Au g/t
4.9
-
4.7
1.7
2.4
Au Oz
8,000
-
29,000
2,383,000
882,000
325,000
48,000 13,884,000
85,000
17,475,000
Probable
Tonnes
Au g/t
Au Oz
Tonnes
4.2
5.7
3.4
1.3
2.0
323,000 2,433,000
162,000
882,000
36,000
518,000
595,000 14,751,000
1,115,000 18,585,000
Total
Au g/t
4.2
5.7
3.9
1.4
2.0
Au Oz
331,000
162,000
65,000
643,000
1,200,000
Since the date of the 2016 MROR Statement, the Ore
Reserve estimates for the Mount Morgans Gold Project
have increased from 28,000 tonnes at 9.2 g/t Au for
8,000 ounces to 18,585,000 tonnes at 2.0 g/t Au for
1,200,000 ounces (refer ASX release 21 November
2016).
The change in Ore Reserves between the 2016 and 2017
MROR Statements was due to the completion of extensive
resource definition drilling programs at the respective
deposits that have significantly increased the confidence
of the Mineral Resource estimates and completion of the
Mount Morgans Gold Project Feasibility Study, resulting
in initial Ore Reserves estimated at the Company’s 100%
owned Westralia, Transvaal and Jupiter deposits.
The Craic deposit was not included in the Feasibility
Study and was removed from the Ore Reserve and is
therefore not included in the 2017 MROR Statement.
The initial Westralia underground Ore Reserve was
estimated at 3,315,000 tonnes at 4.6 g/t Au for 493,000
ounces (refer ASX release 21 November 2016) which is
comprised of the Allanson and Beresford underground
mines.
The initial Jupiter open pit Ore Reserve was estimated at
14,751,000 tonnes at 1.4g/t Au for 643,000 ounces
(refer ASX release 21 November 2016).
The initial Transvaal underground Ore Reserve was
estimated at 518,000 tonnes at 3.9 g/t Au for 65,000
ounces (refer ASX release 21 November 2016).
22
2017 MINERAL RESOURCES & ORE RESERVES
STATEMENT
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 Gold 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 Gold 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 Gold geologists.
Diamond core is oriented and photographed. Dacian
Gold 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.
23
2017 MINERAL RESOURCES & ORE RESERVES
STATEMENT
COMPETENT PERSON STATEMENT
Exploration
The information in this report that relates to Exploration
Results is based on information compiled by Mr Rohan
Williams who is a Member of the Australasian Institute
of Mining and Metallurgy. Mr Williams holds shares
and options in, and is a director and full time employee
of, Dacian Gold Limited. Mr Williams has sufficient
experience which is relevant to the style of mineralisation
under consideration 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 the information
compiled by him, in the form and context in which it
appears.
Mineral Resources
This 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 a director
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 ‘Australian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves’.
Mr Williams has approved this 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.
In relation to Mineral Resources and Ore Reserves, the
Company confirms that all material assumptions and
technical parameters that underpin the relevant market
announcement continue to apply and have not materially
changed.
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 information in this report that relates the Westralia
Deposit Mineral Resource (see ASX announcement
28 July 2016), Jupiter Deposit Mineral Resource (see
ASX announcement 19 July 2016), Transvaal Deposit
Mineral Resource (see ASX announcement 16 September
2015) and the Ramornie Deposit Mineral Resource
(see ASX announcement 24 February 2015) is based
on information compiled by Mr Shaun Searle who is a
Member of Australian Institute of Geoscientists and a
full-time employee of RungePincockMinarco. Mr Searle
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 Searle 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 the Jupiter Low
Grade Stockpile (see ASX announcement – 16 September
2015) is based on information compiled by Mr Rohan
Williams who is a Member of the Australasian Institute
of Mining and Metallurgy. Mr Williams holds shares
and options in, and is a director and full-time employee
of, Dacian Gold Limited. 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, Jupiter Low
Grade Stockpile, Transvaal and Ramornie which are
reported under JORC 2012) is based on information
compiled by Mr Rohan Williams, who is a Member of
The Australasian Institute of Mining and Metallurgy. Mr
Williams holds shares and options in, and is a director
and full-time employee of, Dacian Gold Limited. 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
2004 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
24
2017 MINERAL RESOURCES & ORE RESERVES
STATEMENT
matters based on his information in the form and context
in which it appears.
Where the Company refers to the Mineral Resources
and Ore Reserves in this report (referencing previous
releases made to the ASX), it confirms that it is not
aware of any new information or data that materially
affects the information included in that announcement
and all material assumptions and technical parameters
underpinning the Mineral Resource estimate and Ore
Reserve estimate with that announcement continue to
apply and have not materially changed. The Company
confirms that the form and context in which the Competent
Persons findings are presented have not materially
changed from the original announcement.
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 King Street and Craic Mineral
Resource has 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.
Ore Reserves
The information in this report that relates to Ore Reserves
for the Westralia Mining Area and Transvaal Mining
Area (see ASX announcement 21 November 2016)
is based on information compiled or reviewed by Mr
Matthew Keenan and Mr Shane McLeay. Messrs Keenan
and McLeay have confirmed that they have read and
understood the requirements of the 2012 Edition of the
Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code 2012
Edition). They are Competent Persons as defined by the
JORC Code 2012 Edition, having more than five years’
experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the
activity for which they are accepting responsibility.
Messrs Keenan and McLeay are both Members of The
Australasian Institute of Mining and Metallurgy and
full time employees of Entech Pty Ltd and consent to
the inclusion in the report of the matters based on their
information in the form and context in which it appears.
The information in this report that relates to Ore Reserves
for the Jupiter Mining Area (see ASX announcement 21
November 2016) is based on information compiled or
reviewed by Mr Ross Cheyne. Mr Cheyne confirmed
that he has read and understood the requirements of the
2012 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves
(JORC Code 2012 Edition). He is a Competent Person as
defined by the JORC Code 2012 Edition, having more
than five years’ experience which is relevant to the style
of mineralisation and type of deposit under consideration
and to the activity for which he is accepting responsibility.
Mr Cheyne is a Fellow of The Australasian Institute of
Mining and Metallurgy and a full-time employee of
Orelogy Consulting Pty Ltd and consents to the inclusion
in the report of the matters based on his information in
the form and context in which it appears.
25
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 2017. 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:
EXECUTIVE CHAIRMAN
Rohan Williams BSc (Hons), MAusIMM
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
NonͲ 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
KalgoorlieͲNorseman 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 NonͲExecutive basis.
Other than as stated above, Mr Williams has not served
as a Director of any other listed companies in the three
years immediately before the end of 2017 financial year.
Board of Directors: (clockwise from top left) Barry Patterson,
Robert Reynolds, Ian Cochrane, Rohan Williams and Kevin Hart
(Company Secretary).
26
NON-EXECUTIVE DIRECTOR
Robert Reynolds MAICD, MAusIMM
NON-EXECUTIVE DIRECTOR
Ian Cochrane BCom LLB
Mr Reynolds was the NonͲExecutive Chairman of Avoca
Resources Ltd from 2002 until it merged with Anatolia
Minerals to form Alacer Gold Corp in 2011. Mr Reynolds
was NonͲExecutive 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
was also previously a Director of Canadian company
Exeter Resource Corporation when it was acquired by
Goldcorp Inc. on 2 August 2017 for CAD$184 million.
Mr Reynolds currently hold a Directorship with Canadian
company Rugby Mining Limited. Mr Reynolds was
previously a Director of ASX listed companies Chesser
Resources, Convergent Minerals Limited and Global
Geoscience Limited.
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 coͲestablished 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
ASXͲlisted 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 Reynolds has not served
as a Director of any other listed companies in the three
years immediately before the end of 2017 financial year.
Other than as stated above, Mr Cochrane has not served
as a Director of any other listed companies in the three
years immediately before the end of 2017 financial year.
NON-EXECUTIVE DIRECTOR
Barry Patterson ASMM, MAusIMM, FAICD
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.
Mr Patterson is a mining engineer with over 50 years of
experience in the mining industry and is coͲfounder and
NonͲExecutive 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 coͲfounded 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 NonͲExecutive 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 three
years immediately before the end of 2017 financial year.
27
Board of Directors: (clockwise from top left) Barry Patterson,
Robert Reynolds, Ian Cochrane, Rohan Williams and Kevin Hart
(Company Secretary).
DIRECTORS’ REPORT
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
6,119,637
2,425,000
6,654,987
259,840
5,000,000
300,000
300,000
300,000
MEETINGS OF DIRECTORS
The number of meetings of the Company’s board of Directors and each Board Committee held during the year ended
30 June 2017, and the number of meetings attended by each Director were:
Director
Board Meetings
Remuneration Committee
Audit Committee
Rohan Williams
Robert Reynolds
Barry Patterson
Ian Cochrane
A
7
7
7
7
B
7
6
7
7
A
1
1
1
1
B
1
1
1
1
A
2
2
2
2
B
2
2
2
2
A = the number of meetings the Director was entitled to attend B = the number of meetings the Director attended
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
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
5,000,000
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
On 9 December 2016, the Company issued 10,600,000 ordinary fully paid shares at $2.50 per share to existing and
new institutional and sophisticated investors raising approximately $26 million before costs.
During March 2017, the Company issued a further 54,895,485 shares at $2.00 per share pursuant to a fully
underwritten accelerated non-renounceable pro-rata entitlement to raise approximately A$109.8million.
28
DIRECTORS’ REPORT
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
9 October 2012
28 February 2014
Options
$0.83
$0.77
$0.50
600,000
900,000
500,000
At the date of this report unissued ordinary shares of the Company under option are:
Number of options
Exercise price
4,200,000
1,000,000
2,000,000
1,500,000
1,650,000
300,000
500,000
DIVIDENDS
$0.77
$0.58
$0.39
$1.15
$1.16
$1.99
$3.66
Expiry date
9 October 2017
24 September 2019
17 November 2019
30 September 2020
31 January 2021
28 February 2021
30 June 2021
No dividends have been paid or declared since the start of the financial year and the Directors do notrecommend 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. During the
period, the Company announced it has commenced site-basedconstruction at its100% owned Mt Morgans Gold Project
following receipt of regulatory approvals. The Company anticipates first gold production in the March quarter,2018.
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 $18,857,914 (30 June 2016: $21,832,884). Included in this
loss for the financial year is an amount of $8,858,445 (30 June 2016: $19,141,580) relating to exploration and
evaluation costs not capitalised, and $6,014,752 for the value of shares issued to Macquarie Bank Limited (“MBL”) as
settlement for the termination of the MBL Royalty Deed held over certain Mt Morgans Gold Project (“MMGP”) tenements.
At the end of the financial year the Group had $90,163,337 (30 June 2016: $9,648,425) in cash and an undrawn
A$150 million syndicated debt facility.
29
DIRECTORS’ REPORT
Summary of Activities
Following the release of the MMGP Feasibility Study (see ASX announcement 21 November 2016), the Board approved
project construction in late 2016. At 30 June 2017, the Group was approximately 9 months away from first gold
production at the MMGP project.
Total capital costs to develop the MMGP project is $A197M including A$107M dedicated to the construction of a
2.5Mtpa CIL treatment facility currently under construction. At 30 June 2017, early stage progress had been made on
construction of the treatment plant, the 410 person permanent accommodation village and the Westralia Mine
Services Area. Underground mining at Beresford had also commenced.
As announced on 21 December 2016, the Group entered into a A$150M Syndicated Facility Agreement (Facility) with
Westpac Banking Corporation, Australia New Zealand Banking Group Ltd and BNP Paribas to fund the development
of the MMGP project.
During the period, the Group entered into its first gold forward sales contracts. A total of 51,999oz were forward sold
at an average price of A$1,782/oz. Contract delivery dates are across the 12 month period to 30 June 2020.
Since the end of the financial year the Group has maintained an aggressive exploration spend at the MMGP project
including the Cameron Well prospect.
Further details of the Company’s activities including significant drill results returned for the 2017 financial year are
included in the Review of Operations in the Annual Report.
EVENTS SUBSEQUENT TO THE REPORTING DATE
On 7 August 2017, the Group announced it had drawn down the first $45.0 million under the debt Facility following
the satisfaction of all conditions precedent and first draw down requirements. Each financier participated equally in
the drawdown.
On 28 August 2017, the Group announced that it had executed a Gas Transportation Agreement with the APA Group
which includes the construction of a 4 kilometre lateral from the Eastern Goldfields pipeline to the MMGP power station.
The term of the agreement is for up to 10 years. The Group also announced the entry into a Letter of Intent to award a
Power Purchase Agreement with Zenith Energy Limited for the construction, ownership and operation of a 17MW gas
fired power station.
Other than the matters noted above, 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’s construction and exploration activities are subject to significant conditions and environmental regulations
under the Commonwealth and Western Australia State Governments.
So far as the Directors are aware, all activities have been undertaken in compliance with all relevant environmental
regulations.
30
DIRECTORS’ REPORT
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.
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
Other services
Total
2017
$
44,594
-
44,594
2016
$
32,251
-
32,251
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.
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.
31
DIRECTORS’ 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.
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.
32
DIRECTORS’ REPORT
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 $80,000 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 2017, 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 salary of $629,625 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.
Engagement of Executives
The terms of Mr Dyker’s employment contract governing his role as Chief Financial Officer are summarised below.
In respect of his engagement as Chief Financial Officer, Mr Dyker will receive a salary of $383,250 per annum
inclusive of statutory superannuation (Total Fixed Remuneration, TFR).
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 99.8% of the shareholders voted to adopt the remuneration report for the year ended 30 June 2016.
The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
33
DIRECTORS’ REPORT
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 2016, 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:
Loss for the year attributable to shareholders
$18,857,914
$21,832,884
$8,048,428
$5,620,640
$5,806,907
Closing share price at 30 June
$1.98
$2.90
$0.43
$0.35
$0.17
2017
2016
2015
2014
2013
As an exploration and development Company with its major asset currently under construction, 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, the commencement of construction and responsible
management of cash resources and the Company’s other assets are more appropriate performance indicators to assess
the performance of management.
34
DIRECTORS’ REPORT
Remuneration Disclosures
Current Directors and Key Management Personnel of the Group have been identified as:
Mr Rohan Williams
Mr Ian Cochrane
Mr Barry Patterson
Mr Robert Reynolds
Mr Grant Dyker
Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
The details of the remuneration of each Director and member of Key Management Personnel of the Company are as
follows:
Cash
Non-cash
Short-term
employee benefits
Post
employment
benefits
Long-term
benefits
Share
based
payments
Base salary
and consult-
ing fees
$
Cash Bonus
$
Super-
annuation
contributions
$
Long service
leave
$
Shares
rights (ii) &
options (i)
$
Total
$
Value of
equity as
proportion of
remuneration
%
482,844
160,000
35,000
19,386
944,273
1,641,503
57.5%
403,000
160,000
35,000
16,934
142,268
757,202
18.8%
60,000
20,000
60,000
46,667
60,000
46,667
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
5,700
1,900
5,700
4,433
5,700
4,433
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
65,700
0.0%
155,904
177,804
87.7%
Ͳ
Ͳ
Ͳ
Ͳ
65,700
0.0%
51,100
0.0%
65,700
0.0%
51,100
0.0%
334,380
75,000
24,058
2,561
208,547
644,546
32.4%
116,667
Ͳ
11,083
351
75,668
203,769
37.1%
997,224
235,000
76,158
21,947
1,152,820
2,483,149
633,001
160,000
56,849
17,285
373,840
1,240,975
Rohan Williams
Ian Cochrane
Barry Patterson
Robert Reynolds
Grant Dyker
Total
Total
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
(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 table is the portion of the fair value of the options
recognised in the reporting period.
(ii) The fair value of performance rights is calculated at the date of grant using a Monte Carlo simulation, a review of historical share price volatility
and correlation of the share price of the Company to its Peer Group. The fair value is allocated to each reporting period evenly over the period
from grant date to vesting date. The value disclosed in the above table is the portion of the fair value of the performance rights 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 2017 was $235,000 (30 June 2016: $160,000). The remuneration committee awards discretionary cash
bonuses based on company performance. These awards are not formally detailed in employee agreements and
therefore do not represent a defined percentage of salary.
35
DIRECTORS’ REPORT
Options Granted as Remuneration
2017
During the 2017 financial year, no options over unissued shares were issued to Directors or Key Management Personnel.
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 (i)
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
(i)
The exercise price for each option has been revalued subsequent to grant date. Refer note 18 for further discussion.
During the 2016 financial year there were 1,500,000 options over unissued shares issued to Key Management
Personnel 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 (i)
Expiry date
Number of
options granted
Vesting date
Total value of
options granted
5 February 2016
$1.22 each
31 January 2021
750,000
31 January 2018
$224,333
5 February 2016
$1.22 each
31 January 2021
375,000
31 January 2019
$112,166
5 February 2016
$1.22 each
31 January 2021
375,000
31 July 2019
$112,166
(i)
The exercise price for each option has been revalued subsequent to grant date. Refer note 18 for further discussion.
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 2017 or 30 June 2016.
Performance Rights Granted as Remuneration
During the 2017 financial year there were 670,000 performance rights issued to the Executive Chairman Mr Rohan
Williams, pursuant to the Dacian Gold Limited Employee Option Plan. Details of performance rights issued to Mr
Williams are as follows:
Grant date
17 October 2016
17 October 2016
17 October 2016
140,000
200,000
330,000
Number of share rights
granted(i)
Total fair value of share
rights at grant date(ii)
$396,340
$597,400
Vesting date
30 June 2017
30 June 2018
$1,002,870
30 June 2019
Unamortised total value of
grant yet to vest
-
$351,412
$742,867
(i)
The number of share rights awarded at 30 June 2017 was 70,000. These rights were issued subsequent to period end.
(ii) The performance rights will vest subject to certain operational and market performance conditions being met. The number of performance rights
that vest will be subject to the Company’s relative performance for each of the performance conditions.
36
DIRECTORS’ REPORT
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.
2017
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
5,000,000
I Cochrane
R Reynolds
B Patterson
300,000
300,000
300,000
G Dyker
1,500,000
Share holdings
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
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. During the period, 70,000 shares were granted to the Executive
Chairman as compensation. These share rights were issued subsequent to period end.
2017
Name
R Williams
R Reynolds
B Patterson
I Cochrane
G Dyker
Balance at start
of the year
Acquisitions pursuant to
share placements
Other changes during the
year
Balance at the end
of the year
5,924,637
2,575,000
5,031,819
196,464
137,455
125,000
-
1,623,168
63,376
-
-
(150,000)
-
-
-
6,049,637
2,425,000
6,654,987
259,840
137,455
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 2017 there have been no other transactions with, and no amounts are owing
to or owed by Key Management Personnel.
There were no other transactions with key management personnel.
END OF REMUNERATION REPORT
37
DIRECTORS’ REPORT
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 6th day of September 2017.
Rohan Williams
Executive Chairman
38
AUDITOR’S INDEPENDENCE DECLARATION
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
Auditor’s Independence Declaration
To the Directors of Dacian Gold Limited
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 2017, I declare that, to the best of
my knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b
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, 6 September 2017
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
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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
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Liability limited by a scheme approved under Professional Standards Legislation.
39
CONSOLIDATED STATEMENT OF PROFIT OR
CONSOLIDATED(cid:3)STATEMENT(cid:3)OF(cid:3)PROFIT(cid:3)OR(cid:3)LOSS(cid:3)AND(cid:3)OTHER(cid:3)
LOSS AND OTHER COMPREHENSIVE INCOME
COMPREHENSIVE(cid:3)INCOME(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Revenue(cid:3)
(cid:3)
Total(cid:3)Revenue(cid:3)
(cid:3)
Employee(cid:3)expenses(cid:3)
(cid:3)
Share(cid:3)based(cid:3)employee(cid:3)expense(cid:3)
(cid:3)
Depreciation(cid:3)and(cid:3)amortisation(cid:3)expenses(cid:3)
(cid:3)
Exploration(cid:3)costs(cid:3)expensed(cid:3)and(cid:3)written(cid:3)off(cid:3)
(cid:3)
Other(cid:3)expenses(cid:3)
(cid:3)
Loss(cid:3)before(cid:3)income(cid:3)tax(cid:3)
(cid:3)
Income(cid:3)tax(cid:3)benefit(cid:3)
(cid:3)
Net(cid:3)loss(cid:3)for(cid:3)the(cid:3)period(cid:3)attributable(cid:3)to(cid:3)the(cid:3)members(cid:3)of(cid:3)
the(cid:3)parent(cid:3)entity(cid:3)
