ABN 61 154 262 978 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 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. 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) (cid:3) 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) (cid:3) (cid:3)(cid:3)(cid:3)36(cid:3)|(cid:3)P a g e (cid:3) (cid:3) 60 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) 61 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)37(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)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 LTDTODTONA PTY LTD SGJ INVESTMENTS PTY LTD BNP PARIBAS NOMS PTY LTD VITESSE PTY LTD DALRAN PTY LTD SANPOINT PTY LTD NATIONAL NOMINEES LIMITED KINGARTH PTY LTD REDASO PTY LTD ARIKI INVESTMENTS PTY LIMITED CAUTIOUS PTY LTD ROGO INVESTMENTS PTY LIMITED CS THIRD NOMINEES PTY LTD MR KENNETH JOSEPH HALL CITICORP NOMINEES PTY LTD BNP PARIBAS NOMS PTY LTD TOTALS 73 38,257,513 32,410,521 21,636,646 6,654,987 6,581,819 5,831,819 5,781,080 5,170,000 4,945,000 4,800,000 4,277,744 4,100,000 4,056,980 3,716,033 2,570,000 2,425,000 2,090,766 1,623,168 1,411,723 1,283,556 18.90% 16.01% 10.69% 3.29% 3.25% 2.88% 2.86% 2.55% 2.44% 2.37% 2.11% 2.03% 2.00% 1.83% 1.27% 1.20% 1.03% 0.80% 0.70% 0.63% 159,624,355 78.84% ASX ADDITIONAL INFORMATION D. UNQUOTED SECURITIES Options: Number of Options Exercise Price Expiry Date Number of Holders 4,200,000 250,000 1,000,000 2,000,000 1,500,000 1,650,000 300,000 500,000 $0.77 $0.50 $0.58 $0.39 $1.15 $1.16 $1.99 $3.66 9 October 2017 28 February 2019 24 September 2019 17 November 2019 30 September 2020 31 January 2021 28 February 2021 30 June 2021 5 1 1 1 4 5 1 1 Performance Rights: Number of Performance Rights 40,500 200,000 330,000 Expiry Date 30 June 2018 14 October 2020 14 October 2020 Number of Holders 1 1 1 E. DISTRIBUTION OF EQUITY SECURITIES In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. F. RESTRICTED SECURITIES The Company has no restricted securities. 74 TENEMENT SCHEDULE AS AT 29 AUGUST 2017 Tenement 39/1950 39/1951 39/1967 39/2002 38/2951 39/1310 39/1713 39/1787 39/2004 39/2017 39/2020 39/2038 39/0010 39/0057 39/0244 39/0245 39/0246 38/0395 38/0396 38/0548 38/0595 38/0848 39/0018 39/0036 39/0208 39/0228 39/0236 39/0240 39/0248 39/0250 39/0261 39/0264 39/0272 39/0273 39/0282 39/0287 39/0291 39/0295 39/0304 39/0305 39/0306 39/0333 39/0380 39/0390 39/0391 39/0392 39/0393 39/0394 Tenement Type E E E E E E E E E E E E L L L L L M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M 75 Granted Granted Granted Application Application Application Application Application Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Status Location Ownership Application Lake Carey WA Granted Granted Lake Carey WA Lake Carey WA Application Lake Carey WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) TENEMENT SCHEDULE AS AT 29 AUGUST 2017 Tenement Type M M M M M M M M M M M M M M M M M M M M P P P P P P P P P P P P P P P P P P P P P P P P P P P P Tenement 39/0395 39/0403 39/0441 39/0442 39/0443 39/0444 39/0497 39/0501 39/0502 39/0503 39/0504 39/0513 39/0745 39/0746 39/0747 39/0799 39/0937 39/0938 39/0993 39/1107 38/4093 38/4094 38/4095 39/5358 39/5359 39/5360 39/5361 39/5362 39/5363 39/5364 39/5365 39/5366 39/5367 39/5368 39/5369 39/5370 39/5371 39/5372 39/5374 39/5375 39/5377 39/5378 39/5379 39/5380 39/5381 39/5382 39/5383 39/5384 Status Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Location Ownership Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Mt Morgans WA Mt Morgans WA Mining Pty Ltd (100%) Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) 76 TENEMENT SCHEDULE AS AT 29 AUGUST 2017 Tenement Type P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P Tenement 39/5385 39/5386 39/5387 39/5388 39/5389 39/5390 39/5391 39/5392 39/5393 39/5394 39/5426 39/5427 39/5461 39/5469 39/5475 39/5476 39/5477 39/5478 39/5479 39/5491 39/5493 39/5498 39/5823 39/5824 39/5825 39/5826 39/5827 39/5828 39/5829 39/5830 Status Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Application Application Application Application Application Application Application Application Application Location Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Mt Morgans WA Ownership Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) Dacian Gold Ltd (100%) 77 www.dac i a ngo ld.c om .a u