(cid:3)
Other(cid:3)comprehensive(cid:3)Income(cid:3)(cid:3)
Total(cid:3)comprehensive(cid:3)loss(cid:3)for(cid:3)the(cid:3)period(cid:3)attributable(cid:3)to(cid:3)
the(cid:3)members(cid:3)of(cid:3)the(cid:3)parent(cid:3)entity(cid:3)
(cid:3)
Loss(cid:3)per(cid:3)share(cid:3)
Basic(cid:3)loss(cid:3)per(cid:3)share(cid:3)(cents)(cid:3)
Note
3(cid:3)
3(cid:3)
18(cid:3)
11(cid:3)
12(cid:3)
(cid:3)
4(cid:3)
19(cid:3)
5(cid:3)
(cid:3)
Consolidated(cid:3)
30(cid:3)June(cid:3)(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
30(cid:3)June
2016(cid:3)
$
822,252(cid:3)
332,412(cid:3)
822,252(cid:3)
332,412(cid:3)
(1,775,505)(cid:3)
(1,237,520)(cid:3)
(1,769,234)(cid:3)
(629,723)(cid:3)
(335,896)(cid:3)
(245,595)(cid:3)
(14,957,356)(cid:3)
(19,193,656)(cid:3)
(1,774,775)(cid:3)
(cid:3)
(19,790,514)(cid:3)
932,600(cid:3)
(cid:3)
(cid:3)
(18,857,914)(cid:3)
(cid:3)
(cid:3)
(18,857,914)(cid:3)
(cid:3)
(cid:3)
(11.9)(cid:3)
(1,081,977)(cid:3)
(22,056,059)(cid:3)
223,175(cid:3)
(21,832,884)(cid:3)
(cid:882)(cid:3)
(21,832,884)(cid:3)
(18.5)(cid:3)
(cid:3)
The(cid:3)above(cid:3)statement(cid:3)of(cid:3)profit(cid:3)or(cid:3)loss(cid:3)and(cid:3)other(cid:3)comprehensive(cid:3)income(cid:3)should(cid:3)be(cid:3)read(cid:3)in(cid:3)conjunction(cid:3)with(cid:3)the(cid:3)
accompanying(cid:3)notes.
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)16(cid:3)|(cid:3)P a g e (cid:3)
40
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
CONSOLIDATED(cid:3)STATEMENT(cid:3)OF(cid:3)FINANCIAL(cid:3)POSITION(cid:3)
AS(cid:3)AT(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
AS AT 30 JUNE 2017
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Current(cid:3)assets(cid:3)
Cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)receivables(cid:3)
Inventories(cid:3)
Total(cid:3)current(cid:3)assets(cid:3)
(cid:3)
Non(cid:882)current(cid:3)assets(cid:3)
Other(cid:3)financial(cid:3)assets(cid:3)
Property,(cid:3)plant(cid:3)and(cid:3)equipment(cid:3)
Exploration(cid:3)and(cid:3)evaluation(cid:3)assets(cid:3)
Mine(cid:3)properties(cid:3)
Total(cid:3)non(cid:882)current(cid:3)assets(cid:3)
Total(cid:3)assets(cid:3)
(cid:3)
Current(cid:3)liabilities(cid:3)
Borrowings(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Total(cid:3)current(cid:3)liabilities(cid:3)
(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Provisions(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Total(cid:3)non(cid:882)current(cid:3)liabilities(cid:3)
Total(cid:3)liabilities(cid:3)
Net(cid:3)assets(cid:3)
(cid:3)
Equity(cid:3)
Issued(cid:3)capital(cid:3)
Share(cid:3)based(cid:3)payments(cid:3)reserve(cid:3)
Accumulated(cid:3)losses(cid:3)
Total(cid:3)equity(cid:3)
(cid:3)
Note
7
8
9
10
11
12
13
14
15
16
15
17
18
19
Consolidated(cid:3)
30(cid:3)June(cid:3)(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
90,163,337(cid:3)
3,417,086(cid:3)
265,345(cid:3)
30(cid:3)June(cid:3)
2016(cid:3)
$
9,648,425
90,123
(cid:882)
(cid:3)
93,845,768(cid:3)
9,738,548(cid:3)
(cid:3)
(cid:3)
36,722(cid:3)
1,406,018(cid:3)
4,163,562(cid:3)
60,959,305(cid:3)
34,211
748,125
8,131,847
(cid:882)
(cid:3)
66,565,607(cid:3)
8,914,183(cid:3)
160,411,375(cid:3)
18,652,731(cid:3)
(cid:3)
(cid:3)
1,513,375(cid:3)
16,634,856(cid:3)
18,148,231(cid:3)
(cid:3)
(cid:3)
7,846,408(cid:3)
104,090(cid:3)
7,950,498(cid:3)
26,098,729(cid:3)
134,312,646(cid:3)
(cid:3)
(cid:3)
191,783,216(cid:3)
2,965,222(cid:3)
(60,435,792)(cid:3)
134,312,646(cid:3)
(cid:3)
(cid:882)
3,378,228
(cid:3)
3,378,228(cid:3)
1,966,676(cid:3)
48,560
(cid:3)
2,015,236(cid:3)
5,393,464(cid:3)
13,259,267(cid:3)
53,515,696
1,321,449
(41,577,878)
(cid:3)
13,259,267(cid:3)
(cid:3)
The(cid:3)above(cid:3)statement(cid:3)of(cid:3)financial(cid:3)position(cid:3)should(cid:3)be(cid:3)read(cid:3)in(cid:3)conjunction(cid:3)with(cid:3)the(cid:3)accompanying(cid:3)notes.(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
41
(cid:3)(cid:3)(cid:3)17(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
CONSOLIDATED(cid:3)STATEMENT(cid:3)OF(cid:3)CHANGES(cid:3)IN(cid:3)EQUITY(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Consolidated(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Note(cid:3)
Issued(cid:3)capital(cid:3)
Share(cid:3)reserve(cid:3)
Accumulated(cid:3)
losses(cid:3)
Attributable(cid:3)to(cid:3)
owners(cid:3)of(cid:3)the(cid:3)
parent(cid:3)
$(cid:3)
$(cid:3)
$(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
29,204,822(cid:3)
774,886(cid:3)
(19,744,994)(cid:3)
10,234,714(cid:3)
(cid:882)(cid:3)
25,016,818(cid:3)
653,500(cid:3)
(1,442,604)(cid:3)
(cid:882)(cid:3)
83,160(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
629,723(cid:3)
(83,160)(cid:3)
(21,832,884)(cid:3)
(21,832,884)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
25,016,818(cid:3)
653,500(cid:3)
(1,442,604)(cid:3)
629,723(cid:3)
(cid:882)(cid:3)
53,515,696(cid:3)
1,321,449(cid:3)
(41,577,878)(cid:3)
13,259,267(cid:3)
(cid:3)
(cid:882)(cid:3)
136,290,970(cid:3)
6,000,002(cid:3)
854,000(cid:3)
(5,002,913)(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:3)
818,302(cid:3)
950,932(cid:3)
125,461(cid:3)
(125,461)(cid:3)
(cid:3)
(cid:3)
(18,857,914)(cid:3)
(18,857,914)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:3)
(cid:882)(cid:3)
136,290,970(cid:3)
6,000,002(cid:3)
854,000(cid:3)
(5,002,913)(cid:3)
818,302(cid:3)
950,932(cid:3)
(cid:882)(cid:3)
(cid:3)
Balance(cid:3)at(cid:3)1(cid:3)July(cid:3)2015(cid:3)
Total(cid:3)comprehensive(cid:3)loss(cid:3)for(cid:3)the(cid:3)year(cid:3)
Capital(cid:3)Raising(cid:3)(cid:3)
Options(cid:3)exercised(cid:3)
Costs(cid:3)of(cid:3)capital(cid:3)raising(cid:3)
Options(cid:3)vesting(cid:3)
Options(cid:3)exercised(cid:3)
Balance(cid:3)at(cid:3)30(cid:3)June(cid:3)2016(cid:3)
(cid:3)
Total(cid:3)comprehensive(cid:3)loss(cid:3)for(cid:3)the(cid:3)year(cid:3)
Capital(cid:3)Raising(cid:3)(cid:3)
Issue(cid:3)of(cid:3)Shares(cid:3)–(cid:3)Royalty(cid:3)Termination(cid:3)
Options(cid:3)exercised(cid:3)
Costs(cid:3)of(cid:3)capital(cid:3)raising(cid:3)
Options(cid:3)vesting(cid:3)
Share(cid:3)–based(cid:3)payments(cid:3)expense(cid:3)
Options(cid:3)exercised(cid:3)
Balance(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)
17(cid:3)
191,783,216(cid:3)
2,965,222(cid:3)
(60,435,792)(cid:3)
134,312,646(cid:3)
(cid:3)
(cid:3)
The(cid:3)above(cid:3)statement(cid:3)of(cid:3)changes(cid:3)in(cid:3)equity(cid:3)should(cid:3)be(cid:3)read(cid:3)in(cid:3)conjunction(cid:3)with(cid:3)the(cid:3)accompanying(cid:3)notes.(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)18(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
42
CONSOLIDATED STATEMENT OF
CONSOLIDATED(cid:3)STATEMENT(cid:3)OF(cid:3)CASH(cid:3)FLOWS(cid:3)
CASH FLOWS
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Cash(cid:3)flows(cid:3)from(cid:3)operating(cid:3)activities(cid:3)
(cid:3)
Interest(cid:3)received(cid:3)
(cid:3)
Other(cid:3)income(cid:3)
(cid:3)
Research(cid:3)&(cid:3)development(cid:3)tax(cid:3)concession(cid:3)income(cid:3)
(cid:3)
Interest(cid:3)paid(cid:3)
(cid:3)
Payments(cid:3)for(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)
(cid:3)
Payments(cid:3)to(cid:3)suppliers(cid:3)and(cid:3)employees(cid:3)
Net(cid:3)cash(cid:3)used(cid:3)in(cid:3)operating(cid:3)activities(cid:3)
(cid:3)
(cid:3)
Cash(cid:3)flows(cid:3)from(cid:3)investing(cid:3)activities(cid:3)
(cid:3)
Payments(cid:3)for(cid:3)development(cid:3)expenditure(cid:3)
(cid:3)
Payments(cid:3)for(cid:3)plant(cid:3)and(cid:3)equipment(cid:3)
(cid:3)
Net(cid:3)cash(cid:3)used(cid:3)in(cid:3)investing(cid:3)activities(cid:3)
(cid:3)
(cid:3)
Cash(cid:3)flows(cid:3)from(cid:3)financing(cid:3)activities(cid:3)
(cid:3)
Proceeds(cid:3)from(cid:3)issue(cid:3)of(cid:3)share(cid:3)capital(cid:3)(net(cid:3)of(cid:3)issue(cid:3)costs)
(cid:3)
Transaction(cid:3)costs(cid:3)associated(cid:3)with(cid:3)borrowings(cid:3)
(cid:3)
Net(cid:3)cash(cid:3)provided(cid:3)by(cid:3)financing(cid:3)activities(cid:3)
(cid:3)
Net(cid:3)increase(cid:3)in(cid:3)cash(cid:3)held(cid:3)
(cid:3)
Cash(cid:3)at(cid:3)the(cid:3)beginning(cid:3)of(cid:3)the(cid:3)period(cid:3)
(cid:3)
Cash(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)period(cid:3)
Note
7(cid:3)
7(cid:3)
7(cid:3)
Consolidated(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(cid:3)
819,741(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:3)
835,381(cid:3)
(cid:3)
(1,038)(cid:3)
(cid:3)
(13,501,585)(cid:3)
(cid:3)
(4,716,749)(cid:3)
(16,564,250)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(31,443,454)(cid:3)
(1,031,748)(cid:3)
(cid:3)
(32,475,202)(cid:3)
(cid:3)
(cid:3)
(cid:3)
132,134,358(cid:3)
(cid:3)
(2,579,994)(cid:3)
30(cid:3)June(cid:3)
2016(cid:3)
$
316,771(cid:3)
15,641(cid:3)
555,670
(1,623)(cid:3)
(17,412,277)(cid:3)
(2,142,236)(cid:3)
(18,668,054)(cid:3)
(cid:882)(cid:3)
(525,564)(cid:3)
(525,564)(cid:3)
24,235,414
(18,265)(cid:3)
129,554,364(cid:3)
24,217,149(cid:3)
(cid:3)
80,514,912(cid:3)
(cid:3)
9,648,425(cid:3)
(cid:3)
90,163,337(cid:3)
5,023,531(cid:3)
4,624,894(cid:3)
9,648,425(cid:3)
(cid:3)
The(cid:3)above(cid:3)statement(cid:3)of(cid:3)cash(cid:3)flows(cid:3)should(cid:3)be(cid:3)read(cid:3)in(cid:3)conjunction(cid:3)with(cid:3)the(cid:3)accompanying(cid:3)notes.(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)19(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
43
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(cid:3)
(a)
Basis(cid:3)of(cid:3)Preparation(cid:3)of(cid:3)Financial(cid:3)Report(cid:3)
These(cid:3)financial(cid:3)statements(cid:3)are(cid:3)general(cid:3)purpose(cid:3)financial(cid:3)statements,(cid:3)which(cid:3)have(cid:3)been(cid:3)prepared(cid:3)in(cid:3)accordance(cid:3)
with(cid:3)requirements(cid:3)of(cid:3)the(cid:3)Corporations(cid:3)Act(cid:3)2001(cid:3)and(cid:3)comply(cid:3)with(cid:3)other(cid:3)requirements(cid:3)of(cid:3)the(cid:3)law.(cid:3)
The(cid:3) accounting(cid:3) policies(cid:3)below(cid:3) have(cid:3) been(cid:3) consistently(cid:3) applied(cid:3) to(cid:3) all(cid:3) of(cid:3) the(cid:3) years(cid:3) presented(cid:3) unless(cid:3) otherwise(cid:3)
stated.(cid:3)
The(cid:3)financial(cid:3)statements(cid:3)have(cid:3)been(cid:3)prepared(cid:3)on(cid:3)a(cid:3)historical(cid:3)cost(cid:3)basis,(cid:3)except(cid:3)for(cid:3)available(cid:3)for(cid:3)sale(cid:3)investments(cid:3)
and(cid:3)derivative(cid:3)financial(cid:3)instruments(cid:3)which(cid:3)have(cid:3)been(cid:3)measured(cid:3)at(cid:3)fair(cid:3)value.(cid:3)Cost(cid:3)is(cid:3)based(cid:3)on(cid:3)the(cid:3)fair(cid:3)values(cid:3)of(cid:3)
consideration(cid:3)given(cid:3)in(cid:3)exchange(cid:3)for(cid:3)assets.(cid:3)
The(cid:3)financial(cid:3)statements(cid:3)are(cid:3)presented(cid:3)in(cid:3)Australian(cid:3)dollars.(cid:3)
These(cid:3)financial(cid:3)statements(cid:3)have(cid:3)been(cid:3)prepared(cid:3)on(cid:3)the(cid:3)going(cid:3)concern(cid:3)basis.(cid:3)
The(cid:3)financial(cid:3)report(cid:3)of(cid:3)the(cid:3)Company(cid:3)was(cid:3)authorised(cid:3)for(cid:3)issue(cid:3)in(cid:3)accordance(cid:3)with(cid:3)a(cid:3)resolution(cid:3)of(cid:3)Directors(cid:3)on(cid:3)6th(cid:3)
September(cid:3)2017.(cid:3)
Statement(cid:3)of(cid:3)Compliance(cid:3)
The(cid:3) financial(cid:3) report(cid:3) of(cid:3) the(cid:3) Group(cid:3) complies(cid:3) with(cid:3) Australian(cid:3) Accounting(cid:3) Standards,(cid:3) and(cid:3) other(cid:3) authoritative(cid:3)
pronouncements(cid:3) of(cid:3) the(cid:3) Australian(cid:3) Accounting(cid:3) Standards(cid:3) Board.(cid:3) Compliance(cid:3) with(cid:3) Australian(cid:3) Accounting(cid:3)
Standards(cid:3) results(cid:3) in(cid:3) full(cid:3) compliance(cid:3) with(cid:3) International(cid:3) Financial(cid:3) Reporting(cid:3) Standards(cid:3) (IFRS)(cid:3) as(cid:3) issued(cid:3) by(cid:3) the(cid:3)
International(cid:3)Accounting(cid:3)Standards(cid:3)Board.(cid:3)The(cid:3)Company(cid:3)is(cid:3)a(cid:3)for(cid:3)profit(cid:3)entity(cid:3)for(cid:3)the(cid:3)purpose(cid:3)of(cid:3)preparing(cid:3)the(cid:3)
financial(cid:3)statements.(cid:3)
Going(cid:3)Concern(cid:3)Basis(cid:3)for(cid:3)Preparation(cid:3)of(cid:3)Financial(cid:3)Statements(cid:3)
These(cid:3)financial(cid:3)statements(cid:3)have(cid:3)been(cid:3)prepared(cid:3)on(cid:3)the(cid:3)going(cid:3)concern(cid:3)basis(cid:3)which(cid:3)contemplates(cid:3)the(cid:3)continuity(cid:3)
of(cid:3) normal(cid:3) business(cid:3) activities(cid:3) and(cid:3) the(cid:3) realisation(cid:3) of(cid:3) assets(cid:3) and(cid:3) discharge(cid:3) of(cid:3) liabilities(cid:3) in(cid:3) the(cid:3) normal(cid:3) course(cid:3) of(cid:3)
business.(cid:3)(cid:3)
As(cid:3)at(cid:3)30(cid:3)June(cid:3)2017,(cid:3)the(cid:3)Group(cid:3)has(cid:3)net(cid:3)current(cid:3)assets(cid:3)of(cid:3)$75,697,537(cid:3)(2016:(cid:3)$6,360,320)(cid:3)and(cid:3)an(cid:3)undrawn(cid:3)A$150(cid:3)
million(cid:3)syndicated(cid:3)project(cid:3)development(cid:3)debt(cid:3)facility.(cid:3)(cid:3)Collectively(cid:3)these(cid:3)are(cid:3)considered(cid:3)sufficient(cid:3)by(cid:3)the(cid:3)Directors(cid:3)
to(cid:3) fund(cid:3) construction(cid:3) of(cid:3) the(cid:3) Mt(cid:3) Morgans(cid:3) Gold(cid:3) Project,(cid:3) meet(cid:3) all(cid:3) current(cid:3) minimum(cid:3) exploration(cid:3) expenditure(cid:3)
commitments,(cid:3)settle(cid:3)all(cid:3)debts(cid:3)as(cid:3)and(cid:3)when(cid:3)they(cid:3)become(cid:3)due(cid:3)as(cid:3)well(cid:3)as(cid:3)operating(cid:3)cash(cid:3)outflows(cid:3)of(cid:3)the(cid:3)Group.(cid:3)In(cid:3)
addition,(cid:3)should(cid:3)the(cid:3)Company(cid:3)require,(cid:3)the(cid:3)Board(cid:3)are(cid:3)confident(cid:3)of(cid:3)raising(cid:3)sufficient(cid:3)capital(cid:3)to(cid:3)fund(cid:3)the(cid:3)short(cid:3)term(cid:3)
construction(cid:3)and(cid:3)exploration(cid:3)programs(cid:3)as(cid:3)well(cid:3)as(cid:3)fund(cid:3)the(cid:3)working(cid:3)capital(cid:3)requirements(cid:3)of(cid:3)the(cid:3)Group.(cid:3)(cid:3)
Material(cid:3)accounting(cid:3)policies(cid:3)adopted(cid:3)in(cid:3)the(cid:3)presentation(cid:3)of(cid:3)these(cid:3)financial(cid:3)statements(cid:3)are(cid:3)presented(cid:3)below:(cid:3)
(b)
Revenue(cid:3)
Revenue(cid:3)is(cid:3)measured(cid:3)at(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)the(cid:3)consideration(cid:3)received(cid:3)or(cid:3)receivable.(cid:3)Amounts(cid:3)disclosed(cid:3)as(cid:3)revenue(cid:3)
are(cid:3)net(cid:3)of(cid:3)returns,(cid:3)allowances(cid:3)and(cid:3)amounts(cid:3)collectable(cid:3)on(cid:3)behalf(cid:3)of(cid:3)third(cid:3)parties.(cid:3)
Interest(cid:3)income(cid:3)
Interest(cid:3)income(cid:3)is(cid:3)recognised(cid:3)on(cid:3)a(cid:3)time(cid:3)proportion(cid:3)basis(cid:3)and(cid:3)is(cid:3)recognised(cid:3)as(cid:3)it(cid:3)accrues.(cid:3)
(c)
Income(cid:3)Tax(cid:3)
The(cid:3)income(cid:3)tax(cid:3)expense(cid:3)or(cid:3)revenue(cid:3)for(cid:3)the(cid:3)period(cid:3)is(cid:3)the(cid:3)tax(cid:3)payable(cid:3)on(cid:3)the(cid:3)current(cid:3)period’s(cid:3)taxable(cid:3)income(cid:3)
based(cid:3) on(cid:3) the(cid:3) national(cid:3) income(cid:3) tax(cid:3) rate(cid:3) for(cid:3) each(cid:3) jurisdiction(cid:3) adjusted(cid:3) by(cid:3) changes(cid:3) in(cid:3) deferred(cid:3) tax(cid:3) assets(cid:3) and(cid:3)
liabilities(cid:3) attributable(cid:3) to(cid:3) the(cid:3) temporary(cid:3) differences(cid:3) between(cid:3) the(cid:3) tax(cid:3) bases(cid:3) of(cid:3) assets(cid:3) and(cid:3) liabilities(cid:3) and(cid:3) their(cid:3)
carrying(cid:3)amounts(cid:3)in(cid:3)the(cid:3)financial(cid:3)statements,(cid:3)and(cid:3)to(cid:3)unused(cid:3)tax(cid:3)losses.(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)20(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
44
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)21(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(c)(cid:3)Income(cid:3)Tax(cid:3)(continued)(cid:3)
Deferred(cid:3)tax(cid:3)assets(cid:3)and(cid:3)liabilities(cid:3)are(cid:3)recognised(cid:3)for(cid:3)temporary(cid:3)timing(cid:3)differences(cid:3)at(cid:3)the(cid:3)tax(cid:3)rates(cid:3)expected(cid:3)to(cid:3)
apply(cid:3)when(cid:3)the(cid:3)assets(cid:3)are(cid:3)recovered(cid:3)or(cid:3)liabilities(cid:3)are(cid:3)settled,(cid:3)based(cid:3)on(cid:3)those(cid:3)tax(cid:3)rates(cid:3)which(cid:3)are(cid:3)enacted(cid:3)or(cid:3)
substantially(cid:3) enacted(cid:3) for(cid:3) each(cid:3) jurisdiction.(cid:3) The(cid:3) relevant(cid:3) tax(cid:3) rates(cid:3) are(cid:3) applied(cid:3) to(cid:3) the(cid:3) cumulative(cid:3) amounts(cid:3) of(cid:3)
deductible(cid:3)and(cid:3)taxable(cid:3)temporary(cid:3)differences(cid:3)to(cid:3)measure(cid:3)the(cid:3)deferred(cid:3)tax(cid:3)asset(cid:3)or(cid:3)liability.(cid:3)An(cid:3)exception(cid:3)is(cid:3)made(cid:3)
for(cid:3)certain(cid:3)temporary(cid:3)differences(cid:3)arising(cid:3)from(cid:3)the(cid:3)initial(cid:3)recognition(cid:3)of(cid:3)an(cid:3)asset(cid:3)or(cid:3)a(cid:3)liability.(cid:3)No(cid:3)deferred(cid:3)tax(cid:3)
asset(cid:3)or(cid:3)liability(cid:3)is(cid:3)recognised(cid:3)in(cid:3)relation(cid:3)to(cid:3)those(cid:3)timing(cid:3)differences(cid:3)if(cid:3)they(cid:3)arose(cid:3)in(cid:3)a(cid:3)transaction,(cid:3)other(cid:3)than(cid:3)a(cid:3)
business(cid:3)combination,(cid:3)that(cid:3)at(cid:3)the(cid:3)time(cid:3)of(cid:3)the(cid:3)transaction(cid:3)did(cid:3)not(cid:3)affect(cid:3)either(cid:3)accounting(cid:3)profit(cid:3)or(cid:3)taxable(cid:3)profit(cid:3)
or(cid:3)loss.(cid:3)
Deferred(cid:3) tax(cid:3) assets(cid:3) are(cid:3) recognised(cid:3) for(cid:3) deductible(cid:3) temporary(cid:3) differences(cid:3) and(cid:3) unused(cid:3) tax(cid:3) losses(cid:3) only(cid:3) if(cid:3) it(cid:3) is(cid:3)
probable(cid:3)that(cid:3)future(cid:3)taxable(cid:3)amounts(cid:3)will(cid:3)be(cid:3)available(cid:3)to(cid:3)utilise(cid:3)those(cid:3)temporary(cid:3)differences(cid:3)and(cid:3)losses.(cid:3)
Deferred(cid:3)tax(cid:3)liabilities(cid:3)and(cid:3)assets(cid:3)are(cid:3)not(cid:3)recognised(cid:3)for(cid:3)temporary(cid:3)differences(cid:3)between(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)
and(cid:3)tax(cid:3)bases(cid:3)of(cid:3)investments(cid:3)in(cid:3)controlled(cid:3)entities(cid:3)where(cid:3)the(cid:3)parent(cid:3)is(cid:3)able(cid:3)to(cid:3)control(cid:3)the(cid:3)timing(cid:3)of(cid:3)the(cid:3)reversal(cid:3)
of(cid:3)the(cid:3)temporary(cid:3)differences(cid:3)and(cid:3)it(cid:3)is(cid:3)probable(cid:3)that(cid:3)the(cid:3)differences(cid:3)will(cid:3)not(cid:3)reverse(cid:3)in(cid:3)the(cid:3)foreseeable(cid:3)future.(cid:3)
Deferred(cid:3)tax(cid:3)assets(cid:3)and(cid:3)liabilities(cid:3)are(cid:3)offset(cid:3)when(cid:3)there(cid:3)is(cid:3)a(cid:3)legally(cid:3)enforceable(cid:3)right(cid:3)to(cid:3)offset(cid:3)current(cid:3)tax(cid:3)assets(cid:3)
and(cid:3)liabilities(cid:3)and(cid:3)when(cid:3)the(cid:3)deferred(cid:3)tax(cid:3)balances(cid:3)relate(cid:3)to(cid:3)the(cid:3)same(cid:3)taxation(cid:3)authority.(cid:3)Current(cid:3)tax(cid:3)assets(cid:3)and(cid:3)
liabilities(cid:3)are(cid:3)offset(cid:3)where(cid:3)the(cid:3)entity(cid:3)has(cid:3)a(cid:3)legally(cid:3)enforceable(cid:3)right(cid:3)to(cid:3)offset(cid:3)and(cid:3)intends(cid:3)either(cid:3)to(cid:3)settle(cid:3)on(cid:3)a(cid:3)net(cid:3)
basis,(cid:3)or(cid:3)to(cid:3)realise(cid:3)the(cid:3)asset(cid:3)and(cid:3)settle(cid:3)the(cid:3)liability(cid:3)simultaneously.(cid:3)
Current(cid:3) and(cid:3) deferred(cid:3) tax(cid:3) balances(cid:3) attributable(cid:3) to(cid:3) amounts(cid:3) recognised(cid:3) directly(cid:3) in(cid:3) equity(cid:3) are(cid:3) also(cid:3) recognised(cid:3)
Amounts(cid:3)receivable(cid:3)from(cid:3)the(cid:3)Australian(cid:3)Tax(cid:3)Office(cid:3)in(cid:3)respect(cid:3)of(cid:3)research(cid:3)and(cid:3)development(cid:3)tax(cid:3)concession(cid:3)claims(cid:3)
are(cid:3)recognised(cid:3)when(cid:3)management(cid:3)have(cid:3)a(cid:3)reasonable(cid:3)basis(cid:3)to(cid:3)estimate(cid:3)claim(cid:3)proceeds.(cid:3)
directly(cid:3)in(cid:3)equity.(cid:3)
(d)
Other(cid:3)Taxes(cid:3)
Revenues,(cid:3)expenses(cid:3)and(cid:3)assets(cid:3)are(cid:3)recognised(cid:3)net(cid:3)of(cid:3)the(cid:3)amount(cid:3)of(cid:3)GST(cid:3)except:(cid:3)
when(cid:3)the(cid:3)GST(cid:3)incurred(cid:3)on(cid:3)a(cid:3)purchase(cid:3)of(cid:3)goods(cid:3)and(cid:3)services(cid:3)is(cid:3)not(cid:3)recoverable(cid:3)from(cid:3)the(cid:3)taxation(cid:3)authority,(cid:3)
in(cid:3)which(cid:3)case(cid:3)the(cid:3)GST(cid:3)is(cid:3)recognised(cid:3)as(cid:3)part(cid:3)of(cid:3)the(cid:3)cost(cid:3)of(cid:3)acquisition(cid:3)of(cid:3)the(cid:3)asset(cid:3)or(cid:3)as(cid:3)part(cid:3)of(cid:3)the(cid:3)expense(cid:3)
item(cid:3)as(cid:3)applicable;(cid:3)and(cid:3)
receivables(cid:3)and(cid:3)payables,(cid:3)which(cid:3)are(cid:3)stated(cid:3)with(cid:3)the(cid:3)amount(cid:3)of(cid:3)GST(cid:3)included.(cid:3)
The(cid:3)net(cid:3)amount(cid:3)of(cid:3)GST(cid:3)recoverable(cid:3)from,(cid:3)or(cid:3)payable(cid:3)to,(cid:3)the(cid:3)taxation(cid:3)authority(cid:3)is(cid:3)included(cid:3)as(cid:3)part(cid:3)of(cid:3)receivables(cid:3)
or(cid:3)payables(cid:3)in(cid:3)the(cid:3)statement(cid:3)of(cid:3)financial(cid:3)position.(cid:3)
(e)
Borrowing(cid:3)Costs(cid:3)
General(cid:3)and(cid:3)specific(cid:3)borrowing(cid:3)costs(cid:3)that(cid:3)are(cid:3)directly(cid:3)attributable(cid:3)to(cid:3)the(cid:3)acquisition,(cid:3)construction(cid:3)or(cid:3)production(cid:3)
of(cid:3)a(cid:3)qualifying(cid:3)asset(cid:3)are(cid:3)capitalised(cid:3)during(cid:3)the(cid:3)period(cid:3)of(cid:3)time(cid:3)that(cid:3)is(cid:3)required(cid:3)to(cid:3)complete(cid:3)and(cid:3)prepare(cid:3)the(cid:3)asset(cid:3)
for(cid:3)its(cid:3)intended(cid:3)use(cid:3)or(cid:3)sale.(cid:3)(cid:3)Qualifying(cid:3)assets(cid:3)are(cid:3)assets(cid:3)that(cid:3)necessarily(cid:3)take(cid:3)a(cid:3)substantial(cid:3)period(cid:3)of(cid:3)time(cid:3)to(cid:3)get(cid:3)
ready(cid:3)for(cid:3)their(cid:3)use(cid:3)or(cid:3)sale.(cid:3)
(f)
Borrowings(cid:3)
Other(cid:3)borrowing(cid:3)costs(cid:3)are(cid:3)expensed(cid:3)in(cid:3)the(cid:3)period(cid:3)in(cid:3)which(cid:3)they(cid:3)are(cid:3)incurred.(cid:3)
Borrowings(cid:3)are(cid:3)initially(cid:3)recognised(cid:3)at(cid:3)fair(cid:3)value,(cid:3)net(cid:3)of(cid:3)transaction(cid:3)costs(cid:3)incurred.(cid:3)(cid:3)Borrowings(cid:3)are(cid:3)subsequently(cid:3)
measured(cid:3)at(cid:3)amortised(cid:3)cost.(cid:3)(cid:3)Any(cid:3)difference(cid:3)between(cid:3)the(cid:3)proceeds(cid:3)(net(cid:3)of(cid:3)transaction(cid:3)costs)(cid:3)and(cid:3)the(cid:3)redemption(cid:3)
amount(cid:3)is(cid:3)recognised(cid:3)in(cid:3)profit(cid:3)or(cid:3)loss(cid:3)over(cid:3)the(cid:3)period(cid:3)of(cid:3)borrowings(cid:3)using(cid:3)the(cid:3)effective(cid:3)interest(cid:3)rate(cid:3)method.(cid:3)
Fees(cid:3)paid(cid:3)on(cid:3)establishment(cid:3)of(cid:3)loan(cid:3)facilities(cid:3)are(cid:3)recognised(cid:3)as(cid:3)transaction(cid:3)costs(cid:3)of(cid:3)the(cid:3)loan(cid:3)to(cid:3)the(cid:3)extent(cid:3)that(cid:3)it(cid:3)
is(cid:3)probable(cid:3)that(cid:3)some(cid:3)or(cid:3)all(cid:3)of(cid:3)the(cid:3)facility(cid:3)will(cid:3)be(cid:3)drawn(cid:3)down.(cid:3)(cid:3)In(cid:3)this(cid:3)case,(cid:3)the(cid:3)fee(cid:3)is(cid:3)deferred(cid:3)until(cid:3)the(cid:3)draw(cid:3)
down(cid:3)occurs(cid:3)and(cid:3)amortised(cid:3)over(cid:3)the(cid:3)period(cid:3)of(cid:3)the(cid:3)remaining(cid:3)facility(cid:3)
(cid:131)
(cid:131)
(cid:3)
(cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(c)(cid:3)Income(cid:3)Tax(cid:3)(continued)(cid:3)
Deferred(cid:3)tax(cid:3)assets(cid:3)and(cid:3)liabilities(cid:3)are(cid:3)recognised(cid:3)for(cid:3)temporary(cid:3)timing(cid:3)differences(cid:3)at(cid:3)the(cid:3)tax(cid:3)rates(cid:3)expected(cid:3)to(cid:3)
apply(cid:3)when(cid:3)the(cid:3)assets(cid:3)are(cid:3)recovered(cid:3)or(cid:3)liabilities(cid:3)are(cid:3)settled,(cid:3)based(cid:3)on(cid:3)those(cid:3)tax(cid:3)rates(cid:3)which(cid:3)are(cid:3)enacted(cid:3)or(cid:3)
substantially(cid:3) enacted(cid:3) for(cid:3) each(cid:3) jurisdiction.(cid:3) The(cid:3) relevant(cid:3) tax(cid:3) rates(cid:3) are(cid:3) applied(cid:3) to(cid:3) the(cid:3) cumulative(cid:3) amounts(cid:3) of(cid:3)
deductible(cid:3)and(cid:3)taxable(cid:3)temporary(cid:3)differences(cid:3)to(cid:3)measure(cid:3)the(cid:3)deferred(cid:3)tax(cid:3)asset(cid:3)or(cid:3)liability.(cid:3)An(cid:3)exception(cid:3)is(cid:3)made(cid:3)
for(cid:3)certain(cid:3)temporary(cid:3)differences(cid:3)arising(cid:3)from(cid:3)the(cid:3)initial(cid:3)recognition(cid:3)of(cid:3)an(cid:3)asset(cid:3)or(cid:3)a(cid:3)liability.(cid:3)No(cid:3)deferred(cid:3)tax(cid:3)
asset(cid:3)or(cid:3)liability(cid:3)is(cid:3)recognised(cid:3)in(cid:3)relation(cid:3)to(cid:3)those(cid:3)timing(cid:3)differences(cid:3)if(cid:3)they(cid:3)arose(cid:3)in(cid:3)a(cid:3)transaction,(cid:3)other(cid:3)than(cid:3)a(cid:3)
business(cid:3)combination,(cid:3)that(cid:3)at(cid:3)the(cid:3)time(cid:3)of(cid:3)the(cid:3)transaction(cid:3)did(cid:3)not(cid:3)affect(cid:3)either(cid:3)accounting(cid:3)profit(cid:3)or(cid:3)taxable(cid:3)profit(cid:3)
or(cid:3)loss.(cid:3)
Deferred(cid:3) tax(cid:3) assets(cid:3) are(cid:3) recognised(cid:3) for(cid:3) deductible(cid:3) temporary(cid:3) differences(cid:3) and(cid:3) unused(cid:3) tax(cid:3) losses(cid:3) only(cid:3) if(cid:3) it(cid:3) is(cid:3)
probable(cid:3)that(cid:3)future(cid:3)taxable(cid:3)amounts(cid:3)will(cid:3)be(cid:3)available(cid:3)to(cid:3)utilise(cid:3)those(cid:3)temporary(cid:3)differences(cid:3)and(cid:3)losses.(cid:3)
Deferred(cid:3)tax(cid:3)liabilities(cid:3)and(cid:3)assets(cid:3)are(cid:3)not(cid:3)recognised(cid:3)for(cid:3)temporary(cid:3)differences(cid:3)between(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)
and(cid:3)tax(cid:3)bases(cid:3)of(cid:3)investments(cid:3)in(cid:3)controlled(cid:3)entities(cid:3)where(cid:3)the(cid:3)parent(cid:3)is(cid:3)able(cid:3)to(cid:3)control(cid:3)the(cid:3)timing(cid:3)of(cid:3)the(cid:3)reversal(cid:3)
of(cid:3)the(cid:3)temporary(cid:3)differences(cid:3)and(cid:3)it(cid:3)is(cid:3)probable(cid:3)that(cid:3)the(cid:3)differences(cid:3)will(cid:3)not(cid:3)reverse(cid:3)in(cid:3)the(cid:3)foreseeable(cid:3)future.(cid:3)
Deferred(cid:3)tax(cid:3)assets(cid:3)and(cid:3)liabilities(cid:3)are(cid:3)offset(cid:3)when(cid:3)there(cid:3)is(cid:3)a(cid:3)legally(cid:3)enforceable(cid:3)right(cid:3)to(cid:3)offset(cid:3)current(cid:3)tax(cid:3)assets(cid:3)
and(cid:3)liabilities(cid:3)and(cid:3)when(cid:3)the(cid:3)deferred(cid:3)tax(cid:3)balances(cid:3)relate(cid:3)to(cid:3)the(cid:3)same(cid:3)taxation(cid:3)authority.(cid:3)Current(cid:3)tax(cid:3)assets(cid:3)and(cid:3)
liabilities(cid:3)are(cid:3)offset(cid:3)where(cid:3)the(cid:3)entity(cid:3)has(cid:3)a(cid:3)legally(cid:3)enforceable(cid:3)right(cid:3)to(cid:3)offset(cid:3)and(cid:3)intends(cid:3)either(cid:3)to(cid:3)settle(cid:3)on(cid:3)a(cid:3)net(cid:3)
basis,(cid:3)or(cid:3)to(cid:3)realise(cid:3)the(cid:3)asset(cid:3)and(cid:3)settle(cid:3)the(cid:3)liability(cid:3)simultaneously.(cid:3)
Current(cid:3) and(cid:3) deferred(cid:3) tax(cid:3) balances(cid:3) attributable(cid:3) to(cid:3) amounts(cid:3) recognised(cid:3) directly(cid:3) in(cid:3) equity(cid:3) are(cid:3) also(cid:3) recognised(cid:3)
directly(cid:3)in(cid:3)equity.(cid:3)
Amounts(cid:3)receivable(cid:3)from(cid:3)the(cid:3)Australian(cid:3)Tax(cid:3)Office(cid:3)in(cid:3)respect(cid:3)of(cid:3)research(cid:3)and(cid:3)development(cid:3)tax(cid:3)concession(cid:3)claims(cid:3)
are(cid:3)recognised(cid:3)when(cid:3)management(cid:3)have(cid:3)a(cid:3)reasonable(cid:3)basis(cid:3)to(cid:3)estimate(cid:3)claim(cid:3)proceeds.(cid:3)
(d)
Other(cid:3)Taxes(cid:3)
Revenues,(cid:3)expenses(cid:3)and(cid:3)assets(cid:3)are(cid:3)recognised(cid:3)net(cid:3)of(cid:3)the(cid:3)amount(cid:3)of(cid:3)GST(cid:3)except:(cid:3)
(cid:131)
(cid:131)
when(cid:3)the(cid:3)GST(cid:3)incurred(cid:3)on(cid:3)a(cid:3)purchase(cid:3)of(cid:3)goods(cid:3)and(cid:3)services(cid:3)is(cid:3)not(cid:3)recoverable(cid:3)from(cid:3)the(cid:3)taxation(cid:3)authority,(cid:3)
in(cid:3)which(cid:3)case(cid:3)the(cid:3)GST(cid:3)is(cid:3)recognised(cid:3)as(cid:3)part(cid:3)of(cid:3)the(cid:3)cost(cid:3)of(cid:3)acquisition(cid:3)of(cid:3)the(cid:3)asset(cid:3)or(cid:3)as(cid:3)part(cid:3)of(cid:3)the(cid:3)expense(cid:3)
item(cid:3)as(cid:3)applicable;(cid:3)and(cid:3)
receivables(cid:3)and(cid:3)payables,(cid:3)which(cid:3)are(cid:3)stated(cid:3)with(cid:3)the(cid:3)amount(cid:3)of(cid:3)GST(cid:3)included.(cid:3)
The(cid:3)net(cid:3)amount(cid:3)of(cid:3)GST(cid:3)recoverable(cid:3)from,(cid:3)or(cid:3)payable(cid:3)to,(cid:3)the(cid:3)taxation(cid:3)authority(cid:3)is(cid:3)included(cid:3)as(cid:3)part(cid:3)of(cid:3)receivables(cid:3)
or(cid:3)payables(cid:3)in(cid:3)the(cid:3)statement(cid:3)of(cid:3)financial(cid:3)position.(cid:3)
(e)
Borrowing(cid:3)Costs(cid:3)
General(cid:3)and(cid:3)specific(cid:3)borrowing(cid:3)costs(cid:3)that(cid:3)are(cid:3)directly(cid:3)attributable(cid:3)to(cid:3)the(cid:3)acquisition,(cid:3)construction(cid:3)or(cid:3)production(cid:3)
of(cid:3)a(cid:3)qualifying(cid:3)asset(cid:3)are(cid:3)capitalised(cid:3)during(cid:3)the(cid:3)period(cid:3)of(cid:3)time(cid:3)that(cid:3)is(cid:3)required(cid:3)to(cid:3)complete(cid:3)and(cid:3)prepare(cid:3)the(cid:3)asset(cid:3)
for(cid:3)its(cid:3)intended(cid:3)use(cid:3)or(cid:3)sale.(cid:3)(cid:3)Qualifying(cid:3)assets(cid:3)are(cid:3)assets(cid:3)that(cid:3)necessarily(cid:3)take(cid:3)a(cid:3)substantial(cid:3)period(cid:3)of(cid:3)time(cid:3)to(cid:3)get(cid:3)
ready(cid:3)for(cid:3)their(cid:3)use(cid:3)or(cid:3)sale.(cid:3)
Other(cid:3)borrowing(cid:3)costs(cid:3)are(cid:3)expensed(cid:3)in(cid:3)the(cid:3)period(cid:3)in(cid:3)which(cid:3)they(cid:3)are(cid:3)incurred.(cid:3)
(f)
Borrowings(cid:3)
Borrowings(cid:3)are(cid:3)initially(cid:3)recognised(cid:3)at(cid:3)fair(cid:3)value,(cid:3)net(cid:3)of(cid:3)transaction(cid:3)costs(cid:3)incurred.(cid:3)(cid:3)Borrowings(cid:3)are(cid:3)subsequently(cid:3)
measured(cid:3)at(cid:3)amortised(cid:3)cost.(cid:3)(cid:3)Any(cid:3)difference(cid:3)between(cid:3)the(cid:3)proceeds(cid:3)(net(cid:3)of(cid:3)transaction(cid:3)costs)(cid:3)and(cid:3)the(cid:3)redemption(cid:3)
amount(cid:3)is(cid:3)recognised(cid:3)in(cid:3)profit(cid:3)or(cid:3)loss(cid:3)over(cid:3)the(cid:3)period(cid:3)of(cid:3)borrowings(cid:3)using(cid:3)the(cid:3)effective(cid:3)interest(cid:3)rate(cid:3)method.(cid:3)
Fees(cid:3)paid(cid:3)on(cid:3)establishment(cid:3)of(cid:3)loan(cid:3)facilities(cid:3)are(cid:3)recognised(cid:3)as(cid:3)transaction(cid:3)costs(cid:3)of(cid:3)the(cid:3)loan(cid:3)to(cid:3)the(cid:3)extent(cid:3)that(cid:3)it(cid:3)
is(cid:3)probable(cid:3)that(cid:3)some(cid:3)or(cid:3)all(cid:3)of(cid:3)the(cid:3)facility(cid:3)will(cid:3)be(cid:3)drawn(cid:3)down.(cid:3)(cid:3)In(cid:3)this(cid:3)case,(cid:3)the(cid:3)fee(cid:3)is(cid:3)deferred(cid:3)until(cid:3)the(cid:3)draw(cid:3)
down(cid:3)occurs(cid:3)and(cid:3)amortised(cid:3)over(cid:3)the(cid:3)period(cid:3)of(cid:3)the(cid:3)remaining(cid:3)facility(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
45
(cid:3)(cid:3)(cid:3)21(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(g)
Cash(cid:3)and(cid:3)Cash(cid:3)Equivalents(cid:3)
Cash(cid:3)and(cid:3)short(cid:882)term(cid:3)deposits(cid:3)in(cid:3)the(cid:3)statement(cid:3)of(cid:3)financial(cid:3)position(cid:3)comprise(cid:3)cash(cid:3)at(cid:3)bank(cid:3)and(cid:3)in(cid:3)hand.(cid:3)Cash(cid:3)
equivalents(cid:3)are(cid:3)short(cid:3)term,(cid:3)highly(cid:3)liquid(cid:3)investments(cid:3)that(cid:3)are(cid:3)readily(cid:3)convertible(cid:3)to(cid:3)known(cid:3)amounts(cid:3)of(cid:3)cash(cid:3)and(cid:3)
which(cid:3)are(cid:3)subject(cid:3)to(cid:3)an(cid:3)insignificant(cid:3)risk(cid:3)of(cid:3)changes(cid:3)in(cid:3)value.(cid:3)For(cid:3)the(cid:3)purposes(cid:3)of(cid:3)the(cid:3)statement(cid:3)of(cid:3)cash(cid:3)flows,(cid:3)
cash(cid:3) and(cid:3) cash(cid:3) equivalents(cid:3) consist(cid:3) of(cid:3) cash(cid:3) and(cid:3) cash(cid:3) equivalents(cid:3) as(cid:3) defined(cid:3) above,(cid:3) net(cid:3) of(cid:3) outstanding(cid:3) bank(cid:3)
overdrafts.(cid:3)
(h)
Trade(cid:3)and(cid:3)Other(cid:3)Receivables(cid:3)
Trade(cid:3)receivables,(cid:3)which(cid:3)generally(cid:3)have(cid:3)30–90(cid:3)day(cid:3)terms,(cid:3)are(cid:3)recognised(cid:3)and(cid:3)carried(cid:3)at(cid:3)original(cid:3)invoice(cid:3)amount(cid:3)
less(cid:3)an(cid:3)allowance(cid:3)for(cid:3)any(cid:3)uncollectible(cid:3)amounts.(cid:3)An(cid:3)allowance(cid:3)for(cid:3)doubtful(cid:3)debts(cid:3)is(cid:3)made(cid:3)when(cid:3)there(cid:3)is(cid:3)objective(cid:3)
evidence(cid:3)that(cid:3)the(cid:3)Group(cid:3)will(cid:3)not(cid:3)be(cid:3)able(cid:3)to(cid:3)collect(cid:3)the(cid:3)debts.(cid:3)Bad(cid:3)debts(cid:3)are(cid:3)written(cid:3)off(cid:3)when(cid:3)identified.(cid:3)
(i)
Inventories(cid:3)
Inventories(cid:3)of(cid:3)consumable(cid:3)supplies(cid:3)and(cid:3)spare(cid:3)parts(cid:3)are(cid:3)valued(cid:3)at(cid:3)the(cid:3)lower(cid:3)of(cid:3)cost(cid:3)and(cid:3)net(cid:3)realisable(cid:3)value.(cid:3)(cid:3)Cost(cid:3)
is(cid:3)assigned(cid:3)on(cid:3)a(cid:3)weighted(cid:3)average(cid:3)basis.(cid:3)(cid:3)Net(cid:3)realisable(cid:3)value(cid:3)is(cid:3)the(cid:3)estimated(cid:3)selling(cid:3)price(cid:3)in(cid:3)the(cid:3)ordinary(cid:3)course(cid:3)
of(cid:3)business(cid:3)less(cid:3)estimated(cid:3)costs(cid:3)of(cid:3)completion,(cid:3)and(cid:3)the(cid:3)estimated(cid:3)costs(cid:3)necessary(cid:3)to(cid:3)make(cid:3)the(cid:3)sale.(cid:3)
The(cid:3)recoverable(cid:3)amount(cid:3)of(cid:3)surplus(cid:3)items(cid:3)is(cid:3)assessed(cid:3)regularly(cid:3)on(cid:3)an(cid:3)ongoing(cid:3)basis(cid:3)and(cid:3)written(cid:3)down(cid:3)to(cid:3)its(cid:3)net(cid:3)
realisable(cid:3)value(cid:3)when(cid:3)an(cid:3)impairment(cid:3)indicator(cid:3)is(cid:3)present.(cid:3)
(j)
Property,(cid:3)Plant(cid:3)and(cid:3)Equipment(cid:3)
Property,(cid:3) plant(cid:3) and(cid:3) equipment(cid:3) are(cid:3) stated(cid:3) at(cid:3) cost,(cid:3) less(cid:3) accumulated(cid:3) depreciation(cid:3) and(cid:3) any(cid:3) accumulated(cid:3)
impairment(cid:3)losses.(cid:3)Such(cid:3)cost(cid:3)includes(cid:3)the(cid:3)cost(cid:3)of(cid:3)replacing(cid:3)parts(cid:3)that(cid:3)are(cid:3)eligible(cid:3)for(cid:3)capitalisation(cid:3)when(cid:3)the(cid:3)cost(cid:3)
of(cid:3)replacing(cid:3)the(cid:3)parts(cid:3)is(cid:3)incurred.(cid:3)Similarly,(cid:3)when(cid:3)each(cid:3)major(cid:3)inspection(cid:3)is(cid:3)performed,(cid:3)its(cid:3)cost(cid:3)is(cid:3)recognised(cid:3)in(cid:3)
the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)the(cid:3)asset(cid:3)as(cid:3)a(cid:3)replacement(cid:3)only(cid:3)if(cid:3)it(cid:3)is(cid:3)eligible(cid:3)for(cid:3)capitalisation.(cid:3)The(cid:3)assets'(cid:3)residual(cid:3)values,(cid:3)
useful(cid:3)lives(cid:3)and(cid:3)amortisation(cid:3)methods(cid:3)are(cid:3)reviewed,(cid:3)and(cid:3)adjusted(cid:3)if(cid:3)appropriate,(cid:3)at(cid:3)each(cid:3)financial(cid:3)year(cid:3)end.(cid:3)
Depreciation(cid:3)is(cid:3)calculated(cid:3)on(cid:3)a(cid:3)straight(cid:882)line(cid:3)basis(cid:3)or(cid:3)written(cid:3)down(cid:3)value(cid:3)over(cid:3)the(cid:3)estimated(cid:3)useful(cid:3)life(cid:3)of(cid:3)the(cid:3)
assets(cid:3)as(cid:3)follows:(cid:3)
Office(cid:3)&(cid:3)computer(cid:3)equipment(cid:3)
Fixtures(cid:3)and(cid:3)fittings(cid:3)
Plant(cid:3)and(cid:3)equipment(cid:3)
(cid:131)
(cid:131)
(cid:131)
(cid:131) Motor(cid:3)Vehicles(cid:3) (cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)33%
25%(cid:882)50%(cid:3)straight(cid:3)line(cid:3)
33%(cid:3)written(cid:3)down(cid:3)value(cid:3)
33%(cid:3)written(cid:3)down(cid:3)value(cid:3)
(cid:3)written(cid:3)down(cid:3)value(cid:3)(cid:3)
Impairment(cid:3)
The(cid:3)carrying(cid:3)values(cid:3)of(cid:3)property,(cid:3)plant(cid:3)and(cid:3)equipment(cid:3)are(cid:3)reviewed(cid:3)for(cid:3)impairment(cid:3)at(cid:3)each(cid:3)reporting(cid:3)date,(cid:3)with(cid:3)
recoverable(cid:3)amount(cid:3)being(cid:3)estimated(cid:3)when(cid:3)events(cid:3)or(cid:3)changes(cid:3)in(cid:3)circumstances(cid:3)indicate(cid:3)that(cid:3)the(cid:3)carrying(cid:3)value(cid:3)
may(cid:3)be(cid:3)impaired.(cid:3)This(cid:3)assessment(cid:3)for(cid:3)impairment(cid:3)is(cid:3)discussed(cid:3)further(cid:3)in(cid:3)note(cid:3)1(m).(cid:3)
De(cid:882)recognition(cid:3)and(cid:3)Disposal(cid:3)
An(cid:3)item(cid:3)of(cid:3)property,(cid:3)plant(cid:3)and(cid:3)equipment(cid:3)is(cid:3)de(cid:882)recognised(cid:3)upon(cid:3)disposal(cid:3)or(cid:3)when(cid:3)no(cid:3)further(cid:3)future(cid:3)economic(cid:3)
benefits(cid:3)are(cid:3)expected(cid:3)from(cid:3)its(cid:3)use(cid:3)or(cid:3)disposal.(cid:3)Any(cid:3)gain(cid:3)or(cid:3)loss(cid:3)arising(cid:3)on(cid:3)de(cid:882)recognition(cid:3)of(cid:3)the(cid:3)asset(cid:3)(calculated(cid:3)
as(cid:3)the(cid:3)difference(cid:3)between(cid:3)the(cid:3)net(cid:3)disposal(cid:3)proceeds(cid:3)and(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)the(cid:3)asset)(cid:3)is(cid:3)included(cid:3)in(cid:3)profit(cid:3)
or(cid:3)loss(cid:3)in(cid:3)the(cid:3)year(cid:3)the(cid:3)asset(cid:3)is(cid:3)de(cid:882)recognised.(cid:3)
(k)
Exploration(cid:3)and(cid:3)Evaluation(cid:3)Expenditure(cid:3)(cid:3)(cid:3)
Exploration(cid:3)and(cid:3)evaluation(cid:3)costs(cid:3)are(cid:3)written(cid:3)off(cid:3)in(cid:3)the(cid:3)year(cid:3)they(cid:3)are(cid:3)incurred,(cid:3)apart(cid:3)from(cid:3)acquisition(cid:3)costs(cid:3)and(cid:3)
those(cid:3)costs(cid:3)that(cid:3)are(cid:3)incurred(cid:3)on(cid:3)an(cid:3)area(cid:3)of(cid:3)interest(cid:3)that(cid:3)contains(cid:3)a(cid:3)JORC(cid:3)reserve.(cid:3)
Capitalised(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)expenditures(cid:3)in(cid:3)relation(cid:3)to(cid:3)specific(cid:3)areas(cid:3)of(cid:3)interest(cid:3)are(cid:3)recognised(cid:3)as(cid:3)an(cid:3)
exploration(cid:3) and(cid:3) evaluation(cid:3) asset(cid:3) in(cid:3) the(cid:3) year(cid:3) in(cid:3) which(cid:3) they(cid:3) are(cid:3) incurred(cid:3) where(cid:3) the(cid:3) following(cid:3) conditions(cid:3) are(cid:3)
satisfied:(cid:3)
(i)
the(cid:3)rights(cid:3)to(cid:3)tenure(cid:3)of(cid:3)the(cid:3)area(cid:3)of(cid:3)interest(cid:3)are(cid:3)current;(cid:3)and(cid:3)
(ii)(cid:3) at(cid:3)least(cid:3)one(cid:3)of(cid:3)the(cid:3)following(cid:3)conditions(cid:3)is(cid:3)also(cid:3)met:(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)22(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
46
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(k)(cid:3)Exploration(cid:3)and(cid:3)Evaluation(cid:3)Expenditure(cid:3)(continued)(cid:3)
(a)
(b)(cid:3)
the(cid:3) exploration(cid:3) and(cid:3) evaluation(cid:3) expenditures(cid:3) are(cid:3) expected(cid:3) to(cid:3) be(cid:3) recouped(cid:3) through(cid:3) successful(cid:3)
development(cid:3)and(cid:3)exploration(cid:3)of(cid:3)the(cid:3)area(cid:3)of(cid:3)interest,(cid:3)or(cid:3)alternatively,(cid:3)by(cid:3)its(cid:3)sale;(cid:3)or(cid:3)
exploration(cid:3)and(cid:3)evaluation(cid:3)activities(cid:3)in(cid:3)the(cid:3)area(cid:3)of(cid:3)interest(cid:3)have(cid:3)not(cid:3)at(cid:3)the(cid:3)reporting(cid:3)date(cid:3)reached(cid:3)
a(cid:3) stage(cid:3) which(cid:3) permits(cid:3) a(cid:3) reasonable(cid:3) assessment(cid:3) of(cid:3) the(cid:3) existence(cid:3) or(cid:3) otherwise(cid:3) of(cid:3) economically(cid:3)
recoverable(cid:3)reserves,(cid:3)and(cid:3)active(cid:3)and(cid:3)significant(cid:3)operations(cid:3)in,(cid:3)or(cid:3)in(cid:3)relation(cid:3)to,(cid:3)the(cid:3)area(cid:3)of(cid:3)interest(cid:3)
are(cid:3)continuing.(cid:3)
Exploration(cid:3) and(cid:3) evaluation(cid:3) assets(cid:3) are(cid:3) initially(cid:3) measured(cid:3) at(cid:3) cost(cid:3) and(cid:3) include(cid:3) acquisition(cid:3) of(cid:3) rights(cid:3) to(cid:3) explore,(cid:3)
studies,(cid:3)exploratory(cid:3)drilling,(cid:3)trenching(cid:3)and(cid:3)sampling(cid:3)and(cid:3)associated(cid:3)activities(cid:3)and(cid:3)an(cid:3)allocation(cid:3)of(cid:3)depreciation(cid:3)
and(cid:3)amortisation(cid:3)of(cid:3)assets(cid:3)used(cid:3)in(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)activities.(cid:3)General(cid:3)and(cid:3)administrative(cid:3)costs(cid:3)are(cid:3)
only(cid:3) included(cid:3) in(cid:3) the(cid:3) measurement(cid:3) of(cid:3) exploration(cid:3) and(cid:3) evaluation(cid:3) costs(cid:3) where(cid:3) they(cid:3) are(cid:3) related(cid:3) directly(cid:3) to(cid:3)
operational(cid:3)activities(cid:3)in(cid:3)a(cid:3)particular(cid:3)area(cid:3)of(cid:3)interest.(cid:3)
Exploration(cid:3)and(cid:3)evaluation(cid:3)assets(cid:3)are(cid:3)assessed(cid:3)for(cid:3)impairment(cid:3)when(cid:3)facts(cid:3)and(cid:3)circumstances(cid:3)suggest(cid:3)that(cid:3)the(cid:3)
carrying(cid:3)amount(cid:3)of(cid:3)an(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)asset(cid:3)may(cid:3)exceed(cid:3)its(cid:3)recoverable(cid:3)amount.(cid:3)The(cid:3)recoverable(cid:3)
amount(cid:3)of(cid:3)the(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)asset(cid:3)(for(cid:3)the(cid:3)cash(cid:3)generating(cid:3)unit(s)(cid:3)to(cid:3)which(cid:3)it(cid:3)has(cid:3)been(cid:3)allocated(cid:3)
being(cid:3)no(cid:3)larger(cid:3)than(cid:3)the(cid:3)relevant(cid:3)area(cid:3)of(cid:3)interest)(cid:3)is(cid:3)estimated(cid:3)to(cid:3)determine(cid:3)the(cid:3)extent(cid:3)of(cid:3)the(cid:3)impairment(cid:3)loss(cid:3)
(if(cid:3)any).(cid:3)Where(cid:3)an(cid:3)impairment(cid:3)loss(cid:3)subsequently(cid:3)reverses,(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)the(cid:3)asset(cid:3)is(cid:3)increased(cid:3)to(cid:3)the(cid:3)
revised(cid:3)estimate(cid:3)of(cid:3)its(cid:3)recoverable(cid:3)amount,(cid:3)but(cid:3)only(cid:3)to(cid:3)the(cid:3)extent(cid:3)that(cid:3)the(cid:3)increased(cid:3)carrying(cid:3)amount(cid:3)does(cid:3)not(cid:3)
exceed(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)that(cid:3)would(cid:3)have(cid:3)been(cid:3)determined(cid:3)had(cid:3)no(cid:3)impairment(cid:3)loss(cid:3)been(cid:3)recognised(cid:3)for(cid:3)the(cid:3)
asset(cid:3)in(cid:3)previous(cid:3)years.(cid:3)(cid:3)
Where(cid:3)a(cid:3)decision(cid:3)has(cid:3)been(cid:3)made(cid:3)to(cid:3)proceed(cid:3)with(cid:3)development(cid:3)in(cid:3)respect(cid:3)of(cid:3)a(cid:3)particular(cid:3)area(cid:3)of(cid:3)interest,(cid:3)the(cid:3)
relevant(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)asset(cid:3)is(cid:3)tested(cid:3)for(cid:3)impairment(cid:3)and(cid:3)the(cid:3)balance(cid:3)is(cid:3)then(cid:3)reclassified(cid:3)to(cid:3)mine(cid:3)
properties(cid:3)in(cid:3)development.(cid:3)
(l)
Mine(cid:3)Properties(cid:3)
When(cid:3)technical(cid:3)feasibility(cid:3)and(cid:3)commercial(cid:3)viability(cid:3)of(cid:3)extracting(cid:3)mineral(cid:3)resource(cid:3)has(cid:3)been(cid:3)demonstrated,(cid:3)then(cid:3)
any(cid:3)subsequent(cid:3)expenditure(cid:3)in(cid:3)that(cid:3)area(cid:3)of(cid:3)interest(cid:3)is(cid:3)classified(cid:3)as(cid:3)mine(cid:3)properties(cid:3)in(cid:3)development.(cid:3)(cid:3)These(cid:3)costs(cid:3)
are(cid:3)not(cid:3)amortised(cid:3)but(cid:3)the(cid:3)carrying(cid:3)value(cid:3)is(cid:3)assessed(cid:3)for(cid:3)impairment(cid:3)whenever(cid:3)facts(cid:3)and(cid:3)circumstances(cid:3)suggest(cid:3)
that(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)the(cid:3)asset(cid:3)may(cid:3)exceed(cid:3)the(cid:3)recoverable(cid:3)amount.(cid:3)
(m)
Impairment(cid:3)of(cid:3)Assets(cid:3)
The(cid:3)Group(cid:3)assesses(cid:3)at(cid:3)each(cid:3)reporting(cid:3)date(cid:3)whether(cid:3)there(cid:3)is(cid:3)an(cid:3)indication(cid:3)that(cid:3)an(cid:3)asset(cid:3)may(cid:3)be(cid:3)impaired.(cid:3)If(cid:3)any(cid:3)
such(cid:3)indication(cid:3)exists,(cid:3)or(cid:3)when(cid:3)annual(cid:3)impairment(cid:3)testing(cid:3)for(cid:3)an(cid:3)asset(cid:3)is(cid:3)required,(cid:3)the(cid:3)Group(cid:3)makes(cid:3)an(cid:3)estimate(cid:3)
of(cid:3)the(cid:3)asset’s(cid:3)recoverable(cid:3)amount.(cid:3)An(cid:3)asset’s(cid:3)recoverable(cid:3)amount(cid:3)is(cid:3)the(cid:3)higher(cid:3)of(cid:3)its(cid:3)fair(cid:3)value(cid:3)less(cid:3)costs(cid:3)to(cid:3)sell(cid:3)
and(cid:3)its(cid:3)value(cid:3)in(cid:3)use(cid:3)and(cid:3)is(cid:3)determined(cid:3)for(cid:3)an(cid:3)individual(cid:3)asset,(cid:3)unless(cid:3)the(cid:3)asset(cid:3)does(cid:3)not(cid:3)generate(cid:3)cash(cid:3)inflows(cid:3)
that(cid:3)are(cid:3)largely(cid:3)independent(cid:3)of(cid:3)those(cid:3)from(cid:3)other(cid:3)assets(cid:3)or(cid:3)groups(cid:3)of(cid:3)assets(cid:3)and(cid:3)the(cid:3)asset's(cid:3)value(cid:3)in(cid:3)use(cid:3)cannot(cid:3)
be(cid:3)estimated(cid:3)to(cid:3)be(cid:3)close(cid:3)to(cid:3)its(cid:3)fair(cid:3)value.(cid:3)In(cid:3)such(cid:3)cases(cid:3)the(cid:3)asset(cid:3)is(cid:3)tested(cid:3)for(cid:3)impairment(cid:3)as(cid:3)part(cid:3)of(cid:3)the(cid:3)cash(cid:882)
generating(cid:3)unit(cid:3)to(cid:3)which(cid:3)it(cid:3)belongs.(cid:3)When(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)an(cid:3)asset(cid:3)or(cid:3)cash(cid:882)generating(cid:3)unit(cid:3)exceeds(cid:3)its(cid:3)
recoverable(cid:3) amount,(cid:3) the(cid:3) asset(cid:3) or(cid:3) cash(cid:882)generating(cid:3) unit(cid:3) is(cid:3) considered(cid:3) impaired(cid:3) and(cid:3) is(cid:3) written(cid:3) down(cid:3) to(cid:3) its(cid:3)
recoverable(cid:3)amount.(cid:3)
In(cid:3)assessing(cid:3)value(cid:3)in(cid:3)use,(cid:3)the(cid:3)estimated(cid:3)future(cid:3)cash(cid:3)flows(cid:3)are(cid:3)discounted(cid:3)to(cid:3)their(cid:3)present(cid:3)value(cid:3)using(cid:3)a(cid:3)pre(cid:882)tax(cid:3)
discount(cid:3)rate(cid:3)that(cid:3)reflects(cid:3)current(cid:3)market(cid:3)assessments(cid:3)of(cid:3)the(cid:3)time(cid:3)value(cid:3)of(cid:3)money(cid:3)and(cid:3)the(cid:3)risks(cid:3)specific(cid:3)to(cid:3)the(cid:3)
asset.(cid:3)Impairment(cid:3)losses(cid:3)relating(cid:3)to(cid:3)continuing(cid:3)operations(cid:3)are(cid:3)recognised(cid:3)in(cid:3)those(cid:3)expense(cid:3)categories(cid:3)consistent(cid:3)
with(cid:3) the(cid:3) function(cid:3) of(cid:3) the(cid:3) impaired(cid:3) asset(cid:3) unless(cid:3) the(cid:3) asset(cid:3) is(cid:3) carried(cid:3) at(cid:3) re(cid:882)valued(cid:3) amount(cid:3) (in(cid:3) which(cid:3) case(cid:3) the(cid:3)
impairment(cid:3)loss(cid:3)is(cid:3)treated(cid:3)as(cid:3)a(cid:3)re(cid:882)valuation(cid:3)decrease).(cid:3)
An(cid:3) assessment(cid:3) is(cid:3) also(cid:3) made(cid:3) at(cid:3) each(cid:3) reporting(cid:3) date(cid:3) as(cid:3) to(cid:3) whether(cid:3) there(cid:3) is(cid:3) any(cid:3) indication(cid:3) that(cid:3) previously(cid:3)
recognised(cid:3) impairment(cid:3) losses(cid:3) may(cid:3) no(cid:3) longer(cid:3) exist(cid:3) or(cid:3) may(cid:3) have(cid:3) decreased.(cid:3) If(cid:3) such(cid:3) indication(cid:3) exists,(cid:3) the(cid:3)
recoverable(cid:3)amount(cid:3)is(cid:3)estimated.(cid:3)A(cid:3)previously(cid:3)recognised(cid:3)impairment(cid:3)loss(cid:3)is(cid:3)reversed(cid:3)only(cid:3)if(cid:3)there(cid:3)has(cid:3)been(cid:3)a(cid:3)
change(cid:3)in(cid:3)the(cid:3)estimates(cid:3)used(cid:3)to(cid:3)determine(cid:3)the(cid:3)asset’s(cid:3)recoverable(cid:3)amount(cid:3)since(cid:3)the(cid:3)last(cid:3)impairment(cid:3)loss(cid:3)was(cid:3)
recognised.(cid:3)If(cid:3)that(cid:3)is(cid:3)the(cid:3)case(cid:3)the(cid:3)carrying(cid:3)amount(cid:3)of(cid:3)the(cid:3)asset(cid:3)is(cid:3)increased(cid:3)to(cid:3)its(cid:3)recoverable(cid:3)amount.(cid:3)(cid:3)
(cid:3)
47
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)23(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(m)(cid:3)Impairment(cid:3)of(cid:3)Assets(cid:3)(continued)(cid:3)
That(cid:3) increased(cid:3) amount(cid:3) cannot(cid:3) exceed(cid:3) the(cid:3) carrying(cid:3) amount(cid:3) that(cid:3) would(cid:3) have(cid:3) been(cid:3) determined,(cid:3) net(cid:3) of(cid:3)
depreciation,(cid:3)had(cid:3)no(cid:3)impairment(cid:3)loss(cid:3)been(cid:3)recognised(cid:3)for(cid:3)the(cid:3)asset(cid:3)in(cid:3)prior(cid:3)years.(cid:3)Such(cid:3)reversal(cid:3)is(cid:3)recognised(cid:3)in(cid:3)
profit(cid:3)or(cid:3)loss(cid:3)unless(cid:3)the(cid:3)asset(cid:3)is(cid:3)carried(cid:3)at(cid:3)the(cid:3)re(cid:882)valued(cid:3)amount,(cid:3)in(cid:3)which(cid:3)case(cid:3)the(cid:3)reversal(cid:3)is(cid:3)treated(cid:3)as(cid:3)a(cid:3)re(cid:882)
valuation(cid:3)increase.(cid:3)(cid:3)
After(cid:3)such(cid:3)a(cid:3)reversal(cid:3)the(cid:3)depreciation(cid:3)charge(cid:3)is(cid:3)adjusted(cid:3)in(cid:3)future(cid:3)periods(cid:3)to(cid:3)allocate(cid:3)the(cid:3)asset’s(cid:3)revised(cid:3)carrying(cid:3)
amount,(cid:3)less(cid:3)any(cid:3)residual(cid:3)value,(cid:3)on(cid:3)a(cid:3)systematic(cid:3)basis(cid:3)over(cid:3)its(cid:3)remaining(cid:3)useful(cid:3)life.(cid:3)
(n)
Trade(cid:3)and(cid:3)Other(cid:3)Payables(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)are(cid:3)carried(cid:3)at(cid:3)amortised(cid:3)costs(cid:3)and(cid:3)represent(cid:3)liabilities(cid:3)for(cid:3)goods(cid:3)and(cid:3)services(cid:3)provided(cid:3)
to(cid:3)the(cid:3)Group(cid:3)prior(cid:3)to(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)that(cid:3)are(cid:3)unpaid(cid:3)and(cid:3)arise(cid:3)when(cid:3)the(cid:3)Group(cid:3)becomes(cid:3)obliged(cid:3)to(cid:3)
make(cid:3)future(cid:3)payments(cid:3)in(cid:3)respect(cid:3)of(cid:3)the(cid:3)purchase(cid:3)of(cid:3)these(cid:3)goods(cid:3)and(cid:3)services.(cid:3)
(o)
Provisions(cid:3)
Rehabilitation(cid:3)and(cid:3)Restoration(cid:3)
Long(cid:882)term(cid:3)environmental(cid:3)obligations(cid:3)are(cid:3)based(cid:3)on(cid:3)the(cid:3)Group’s(cid:3)environmental(cid:3)management(cid:3)plans,(cid:3)in(cid:3)compliance(cid:3)
with(cid:3)current(cid:3)environmental(cid:3)and(cid:3)regulatory(cid:3)requirements.(cid:3)
Full(cid:3) provision(cid:3) is(cid:3) made(cid:3) based(cid:3) on(cid:3) the(cid:3) net(cid:3) present(cid:3) value(cid:3) of(cid:3) the(cid:3) estimated(cid:3) cost(cid:3) of(cid:3) restoring(cid:3) the(cid:3) environmental(cid:3)
disturbance(cid:3)that(cid:3)has(cid:3)occurred(cid:3)up(cid:3)to(cid:3)the(cid:3)reporting(cid:3)date.(cid:3)(cid:3)To(cid:3)the(cid:3)extent(cid:3)that(cid:3)future(cid:3)economic(cid:3)benefits(cid:3)are(cid:3)expected(cid:3)
to(cid:3)arise,(cid:3)these(cid:3)costs(cid:3)are(cid:3)capitalised(cid:3)and(cid:3)amortised(cid:3)over(cid:3)the(cid:3)remaining(cid:3)lives(cid:3)of(cid:3)mines.(cid:3)
Annual(cid:3)increases(cid:3)in(cid:3)the(cid:3)provision(cid:3)relating(cid:3)to(cid:3)the(cid:3)change(cid:3)in(cid:3)the(cid:3)net(cid:3)present(cid:3)value(cid:3)of(cid:3)the(cid:3)provision(cid:3)are(cid:3)recognised(cid:3)
as(cid:3)finance(cid:3)costs.(cid:3)(cid:3)The(cid:3)estimated(cid:3)costs(cid:3)of(cid:3)rehabilitation(cid:3)are(cid:3)reviewed(cid:3)annually(cid:3)and(cid:3)adjusted(cid:3)as(cid:3)appropriate(cid:3)for(cid:3)
changes(cid:3) in(cid:3) legislation,(cid:3) technology(cid:3) or(cid:3) other(cid:3) circumstances.(cid:3) (cid:3)Cost (cid:3) estimates(cid:3) are(cid:3) not(cid:3) reduced(cid:3) by(cid:3) the(cid:3) potential(cid:3)
proceeds(cid:3)from(cid:3)the(cid:3)sale(cid:3)of(cid:3)assets(cid:3)or(cid:3)from(cid:3)plant(cid:3)clear(cid:882)up(cid:3)closure.(cid:3)
Employee(cid:3)Benefits(cid:3)
The(cid:3) provision(cid:3) for(cid:3) employee(cid:3)benefits(cid:3) represents(cid:3) annual(cid:3) leave(cid:3) and(cid:3) long(cid:3) service(cid:3) leave(cid:3) entitlements(cid:3) accrued(cid:3) by(cid:3)
employees.(cid:3)
Short(cid:882)term(cid:3)obligations(cid:3)
Liabilities(cid:3)for(cid:3)wages(cid:3)and(cid:3)salaries,(cid:3)including(cid:3)non(cid:882)monetary(cid:3)benefits(cid:3)and(cid:3)accumulating(cid:3)sick(cid:3)leave(cid:3)that(cid:3)are(cid:3)expected(cid:3)
to(cid:3)be(cid:3)settled(cid:3)wholly(cid:3)within(cid:3)12(cid:3)months(cid:3)after(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)period(cid:3)in(cid:3)which(cid:3)the(cid:3)employees(cid:3)render(cid:3)the(cid:3)related(cid:3)
service(cid:3) are(cid:3) recognised(cid:3) in(cid:3) respect(cid:3) of(cid:3) the(cid:3) employees’(cid:3) services(cid:3) up(cid:3) to(cid:3) the(cid:3) end(cid:3) of(cid:3) the(cid:3) reporting(cid:3) period(cid:3) and(cid:3) are(cid:3)
measured(cid:3)at(cid:3)the(cid:3)amounts(cid:3)expected(cid:3)to(cid:3)be(cid:3)paid(cid:3)when(cid:3)the(cid:3)liabilities(cid:3)are(cid:3)settled.(cid:3)
Long(cid:3)service(cid:3)leave(cid:3)
The(cid:3) liability(cid:3) for(cid:3) long(cid:3) service(cid:3) leave(cid:3) is(cid:3) recognised(cid:3) and(cid:3) measured(cid:3) as(cid:3) the(cid:3) present(cid:3) value(cid:3) of(cid:3) the(cid:3) expected(cid:3) future(cid:3)
payments(cid:3)to(cid:3)be(cid:3)made(cid:3)in(cid:3)respect(cid:3)of(cid:3)services(cid:3)provided(cid:3)by(cid:3)employees(cid:3)up(cid:3)to(cid:3)the(cid:3)reporting(cid:3)date.(cid:3)(cid:3)Consideration(cid:3)is(cid:3)
given(cid:3)to(cid:3)the(cid:3)expected(cid:3)future(cid:3)wage(cid:3)and(cid:3)salary(cid:3)levels,(cid:3)experience(cid:3)of(cid:3)employee(cid:3)departures,(cid:3)and(cid:3)period(cid:3)of(cid:3)services.(cid:3)(cid:3)
Expected(cid:3)future(cid:3)payments(cid:3)are(cid:3)discounted(cid:3)using(cid:3)market(cid:3)yields(cid:3)at(cid:3)the(cid:3)reporting(cid:3)date(cid:3)on(cid:3)high(cid:3)quality(cid:3)corporate(cid:3)
bonds(cid:3) with(cid:3) terms(cid:3) to(cid:3) maturity(cid:3) and(cid:3) currencies(cid:3) that(cid:3) match,(cid:3) as(cid:3) closely(cid:3) as(cid:3) possible,(cid:3) the(cid:3) estimated(cid:3) future(cid:3) cash(cid:3)
outflows.(cid:3)
(p)
Interest(cid:3)Bearing(cid:3)Liabilities(cid:3)(cid:3)
All(cid:3) loans(cid:3) and(cid:3) borrowings(cid:3) are(cid:3) initially(cid:3) recognised(cid:3) at(cid:3) the(cid:3) fair(cid:3) value(cid:3) of(cid:3) the(cid:3) consideration(cid:3) received(cid:3) less(cid:3) directly(cid:3)
attributable(cid:3)transaction(cid:3)costs.(cid:3)
After(cid:3)initial(cid:3)recognition,(cid:3)interest(cid:882)bearing(cid:3)loans(cid:3)and(cid:3)borrowings(cid:3)are(cid:3)subsequently(cid:3)measured(cid:3)at(cid:3)amortised(cid:3)cost(cid:3)
using(cid:3) the(cid:3) effective(cid:3) interest(cid:3) method.(cid:3) Gains(cid:3) and(cid:3) losses(cid:3) are(cid:3) recognised(cid:3) in(cid:3) profit(cid:3) or(cid:3) loss(cid:3) when(cid:3) the(cid:3) liabilities(cid:3) are(cid:3)
derecognised.(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)24(cid:3)|(cid:3)P a g e (cid:3)
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48
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(q)
Share(cid:3)Based(cid:3)Payments(cid:3)
Equity(cid:3)Settled(cid:3)Transactions:(cid:3)
The(cid:3)Group(cid:3)provides(cid:3)benefits(cid:3)to(cid:3)employees(cid:3)(including(cid:3)senior(cid:3)executives)(cid:3)of(cid:3)the(cid:3)Group(cid:3)in(cid:3)the(cid:3)form(cid:3)of(cid:3)share(cid:882)based(cid:3)
incentives,(cid:3)whereby(cid:3)employees(cid:3)render(cid:3)services(cid:3)in(cid:3)exchange(cid:3)for(cid:3)options(cid:3)and(cid:3)shares(cid:3)(equity(cid:882)settled(cid:3)transactions).(cid:3)
There(cid:3)is(cid:3)currently(cid:3)a(cid:3)plan(cid:3)in(cid:3)place(cid:3)to(cid:3)provide(cid:3)these(cid:3)benefits,(cid:3)the(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Option(cid:3)Plan,(cid:3)which(cid:3)
provides(cid:3)benefits(cid:3)to(cid:3)Executive(cid:3)Directors(cid:3)and(cid:3)other(cid:3)employees.(cid:3)
The(cid:3)cost(cid:3)of(cid:3)these(cid:3)equity(cid:882)settled(cid:3)transactions(cid:3)with(cid:3)employees(cid:3)is(cid:3)measured(cid:3)by(cid:3)reference(cid:3)to(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)the(cid:3)
equity(cid:3)instruments(cid:3)at(cid:3)the(cid:3)date(cid:3)at(cid:3)which(cid:3)they(cid:3)are(cid:3)granted.(cid:3)The(cid:3)fair(cid:3)value(cid:3)is(cid:3)determined(cid:3)by(cid:3)using(cid:3)an(cid:3)appropriate(cid:3)
valuation(cid:3)model.(cid:3)(cid:3)
In(cid:3)valuing(cid:3)equity(cid:882)settled(cid:3)transactions,(cid:3)no(cid:3)account(cid:3)is(cid:3)taken(cid:3)of(cid:3)any(cid:3)performance(cid:3)conditions,(cid:3)other(cid:3)than(cid:3)conditions(cid:3)
linked(cid:3) to(cid:3) the(cid:3) price(cid:3) of(cid:3) the(cid:3) underlying(cid:3) Shares(cid:3) to(cid:3) which(cid:3) the(cid:3) equity(cid:3) instrument(cid:3) relates(cid:3) (market(cid:3) conditions)(cid:3) if(cid:3)
applicable.(cid:3) (cid:3)The (cid:3) cost(cid:3) of(cid:3) equity(cid:882)settled(cid:3) transactions(cid:3) is(cid:3) recognised,(cid:3) together(cid:3) with(cid:3) a(cid:3) corresponding(cid:3) increase(cid:3) in(cid:3)
equity,(cid:3)over(cid:3)the(cid:3)period(cid:3)in(cid:3)which(cid:3)the(cid:3)performance(cid:3)and/or(cid:3)service(cid:3)conditions(cid:3)are(cid:3)fulfilled,(cid:3)ending(cid:3)on(cid:3)the(cid:3)date(cid:3)on(cid:3)
which(cid:3)the(cid:3)relevant(cid:3)employees(cid:3)become(cid:3)fully(cid:3)entitled(cid:3)to(cid:3)the(cid:3)award(cid:3)(the(cid:3)vesting(cid:3)period).(cid:3)
The(cid:3) cumulative(cid:3) expense(cid:3) recognised(cid:3) for(cid:3) equity(cid:882)settled(cid:3) transactions(cid:3) at(cid:3) each(cid:3) reporting(cid:3) date(cid:3) until(cid:3) vesting(cid:3) date(cid:3)
reflects:(cid:3)
(i)
(ii)
the(cid:3)extent(cid:3)to(cid:3)which(cid:3)the(cid:3)vesting(cid:3)period(cid:3)has(cid:3)expired;(cid:3)and(cid:3)
the(cid:3)Group’s(cid:3)best(cid:3)estimate(cid:3)of(cid:3)the(cid:3)number(cid:3)of(cid:3)equity(cid:3)instruments(cid:3)that(cid:3)will(cid:3)ultimately(cid:3)vest.(cid:3)(cid:3)
No(cid:3)adjustment(cid:3)is(cid:3)made(cid:3)for(cid:3)the(cid:3)likelihood(cid:3)of(cid:3)market(cid:3)performance(cid:3)conditions(cid:3)being(cid:3)met(cid:3)as(cid:3)the(cid:3)effect(cid:3)of(cid:3)these(cid:3)
conditions(cid:3)is(cid:3)included(cid:3)in(cid:3)the(cid:3)determination(cid:3)of(cid:3)fair(cid:3)value(cid:3)at(cid:3)grant(cid:3)date.(cid:3)The(cid:3)statement(cid:3)of(cid:3)profit(cid:3)or(cid:3)loss(cid:3)charge(cid:3)or(cid:3)
credit(cid:3)for(cid:3)a(cid:3)period(cid:3)represents(cid:3)the(cid:3)movement(cid:3)in(cid:3)cumulative(cid:3)expense(cid:3)recognised(cid:3)as(cid:3)at(cid:3)the(cid:3)beginning(cid:3)and(cid:3)end(cid:3)of(cid:3)
that(cid:3)period.(cid:3)
No(cid:3)expense(cid:3)is(cid:3)recognised(cid:3)for(cid:3)share(cid:882)based(cid:3)incentives(cid:3)that(cid:3)do(cid:3)not(cid:3)ultimately(cid:3)vest,(cid:3)except(cid:3)for(cid:3)incentives(cid:3)where(cid:3)
vesting(cid:3)is(cid:3)only(cid:3)conditional(cid:3)upon(cid:3)a(cid:3)market(cid:3)condition.(cid:3)
If(cid:3)the(cid:3)terms(cid:3)of(cid:3)a(cid:3)share(cid:882)based(cid:3)incentive(cid:3)are(cid:3)modified,(cid:3)as(cid:3)a(cid:3)minimum(cid:3)an(cid:3)expense(cid:3)is(cid:3)recognised(cid:3)as(cid:3)if(cid:3)the(cid:3)terms(cid:3)had(cid:3)
not(cid:3)been(cid:3)modified.(cid:3)In(cid:3)addition,(cid:3)an(cid:3)expense(cid:3)is(cid:3)recognised(cid:3)for(cid:3)any(cid:3)modification(cid:3)that(cid:3)increases(cid:3)the(cid:3)total(cid:3)fair(cid:3)value(cid:3)
of(cid:3)the(cid:3)incentive,(cid:3)or(cid:3)is(cid:3)otherwise(cid:3)beneficial(cid:3)to(cid:3)the(cid:3)employee,(cid:3)as(cid:3)measured(cid:3)at(cid:3)the(cid:3)date(cid:3)of(cid:3)modification.(cid:3)
If(cid:3)a(cid:3)share(cid:882)based(cid:3)incentive(cid:3)is(cid:3)cancelled,(cid:3)it(cid:3)is(cid:3)treated(cid:3)as(cid:3)if(cid:3)it(cid:3)had(cid:3)vested(cid:3)on(cid:3)the(cid:3)date(cid:3)of(cid:3)cancellation,(cid:3)and(cid:3)any(cid:3)expense(cid:3)
not(cid:3) yet(cid:3) recognised(cid:3) for(cid:3) the(cid:3) award(cid:3) is(cid:3) recognised(cid:3) immediately.(cid:3) However,(cid:3) if(cid:3) a(cid:3) new(cid:3) award(cid:3) is(cid:3) substituted(cid:3) for(cid:3) the(cid:3)
cancelled(cid:3)incentive(cid:3)and(cid:3)designated(cid:3)as(cid:3)a(cid:3)replacement(cid:3)award(cid:3)on(cid:3)the(cid:3)date(cid:3)that(cid:3)it(cid:3)is(cid:3)granted,(cid:3)the(cid:3)cancelled(cid:3)incentive(cid:3)
and(cid:3) new(cid:3) awards(cid:3) are(cid:3) treated(cid:3) as(cid:3) if(cid:3) they(cid:3) were(cid:3) a(cid:3) modification(cid:3) of(cid:3) the(cid:3) incentive,(cid:3) as(cid:3) described(cid:3) in(cid:3) the(cid:3) previous(cid:3)
paragraph.(cid:3)
(r)
Share(cid:3)Capital(cid:3)
Shares(cid:3)are(cid:3)classified(cid:3)as(cid:3)equity.(cid:3)Incremental(cid:3)costs(cid:3)directly(cid:3)attributable(cid:3)to(cid:3)the(cid:3)issue(cid:3)of(cid:3)Shares(cid:3)pursuant(cid:3)to(cid:3)the(cid:3)Offer(cid:3)
or(cid:3)Options(cid:3)are(cid:3)shown(cid:3)in(cid:3)equity(cid:3)as(cid:3)a(cid:3)deduction,(cid:3)net(cid:3)of(cid:3)tax,(cid:3)from(cid:3)the(cid:3)proceeds(cid:3)of(cid:3)issue.(cid:3)
(s)
Basis(cid:3)of(cid:3)Consolidation(cid:3)
The(cid:3)financial(cid:3)statements(cid:3)consolidate(cid:3)those(cid:3)of(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)and(cid:3)all(cid:3)of(cid:3)its(cid:3)subsidiaries(cid:3)as(cid:3)at(cid:3)30(cid:3)June(cid:3)2017.(cid:3)(cid:3)
The(cid:3)parent(cid:3)controls(cid:3)a(cid:3)subsidiary(cid:3)if(cid:3)it(cid:3)is(cid:3)exposed,(cid:3)or(cid:3)has(cid:3)rights(cid:3)to(cid:3)variable(cid:3)returns(cid:3)from(cid:3)its(cid:3)involvement(cid:3)with(cid:3)the(cid:3)
subsidiary(cid:3)and(cid:3)has(cid:3)the(cid:3)ability(cid:3)to(cid:3)affect(cid:3)those(cid:3)returns(cid:3)through(cid:3)its(cid:3)power(cid:3)over(cid:3)the(cid:3)subsidiary.(cid:3)(cid:3)All(cid:3)subsidiaries(cid:3)have(cid:3)
a(cid:3)reporting(cid:3)date(cid:3)of(cid:3)30(cid:3)June.(cid:3)
All(cid:3)transactions(cid:3)and(cid:3)balances(cid:3)between(cid:3)controlled(cid:3)entities(cid:3)are(cid:3)eliminated(cid:3)on(cid:3)consolidation,(cid:3)including(cid:3)unrealised(cid:3)
gains(cid:3)and(cid:3)losses(cid:3)resulting(cid:3)from(cid:3)intra(cid:882)group(cid:3)transactions.(cid:3)(cid:3)Where(cid:3)unrealised(cid:3)losses(cid:3)on(cid:3)intra(cid:882)group(cid:3)asset(cid:3)sales(cid:3)are(cid:3)
reversed(cid:3)on(cid:3)consolidation,(cid:3)the(cid:3)underlying(cid:3)asset(cid:3)is(cid:3)also(cid:3)tested(cid:3)for(cid:3)impairment(cid:3)from(cid:3)a(cid:3)group(cid:3)perspective.(cid:3)(cid:3)Amounts(cid:3)
reported(cid:3)in(cid:3)the(cid:3)financial(cid:3)statements(cid:3)of(cid:3)subsidiaries(cid:3)have(cid:3)been(cid:3)adjusted(cid:3)where(cid:3)necessary(cid:3)to(cid:3)ensure(cid:3)consistency(cid:3)
with(cid:3)accounting(cid:3)policies(cid:3)adopted(cid:3)by(cid:3)the(cid:3)Company.(cid:3)
Profit(cid:3) or(cid:3) loss(cid:3) and(cid:3) other(cid:3) comprehensive(cid:3) income(cid:3) of(cid:3) subsidiaries(cid:3) acquired(cid:3) or(cid:3) disposed(cid:3) of(cid:3) during(cid:3) the(cid:3) year(cid:3) are(cid:3)
recognised(cid:3)from(cid:3)the(cid:3)effective(cid:3)date(cid:3)of(cid:3)acquisition,(cid:3)or(cid:3)up(cid:3)to(cid:3)the(cid:3)effective(cid:3)date(cid:3)of(cid:3)disposal,(cid:3)as(cid:3)applicable.(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
49
(cid:3)(cid:3)(cid:3)25(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(s)(cid:3)Basis(cid:3)of(cid:3)consolidation(cid:3)(continued)(cid:3)
Non(cid:882)controlling(cid:3)interests,(cid:3)presented(cid:3)as(cid:3)part(cid:3)of(cid:3)equity,(cid:3)represent(cid:3)the(cid:3)portion(cid:3)of(cid:3)a(cid:3)subsidiaries(cid:3)profit(cid:3)or(cid:3)loss(cid:3)and(cid:3)
net(cid:3) assets(cid:3) that(cid:3) is(cid:3) not(cid:3) held(cid:3) by(cid:3) the(cid:3) Company.(cid:3) (cid:3) The(cid:3) Company(cid:3) attributes(cid:3) total(cid:3) comprehensive(cid:3) income(cid:3) or(cid:3) loss(cid:3) of(cid:3)
subsidiaries(cid:3) between(cid:3) the(cid:3) owners(cid:3) of(cid:3) the(cid:3) parent(cid:3) and(cid:3) the(cid:3) non(cid:882)controlling(cid:3) interests(cid:3) based(cid:3) on(cid:3) their(cid:3) respective(cid:3)
ownership(cid:3)interests.(cid:3)
(t)
Critical(cid:3)Accounting(cid:3)Estimates(cid:3)and(cid:3)Judgements(cid:3)
Estimates(cid:3)and(cid:3)judgements(cid:3)are(cid:3)continually(cid:3)evaluated(cid:3)and(cid:3)are(cid:3)based(cid:3)on(cid:3)historical(cid:3)experience(cid:3)and(cid:3)other(cid:3)factors,(cid:3)
including(cid:3)expectations(cid:3)of(cid:3)future(cid:3)events(cid:3)that(cid:3)may(cid:3)have(cid:3)a(cid:3)financial(cid:3)impact(cid:3)on(cid:3)the(cid:3)Group(cid:3)and(cid:3)that(cid:3)are(cid:3)believed(cid:3)to(cid:3)
be(cid:3)reasonable(cid:3)under(cid:3)the(cid:3)circumstances.(cid:3)
(cid:3)
Accounting(cid:3)for(cid:3)capitalised(cid:3)mineral(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)expenditure(cid:3)
The(cid:3)Group’s(cid:3)accounting(cid:3)policy(cid:3)is(cid:3)stated(cid:3)at(cid:3)note(cid:3)1(k).(cid:3)(cid:3)A(cid:3)regular(cid:3)review(cid:3)is(cid:3)undertaken(cid:3)of(cid:3)each(cid:3)area(cid:3)of(cid:3)interest(cid:3)to(cid:3)
determine(cid:3)the(cid:3)reasonableness(cid:3)of(cid:3)the(cid:3)continuing(cid:3)carrying(cid:3)forward(cid:3)of(cid:3)costs(cid:3)in(cid:3)relation(cid:3)to(cid:3)that(cid:3)area(cid:3)of(cid:3)interest.(cid:3)
Mine(cid:3)restoration(cid:3)provisions(cid:3)estimates(cid:3)
The(cid:3)provision(cid:3)for(cid:3)rehabilitation(cid:3)and(cid:3)restoration(cid:3)costs(cid:3)is(cid:3)based(cid:3)on(cid:3)the(cid:3)net(cid:3)present(cid:3)value(cid:3)of(cid:3)the(cid:3)estimated(cid:3)cost(cid:3)of(cid:3)
restoring(cid:3)the(cid:3)environmental(cid:3)disturbance(cid:3)that(cid:3)has(cid:3)occurred(cid:3)up(cid:3)to(cid:3)the(cid:3)reporting(cid:3)date.(cid:3)(cid:3)Significant(cid:3)estimates(cid:3)and(cid:3)
assumptions(cid:3)are(cid:3)made(cid:3)in(cid:3)determining(cid:3)the(cid:3)provision(cid:3)for(cid:3)mine(cid:3)rehabilitation(cid:3)as(cid:3)there(cid:3)are(cid:3)numerous(cid:3)factors(cid:3)that(cid:3)
will(cid:3) affect(cid:3) the(cid:3) ultimate(cid:3) liability(cid:3) payable.(cid:3) (cid:3) These(cid:3) factors(cid:3) include(cid:3) an(cid:3) estimate(cid:3) of(cid:3) the(cid:3) extent(cid:3) and(cid:3) costs(cid:3) of(cid:3)
rehabilitation(cid:3)activities,(cid:3)technological(cid:3)changes,(cid:3)regulatory(cid:3)changes,(cid:3)costs(cid:3)increases(cid:3)as(cid:3)compared(cid:3)to(cid:3)the(cid:3)inflation(cid:3)
rates(cid:3)and(cid:3)changes(cid:3)in(cid:3)discount(cid:3)rates.(cid:3)(cid:3)These(cid:3)uncertainties(cid:3)may(cid:3)result(cid:3)in(cid:3)future(cid:3)actual(cid:3)expenditure(cid:3)differing(cid:3)from(cid:3)
the(cid:3)amounts(cid:3)currently(cid:3)provided.(cid:3)(cid:3)The(cid:3)provision(cid:3)at(cid:3)reporting(cid:3)date(cid:3)represents(cid:3)management’s(cid:3)best(cid:3)estimate(cid:3)of(cid:3)the(cid:3)
present(cid:3)value(cid:3)of(cid:3)the(cid:3)future(cid:3)rehabilitation(cid:3)costs(cid:3)required.(cid:3)
Measurement(cid:3)of(cid:3)share(cid:3)based(cid:3)payments(cid:3)
The(cid:3)Group(cid:3)measures(cid:3)the(cid:3)cost(cid:3)of(cid:3)equity(cid:3)settled(cid:3)transactions(cid:3)with(cid:3)employees(cid:3)by(cid:3)reference(cid:3)to(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)the(cid:3)
equity(cid:3)instruments(cid:3)at(cid:3)the(cid:3)date(cid:3)at(cid:3)which(cid:3)they(cid:3)are(cid:3)granted.(cid:3)(cid:3)The(cid:3)fair(cid:3)value(cid:3)is(cid:3)determined(cid:3)using(cid:3)an(cid:3)appropriate(cid:3)
valuation(cid:3)model.(cid:3)(cid:3)The(cid:3)valuation(cid:3)basis(cid:3)and(cid:3)related(cid:3)assumptions(cid:3)are(cid:3)detailed(cid:3)in(cid:3)note(cid:3)18.(cid:3)(cid:3)The(cid:3)accounting(cid:3)estimates(cid:3)
and(cid:3)assumptions(cid:3)relating(cid:3)to(cid:3)the(cid:3)equity(cid:3)settled(cid:3)transactions(cid:3)would(cid:3)have(cid:3)no(cid:3)impact(cid:3)on(cid:3)the(cid:3)carrying(cid:3)value(cid:3)of(cid:3)assets(cid:3)
and(cid:3)liabilities(cid:3)within(cid:3)the(cid:3)next(cid:3)annual(cid:3)reporting(cid:3)period(cid:3)but(cid:3)may(cid:3)impact(cid:3)expenses(cid:3)and(cid:3)equity.(cid:3)
(u)
Adoption(cid:3)of(cid:3)New(cid:3)and(cid:3)Revised(cid:3)Accounting(cid:3)Standards(cid:3)
A(cid:3)number(cid:3)of(cid:3)new(cid:3)and(cid:3)revised(cid:3)standards(cid:3)are(cid:3)effective(cid:3)for(cid:3)the(cid:3)current(cid:3)reporting(cid:3)period,(cid:3)however(cid:3)there(cid:3)was(cid:3)no(cid:3)
need(cid:3)to(cid:3)change(cid:3)accounting(cid:3)policies(cid:3)or(cid:3)make(cid:3)retrospective(cid:3)adjustments(cid:3)as(cid:3)a(cid:3)result(cid:3)of(cid:3)adopting(cid:3)these(cid:3)standards.(cid:3)(cid:3)
Information(cid:3)of(cid:3)these(cid:3)new(cid:3)standards(cid:3)is(cid:3)presented(cid:3)below.(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)26(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
50
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)1(cid:3) Summary(cid:3)of(cid:3)Significant(cid:3)Accounting(cid:3)Policies(cid:3)(continued)(cid:3)
(u)(cid:3)Adoption(cid:3)of(cid:3)New(cid:3)and(cid:3)Revised(cid:3)Accounting(cid:3)Standards(cid:3)(continued)(cid:3)
New/revised(cid:3)
pronouncement(cid:3)
AASB(cid:3)9(cid:3)Financial(cid:3)
Instruments(cid:3)(cid:3)
Nature(cid:3)of(cid:3)change(cid:3)
AASB(cid:3) introduces(cid:3) new(cid:3) requirements(cid:3) for(cid:3) the(cid:3)
classification(cid:3) and(cid:3) measurement(cid:3) of(cid:3) financial(cid:3)
assets(cid:3) and(cid:3) liabilities(cid:3) and(cid:3) includes(cid:3) a(cid:3) forward(cid:882)
looking(cid:3)‘expected(cid:3)loss’(cid:3)impairment(cid:3)model(cid:3)and(cid:3)
a(cid:3) substantially(cid:882)changed(cid:3) approach(cid:3) to(cid:3) hedge(cid:3)
accounting.(cid:3)
These(cid:3)requirements(cid:3)improve(cid:3)and(cid:3)simplify(cid:3)the(cid:3)
approach(cid:3)for(cid:3)classification(cid:3)and(cid:3)measurement(cid:3)
of(cid:3)
financial(cid:3) assets(cid:3) compared(cid:3) with(cid:3) the(cid:3)
requirements(cid:3)of(cid:3)AASB(cid:3)139.(cid:3)
requirements(cid:3)
AASB(cid:3) 9(cid:3)
regarding(cid:3) hedge(cid:3)
accounting(cid:3) represent(cid:3) a(cid:3) substantial(cid:3) overhaul(cid:3)
of(cid:3) hedge(cid:3) accounting(cid:3) that(cid:3) enable(cid:3) entities(cid:3) to(cid:3)
better(cid:3)reflect(cid:3)their(cid:3)risk(cid:3)management(cid:3)activities(cid:3)
in(cid:3)the(cid:3)financial(cid:3)statements.(cid:3)
Effective(cid:3)
Date(cid:3)
1(cid:3)January(cid:3)
2018(cid:3)
Likely(cid:3)impact(cid:3)on(cid:3)initial(cid:3)application(cid:3)
The(cid:3)Group(cid:3)is(cid:3)yet(cid:3)to(cid:3)undertake(cid:3)a(cid:3)detailed(cid:3)
assessment(cid:3) of(cid:3) the(cid:3) impact(cid:3) of(cid:3) AASB(cid:3) 9.(cid:3)
However,(cid:3) based(cid:3) on(cid:3)
the(cid:3) Group’s(cid:3)
preliminary(cid:3)assessment,(cid:3)the(cid:3)Standard(cid:3)is(cid:3)
not(cid:3)expected(cid:3)to(cid:3)have(cid:3)a(cid:3)material(cid:3)impact(cid:3)
transactions(cid:3) and(cid:3) balances(cid:3)
on(cid:3)
recognised(cid:3) in(cid:3) the(cid:3) financial(cid:3) statements(cid:3)
when(cid:3) it(cid:3) is(cid:3) first(cid:3) adopted(cid:3) for(cid:3) the(cid:3) year(cid:3)
ending(cid:3)30(cid:3)June(cid:3)2019.(cid:3)
the(cid:3)
Furthermore,(cid:3) AASB(cid:3) 9(cid:3)
introduces(cid:3) a(cid:3) new(cid:3)
impairment(cid:3)model(cid:3)based(cid:3)on(cid:3)expected(cid:3)credit(cid:3)
losses.(cid:3) This(cid:3) model(cid:3) makes(cid:3) use(cid:3) of(cid:3) more(cid:3)
forward(cid:882)looking(cid:3)information(cid:3)and(cid:3)applies(cid:3)to(cid:3)all(cid:3)
financial(cid:3) instruments(cid:3) that(cid:3) are(cid:3) subject(cid:3) to(cid:3)
impairment(cid:3)accounting.(cid:3)
(cid:3)
AASB(cid:3) 15(cid:3) replaces(cid:3) AASB(cid:3) 118(cid:3) Revenue,(cid:3) AASB(cid:3)
111(cid:3) Construction(cid:3) Contracts(cid:3) and(cid:3)
some(cid:3)
revenue(cid:882)related(cid:3)interpretations:(cid:3)
(cid:882)
Establishes(cid:3) a(cid:3) new(cid:3) revenue(cid:3) recognition(cid:3)
model(cid:3)
Changes(cid:3) the(cid:3) basis(cid:3) for(cid:3) deciding(cid:3) whether(cid:3)
revenue(cid:3)is(cid:3)to(cid:3)be(cid:3)recognised(cid:3)over(cid:3)time(cid:3)or(cid:3)
at(cid:3)a(cid:3)point(cid:3)in(cid:3)time(cid:3)
Provides(cid:3) new(cid:3) and(cid:3) more(cid:3) detailed(cid:3)
guidance(cid:3)on(cid:3)specific(cid:3)topics(cid:3)(e.g.(cid:3)multiple(cid:3)
element(cid:3)arrangements,(cid:3)variable(cid:3)pricing,(cid:3)
rights(cid:3) of(cid:3)
return,(cid:3) warranties(cid:3) and(cid:3)
licensing)(cid:3)
Expands(cid:3)and(cid:3)improves(cid:3)disclosures(cid:3)about(cid:3)
revenue.(cid:3)
(cid:3)
AASB(cid:3)16:(cid:3)
(cid:882)
Replaces(cid:3) AASB(cid:3) 117(cid:3) Leases(cid:3) and(cid:3) some(cid:3)
lease(cid:882)related(cid:3)interpretations.(cid:3)
Requires(cid:3) all(cid:3) leases(cid:3) to(cid:3) be(cid:3) accounted(cid:3) for(cid:3)
‘on(cid:882)balance(cid:3)sheet’(cid:3)by(cid:3)lessees,(cid:3)other(cid:3)than(cid:3)
short(cid:882)term(cid:3)and(cid:3)low(cid:3)value(cid:3)asset(cid:3)leases(cid:3)(cid:3)
the(cid:3)
Provides(cid:3)
application(cid:3)of(cid:3)the(cid:3)definition(cid:3)of(cid:3)lease(cid:3)and(cid:3)
on(cid:3)sale(cid:3)and(cid:3)lease(cid:3)back(cid:3)accounting(cid:3)
Largely(cid:3)
accounting(cid:3)requirements(cid:3)in(cid:3)AASB(cid:3)117(cid:3)
Requires(cid:3) new(cid:3) and(cid:3) different(cid:3) disclosures(cid:3)
about(cid:3)leases.(cid:3)
the(cid:3) existing(cid:3)
guidance(cid:3)
retains(cid:3)
lessor(cid:3)
new(cid:3)
on(cid:3)
(cid:3)
AASB(cid:3)15(cid:3)Revenue(cid:3)
from(cid:3)Contracts(cid:3)with(cid:3)
Customers(cid:3)
(cid:3)
AASB(cid:3)16(cid:3)Leases(cid:3)
(cid:3)
(cid:3)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:3)
1(cid:3)January(cid:3)
2018(cid:3)
(cid:3)
The(cid:3)Group(cid:3)is(cid:3)yet(cid:3)to(cid:3)undertake(cid:3)a(cid:3)detailed(cid:3)
assessment(cid:3) of(cid:3) the(cid:3) impact(cid:3) of(cid:3) AASB(cid:3) 15.(cid:3)(cid:3)
However,(cid:3) based(cid:3) on(cid:3)
the(cid:3) Group’s(cid:3)
preliminary(cid:3)assessment,(cid:3)the(cid:3)Standard(cid:3)is(cid:3)
not(cid:3)expected(cid:3)to(cid:3)have(cid:3)a(cid:3)material(cid:3)impact(cid:3)
on(cid:3)
transaction(cid:3) and(cid:3) balances(cid:3)
recognised(cid:3) in(cid:3) the(cid:3) financial(cid:3) statements(cid:3)
when(cid:3) it(cid:3) is(cid:3) first(cid:3) adopted(cid:3) for(cid:3) the(cid:3) year(cid:3)
ended(cid:3)30(cid:3)June(cid:3)2019.(cid:3)(cid:3)
the(cid:3)
(cid:3)
1(cid:3)January(cid:3)
2019(cid:3)
(cid:3)
The(cid:3)Group(cid:3)will(cid:3)adopt(cid:3)this(cid:3)standard(cid:3)from(cid:3)
1(cid:3)July(cid:3)2019,(cid:3)the(cid:3)impact(cid:3)of(cid:3)its(cid:3)adoption(cid:3)is(cid:3)
currently(cid:3)being(cid:3)assessed(cid:3)by(cid:3)the(cid:3)Group.(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
51
(cid:3)(cid:3)(cid:3)27(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)2(cid:3) Segment(cid:3)Information(cid:3)
The(cid:3)Group(cid:3)has(cid:3)identified(cid:3)its(cid:3)operating(cid:3)segments(cid:3)based(cid:3)on(cid:3)the(cid:3)internal(cid:3)reports(cid:3)that(cid:3)are(cid:3)reviewed(cid:3)and(cid:3)used(cid:3)by(cid:3)the(cid:3)
Board(cid:3)of(cid:3)Directors(cid:3)in(cid:3)assessing(cid:3)performance(cid:3)and(cid:3)determining(cid:3)the(cid:3)allocation(cid:3)of(cid:3)resources.(cid:3)(cid:3)(cid:3)
Reportable(cid:3)segments(cid:3)disclosed(cid:3)are(cid:3)based(cid:3)on(cid:3)aggregating(cid:3)operating(cid:3)segments,(cid:3)where(cid:3)the(cid:3)segments(cid:3)have(cid:3)similar(cid:3)
characteristics.(cid:3) The(cid:3) Group’s(cid:3) sole(cid:3) activity(cid:3) is(cid:3) mineral(cid:3) exploration(cid:3) and(cid:3) development(cid:3) wholly(cid:3) within(cid:3) Australia,(cid:3)
therefore(cid:3)it(cid:3)has(cid:3)aggregated(cid:3)all(cid:3)operating(cid:3)segments(cid:3)into(cid:3)the(cid:3)one(cid:3)reportable(cid:3)segment(cid:3)being(cid:3)mineral(cid:3)exploration(cid:3)
and(cid:3)development.(cid:3)
The(cid:3)reportable(cid:3)segment(cid:3)is(cid:3)represented(cid:3)by(cid:3)the(cid:3)primary(cid:3)statements(cid:3)forming(cid:3)these(cid:3)financial(cid:3)statements.(cid:3)
(cid:3)
Note(cid:3)3(cid:3) Revenue(cid:3)and(cid:3)Expenses(cid:3)
(cid:3)
(cid:3)
Loss(cid:3) for(cid:3) the(cid:3) year(cid:3) includes(cid:3) the(cid:3) following(cid:3) specific(cid:3) income(cid:3)
and(cid:3)expenses:(cid:3)
(cid:3)
Other(cid:3)income(cid:3)
Interest(cid:3)income(cid:3)
(cid:3)
Legal(cid:3)expenses(cid:3)
Insurance(cid:3)
Office(cid:3)rent(cid:3)
Other(cid:3)office(cid:3)occupancy(cid:3)expenses(cid:3)
(cid:3)
Employee(cid:3)expenses:(cid:3)
Salaries(cid:3)and(cid:3)wages(cid:3)
Director(cid:3)fees(cid:3)and(cid:3)consulting(cid:3)expenses(cid:3)
Defined(cid:3)contribution(cid:3)superannuation(cid:3)
Other(cid:3)employment(cid:3)expenses(cid:3)
Less:(cid:3)allocation(cid:3)to(cid:3)exploration(cid:3)&(cid:3)construction(cid:3)project(cid:3)costs
(cid:3)
(cid:3)
Note(cid:3)4(cid:3)
Income(cid:3)Tax(cid:3)
(cid:3)
Year(cid:3)ended(cid:3)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(cid:882)(cid:3)
822,252(cid:3)
(cid:3)
36,251(cid:3)
95,617(cid:3)
226,971(cid:3)
161,889(cid:3)
(cid:3)
(cid:3)
4,615,499(cid:3)
180,000(cid:3)
436,643(cid:3)
703,998(cid:3)
(4,160,635)(cid:3)
1,775,505(cid:3)
Year ended(cid:3)
30(cid:3)June
2016(cid:3)
$
15,641
316,771
21,990
79,591
87,595
59,201
3,246,853
113,333
292,483
342,617
(2,757,766)
1,237,520(cid:3)
Tax(cid:3)consolidation(cid:3)
The(cid:3)company(cid:3)and(cid:3)its(cid:3)100%(cid:3)owned(cid:3)controlled(cid:3)entities(cid:3)have(cid:3)formed(cid:3)a(cid:3)tax(cid:3)consolidated(cid:3)group.(cid:3)(cid:3)Members(cid:3)of(cid:3)the(cid:3)
Consolidated(cid:3)Entity(cid:3)have(cid:3)entered(cid:3)into(cid:3)a(cid:3)tax(cid:3)sharing(cid:3)arrangement(cid:3)in(cid:3)order(cid:3)to(cid:3)allocate(cid:3)income(cid:3)tax(cid:3)expense(cid:3)to(cid:3)the(cid:3)
wholly(cid:3)owned(cid:3)controlled(cid:3)entities(cid:3)on(cid:3)a(cid:3)pro(cid:882)rate(cid:3)basis.(cid:3)(cid:3)The(cid:3)agreement(cid:3)provides(cid:3)for(cid:3)the(cid:3)allocation(cid:3)of(cid:3)income(cid:3)tax(cid:3)
liabilities(cid:3)between(cid:3)the(cid:3)entities(cid:3)should(cid:3)the(cid:3)head(cid:3)entity(cid:3)default(cid:3)on(cid:3)its(cid:3)tax(cid:3)payment(cid:3)obligations.(cid:3)(cid:3)At(cid:3)reporting(cid:3)date,(cid:3)
the(cid:3)possibility(cid:3)of(cid:3)default(cid:3)is(cid:3)remote.(cid:3)(cid:3)The(cid:3)head(cid:3)entity(cid:3)of(cid:3)the(cid:3)tax(cid:3)consolidated(cid:3)group(cid:3)is(cid:3)Dacian(cid:3)Gold(cid:3)Limited.(cid:3) (cid:3)
(cid:3)
Tax(cid:3)effect(cid:3)accounting(cid:3)by(cid:3)members(cid:3)of(cid:3)the(cid:3)tax(cid:3)consolidated(cid:3)group(cid:3)
Members(cid:3)of(cid:3)the(cid:3)tax(cid:3)consolidated(cid:3)group(cid:3)have(cid:3)entered(cid:3)into(cid:3)a(cid:3)tax(cid:3)funding(cid:3)agreement.(cid:3)(cid:3)The(cid:3)tax(cid:3)funding(cid:3)agreement(cid:3)
provides(cid:3) for(cid:3) the(cid:3) allocation(cid:3) of(cid:3) current(cid:3) taxes(cid:3) to(cid:3) members(cid:3) of(cid:3) the(cid:3) tax(cid:3) consolidated(cid:3) group.(cid:3) (cid:3)Deferred (cid:3) taxes(cid:3) are(cid:3)
allocated(cid:3)to(cid:3)members(cid:3)of(cid:3)the(cid:3)tax(cid:3)consolidated(cid:3)group(cid:3)in(cid:3)accordance(cid:3)with(cid:3)a(cid:3)group(cid:3)allocation(cid:3)approach(cid:3)which(cid:3)is(cid:3)
consistent(cid:3) with(cid:3) the(cid:3) principles(cid:3) of(cid:3) AASB(cid:3) 112(cid:3) Income(cid:3) Taxes.(cid:3) (cid:3)The(cid:3) allocation(cid:3) of(cid:3) taxes(cid:3) under(cid:3) the(cid:3) tax(cid:3) funding(cid:3)
agreement(cid:3)is(cid:3)recognised(cid:3)as(cid:3)an(cid:3)increase/decrease(cid:3)in(cid:3)the(cid:3)controlled(cid:3)entities(cid:3)intercompany(cid:3)accounts(cid:3)with(cid:3)the(cid:3)tax(cid:3)
consolidated(cid:3)group(cid:3)head(cid:3)company,(cid:3)Dacian(cid:3)Gold(cid:3)Limited.(cid:3)
(cid:3)
In(cid:3)this(cid:3)regard(cid:3)the(cid:3)Company(cid:3)has(cid:3)assumed(cid:3)the(cid:3)benefit(cid:3)of(cid:3)tax(cid:3)losses(cid:3)from(cid:3)controlled(cid:3)entities(cid:3)of(cid:3)$10,061,199(cid:3)(2016:(cid:3)
$Nil)(cid:3) as(cid:3) of(cid:3) the(cid:3) reporting(cid:3) date.(cid:3) (cid:3)The (cid:3) nature(cid:3) of(cid:3) the(cid:3) tax(cid:3) funding(cid:3) agreement(cid:3) is(cid:3) such(cid:3) that(cid:3) no(cid:3) tax(cid:3) consolidation(cid:3)
contributions(cid:3)by(cid:3)or(cid:3)distributions(cid:3)to(cid:3)equity(cid:3)participants(cid:3)are(cid:3)required.(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)28(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
52
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)4(cid:3)
Income(cid:3)Tax(cid:3)(continued)(cid:3)
(cid:3)
a) Income(cid:3)tax(cid:3)expense(cid:3)(cid:3)
(cid:3)
(cid:3)
Current(cid:3)income(cid:3)tax:(cid:3)
Current(cid:3)income(cid:3)tax(cid:3)charge(cid:3)(benefit)(cid:3)
Current(cid:3)income(cid:3)tax(cid:3)not(cid:3)recognised(cid:3)
Research(cid:3)and(cid:3)development(cid:3)tax(cid:3)concession(cid:3)(i)
Deferred(cid:3)income(cid:3)tax:(cid:3)
Relating(cid:3)to(cid:3)origination(cid:3)and(cid:3)reversal(cid:3)of(cid:3)timing(cid:3)differences
Deferred(cid:3)income(cid:3)tax(cid:3)benefit(cid:3)not(cid:3)recognised
Income(cid:3)tax(cid:3)expense/(benefit)(cid:3)reported(cid:3)in(cid:3)the(cid:3)Statement(cid:3)of(cid:3)
Profit(cid:3)or(cid:3)Loss(cid:3)and(cid:3)Other(cid:3)Comprehensive(cid:3)Income(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(5,076,889)
5,076,889
(932,600)
6,820,206
(6,820,206)
30(cid:3)June
2016
$(cid:3)
(6,451,576)
6,451,576
(223,175)
6,845,277
(6,845,277)
(932,600)
(223,175)
(cid:3)
The(cid:3)Research(cid:3)and(cid:3)Development(cid:3)tax(cid:3)concession(cid:3)benefit(cid:3)recognised(cid:3)in(cid:3)the(cid:3)year(cid:3)ended(cid:3)30(cid:3)June(cid:3)2017(cid:3)relates(cid:3)
to(cid:3)applications(cid:3)made(cid:3)in(cid:3)respect(cid:3)of(cid:3)qualifying(cid:3)expenditure(cid:3)incurred(cid:3)during(cid:3)the(cid:3)2015(cid:3)and(cid:3)2016(cid:3)financial(cid:3)years(cid:3)
and(cid:3)lodged(cid:3)with(cid:3)AusIndustry.(cid:3)(cid:3)
(i)
(cid:3)
b) Reconciliation(cid:3)of(cid:3)consolidated(cid:3)(cid:3)income(cid:3)tax(cid:3)expense(cid:3)to(cid:3)
prima(cid:3)facie(cid:3)tax(cid:3)payable(cid:3)
Loss(cid:3)from(cid:3)continuing(cid:3)operations(cid:3)before(cid:3)income(cid:3)tax(cid:3)
expense(cid:3)
Tax(cid:3)at(cid:3)the(cid:3)Australian(cid:3)rate(cid:3)of(cid:3)30%(cid:3)(cid:3)
(2016(cid:3)–(cid:3)30%)(cid:3)
Tax(cid:3)effect(cid:3)of(cid:3)permanent(cid:3)differences:(cid:3)
Non(cid:882)deductible(cid:3)expenses(cid:3)
Research(cid:3)and(cid:3)development(cid:3)tax(cid:3)concession
Capital(cid:3)raising(cid:3)costs(cid:3)claimed(cid:3)
Tax(cid:3)effect(cid:3)of(cid:3)other(cid:3)differences:(cid:3)
Net(cid:3)deferred(cid:3)tax(cid:3)asset(cid:3)benefit(cid:3)not(cid:3)brought(cid:3)(cid:3)to(cid:3)account
Tax(cid:3)(benefit)/expense(cid:3)
c) Deferred(cid:3)tax(cid:3)–(cid:3)Consolidated(cid:3)statement(cid:3)of(cid:3)Financial(cid:3)
Position(cid:3)
Liabilities(cid:3)
Prepaid(cid:3)expenses(cid:3)
Accrued(cid:3)income(cid:3)
Inventories(cid:3)
Mine(cid:3)Development(cid:3)
Capitalised(cid:3)exploration(cid:3)expenditure(cid:3)
(cid:3)
Assets(cid:3)
Revenue(cid:3)losses(cid:3)available(cid:3)to(cid:3)offset(cid:3)against(cid:3)future(cid:3)taxable(cid:3)
income(cid:3)
Rehabilitation(cid:3)provision
Employee(cid:3)leave(cid:3)provisions(cid:3)
Other(cid:3)financial(cid:3)assets(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Business(cid:3)related(cid:3)costs(cid:3)
(cid:3)
Net(cid:3)deferred(cid:3)tax(cid:3)asset/(liability)(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
53
(cid:3)
(cid:3)
(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(19,790,514)(cid:3)
(cid:3)
(5,937,154)(cid:3)
(cid:3)
533,980(cid:3)
(932,600)(cid:3)
(467,909)(cid:3)
(cid:3)
5,871,083(cid:3)
(932,600)(cid:3)
(30,768)(cid:3)
(29,166)(cid:3)
(79,604)(cid:3)
(2,078,007)(cid:3)
874,937(cid:3)
(1,342,608)(cid:3)
(cid:3)
(cid:3)
18,601,101(cid:3)
582,909(cid:3)
129,940(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
1,464,950(cid:3)
20,778,900(cid:3)
30(cid:3)June
2016
$(cid:3)
(22,056,059)(cid:3)
(6,616,818)(cid:3)
189,927
(223,175)
(167,272)
6,594,163
(223,175)(cid:3)
(cid:3)
(cid:3)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(2,115,457)
(2,115,457)(cid:3)
13,633,829(cid:3)
590,003
60,094
8,874
9,069
429,675
14,731,544(cid:3)
19,436,293(cid:3)
12,616,087(cid:3)
(cid:3)(cid:3)(cid:3)29(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Income(cid:3)Tax(cid:3)(continued)(cid:3)
Note(cid:3)4(cid:3)
(cid:3)
(cid:3)
d)
(cid:3)Deferred(cid:3)tax(cid:3)–(cid:3)Statement(cid:3)of(cid:3)Profit(cid:3)or(cid:3)Loss(cid:3)and(cid:3)Other(cid:3)
Comprehensive(cid:3)Income(cid:3)
Liabilities(cid:3)
(Increase)/decrease(cid:3)in(cid:3)prepaid(cid:3)expenses
(Increase)/decrease(cid:3)in(cid:3)accrued(cid:3)income(cid:3)
(Increase)/decrease(cid:3)in(cid:3)inventories(cid:3)
(Increase)/decrease(cid:3)in(cid:3)mine(cid:3)development
(Increase)/decrease(cid:3)in(cid:3)capitalised(cid:3)exploration(cid:3)expenditure
(cid:3)
Assets(cid:3)
Increase/(decrease)(cid:3)in(cid:3)revenue(cid:3)losses(cid:3)available(cid:3)to(cid:3)offset(cid:3)
against(cid:3)future(cid:3)taxable(cid:3)income(cid:3)
Increase/(decrease)(cid:3)in(cid:3)rehabilitation(cid:3)provision
Increase/(decrease)(cid:3)in(cid:3)employee(cid:3)leave(cid:3)provisions
Increase/(decrease)(cid:3)in(cid:3)other(cid:3)financial(cid:3)assets
Increase/(decrease)(cid:3)in(cid:3)accruals(cid:3)
Increase/(decrease)(cid:3)in(cid:3)deductible(cid:3)equity(cid:3)raising(cid:3)costs
Deferred(cid:3)tax(cid:3)benefit/(expense)(cid:3)not(cid:3)recognised(cid:3)
(cid:3)
Year(cid:3)ended(cid:3)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(30,768)(cid:3)
(29,166)(cid:3)
(79,604)(cid:3)
(2,078,007)(cid:3)
2,990,394(cid:3)
(cid:3)
(cid:3)
4,967,272(cid:3)
(7,093)(cid:3)
69,846(cid:3)
(8,874)(cid:3)
(9,069)(cid:3)
1,035,275(cid:3)
6,820,206(cid:3)
Year(cid:3)ended(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:882)
2,016
(cid:882)
(cid:882)
324,097
6,197,443(cid:3)
15,623
39,279
8,874
(8,931)
266,876
6,845,277(cid:3)
Deferred(cid:3)tax(cid:3)assets(cid:3)have(cid:3)been(cid:3)recognised(cid:3)to(cid:3)the(cid:3)extent(cid:3)that(cid:3)they(cid:3)extinguish(cid:3)deferred(cid:3)tax(cid:3)liabilities(cid:3)of(cid:3)the(cid:3)
Company(cid:3)as(cid:3)at(cid:3)the(cid:3)reporting(cid:3)date.(cid:3)(cid:3)
Net(cid:3)deferred(cid:3)tax(cid:3)assets(cid:3)have(cid:3)not(cid:3)been(cid:3)recognised,(cid:3)in(cid:3)either(cid:3)reporting(cid:3)period,(cid:3)in(cid:3)respect(cid:3)of(cid:3)amounts(cid:3)in(cid:3)excess(cid:3)of(cid:3)
deferred(cid:3)tax(cid:3)liabilities.(cid:3)
(cid:3)
The(cid:3)deferred(cid:3)tax(cid:3)benefit(cid:3)of(cid:3)tax(cid:3)losses(cid:3)not(cid:3)brought(cid:3)to(cid:3)account(cid:3)will(cid:3)only(cid:3)be(cid:3)obtained(cid:3)if:(cid:3)
(cid:3)
(i)
The(cid:3)Company(cid:3)derives(cid:3)future(cid:3)assessable(cid:3)income(cid:3)of(cid:3)a(cid:3)nature(cid:3)and(cid:3)an(cid:3)amount(cid:3)sufficient(cid:3)to(cid:3)enable(cid:3)the(cid:3)benefit(cid:3)
from(cid:3)the(cid:3)tax(cid:3)losses(cid:3)to(cid:3)be(cid:3)realised;(cid:3)
The(cid:3)Company(cid:3)continues(cid:3)to(cid:3)comply(cid:3)with(cid:3)the(cid:3)conditions(cid:3)for(cid:3)deductibility(cid:3)imposed(cid:3)by(cid:3)tax(cid:3)legislation;(cid:3)and(cid:3)
No(cid:3)changes(cid:3)in(cid:3)tax(cid:3)legislation(cid:3)adversely(cid:3)affect(cid:3)the(cid:3)Company(cid:3)realising(cid:3)the(cid:3)benefit(cid:3)from(cid:3)the(cid:3)deduction(cid:3)of(cid:3)the(cid:3)
losses.(cid:3)
(ii)
(iii)
(cid:3)
All(cid:3)unused(cid:3)tax(cid:3)losses(cid:3)of(cid:3)$62,003,669(cid:3)(2016:(cid:3)$45,446,094)(cid:3)were(cid:3)incurred(cid:3)by(cid:3)Australian(cid:3)entities.(cid:3)
(cid:3)
Note(cid:3)5(cid:3) Earnings(cid:3)per(cid:3)Share(cid:3)
(cid:3)
(cid:3)
a)(cid:3)(cid:3)Basic(cid:3)earnings(cid:3)per(cid:3)share(cid:3)
(cid:3)
Loss(cid:3)attributable(cid:3)to(cid:3)ordinary(cid:3)equity(cid:3)holders(cid:3)of(cid:3)the(cid:3)Company
(cid:3)
b)(cid:3)(cid:3)Diluted(cid:3)earnings(cid:3)per(cid:3)share(cid:3)
(cid:3)
Loss(cid:3)attributable(cid:3)to(cid:3)ordinary(cid:3)equity(cid:3)holders(cid:3)of(cid:3)the(cid:3)Company
Year(cid:3)ended(cid:3)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
Cents(cid:3)
(cid:3)
(cid:3)
(11.9)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(11.9)(cid:3)
Year(cid:3)ended(cid:3)
30(cid:3)June
2016(cid:3)
Cents
(18.5)
(18.5)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)30(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
54
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)5(cid:3) Earnings(cid:3)per(cid:3)Share(cid:3)(continued)(cid:3)
c)(cid:3)(cid:3)Loss(cid:3)used(cid:3)in(cid:3)calculation(cid:3)of(cid:3)basic(cid:3)and(cid:3)diluted(cid:3)loss(cid:3)per(cid:3)share
Loss(cid:3)after(cid:3)tax(cid:3)from(cid:3)continuing(cid:3)operations(cid:3)
(cid:3)
d)(cid:3) Weighted(cid:3) average(cid:3) number(cid:3) of(cid:3) shares(cid:3) used(cid:3) as(cid:3) the(cid:3)
denominator(cid:3)
Weighted(cid:3)average(cid:3)number(cid:3)of(cid:3)shares(cid:3)used(cid:3)as(cid:3)the(cid:3)denominator(cid:3)
in(cid:3)calculating(cid:3)basic(cid:3)and(cid:3)dilutive(cid:3)loss(cid:3)per(cid:3)share(cid:3)
(cid:3)
(cid:3)
Year(cid:3)ended(cid:3)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(18,857,914)(cid:3)
(cid:3)
No.(cid:3)
(cid:3)
Year(cid:3)ended(cid:3)
30(cid:3)June
2016(cid:3)
$
(21,832,884)(cid:3)
No.
158,264,131(cid:3)
118,222,614(cid:3)
(cid:3)
At(cid:3)30(cid:3)June(cid:3)2017(cid:3)the(cid:3)Company(cid:3)has(cid:3)on(cid:3)issue(cid:3)12,000,000(cid:3)(2016:(cid:3)13,150,000)(cid:3)unlisted(cid:3)options(cid:3)over(cid:3)ordinary(cid:3)shares(cid:3)
that(cid:3)are(cid:3)not(cid:3)considered(cid:3)to(cid:3)be(cid:3)dilutive(cid:3)as(cid:3)the(cid:3)potential(cid:3)increase(cid:3)in(cid:3)shares(cid:3)on(cid:3)issue(cid:3)would(cid:3)decrease(cid:3)the(cid:3)loss(cid:3)per(cid:3)
share.(cid:3)
(cid:3)
Note(cid:3)6(cid:3) Dividends(cid:3)
No(cid:3)dividends(cid:3)were(cid:3)paid(cid:3)or(cid:3)proposed(cid:3)during(cid:3)the(cid:3)financial(cid:3)year(cid:3)ended(cid:3)30(cid:3)June(cid:3)2017(cid:3)(2016:(cid:3)$Nil).(cid:3)
(cid:3)
The(cid:3)Company(cid:3)has(cid:3)no(cid:3)franking(cid:3)credits(cid:3)available(cid:3)as(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)(2016:(cid:3)$Nil).(cid:3)
(cid:3)
Note(cid:3)7(cid:3) Cash(cid:3)and(cid:3)Cash(cid:3)Equivalents(cid:3)
(cid:3)
(cid:3)
Cash(cid:3)at(cid:3)bank1(cid:3)
Deposits(cid:3)at(cid:3)call2(cid:3)
(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
90,163,337(cid:3)
(cid:882)(cid:3)
90,163,337(cid:3)
30(cid:3)June
2016(cid:3)
$
6,138,645(cid:3)
3,509,780
9,648,425(cid:3)
(cid:3)
(cid:3)
1(cid:3)Cash(cid:3)at(cid:3)bank(cid:3)earns(cid:3)interest(cid:3)at(cid:3)floating(cid:3)rates(cid:3)based(cid:3)on(cid:3)daily(cid:3)deposit(cid:3)rates.(cid:3)
2(cid:3)Short(cid:3)term(cid:3)deposits,(cid:3)the(cid:3)duration(cid:3)of(cid:3)which(cid:3)is(cid:3)dependent(cid:3)on(cid:3)the(cid:3)immediate(cid:3)cash(cid:3)requirements(cid:3)of(cid:3)the(cid:3)Group.(cid:3)(cid:3)
These(cid:3)deposits(cid:3)earn(cid:3)interest(cid:3)at(cid:3)the(cid:3)respective(cid:3)short(cid:3)term(cid:3)interest(cid:3)rates.(cid:3)(cid:3)
At(cid:3)30(cid:3)June(cid:3)2017(cid:3)the(cid:3)Group(cid:3)had(cid:3)a(cid:3)A$150M(cid:3)undrawn(cid:3)syndicated(cid:3)project(cid:3)development(cid:3)facility(cid:3)(30(cid:3)June(cid:3)2016:(cid:3)$Nil).(cid:3)(cid:3)
Refer(cid:3)to(cid:3)note(cid:3)14(cid:3)for(cid:3)further(cid:3)discussion.(cid:3)
Reconciliation(cid:3)to(cid:3)the(cid:3)Statement(cid:3)of(cid:3)Cash(cid:3)Flows:(cid:3)
For(cid:3)the(cid:3)purposes(cid:3)of(cid:3)the(cid:3)Statement(cid:3)of(cid:3)Cash(cid:3)Flows,(cid:3)cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)comprise(cid:3)cash(cid:3)on(cid:3)hand(cid:3)and(cid:3)at(cid:3)bank(cid:3)
and(cid:3)investments(cid:3)in(cid:3)money(cid:3)market(cid:3)instruments,(cid:3)net(cid:3)of(cid:3)any(cid:3)outstanding(cid:3)bank(cid:3)overdrafts.(cid:3)
Cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)as(cid:3)shown(cid:3)in(cid:3)the(cid:3)Statement(cid:3)of(cid:3)Cash(cid:3)Flows(cid:3)is(cid:3)reconciled(cid:3)to(cid:3)the(cid:3)related(cid:3)items(cid:3)in(cid:3)the(cid:3)
Statement(cid:3)of(cid:3)Financial(cid:3)Position(cid:3)as(cid:3)follows:(cid:3)
(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
30(cid:3)June
2016(cid:3)
$
Cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)
(cid:3)
90,163,337(cid:3)
9,648,425(cid:3)
Non(cid:882)cash(cid:3)financing(cid:3)and(cid:3)investing(cid:3)activities:(cid:3)
There(cid:3)have(cid:3)been(cid:3)no(cid:3)non(cid:882)cash(cid:3)financing(cid:3)and(cid:3)investing(cid:3)activities(cid:3)for(cid:3)the(cid:3)year(cid:3)ended(cid:3)30(cid:3)June(cid:3)2017(cid:3)(2016:(cid:3)$Nil).(cid:3)
(cid:3)
(cid:3)
(cid:3)
55
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)31(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)7(cid:3) Cash(cid:3)and(cid:3)Cash(cid:3)Equivalents(cid:3)(continued)(cid:3)
(cid:3)
Cash(cid:3)balances(cid:3)held(cid:3)in(cid:3)reserve:(cid:3)
An(cid:3)amount(cid:3)of(cid:3)$15,000,000(cid:3)was(cid:3)reserved(cid:3)on(cid:3)deposit(cid:3)in(cid:3)respect(cid:3)of(cid:3)contingency(cid:3)funding(cid:3)for(cid:3)the(cid:3)development(cid:3)of(cid:3)
the(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)Project.(cid:3)(cid:3)The(cid:3)purpose(cid:3)of(cid:3)the(cid:3)reserved(cid:3)cash(cid:3)is(cid:3)to(cid:3)fund(cid:3)future(cid:3)unplanned(cid:3)development(cid:3)costs(cid:3)
and(cid:3) to(cid:3) provide(cid:3) funding(cid:3) support(cid:3) for(cid:3) debt(cid:3) service(cid:3) obligations(cid:3) under(cid:3) the(cid:3) syndicated(cid:3) project(cid:3) development(cid:3) debt(cid:3)
facility.(cid:3)(cid:3)At(cid:3)30(cid:3)June(cid:3)2017,(cid:3)the(cid:3)Group(cid:3)forecasts(cid:3)indicate(cid:3)there(cid:3)were(cid:3)no(cid:3)future(cid:3)requirements(cid:3)to(cid:3)use(cid:3)this(cid:3)reserved(cid:3)
cash.(cid:3)(cid:3)There(cid:3)were(cid:3)no(cid:3)other(cid:3)amounts(cid:3)included(cid:3)in(cid:3)cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)that(cid:3)are(cid:3)held(cid:3)in(cid:3)reserve(cid:3)as(cid:3)at(cid:3)30(cid:3)June(cid:3)
2017.(cid:3)
Reconciliation(cid:3) of(cid:3) loss(cid:3) after(cid:3) tax(cid:3) to(cid:3) net(cid:3) cash(cid:3) outflow(cid:3) from(cid:3)
operating(cid:3)activities:(cid:3)
(cid:3)
Loss(cid:3)from(cid:3)ordinary(cid:3)activities(cid:3)after(cid:3)income(cid:3)tax
Depreciation(cid:3)
Share(cid:3)based(cid:3)payments(cid:3)expense(cid:3)
Exploration(cid:3)expense(cid:3)for(cid:3)termination(cid:3)of(cid:3)royalty(cid:3)deed
Deferred(cid:3)exploration(cid:3)expense(cid:3)for(cid:3)tenements(cid:3)surrendered
Capitalised(cid:3)exploration(cid:3)expenditure(cid:3)
Movement(cid:3)in(cid:3)assets(cid:3)and(cid:3)liabilities:(cid:3)
(Increase)/decrease(cid:3)in(cid:3)prepaid(cid:3)expenses
(Increase)/decrease(cid:3)in(cid:3)accrued(cid:3)income
(Increase)/decrease(cid:3)in(cid:3)other(cid:3)receivables
Increase/(decrease)(cid:3)in(cid:3)rehabilitation(cid:3)provision
Increase/(decrease)(cid:3)in(cid:3)employee(cid:3)leave(cid:3)provisions
Increase/(decrease)(cid:3)in(cid:3)trade(cid:3)and(cid:3)other(cid:3)payables
Net(cid:3)cash(cid:3)flow(cid:3)from(cid:3)operating(cid:3)activities(cid:3)
(cid:3)
Note(cid:3)8(cid:3) Trade(cid:3)and(cid:3)Other(cid:3)Receivables(cid:3)
(cid:3)
Current(cid:3)assets(cid:3)
R&D(cid:3)Concession(cid:3)tax(cid:3)benefit(cid:3)receivable(cid:3)
GST(cid:3)receivable(cid:3)
Prepayments(cid:3)
Other(cid:3)receivables(cid:3)(cid:3) (cid:3)
(cid:3)
(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(18,857,914)(cid:3)
335,896(cid:3)
1,769,234(cid:3)
6,000,002(cid:3)
84,159(cid:3)
(2,536,174)(cid:3)
(cid:3)
(68,058)(cid:3)
(97,219)(cid:3)
(1,219,551)(cid:3)
(cid:882)(cid:3)
128,975(cid:3)
(2,103,600)(cid:3)
(16,564,250)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
97,219(cid:3)
1,204,603(cid:3)
2,012,705(cid:3)
102,559(cid:3)
3,417,086(cid:3)
30(cid:3)June
2016(cid:3)
$
(21,832,884)
245,595
629,723
(cid:882)
(cid:882)
(cid:882)
6,720
332,495
(5,540)
52,076
130,930
1,772,831
(18,668,054)(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:882)
90,123
(cid:882)
(cid:882)
90,123(cid:3)
The(cid:3)Group(cid:3)has(cid:3)no(cid:3)trading(cid:3)activity(cid:3)and(cid:3)as(cid:3)such(cid:3)has(cid:3)no(cid:3)trading(cid:3)receivables.(cid:3)The(cid:3)Group(cid:3)does(cid:3)not(cid:3)consider(cid:3)any(cid:3)of(cid:3)its(cid:3)
current(cid:3)receivables(cid:3)to(cid:3)be(cid:3)subject(cid:3)to(cid:3)impairment.(cid:3)
(cid:3)
Note(cid:3)9(cid:3)
Inventories(cid:3)
(cid:3)
Current(cid:3)assets(cid:3)
Mine(cid:3)spare(cid:3)and(cid:3)stores(cid:3)– cost(cid:3)
(cid:3)
Note(cid:3)10(cid:3)Other(cid:3)Financial(cid:3)Assets(cid:3)
(cid:3)
Non(cid:882)current(cid:3)assets(cid:3)
Security(cid:3)bonds(cid:3)and(cid:3)deposits(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
265,345(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
36,722(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:882)
30(cid:3)June
2016(cid:3)
$
34,211
(cid:3)
Other(cid:3)financial(cid:3)assets(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)represent(cid:3)a(cid:3)security(cid:3)deposit(cid:3)of(cid:3)$36,772(cid:3)in(cid:3)respect(cid:3)of(cid:3)the(cid:3)Company’s(cid:3)lease(cid:3)
of(cid:3)its(cid:3)Perth(cid:3)administration(cid:3)office.(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)32(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
56
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)11(cid:3)(cid:3)Property,(cid:3)Plant(cid:3)and(cid:3)Equipment(cid:3)
(cid:3)
(cid:3)
Carrying(cid:3)values(cid:3)(cid:3)
Office(cid:3)and(cid:3)computer(cid:3)equipment:(cid:3)
Cost(cid:3)(cid:3)
Depreciation(cid:3)
(cid:3)
Plant(cid:3)and(cid:3)equipment:(cid:3)
Cost(cid:3)
Depreciation(cid:3)
(cid:3)
Fixtures(cid:3)and(cid:3)fittings:(cid:3)
Cost(cid:3)
Depreciation(cid:3)
(cid:3)
Motor(cid:3)vehicles:(cid:3)
Cost(cid:3)
Depreciation(cid:3)
(cid:3)
Work(cid:3)in(cid:3)progress:(cid:3)
Cost(cid:3)
(cid:3)
Reconciliation(cid:3)of(cid:3)movements(cid:3)(cid:3)
Office(cid:3)and(cid:3)computer(cid:3)equipment:(cid:3)
Opening(cid:3)net(cid:3)book(cid:3)value(cid:3)
Additions(cid:3)
Depreciation(cid:3)
(cid:3)
Plant(cid:3)and(cid:3)equipment:(cid:3)
Opening(cid:3)net(cid:3)book(cid:3)value(cid:3)
Additions(cid:3)
Depreciation(cid:3)
(cid:3)
Fixtures(cid:3)and(cid:3)Fitting:(cid:3)
Opening(cid:3)net(cid:3)book(cid:3)value(cid:3)
Additions(cid:3)
Depreciation(cid:3)
(cid:3)
Motor(cid:3)Vehicles:(cid:3)
Opening(cid:3)net(cid:3)book(cid:3)value(cid:3)
Additions(cid:3)
Depreciation(cid:3)
(cid:3)
Work(cid:3)in(cid:3)Progress:(cid:3)
Cost(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(cid:3)
715,854(cid:3)
(265,531)(cid:3)
450,323(cid:3)
(cid:3)
946,542(cid:3)
(665,413)(cid:3)
281,129(cid:3)
(cid:3)
283,783(cid:3)
(97,933)(cid:3)
185,850(cid:3)
(cid:3)
652,931(cid:3)
(198,915)(cid:3)
454,016(cid:3)
(cid:3)
34,700(cid:3)
(cid:3)
1,406,018(cid:3)
(cid:3)
(cid:3)
55,359(cid:3)
484,737(cid:3)
(89,773)(cid:3)
450,323(cid:3)
(cid:3)
411,702(cid:3)
5,881(cid:3)
(136,454)(cid:3)
281,129(cid:3)
(cid:3)
39,875(cid:3)
200,074(cid:3)
(54,099)(cid:3)
185,850(cid:3)
(cid:3)
129,227(cid:3)
380,359(cid:3)
(55,570)(cid:3)
454,016(cid:3)
(cid:3)
34,700(cid:3)
(cid:3)
1,406,018(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:3)
232,758
(177,399)(cid:3)
55,359
940,661(cid:3)
(528,959)
411,702(cid:3)
83,709(cid:3)
(43,834)
39,875
(cid:3)
272,572
(143,345)(cid:3)
129,227
111,962(cid:3)
748,125(cid:3)
(cid:3)
58,012
49,854(cid:3)
(52,507)
55,359(cid:3)
233,257
311,234(cid:3)
(132,789)
411,702(cid:3)
43,566
13,627(cid:3)
(17,318)
39,875(cid:3)
61,390(cid:3)
110,818
(42,981)
129,227(cid:3)
111,962
748,125(cid:3)
The(cid:3)Group(cid:3)had(cid:3)no(cid:3)assets(cid:3)secured(cid:3)under(cid:3)finance(cid:3)lease(cid:3)at(cid:3)30(cid:3)June(cid:3)2017.(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
57
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)33(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)12(cid:3)(cid:3)Deferred(cid:3)Exploration(cid:3)and(cid:3)Evaluation(cid:3)Expenditure
(cid:3)
(cid:3)
Deferred(cid:3)exploration(cid:3)costs(cid:3)at(cid:3)the(cid:3)start(cid:3)of(cid:3)the(cid:3)financial(cid:3)year
Exploration(cid:3)and(cid:3)evaluation(cid:3)costs(cid:3)incurred
Royalty(cid:3)termination(cid:3)costs(cid:3)1(cid:3)
Transfers(cid:3)to(cid:3)mine(cid:3)properties(cid:3)in(cid:3)development
Movement(cid:3)in(cid:3)provision(cid:3)for(cid:3)rehabilitation(cid:3)costs 2
Exploration(cid:3)and(cid:3)evaluation(cid:3)costs(cid:3)expensed(cid:3)and(cid:3)written(cid:3)off 3
(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
8,131,847(cid:3)
11,394,620(cid:3)
6,014,752(cid:3)
(6,420,301)(cid:3)
(cid:882)(cid:3)
(14,957,356)(cid:3)
4,163,562(cid:3)
30(cid:3)June
2016(cid:3)
$
8,131,847
19,141,580
(cid:882)
(cid:882)
52,076
(19,193,656)
8,131,847(cid:3)
1(cid:3)During(cid:3) the(cid:3) period(cid:3) the(cid:3) Company(cid:3) issued(cid:3) 1,780,416(cid:3) ordinary(cid:3) shares(cid:3) to(cid:3) Macquarie(cid:3) Bank(cid:3) Limited(cid:3) (‘MBL’)(cid:3) being(cid:3)
settlement(cid:3)for(cid:3)the(cid:3)termination(cid:3)of(cid:3)the(cid:3)MBL(cid:3)Royalty(cid:3)Deed(cid:3)over(cid:3)certain(cid:3)tenements(cid:3)held(cid:3)by(cid:3)the(cid:3)company.(cid:3)(cid:3)The(cid:3)
MBL(cid:3)smelter(cid:3)return(cid:3)royalty(cid:3)was(cid:3)1%(cid:3)of(cid:3)gross(cid:3)revenue(cid:3)earned(cid:3)on(cid:3)491,617(cid:3)troy(cid:3)ounces(cid:3)of(cid:3)gold(cid:3)produced(cid:3)from(cid:3)the(cid:3)
tenements(cid:3)of(cid:3)the(cid:3)MMGP.(cid:3)The(cid:3)Royalty(cid:3)termination(cid:3)costs(cid:3)disclosed(cid:3)include(cid:3)$14,750(cid:3)in(cid:3)transaction(cid:3)costs.(cid:3)(cid:3)
2(cid:3)The(cid:3)Group(cid:3)reviews(cid:3)its(cid:3)estimate(cid:3)for(cid:3)likely(cid:3)rehabilitation(cid:3)costs(cid:3)on(cid:3)an(cid:3)annual(cid:3)basis.(cid:3)(cid:3)In(cid:3)the(cid:3)period(cid:3)ending(cid:3)30(cid:3)June(cid:3)
2016,(cid:3)the(cid:3)Group(cid:3)recognised(cid:3)the(cid:3)change(cid:3)in(cid:3)the(cid:3)resulting(cid:3)provision(cid:3)as(cid:3)an(cid:3)expense(cid:3)in(cid:3)the(cid:3)Statement(cid:3)of(cid:3)Profit(cid:3)or(cid:3)
Loss(cid:3) and(cid:3) Other(cid:3) Comprehensive(cid:3) Income(cid:3) in(cid:3) line(cid:3) with(cid:3) the(cid:3) accounting(cid:3) policy(cid:3) for(cid:3) exploration(cid:3) and(cid:3) evaluation(cid:3)
expenditure.(cid:3)
3(cid:3) Exploration(cid:3) and(cid:3) Evaluation(cid:3) costs(cid:3) expensed(cid:3) and(cid:3) written(cid:3) off(cid:3) includes(cid:3) deferred(cid:3) write(cid:3) off(cid:3) for(cid:3) tenements(cid:3)
surrendered(cid:3)during(cid:3)the(cid:3)period(cid:3)of(cid:3)$84,159(cid:3)(30(cid:3)June(cid:3)2016:(cid:3)$Nil).(cid:3)(cid:3)
The(cid:3)recoupment(cid:3)of(cid:3)costs(cid:3)carried(cid:3)forward(cid:3)in(cid:3)relation(cid:3)to(cid:3)areas(cid:3)of(cid:3)interest(cid:3)in(cid:3)the(cid:3)exploration(cid:3)and(cid:3)evaluation(cid:3)phase(cid:3)
is(cid:3)dependent(cid:3)upon(cid:3)the(cid:3)successful(cid:3)development(cid:3)or(cid:3)commercial(cid:3)exploitation(cid:3)of(cid:3)the(cid:3)respective(cid:3)areas.(cid:3)
(cid:3)
Note(cid:3)13(cid:3)(cid:3)Mine(cid:3)Properties(cid:3)(cid:3)
(cid:3)
Mine(cid:3)properties(cid:3)in(cid:3)development(cid:3)
Additions(cid:3)
Transfers(cid:3)from(cid:3)exploration(cid:3)
Change(cid:3)in(cid:3)rehabilitation(cid:3)provision(cid:3)
Borrowing(cid:3)costs(cid:3)capitalised(cid:3)
(cid:3)
(cid:3)
Note(cid:3)14(cid:3)(cid:3)Borrowings(cid:3)
(cid:3)
(cid:3)
Insurance(cid:3)premium(cid:3)funding(cid:3)liability(cid:3)
(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
46,103,677(cid:3)
6,420,301(cid:3)
5,903,376(cid:3)
2,531,951(cid:3)
60,959,305(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
1,513,375(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:882)(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:882)
(cid:3)
On(cid:3)21(cid:3)December(cid:3)2016(cid:3)the(cid:3)Company(cid:3)announced(cid:3)entry(cid:3)into(cid:3)an(cid:3)$A150(cid:3)million(cid:3)Syndicated(cid:3)Project(cid:3)Development(cid:3)
Debt(cid:3) Facility(cid:3) Agreement(cid:3) (“Facility”)(cid:3) with(cid:3) Westpac(cid:3) Banking(cid:3) Corporation,(cid:3) Australia(cid:3) and(cid:3) New(cid:3) Zealand(cid:3) Banking(cid:3)
Group(cid:3) Limited(cid:3) and(cid:3) BNP(cid:3) Paribas.(cid:3) (cid:3)The(cid:3) Facility(cid:3) comprises(cid:3) A$140(cid:3) million(cid:3) tranche(cid:3) for(cid:3) project(cid:3) development(cid:3) and(cid:3)
working(cid:3)capital(cid:3)during(cid:3)the(cid:3)construction,(cid:3)commissioning(cid:3)and(cid:3)ramp(cid:3)up(cid:3)stages(cid:3)of(cid:3)the(cid:3)Project(cid:3)and(cid:3)a(cid:3)cost(cid:3)overrun(cid:3)
tranche(cid:3)of(cid:3)A$10(cid:3)million.(cid:3)(cid:3)The(cid:3)key(cid:3)terms(cid:3)of(cid:3)the(cid:3)Facility(cid:3)are:(cid:3)
A(cid:3)five(cid:3)year(cid:3)tenor(cid:3)with(cid:3)a(cid:3)fixed(cid:3)schedule(cid:3)of(cid:3)repayments(cid:3)starting(cid:3)September(cid:3)2018(cid:3)through(cid:3)to(cid:3)December(cid:3)2021;(cid:3)
The(cid:3)Facility(cid:3)can(cid:3)be(cid:3)repaid(cid:3)early(cid:3)at(cid:3)any(cid:3)time(cid:3)without(cid:3)restriction(cid:3)or(cid:3)financial(cid:3)penalty;(cid:3)
Security(cid:3)is(cid:3)provided(cid:3)via(cid:3)a(cid:3)fixed(cid:3)and(cid:3)floating(cid:3)charge(cid:3)over(cid:3)the(cid:3)assets(cid:3)of(cid:3)Dacian(cid:3)Gold’s(cid:3)operating(cid:3)subsidiary,(cid:3)Mt(cid:3)
Morgans(cid:3)WA(cid:3)Mining(cid:3)Pty(cid:3)Ltd;(cid:3)and(cid:3)
The(cid:3)facility(cid:3)can(cid:3)be(cid:3)drawn(cid:3)down(cid:3)in(cid:3)stages(cid:3)when(cid:3)needed(cid:3)with(cid:3)interest(cid:3)payable(cid:3)only(cid:3)on(cid:3)the(cid:3)amounts(cid:3)drawn.(cid:3)
(cid:882)
(cid:882)
(cid:882)
(cid:882)
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)14(cid:3)(cid:3)Borrowings(cid:3)(continued)(cid:3)
(cid:3)
Total(cid:3)capitalised(cid:3)transaction(cid:3)costs(cid:3)to(cid:3)30(cid:3)June(cid:3)2017(cid:3)are(cid:3)$2,531,951(cid:3)(2016:(cid:3)$Nil).(cid:3)(cid:3)Transaction(cid:3)costs(cid:3)are(cid:3)accounted(cid:3)
for(cid:3)under(cid:3)the(cid:3)effective(cid:3)interest(cid:3)rate(cid:3)method.(cid:3)(cid:3)These(cid:3)costs(cid:3)are(cid:3)incremental(cid:3)costs(cid:3)that(cid:3)are(cid:3)directly(cid:3)attributable(cid:3)to(cid:3)
the(cid:3)loan(cid:3)and(cid:3)include(cid:3)loan(cid:3)origination(cid:3)fees,(cid:3)commitment(cid:3)fees(cid:3)and(cid:3)legal(cid:3)fees.(cid:3)(cid:3)(cid:3)
At(cid:3) 30(cid:3) June(cid:3) 2017(cid:3) no(cid:3) amounts(cid:3) had(cid:3) been(cid:3) drawn(cid:3) under(cid:3) the(cid:3) facility.(cid:3) (cid:3)The (cid:3) first(cid:3) drawdown(cid:3) of(cid:3) $A45(cid:3) million(cid:3) was(cid:3)
announced(cid:3)on(cid:3)7(cid:3)August(cid:3)2017(cid:3)and(cid:3)is(cid:3)further(cid:3)discussed(cid:3)in(cid:3)note(cid:3)25.(cid:3)
See(cid:3)note(cid:3)20(cid:3)for(cid:3)financial(cid:3)instrument(cid:3)disclosures(cid:3)relating(cid:3)to(cid:3)borrowings.(cid:3)
Note(cid:3)15(cid:3)(cid:3)Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Current(cid:3)liabilities(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Accrued(cid:3)expenses(cid:3)
Employee(cid:3)leave(cid:3)liabilities(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Employee(cid:3)leave(cid:3)liabilities(cid:3)
Note(cid:3)16(cid:3)(cid:3)Provisions(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Rehabilitation(cid:3)provision(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
639,270(cid:3)
15,666,542(cid:3)
329,044(cid:3)
30(cid:3)June
2016(cid:3)
$
2,665,370
561,105
151,753
16,634,856(cid:3)
3,378,228(cid:3)
(cid:3)
(cid:3)
104,090(cid:3)
48,560(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
30(cid:3)June
2016(cid:3)
$
7,846,408(cid:3)
1,966,676(cid:3)
1,966,676(cid:3)
1,914,600
5,879,732(cid:3)
7,846,408(cid:3)
52,076(cid:3)
1,966,676(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Trade(cid:3) payables(cid:3) are(cid:3) non(cid:882)interest(cid:3) bearing(cid:3) and(cid:3) normally(cid:3) settled(cid:3) on(cid:3) 30(cid:3) day(cid:3) terms.(cid:3) See(cid:3) note(cid:3) 20(cid:3) for(cid:3) financial(cid:3)
instrument(cid:3)disclosures(cid:3)relating(cid:3)to(cid:3)trade(cid:3)and(cid:3)other(cid:3)payables.(cid:3)
The(cid:3)rehabilitation(cid:3)provision(cid:3)relates(cid:3)to(cid:3)the(cid:3)estimated(cid:3)obligations(cid:3)in(cid:3)relation(cid:3)to(cid:3)the(cid:3)environmental(cid:3)rectification(cid:3)
works(cid:3)at(cid:3)the(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)Project.(cid:3)
Reconciliation(cid:3)of(cid:3)movements(cid:3)in(cid:3)Rehabilitation(cid:3)Provision:
Balance(cid:3)at(cid:3)the(cid:3)start(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
Increase/(decrease)(cid:3)in(cid:3)rehabilitation(cid:3)provision(cid:3)during(cid:3)the(cid:3)
financial(cid:3)year(cid:3)(cid:3)
Balance(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
Note(cid:3)17(cid:3)(cid:3)Issued(cid:3)Capital(cid:3)
a)(cid:3)Ordinary(cid:3)shares(cid:3)
The(cid:3)Company(cid:3)is(cid:3)a(cid:3)public(cid:3)company(cid:3)limited(cid:3)by(cid:3)shares.(cid:3)The(cid:3)Company(cid:3)was(cid:3)incorporated(cid:3)in(cid:3)Perth,(cid:3)Western(cid:3)Australia.(cid:3)
The(cid:3)Company’s(cid:3)shares(cid:3)are(cid:3)limited(cid:3)whereby(cid:3)the(cid:3)liability(cid:3)of(cid:3)its(cid:3)members(cid:3)is(cid:3)limited(cid:3)to(cid:3)the(cid:3)amount(cid:3)(if(cid:3)any)(cid:3)unpaid(cid:3)
on(cid:3)the(cid:3)shares(cid:3)respectively(cid:3)held(cid:3)by(cid:3)them.(cid:3)
Ordinary(cid:3)shares(cid:3)entitle(cid:3)the(cid:3)holder(cid:3)to(cid:3)participate(cid:3)in(cid:3)dividends(cid:3)and(cid:3)the(cid:3)proceeds(cid:3)on(cid:3)winding(cid:3)up(cid:3)of(cid:3)the(cid:3)Company(cid:3)in(cid:3)
proportion(cid:3)to(cid:3)the(cid:3)number(cid:3)of(cid:3)and(cid:3)amounts(cid:3)paid(cid:3)on(cid:3)the(cid:3)shares(cid:3)held.(cid:3)On(cid:3)a(cid:3)show(cid:3)of(cid:3)hands(cid:3)every(cid:3)holder(cid:3)of(cid:3)ordinary(cid:3)
shares(cid:3)present(cid:3)at(cid:3)a(cid:3)meeting(cid:3)in(cid:3)person(cid:3)or(cid:3)by(cid:3)proxy,(cid:3)is(cid:3)entitled(cid:3)to(cid:3)one(cid:3)vote,(cid:3)and(cid:3)upon(cid:3)a(cid:3)poll(cid:3)each(cid:3)share(cid:3)is(cid:3)entitled(cid:3)
to(cid:3)one(cid:3)vote.(cid:3)
Ordinary(cid:3)shares(cid:3)have(cid:3)no(cid:3)par(cid:3)value.(cid:3)There(cid:3)is(cid:3)no(cid:3)limit(cid:3)to(cid:3)the(cid:3)authorised(cid:3)share(cid:3)capital(cid:3)of(cid:3)the(cid:3)Company.(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)34(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
58
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)35(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)14(cid:3)(cid:3)Borrowings(cid:3)(continued)(cid:3)
Total(cid:3)capitalised(cid:3)transaction(cid:3)costs(cid:3)to(cid:3)30(cid:3)June(cid:3)2017(cid:3)are(cid:3)$2,531,951(cid:3)(2016:(cid:3)$Nil).(cid:3)(cid:3)Transaction(cid:3)costs(cid:3)are(cid:3)accounted(cid:3)
for(cid:3)under(cid:3)the(cid:3)effective(cid:3)interest(cid:3)rate(cid:3)method.(cid:3)(cid:3)These(cid:3)costs(cid:3)are(cid:3)incremental(cid:3)costs(cid:3)that(cid:3)are(cid:3)directly(cid:3)attributable(cid:3)to(cid:3)
the(cid:3)loan(cid:3)and(cid:3)include(cid:3)loan(cid:3)origination(cid:3)fees,(cid:3)commitment(cid:3)fees(cid:3)and(cid:3)legal(cid:3)fees.(cid:3)(cid:3)(cid:3)
At(cid:3) 30(cid:3) June(cid:3) 2017(cid:3) no(cid:3) amounts(cid:3) had(cid:3) been(cid:3) drawn(cid:3) under(cid:3) the(cid:3) facility.(cid:3) (cid:3)The (cid:3) first(cid:3) drawdown(cid:3) of(cid:3) $A45(cid:3) million(cid:3) was(cid:3)
announced(cid:3)on(cid:3)7(cid:3)August(cid:3)2017(cid:3)and(cid:3)is(cid:3)further(cid:3)discussed(cid:3)in(cid:3)note(cid:3)25.(cid:3)
See(cid:3)note(cid:3)20(cid:3)for(cid:3)financial(cid:3)instrument(cid:3)disclosures(cid:3)relating(cid:3)to(cid:3)borrowings.(cid:3)
(cid:3)
Note(cid:3)15(cid:3)(cid:3)Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
(cid:3)
(cid:3)
Current(cid:3)liabilities(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables(cid:3)
Accrued(cid:3)expenses(cid:3)
Employee(cid:3)leave(cid:3)liabilities(cid:3)
(cid:3)
(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Employee(cid:3)leave(cid:3)liabilities(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
639,270(cid:3)
15,666,542(cid:3)
329,044(cid:3)
30(cid:3)June
2016(cid:3)
$
2,665,370
561,105
151,753
16,634,856(cid:3)
3,378,228(cid:3)
(cid:3)
104,090(cid:3)
(cid:3)
48,560(cid:3)
(cid:3)
Trade(cid:3) payables(cid:3) are(cid:3) non(cid:882)interest(cid:3) bearing(cid:3) and(cid:3) normally(cid:3) settled(cid:3) on(cid:3) 30(cid:3) day(cid:3) terms.(cid:3) See(cid:3) note(cid:3) 20(cid:3) for(cid:3) financial(cid:3)
instrument(cid:3)disclosures(cid:3)relating(cid:3)to(cid:3)trade(cid:3)and(cid:3)other(cid:3)payables.(cid:3)
(cid:3)
Note(cid:3)16(cid:3)(cid:3)Provisions(cid:3)
(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Rehabilitation(cid:3)provision(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
30(cid:3)June
2016(cid:3)
$
(cid:3)
7,846,408(cid:3)
1,966,676(cid:3)
The(cid:3)rehabilitation(cid:3)provision(cid:3)relates(cid:3)to(cid:3)the(cid:3)estimated(cid:3)obligations(cid:3)in(cid:3)relation(cid:3)to(cid:3)the(cid:3)environmental(cid:3)rectification(cid:3)
works(cid:3)at(cid:3)the(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)Project.(cid:3)
Reconciliation(cid:3)of(cid:3)movements(cid:3)in(cid:3)Rehabilitation(cid:3)Provision:
Balance(cid:3)at(cid:3)the(cid:3)start(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
Increase/(decrease)(cid:3)in(cid:3)rehabilitation(cid:3)provision(cid:3)during(cid:3)the(cid:3)
financial(cid:3)year(cid:3)(cid:3)
Balance(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
(cid:3)
(cid:3)
1,966,676(cid:3)
(cid:3)
5,879,732(cid:3)
7,846,408(cid:3)
1,914,600
52,076(cid:3)
1,966,676(cid:3)
(cid:3)
Note(cid:3)17(cid:3)(cid:3)Issued(cid:3)Capital(cid:3)
a)(cid:3)Ordinary(cid:3)shares(cid:3)
The(cid:3)Company(cid:3)is(cid:3)a(cid:3)public(cid:3)company(cid:3)limited(cid:3)by(cid:3)shares.(cid:3)The(cid:3)Company(cid:3)was(cid:3)incorporated(cid:3)in(cid:3)Perth,(cid:3)Western(cid:3)Australia.(cid:3)
The(cid:3)Company’s(cid:3)shares(cid:3)are(cid:3)limited(cid:3)whereby(cid:3)the(cid:3)liability(cid:3)of(cid:3)its(cid:3)members(cid:3)is(cid:3)limited(cid:3)to(cid:3)the(cid:3)amount(cid:3)(if(cid:3)any)(cid:3)unpaid(cid:3)
on(cid:3)the(cid:3)shares(cid:3)respectively(cid:3)held(cid:3)by(cid:3)them.(cid:3)
Ordinary(cid:3)shares(cid:3)entitle(cid:3)the(cid:3)holder(cid:3)to(cid:3)participate(cid:3)in(cid:3)dividends(cid:3)and(cid:3)the(cid:3)proceeds(cid:3)on(cid:3)winding(cid:3)up(cid:3)of(cid:3)the(cid:3)Company(cid:3)in(cid:3)
proportion(cid:3)to(cid:3)the(cid:3)number(cid:3)of(cid:3)and(cid:3)amounts(cid:3)paid(cid:3)on(cid:3)the(cid:3)shares(cid:3)held.(cid:3)On(cid:3)a(cid:3)show(cid:3)of(cid:3)hands(cid:3)every(cid:3)holder(cid:3)of(cid:3)ordinary(cid:3)
shares(cid:3)present(cid:3)at(cid:3)a(cid:3)meeting(cid:3)in(cid:3)person(cid:3)or(cid:3)by(cid:3)proxy,(cid:3)is(cid:3)entitled(cid:3)to(cid:3)one(cid:3)vote,(cid:3)and(cid:3)upon(cid:3)a(cid:3)poll(cid:3)each(cid:3)share(cid:3)is(cid:3)entitled(cid:3)
to(cid:3)one(cid:3)vote.(cid:3)
Ordinary(cid:3)shares(cid:3)have(cid:3)no(cid:3)par(cid:3)value.(cid:3)There(cid:3)is(cid:3)no(cid:3)limit(cid:3)to(cid:3)the(cid:3)authorised(cid:3)share(cid:3)capital(cid:3)of(cid:3)the(cid:3)Company.(cid:3)
(cid:3)
(cid:3)
59
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)35(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)17(cid:3)(cid:3)Issued(cid:3)Capital(cid:3)(continued)(cid:3)
(cid:3)
(cid:3)
(cid:3)
b)(cid:3)Share(cid:3)capital(cid:3)
Issued(cid:3)share(cid:3)capital(cid:3)
c)(cid:3)Share(cid:3)movements(cid:3)during(cid:3)the(cid:3)year(cid:3)
Balance(cid:3)at(cid:3)the(cid:3)start(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
Share(cid:3)issue(cid:3)
Exercise(cid:3)of(cid:3)options(cid:3)
Less(cid:3)share(cid:3)issue(cid:3)costs(cid:3)
Balance(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)financial(cid:3)year(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
2017
No.
2016
No.
2017(cid:3)
$(cid:3)
(cid:3)
2016
$
201,732,155(cid:3)
133,306,254(cid:3)
191,783,216(cid:3)
53,515,696(cid:3)
(cid:3)
133,306,254(cid:3)
67,275,901
1,150,000
(cid:882)
96,100,000(cid:3)
36,256,254
950,000
(cid:882)
53,515,696(cid:3)
142,290,972(cid:3)
979,461(cid:3)
(5,002,913)(cid:3)
29,204,822(cid:3)
25,016,818
736,660
(1,442,604)
201,732,155(cid:3)
133,306,254(cid:3)
191,783,216(cid:3)
53,515,696(cid:3)
(cid:3)
On(cid:3)9(cid:3)December(cid:3)2016,(cid:3)the(cid:3)Company(cid:3)issued(cid:3)10,600,000(cid:3)ordinary(cid:3)fully(cid:3)paid(cid:3)shares(cid:3)at(cid:3)$2.50(cid:3)per(cid:3)share(cid:3)to(cid:3)existing(cid:3)
and(cid:3)new(cid:3)institutional(cid:3)and(cid:3)sophisticated(cid:3)investors(cid:3)raising(cid:3)approximately(cid:3)$26(cid:3)million(cid:3)before(cid:3)costs.(cid:3)
During(cid:3) March(cid:3) 2017,(cid:3) the(cid:3) Company(cid:3) issued(cid:3) a(cid:3) further(cid:3) 54,895,485(cid:3) shares(cid:3) at(cid:3) $2.00(cid:3) per(cid:3) share(cid:3) pursuant(cid:3) to(cid:3) a(cid:3) fully(cid:3)
underwritten(cid:3)accelerated(cid:3)non(cid:882)renounceable(cid:3)pro(cid:882)rata(cid:3)entitlement(cid:3)to(cid:3)raise(cid:3)approximately(cid:3)A$109.8(cid:3)million.(cid:3)(cid:3)
In(cid:3)addition,(cid:3)1,780,416(cid:3)ordinary(cid:3)fully(cid:3)paid(cid:3)shares(cid:3)were(cid:3)issued,(cid:3)being(cid:3)settlement(cid:3)in(cid:3)respect(cid:3)of(cid:3)the(cid:3)termination(cid:3)of(cid:3)
the(cid:3)Macquarie(cid:3)Bank(cid:3)Limited(cid:3)Royalty(cid:3)Deed.(cid:3)(cid:3)Refer(cid:3)note(cid:3)12(cid:3)for(cid:3)further(cid:3)detail.(cid:3)
(cid:3)
d)(cid:3)Option(cid:3)plan(cid:3)
Information(cid:3)relating(cid:3)to(cid:3)the(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Option(cid:3)Plan(cid:3)is(cid:3)set(cid:3)out(cid:3)in(cid:3)note(cid:3)18.(cid:3)
(cid:3)
Note(cid:3)18(cid:3)Share(cid:3)Based(cid:3)Payments(cid:3)
The(cid:3) Group(cid:3) provides(cid:3) benefits(cid:3) to(cid:3) employees(cid:3) (including(cid:3) Executive(cid:3) Directors)(cid:3) of(cid:3) the(cid:3) Group(cid:3) through(cid:3) share(cid:882)based(cid:3)
incentives.(cid:3)(cid:3)Information(cid:3)relating(cid:3)to(cid:3)these(cid:3)schemes(cid:3)is(cid:3)set(cid:3)out(cid:3)below.(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Option(cid:3)Plan(cid:3)
The(cid:3) establishment(cid:3) of(cid:3) the(cid:3) Dacian(cid:3) Gold(cid:3) Limited(cid:3) Employee(cid:3) Option(cid:3) Plan(cid:3) (‘the(cid:3) Plan”)(cid:3) was(cid:3) last(cid:3) approved(cid:3) by(cid:3) a(cid:3)
resolution(cid:3)of(cid:3)the(cid:3)shareholders(cid:3)of(cid:3)the(cid:3)Company(cid:3)on(cid:3)16(cid:3)November(cid:3)2015.(cid:3)All(cid:3)eligible(cid:3)Directors,(cid:3)executive(cid:3)officers(cid:3)
and(cid:3)employees(cid:3)of(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)who(cid:3)have(cid:3)been(cid:3)continuously(cid:3)employed(cid:3)by(cid:3)the(cid:3)Company(cid:3)are(cid:3)eligible(cid:3)to(cid:3)
participate(cid:3) in(cid:3) the(cid:3) Plan.(cid:3) (cid:3) The(cid:3) Plan(cid:3) allows(cid:3) the(cid:3) Company(cid:3) to(cid:3) issue(cid:3) free(cid:3) options(cid:3) or(cid:3) performance(cid:3) rights(cid:3) to(cid:3) eligible(cid:3)
persons.(cid:3)
Options(cid:3)over(cid:3)Unissued(cid:3)Shares(cid:3)
The(cid:3)options(cid:3)can(cid:3)be(cid:3)granted(cid:3)free(cid:3)of(cid:3)charge(cid:3)and(cid:3)are(cid:3)exercisable(cid:3)at(cid:3)a(cid:3)fixed(cid:3)price(cid:3)in(cid:3)accordance(cid:3)with(cid:3)the(cid:3)Plan.(cid:3)Options(cid:3)
issued(cid:3)under(cid:3)the(cid:3)Plan(cid:3)have(cid:3)vesting(cid:3)periods(cid:3)prior(cid:3)to(cid:3)exercise,(cid:3)except(cid:3)under(cid:3)certain(cid:3)circumstances(cid:3)whereby(cid:3)options(cid:3)
may(cid:3)be(cid:3)capable(cid:3)of(cid:3)exercise(cid:3)prior(cid:3)to(cid:3)the(cid:3)expiry(cid:3)of(cid:3)the(cid:3)vesting(cid:3)period.(cid:3)(cid:3)(cid:3)The(cid:3)performance(cid:3)rights(cid:3)are(cid:3)granted(cid:3)free(cid:3)of(cid:3)
charge(cid:3)and(cid:3)vest(cid:3)subject(cid:3)to(cid:3)certain(cid:3)operational(cid:3)and(cid:3)market(cid:3)performance(cid:3)conditions(cid:3)being(cid:3)met.(cid:3)
During(cid:3) the(cid:3)financial(cid:3)year(cid:3) no(cid:3) options(cid:3) over(cid:3)unissued(cid:3) shares(cid:3) were(cid:3) issued(cid:3) pursuant(cid:3)to(cid:3)the(cid:3) Company’s(cid:3) Employee(cid:3)
Share(cid:3) Option(cid:3) Plan(cid:3) (30(cid:3) June(cid:3) 2016:(cid:3) 3,950,000).(cid:3) These(cid:3) options(cid:3) have(cid:3) been(cid:3) valued(cid:3) and(cid:3) included(cid:3) in(cid:3) the(cid:3) financial(cid:3)
statements(cid:3)over(cid:3)the(cid:3)periods(cid:3)that(cid:3)they(cid:3)vest.(cid:3)The(cid:3)share(cid:3)based(cid:3)payments(cid:3)expense(cid:3)for(cid:3)the(cid:3)period(cid:3)of(cid:3)$818,302(cid:3)(30(cid:3)
June(cid:3)2016:(cid:3)$629,723)(cid:3)relates(cid:3)to(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)options(cid:3)apportioned(cid:3)over(cid:3)their(cid:3)respective(cid:3)vesting(cid:3)periods.(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
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NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)18(cid:3)Share(cid:3)Based(cid:3)Payments(cid:3)(continued)(cid:3)
Options(cid:3)over(cid:3)Unissued(cid:3)Shares(cid:3)(continued)(cid:3)
a)(cid:3) Reconciliation(cid:3) of(cid:3) movement(cid:3) of(cid:3) options(cid:3)over(cid:3) unissued(cid:3) shares(cid:3) during(cid:3)the(cid:3) period(cid:3) including(cid:3) weighted(cid:3) average(cid:3)
exercise(cid:3)price(cid:3)(WAEP)(cid:3)
(cid:3)
(cid:3)
Options(cid:3)outstanding(cid:3)at(cid:3)the(cid:3)start(cid:3)of(cid:3)the(cid:3)yeari
Options(cid:3)granted(cid:3)during(cid:3)the(cid:3)year(cid:3)
Options(cid:3)exercised(cid:3)during(cid:3)the(cid:3)year(cid:3)
2017
2016(cid:3)
No.
13,150,000
(cid:882)
(1,150,000)
WAEP
$0.92
(cid:882)
$0.74
No.(cid:3)
10,150,000(cid:3)
3,950,000(cid:3)
(950,000)(cid:3)
Options(cid:3)outstanding(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)year(cid:3)
(cid:3)
12,000,000(cid:3)
$0.94(cid:3)
13,150,000(cid:3)
WAEP
$0.71
$1.60
$0.69
$0.98(cid:3)
i(cid:3)Number(cid:3)and(cid:3)WAEP(cid:3)of(cid:3)options(cid:3)outstanding(cid:3)at(cid:3)1(cid:3)July(cid:3)2016(cid:3)have(cid:3)been(cid:3)adjusted(cid:3)in(cid:3)accordance(cid:3)with(cid:3)the(cid:3)terms(cid:3)and(cid:3)
conditions(cid:3)of(cid:3)the(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Option(cid:3)Plan.(cid:3)(cid:3)Details(cid:3)of(cid:3)the(cid:3)adjustment(cid:3)are(cid:3)noted(cid:3)below.(cid:3)
(cid:3)
The(cid:3)terms(cid:3)of(cid:3)the(cid:3)unissued(cid:3)ordinary(cid:3)options(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)are(cid:3)as(cid:3)follows:(cid:3)
Number(cid:3)of(cid:3)options(cid:3)outstanding(cid:3)
4,800,000(cid:3)
250,000(cid:3)
1,000,000(cid:3)
2,000,000(cid:3)
1,500,000(cid:3)
1,650,000(cid:3)
300,000(cid:3)
500,000(cid:3)
Exercise(cid:3)price
$0.77
$0.50
$0.58
$0.39
$1.15
$1.16
$1.99
$3.66
Expiry(cid:3)date(cid:3)
9(cid:3)October(cid:3)2017(cid:3)
28(cid:3)February(cid:3)2019(cid:3)
24(cid:3)September(cid:3)2019(cid:3)
17(cid:3)November(cid:3)2019(cid:3)
30(cid:3)September(cid:3)2020(cid:3)
31(cid:3)January(cid:3)2021(cid:3)
28(cid:3)February(cid:3)2021(cid:3)
30(cid:3)June(cid:3)2021(cid:3)
b)(cid:3)Subsequent(cid:3)to(cid:3)the(cid:3)reporting(cid:3)date(cid:3)
No(cid:3)options(cid:3)have(cid:3)been(cid:3)granted(cid:3)subsequent(cid:3)to(cid:3)the(cid:3)reporting(cid:3)date(cid:3)and(cid:3)to(cid:3)the(cid:3)date(cid:3)of(cid:3)signing(cid:3)this(cid:3)report.(cid:3)(cid:3)
Subsequent(cid:3)to(cid:3)reporting(cid:3)date(cid:3)and(cid:3)to(cid:3)the(cid:3)date(cid:3)of(cid:3)signing(cid:3)this(cid:3)report(cid:3)850,000(cid:3)options(cid:3)have(cid:3)been(cid:3)exercised(cid:3)at(cid:3)69(cid:3)
cents(cid:3)per(cid:3)share.(cid:3)
(cid:3)
c)(cid:3)Adjustment(cid:3)to(cid:3)exercise(cid:3)price(cid:3)of(cid:3)unlisted(cid:3)options(cid:3)
As(cid:3)a(cid:3)result(cid:3)of(cid:3)the(cid:3)Company’s(cid:3)accelerated(cid:3)non(cid:882)renounceable(cid:3)pro(cid:882)rata(cid:3)entitlement(cid:3)which(cid:3)was(cid:3)completed(cid:3)in(cid:3)March(cid:3)
2017,(cid:3)the(cid:3)exercise(cid:3)price(cid:3)of(cid:3)a(cid:3)number(cid:3)of(cid:3)classes(cid:3)of(cid:3)options(cid:3)over(cid:3)unissued(cid:3)shares(cid:3)in(cid:3)the(cid:3)Company(cid:3)issued(cid:3)prior(cid:3)to(cid:3)
the(cid:3) offer(cid:3) has(cid:3) been(cid:3) recalculated.(cid:3) (cid:3)The(cid:3) resulting(cid:3) reduction(cid:3) in(cid:3) exercise(cid:3) price,(cid:3) reflected(cid:3) in(cid:3) the(cid:3) table(cid:3) below,(cid:3) was(cid:3)
calculated(cid:3)in(cid:3)accordance(cid:3)with(cid:3)the(cid:3)terms(cid:3)and(cid:3)conditions(cid:3)of(cid:3)the(cid:3)options(cid:3)on(cid:3)issue(cid:3)and(cid:3)the(cid:3)Company’s(cid:3)employee(cid:3)
share(cid:3)option(cid:3)plan.(cid:3)
(cid:3)
Number(cid:3)of(cid:3)
options(cid:3)(cid:3)
Expiry(cid:3)date(cid:3)
Original(cid:3)
exercise(cid:3)price(cid:3)(cid:3)
Amended(cid:3)
exercise(cid:3)price(cid:3)
Date(cid:3)granted(cid:3)
9(cid:3)October(cid:3)2012(cid:3)
5,100,000(cid:3)
9(cid:3)October(cid:3)2017(cid:3)
28(cid:3)February(cid:3)2014(cid:3)
250,000(cid:3)
28(cid:3)February(cid:3)2019(cid:3)
25(cid:3)September(cid:3)2014(cid:3)
1,000,000(cid:3)
24(cid:3)September(cid:3)2019(cid:3)
18(cid:3)November(cid:3)2014(cid:3)
2,000,000(cid:3)
17(cid:3)November(cid:3)2019(cid:3)
5(cid:3)October(cid:3)2015(cid:3)
1,500,000(cid:3)
30(cid:3)September(cid:3)2020(cid:3)
5(cid:3)February(cid:3)2016(cid:3)
1,650,000(cid:3)
31(cid:3)January(cid:3)2021(cid:3)
26(cid:3)February(cid:3)2016(cid:3)
28(cid:3)June(cid:3)2016(cid:3)
300,000(cid:3)
500,000(cid:3)
28(cid:3)February(cid:3)2021(cid:3)
30(cid:3)June(cid:3)2021(cid:3)
$0.83(cid:3)
$0.56(cid:3)
$0.64(cid:3)
$0.45(cid:3)
$1.21(cid:3)
$1.22(cid:3)
$2.05(cid:3)
$3.72(cid:3)
$0.77(cid:3)
$0.50(cid:3)
$0.58(cid:3)
$0.39(cid:3)
$1.15(cid:3)
$1.16(cid:3)
$1.99(cid:3)
$3.66(cid:3)
(cid:3)Any(cid:3)vesting(cid:3)conditions(cid:3)in(cid:3)relation(cid:3)to(cid:3)the(cid:3)options(cid:3)on(cid:3)issue(cid:3)remain(cid:3)unchanged.(cid:3)
(cid:3)
d)(cid:3)Weighted(cid:3)average(cid:3)contractual(cid:3)life(cid:3)
The(cid:3)weighted(cid:3)average(cid:3)contractual(cid:3)life(cid:3)for(cid:3)un(cid:882)exercised(cid:3)options(cid:3)is(cid:3)23(cid:3)months(cid:3)(2016:(cid:3)33(cid:3)months).(cid:3)(cid:3)
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NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)18(cid:3)Share(cid:3)Based(cid:3)Payments(cid:3)(continued)(cid:3)
Performance(cid:3)Rights(cid:3)
During(cid:3)the(cid:3)financial(cid:3)year(cid:3)ended(cid:3)30(cid:3)June(cid:3)2017,(cid:3)710,500(cid:3)performance(cid:3)rights(cid:3)(30(cid:3)June(cid:3)2016:(cid:3)nil)(cid:3)were(cid:3)issued(cid:3)to(cid:3)a(cid:3)
Director(cid:3)and(cid:3)employee,(cid:3)pursuant(cid:3)to(cid:3)the(cid:3)terms(cid:3)of(cid:3)the(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Share(cid:3)Option(cid:3)Plan.(cid:3)(cid:3)The(cid:3)
share(cid:882)based(cid:3)payments(cid:3)expense(cid:3)for(cid:3)the(cid:3)period(cid:3)includes(cid:3)$950,932(cid:3)(30(cid:3)June(cid:3)2016:(cid:3)$Nil)(cid:3)relating(cid:3)to(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)
performance(cid:3)rights(cid:3)apportioned(cid:3)over(cid:3)the(cid:3)respective(cid:3)vesting(cid:3)periods.(cid:3)
a)(cid:3)Reconciliation(cid:3)of(cid:3)movement(cid:3)of(cid:3)performance(cid:3)rights(cid:3)during(cid:3)the(cid:3)period(cid:3)including(cid:3)weighted(cid:3)average(cid:3)fair(cid:3)value(cid:3)
(WAFV)(cid:3)
(cid:3)
(cid:3)
(cid:3)
Rights(cid:3)issued(cid:3)during(cid:3)the(cid:3)year(cid:3)
Rights(cid:3)vested(cid:3)during(cid:3)the(cid:3)year^(cid:3)
Rights(cid:3)lapsed(cid:3)during(cid:3)the(cid:3)year(cid:3)
Rights(cid:3)outstanding(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)year(cid:3)
(cid:3)
(cid:3)
^(cid:3)The(cid:3)70,000(cid:3)rights(cid:3)that(cid:3)vested(cid:3)during(cid:3)year(cid:3)were(cid:3)unissued(cid:3)at(cid:3)period(cid:3)end.(cid:3)
(cid:3)
b)(cid:3)Fair(cid:3)value(cid:3)of(cid:3)performance(cid:3)rights(cid:3)granted(cid:3)
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)2017(cid:3)
No.(cid:3)
710,500(cid:3)
(70,000)(cid:3)
(90,250)(cid:3)
550,250(cid:3)
WAFV
$2.88
$3.30
$1.94(cid:3)
$2.98(cid:3)
The(cid:3)fair(cid:3)value(cid:3)of(cid:3)the(cid:3)performance(cid:3)rights(cid:3)granted(cid:3)during(cid:3)period(cid:3)were(cid:3)determined(cid:3)using(cid:3)Monte(cid:3)Carlo(cid:3)simulation,(cid:3)
a(cid:3)review(cid:3)of(cid:3)historical(cid:3)share(cid:3)price(cid:3)volatility(cid:3)and(cid:3)correlation(cid:3)of(cid:3)the(cid:3)share(cid:3)price(cid:3)of(cid:3)the(cid:3)Company(cid:3)to(cid:3)its(cid:3)Peer(cid:3)Group.(cid:3)(cid:3)
Further(cid:3)details(cid:3)of(cid:3)the(cid:3)basis(cid:3)of(cid:3)valuation(cid:3)appear(cid:3)below.(cid:3)
During(cid:3)the(cid:3)period(cid:3)the(cid:3)Company(cid:3)issued(cid:3)670,000(cid:3)performance(cid:3)rights(cid:3)to(cid:3)Mr(cid:3)Rohan(cid:3)Williams(cid:3)(Executive(cid:3)Chairman),(cid:3)
pursuant(cid:3) to(cid:3) the(cid:3) terms(cid:3) and(cid:3) conditions(cid:3) of(cid:3) the(cid:3) Dacian(cid:3) Gold(cid:3) Limited(cid:3) Employee(cid:3) Option(cid:3) Plan(cid:3) (30(cid:3) June(cid:3) 2016:(cid:3) Nil).(cid:3)(cid:3)
Details(cid:3)of(cid:3)the(cid:3)performance(cid:3)rights(cid:3)issued(cid:3)to(cid:3)Mr(cid:3)Williams(cid:3)are(cid:3)as(cid:3)follows:(cid:3)
(cid:3)
Number(cid:3)
of(cid:3)rights(cid:3)
issued(cid:3)(i)(cid:3)
140,000(cid:3)
200,000(cid:3)
330,000(cid:3)
Tranche(cid:3)
A(cid:3)
B(cid:3)
C(cid:3)
Date(cid:3)of(cid:3)grant(cid:3)
17(cid:3)October(cid:3)2016(cid:3)
17(cid:3)October(cid:3)2016(cid:3)
17(cid:3)October(cid:3)2016(cid:3)
Date(cid:3)of(cid:3)
vesting(cid:3)(i)(cid:3)
30(cid:3)June(cid:3)2017
30(cid:3)June(cid:3)2018
30(cid:3)June(cid:3)2019
Share(cid:3)
price(cid:3)
on(cid:3)
grant(cid:3)
date(cid:3)
$3.30
$3.30
$3.30
Fair(cid:3)
value(cid:3)
at(cid:3)
grant(cid:3)
date(cid:3)
$2.83
$2.99
$3.04
(cid:3)
Expected(cid:3)
share(cid:3)
price(cid:3)
volatility(cid:3)
68.0%(cid:3)
68.0%(cid:3)
68.0%(cid:3)
Expected(cid:3)
dividend(cid:3)
yield(cid:3)
0%(cid:3)
0%(cid:3)
0%(cid:3)
Expected(cid:3)
risk(cid:3)free(cid:3)
rate(cid:3)
1.74%
1.74%
1.74%
(i)(cid:3)The(cid:3)number(cid:3)of(cid:3)performance(cid:3)rights(cid:3)awarded(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)was(cid:3)70,000.(cid:3)(cid:3)These(cid:3)rights(cid:3)were(cid:3)issued(cid:3)subsequent(cid:3)
to(cid:3)period(cid:3)end.(cid:3)
(cid:3)
During(cid:3)the(cid:3)period(cid:3)the(cid:3)Company(cid:3)issued(cid:3)40,500(cid:3)performance(cid:3)rights(cid:3)to(cid:3)other(cid:3)employees(cid:3)of(cid:3)the(cid:3)company(cid:3)pursuant(cid:3)
to(cid:3)the(cid:3)terms(cid:3)and(cid:3)conditions(cid:3)of(cid:3)the(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)Employee(cid:3)Option(cid:3)Plan(cid:3)(30(cid:3)June(cid:3)2016:(cid:3)Nil).(cid:3)(cid:3)Details(cid:3)of(cid:3)the(cid:3)
performance(cid:3)rights(cid:3)issued(cid:3)are(cid:3)as(cid:3)follows:(cid:3)
Number(cid:3)
of(cid:3)rights(cid:3)
issued(cid:3)(i)(cid:3)
40,500(cid:3)
Tranche(cid:3)
A(cid:3)
Date(cid:3)of(cid:3)grant(cid:3)
5(cid:3)April(cid:3)2017(cid:3)
Date(cid:3)of(cid:3)
vesting(cid:3)(i)(cid:3)
30(cid:3)June(cid:3)2018
Share(cid:3)
price(cid:3)on(cid:3)
grant(cid:3)
date(cid:3)
$1.97
Fair(cid:3)
value(cid:3)
at(cid:3)
grant(cid:3)
date(cid:3)
$1.20
(cid:3)
Expected(cid:3)
share(cid:3)
price(cid:3)
volatility(cid:3)
63.8%(cid:3)
Expected(cid:3)
dividend(cid:3)
yield(cid:3)
0%(cid:3)
Expected(cid:3)
risk(cid:3)free(cid:3)
rate(cid:3)
1.69%
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)38(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
62
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)18(cid:3)Share(cid:3)Based(cid:3)Payments(cid:3)(continued)(cid:3)
c)(cid:3)Vesting(cid:3)conditions(cid:3)of(cid:3)performance(cid:3)rights(cid:3)
The(cid:3)performance(cid:3)rights(cid:3)issued(cid:3)during(cid:3)the(cid:3)period(cid:3)are(cid:3)subject(cid:3)to(cid:3)the(cid:3)following(cid:3)specific(cid:3)vesting(cid:3)conditions.(cid:3)
Tranche(cid:3)
Measurement(cid:3)date(cid:3)of(cid:3)
performance(cid:3)rights(cid:3)
Specific(cid:3)vesting(cid:3)conditions(cid:3)and(cid:3)weighting(cid:3)applicable(cid:3)in(cid:3)the(cid:3)
calculation(cid:3)of(cid:3)performance(cid:3)rights(cid:3)vesting(cid:3)
A(cid:3)
B(cid:3)
C(cid:3)
30(cid:3)June(cid:3)2017(cid:3)
30(cid:3)June(cid:3)2018(cid:3)
30(cid:3)June(cid:3)2019(cid:3)
50%(cid:3)(cid:882) Commencement(cid:3)of(cid:3)construction(cid:3)of(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)
Project(cid:3)processing(cid:3)plant(cid:3)
50%(cid:3)(cid:882)(cid:3)Relative(cid:3)Total(cid:3)Shareholder(cid:3)Return(cid:3)(TSR)(cid:3)performance(cid:3)to(cid:3)
peers(cid:3)above(cid:3)50th(cid:3)percentile(cid:3)(measured(cid:3)over(cid:3)the(cid:3)1(cid:3)year(cid:3)period(cid:3)to(cid:3)
30(cid:3)June(cid:3)2017)(cid:3)
50%(cid:3)(cid:882) First(cid:3)gold(cid:3)production(cid:3)at(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)Project(cid:3)on(cid:3)time(cid:3)
and(cid:3)budget(cid:3)
50%(cid:3)(cid:882)(cid:3)Relative(cid:3)Total(cid:3)Shareholder(cid:3)Return(cid:3)(TSR)(cid:3)performance(cid:3)to(cid:3)
peers(cid:3)above(cid:3)50th(cid:3)percentile(cid:3)(measured(cid:3)over(cid:3)the(cid:3)2(cid:3)year(cid:3)period(cid:3)to(cid:3)
30(cid:3)June(cid:3)2018)(cid:3)
50%(cid:3)(cid:882) Ore(cid:3)reserves(cid:3)at(cid:3)Mt(cid:3)Morgans(cid:3)Gold(cid:3)Project(cid:3)exceeding(cid:3)1.2(cid:3)
million(cid:3)ounces(cid:3)
50%(cid:3)(cid:882)(cid:3)Relative(cid:3)Total(cid:3)Shareholder(cid:3)Return(cid:3)(TSR)(cid:3)performance(cid:3)to(cid:3)
peers(cid:3)above(cid:3)50th(cid:3)percentile(cid:3)(measured(cid:3)over(cid:3)the(cid:3)3(cid:3)year(cid:3)period(cid:3)to(cid:3)
30(cid:3)June(cid:3)2019)(cid:3)
(cid:3)
The(cid:3)Company’s(cid:3)TSR(cid:3)performance(cid:3)for(cid:3)share(cid:3)rights(cid:3)issued(cid:3)during(cid:3)the(cid:3)current(cid:3)financial(cid:3)year(cid:3)will(cid:3)be(cid:3)assessed(cid:3)against(cid:3)
the(cid:3)following(cid:3)10(cid:3)peer(cid:3)group(cid:3)companies.(cid:3)
Peer(cid:3)Companies(cid:3)
1(cid:3)
2(cid:3)
3(cid:3)
4(cid:3)
5(cid:3)
6(cid:3)
7(cid:3)
8(cid:3)
9(cid:3)
10(cid:3)
St(cid:3)Barbara(cid:3)Limited(cid:3)
Saracen(cid:3)Mineral(cid:3)Holdings(cid:3)Limited
Resolute(cid:3)Mining(cid:3)Limited(cid:3)
Gold(cid:3)Road(cid:3)Resources(cid:3)Limited(cid:3)
Perseus(cid:3)Mining(cid:3)Limited(cid:3)
Beadell(cid:3)Resources(cid:3)Limited(cid:3)
Silver(cid:3)Lake(cid:3)Resources(cid:3)Limited(cid:3)
Doray(cid:3)Minerals(cid:3)Limited(cid:3)
Troy(cid:3)Resources(cid:3)Limited(cid:3)
Ramelius(cid:3)Resources(cid:3)Limited(cid:3)
(cid:3)
Note(cid:3)19(cid:3)(cid:3)Accumulated(cid:3)Losses(cid:3)and(cid:3)Reserves(cid:3)
(cid:3)
(cid:3)
(cid:3)
Balance(cid:3)at(cid:3)the(cid:3)beginning(cid:3)of(cid:3)the(cid:3)year(cid:3)
Loss(cid:3)for(cid:3)the(cid:3)period(cid:3)
Transfer(cid:3)to(cid:3)issued(cid:3)capital(cid:3)on(cid:3)exercise(cid:3)of(cid:3)
options(cid:3)
Share(cid:3)based(cid:3)payments(cid:3)for(cid:3)the(cid:3)period(cid:3)
ASX(cid:3)Codes(cid:3)
SBM(cid:3)
SAR(cid:3)
RSG(cid:3)
GOR(cid:3)
PRU(cid:3)
BDR(cid:3)
SLR(cid:3)
DRM(cid:3)
TRY(cid:3)
RMS(cid:3)
2016(cid:3)
Share(cid:3)based(cid:3)
payments(cid:3)
reserve(cid:3)(i)(cid:3)
$
1,321,449
(cid:882)
Accumulated(cid:3)
losses(cid:3)
$(cid:3)
(19,744,994)(cid:3)
(21,832,884)(cid:3)
Share(cid:3)based(cid:3)
payments(cid:3)
reserve(cid:3)(i)(cid:3)
$
774,886
(cid:882)
2017
Accumulated(cid:3)
losses(cid:3)
$
(41,577,878)
(18,857,914)
(cid:882)(cid:3)
(cid:882)
(125,461)(cid:3)
1,769,234
(cid:882)(cid:3)
(cid:882)(cid:3)
(83,160)(cid:3)
629,723
Balance(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)year(cid:3)(cid:3)
(60,435,792)(cid:3)
2,965,222(cid:3)
(41,577,878)(cid:3)
1,321,449(cid:3)
(i)(cid:3)The(cid:3)share(cid:3)based(cid:3)payments(cid:3)reserve(cid:3)is(cid:3)used(cid:3)to(cid:3)recognise(cid:3)the(cid:3)fair(cid:3)value(cid:3)of(cid:3)options(cid:3)over(cid:3)unissued(cid:3)shares(cid:3)and(cid:3)
performance(cid:3)rights.(cid:3)
(cid:3)
63
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)39(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
(cid:3)
Note(cid:3)20(cid:3)Financial(cid:3)Instruments(cid:3)
The(cid:3) Group(cid:3) has(cid:3) exposure(cid:3) to(cid:3) a(cid:3) variety(cid:3) of(cid:3) risks(cid:3) arising(cid:3) from(cid:3)its(cid:3) use(cid:3) of(cid:3) financial(cid:3) instruments.(cid:3) This(cid:3)note(cid:3)presents(cid:3)
information(cid:3)about(cid:3)the(cid:3)Group’s(cid:3)exposure(cid:3)to(cid:3)the(cid:3)specific(cid:3)risks,(cid:3)and(cid:3)the(cid:3)policies(cid:3)and(cid:3)processes(cid:3)for(cid:3)measuring(cid:3)and(cid:3)
managing(cid:3)those(cid:3)risks.(cid:3)The(cid:3)Board(cid:3)of(cid:3)Directors(cid:3)has(cid:3)the(cid:3)overall(cid:3)responsibility(cid:3)for(cid:3)the(cid:3)risk(cid:3)management(cid:3)framework(cid:3)
and(cid:3)has(cid:3)adopted(cid:3)a(cid:3)Risk(cid:3)Management(cid:3)Policy.(cid:3)(cid:3)(cid:3)
(cid:3)
(a) Credit(cid:3)risk(cid:3)
Credit(cid:3)risk(cid:3)is(cid:3)the(cid:3)risk(cid:3)of(cid:3)financial(cid:3)loss(cid:3)to(cid:3)the(cid:3)Group(cid:3)if(cid:3)a(cid:3)customer(cid:3)or(cid:3)counterparty(cid:3)to(cid:3)a(cid:3)financial(cid:3)instrument(cid:3)fails(cid:3)to(cid:3)
meet(cid:3)its(cid:3)contractual(cid:3)obligations,(cid:3)and(cid:3)arises(cid:3)principally(cid:3)from(cid:3)transactions(cid:3)with(cid:3)customers(cid:3)and(cid:3)investments.(cid:3)
(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)receivables(cid:3)
The(cid:3)nature(cid:3)of(cid:3)the(cid:3)business(cid:3)activity(cid:3)of(cid:3)the(cid:3)Group(cid:3)does(cid:3)not(cid:3)result(cid:3)in(cid:3)trading(cid:3)receivables.(cid:3)The(cid:3)receivables(cid:3)that(cid:3)the(cid:3)
Company(cid:3)does(cid:3)experience(cid:3)through(cid:3)its(cid:3)normal(cid:3)course(cid:3)of(cid:3)business(cid:3)are(cid:3)short(cid:3)term(cid:3)and(cid:3)the(cid:3)most(cid:3)significant(cid:3)recurring(cid:3)
by(cid:3)quantity(cid:3)is(cid:3)receivable(cid:3)from(cid:3)the(cid:3)Australian(cid:3)Taxation(cid:3)Office,(cid:3)the(cid:3)risk(cid:3)of(cid:3)non(cid:882)recovery(cid:3)of(cid:3)receivables(cid:3)from(cid:3)this(cid:3)
source(cid:3)is(cid:3)considered(cid:3)to(cid:3)be(cid:3)negligible.(cid:3)
(cid:3)
Cash(cid:3)deposits(cid:3)
The(cid:3)Directors(cid:3)believe(cid:3)any(cid:3)risk(cid:3)associated(cid:3)with(cid:3)the(cid:3)use(cid:3)of(cid:3)predominantly(cid:3)only(cid:3)one(cid:3)bank(cid:3)is(cid:3)addressed(cid:3)through(cid:3)the(cid:3)
use(cid:3)of(cid:3)at(cid:3)least(cid:3)an(cid:3)A(cid:882)rated(cid:3)bank(cid:3)as(cid:3)a(cid:3)primary(cid:3)banker(cid:3)and(cid:3)by(cid:3)the(cid:3)holding(cid:3)of(cid:3)a(cid:3)portion(cid:3)of(cid:3)funds(cid:3)on(cid:3)deposit(cid:3)with(cid:3)
alternative(cid:3)A(cid:882)rated(cid:3)institutions.(cid:3)Except(cid:3)for(cid:3)this(cid:3)matter(cid:3)the(cid:3)Group(cid:3)currently(cid:3)has(cid:3)no(cid:3)significant(cid:3)concentrations(cid:3)of(cid:3)
credit(cid:3)risk.(cid:3)
Liquidity(cid:3)risk(cid:3)
The(cid:3)Directors(cid:3)do(cid:3)not(cid:3)consider(cid:3)that(cid:3)the(cid:3)Group’s(cid:3)financial(cid:3)assets(cid:3)are(cid:3)subject(cid:3)to(cid:3)anything(cid:3)more(cid:3)than(cid:3)a(cid:3)negligible(cid:3)
level(cid:3)of(cid:3)credit(cid:3)risk,(cid:3)and(cid:3)as(cid:3)such(cid:3)no(cid:3)disclosures(cid:3)are(cid:3)made.(cid:3)
(cid:3)
(b)
Liquidity(cid:3) risk(cid:3) is(cid:3) the(cid:3) risk(cid:3)that(cid:3) the(cid:3) Group(cid:3) will(cid:3) not(cid:3) be(cid:3) able(cid:3) to(cid:3) meet(cid:3) its(cid:3) financial(cid:3) obligations(cid:3) as(cid:3) they(cid:3) fall(cid:3) due.(cid:3) The(cid:3)
Group’s(cid:3)approach(cid:3)to(cid:3)managing(cid:3)liquidity(cid:3)is(cid:3)to(cid:3)ensure,(cid:3)as(cid:3)far(cid:3)as(cid:3)possible,(cid:3)that(cid:3)it(cid:3)will(cid:3)always(cid:3)have(cid:3)sufficient(cid:3)liquidity(cid:3)
to(cid:3) meet(cid:3) its(cid:3) liabilities(cid:3) when(cid:3) due,(cid:3) under(cid:3) both(cid:3) normal(cid:3) and(cid:3) stressed(cid:3) conditions,(cid:3) without(cid:3) incurring(cid:3) unacceptable(cid:3)
losses(cid:3)or(cid:3)risking(cid:3)damage(cid:3)to(cid:3)the(cid:3)Company’s(cid:3)reputation.(cid:3)(cid:3)(cid:3)
The(cid:3) Group(cid:3) manages(cid:3) its(cid:3) liquidity(cid:3) risk(cid:3) by(cid:3) monitoring(cid:3) its(cid:3) cash(cid:3) reserves(cid:3) and(cid:3) forecast(cid:3) spending.(cid:3) Management(cid:3) is(cid:3)
cognisant(cid:3) of(cid:3) the(cid:3) future(cid:3) demands(cid:3) for(cid:3) liquid(cid:3) finance(cid:3) resources(cid:3) to(cid:3) finance(cid:3) the(cid:3) Group’s(cid:3) current(cid:3) and(cid:3) future(cid:3)
operations,(cid:3)and(cid:3)consideration(cid:3)is(cid:3)given(cid:3)to(cid:3)the(cid:3)liquid(cid:3)assets(cid:3)available(cid:3)to(cid:3)the(cid:3)Group(cid:3)before(cid:3)commitment(cid:3)is(cid:3)made(cid:3)to(cid:3)
future(cid:3)expenditure(cid:3)or(cid:3)investment.(cid:3)
(cid:3)
The(cid:3)following(cid:3)are(cid:3)the(cid:3)contractual(cid:3)maturities(cid:3)of(cid:3)financial(cid:3)liabilities,(cid:3)including(cid:3)estimated(cid:3)interest(cid:3)payments(cid:3)and(cid:3)
excluding(cid:3)the(cid:3)impact(cid:3)of(cid:3)netting(cid:3)agreements:(cid:3)
(cid:3)
(cid:3)
Carrying(cid:3)
amount(cid:3)
Contractual(cid:3)
cash(cid:3)flows(cid:3)
6(cid:3)months(cid:3)
or(cid:3)less(cid:3)
6(cid:882)12(cid:3)
months(cid:3)
1(cid:882)2(cid:3)
years(cid:3)
2(cid:882)5(cid:3)
years(cid:3)
(cid:3)
(cid:3)
(cid:3)
2017(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)
payables(cid:3)
(cid:3)
(cid:3)
2016(cid:3)
$(cid:3)
(cid:3)
(cid:3)
639,270(cid:3)
639,270(cid:3)
$
$
639,270(cid:3)
639,270(cid:3)
639,270(cid:3)
639,270(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)
payables(cid:3)
(cid:3)
2,665,370(cid:3)
2,665,370(cid:3)
2,665,370(cid:3)
(cid:3)
(cid:3)
(cid:3)
2,665,370(cid:3)
2,665,370(cid:3)
2,665,370(cid:3)
$
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
$(cid:3)
(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
More(cid:3)
than(cid:3)5(cid:3)
years(cid:3)
$
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
(cid:882)(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)40(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(cid:3)
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)20(cid:3)Financial(cid:3)Instruments(cid:3)(continued)(cid:3)
(c) Market(cid:3)risk(cid:3)
Market(cid:3)risk(cid:3)is(cid:3)the(cid:3)risk(cid:3)that(cid:3)changes(cid:3)in(cid:3)market(cid:3)prices,(cid:3)such(cid:3)as(cid:3)foreign(cid:3)exchange(cid:3)rates,(cid:3)interest(cid:3)rates(cid:3)commodity(cid:3)
prices(cid:3)and(cid:3)equity(cid:3)prices(cid:3)will(cid:3)affect(cid:3)the(cid:3)Group’s(cid:3)income(cid:3)or(cid:3)the(cid:3)value(cid:3)of(cid:3)its(cid:3)holdings(cid:3)of(cid:3)financial(cid:3)instruments.(cid:3)The(cid:3)
objective(cid:3) of(cid:3) market(cid:3) risk(cid:3) management(cid:3) is(cid:3) to(cid:3) manage(cid:3) and(cid:3) control(cid:3) market(cid:3) risk(cid:3) exposures(cid:3) within(cid:3) acceptable(cid:3)
parameters,(cid:3)while(cid:3)optimising(cid:3)any(cid:3)return.(cid:3)
Commodity(cid:3)Price(cid:3)Risk(cid:3)
The(cid:3)Groups(cid:3)exposure(cid:3)to(cid:3)commodity(cid:3)price(cid:3)risk(cid:3)arises(cid:3)largely(cid:3)from(cid:3)gold(cid:3)price(cid:3)fluctuations.(cid:3)(cid:3)The(cid:3)Groups(cid:3)exposure(cid:3)
to(cid:3)movements(cid:3)in(cid:3)the(cid:3)gold(cid:3)price(cid:3)is(cid:3)managed(cid:3)through(cid:3)the(cid:3)use(cid:3)of(cid:3)gold(cid:3)forward(cid:3)contracts.(cid:3)(cid:3)The(cid:3)gold(cid:3)forward(cid:3)sale(cid:3)
contracts(cid:3)do(cid:3)not(cid:3)meet(cid:3)the(cid:3)criteria(cid:3)of(cid:3)financial(cid:3)instruments(cid:3)for(cid:3)accounting(cid:3)purposes(cid:3)on(cid:3)the(cid:3)basis(cid:3)that(cid:3)they(cid:3)meet(cid:3)
the(cid:3) normal(cid:3) purchase/sale(cid:3) exemption(cid:3) because(cid:3) physical(cid:3) gold(cid:3) will(cid:3) be(cid:3) delivered(cid:3) into(cid:3) the(cid:3) contract.(cid:3) (cid:3)Further (cid:3)
information(cid:3)relating(cid:3)to(cid:3)these(cid:3)forward(cid:3)sale(cid:3)contracts(cid:3)is(cid:3)included(cid:3)in(cid:3)note(cid:3)21.(cid:3)(cid:3)No(cid:3)sensitivity(cid:3)analysis(cid:3)is(cid:3)provided(cid:3)for(cid:3)
these(cid:3)contracts(cid:3)as(cid:3)they(cid:3)are(cid:3)outside(cid:3)the(cid:3)scope(cid:3)of(cid:3)AASB(cid:3)9(cid:3)Financial(cid:3)Instruments(cid:3)2014.(cid:3)
Interest(cid:3)rate(cid:3)risk(cid:3)
The(cid:3)Group(cid:3)has(cid:3)significant(cid:3)cash(cid:3)assets(cid:3)which(cid:3)may(cid:3)be(cid:3)susceptible(cid:3)to(cid:3)fluctuations(cid:3)in(cid:3)changes(cid:3)in(cid:3)interest(cid:3)rates.(cid:3)Whilst(cid:3)
the(cid:3) Company(cid:3) requires(cid:3) the(cid:3) cash(cid:3) assets(cid:3) to(cid:3) be(cid:3) sufficiently(cid:3) liquid(cid:3) to(cid:3) cover(cid:3) any(cid:3) planned(cid:3) or(cid:3) unforeseen(cid:3) future(cid:3)
expenditure,(cid:3) which(cid:3) prevents(cid:3) the(cid:3) cash(cid:3) assets(cid:3) being(cid:3) committed(cid:3) to(cid:3) long(cid:3) term(cid:3) fixed(cid:3) interest(cid:3) arrangements;(cid:3) the(cid:3)
Group(cid:3)does(cid:3)mitigate(cid:3)potential(cid:3)interest(cid:3)rate(cid:3)risk(cid:3)by(cid:3)entering(cid:3)into(cid:3)short(cid:3)to(cid:3)medium(cid:3)term(cid:3)fixed(cid:3)interest(cid:3)investments.(cid:3)
The(cid:3)Group(cid:3)does(cid:3)not(cid:3)have(cid:3)any(cid:3)direct(cid:3)contact(cid:3)with(cid:3)foreign(cid:3)exchange(cid:3)or(cid:3)equity(cid:3)risks(cid:3)other(cid:3)than(cid:3)their(cid:3)effect(cid:3)on(cid:3)the(cid:3)
general(cid:3)economy.(cid:3)
At(cid:3)the(cid:3)reporting(cid:3)date(cid:3)the(cid:3)interest(cid:3)profile(cid:3)of(cid:3)the(cid:3)Group’s(cid:3)interest(cid:882)bearing(cid:3)financial(cid:3)instruments(cid:3)was:(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Fixed(cid:3)rate(cid:3)instruments(cid:3)
Financial(cid:3)assets(cid:3)
Variable(cid:3)rate(cid:3)instruments(cid:3)
Financial(cid:3)assets(cid:3)
Carrying(cid:3)amount(cid:3)($)(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
(cid:882)(cid:3)
(cid:3)
90,163,337(cid:3)
30(cid:3)June(cid:3)
2016(cid:3)
$
3,509,780
(cid:3)
6,138,645
(cid:3)
Cash(cid:3)flow(cid:3)sensitivity(cid:3)analysis(cid:3)for(cid:3)variable(cid:3)rate(cid:3)instruments(cid:3)
A(cid:3)change(cid:3)of(cid:3)100(cid:3)basis(cid:3)points(cid:3)in(cid:3)interest(cid:3)rates(cid:3)at(cid:3)the(cid:3)reporting(cid:3)date(cid:3)would(cid:3)have(cid:3)increased/(decreased)(cid:3)equity(cid:3)and(cid:3)
profit(cid:3)or(cid:3)loss(cid:3)by(cid:3)the(cid:3)amounts(cid:3)shown(cid:3)below.(cid:3)This(cid:3)analysis(cid:3)assumes(cid:3)that(cid:3)all(cid:3)other(cid:3)variables(cid:3)remain(cid:3)constant.(cid:3)
(cid:3)
Profit(cid:3)or(cid:3)loss
1%
increase
$
1%
decrease
$
Equity(cid:3)
1%(cid:3)
increase(cid:3)
$(cid:3)
1%
decrease
$
Fixed(cid:3)&(cid:3)variable(cid:3)rate(cid:3)instruments(cid:3)
901,633(cid:3)
(901,633)(cid:3)
901,633(cid:3)
2016(cid:3)
Fixed(cid:3)&(cid:3)variable(cid:3)rate(cid:3)instruments(cid:3)
96,484(cid:3)
(96,484)(cid:3)
96,484(cid:3)
(96,484)(cid:3)
(901,633)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
2017(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
65
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)41(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)20(cid:3)Financial(cid:3)Instruments(cid:3)(continued)(cid:3)
Fair(cid:3)values(cid:3)
(d)
Fair(cid:3)values(cid:3)versus(cid:3)carrying(cid:3)amounts(cid:3)
The(cid:3)fair(cid:3)values(cid:3)of(cid:3)financial(cid:3)assets(cid:3)and(cid:3)liabilities,(cid:3)together(cid:3)with(cid:3)the(cid:3)carrying(cid:3)amounts(cid:3)shown(cid:3)in(cid:3)the(cid:3)balance(cid:3)sheet(cid:3)
are(cid:3)as(cid:3)follows:(cid:3)
(cid:3)
(cid:3)
(cid:3)
Cash(cid:3)and(cid:3)cash(cid:3)equivalents(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)receivables(cid:3)
Borrowings(cid:3)
Trade(cid:3)and(cid:3)other(cid:3)payables
2017
2016(cid:3)
Carrying(cid:3)
amount(cid:3)
$
90,163,337(cid:3)
1,404,381
(1,513,375)
(639,270)
Fair(cid:3)value
$
90,163,337(cid:3)
1,404,381
(1,513,375)
(639,270)
Carrying(cid:3)
amount(cid:3)
$(cid:3)
9,648,425(cid:3)
90,123(cid:3)
(cid:882)(cid:3)
(2,665,370)(cid:3)
Fair(cid:3)value
$
9,648,425(cid:3)
90,123
(cid:882)
(2,665,370)
Net(cid:3)financial(cid:3)assets(cid:3)
89,415,073(cid:3)
89,415,073(cid:3)
7,073,178(cid:3)
7,073,178(cid:3)
Impairment(cid:3)losses(cid:3)
(e)
The(cid:3)Directors(cid:3)do(cid:3)not(cid:3)consider(cid:3)that(cid:3)any(cid:3)of(cid:3)the(cid:3)Group’s(cid:3)financial(cid:3)assets(cid:3)are(cid:3)subject(cid:3)to(cid:3)impairment(cid:3)at(cid:3)the(cid:3)reporting(cid:3)
date.(cid:3)No(cid:3)impairment(cid:3)expense(cid:3)or(cid:3)reversal(cid:3)of(cid:3)impairment(cid:3)charge(cid:3)has(cid:3)occurred(cid:3)during(cid:3)the(cid:3)reporting(cid:3)period,(cid:3)other(cid:3)
than(cid:3)the(cid:3)write(cid:3)off(cid:3)of(cid:3)deferred(cid:3)exploration(cid:3)assets(cid:3)at(cid:3)note(cid:3)12.(cid:3)
(cid:3)
Note(cid:3)21(cid:3)Commitments(cid:3)
(a)(cid:3)(cid:3) Operating(cid:3)lease(cid:3)commitments:(cid:3)
(cid:3)
(cid:3)
(cid:3)
Due(cid:3)within(cid:3)1(cid:3)year(cid:3)
Due(cid:3)after(cid:3)1(cid:3)year(cid:3)but(cid:3)not(cid:3)more(cid:3)than(cid:3)5(cid:3)years
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
242,657(cid:3)
690,319(cid:3)
932,976(cid:3)
30(cid:3)June
2016(cid:3)
$
97,680(cid:3)
41,400
139,080(cid:3)
(cid:3)
(cid:3)
(cid:3)
The(cid:3)operating(cid:3)lease(cid:3)commitment(cid:3)relates(cid:3)to(cid:3)the(cid:3)lease(cid:3)of(cid:3)the(cid:3)Group’s(cid:3)Perth(cid:3)office(cid:3)and(cid:3)car(cid:3)parking(cid:3)for(cid:3)a(cid:3)5(cid:3)year(cid:3)term(cid:3)
from(cid:3)24(cid:3)October(cid:3)2016.(cid:3)The(cid:3)lease(cid:3)includes(cid:3)an(cid:3)option(cid:3)to(cid:3)extend(cid:3)for(cid:3)an(cid:3)additional(cid:3)3(cid:3)year(cid:3)period(cid:3)following(cid:3)expiry(cid:3)of(cid:3)
the(cid:3)initial(cid:3)lease(cid:3)term(cid:3)on(cid:3)24(cid:3)October(cid:3)2021.(cid:3)(cid:3)
(b)(cid:3)(cid:3) Capital(cid:3)commitments:(cid:3)
Significant(cid:3)capital(cid:3)expenditure(cid:3)contracted(cid:3)for(cid:3)at(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)reporting(cid:3)period(cid:3)but(cid:3)not(cid:3)recognised(cid:3)as(cid:3)liabilities(cid:3)
is(cid:3)as(cid:3)follows:(cid:3)
Mine(cid:3)Properties(cid:3)in(cid:3)development(cid:3)
(cid:3)
103,228,720(cid:3)
(cid:882)(cid:3)
(c)(cid:3)(cid:3) Exploration(cid:3)commitments(cid:3)
The(cid:3) Group(cid:3) has(cid:3) certain(cid:3) obligations(cid:3) for(cid:3) payment(cid:3) of(cid:3) tenement(cid:3) rent,(cid:3) shire(cid:3) rates(cid:3) and(cid:3) to(cid:3) perform(cid:3) minimum(cid:3)
exploration(cid:3) work(cid:3) on(cid:3) mineral(cid:3) leases(cid:3) held.(cid:3)(cid:3) These(cid:3) obligations(cid:3) may(cid:3) vary(cid:3) over(cid:3) time,(cid:3) depending(cid:3) on(cid:3) the(cid:3) Group’s(cid:3)
exploration(cid:3) programmes(cid:3) and(cid:3) priorities.(cid:3) At(cid:3) 30(cid:3) June(cid:3) 2017,(cid:3) the(cid:3) Group(cid:3) had(cid:3) satisfied(cid:3) all(cid:3) of(cid:3) its(cid:3) exploration(cid:3)
commitments(cid:3)pursuant(cid:3)to(cid:3)the(cid:3)leases,(cid:3)which(cid:3)are(cid:3)currently(cid:3)approximately(cid:3)$3,997,725(cid:3)per(cid:3)annum.(cid:3)(cid:3)
(d)(cid:3)(cid:3) Gold(cid:3)delivery(cid:3)commitments(cid:3)
Due(cid:3)within(cid:3)1(cid:3)year(cid:3)
Due(cid:3)after(cid:3)1(cid:3)year(cid:3)but(cid:3)not(cid:3)more(cid:3)than(cid:3)5(cid:3)years
Gold(cid:3)for(cid:3)physical(cid:3)
delivery(cid:3)
oz
(cid:882)
51,999
Average(cid:3)contract(cid:3)
sale(cid:3)price(cid:3)
A$/oz(cid:3)
(cid:882)(cid:3)
1,782(cid:3)
Value(cid:3)of(cid:3)
committed(cid:3)sales(cid:3)
$’000
(cid:882)
92,664
51,999(cid:3)
1,782(cid:3)
92,664(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)42(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
66
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)21(cid:3)Commitments(cid:3)(continued)(cid:3)
(d)(cid:3)Gold(cid:3)delivery(cid:3)commitments(cid:3)(continued)(cid:3)
The(cid:3)Group(cid:3)enters(cid:3)into(cid:3)gold(cid:3)forward(cid:3)contracts(cid:3)to(cid:3)manage(cid:3)the(cid:3)gold(cid:3)price(cid:3)of(cid:3)a(cid:3)proportion(cid:3)of(cid:3)anticipated(cid:3)gold(cid:3)sales.(cid:3)(cid:3)
The(cid:3)forward(cid:3)contracts(cid:3)are(cid:3)settled(cid:3)by(cid:3)the(cid:3)physical(cid:3)delivery(cid:3)of(cid:3)gold(cid:3)as(cid:3)per(cid:3)the(cid:3)contract(cid:3)terms.(cid:3)(cid:3)The(cid:3)contracts(cid:3)are(cid:3)
accounted(cid:3) for(cid:3) as(cid:3) gold(cid:3) sales(cid:3) contracts(cid:3) with(cid:3) revenue(cid:3) recognised(cid:3) once(cid:3) the(cid:3) gold(cid:3) has(cid:3) been(cid:3) delivered(cid:3) to(cid:3) the(cid:3)
counterparties.(cid:3)(cid:3)The(cid:3)physical(cid:3)gold(cid:3)delivery(cid:3)contracts(cid:3)are(cid:3)considered(cid:3)to(cid:3)sell(cid:3)a(cid:3)non(cid:882)financial(cid:3)item(cid:3)and(cid:3)therefore(cid:3)do(cid:3)
not(cid:3)fall(cid:3)within(cid:3)the(cid:3)scope(cid:3)of(cid:3)AASB(cid:3)139(cid:3)Financial(cid:3)Instruments:(cid:3)Recognition(cid:3)and(cid:3)Measurement.(cid:3)
(cid:3)
Note(cid:3)22(cid:3)Contingencies(cid:3)
(a) Contingent(cid:3)liabilities(cid:3)
The(cid:3)Group(cid:3)had(cid:3)guarantees(cid:3)outstanding(cid:3)at(cid:3)30(cid:3)June(cid:3)2017(cid:3)totalling(cid:3)$110,938(cid:3)(2016:(cid:3)$Nil)(cid:3)relating(cid:3)to(cid:3)the(cid:3)lease(cid:3)of(cid:3)
the(cid:3)Group’s(cid:3)head(cid:3)office.(cid:3)
(cid:3)
(b) Contingent(cid:3)assets(cid:3)
There(cid:3)are(cid:3)no(cid:3)material(cid:3)contingent(cid:3)assets(cid:3)at(cid:3)the(cid:3)reporting(cid:3)date.(cid:3)
(cid:3)
Note(cid:3)23(cid:3)Related(cid:3)Party(cid:3)Disclosures(cid:3)
Other(cid:3)than(cid:3)the(cid:3)key(cid:3)management(cid:3)personnel(cid:3)related(cid:3)party(cid:3)disclosure(cid:3)in(cid:3)the(cid:3)Remuneration(cid:3)Report(cid:3)and(cid:3)in(cid:3)Note(cid:3)
24,(cid:3)there(cid:3)are(cid:3)no(cid:3)related(cid:3)party(cid:3)transactions(cid:3)to(cid:3)report.(cid:3)
(cid:3)
Note(cid:3)24(cid:3)Key(cid:3)Management(cid:3)Personnel(cid:3)(cid:3)
(a)(cid:3) Directors(cid:3)and(cid:3)key(cid:3)management(cid:3)personnel(cid:3)
The(cid:3)following(cid:3)persons(cid:3)were(cid:3)Directors(cid:3)or(cid:3)key(cid:3)management(cid:3)personnel(cid:3)of(cid:3)the(cid:3)Company(cid:3)during(cid:3)the(cid:3)current(cid:3)and(cid:3)
prior(cid:3)financial(cid:3)year:(cid:3)
Executive(cid:3)Chairman(cid:3)
Non(cid:882)Executive(cid:3)Director(cid:3)
Non(cid:882)Executive(cid:3)Director(cid:3)
Non(cid:882)Executive(cid:3)Director(cid:3)
Chief(cid:3)Financial(cid:3)Officer(cid:3)
Rohan(cid:3)Williams(cid:3)
Robert(cid:3)Reynolds(cid:3)
Barry(cid:3)Patterson(cid:3)
Ian(cid:3)Cochrane(cid:3)
Grant(cid:3)Dyker(cid:3)
(cid:3)
There(cid:3) were(cid:3) no(cid:3) other(cid:3) persons(cid:3) employed(cid:3) by(cid:3) or(cid:3) contracted(cid:3) to(cid:3) the(cid:3) Company(cid:3) during(cid:3) the(cid:3) financial(cid:3) year,(cid:3) having(cid:3)
responsibility(cid:3)for(cid:3)planning,(cid:3)directing(cid:3)and(cid:3)controlling(cid:3)the(cid:3)activities(cid:3)of(cid:3)the(cid:3)Company,(cid:3)either(cid:3)directly(cid:3)or(cid:3)indirectly.(cid:3)
(cid:3)
(b)(cid:3) Key(cid:3)management(cid:3)personnel(cid:3)compensation(cid:3)
Details(cid:3)of(cid:3)key(cid:3)management(cid:3)personnel(cid:3)remuneration(cid:3)are(cid:3)contained(cid:3)in(cid:3)the(cid:3)Audited(cid:3)Remuneration(cid:3)Report(cid:3)in(cid:3)the(cid:3)
Directors’(cid:3)Report.(cid:3)A(cid:3)summary(cid:3)of(cid:3)total(cid:3)compensation(cid:3)paid(cid:3)to(cid:3)key(cid:3)management(cid:3)personnel(cid:3)during(cid:3)the(cid:3)year(cid:3)is(cid:3)as(cid:3)
follows:(cid:3)
(cid:3)
(cid:3)
Short(cid:882)term(cid:3)employment(cid:3)benefits(cid:3)
Share(cid:3)based(cid:3)payments(cid:3)
Other(cid:3)long(cid:3)term(cid:3)benefits
Post(cid:882)employment(cid:3)benefits
Total(cid:3)key(cid:3)management(cid:3)personnel(cid:3)remuneration(cid:3)
(cid:3)
Note(cid:3)25(cid:3)Events(cid:3)Subsequent(cid:3)to(cid:3)the(cid:3)Reporting(cid:3)Date(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
1,232,224(cid:3)
1,152,820(cid:3)
21,947(cid:3)
76,158(cid:3)
2,483,149(cid:3)
30(cid:3)June
2016(cid:3)
$
793,001
373,840
17,285
56,849
1,240,975(cid:3)
On(cid:3)7(cid:3)August(cid:3)2017,(cid:3)the(cid:3)Group(cid:3)announced(cid:3)it(cid:3)had(cid:3)drawn(cid:3)down(cid:3)the(cid:3)first(cid:3)$45.0(cid:3)million(cid:3)under(cid:3)the(cid:3)Syndicated(cid:3)Facility(cid:3)
Agreement(cid:3) following(cid:3) the(cid:3) satisfaction(cid:3) of(cid:3) all(cid:3) conditions(cid:3) precedent(cid:3) and(cid:3) first(cid:3) draw(cid:3) down(cid:3) requirements.(cid:3) (cid:3) Each(cid:3)
financier(cid:3)participated(cid:3)equally(cid:3)in(cid:3)the(cid:3)drawdown.(cid:3)
(cid:3)
67
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)43(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
NOTES TO THE FINANCIAL STATEMENTS
(cid:3)
FOR THE YEAR ENDED 30 JUNE 2017
NOTES(cid:3)TO(cid:3)THE(cid:3)FINANCIAL(cid:3)STATEMENTS(cid:3)
FOR(cid:3)THE(cid:3)YEAR(cid:3)ENDED(cid:3)30(cid:3)JUNE(cid:3)2017(cid:3)
Note(cid:3)25(cid:3)Events(cid:3)Subsequent(cid:3)to(cid:3)the(cid:3)Reporting(cid:3)Date(cid:3)(continued)(cid:3)
On(cid:3)28(cid:3)August(cid:3)2017,(cid:3)the(cid:3)Group(cid:3)announced(cid:3)that(cid:3)it(cid:3)had(cid:3)executed(cid:3)a(cid:3)Gas(cid:3)Transportation(cid:3)Agreement(cid:3)with(cid:3)the(cid:3)APA(cid:3)
Group(cid:3)which(cid:3)includes(cid:3)the(cid:3)construction(cid:3)of(cid:3)a(cid:3)4(cid:3)kilometre(cid:3)lateral(cid:3)from(cid:3)the(cid:3)Eastern(cid:3)Goldfields(cid:3)pipeline(cid:3)to(cid:3)the(cid:3)MMGP(cid:3)
power(cid:3)station.(cid:3)(cid:3)The(cid:3)term(cid:3)of(cid:3)the(cid:3)agreement(cid:3)is(cid:3)for(cid:3)up(cid:3)to(cid:3)10(cid:3)years.(cid:3)(cid:3)The(cid:3)Group(cid:3)also(cid:3)announced(cid:3)the(cid:3)entry(cid:3)into(cid:3)a(cid:3)
Letter(cid:3) of(cid:3) Intent(cid:3) to(cid:3) award(cid:3) a(cid:3) Power(cid:3) Purchase(cid:3) Agreement(cid:3) with(cid:3) Zenith(cid:3) Energy(cid:3) Limited(cid:3) for(cid:3) the(cid:3) construction,(cid:3)
ownership(cid:3)and(cid:3)operation(cid:3)of(cid:3)a(cid:3)17MW(cid:3)gas(cid:3)fired(cid:3)power(cid:3)station.(cid:3)
Other(cid:3)than(cid:3)the(cid:3)matters(cid:3)noted(cid:3)above,(cid:3)there(cid:3)has(cid:3)not(cid:3)arisen(cid:3)in(cid:3)the(cid:3)interval(cid:3)between(cid:3)the(cid:3)end(cid:3)of(cid:3)the(cid:3)reporting(cid:3)period(cid:3)
and(cid:3)the(cid:3)date(cid:3)of(cid:3)this(cid:3)report,(cid:3)any(cid:3)item,(cid:3)transaction(cid:3)or(cid:3)event(cid:3)of(cid:3)a(cid:3)material(cid:3)and(cid:3)unusual(cid:3)nature(cid:3)likely,(cid:3)in(cid:3)the(cid:3)opinion(cid:3)
of(cid:3) the(cid:3) Directors(cid:3) of(cid:3) the(cid:3) Company(cid:3) to(cid:3) affect(cid:3) substantially(cid:3) the(cid:3) operations(cid:3) of(cid:3) the(cid:3) Company,(cid:3) the(cid:3) results(cid:3) of(cid:3) those(cid:3)
operations(cid:3)or(cid:3)the(cid:3)state(cid:3)of(cid:3)affairs(cid:3)of(cid:3)the(cid:3)Company(cid:3)in(cid:3)subsequent(cid:3)financial(cid:3)years.(cid:3)
(cid:3)
Note(cid:3)26(cid:3)Auditors(cid:3)Remuneration(cid:3)
(cid:3)
Total(cid:3)remuneration(cid:3)paid(cid:3)to(cid:3)auditors(cid:3)during(cid:3)the(cid:3)financial(cid:3)year:
Audit(cid:3)and(cid:3)review(cid:3)of(cid:3)the(cid:3)Company’s(cid:3)financial(cid:3)statements
Other(cid:3)services(cid:3)
Total(cid:3)
Note(cid:3)27(cid:3)Controlled(cid:3)Entities(cid:3)
(cid:3)
Parent(cid:3)Entity(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)
Subsidiaries(cid:3)
Dacian(cid:3)Gold(cid:3)Mining(cid:3)Pty(cid:3)Ltd(cid:3)
Mt(cid:3)Morgans(cid:3)WA(cid:3)Mining(cid:3)Pty(cid:3)Ltd(cid:3)
(cid:3)
(cid:3)
Note(cid:3)28(cid:3)Parent(cid:3)Entity(cid:3)
(cid:3)
Financial(cid:3)statements(cid:3)and(cid:3)notes(cid:3)for(cid:3)Dacian(cid:3)Gold(cid:3)Limited,(cid:3)the(cid:3)legal(cid:3)
parent(cid:3)entity(cid:3)are(cid:3)provided(cid:3)below:(cid:3)
Financial(cid:3)position(cid:3)
Current(cid:3)assets(cid:3)
Non(cid:882)current(cid:3)assets(cid:3)
Total(cid:3)assets(cid:3)
Current(cid:3)liabilities(cid:3)
Non(cid:882)current(cid:3)liabilities(cid:3)
Total(cid:3)liabilities(cid:3)
Shareholders’(cid:3)equity(cid:3)
Issued(cid:3)capital(cid:3)
Share(cid:3)based(cid:3)payments(cid:3)reserve(cid:3)
Accumulated(cid:3)losses(cid:3)
Total(cid:3)equity(cid:3)
Financial(cid:3)performance(cid:3)
Loss(cid:3)for(cid:3)the(cid:3)year(cid:3)
Other(cid:3)comprehensive(cid:3)income/)loss)(cid:3)
Total(cid:3)comprehensive(cid:3)loss(cid:3)
30(cid:3)June(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
44,594(cid:3)
(cid:882)(cid:3)
44,594(cid:3)
Ownership(cid:3)Interest(cid:3)
2017(cid:3)
%(cid:3)
(cid:3)
(cid:3)
(cid:3)
100(cid:3)
100(cid:3)
Parent(cid:3)
30(cid:3)June
2016(cid:3)
$
32,251
(cid:882)
32,251(cid:3)
2016
%(cid:3)
(cid:3)
100
100
30(cid:3)June(cid:3)(cid:3)
2017(cid:3)
$(cid:3)
(cid:3)
23,167,171(cid:3)
128,287,175(cid:3)
151,454,346(cid:3)
2,054,203(cid:3)
92,662(cid:3)
2,146,865(cid:3)
(cid:3)
191,783,216(cid:3)
2,965,222(cid:3)
(45,440,957)(cid:3)
149,307,481(cid:3)
(cid:3)
(3,863,079)(cid:3)
(cid:3)
(3,863,079)(cid:3)
30(cid:3)June
2016(cid:3)
$
9,738,548
8,914,183
18,652,731(cid:3)
3,378,228
2,015,236
5,393,464(cid:3)
53,515,696
1,321,449
(41,577,878)
13,259,267(cid:3)
(21,832,884)
(cid:882)
(21,832,884)(cid:3)
The(cid:3) contingent(cid:3) liabilities(cid:3) and(cid:3) commitments(cid:3) of(cid:3) the(cid:3) parent(cid:3) entity(cid:3) are(cid:3) consistent(cid:3) with(cid:3) those(cid:3) disclosed(cid:3) in(cid:3) the(cid:3)
financial(cid:3)report.(cid:3)(cid:3)(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
(cid:3)(cid:3)(cid:3)44(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
68
DIRECTORS’ DECLARATION
(cid:3)
DIRECTORS’(cid:3)DECLARATION(cid:3)
In(cid:3)the(cid:3)opinion(cid:3)of(cid:3)the(cid:3)Directors(cid:3)of(cid:3)Dacian(cid:3)Gold(cid:3)Limited(cid:3)(the(cid:3)‘Company’):(cid:3)
(cid:3)
a.
The(cid:3)accompanying(cid:3)financial(cid:3)statements(cid:3)and(cid:3)notes(cid:3)of(cid:3)the(cid:3)Company(cid:3)and(cid:3)of(cid:3)the(cid:3)consolidated(cid:3)entity(cid:3)are(cid:3)
in(cid:3)accordance(cid:3)with(cid:3)the(cid:3)Corporations(cid:3)Act(cid:3)2001,(cid:3)including:(cid:3)
i.
ii.
give(cid:3)a(cid:3)true(cid:3)and(cid:3)fair(cid:3)view(cid:3)of(cid:3)the(cid:3)Company’s(cid:3)and(cid:3)consolidated(cid:3)entity’s(cid:3)financial(cid:3)position(cid:3)as(cid:3)at(cid:3)30(cid:3)
June(cid:3)2017(cid:3)and(cid:3)of(cid:3)its(cid:3)performance(cid:3)for(cid:3)the(cid:3)year(cid:3)then(cid:3)ended;(cid:3)and(cid:3)
comply(cid:3)with(cid:3)Australian(cid:3)Accounting(cid:3)Standards,(cid:3)the(cid:3)Corporations(cid:3)Regulations(cid:3)2001,(cid:3)
professional(cid:3)reporting(cid:3)requirements(cid:3)and(cid:3)other(cid:3)mandatory(cid:3)requirements.(cid:3)
(cid:3)
b.
c.
There(cid:3)are(cid:3)reasonable(cid:3)grounds(cid:3)to(cid:3)believe(cid:3)that(cid:3)the(cid:3)Company(cid:3)will(cid:3)be(cid:3)able(cid:3)to(cid:3)pay(cid:3)its(cid:3)debts(cid:3)as(cid:3)and(cid:3)when(cid:3)
they(cid:3)become(cid:3)due(cid:3)and(cid:3)payable.(cid:3)
(cid:3)
The(cid:3)financial(cid:3)statements(cid:3)and(cid:3)notes(cid:3)thereto(cid:3)are(cid:3)in(cid:3)accordance(cid:3)with(cid:3)International(cid:3)Financial(cid:3)Reporting(cid:3)
Standards(cid:3)issued(cid:3)by(cid:3)the(cid:3)International(cid:3)Accounting(cid:3)Standards(cid:3)Board.(cid:3)
This(cid:3)declaration(cid:3)has(cid:3)been(cid:3)made(cid:3)after(cid:3)receiving(cid:3)the(cid:3)declarations(cid:3)required(cid:3)to(cid:3)be(cid:3)made(cid:3)to(cid:3)the(cid:3)Directors(cid:3)in(cid:3)
accordance(cid:3)with(cid:3)Section(cid:3)295A(cid:3)of(cid:3)the(cid:3)Corporations(cid:3)Act(cid:3)2001(cid:3)for(cid:3)the(cid:3)financial(cid:3)year(cid:3)ended(cid:3)30(cid:3)June(cid:3)2017.(cid:3)
This(cid:3)declaration(cid:3)is(cid:3)signed(cid:3)in(cid:3)accordance(cid:3)with(cid:3)a(cid:3)resolution(cid:3)of(cid:3)the(cid:3)Board(cid:3)of(cid:3)Directors.(cid:3)
(cid:3)
DATED(cid:3)at(cid:3)Perth(cid:3)this(cid:3)6th(cid:3)day(cid:3)of(cid:3)September(cid:3)2017.(cid:3)
Rohan(cid:3)Williams(cid:3)
Executive(cid:3)Chairman(cid:3)
(cid:3)
Dacian(cid:3)Gold(cid:3)Limited(cid:3)2017(cid:3)Annual(cid:3)Report(cid:3)
(cid:3)
69
(cid:3)(cid:3)(cid:3)45(cid:3)|(cid:3)P a g e (cid:3)
(cid:3)
INDEPENDENT AUDITOR’S REPORT
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
Independent Auditor’s Report
to the Members of Dacian Gold Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Dacian Gold Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2017,
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,
and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
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.
70
INDEPENDENT AUDITOR’S REPORT
Key audit matter
How our audit addressed the key audit matter
Carrying Value of the provision for rehabilitation,
Note 1(o) and Note 16.
The Group recognised a rehabilitation provision of
$7,846,408 as at 30 June 2017 relating to the Mount
Morgan’s Gold Project (MMGP).
As disclosed in Note 1(o), the calculation of the
provision requires judgement in estimating the future
cost and expected timing of incurring these costs.
The Group reviews its rehabilitation calculations
annually or as new information becomes available.
Changes in estimate and underlying assumptions are
reviewed annually including changes to the mining
operations, local regulations and rehabilitation
requirements.
The process for determining the rehabilitation
provision involves significant management judgement
and subjectivity of the underlying assumptions in
determining the rehabilitation provision as the MMGP
transitions from an exploration asset to a
development asset.
This area is a key audit matter due to the
judgemental nature of the estimates and assumptions
used in the rehabilitation provision assessment.
Our procedures included, amongst others:
Obtaining an understanding of management’s
process for determining the rehabilitation
provision;
Evaluating the reasonableness of management’s
estimates and judgements to available supporting
documentation, including assessing estimates and
judgements determined by management experts;
Assessing the Group’s legal obligations with
respect to the rehabilitation requirements in
accordance with the Mining Rehabilitation Fund
2012 and the associated effect on the estimated
costs;
Recalculating the rehabilitation provision
calculation to check for mathematical accuracy;
and
Reviewing the appropriateness of the related
disclosures within the financial statements.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2017, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ 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 and for 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.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Group or
to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
71
INDEPENDENT AUDITOR’S REPORT
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in page 31 to 37 of the directors’ report for the
year ended 30 June 2017.
In our opinion, the Remuneration Report of Dacian Gold Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
C A Becker
Partner - Audit & Assurance
Perth, 6 September 2017
72
ASX ADDITIONAL INFORMATION
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below
was applicable as at 25 August 2017.
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of shareholders by size of holding:
Distribution
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
More than 100,000
TOTALS
Number of Shareholders
443
742
299
501
104
2,089
Securities Held
220,702
2,123,206
2,324,760
15,064,255
182,669,232
202,402,155
There are 109 shareholders holding less than a marketable parcel of ordinary shares.
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
COMMONWEALTH BANK OF AUSTRALIA
AUSTRALIAN SUPER PTY LTD
BANK OF NOVA SCOTIA
22,542,904
11,188,114
10,850,000
11.17%
5.55%
5.39%
C. TWENTY LARGEST SHAREHOLDERS
Shareholder Name
Number of Shares
% of Shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
POLLY PTY LTD
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